EXHIBIT 10.5
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$175,000,000
SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT
Dated as of
November 12, 1998
Among
QUANTA SERVICES, INC., AS BORROWER
AND
THE FINANCIAL INSTITUTIONS PARTIES HERETO, AS LENDERS
AND
BANK ONE, TEXAS, NATIONAL ASSOCIATION, AS ADMINISTRATIVE AGENT
AND
NATIONAL CITY BANK, AS SYNDICATION AGENT
AND
NATIONSBANK, N.A., AS DOCUMENTATION AGENT
AND
BANKBOSTON, N.A., LASALLE NATIONAL BANK AND
THE BANK OF NOVA SCOTIA, AS CO-AGENTS
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TABLE OF CONTENTS Page
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SECTION 1. DEFINITIONS; INTERPRETATION................................................... 1
Section 1.1 Definitions............................................................ 1
Section 1.2 Interpretation......................................................... 14
SECTION 2. THE CREDIT FACILITY........................................................... 14
Section 2.1 Loans.................................................................. 14
Section 2.2 Letters of Credit...................................................... 15
Section 2.3 Types of Loans and Minimum Borrowing Amounts........................... 19
Section 2.4 Manner of Borrowing.................................................... 19
Section 2.5 Interest Periods....................................................... 21
Section 2.6 Interest Payments...................................................... 21
Section 2.7 Default Rates.......................................................... 22
Section 2.8 Maturity of Loans...................................................... 23
Section 2.9 Optional Prepayments................................................... 24
Section 2.10 Mandatory Prepayments of Loans......................................... 24
Section 2.11 The Notes.............................................................. 24
Section 2.12 Breakage Fees.......................................................... 24
Section 2.13 Commitment Terminations................................................ 25
SECTION 3. FEES AND PAYMENTS............................................................. 26
Section 3.1 Fees................................................................... 26
Section 3.2 Place and Application of Payments...................................... 27
Section 3.3 Withholding Taxes...................................................... 27
SECTION 4. CONDITIONS PRECEDENT.......................................................... 29
Section 4.1 Conditions Precedent to Initial Borrowing.............................. 29
Section 4.2 Conditions Precedent to all Borrowings................................. 31
SECTION 5. REPRESENTATIONS AND WARRANTIES................................................ 32
Section 5.1 Organization........................................................... 32
Section 5.2 Power and Authority; Validity.......................................... 33
Section 5.3 No Violation........................................................... 33
Section 5.4 Litigation............................................................. 33
Section 5.5 Use of Proceeds; Margin Regulations.................................... 33
Section 5.6 Investment Company Act................................................. 34
Section 5.7 Public Utility Holding Company Act..................................... 34
Section 5.8 True and Complete Disclosure........................................... 34
Section 5.9 Financial Statements................................................... 34
Section 5.10 No Material Adverse Change............................................. 34
Section 5.11 Labor Controversies.................................................... 35
Section 5.12 Taxes.................................................................. 35
Section 5.13 ERISA.................................................................. 35
Section 5.14 Consents............................................................... 35
Section 5.15 Capitalization......................................................... 35
Section 5.16 Ownership of Property.................................................. 35
Section 5.17 Compliance with Statutes............................................... 36
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TABLE OF CONTENTS Page
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Section 5.18 Environmental Matters.................................................. 36
Section 5.19 Year 2000 Compliance................................................... 36
Section 5.20 Existing Indebtedness and Liens........................................ 37
SECTION 6. COVENANTS..................................................................... 37
Section 6.1 Existence.............................................................. 37
Section 6.2 Maintenance............................................................ 37
Section 6.3 Taxes.................................................................. 38
Section 6.4 ERISA.................................................................. 38
Section 6.5 Insurance.............................................................. 38
Section 6.6 Financial Reports and Other Information................................ 38
Section 6.7 Lenders' Inspection Rights............................................. 40
Section 6.8 Conduct of Business.................................................... 41
Section 6.9 New Subsidiaries and Additional Collateral............................. 41
Section 6.10 Dividends and Negative Pledges......................................... 41
Section 6.11 Restrictions on Fundamental Changes.................................... 42
Section 6.12 Environmental Laws..................................................... 43
Section 6.13 Liens.................................................................. 43
Section 6.14 Indebtedness........................................................... 44
Section 6.15 Loans, Advances and Investments........................................ 45
Section 6.16 Transfer of Assets..................................................... 46
Section 6.17 Transactions with Affiliates........................................... 46
Section 6.18 Compliance with Laws................................................... 46
Section 6.19 Capital Expenditures................................................... 46
Section 6.20 Minimum Consolidated Net Worth......................................... 46
Section 6.21 Fixed Charge Coverage Ratio............................................ 47
Section 6.22 Funded Debt to EBITDA Ratio............................................ 47
Section 6.23 Senior Debt to EBITDA.................................................. 47
Section 6.24 Tangible Assets to Senior Debt Ratio................................... 47
Section 6.25 Subordinated Debt Investment........................................... 47
SECTION 7. EVENTS OF DEFAULT AND REMEDIES................................................ 47
Section 7.1 Events of Default...................................................... 47
Section 7.2 Non-Bankruptcy Defaults................................................ 49
Section 7.3 Bankruptcy Defaults.................................................... 50
Section 7.4 Collateral for Undrawn Letters of Credit............................... 50
Section 7.5 Notice of Default...................................................... 51
SECTION 8. CHANGE IN CIRCUMSTANCES....................................................... 51
Section 8.1 Change of Law.......................................................... 51
Section 8.2 Unavailability of Deposits or Inability to Ascertain LIBOR Rate........ 51
Section 8.3 Increased Cost and Reduced Return...................................... 52
Section 8.4 Lending Offices........................................................ 53
Section 8.5 Discretion of Lender as to Manner of Funding........................... 53
Section 8.6 Substitution of Lender................................................. 53
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SECTION 9. THE AGENT..................................................................... 54
Section 9.1. Appointment and Authorization.......................................... 54
Section 9.2. Rights and Powers...................................................... 54
Section 9.3. Action by Agent........................................................ 54
Section 9.4. Consultation with Experts.............................................. 54
Section 9.5. Indemnification Provisions; Credit Decision............................ 55
Section 9.6. Indemnity.............................................................. 55
Section 9.7. Resignation of Agent and Successor Agent............................... 56
Section 9.7. Syndication Agent, Documentation Agent and Co-Agents................... 56
SECTION 10. MISCELLANEOUS................................................................. 56
Section 10.1 No Waiver of Rights.................................................... 56
Section 10.2 Non-Business Day....................................................... 56
Section 10.3 Documentary Taxes...................................................... 57
Section 10.4 Survival of Representations............................................ 57
Section 10.5 Survival of Indemnities................................................ 57
Section 10.6 Setoff................................................................. 57
Section 10.7 Notices................................................................ 58
Section 10.8 Counterparts........................................................... 58
Section 10.9 Successors and Assigns................................................. 59
Section 10.10 Sales and Transfers of Borrowings and Notes; Participations in
Borrowings and Notes................................................... 59
Section 10.11 Amendments............................................................. 61
Section 10.12 Headings............................................................... 62
Section 10.13 Legal Fees, Other Costs and Indemnification............................ 62
Section 10.14 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial........ 63
Section 10.15 Confidentiality........................................................ 64
Section 10.16 Severability........................................................... 65
Section 10.17 Change in Accounting Principles or Tax Laws............................ 65
Section 10.18 Loans Under Prior Credit Agreement..................................... 65
Section 10.19 Effectiveness.......................................................... 66
Section 10.20 Notice................................................................. 66
EXHIBITS
Exhibit 2.2A Form of Borrowing Request
Exhibit 2.2B Form of Application
Exhibit 2.11 Form of Note
Exhibit 4.1A Form of Subsidiary Guaranty
Exhibit 4.1B Form of Stock Pledge Agreement
Exhibit 4.1C Form of Security Agreement
Exhibit 4.1D Form of Financial Condition Certificate
Exhibit 6.6 Form of Compliance Certificate
Exhibit 10.10 Form of Assignment Agreement
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SCHEDULES
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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SECOND AMENDED AND RESTATED SECURED CREDIT AGREEMENT, dated as of
November 12, 1998, between Quanta Services, Inc., a Delaware corporation (the
"Borrower"), the lenders from time to time parties hereto (each a "Lender" and
collectively, the "Lenders"), Bank One, Texas, National Association, as
administrative agent for the Lenders (in such capacity, the "Agent"), National
City Bank as Syndication Agent for the Lenders (in such capacity, the
"Syndication Agent"), NationsBank, N.A. as documentation agent for the Lenders
(in such capacity, the "Documentation Agent"), and BankBoston, N.A., LaSalle
National Bank, and The Bank of Nova Scotia, as co-agents for the Lenders (in
such capacity, the "Co-Agents").
WITNESSETH:
WHEREAS, the Borrower, certain of the Lenders and the Agent have previously
entered into that certain Credit Agreement dated as of April 9, 1998 (the "Prior
Credit Agreement"); and
WHEREAS, the Borrower, certain of the Lenders, the Agent, the Syndication
Agent, the Documentation Agent, and the Co-Agents have previously entered into
that certain Amended and Restated Credit Agreement dated as of August 3, 1998,
which amended and restated in its entirety the Prior 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"); and
WHEREAS, the parties to the Amended and Restated Credit Agreement desire to
amend and restate such agreement in its entirety as provided herein;
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. DEFINITIONS; INTERPRETATION.
Section 1.1 Definitions. Unless otherwise defined herein, 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 hereof 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 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 Bank One acting in its capacity as administrative agent for
the Lenders, and any successor agent appointed hereunder pursuant to
Section 9.7.
"Agent Loans" means the loans made by the Agent, in its sole discretion,
described in Section 2.1(b).
"Agent Swing Line" means the uncommitted credit facility in an amount of
$5,000,000 for making Agent Loans described in Section 2.1(b).
"Agreement" means this Second Amended and Restated Secured 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 as follows:
Funded Debt to
EBITDA Ratio LIBOR Loans Base Rate Loans
-------------- ----------- ---------------
Less than or equal to 1.5 to 1.0 1.00% 0.00%
Greater than 1.5 to 1.0 but less than 1.25% 0.00%
or equal to 1.75 to 1.0
Greater than 1.75 to 1.0 but less 1.50% 0.00%
than or equal to 2.25 to 1.0
Greater than 2.25 to 1.0 but less 1.75% 0.00%
than or equal to 2.75 to 1.0
Greater than 2.75 to 1.0 2.00% 0.25%
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For the period from the Effective Date through the earlier of the date the
Borrower is to provide the Agent with the financial statements for the fiscal
quarter ended March 31, 1999, as required by Section 6.6(a)(i) or the date such
financial statements are provided to the Agent, the Applicable Margin for LIBOR
Loans shall be 1.25% and the Applicable Margin for Base Rate Loans shall be 0%,
provided that the Applicable Margin for LIBOR Loans and for Base Loans shall
increase (but not decrease) according to the above grid, if applicable, as of
the date one (1) Business Day after the earlier of the date the financial
statements are required to be provided or the date such financial statements are
provided to the Agent for the fiscal quarter ended December 31, 1998; and
thereafter, the Applicable Margin shall be set according to the above grid upon
receipt by the Agent of the applicable financial statements and Compliance
Certificate as required by Section 6.6(a)(i) or (ii) and Section 6.6(b) from the
Borrower to be effective as of the date one (1) Business Day after the earlier
of the date such financial statements are required to be provided or the date
such financial statements are provided to the Agent.
"Application" means an application for a Letter of Credit as defined in
Section 2.2(b).
"Arranger" means Bank One Capital Markets.
"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 (i) a Revolving Loan bearing interest prior to
maturity at the Base Rate plus the Applicable Margin, or (ii) an Agent Loan
bearing interest prior to maturity at the Base Rate minus 0.625%, as applicable.
"Beneficial Ownership," and "Beneficial Owner" shall have the meanings
assigned to them in Rule 13d-3 under the Exchange Act in effect on September 29,
1998.
"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
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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 2.2(b).
"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 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.
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"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 September 29, 1998, constitute the
Borrower's Board of Directors, or their successors approved in accordance with
the terms below, cease for any reason to constitute at least a majority thereof,
unless the election or nomination for the election by the Borrower's
stockholders of each new director was approved by vote of at least 2/3rds of the
directors then still in office who were directors on September 29, 1998, or
their successors approved in accordance with the terms hereof.
"Co-Agents" means BankBoston, N.A., LaSalle National Bank and The Bank of
Nova Scotia acting in their capacity as co-agents for the Lenders.
"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 Revolving Loans and participate in Letters of Credit issued pursuant to
Sections 2.1 and 2.2 in the percentage set forth opposite its signature hereto
or pursuant to Section 10.10, as such commitment may be reduced from time to
time pursuant to this Agreement, provided that the obligation of the Agent to
make Revolving Loans and participate in Letters of Credit shall be limited to
$30,000,000 (subject to any reduction thereof pursuant to Section 10.10) minus
the outstanding principal amount of the Agent Loans from time to time
outstanding.
"Commitment Amount" means an amount equal to $175,000,000 minus the
outstanding amount of Agent Loans, as such amount may be reduced from time to
time pursuant to the terms of this Agreement.
"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 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.
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"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 Stock Pledge Agreements, the Security Agreements, the
Applications, the Borrowing Requests and any other documents or instruments
executed by the Borrower or any of the Guarantors 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" means NationsBank, N.A. acting in its capacity as
documentation agent for the Lenders.
"Dollar" and "U.S. Dollar" and the sign "$" means lawful money of the
United States of America.
"EBITA" means, for any period, on a trailing four fiscal quarter basis
(using the historical financial results of the Founding Companies for any period
prior to the acquisition of the Founding Companies by the Borrower and the
historical financial results of any other business acquired in an Acquisition
through the Effective Date hereof, 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 amortization
expense and other non-cash charges (excluding depreciation) deducted in
determining Consolidated Net Income, 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 hereof, EBITA
shall be adjusted to include the historical financial results of the acquired
business (on a trailing four fiscal quarter pro forma basis consistent with SEC
regulations).
"EBITDA" means, for any period, on a trailing four fiscal quarter basis
(using the historical financial results of the Founding Companies for any period
prior to the acquisition of the Founding Companies by the Borrower and the
historical financial results of any other business acquired in an Acquisition
through the Effective Date hereof, 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
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Interest Expense, and (b) provisions for taxes based on income or revenues, plus
(ii) the amount of all depreciation, amortization expense and other non-cash
charges deducted in determining Consolidated Net Income, 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 hereof, EBITDA shall be adjusted to include the historical
financial results of the acquired business (on a trailing four fiscal quarter
pro forma basis consistent with SEC regulations).
"Effective Date" means the date this Agreement becomes effective as defined
in Section 10.19.
"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.
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"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 July 30, 1998, by
and between the Agent, the Arranger and the Borrower.
"Fixed Charge Coverage Ratio" means, for any period, on a trailing four
fiscal quarter basis (using the historical financial results of the Founding
Companies, to the extent necessary, for any period prior to the acquisition of
the Founding Companies by the Borrower on a pro forma basis, consistent with SEC
regulations), the ratio of (i) the sum of, without duplication, (a) EBITA, minus
(b) cash taxes, minus (c) all cash dividends, distributions or payments made in
respect of the capital stock of the Borrower to the extent permitted hereunder;
to (ii) the sum of, without duplication, (a) the portion of Funded Debt due and
payable within one (1) year of the date of determination, plus (b) Consolidated
Interest Expense for the four fiscal quarters then ended plus (c) twenty percent
(20%) of the outstanding aggregate principal amount outstanding under the Notes
(excluding for the fiscal quarter ending September 30, 1998, and October 1
through 4, 1998, the principal amount of $49,350,000 outstanding under the Notes
repaid with the proceeds of the Enron Subordinated Debt Documents) on the date
of determination, all calculated on a consolidated basis for the Borrower and
its Subsidiaries and as determined in accordance with GAAP.
