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Exhibit 4.3
EMCOR Group, Inc.
Second Amendment to Credit Agreement
Xxxxxx Trust and Savings Chicago, Illinois and the other from time to time
Lenders party to the Credit Agreement referred to below
Gentlemen:
We refer to the Credit Agreement dated as of June 19, 1996 as amended and
currently in effect between the EMCOR Group, Inc., DYN Specialty Contracting,
Inc., EMCOR (UK) Limited and you (the "Credit Agreement"), capitalized terms
used without definition below to have the meanings ascribed to them in the
Credit Agreement. Upon your acceptance hereof in the space provided for that
purpose below, this letter shall serve to amend the Credit Agreement as follows:
1. Addition of Drake & Xxxxx Engineering Ltd. as a Borrower in lieu of
EMCOR (UK) Limited.
Subject to all of the terms and conditions hereof and of the Credit
Agreement, Drake & Xxxxx Engineering Ltd., a United Kingdom corporation ("Drake
& Xxxxx"), shall be and become a Borrower under the Credit Agreement with a
Sublimit equal to the U.S. Dollar Equivalent of (pound)12,000,000 and subject to
such Sublimit Drake & Xxxxx shall have all of the rights and obligations of a
"Borrower" under the Credit Agreement all with the same force and effect as
though it were a signatory as a Borrower thereto and EMCOR (UK) Limited, a
United Kingdom corporation, shall cease to be a "Borrower" under the Credit
Agreement. Drake & Xxxxx hereby agrees to be bound by, and to pay, perform and
observe, all of the obligations and agreements of EMCOR (UK) Limited under that
certain Application and Agreement for Irrevocable Standby Letter of Credit dated
as of July 12, 1996 and executed and delivered by EMCOR (UK) Limited to the
Agent (the "London Underground Application") pursuant to which the Agent has
issued its Letter of Credit number SPL 35322 in favor of Barclays Bank PLC in
the amount of (pound)7,387,754 all with the same force and effect as though
Drake & Xxxxx had executed the London Underground Application. The liability of
Drake & Xxxxx under the London Underground Application shall be deemed a
utilization of the Activated Commitments but such liability and the liability of
Drake & Xxxxx under any amendment to the London Underground Application that
does not increase the amount of the Letter of Credit issued pursuant thereto
above the amount set forth above shall not count against Sublimit of Drake &
Xxxxx and the amount of credit available under such Sublimit shall be computed
exclusive of the liability under the London Underground Application and any such
amendment. Guarantees and Collateral shall be provided by Drake & Xxxxx as and
when required by Section 4(c) hereof.
2. Addition of LaSalle National Bank and Bank of Scotland as Lenders
Subject to all of the terms and conditions hereof, LaSalle National Bank
and Bank of Scotland shall be and become Lenders under the Credit Agreement with
Commitments (each of which shall be an Activated Commitment) in the amounts set
forth opposite their signatures hereto and with an address for notices as set
forth on the signature pages hereto. Each of LaSalle National Bank and Bank of
Scotland shall have all of the rights and obligations of a Lender under the
Credit Agreement and the other Loan Documents and makes all of the
acknowledgments and undertakings to the Agent as are set forth in Section 10 of
the Credit Agreement. Each of LaSalle National Bank and Bank of Scotland shall
be entitled to receive its Percentage of all commitment fees accruing under
Section 3.1 of the Credit Agreement from and after the date this Second
Amendment to Credit Agreement becomes effective and of all Letter of Credit fees
payable under the first sentence of Section 3.3 of the Credit Agreement from and
after the date this Second Amendment to Credit Agreement becomes effective. The
Letters of Credit and Revolving Loans which are outstanding as December 23, 1996
are listed on Schedule I attached hereto. After giving effect to LaSalle
National Bank and Bank of Scotland becoming "Lenders" under the Credit Agreement
and other Loan Documents, $15,000,000 of the Tranche D Activation shall be
deemed to have occurred.
3. Non Dollar Borrowings. Anything contained in the Credit Agreement to the
contrary notwithstanding, all Borrowings (and repayments thereof) shall be in
U.S. Dollars unless and until the Borrowers and all Lenders otherwise agree in
writing.
4. Amendments to Specific Provisions of the Credit Agreement.
The Credit Agreement shall be further amended as follows:
(a) Section 1.1 (Revolving Credit).
Section 1.1 of the Credit Agreement shall be amended by adding the
following immediately after the third sentence thereof:
"The foregoing to the contrary notwithstanding, not more than the
greater of $10,000,000 or an amount equal to 15% of the Activated
Commitments (but in any event not more than $15,000,000) of the
Credit Utilizations extended to Borrowers other than Drake