"Founding Companies" means PAR Electrical Contractors, Inc., a Missouri
corporation, Union Power Construction Company, a Colorado corporation, TRANS
TECH Electric, Inc., an Indiana corporation, and Potelco, Inc., a Washington
corporation.
"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, for any period, the ratio of (i)
Funded Debt, to (ii) EBITDA.
8
"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
9
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 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 December 31,
1998, 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.
10
"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; provided that the obligation of the Agent to make Revolving Loans and
participate in Letters of Credit shall be limited to $30,000,000 (subject to any
reduction thereof pursuant to Section 10.10) minus the outstanding principal
amount of the Agent Loans from time to time outstanding.
"L/C Commitment Amount" means $10,000,000, 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.
"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 the letters of credit issued by the Agent
on behalf of the Lenders for the account of the Borrower pursuant to
Section 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 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
11
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 an Agent 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 at least sixty-six and two-thirds percent (66 2/3%) of the aggregate
of the Commitments plus the outstanding principal amount of the Agent Loans, or
if the Commitments have terminated pursuant to the terms hereof, the aggregate
Obligations. 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.
"Material Adverse Effect" means an effect that results in a material
adverse change since June 30, 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 its
Obligations under the Credit Documents to which they are a party.
"Maturity Date" means August 2, 2003.
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor thereto.
"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 or
interest on Loans and Reimbursement Obligations and to pay any other obligations
to the Agent or the Lenders arising under any Credit Document.
"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
12
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.
"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.
"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, as of the date of any determination all Funded Debt
which is not expressly subordinated in payment to the outstanding Indebtedness
under the Credit Documents.
"Senior Debt to EBITDA Ratio" means, for any period, the ratio of (i)
Senior Debt, to (ii) EBITDA.
"Stock Pledge Agreements" means each Stock 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.
"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
13
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 any issue of subordinated debt of the
Borrower subordinated in payment to the Obligations, including, without
limitation, the Enron Subordinated Debt Documents, having a maturity after the
Maturity Date, with no scheduled principal payments until after the Maturity
Date, containing covenants no more restrictive than the covenants contained in
this Agreement and containing subordination, standstill and other provisions
reasonably acceptable to the Agent.
"Subsidiary Guaranty" means each Guaranty of each direct or indirect
domestic Subsidiary of the Borrower in substantially the form of Exhibit 4.1A.
"Syndication Agent" means National City Bank acting in its capacity as
syndication agent for the Lenders.
"Tangible Assets" means all property which would be considered tangible
under GAAP, all calculated on a consolidated basis for the Borrower and its
Subsidiaries.
"Tangible Assets to Senior Debt" means, for any period, the ratio of (i)
Tangible Assets, to (ii) Senior Debt.
"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.
(a) 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 Percentage of the
14
Commitment Amount (for each Lender, its "Commitment"), subject to any reductions
thereof pursuant to the terms of this Agreement. No Lender shall be permitted or
required to make any Revolving Loan if, after giving effect thereto, (i) the
aggregate principal amount of the Revolving Loans of all Lenders and L/C
Obligations outstanding of the Borrower would thereby exceed the Commitment
Amount then in effect; (ii) the aggregate principal amount of all Revolving
Loans of such Lender and its participating interest in all L/C Obligations would
thereby exceed the Percentage of such Lender of the Commitment Amount then in
effect; or (iii) with respect to the Agent, the aggregate principal amount of
all Revolving Loans, its participating interest in all L/C Obligations and the
aggregate principal amount of all its Agent Loans would thereby exceed its
Commitment. Each Borrowing of Revolving Loans shall be made ratably from the
Lenders in proportion to their respective Percentages (subject to the limitation
of the Commitment of the Agent). 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.
(b) Agent Loans. Subject to the terms and conditions hereof,
the Agent may, in its sole discretion, make one or more loans (each an "Agent
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
Agent Swing Line. Agent Loans may be repaid, in whole or in part, at any time.
Upon an Event of Default and at the request of the Agent, (i) the Lenders agree
to make Revolving Loans to the Borrower in an amount equal to the outstanding
amount of the Agent Loans, and the Borrower hereby instructs the Agent in such
circumstance to apply the proceeds of such Revolving Loans to such Agent Loans
such that the Agent Loans are repaid in full; or (ii) in the event any such
Revolving Loans are not made, 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 participation interest, up to the extent of its Percentage,
in each Agent Loan, in each case so long as no Default or Event of Default of
which the Agent had actual knowledge was in existence at the time the Agent Loan
was made and such that the principal amount of each Lender's Revolving Loans
and/or participations in Agent Loans shall be an amount equal to its Percentage
times the principal amount of all Loans.
Section 2.2 Letters of Credit.
(a) 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.
15
(b) 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 Borrowing Request in the form of Exhibit 2.2A (each a
"Borrowing Request"), together with a duly executed application for the relevant
Letter of Credit substantially in the form of Exhibit 2.2B (each an
"Application"), 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 Borrowing Request and 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 Borrowing
Request and 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.
(c) The Borrower's Reimbursement Obligations.
(i) The Borrower hereby irrevocably and unconditionally
agrees to reimburse the Agent, for the benefit of the Lenders, for each payment
or disbursement made by the Agent 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
16
the Borrower notice of any drawing on a Letter of Credit within one (1) Business
Day after such drawing is paid.
(ii) 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
17
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.
(d) 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 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.
18
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 Agent 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 two (2) 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 shall be in an amount of not less than $250,000 and
each Borrowing of LIBOR Loans shall be in an amount of not less than $500,000.
Section 2.4 Manner of Borrowing.
(a) Notice to the Agent. Subject to the limitations in
Section 2.3, the Borrower shall give notice to the Agent by no later than
11:00 a.m. at least two (2) Business Days before the date on which the Borrower
requests the Lenders or the Agent, as applicable, to advance a Borrowing of
LIBOR Loans and on the date the Borrower requests the Lenders or the Agent, as
applicable, to advance a Borrowing of Base Rate Loans pursuant to a duly
executed Borrowing Request, and the Agent shall promptly give the Lenders notice
thereof.
(b) 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 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 two (2) 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
19
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.
(c) 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 two (2) 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.
(d) 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 Agent 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.
(e) 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
20
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 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:
(a) the Borrower may not select an Interest Period for a
Borrowing of LIBOR Loans that extends beyond the Maturity Date;
(b) 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
(c) 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.
(a) 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 Agent Loans, the sum of the Base Rate from
time to time in effect minus 0.625%, 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).
(b) 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
21
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).
(c) 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 (in
the case of Revolving Loans) 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:
(a) 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;
(b) 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;
(c) 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
(d) for any Base Rate Loan which is an Agent 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 0.625%.
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
22
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.
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 Agent Loan, together with accrued and unpaid interest thereon, shall
mature and become due and payable five (5) days after the date of such Agent
Loan, provided that all such Agent Loans shall mature and become due and payable
no later than the Maturity Date.
23
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 Agent 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:
24
(i) 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);
(ii) any failure to make a principal payment of a LIBOR
Loan on the due date therefor; or
(iii) 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),
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.
25
SECTION 3. FEES AND PAYMENTS.
Section 3.1 Fees.
(a) 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 plus the
outstanding principal amount of the Agent Loans 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 ranges, based upon the percentage per annum set forth opposite
such Funded Debt to EBITDA Ratio set forth below times such amount:
Funded Debt to EBITDA Ratio Commitment Fee
--------------------------- --------------
Less than or equal to 1.5 to 1.0 0.175%
Greater than 1.5 to 1.0 but less
than or equal to 1.75 to 1.0 0.200%
Greater than 1.75 to 1.0 but less
than or equal to 2.25 to 1.0 0.250%
Greater than 2.25 to 1.0 but less
than or equal to 2.75 to 1.0 0.250%
Greater than 2.75 to 1.0 0.300%
For the period from the Effective Date through the earlier of the date the
Borrower is to provide the Agent with the financial statements for the fiscal
quarter ended March 31, 1999, as required by Section 6.6(a)(i) or the date such
financial statements are provided to the Agent, the commitment fee percentage
shall be 0.20%, provided that the commitment fee shall increase (but not
decrease) according to the above grid, if applicable, as of the date one (1)
Business Day after the earlier of the date the financial statements are required
to be provided or the date such financial statements are provided to the Agent
for the fiscal quarter ended December 31, 1998; 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. Such commitment fees shall be payable in
arrears commencing on December 31, 1998, 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.
(b) 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
26
necessary for any portion of such quarter) for the ratable account of the
Lenders 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 1/8%
fronting fee of 1% of the face amount of each Letter of Credit.
(c) Agent Fees. The Borrower shall pay to each of the Agent and
the Arranger the fees agreed to between the Agent, the Arranger and the Borrower
pursuant to the Fee Letter, and any other fees from time to time agreed to by
the Borrower and the Agent.
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.
(a) 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
(i) 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);
(ii) 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;
27
(iii) 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);
(iv) 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 hereof, 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;
(v) 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 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.
(b) 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
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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.
(c) 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.
(d) 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):
(a) The Agent shall have received:
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(i) Notes. The duly executed Notes of the Borrower;
(ii) Subsidiary Guaranties. The duly executed Subsidiary
Guaranties of each of the Guarantors in substantially the form of Exhibit 4.1A;
(iii) Stock Pledge Agreements. The duly executed Stock
Pledge Agreements of each of the Borrower, NorAm Telecommunications, Inc., Spalj
Construction Co. and Underground Construction Company in substantially the form
of Exhibit 4.1B, together with the original stock certificates referenced
therein and undated stock powers executed in blank with respect to each such
stock certificate;
(iv) Security Agreements. The Security Agreements of the
Borrower and each of the Guarantors in substantially the form of Exhibit 4.1C;
(v) UCC-1 Financing Statements. The duly executed UCC-1
Financing Statements of each of the Borrower and the Guarantors with respect to
the stock referenced in the Stock Pledge Agreements, to the extent applicable,
and the Collateral referenced in the Security Agreements;
(vi) 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 (to the extent not previously provided
to the Agent or if amended since August 3, 1998);
(vii) Certificates of Existence and Good Standing.
Certificates of existence and good standing from the appropriate governing
agency of the Borrower's jurisdiction of organization and of all jurisdictions
where the Borrower is authorized to do business;
(viii) Fees. Payment of all fees and all expenses incurred
through the Effective Date then due and owing to the Agent and the Arranger
pursuant to this Agreement and the Fee Letter;
(ix) 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;
(x) Financial Condition Certificate. A certificate of
the principal financial officer of the Borrower in substantially the form of
Exhibit 4.1D;
30
(xi) Financial Projections. Annual financial projections
of the Borrower for a period of five (5) years from and after the Effective
Date;
(xii) Opinion of Counsel. The opinion of Xxxx Xxxxxxx,
General Counsel to the Borrower and the Guarantors covering such matters as the
Lenders may reasonably require; and
(xiii) Other Documents. Such other documents as the
Lenders may reasonably request.
(b) 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)):
(a) 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 Borrowing Request and Application for such Letter of
Credit meeting the requirements of Section 2.2;
(b) 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;
(c) No Default. No Default or Event of Default shall have
occurred and be continuing or would occur as a result of such Borrowing;
(d) 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;
(e) 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
31
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
(f) 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 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.
(a) 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.
32
(b) 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 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
33
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, superceded or otherwise modified information
except as so updated, corrected, supplemented, superceded 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 quarter ending June 30, 1998, 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 June 30, 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.
34
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.
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 shares of the Borrower and
its Subsidiaries have 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
35
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.
(a) 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.
(b) 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, 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
36
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 (i) 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 (ii) develop a plan and
timeline 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 (i) for the dissolution of any Subsidiaries
whose assets are transferred to the Borrower or any of its Subsidiaries; (ii)
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,
37
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.
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
(i) 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; (ii) receipt of any notice from PBGC of its intention to seek
termination of any Plan or appointment of a trustee therefor; (iii) 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 (iv) 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
$250,000, 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.
(a) 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
38
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:
(i) 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
(ii) 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 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.
(b) 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.
(c) 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.
(d) 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
39
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.
(e) 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, 6.24 or 6.25.
(f) 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; and (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.
(g) 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
40
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 cause (i) 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, together with a UCC-1
Financing Statement with respect to the assets of such Guarantor as set forth
therein, and (ii) any Subsidiary which forms or acquires a Subsidiary after the
Effective Date to execute and deliver to the Agent a Stock Pledge Agreement
substantially in the form of Exhibit 4.1B, 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 thirty (30) 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.
Section 6.10 Dividends and Negative Pledges.
(a) The Borrower shall not pay any dividends or other
distributions on its capital stock.
(b) 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.
(c) 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
41
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.
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:
(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 upon the
consummation of any such merger, consolidation, purchase or Acquisition, (i) the
Borrower or such Subsidiary is the surviving corporation 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) the
maximum cash purchase price paid, Borrowings hereunder and Indebtedness of such
acquired Person otherwise refinanced by the Borrower or any of its Subsidiaries
in connection with (x) any single Acquisition shall not exceed $12,000,000
unless the Borrower shall have delivered to the Agent (which the Agent shall
promptly provide to each Lender) prior to the consummation of an Acquisition
exceeding such amount 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, 6.23 and 6.24 (on a trailing four fiscal quarter pro
forma basis, consistent with SEC regulations, using historical financial results
of the acquired business to the extent applicable and required hereunder) and
the Borrower shall have obtained approval of the Majority Lenders hereunder to
make such Acquisition, and (y) all Acquisitions made during any rolling four (4)
fiscal quarters (excluding any Acquisitions exceeding $12,000,000 for which the
Borrower has obtained approval of the Majority Lenders hereunder and all
Acquisitions made from and after April 9, 1998, through September 29, 1998)
shall not exceed twenty-five percent (25%) of the Borrower's Consolidated Net
Worth as of the end of the immediately preceding fiscal quarter; (iv) 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; and
(v) such merger, consolidation, purchase or Acquisition is non-hostile in
nature;
(b) 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 the Borrower shall be the surviving entity to any such merger or
consolidation if the transaction is with the Borrower; and
(c) 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.
42
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"):
(a) 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;
(b) 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;
(c) 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;
(d) 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;
(e) 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;
(f) 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
43
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;
(g) 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;
(h) rights of lessees of equipment owned by the Borrower or any
of its Subsidiaries;
(i) Liens securing Indebtedness permitted by Section 6.14(d) on
any assets acquired;
(j) Liens on assets acquired in an Acquisition securing
Indebtedness permitted by Section 6.14(h); 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;
(k) existing Liens listed on Schedule 6.13 and any extension,
renewal or replacement thereof;
(l) Liens created by the Credit Documents; and
(m) Liens on any assets acquired in an Acquisition, provided
that all such Liens, other than Permitted Liens listed in (a) through (l) of
this Section, shall be released on or before thirty (30) days from the date of
such Acquisition.
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:
(a) Indebtedness under the Credit Documents;
(b) 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;
(c) existing Indebtedness listed on Schedule 6.13, and any
subsequent extensions, renewals or refinancings thereof so long as such
Indebtedness is not increased in amount, the maturity date thereof is not made
earlier in time, the interest rate per annum applicable thereto is not
increased, any amortization of principal thereunder is not shortened and the
payments thereunder are not increased;
(d) Capitalized Lease Obligations and purchase money
Indebtedness on assets acquired in an aggregate amount not to exceed $2,500,000
at any one time outstanding;
44
(e) 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;
(f) Indebtedness under any Interest Rate Protection Agreements
entered into to protect the Borrower against fluctuations in interest rates and
not for speculative purposes;
(g) Indebtedness incurred in connection with Subordinated
Debt Investments not to exceed (excluding any Indebtedness permitted by
Section 6.14(e)) in the aggregate $50,000,000, all as reasonably acceptable to
the Agent; and
(h) other Indebtedness not included within subsections (a)
through (g) above, including, without limitation, Indebtedness assumed in
connection with an Acquisition, provided that such Indebtedness shall not exceed
$7,500,000 at any one time outstanding.
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:
(a) Investments in Cash Equivalents;
(b) 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;
(c) 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;
(d) deposits made in the ordinary course of business consistent
with past practices to secure the performance of leases;
(e) as permitted by Section 6.14(b);
(f) loans to employees of the Borrower or any of its
Subsidiaries, provided that all such loans shall not exceed $2,000,000 at any
one time;
(g) the existing loan to the NorAm Telecommunications, Inc.
employee stock ownership plan; and
(h) as permitted by Section 6.11.
45
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:
(a) transfers of inventory, equipment and other assets in the
ordinary course of business;
(b) the retirement or replacement of assets (with assets of
equal or greater value) in the ordinary course of business;
(c) transfers of any assets among the Borrower and any of its
Subsidiaries; and
(d) 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 in excess of
fifteen percent (15%) of Consolidated Net Worth during any rolling four (4)
fiscal quarters.
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) $115,820,000, plus (ii) for each fiscal quarter ended prior to (but not on)
such date of determination, commencing with the fiscal quarter ended
September 30, 1998, (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 in a secondary offering or
where equity is used to acquire another entity in an Acquisition, plus (y) an
amount equal to 100% of the stockholders
46
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 Fixed Charge Coverage Ratio. The Borrower will maintain a
Fixed Charge Coverage Ratio of at least 1.2 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 Tangible Assets to Senior Debt Ratio. The Borrower will
maintain a Tangible Assets to Senior Debt Ratio of at least 1.5 to 1.0.
Section 6.25 Subordinated Debt Investment. The Borrower shall provide
written notice to the Agent (by confirmed fax to each of the Agent and its legal
counsel, Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P., attention: Xx. Xxxx X.
Xxxxxxxxxx (fax no.: 000-000-0000)) of (i) any Change of Control within two (2)
Business Days following any such Change of Control, 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:
(a) 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;
47
(b) 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 or 6.25;
(c) 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 (excluding any default of Section 6.21 solely as a result of distributions
or dividends made by the entity acquired in an Acquisition before the date of
such Acquisition), 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;
(d) 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;
(e) 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;
(f) 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(f);
(g) 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)
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;
48
(h) 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;
(i) 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;
(j) 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
(k) 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,
49
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 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.
(a) 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.
(b) 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
50
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.
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.
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Section 8.3 Increased Cost and Reduced Return.
(a) 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:
(i) 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
(ii) 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.
(b) 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
52
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 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.
(c) 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
53
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
Bank One 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 Agent 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.
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
54
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, 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, 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 and its 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 the transactions contemplated
thereby, regardless of when asserted or arising, except to the extent they are
55
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 9.7. Syndication Agent, Documentation Agent and Co-Agents. The
Lenders identified on the facing page or signature pages of this Agreement as
Syndication Agent, Documentation Agent 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. 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
56
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
Loans or the Agent 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
57
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
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
58
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 Syndication Agent, the Documentation Agent,
the Co-Agents and the Lenders and their respective successors and assigns, and
shall inure to the benefit of the Borrower, the Agent, the Syndication Agent,
the Documentation Agent, 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.
(a) 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
59
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.
(b) 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
Agent 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."
60
(c) 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.
(d) 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.
(e) 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 Purchasing Lender, the
Agent and the Borrower) a new Form 4224 or Form 1001 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:
(i) 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 Agent 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
61
or (C) release any Subsidiary Guaranty or any Collateral without the consent of
all the Lenders and the Agent; and
(ii) 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 Syndication Agent, the Documentation Agent, any
Co-Agent or any Lender, agrees to pay the reasonable fees and disbursements of
legal counsel to the Agent, the Syndication Agent, the Documentation Agent, 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 Syndication Agent, the Documentation
Agent, 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
Syndication Agent, the Documentation Agent, 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 Syndication Agent, the Documentation Agent, 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 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
62
required to be paid under applicable law, (iii) the Agent's, the Syndication
Agent's, the Documentation Agent's, 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 Syndication Agent, the Documentation Agent, 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.
(a) 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.
(b) THE AGENT, THE SYNDICATION AGENT, THE DOCUMENTATION AGENT,
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
63
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.
(c) 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 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.
(d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH
PARTY HERETO VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY ITS
ACCEPTANCE HEREOF) 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 Syndication Agent, the
Documentation Agent, each Co-Agent and each Lender agrees it will not disclose
without the Borrower's consent (other than to its employees, auditors, counsel
or other professional advisors or to its Affiliates on a need to know basis and
provided that such Persons agree to be bound by this Section 10.15)
64
any information concerning the Borrower or any of its Subsidiaries furnished
pursuant to any of the Credit Documents; provided that the Agent, the
Syndication Agent, the Documentation Agent, any Co-Agent and any Lender may
disclose any such information (i) that has become generally available to the
public other than through the Agent, the Syndication Agent, the Documentation
Agent, the Co-Agents or the Lenders or that was previously known to the Agent,
the Syndication Agent, the Documentation Agent, such Co-Agent or such Lender or
comes from a source other than the Borrower or any of its Subsidiaries, (ii) 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 the Agent, the Syndication Agent, the Documentation
Agent, such Co-Agent or such Lender, (iii) if required or appropriate in
response to any summons or subpoena or in connection with any litigation, (iv)
in order to comply with any law, order, regulation or ruling applicable to
Agent, the Syndication Agent, the Documentation Agent, such Co-Agent or such
Lender, (v) to any prospective or actual permitted transferee in connection with
any contemplated or actual permitted transfer of any interest in the Note by
such Lender (but only after the Borrower's conditional approval has been
obtained to such transfer to the extent any such approval is required
hereunder), and (vi) in connection with the exercise of any remedies by the
Agent, the Syndication Agent, the Documentation Agent, any Co-Agent or any
Lender; provided that such actual or prospective transferee executes an
agreement with the applicable Lender containing provisions substantially
identical to those contained in this Section 10.15 prior to such transferee's
receipt of any such information.
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 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 Prior Credit Agreement. On the Initial
Borrowing Date:
(a) The Borrower shall pay all accrued and unpaid commitment
fees outstanding under the Amended and Restated Credit Agreement;
65
(b) each Revolving Loan under the Amended and Restated Credit
Agreement shall be deemed to be repaid with the proceeds of a new LIBOR Loan(s)
and each Agent Loan under the Amended and Restated Credit Agreement shall be
deemed to be repaid with the proceeds of a new Base Rate Loan;
(c) each Letter of Credit outstanding under the 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
(d) the 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 Syndication
Agent, the Documentation Agent, each Co-Agent and each Lender has signed and
delivered to the Agent a counterparty 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 Syndication Agent, the
Documentation Agent, 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 hereto 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.
By:
------------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Chief Financial Officer
66
LENDERS:
Percentage of Commitment: 17.1428571428% BANK ONE, TEXAS, National Association,
as Administrative Agent and as a Lender
By:
------------------------------------
Name: Xxxx X. Xxxx, Xx.
Title: Vice President
Bank One, Texas, National Association
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Xx. Xxxx X. Xxxx, Xx.
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. Xxxxxx Xxxxxx
Lending Office:
--------------
Bank One, Texas, National Association
000 Xxxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxx, Xx.
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
67
Percentage of Commitment: 14.0000000000% NATIONAL CITY BANK, as Syndication
Agent and as a Lender
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
68
Percentage of Commitment: 14.0000000000% NATIONSBANK, N.A., as Documentation
Agent and as a Lender
By:
------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Vice President
Address for Notices:
-------------------
000 Xxxxxxxxx Xx., 0/xx/ Xxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: NationsBank, N.A.
City, State: Dallas, Texas
Method of Payment: ABA #000000000
For Credit To: Quanta Services, Inc.
Attention: Ms. Xxxxxxxx Textus
Telephone No.: (000) 000-0000
Lending Office:
--------------
000 Xxxxxxxxx Xx., 0/xx/ Xxxxx
Xxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
69
Percentage of Commitment: 11.4285714286% BANKBOSTON, N.A., as a Co-Agent and
as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
-------------------
000 Xxxxxxx Xx. 0-0-0
Xxxxxx, XX 00000
Attention: Mr. Xxxxxxx Xxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Telex No.:
--------------------
Answerback:
-------------------
Payment Instructions:
--------------------
Name of Credit Bank: BankBoston, N.A.
City, State:
Method of Payment:
------------------------
For Credit To:
------------------------
Account No.:
------------------------
Reference: Quanta Services, Inc.
Lending Office:
--------------
---------------------
---------------------
---------------------
Telephone No.:
--------------------
Fax No.:
--------------------------
70
Percentage of Commitment: 11.4285714286% LASALLE NATIONAL BANK, as a Co-
Agent and as a Lender
By:
------------------------------------
Xxxxxxx X. Xxxxx, Vice President
Address for Notices:
-------------------
000 X. XxXxxxx Xxxxxx, Xx. 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 National Bank
City, State: Chicago, IL
Method of Payment: ABA # - 000-000-000
For Credit To: Commercial Wires
Account No.: #0000000
Reference: Quanta Services, Inc.
Attention: Xx. Xxxxxxx X. Xxxxx
Lending Office:
--------------
000 XxXxxxx Xxxxxx, Xx. 214
Xxxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
71
Percentage of Commitment: 11.0000000000% THE BANK OF NOVA SCOTIA, as a Co-
Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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: Mr. F.C.H. Xxxxx 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:
------------------------
Lending Office:
--------------
The Bank of Nova Scotia,
Atlanta Agency
000 Xxxxxxxxx Xxxxxx X.X., Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Mr. F.C.H. Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Telex: 00000000
Answerback: XXXXXXXXXX XXX
00
Xxxxxxxxxx xx Xxxxxxxxxx: 8.5714285714% CREDIT LYONNAIS NEW YORK
BRANCH, as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices: With a copy to:
-------------------
Credit Lyonnais New York Branch Credit Lyonnais
1301 Avenue of the Americas 0000 Xxxx Xxx., Xxxxx 0000-X
Xxx Xxxx, Xxx Xxxx 00000 Xxxxxx, Xxxxx 00000
Attention: Xx. Xxx Xxxx Attention: Xx. Xxxxx Xxxxxx
Telephone No.: (000) 000-0000 Telephone No.: (000) 000-0000
Fax 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:
------------------------
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
73
Percentage of Commitment: 5.7142857143% COMERICA BANK, as a Lender
By:
------------------------------------
Name: Xxxx 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
Telex No.: N/A
Answerback: N/A
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
74
Percentage of Commitment: 5.7142857143% THE BANK OF TOKYO-MITSUBISHI,
LTD., as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address for Notices:
-------------------
The Bank of Tokyo - Mitsubishi, Ltd.,
Houston Agency
0000 Xxxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xx. Xxxx Xxxxx
Telephone No.: (000) 000-0000
Fax No.: (000) 000-0000
Payment Instructions:
--------------------
Name of Credit Bank: The Bank of Tokyo-Mitsubishi, Ltd., New York Agency
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
75
EXHIBIT 4.1A
[AMENDED AND RESTATED] GUARANTY
THIS [AMENDED AND RESTATED] GUARANTY (this "Guaranty") dated as of
November 12, 1998, is from each of the undersigned Guarantors (each a
"Guarantor"), to the Lenders referred to hereinafter and Bank One, Texas,
National Association, as Agent for the Lenders (in such capacity the "Agent").
RECITALS:
[A. Quanta Services, Inc., a Delaware corporation (the "Borrower") the
various financial institutions as are or may from time to time become parties
thereto (collectively, the "Lenders"), National City Bank, as Syndication Agent
for the Lenders, NationsBank, N.A., as Documentation Agent for the Lenders, and
BankBoston, N.A., LaSalle National Bank, and The Bank of Nova Scotia, as
Co-Agents for the Lenders, and Secured Party have entered into that certain
Second Amended and Restated Secured Credit Agreement dated as of November 12,
1998 (herein, as the same may be amended, modified, supplemented, extended,
rearranged, and/or restated from time to time, collectively called the "Credit
Agreement"), pursuant to which, upon the terms and conditions therein set forth,
(i) the Lenders have agreed to from time to time make Revolving Loans to the
Borrower, which Revolving Loans are evidenced by Notes of the Borrower dated
November 12, 1998, in the aggregate original principal amount of $175,000,000,
payable to the order of the Lenders, and the Agent, in its sole discretion, may
make Agent Loans to the Borrower in the aggregate original principal amount of
$5,000,000 pursuant to its Note (together, herein, as the same may be amended,
modified, supplemented, extended, rearranged, and/or restated from time to time,
together with any notes given by any Guarantor in extension, replacement,
rearrangement, modification and/or substitution thereof or therefor,
collectively called the "Notes"), and (ii) the Agent on behalf of the Lenders
has agreed to issue Letters of Credit for the account of the Borrower.
Capitalized terms used herein without definition shall have the meanings
assigned in the Credit Agreement.]
[A. Quanta Services, Inc., a Delaware corporation (the "Borrower"), the
various financial institutions as are parties thereto, and the Agent have
entered into that certain Amended and Restated Credit Agreement dated as of
August 3, 1998, as amended by that certain First Amendment to Credit Agreement
dated as of September 29, 1998 (the "Prior Credit Agreement"), pursuant to
which, upon the terms and conditions set forth therein, such lenders agreed to
make loans to the Borrower, and the Agent, on behalf of such lenders, agreed to
issue letters of credit for the account of the Borrower in the aggregate
principal amount of $125,000,000, and Five Points Construction Company has
executed and delivered its Guaranty in connection therewith dated as of
August 4, 1998, each of the other Guarantors has executed and delivered its
Amended and Restated Guaranty in connection therewith dated as of August 3, 1998
(each a "Prior Guaranty").]
B. Certain of the parties to the Prior Credit Agreement have entered into
that certain Second Amended and Restated Secured Credit Agreement dated as of
November 12, 1998, which amends and restates in its entirety the Prior Credit
Agreement (herein, as the same may be
amended, modified, supplemented, extended, rearranged and/or restated from time
to time, called the "Credit Agreement"), pursuant to which, upon the terms and
conditions therein set forth, (i) the various financial institutions as are
parties thereto (collectively, the "Lenders") have agreed to from time to time
make Revolving Loans to the Borrower, which Revolving Loans are evidenced by
Notes of the Borrower dated November 12, 1998, in the aggregate original
principal amount of $175,000,000, payable the order of the Lenders,
respectively, and the Agent may, in its sole discretion, make Agent Loans to the
Borrower, in an aggregate principal amount of up to $5,000,000 pursuant to its
Note (herein, as amended, extended, modified, rearranged and/or supplemented
from time to time, together with any promissory notes given in extension,
replacement, rearrangement, modification and/or substitution thereof or
therefor, collectively called the "Notes") and (ii) the Agent on behalf of the
Lenders has agreed to issue Letters of Credit for the account of the Borrower.
Capitalized terms used herein without definition shall have the meanings
assigned in the Credit Agreement.]
[B.][C.] As a condition precedent to the making of the Loans and the
issuance of the Letters of Credit under the Credit Agreement, each of the
Guarantors is required to execute and deliver this Guaranty [which amends and
restates in its entirety its Prior Guaranty.]
[C.][D.] Each of the Guarantors has duly authorized the execution,
delivery and performance of this Guaranty.
[D.][E.] It is in the best interests of each of the Guarantors to execute
this Guaranty inasmuch as each of the Guarantors will derive substantial direct
and indirect benefits from the Loans made from time to time to the Borrower and
the issuance of Letters of Credit by the Agent pursuant to the Credit Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to induce the Agent
and the Lenders to make Loans to the Borrower and to issue or participate in
Letters of Credit pursuant to the Credit Agreement, each of the Guarantors,
jointly and severally, agrees, for the benefit of the Agent and each Lender, as
follows:
ARTICLE I
GUARANTY
1.1 Guaranty. For value received, and in consideration of any loan or
other financial accommodation, heretofore or hereafter at any time made or
granted to the Borrower by the Agent and the Lenders, each of the Guarantors,
jointly and severally, hereby unconditionally guarantees the full and prompt
payment when due, whether by acceleration or otherwise, and at all times
thereafter, of all obligations of the Borrower to the Agent and each Lender and
their successors and assigns, howsoever created, arising or evidenced, whether
direct or indirect, primary or secondary, absolute or contingent, joint or
several, or now or hereafter existing or due or to become due, including,
without limitation, all such amounts which would become due but for the
-2-
operation of the automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. (S) 362(a), and the operation of Sections 502(b) and
506(b) of such Bankruptcy Code, 11 U.S.C. (S) 502(b) and (S) 506(b), under and
in connection with the Credit Agreement, including, without limitation under (a)
the Notes, and (b) the Letters of Credit, including any Reimbursement
Obligations with respect thereto (all such obligations being hereinafter
collectively called the "Liabilities"), and each of the Guarantors further
agrees, jointly and severally, to pay all reasonable expenses (including
reasonable attorneys' fees and legal expenses) paid or incurred by the Agent and
any Lender in endeavoring to collect the Liabilities, or any part thereof, and
in enforcing this Guaranty. Anything herein contained to the contrary
notwithstanding, the amount of this Guaranty which shall be enforceable against
any one Guarantor, however, shall not exceed the maximum amount which such
Guarantor could pay under this Guaranty without having such payment set aside as
a fraudulent transfer or conveyance or similar action under such Bankruptcy Code
or any applicable state law.
1.2 Bankruptcy. Each of the Guarantors hereby agrees that, in the event
of the dissolution or insolvency of the Borrower or any Guarantor, or the
inability or failure of the Borrower or any Guarantor to pay its debts as they
become due, or an assignment by the Borrower or any Guarantor for the benefit of
creditors, or the commencement of any case or proceeding in respect of the
Borrower or any Guarantor under any bankruptcy, insolvency or similar laws, and
if such event shall occur at a time when any of the Liabilities may not then be
due and payable, such Guarantor will pay to the Lender forthwith the full
amount which would be payable hereunder by such Guarantor as if all Liabilities
were then due and payable.
1.3 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 Event of Default under the
Credit Agreement, the Agent and each Lender and each subsequent holder of any of
the Notes is hereby authorized by each of the Guarantors without notice to the
Borrower, any Guarantor or 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, that Lender or that
subsequent holder to or for the credit or the account of any Guarantor, whether
or not matured, against and on account of the obligations and liabilities of the
Borrower and the Guarantors to the Agent, such Lender or such subsequent holder
under the Credit Documents, irrespective of whether or not (a) the Agent, such
Lender or such subsequent holder shall have made any demand hereunder, or (b)
the principal of or the interest on the Loans, the L/C Obligations or any other
amounts due hereunder shall have become due and payable and although said
obligations and liabilities, or any of them, may be contingent or unmatured.
1.4 Guaranty Absolute, etc. This Guaranty shall in all respects be a
continuing, absolute and unconditional Guaranty, and shall remain in full force
and effect (notwithstanding, without limitation, the dissolution of the Borrower
or any Guarantor or that at any time or from time to time all Liabilities may
have been paid in full), until all Liabilities (including any renewals,
-3-
extensions and/or rearrangements of any thereof) and all interest thereon and
all reasonable expenses (including reasonable attorneys' fees and legal
expenses) paid or incurred by the Agent and the Lenders in endeavoring to
collect the Liabilities and in enforcing this Guaranty shall have been finally
paid in full and the Commitments have been permanently terminated.
1.5 Reinstatement. Each of the Guarantors further agrees that, if at any
time all or any part of any payment theretofore applied by the Agent or any
Lender to any of the Liabilities is or must be rescinded or returned by the
Agent or any Lender for any reason whatsoever (including, without limitation,
the insolvency, bankruptcy or reorganization of the Borrower or any Guarantor),
such Liabilities shall, for the purposes of this Guaranty, to the extent that
such payment is or must be rescinded or returned, be deemed to have continued in
existence, notwithstanding such application by the Agent or any Lender, and this
Guaranty shall continue to be effective or be reinstated, as the case may be, as
to such Liabilities, all as though such application by the Agent or any Lender
had not been made.
1.6 Rights of the Agent and Lenders. The Agent or any Lender may, from
time to time, at its sole discretion and without notice to any of the
Guarantors, take any or all of the following actions:
(a) retain or obtain a lien upon or a security interest in any
property to secure any of the Liabilities or any obligation hereunder;
(b) retain or obtain the primary or secondary obligation of any
obligor or obligors, in addition to the Guarantors, with respect to any of
the Liabilities;
(c) extend or renew for one or more periods (whether or not longer
than the original period), alter or exchange any of the Liabilities, or
release or compromise any obligation of any or all of the Guarantors
hereunder or any obligation of any nature of any other obligor with respect
to any of the Liabilities;
(d) extend or renew for one or more periods (whether or not longer
than the original period) or release, compromise, alter or exchange any
obligations of any nature of any obligor with respect to any such property
securing any of the Liabilities; or
(e) resort to any or all of the Guarantors for payment of any of the
Liabilities, whether or not the Agent or the Lenders shall have proceeded
against the Borrower or any other Guarantor under this Guaranty or any
other obligor primarily or secondarily obligated with respect to any of the
Liabilities (all of the actions referred to in this clause being hereby
expressly waived by each of the Guarantors).
1.7 Application of Payments. Any amounts received by the Agent or any
Lender from whatsoever source on account of the Liabilities may be applied by it
toward the payment of such of the Liabilities, and in such order of application,
as the Agent or any Lender may from time to time elect.
-4-
1.8 Waiver.
(a) Each of the Guarantors hereby expressly waives:
(i) notice of the acceptance by the Agent or any Lender of this
Guaranty;
(ii) notice of the existence or creation or non-payment of all
or any of the Liabilities;
(iii) presentment for payment, demand, protest, notice of intent
to accelerate, notice of acceleration, notice of dishonor and all
other notices whatsoever;
(iv) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any
security for or guaranty of any of the foregoing; and
(v) any rights under, or any requirements imposed by, Chapter 34
of the Texas Business and Commerce Code, as amended, and any other
rights or requirements that the Agent or any Lender first enforce any
rights or remedies against the Borrower or any other Guarantor or
other obligor or against any collateral for any of Liabilities.
(b) No delay on the part of the Agent or any Lender in the exercise
of any right or remedy shall operate as a waiver thereof, and no single or
partial exercise by the Agent or any Lender of any right or remedy shall
preclude other or further exercise thereof or the exercise of any other
right or remedy; nor shall any modification or waiver of any of the
provisions of this Guaranty be binding upon the Agent or any Lender except
as expressly set forth in a writing duly signed and delivered on behalf of
the Agent or such Lender. No action of the Agent or any Lender permitted
hereunder shall in any way affect or impair the rights of the Agent or any
Lender and the obligations of the Guarantor under this Guaranty. The
obligations of each of the Guarantors under this Guaranty shall be absolute
and unconditional irrespective of any circumstance whatsoever which might
constitute a legal or equitable discharge or defense of any Guarantor. Each
of the Guarantors hereby acknowledges that there are no conditions to the
effectiveness of this Guaranty.
1.9 Subrogation. No payment made by or for the account of any Guarantor
pursuant to this Guaranty shall entitle such Guarantor or any other Guarantor by
subrogation or otherwise to demand or receive any payments by the Borrower or
from or out of any properties of the Borrower until the Liabilities shall have
been paid in full. None of the Guarantors shall exercise any right or remedy
against the Borrower or any properties of the Borrower by reason of any
performance by any Guarantor of this Guaranty until the Liabilities shall have
been paid in full.
-5-
1.10 Subordination. Each of the Guarantors hereby subordinates its right
to payment from the Borrower of any obligations, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or hereafter
existing or due or to become due (collectively, the "Guarantor Liabilities"), to
the Liabilities of the Borrower to the Agent and the Lenders, and no payments or
other distributions whatsoever in respect of any such Guarantor Liabilities
shall be made, nor shall any property or assets of the Borrower be applied to
the purchase, acquisition or retirement of any such Guarantor Liabilities;
provided that payments on such Guarantor Liabilities may be made at any time no
Event of Default shall have occurred and be continuing. Any payments received
by any Guarantor in respect of any such Guarantor Liabilities owing to it other
than as expressly provided herein shall be held in trust for the Agent and the
Lenders.
1.11 Excess Liabilities. The creation or existence from time to time of
Liabilities in excess of the amount to which the right of recovery under this
Guaranty is limited, if any, is hereby authorized, without notice to any
Guarantor, and shall in no way affect or impair the rights of the Lender and the
obligation of the Guarantors under this Guaranty.
1.12 Successors, Transferees and Assigns. The Agent and each Lender may,
from time to time, without notice to any Guarantor, assign or transfer any or
all of the Liabilities or any interest therein in accordance with the terms of
the Credit Agreement; and, notwithstanding any such assignment or transfer or
any subsequent assignment or transfer thereof, such Liabilities shall be and
remain Liabilities for the purposes of this Guaranty, and each and every
immediate and successive assignee or transferee of any of the Liabilities or of
any interest therein shall, to the extent of the interest of such assignee or
transferee in the Liabilities, be entitled to the benefits of this Guaranty to
the same extent as if such assignee or transferee were the transferring Lender;
provided, however, that, unless the transferring Lender shall otherwise consent
in writing, the transferring Lender shall have an unimpaired right, prior and
superior to that of any such assignee or transferee, to enforce this Guaranty,
for the benefit of the transferring Lender as to those of the Liabilities which
the transferring Lender has not assigned or transferred.
ARTICLE II
REPRESENTATIONS AND WARRANTIES
2.1 Independent Means of Obtaining Information. Each of the Guarantors
hereby represents and warrants to the Agent and each Lender that it now has and
will use its best commercial efforts to continue to have independent means of
obtaining information concerning the affairs, operations, financial condition,
business and prospects of the Borrower.
2.2 Authorization; No Conflict. Each of the Guarantors hereby further
represents and warrants to the Agent and each Lender that
(a) the execution and delivery of this Guaranty, and the performance
by such Guarantor of its obligations hereunder, are within the Guarantor's
corporate powers and
-6-
have been duly authorized by all necessary corporate action on the part of
such Guarantor; and
(b) this Guaranty has been duly executed and delivered on behalf of
such Guarantor and is the legal, valid and binding obligation of such
Guarantor, 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 equitable principles relating to or limiting creditors' rights
generally, the making and performance of which do not and will not
contravene or conflict with the articles or certificate of incorporation
and by-laws or other corporate governance documents of any Guarantor or
violate or constitute a default under any law, any presently existing
requirement or restriction imposed by any judicial, arbitral or
governmental instrumentality or any agreement, instrument or indenture by
which such Guarantor is bound.
2.3 Validity and Binding Nature. This Guaranty shall be binding upon
each of the Guarantors, and upon the successors and assigns of each of the
Guarantors, and shall include any successor or successors, whether immediate or
remote, to such entity; provided, however, that no Guarantor may assign any of
its obligations hereunder without the prior written consent of the Agent and the
Lenders except as may be provided in the Credit Agreement.
ARTICLE III
EVENTS OF DEFAULT
The Guarantor shall be in default under this Guaranty upon the occurrence
of and during the continuance of any of the events or conditions defined as
Events of Default in the Credit Agreement.
ARTICLE IV
MISCELLANEOUS PROVISIONS
4.1 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Arbitration.
(a) This Guaranty 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.
(b) EACH OF THE GUARANTORS HEREBY WAIVES ITS RIGHT TO RESOLVE
DISPUTES, CLAIMS, AND CONTROVERSIES ARISING FROM THIS GUARANTY, ANY OTHER
CREDIT DOCUMENT OR ANY MATTER IN CONNECTION THEREWITH, INCLUDING, WITHOUT
LIMITATION, CONTRACT DISPUTES AND TORT CLAIMS, THROUGH ANY COURT
-7-
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 of the Guarantors
represents to the Lenders that this waiver is made knowingly and
voluntarily after consultation with and upon advice of its counsel and is a
material part of this Guaranty. 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 Agent and
the Guarantors. 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 either 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.
(c) To the fullest extent permitted by applicable law, each of the
Guarantors agrees that any court proceeding or litigation permitted by
Section 4.1(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, each of the Guarantors 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 litigation as set forth above and irrevocably agree to be bound by any
judgment rendered thereby in connection with such
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litigation. To the fullest extent permitted by applicable law, the
Guarantor 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, each
of the Guarantors 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 any Guarantor 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, such
Guarantor hereby irrevocably waives to the fullest extent permitted by
applicable law, such immunity in respect of its obligations under this
Guaranty.
(d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH OF THE
GUARANTORS VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY ITS
ACCEPTANCE HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY COURT
PROCEEDING OR LITIGATION PERMITTED BY SECTION 4.1(B) AND WAIVES ANY RIGHT
TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON
CONTRACT, TORT OR OTHERWISE) ARISING OUT OF THIS GUARANTY OR ANY OTHER
CREDIT DOCUMENT, ANY OTHER RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN THE
AGENT, LENDERS, THE BORROWER AND/OR ANY GUARANTOR, AND AGREES THAT ANY SUCH
ACTION, PROCEEDING OR DISPUTE TO THE EXTENT PERMITTED BY SECTION 4.1(B)
SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO THE LENDER TO PROVIDE THE LOANS AND THE LETTERS OF
CREDIT.
4.2 Severability. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable laws, but if any provision of this Guaranty shall be prohibited by or
invalid under such laws, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
4.3 Notices. Except as otherwise specified herein, all notices under
this Guaranty shall be in writing (including cable, telecopy or telex) and shall
be given to any Guarantor at its address, telecopier number or telex number set
forth on the signature page hereof or such other address, telecopier number or
telex number as such Guarantor may hereafter specify by notice to the Agent,
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. 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 on the signature pages hereof
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 on the signature pages hereof
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and the answerback 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, certified or registered with return receipt requested, or
(v) if given by any other means, when delivered at the addresses specified on
the signature page hereof.
IN WITNESS WHEREOF, each of the Guarantors has caused this Guaranty to be
duly executed and delivered by its duly authorized officer as of the date first
above written.
----------------
Address: By:
------------------------------------
------------------- Name:
----------------------------------
------------------- Title:
---------------------------------
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EXHIBIT 4.1B
[AMENDED AND RESTATED] STOCK PLEDGE AGREEMENT
THIS [AMENDED AND RESTATED] STOCK PLEDGE AGREEMENT (this "Agreement") dated
as of November 12, 1998, is by and between ___________________________, a
________ corporation ("Pledgor"), and Bank One, Texas, National Association, as
Agent for the Lenders ("Secured Party").
RECITALS:
[A. Quanta Services, Inc., a Delaware corporation (the "Borrower")
the various financial institutions as are or may from time to time become
parties thereto (collectively, the "Lenders"), National City Bank as Syndication
Agent for the Lenders, NationsBank, N.A., as Documentation Agent for the
Lenders, and BankBoston, N.A., LaSalle National Bank, and The Bank of Nova
Scotia, as Co-Agents for the Lenders, and and Secured Party have entered into
that certain Second Amended and Restated Secured Credit Agreement dated as of
November 12, 1998 (herein, as the same may be amended, modified, supplemented,
extended, rearranged, and/or restated from time to time, collectively called the
"Credit Agreement"), pursuant to which, upon the terms and conditions therein
set forth, (i) the Lenders have agreed to from time to time make Revolving Loans
to the Borrower, which Revolving Loans are evidenced by Notes of the Borrower
dated November 12, 1998, in the aggregate original principal amount of
$175,000,000, payable to the order of the Lenders, and the Agent, in its sole
discretion, may make Agent Loans to the Borrower in the aggregate original
principal amount of $5,000,000 pursuant to its Note (together, herein, as the
same may be amended, modified, supplemented, extended, rearranged, and/or
restated from time to time, together with any notes given by Pledgor in
extension, replacement, rearrangement, modification and/or substitution thereof
or therefor, collectively called the "Notes"), and (ii) the Agent on behalf of
the Lenders has agreed to issue Letters of Credit for the account of the
Borrower.]
[A. [Pledgor] [Quanta Services, Inc., a Delaware corporation (the
"Borrower")], the various financial institutions as are parties thereto, and the
Agent have entered into that certain Amended and Restated Credit Agreement dated
as of August 3, 1998, as amended by that certain First Amendment to Credit
Agreement dated as of September 29, 1998 (the "Prior Credit Agreement"),
pursuant to which, upon the terms and conditions set forth therein, such lenders
agreed to make loans to the Borrower, and the Agent, on behalf of such lenders,
agreed to issue letters of credit for the account of the Borrower in the
aggregate principal amount of $125,000,000, and Pledgor has executed and
delivered that certain Stock Pledge Agreement in connection therewith dated as
of ____________, 1998 (the "Prior Agreement")].
B. Certain of the parties to the Prior Credit Agreement have entered
into that certain Second Amended and Restated Secured Credit Agreement dated as
of November 12, 1998, which amends and restates in its entirety the Prior Credit
Agreement (herein, as the same may be amended, modified, supplemented, extended,
rearranged and/or restated from time to time, called the "Credit Agreement"),
pursuant to which, upon the terms and conditions therein set forth, (i)
Stock Pledge Agreement - Page 1
the various financial institutions as are parties thereto (collectively, the
"Lenders") have agreed to from time to time make Revolving Loans to [Pledgor]
[the Borrower], which Revolving Loans are evidenced by Notes of [Pledgor] [the
Borrower] dated November 12, 1998, in the aggregate original principal amount of
$175,000,000, payable the order of the Lenders, respectively, and the Agent may,
in its sole discretion, make Agent Loans to [Pledgor] [the Borrower], in an
aggregate principal amount of up to $5,000,000 pursuant to its Note (herein, as
amended, extended, modified, rearranged and/or supplemented from time to time,
together with any promissory notes given in extension, replacement,
rearrangement, modification and/or substitution thereof or therefor,
collectively called the "Notes") and (ii) the Agent on behalf of the Lenders has
agreed to issue Letters of Credit for the account of [Pledgor] [the Borrower].]
[B.][C.] Under the terms of the Credit Agreement, Pledgor is required
by the Lenders to provide certain security in respect of the liabilities under
the Credit Agreement, and the Lenders require that this Agreement be entered
into by Pledgor as a condition precedent to the Revolving Loans to be made and
the Letters of Credit to be issued pursuant to the terms and conditions of the
Credit Agreement.
[C.][D.] As a condition precedent to the making of the Revolving
Loans and the issuance of the Letters of Credit under the Credit Agreement,
Pledgor is required to execute and deliver this Agreement [which amends and
restates in its entirety the Prior Agreement].
NOW THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Definitions.
1.1 Unless otherwise defined herein, capitalized terms have the same
meaning assigned to such terms in the Credit Agreement.
1.2 "UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of Texas; provided that if by mandatory provisions of law
the perfection or the effect of perfection or non-perfection of the security
interests granted pursuant to Section 2, as well as all other security interests
created or assigned as additional security for the Obligations (defined
hereinafter) pursuant to the provisions of this Agreement in any Collateral
(defined hereinafter) is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than the State of Texas, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection.
Stock Pledge Agreement - Page 2
Section 2. Security Interest and Pledge.
2.1. Security Interest and Pledge. Subject to the terms of this
Agreement and to secure the Obligations, Pledgor hereby pledges, assigns,
grants, conveys and transfers to Secured Party a first priority security
interest in all of Pledgor's rights, title and interest in, to and under the
following property (such property being hereinafter called the "Collateral"):
(a) all of shares of capital stock or membership interests, as
applicable, in the Persons listed on the attached Schedule 1 and
any other entities which hereafter become Subsidiaries of [Pledgor]
[the Borrower] or any of its Subsidiaries in which Pledgor has an
ownership interest (collectively, the "Companies");
(b) any other shares of capital stock or membership interests hereafter
pledged to Secured Party pursuant to this Agreement;
(c) all "investment property" as such term is defined in (S)9.115(a)(6)
of the UCC with respect thereto;
(d) any "security entitlement" as such term is defined in
(S) 8.102(a)(17) of the UCC with respect thereto; and
(e) all products and proceeds of the foregoing, including, without
limitation, all distributions, dividends, stock dividends,
securities, and other property, rights, and interests that Pledgor
is at any time entitled to receive on account of the same (all of
the foregoing described in this clause (e), the "Collateral
Proceeds");
provided that in no event shall Secured Party's security interest encumber
capital stock of any of the Companies which is a "controlled foreign
corporation" (within the meaning of the Code) representing more than sixty-five
percent (65%) of the combined voting power of all classes of stock entitled to
vote (the "Voting Stock") of any such entity.
2.2. Obligations. The Collateral shall secure the following obligations,
indebtedness and liabilities (all such obligations, indebtedness and liabilities
being hereinafter sometimes called the "Obligations"):
(a) the payment of the indebtedness evidenced by the Notes;
(b) all obligations of [Pledgor] [the Borrower] to the Lenders under
the Credit Agreement;
(c) the performance and payment of the obligations of [Pledgor] [the
Borrower] and the Guarantors under any of the Credit Documents,
including, without limitation, the performance and payment of
Pledgor's obligations hereunder; and
Stock Pledge Agreement - Page 3
(d) all extensions, renewals, rearrangements and modifications of any
of the foregoing.
Section 3. Representations and Warranties. Pledgor represents and warrants
to Secured Party as follows:
3.1. Title. Pledgor owns or, with respect to Collateral acquired after
the date hereof, Pledgor will own, legally and beneficially, the Collateral free
and clear of any Lien, security interest, pledge, claim, or other encumbrance or
any right or option on the part of any third person to purchase or otherwise
acquire the Collateral or any part thereof, except for the security interest
granted hereunder and Permitted Liens. Pledgor has the unrestricted right to
pledge the Collateral as contemplated hereby.
3.2. Organization and Authority. Neither the execution, delivery or
performance by Pledgor of this Agreement nor compliance by it with the terms and
provisions hereof, nor the consummation of the transactions contemplated herein,
will (i) contravene any applicable provision of any law, statute, rule or
regulation, or any order, writ, injunction or decree of any court or
governmental instrumentality; or (ii) conflict with or result in any breach of
any term, covenant, condition or other provision of, or constitute a default
under, or (other than pursuant to the Security Documents) result in the creation
or imposition of (or the obligation to create or impose) any Lien upon any of
the property or assets of Pledgor under the terms of any contractual obligation
to which Pledgor is a party or by which it or any of its properties or assets
are bound or to which it may be subject.
3.3. Location of Pledgor. As of the date hereof, the principal place of
business and chief executive office of Pledgor, and the place where Pledgor
keeps its books and records, is located at the address set forth opposite the
name of Pledgor on the signature page hereof.
3.4. First Priority Perfected Security Interest. This Agreement has been
duly authorized, executed and delivered by the Pledgor. This Agreement creates
in favor of Secured Party a first priority security interest in the Collateral
currently in existence, which will be perfected upon the filing of a duly
executed and completed UCC-1 Financing Statement in the Office of the Secretary
of State of the state listed in the address set forth opposite the name of
Pledgor on the signature page hereof. There is no financing statement (or other
evidence of a Lien or security interest) now on file in any public office
covering any of the Collateral.
3.5 No Consents. No consent of, or notice to, any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the grant by Pledgor
of the Liens granted hereby or for the execution, delivery or performance of
this Agreement by Pledgor, other than the filing of financing statements as
provided in Section 3.4 and the filing of an investment act notice in connection
with the stock of any Company organized in Canada and except for such other
consents, notices or filings that have been obtained or made or that as of the
date hereof are not
Stock Pledge Agreement - Page 4
required to have been obtained or made and may be obtained or made, as the case
may be, when necessary.
Section 4. Covenants. Pledgor covenants and agrees with Secured Party
that:
4.1. Encumbrances. Except as permitted by the Credit Agreement, Pledgor
shall not create, permit, or suffer to exist, and shall defend the Collateral
against, any Lien on the Collateral except the pledge and security interest of
Secured Party hereunder except for Permitted Liens, and shall defend Pledgor's
rights in the Collateral and Secured Party's security interest in the Collateral
against the claims of all persons and entities (other than any person or entity
claiming by, through or under Secured Party or any obligee of the Obligations).
4.2. Sale of Collateral. Pledgor shall not sell, assign, or otherwise
dispose of the Collateral or any part thereof except as permitted by the Credit
Agreement.
4.3. Dividends. If Pledgor shall become entitled to receive or shall
receive any distribution (including, without limitation, any dividend or
distribution in connection with any reclassification, increase, or reduction of
capital or issued in connection with any reorganization), option or rights
constituting Collateral, whether as an addition to, in substitution of, or in
exchange for any Collateral or otherwise, Pledgor agrees to accept the same as
Secured Party's agent and to hold the same in trust for Secured Party and to
deliver the same (to the extent in form capable of delivery) promptly to Secured
Party in the exact form received, with the appropriate endorsement of Pledgor
when necessary, to be held by Secured Party, as additional Collateral for the
Obligations, subject to the terms hereof. Any sums paid upon or in respect of
the Collateral upon the liquidation or dissolution of the issuer thereof in
violation of the Credit Agreement shall be paid over to Secured Party to be held
by it as additional Collateral for the Obligations subject to the terms hereof
except as otherwise provided in the Credit Agreement; and in case any
distribution shall be made on or in respect of the Collateral while a Default or
an Event of Default shall be continuing or any property shall be distributed
while a Default or an Event of Default shall be continuing upon or with respect
to the Collateral pursuant to any recapitalization or reclassification of the
capital of the issuer thereof or pursuant to any reorganization of the issuer
thereof, the property so distributed shall be delivered to the Secured Party to
be held by it, as additional Collateral for the Obligations, subject to the
terms hereof. All sums of money and property so paid or distributed in respect
of the Collateral that are received by Pledgor shall, until paid or delivered to
Secured Party, be held by Pledgor in trust as additional security for the
Obligations, provided that except to the extent that such sums of money or
property have theretofore been applied against the Obligations in accordance
with the Credit Agreement, such sums of money or property shall forthwith be
delivered to Pledgor at such time as no Default or Event of Default shall be
continuing under the Credit Agreement.
4.4. Further Assurances. At any time and from time to time, upon the
request of Secured Party, and at the sole expense of Pledgor, Pledgor shall
promptly execute and deliver all
Stock Pledge Agreement - Page 5
such further instruments and documents and take such further action as Secured
Party may deem reasonably necessary or desirable to preserve and perfect its
security interest in the Collateral and carry out the provisions and purposes of
this Agreement, including, without limitation, the execution and filing of such
financing statements as Secured Party may require. A carbon, photographic, or
other reproduction of this Agreement or of any financing statement covering the
Collateral or any part thereof shall be sufficient as a financing statement and
may be filed as a financing statement to the extent provided by applicable law.
4.5. Inspection Rights. Upon reasonable notice from Secured Party,
Pledgor shall permit Secured Party and its representatives to examine, inspect,
and copy Pledgor's books and records concerning ownership of the Collateral at
any reasonable time during normal business hours and as often as Secured Party
may desire.
4.6. Notification. Pledgor shall promptly after it has knowledge
thereof, notify Secured Party of (i) any Lien upon or claim made or threatened
against the Collateral other than Permitted Liens, (ii) any change in its
principal place of business, its chief executive office or the place where its
books and records are maintained, and (iii) any change in its name, state of
incorporation or organization, its type of entity or its taxpayer identification
number.
4.7. Books and Records. Pledgor shall xxxx its books and records to
reflect the security interest of Secured Party under this Agreement.
4.8. Receipt after Default. If any Collateral is received by Pledgor
during the continuance of an Event of Default, Pledgor shall pay over to Secured
Party all such Collateral on the day received, including the cash and checks
endorsed by Pledgor evidencing the Collateral. Pledgor shall not commingle the
Collateral with any other funds, proceeds or monies of Pledgor, and shall keep
such proceeds separate and apart from any other funds, proceeds or monies of
Pledgor and shall hold the Collateral in trust for Secured Party until same
shall be paid over to Secured Party as agreed to herein.
4.9 Pledge of Shares of Controlled Foreign Corporation.
(a) In the event that the Collateral hereunder would, but for this
Section 4.9(a), represent more than sixty-five percent (65%) of the
Voting Stock of a Company which is a controlled foreign
corporation, then the number of shares of Voting Stock of such
Company in excess of such sixty-five percent (65%) automatically
shall be released from the Lien of, and the terms and provisions
of, this Agreement.
(b) In the event that the Collateral hereunder represents less than
sixty-five percent (65%) of the Voting Stock of any Company which
is a controlled foreign corporation (or, if less, 100% of the
Voting Stock of such Company owned by Pledgor), then Pledgor will
promptly pledge additional capital stock to increase the
Stock Pledge Agreement - Page 6
number of shares pledged hereunder to such sixty-five percent (65%)
(or, if less, 100% of the Voting Stock of such Company owned by
Pledgor).
Section 5. Rights of Secured Party and Pledgor.
5.1. Power of Attorney. Pledgor hereby irrevocably constitutes and
appoints Secured Party and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead and in the name of Pledgor or in its
own name, from time to time in Secured Party's discretion during the continuance
of an Event of Default and prior to the Collateral Termination Date, to take any
and all action and to execute any and all documents and instruments which may be
necessary or desirable to accomplish the purposes of this Agreement and, without
limiting the generality of the foregoing, hereby gives Secured Party the power
and right on behalf of Pledgor and in its own name to do any of the following
after the occurrence and during the continuance of an Event of Default and to
the extent permitted by applicable laws, without notice to or the consent of
Pledgor:
(a) to demand, xxx for, collect, or receive in the name of Pledgor or
in its own name, any money or property at any time payable or
receivable on account of or in exchange for any of the Collateral
and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, or any other instruments for the payment
of money under the Collateral;
(b) to pay or discharge taxes, liens, security interests, or other
encumbrances (other than Permitted Liens) levied or placed on or
threatened against the Collateral;
(c) (i) to direct any parties liable for any payment under any of the
Collateral to make payment of any and all monies due and to become
due thereunder directly to Secured Party or as Secured Party shall
direct; (ii) to receive payment of and receipt for any and all
monies, claims, and other amounts due and to become due at any time
in respect of or arising out of any Collateral; (iii) to sign and
endorse any drafts, assignments, proxies, stock powers,
verifications, notices, and other documents relating to the
Collateral; (iv) to commence and prosecute any suit, actions or
proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any part thereof and to
enforce any other right in respect of any Collateral; (v) to defend
any suit, action, or proceeding brought against Pledgor with
respect to any Collateral; (vi) to settle, compromise, or adjust
any suit, action, or proceeding described in clause (v) above and,
in connection therewith, to give such discharges or releases as
Secured Party may deem appropriate; (vii) to exchange any of the
Collateral for other property upon any merger, consolidation,
reorganization, recapitalization, or other readjustment of the
issuer thereof and, in connection therewith, deposit any of the
Collateral with any committee, depositary, transfer agent,
registrar, or other designated agency upon such terms as Secured
Party may determine; (viii) to add or release any guarantor,
Stock Pledge Agreement - Page 7
endorser, surety, or other party to any of the Collateral or the
Obligations; and (ix) to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral as
fully and completely as though Secured Party were the absolute
owner thereof for all purposes, and to do, at Secured Party's
option and Pledgor's expense, at any time, or from time to time,
all acts and things which Secured Party deems necessary to protect,
preserve, or realize upon the Collateral and Secured Party's
security interest.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Secured Party shall not be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or in its capacity as attorney-in-fact
except acts or omissions constituting or resulting from its willful misconduct
or gross negligence. This power of attorney is conferred on Secured Party
solely to protect, preserve, and realize upon its security interest in the
Collateral.
5.2. Voting Rights. Until written notice shall be given to Pledgor in
accordance with Section 5.02(d) that Secured Party has exercised its rights
under Section 5.02(d) to vote the Collateral (provided, however, if Secured
Party is prevented from providing such notice as a result of Section 362 of the
United States Bankruptcy Code or similar law Pledgor shall be entitled to
exercise such rights so long as no Event of Default shall have occurred and be
continuing), Pledgor shall be entitled to exercise any and all voting and other
rights relating or pertaining to the Collateral or any part thereof (and the
Secured Party shall execute and deliver (or cause to be executed and delivered)
to Pledgor all such proxies and other instruments as Pledgor may reasonably
request for the purpose of enabling Pledgor to exercise the voting and other
rights which it is entitled to exercise pursuant to this sentence).
5.3. Collateral Proceeds. Until written notice shall be given to Pledgor
in accordance with Section 5.02(d) that Secured Party has exercised its rights
under Section 5.02(d) to vote the Collateral, Pledgor shall be entitled to
receive and collect for its own use all Collateral Proceeds.
5.4. Performance by Secured Party of Pledgor's Obligations. If an Event
of Default has occurred and is continuing or if Pledgor fails to perform or
comply with any of its agreements contained herein and Secured Party itself
shall cause performance of or compliance with such agreement, the reasonable
expenses of Secured Party, together with interest thereon at the rate of
interest provided in the Credit Agreement, shall be payable by Pledgor to
Secured Party on demand and shall constitute Obligations secured by this
Agreement.
5.5. Secured Party's Duty of Care. Other than the exercise of reasonable
care in the physical custody of the Collateral while held by Secured Party
hereunder, Secured Party shall have no responsibility for or obligation or duty
with respect to all or any part of the Collateral or any matter or proceeding
arising out of or relating thereto, including, without limitation, any
Stock Pledge Agreement - Page 8
obligation or duty to collect any sums due in respect thereof or to protect or
preserve any rights against prior parties or any other rights pertaining
thereto, it being understood and agreed that Pledgor shall be responsible for
preservation of all rights in the Collateral. Without limiting the generality of
the foregoing, Secured Party shall be conclusively deemed to have exercised
reasonable care in the custody of the Collateral if Secured Party takes such
action, for purposes of preserving rights in the Collateral, as Pledgor may
reasonably request in writing, but no failure or omission or delay by Secured
Party in complying with any such request by Pledgor, and no refusal by Secured
Party to comply with any such request by Pledgor, shall of itself be deemed to
be a failure to exercise reasonable care.
Section 6. Events of Default and Remedies.
6.1. Events of Default. Pledgor shall be in default under this Agreement
upon the occurrence of and during the continuation of any of the events or
conditions defined as Events of Default in the Credit Agreement (an "Event of
Default").
6.2. Rights and Remedies. Prior to the Collateral Termination Date, upon
the occurrence of an Event of Default and so long as the same shall be
continuing, Secured Party shall have the following rights and remedies to the
extent not prohibited by applicable laws:
(a) In addition to all other rights and remedies granted to Secured
Party in this Agreement and in any other instrument or agreement
securing, evidencing, or relating to the Obligations, Secured Party
shall have all of the rights and remedies of a secured party under
the UCC. Without limiting the generality of the foregoing, Secured
Party may (i) without demand or notice to Pledgor, collect,
receive, or take possession of the Collateral or any part thereof,
(ii) sell or otherwise dispose of the Collateral, or any part
thereof, in one or more parcels at public or private sale or sales,
at Secured Party's offices or elsewhere, for cash, on credit, or
for future delivery without assumption of any credit risk, and/or
(iii) bid and become a purchaser at any such sale free of any right
or equity of redemption in Pledgor, which right or equity is hereby
expressly waived and released by Pledgor. Upon the request of
Secured Party, Pledgor shall assemble the Collateral and make it
available to Secured Party at any place designated by Secured Party
that is reasonably convenient to Pledgor and Secured Party. Pledgor
agrees that Secured Party shall not be obligated to give more than
ten (10) days' prior written notice of the time and place of any
public sale or of the time after which any private sale may take
place and that such notice shall constitute reasonable notice of
such matters. Pledgor shall be liable for all reasonable expenses
of retaking, holding, preparing for sale, or the like, and all
reasonable attorneys' fees and other reasonable expenses incurred
by Secured Party in connection with the collection of the
Obligations and the enforcement of Secured Party's rights under
this Agreement, in each case during the continuance of an Event of
Default, all of which expenses and fees shall constitute additional
Obligations secured by this
Stock Pledge Agreement - Page 9
Agreement. Secured Party may apply the Collateral against the
Obligations then due and payable in such order and manner as it
shall elect in its sole discretion. Pledgor shall remain liable for
any deficiency if the proceeds of any sale or disposition of the
Collateral are insufficient to pay the Obligations. Pledgor waives
all rights of marshaling in respect of the Collateral.
(b) Secured Party may cause any or all of the Collateral held by it to
be transferred into the name of Secured Party or the name or names
of Secured Party's nominee or nominees (in each case as pledgee
hereunder).
(c) Secured Party shall be entitled to receive all cash distributions
payable in respect of the Collateral. Pledgor shall execute notice
letters, in form and substance satisfactory to Secured Party (as
and when requested by Secured Party), notifying the Borrower of the
fact of this Agreement and directing the Borrower to make payment
directly to Secured Party of all of the distributions which are due
and owing to Pledgor by the Borrower, and directing the Borrower to
accompany each transmission of such distributions to Secured Party
with a report in such form as Secured Party may reasonably require
in order to identify (i) the type of distribution being made, and
(ii) the calculations made by the Borrower to determine the amount
of the distribution distributed to Secured Party.
(d) Secured Party shall have the right, but shall not be obligated to,
exercise or cause to be exercised all voting rights and powers in
respect of the Collateral, and Pledgor shall deliver to Secured
Party, if requested by Secured Party, irrevocable proxies with
respect to the Collateral in form satisfactory to Secured Party.
Because of applicable securities laws, including without limitation, the
Securities Act of 1933, as amended, the securities laws of Texas and other
applicable state securities laws, there may be legal restrictions or limitations
affecting attempts of Secured Party to dispose of the Collateral in the
enforcement of its rights and remedies hereunder. Secured Party is hereby
authorized by Pledgor, but not obligated, upon the occurrence and during the
continuance of an Event of Default, to the extent permitted by applicable law,
to sell all or any part of the Collateral at private sale, subject to investment
letters or in any other manner which will not require the Collateral or any part
thereof, to be registered in accordance with the Securities Act of 1933, as
amended, or the rules and regulations promulgated thereunder, or any other
applicable securities law or regulation. Pledgor specifically agrees that under
these circumstances, such a sale is a commercially reasonable method of
disposition of the Collateral. Secured Party is also hereby authorized by
Pledgor, but not obligated, to take such actions, give such notices, obtain such
rulings and consents, and do such other things as Secured Party may deem
appropriate in the event of such a sale or disposition of any of the Collateral.
Pledgor acknowledges that Secured Party may, in its reasonable discretion,
approach a restricted number of potential purchasers and that a sale under such
circumstances may yield a lower price for the Collateral or any part or parts
thereof than would otherwise be obtainable if the same were registered and sold
in the open market.
Stock Pledge Agreement - Page 10
Pledgor agrees that such private sale shall constitute a commercially reasonable
method of disposing of the Collateral in view of the time, expense, and
potential liability to the parties of such transactions of registration of the
Collateral in accordance with applicable securities laws.
6.3. INDEMNITY. PLEDGOR AGREES TO INDEMNIFY AND SAVE AND HOLD SECURED
PARTY HARMLESS FROM AND AGAINST ANY CLAIM OF ANY THIRD PERSON TO ANY COLLATERAL
AND ANY CLAIM BY ANY OTHER PARTY OR ENTITY ARISING (INCLUDING, WITHOUT
LIMITATION, A BANKRUPTCY TRUSTEE OR THE ISSUER OF THE OPTION SHARES), DIRECTLY
OR INDIRECTLY, AS A RESULT OF SECURED PARTY'S ENTERING INTO THIS AGREEMENT
AND/OR PURSUING ANY OF ITS RIGHTS AND REMEDIES HEREUNDER, PROVIDED THAT PLEDGOR
SHALL HAVE NO OBLIGATION UNDER THIS PROVISION TO SECURED PARTY WITH RESPECT TO
LIABILITIES OF OR CLAIMS AGAINST SECURED PARTY THAT ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE JUDGMENT TO HAVE RESULTED
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SECURED PARTY.
Section 7. Miscellaneous.
7.1. No Waiver; Cumulative Remedies. No failure on the part of Secured
Party to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, or privilege under this Agreement shall operate as
a waiver thereof, nor shall any single or partial exercise of any right, power,
or privilege under this Agreement preclude any other or further exercise thereof
or the exercise of any other right, power, or privilege. To the fullest extent
permitted by applicable laws, the rights and remedies provided for in this
Agreement are cumulative and not exclusive of any rights and remedies provided
by law.
7.2. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of Pledgor and Secured Party and their respective heirs,
successors, and assigns, except that Pledgor may not assign any of its rights or
obligations under this Agreement without the prior written consent of Secured
Party except to the extent permitted by the Credit Agreement.
7.3. Notices. Any notice, consent, or other communication required or
permitted to be given under this Agreement to Secured Party or Pledgor must be
in writing and delivered in person or by facsimile or by registered or certified
mail, return receipt requested, postage prepaid, as follows:
To Secured Party: Bank One, Texas, National Association
Attention: Mr. Xxxx Xxxx, Jr.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
Stock Pledge Agreement - Page 11
with a copy to: Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
Attention: Xx. Xxxx X. Xxxxxxxxxx
000 Xxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
To Pledgor: 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
Any such notice, consent, or other communication shall be deemed given when
delivered in person, sent by confirmed fax or, if given by mail, five (5) days
after such communication is deposited in the mail, certified or registered with
return receipt requested.
Stock Pledge Agreement - Page 12
7.4. Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Arbitration.
(a) This 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.
(b) PLEDGOR AND SECURED PARTY EACH HEREBY WAIVES ITS RIGHT TO RESOLVE
DISPUTES, CLAIMS, AND CONTROVERSIES ARISING FROM THIS 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. PLEDGOR REPRESENTS TO SECURED PARTY AND SECURED PARTY
REPRESENTS TO PLEDGOR 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 Secured Party and Pledgor. 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 either 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
Stock Pledge Agreement - Page 13
9 of the United States Code) shall apply to the construction, interpretation,
and enforcement of this arbitration provision.
(c) To the fullest extent permitted by applicable law, each party
hereto agrees that any court proceeding or litigation permitted by
Section 7.4(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, Pledgor
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 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, Pledgor
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, Pledgor 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 Pledgor 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 this Agreement and the other Credit
Documents.
(d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY
HERETO VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY THEIR
ACCEPTANCE HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR
PROCEEDING PERMITTED BY SECTION 7.4(B) AND WAIVES ANY RIGHT TO HAVE A JURY
PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY OTHER
RELATED DOCUMENT OR ANY RELATIONSHIP BETWEEN THE 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 LENDER TO PROVIDE THE LOANS AND THE LETTERS OF CREDIT.
7.5. Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
7.6. Survival of Representations and Warranties. All representations and
warranties made in this Agreement or in any certificate delivered pursuant
hereto shall survive the execution and delivery of this Agreement, and no
investigation by Secured Party shall affect the representations and warranties
or the right of Secured Party to rely upon them.
Stock Pledge Agreement - Page 14
7.7. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.8. Severability. Any provision of this Agreement which 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 of this Agreement, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
7.9. Construction. Pledgor and Secured Party acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement with its legal counsel and that
this Agreement shall be construed as if jointly drafted by Pledgor and Secured
Party.
7.10. Obligations Absolute. The obligations of Pledgor under this
Agreement shall be absolute and unconditional and shall not be released,
discharged, reduced, or in any way impaired by any circumstance whatsoever,
including, without limitation, any amendment, modification, extension, or
renewal of this Agreement, the Obligations, or any document or instrument
evidencing, securing, or otherwise relating to the Obligations, or any release,
subordination, or impairment of collateral, or any waiver, consent, extension,
indulgence, compromise, settlement, or other action or inaction in respect of
this Agreement, the Obligations, or any document or instrument evidencing,
securing, or otherwise relating to the Obligations, or any exercise or failure
to exercise any right, remedy, power, or privilege in respect of the
Obligations.
7.11. Termination. On the Collateral Termination Date, the Liens created
hereby shall terminate, and Secured Party, at the request and expense of
Pledgor, forthwith will execute and deliver to Pledgor a proper instrument or
instruments acknowledging the satisfaction and termination of the Liens created
hereby and will duly assign, transfer and deliver to Pledgor (without recourse
and without any representation or warranty), such of the Collateral as may be in
the possession of the Lender and as has not theretofore been sold or otherwise
applied pursuant to this Agreement or the Credit Agreement. Upon such release
and redelivery, this Agreement shall terminate. The term "Collateral Termination
Date" shall mean the first date on which no Note or Letter of Credit is
outstanding under the Credit Agreement, the Commitments have been permanently
terminated and no other Obligation is due and payable thereunder or under any
other Credit Document.
7.12. AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE
OTHER CREDIT DOCUMENTS, EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES
HERETO AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS,
REPRESENTATIONS, AND UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE
SUBJECT MATTER HEREOF. THE PROVISIONS OF THIS AGREEMENT MAY BE AMENDED
Stock Pledge Agreement - Page 15
OR WAIVED ONLY BY AN INSTRUMENT IN WRITING SIGNED BY THE PARTIES HERETO.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
SECURED PARTY:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION, AS AGENT
By:
-------------------------------------------
Name:
-----------------------------------------
Title:
----------------------------------------
PLEDGOR:
_____________________, a _________ corporation
Address:
------------------------ By:
-------------------------------------------
------------------------ Name:
-----------------------------------------
------------------------ Title:
----------------------------------------
------------------------
Stock Pledge Agreement - Page 16
SCHEDULE 1
Stock Pledge Agreement - Page 17
EXHIBIT 4.1C
SECURITY AGREEMENT AND FINANCING STATEMENT
THIS SECURITY AGREEMENT AND FINANCING STATEMENT (this "Agreement") dated as
of November 12, 1998, is by and [between Quanta Services, Inc., a Delaware
corporation (the "Debtor")] [among each of the undersigned Debtors (each a
"Debtor")], and Bank One, Texas, National Association, as Agent for the Lenders
(the "Secured Party").
RECITALS:
A. Quanta Services, Inc., a Delaware corporation (the "Borrower")
the various financial institutions as are or may from time to time become
parties thereto (collectively, the "Lenders"), National City Bank, as
Syndication Agent for the Lenders, NationsBank, N.A. as Documentation Agent for
the Lenders, BankBoston, N.A., LaSalle National Bank, and The Bank of Nova
Scotia, as Co-Agents for the Lenders, and Secured Party have entered into that
certain Second Amended and Restated Secured Credit Agreement dated as of
November 12, 1998 (herein, as the same may be amended, modified, supplemented,
extended, rearranged, and/or restated from time to time, collectively called the
"Credit Agreement"), pursuant to which, upon the terms and conditions therein
set forth, (i) the Lenders have agreed to from time to time make Revolving Loans
to the Borrower, which Revolving Loans are evidenced by Notes of the Borrower
dated November 12, 1998, in the aggregate original principal amount of
$175,000,000, payable to the order of the Lenders, and the Agent, in its sole
discretion, may make Agent Loans to the Borrower in the aggregate original
principal amount of $5,000,000 pursuant to its Note (together, herein, as the
same may be amended, modified, supplemented, extended, rearranged, and/or
restated from time to time, together with any notes given by the Borrower in
extension, replacement, rearrangement, modification and/or substitution thereof
or therefor, collectively called the "Notes"), and (ii) the Agent on behalf of
the Lenders has agreed to issue Letters of Credit for the account of the
Borrower.
B. Under the terms of the Credit Agreement, [each of the Debtors]
[the Borrower] is required by the Lenders to provide certain security in respect
of the liabilities under the Credit Agreement, and the Lenders require that this
Agreement be entered into by [each of the Debtors] [the Borrower] as a condition
precedent to the Revolving Loans to be made and the Letters of Credit to be
issued pursuant to the terms and conditions of the Credit Agreement.
C. As a condition precedent to the making of the Revolving Loans and
the issuance of the Letters of Credit under the Credit Agreement, [each of the
Debtors] [the Borrower] is required to execute and deliver this Agreement.
NOW, THEREFORE, in consideration of the premises and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
Security Agreement and Financing Statement
Page 1
Section 1. Definitions.
1.1 Unless otherwise defined herein, capitalized terms have the same
meaning assigned to such terms in the Credit Agreement.
1.2 "UCC" means the Uniform Commercial Code as in effect on the date
hereof in the State of Texas; provided that if by mandatory provisions of law
the perfection or the effect of perfection or non-perfection of the security
interests granted pursuant to Section 2, as well as all other security interests
created or assigned as additional security for the Obligations (defined
hereinafter) pursuant to the provisions of this Agreement in any Collateral
(defined hereinafter) is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than the State of Texas, "UCC" means the Uniform Commercial
Code as in effect in such other jurisdiction for purposes of the provisions
hereof relating to such perfection or effect of perfection or non-perfection.
Section 2. Security Interest.
2.1 Grant of Security Interest. Subject to the terms of this Agreement
and to secure the Obligations, [each of] the Debtor[s] hereby pledges, assigns
grants, conveys and transfers to the Secured Party a security interest in all of
[the Debtor's] [its] right, title and interest in, to and under the following
(but excluding any Excluded Items as hereinafter defined):
(a) all equipment, goods and inventory (each term as defined in the UCC),
and (whether or not included in such definitions) all tangible personal
property, now owned or hereafter acquired by [the] [such] Debtor, including,
without limitation, (i) all research, storage or office equipment, computer
hardware and software, machinery, chattels, tools, parts, machine tools,
furniture, furnishings, fixtures and supplies, of every nature, wherever
located, and (ii) all additions, accessories and improvements to any equipment
and all substitutions therefor and all accessories, parts and equipment which
may be attached to or which are necessary for the operation and use of any
equipment, personal property or fixtures, together with all accessions thereto;
(b) all accounts (as defined in the UCC) and accounts receivable now owned
or hereafter acquired by [the] [such] Debtor;
(c) all rights of [the] [such] Debtor under or arising out of present or
future leases or contracts relating to any equipment;
(d) all rights of [the] [such] Debtor in, to and under all patents,
trademarks, tradenames, copyrights, techniques, processes, formulas, know-how or
other intellectual property, and licenses thereof;
(e) all rights of [the] [such] Debtor in, to and under all permits,
authorizations, approvals, registrations, licenses, approvals, certificates of
convenience or necessity, franchises,
Security Agreement and Financing Statement
Page 2
immunities, easements, consents, grants, ordinances or other rights granted by
any governmental authority;
(f) all rights of [the] [such] Debtor in and to all books, records,
writings, databases (electronic or otherwise), information and other property
relating to, used or useful in connection with, or evidencing, embodying,
incorporating or referring to, any of the foregoing;
(g) all rights of [the] [such] Debtor in, to or under (i) all sales
orders, sales contracts, purchase orders, purchase contracts, operating
agreements, management agreements, service agreements, development agreements,
consulting agreements and leases, and (ii) all other contract rights, general
intangibles (as defined in the UCC) and, to the extent they can lawfully be
conveyed or assigned, under express or implied warranties from providers of
goods or services;
(h) all rights of [the] [such] Debtor in, to and under all products,
accessions, rents, issues, profits, returns, income and proceeds of any and all
Collateral and, to the extent not otherwise included, all rights of [the] [such]
Debtor in, to and under all payments under insurance or any indemnity, warranty
or guaranty payable by reason of any loss or damage to any Collateral or
otherwise with respect to any of the Collateral; and
(i) all rights of [the] [such] Debtor in, to and under all moneys and
securities deposited with the Secured Party pursuant to any term of this
Agreement or any other Credit Document to be held by the Secured Party hereunder
or thereunder (collectively "Cash Collateral").
All of the foregoing property, whether now owned or hereafter acquired, other
than the Excluded Items, is hereinafter collectively referred to as the
"Collateral"; Collateral described in clauses (h) and (i) may be referred to
herein as "Collateral Proceeds"). To have and to hold all and singular the
Collateral by the Secured Party, its successors and assigns, in trust for the
benefit and security of the Secured Party and for the uses and purposes, and
subject to the terms and provisions, set forth in this Agreement and in the
Credit Agreement. Any term of this Agreement to the contrary notwithstanding,
the Collateral does not include any of the Excluded Items. The term "Excluded
Items" means and includes all properties or assets described above, whether now
owned or hereafter acquired by [the] [such] Debtor, which by their terms or by
reason of applicable law would become void or voidable if a security interest
therein were granted hereunder by [the] [such] Debtor or which cannot be
granted, conveyed, mortgaged, transferred or assigned by this Agreement or in
which a security interest cannot effectively be granted hereunder.
2.2 Obligations. The Collateral shall secure the following obligations,
indebtedness and liabilities (all such obligations, indebtedness and liabilities
being hereinafter sometimes called the "Obligations"):
(a) the payment of the indebtedness evidenced by the Notes;
(b) all obligations of [the Debtor] [the Borrower] to the Lenders under
the Credit Agreement;
Security Agreement and Financing Statement
Page 3
(c) the performance and payment of the obligations of [the Debtor] [the
Borrower] and the Guarantors under any of the Credit Documents,
including, without limitation, the performance and payment of the
Debtor's obligations hereunder; and
(d) all extensions, renewals, rearrangements and modifications of any of
the foregoing.
Section 3. Representations and Warranties. [The Debtor] [Each of the
Debtors] represents and warrants to the Secured Party as follows:
3.1 Title. [The Debtor] [Each of the Debtors] owns or, with respect to
Collateral acquired after the date hereof, the Debtor[s] will own, legally and
beneficially, the Collateral free and clear of any Lien, security interest,
pledge, claim, or other encumbrance or any right or option on the part of any
third person to purchase or otherwise acquire the Collateral or any part
thereof, except for the security interest granted hereunder and Permitted Liens.
[The Debtor] [Each of the Debtors] has the unrestricted right to pledge the
Collateral as contemplated hereby. No effective financing statement, mortgage,
or other instrument similar in effect covering all or any part of the Collateral
is on file in any recording office, except for (i) protective filings under true
leases, (ii) filings filed in favor of the Secured Party for the benefit of the
Secured Party relating to this Agreement, and (iii) filings, if any, with
respect to Permitted Liens.
3.2 Organization and Authority. Neither the execution, delivery or
performance by the Debtor[s] of this Agreement nor compliance by [it] [them]
with the terms and provisions hereof, nor the consummation of the transactions
contemplated herein, will (i) contravene any applicable provision of any law,
statute, rule or regulation, or any order, writ, injunction or decree of any
court or governmental instrumentality; or (ii) conflict with or result in any
breach of any term, covenant, condition or other provision of, or constitute a
default under, or (other than pursuant to the Security Documents) result in the
creation or imposition of (or the obligation to create or impose) any Lien upon
any of the property or assets of [the] [any] Debtor under the terms of any
contractual obligation to which [the] [any] Debtor is a party or by which it or
any of its properties or assets are bound or to which it may be subject.
3.3 Location of [the Debtor] [any Debtors]. As of the date hereof, the
principal place of business and chief executive office of [each of] the
Debtor[s], and the place where [each of] the Debtor[s] keeps its books and
records, is located at the address set forth opposite the name of [the] [such]
Debtor on [the signature page hereof] [Schedule I attached hereto and made a
part hereof].
3.4 Perfected Security Interest. This Agreement has been duly authorized,
executed and delivered by [each of] the Debtor[s]. This Agreement creates in
favor of Secured Party a security interest in the Collateral currently in
existence, which will be perfected upon the filing of a duly executed and
completed UCC-1 Financing Statement in the Office of the Secretary of State of
the state listed in the address set forth opposite the name of the Debtor on
[the signature page hereof] [Schedule I hereto], subject only to prior
Permitted Liens, to the extent such security interests can be perfected by such
filings pursuant to the UCC.
Security Agreement and Financing Statement
Page 4
3.5 No Consents. No consent of, or notice to, any other Person and no
authorization, approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for the grant by [any of]
the Debtor[s] of the Liens granted hereby (excluding any notices required in
connection with Liens against any accounts or accounts receivable from any
governmental entity) or for the execution, delivery or performance of this
Agreement by [any of] the Debtor[s], other than the filing of financing
statements as provided in (b) above and except for such other consents, notices
or filings that have been obtained or made or that as of the date hereof are not
required to have been obtained or made and may be obtained or made, as the case
may be, when necessary.
Section 4. Covenants. [The Debtor] [Each of the Debtors] covenants and
agrees with Secured Party that:
4.1 Encumbrances. Except as permitted by the Credit Agreement, [none of]
the Debtor[s] shall [not] create, permit, or suffer to exist, and shall defend
the Collateral against, any Lien on the Collateral except the pledge and
security interest of Secured Party hereunder except for Permitted Liens, and
shall defend the [Debtor's] [Debtors'] rights in the Collateral and Secured
Party's security interest in the Collateral against the claims of all persons
and entities (other than any person or entity claiming by, through or under
Secured Party or any obligee of the Obligations).
4.2 Sale of Collateral. [The Debtor] [None of the Debtors] shall [not]
sell, assign, or otherwise dispose of the Collateral or any part thereof except
as permitted by the Credit Agreement.
4.3 Further Assurances. At any time and from time to time, upon the
request of Secured Party, and at the sole expense of the [Debtor] [Debtors
(jointly and severally)], [the Debtor] [any of the Debtors] shall promptly
execute and deliver all such further instruments and documents and take such
further action as Secured Party may deem reasonably necessary or desirable to
preserve and perfect its security interest in the Collateral and carry out the
provisions and purposes of this Agreement, including, without limitation, the
execution and filing of such financing statements as Secured Party may require.
A carbon, photographic, or other reproduction of this Agreement or of any
financing statement covering the Collateral or any part thereof shall be
sufficient as a financing statement and may be filed as a financing statement to
the extent provided by applicable law.
4.4 Inspection Rights. Upon reasonable notice from Secured Party, [each
of] the Debtor[s] shall permit Secured Party and its representatives to examine,
inspect, and copy [the Debtor's] [its] books and records concerning ownership of
the Collateral at any reasonable time during normal business hours and as often
as Secured Party may desire.
4.5 Notification. [The Debtor] [Each of the Debtors] shall promptly after
it has knowledge thereof, notify Secured Party of (i) any Lien upon or claim
made or threatened against the Collateral other than Permitted Liens, (ii) any
change in its principal place of business, its
Security Agreement and Financing Statement
Page 5
chief executive office or the place where its books and records are maintained,
and (iii) any change in its name, state of incorporation or organization, its
type of entity or its taxpayer identification number.
4.6 Books and Records. [The Debtor] [Each of the Debtors] shall xxxx its
books and records to reflect the security interest of Secured Party under this
Agreement.
4.7 Receipt after Default. If any Collateral is received by [any of] the
Debtor[s] during the continuance of an Event of Default, [the] [such] Debtor
shall pay over to Secured Party all such Collateral on the day received,
including the cash and checks endorsed by [the] [such] Debtor evidencing the
Collateral. [The Debtor] [None of the Debtors] shall not commingle the
Collateral with any other funds, proceeds or monies of [any of] the Debtor[s],
and shall keep such proceeds separate and apart from any other funds, proceeds
or monies of [any of] the Debtor[s] and shall hold the Collateral in trust for
Secured Party until same shall be paid over to Secured Party as agreed to
herein.
4.8 Insurance. [The Debtor] [Each of the Debtors] shall, at [its] [their]
own expense [(jointly and severally)], maintain insurance with respect to the
Collateral as required by the Credit Agreement.
Section 5. Rights of Secured Party and Debtor[s].
5.1 Power of Attorney. [The Debtor] [Each of the Debtors] hereby
irrevocably constitutes and appoints Secured Party and any officer or agent
thereof, with full power of substitution, as its true and lawful attorney-in-
fact with full irrevocable power and authority in the place and stead and in the
name of [the] [such] Debtor or in its own name, from time to time in Secured
Party's discretion during the continuance of an Event of Default and prior to
the Collateral Termination Date, to take any and all action and to execute any
and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement and, without limiting the generality
of the foregoing, hereby gives Secured Party the power and right on behalf of
[the] [such] Debtor and in its own name to do any of the following after the
occurrence and during the continuance of an Event of Default and to the extent
permitted by applicable laws, without notice to or the consent of the Debtor:
(a) to demand, xxx for, collect, or receive in the name of [the] [such]
Debtor or in its own name, any money or property at any time payable
or receivable on account of or in exchange for any of the Collateral
and, in connection therewith, endorse checks, notes, drafts,
acceptances, money orders, or any other instruments for the payment of
money under the Collateral;
(b) to pay or discharge taxes, liens, security interests, or other
encumbrances (other than Permitted Liens) levied or placed on or
threatened against the Collateral;
Security Agreement and Financing Statement
Page 6
(c) (i) to direct any parties liable for any payment under any of the
Collateral to make payment of any and all monies due and to become due
thereunder directly to Secured Party or as Secured Party shall direct;
(ii) to receive payment of and receipt for any and all monies, claims,
and other amounts due and to become due at any time in respect of or
arising out of any Collateral; (iii) to sign and endorse any drafts,
assignments, proxies, stock powers, verifications, notices, and other
documents relating to the Collateral; (iv) to commence and prosecute
any suit, actions or proceedings at law or in equity in any court of
competent jurisdiction to collect the Collateral or any part thereof
and to enforce any other right in respect of any Collateral; (v) to
defend any suit, action, or proceeding brought against the Debtor with
respect to any Collateral; (vi) to settle, compromise, or adjust any
suit, action, or proceeding described in clause (v) above and, in
connection therewith, to give such discharges or releases as Secured
Party may deem appropriate; (vii) to exchange any of the Collateral
for other property upon any merger, consolidation, reorganization,
recapitalization, or other readjustment of the issuer thereof and, in
connection therewith, deposit any of the Collateral with any
committee, depositary, transfer agent, registrar, or other designated
agency upon such terms as Secured Party may determine; (viii) to add
or release any guarantor, endorser, surety, or other party to any of
the Collateral or the Obligations; and (ix) to sell, transfer, pledge,
make any agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured Party's
option and the [Debtor's] [Debtors'] expense [(jointly and
severally)], at any time, or from time to time, all acts and things
which Secured Party deems necessary to protect, preserve, or realize
upon the Collateral and Secured Party's security interest.
This power of attorney is a power coupled with an interest and shall be
irrevocable. Secured Party shall be under no duty to exercise or withhold the
exercise of any of the rights, powers, privileges, and options expressly or
implicitly granted to Secured Party in this Agreement, and shall not be liable
for any failure to do so or any delay in doing so. Secured Party shall not be
liable for any act or omission or for any error of judgment or any mistake of
fact or law in its individual capacity or in its capacity as attorney-in-fact
except acts or omissions constituting or resulting from its willful misconduct
or gross negligence. This power of attorney is conferred on Secured Party
solely to protect, preserve, and realize upon its security interest in the
Collateral.
5.2 Performance by Secured Party of the [Debtor's] [Debtors'] Obligations.
If an Event of Default has occurred and is continuing or if [any of] the
Debtor[s] fails to perform or comply with any of its agreements contained herein
and Secured Party itself shall cause performance of or compliance with such
agreement, the reasonable expenses of Secured Party, together with interest
thereon at the rate of interest provided in the Credit Agreement, shall be
payable by the Debtor[s (jointly and severally)] to Secured Party on demand and
shall constitute Obligations secured by this Agreement.
Security Agreement and Financing Statement
Page 7
5.3 Secured Party's Duty of Care. Other than the exercise of reasonable
care in the physical custody of the Collateral while held by Secured Party
hereunder, Secured Party shall have no responsibility for or obligation or duty
with respect to all or any part of the Collateral or any matter or proceeding
arising out of or relating thereto, including, without limitation, any
obligation or duty to collect any sums due in respect thereof or to protect or
preserve any rights against prior parties or any other rights pertaining
thereto, it being understood and agreed that the Debtor[s] shall be responsible
for preservation of all rights in the Collateral. Without limiting the
generality of the foregoing, Secured Party shall be conclusively deemed to have
exercised reasonable care in the custody of the Collateral if Secured Party
takes such action, for purposes of preserving rights in the Collateral, as [any
of] the Debtor[s] may reasonably request in writing, but no failure or omission
or delay by Secured Party in complying with any such request by [the] [such]
Debtor, and no refusal by Secured Party to comply with any such request by the
Debtor, shall of itself be deemed to be a failure to exercise reasonable care.
5.4 Rights of [Debtor; Debtor Remains] [Debtors; Debtors Remain] Liable.
(a) Any term of this Agreement to the contrary notwithstanding, until
written notice shall be given to [any of] the Debtor[s] that the Secured Party
is exercising its rights under this Section 5, [the] [such] Debtor shall have
the right, subject to the prohibitions contained in the Credit Agreement to
possess, retain, enjoy and use the Collateral, to give consents, waivers or
notifications with respect to the Collateral, to exercise its rights, powers and
privileges under the Collateral, to agree to any modification of any of the
terms of the Collateral, to dispose of any of the Collateral (it being agreed
that the Lien of this Agreement shall attach to the proceeds thereof), and
otherwise to act with respect to the Collateral in the ordinary course of
business, in each case other than with respect to any Cash Collateral held by
the Secured Party.
(b) Anything herein to the contrary notwithstanding, (i) [each of] the
Debtor[s] shall remain liable under the contracts and agreements included in the
Collateral to the extent set forth therein (and subject to any defenses
thereto), to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (ii) the exercise by the
Secured Party of any of the rights hereunder shall not release any [of the]
Debtor[s] from any of its duties or obligations under the contracts and
agreements included in the Collateral, and (iii) the Secured Party shall not
have any obligation or liability under the contracts and agreements included in
the Collateral solely by reason of this Agreement, nor shall the Secured Party
be obligated to perform any of the obligations or duties of the Debtor[s]
thereunder or to take any action to collect or enforce any claim for payment
assigned hereunder, in each case, solely by reason of this Agreement.
Section 6. Events of Default and Remedies.
6.1 Events of Default. The Debtor[s] shall be in default under this
Agreement upon the occurrence of and during the continuation of any of the
events or conditions defined as Events of Default in the Credit Agreement (an
"Event of Default").
Security Agreement and Financing Statement
Page 8
6.2 Rights and Remedies. Prior to the Collateral Termination Date, upon
the occurrence of an Event of Default and so long as the same shall be
continuing, Secured Party shall have the following rights and remedies to the
extent not prohibited by applicable laws:
(a) In addition to all other rights and remedies granted to Secured Party
in this Agreement and in any other instrument or agreement securing,
evidencing, or relating to the Obligations, Secured Party shall have
all of the rights and remedies of a secured party under the UCC.
Without limiting the generality of the foregoing, Secured Party may
(i) without demand or notice to the Debtor, collect, receive, or take
possession of the Collateral or any part thereof, (ii) sell or
otherwise dispose of the Collateral, or any part thereof, in one or
more parcels at public or private sale or sales, at Secured Party's
offices or elsewhere, for cash, on credit, or for future delivery
without assumption of any credit risk, and/or (iii) bid and become a
purchaser at any such sale free of any right or equity of redemption
in [any of] the Debtor[s], which right or equity is hereby expressly
waived and released by [all of] the Debtor[s]. Upon the request of
Secured Party, the Debtor[s] shall assemble the Collateral and make it
available to Secured Party at any place designated by Secured Party
that is reasonably convenient to [the] [such] Debtor and Secured
Party. [The Debtor] [Each of the Debtors] agrees that Secured Party
shall not be obligated to give more than ten (10) days' prior written
notice of the time and place of any public sale or of the time after
which any private sale may take place and that such notice shall
constitute reasonable notice of such matters. [The Debtor] [[Each of
the Debtors] shall be liable [, jointly and severally,] for all
reasonable expenses of retaking, holding, preparing for sale, or the
like, and all reasonable attorneys' fees and other reasonable expenses
incurred by Secured Party in connection with the collection of the
Obligations and the enforcement of Secured Party's rights under this
Agreement, in each case during the continuance of an Event of Default,
all of which expenses and fees shall constitute additional Obligations
secured by this Agreement. Secured Party may apply the Collateral
against the Obligations then due and payable in such order and manner
as it shall elect in its sole discretion. [The Debtor] [Each of the
Debtors] shall remain liable for any deficiency if the proceeds of any
sale or disposition of the Collateral are insufficient to pay the
Obligations. [The Debtor] [Each of the Debtors] waives all rights of
marshaling in respect of the Collateral.
(b) Secured Party may cause any or all of the Collateral held by it to be
transferred into the name of Secured Party or the name or names of
Secured Party's nominee or nominees (in each case as pledgee
hereunder).
6.3 INDEMNITY. [THE DEBTOR AGREES] [EACH OF THE DEBTORS AGREES, JOINTLY
AND SEVERALLY,] TO INDEMNIFY AND SAVE AND HOLD SECURED PARTY HARMLESS FROM AND
AGAINST ANY CLAIM OF ANY THIRD PERSON TO ANY COLLATERAL AND ANY CLAIM BY ANY
OTHER PARTY OR ENTITY ARISING (INCLUDING, WITHOUT LIMITATION, A BANKRUPTCY
Security Agreement and Financing Statement
Page 9
TRUSTEE OR THE ISSUER OF THE OPTION SHARES), DIRECTLY OR INDIRECTLY, AS A RESULT
OF SECURED PARTY'S ENTERING INTO THIS AGREEMENT AND/OR PURSUING ANY OF ITS
RIGHTS AND REMEDIES HEREUNDER, PROVIDED THAT [THE] [NO] DEBTOR SHALL HAVE [NO]
[ANY] OBLIGATION UNDER THIS PROVISION TO SECURED PARTY WITH RESPECT TO
LIABILITIES OF OR CLAIMS AGAINST SECURED PARTY THAT ARE DETERMINED BY A COURT OF
COMPETENT JURISDICTION BY FINAL AND NON-APPEALABLE JUDGMENT TO HAVE RESULTED
FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF SECURED PARTY.
Section 7. Miscellaneous.
7.1 No Waiver; Cumulative Remedies. No failure on the part of Secured
Party to exercise and no delay in exercising, and no course of dealing with
respect to, any right, power, privilege or remedy under this Agreement shall
operate as a waiver thereof, nor shall any single or partial exercise of any
right, power, privilege or remedy under this Agreement preclude any other or
further exercise thereof or the exercise of any other right, power, privilege
or remedy. To the fullest extent permitted by applicable laws, the rights,
powers, privilege and remedies provided for in this Agreement are cumulative and
not exclusive of any rights and remedies provided by law. [Secured Party may
exercise any right, power, privilege or remedy under this Agreement or under
applicable law against any Debtor without enforcing any rights, powers,
privileges or remedies against any other Debtor under this Agreement or
otherwise, each of the Debtors expressly waiving any rights or requirements that
the Secured Party or any Lender first enforce any right, power, privilege or
remedy against the Borrower, any other Debtor or any other Collateral for the
Obligations.]
7.2 Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of [each of] the Debtor[s] and Secured Party and their
respective heirs, successors, and assigns, except that the Debtor may not assign
any of its rights or obligations under this Agreement without the prior written
consent of Secured Party except to the extent permitted by the Credit Agreement.
7.3 Notices. Any notice, consent, or other communication required or
permitted to be given under this Agreement to Secured Party or [any of] the
Debtor[s] must be in writing and delivered in person or by facsimile or by
registered or certified mail, return receipt requested, postage prepaid, as
follows:
To Secured Party: Bank One, Texas, National Association
Attention: Mr. Xxxx Xxxx, Jr.
000 Xxxxxx
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
Security Agreement and Financing Statement
Page 10
with a copy to: Gardere Xxxxx Xxxxxx & Xxxxx, L.L.P.
Attention: Xx. Xxxx X. Xxxxxxxxxx
000 Xxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Fax No.: (000) 000-0000
To the Debtor: [_____________________]
c/o 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
Any such notice, consent, or other communication shall be deemed given when
delivered in person, sent by confirmed fax or, if given by mail, five (5) days
after such communication is deposited in the mail, certified or registered with
return receipt requested.
7.4 Governing Law; Submission to Jurisdiction; Waiver of Jury Trial;
Arbitration.
(a) This 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.
(b) [THE DEBTOR] [EACH OF THE DEBTORS] AND SECURED PARTY EACH HEREBY
WAIVES ITS RIGHT TO RESOLVE DISPUTES, CLAIMS, AND CONTROVERSIES ARISING FROM
THIS 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. [THE DEBTOR] [EACH OF THE
DEBTORS]
Security Agreement and Financing Statement
Page 11
REPRESENTS TO SECURED PARTY AND SECURED PARTY REPRESENTS TO [THE DEBTOR] [EACH
OF THE DEBTORS] 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 Secured Party and the Debtor[s]. 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 either 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.
(c) To the fullest extent permitted by applicable law, each party hereto
agrees that any court proceeding or litigation permitted by Section 7.4(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, [each of] the Debtor[s]
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 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, [each
of] the Debtor[s] 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, [each of]
the Debtor[s] 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
Security Agreement and Financing Statement
Page 12
been brought in an inconvenient forum. To the extent that [any of] the Debtor[s]
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] [such] Debtor hereby irrevocably waives to the fullest
extent permitted by applicable law, such immunity in respect of its obligations
under this Agreement and the other Credit Documents.
(d) TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, EACH PARTY HERETO
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY (BY THEIR ACCEPTANCE
HEREOF) WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING
PERMITTED BY SECTION 7.4(B) AND WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT
OF THIS AGREEMENT, ANY OTHER CREDIT DOCUMENT, ANY OTHER RELATED DOCUMENT OR ANY
RELATIONSHIP BETWEEN THE LENDER, THE DEBTOR [, AND/OR] ANY GUARANTOR [AND/OR ANY
DEBTOR], 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 LENDER TO PROVIDE THE LOANS AND THE LETTERS OF CREDIT.
7.5 Headings. The headings, captions, and arrangements used in this
Agreement are for convenience only and shall not affect the interpretation of
this Agreement.
7.6 Survival of Representations and Warranties. All representations and
warranties made in this Agreement or in any certificate delivered pursuant
hereto shall survive the execution and delivery of this Agreement, and no
investigation by Secured Party shall affect the representations and warranties
or the right of Secured Party to rely upon them.
7.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
7.8 Severability. Any provision of this Agreement which 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 of this Agreement, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
7.9 Construction. [The Debtor] [Each of the Debtors] and Secured Party
acknowledge that each of them has had the benefit of legal counsel of its own
choice and has been afforded an opportunity to review this Agreement with its
legal counsel and that this Agreement shall be construed as if jointly drafted
by the Debtor[s] and Secured Party.
Security Agreement and Financing Statement
Page 13
7.10 Obligations Absolute. The obligations of [each of] the Debtor[s]
under this Agreement shall be absolute and unconditional and shall not be
released, discharged, reduced, or in any way impaired by any circumstance
whatsoever, including, without limitation, any amendment, modification,
extension, or renewal of this Agreement, the Obligations, or any document or
instrument evidencing, securing, or otherwise relating to the Obligations, or
any release, subordination, or impairment of collateral, or any waiver, consent,
extension, indulgence, compromise, settlement, or other action or inaction in
respect of this Agreement, the Obligations, or any document or instrument
evidencing, securing, or otherwise relating to the Obligations, or any exercise
or failure to exercise any right, remedy, power, or privilege in respect of the
Obligations.
7.11 Termination. On the Collateral Termination Date, the Liens created
hereby shall terminate, and Secured Party, at the request and expense of the
Debtor[s, jointly and severally], forthwith will execute and deliver to the
Debtor[s] a proper instrument or instruments acknowledging the satisfaction and
termination of the Liens created hereby and will duly assign, transfer and
deliver to the [applicable] Debtor[s] (without recourse and without any
representation or warranty), such of the Collateral as may be in the possession
of the Lender and as has not theretofore been sold or otherwise applied pursuant
to this Agreement or the Credit Agreement. Upon such release and redelivery,
this Agreement shall terminate. The term "Collateral Termination Date" shall
mean the first date on which no Note or Letter of Credit is outstanding under
the Credit Agreement, the Commitments have been permanently terminated and no
other Obligation is due and payable thereunder or under any other Credit
Document.
7.12 AMENDMENT; ENTIRE AGREEMENT. THIS AGREEMENT, TOGETHER WITH THE OTHER
CREDIT DOCUMENTS, EMBODIES THE FINAL, ENTIRE AGREEMENT AMONG THE PARTIES HERETO
AND SUPERSEDES ANY AND ALL PRIOR COMMITMENTS, AGREEMENTS, REPRESENTATIONS, AND
UNDERSTANDINGS, WHETHER WRITTEN OR ORAL, RELATING TO THE SUBJECT MATTER HEREOF.
THE PROVISIONS OF THIS AGREEMENT MAY BE AMENDED OR WAIVED ONLY BY AN INSTRUMENT
IN WRITING SIGNED BY THE PARTIES HERETO.
Security Agreement and Financing Statement
Page 14
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the day and year first written above.
SECURED PARTY:
BANK ONE, TEXAS, NATIONAL
ASSOCIATION, AS AGENT
By:
-----------------------------------------
Name: Xxxx X. Xxxx, Xx.
Title: Vice President
Security Agreement and Financing Statement
Page 15
DEBTOR[S]:
--------------------------------------------
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Address:
-------------------------
-------------------------
-------------------------
Security Agreement and Financing Statement
Page 16
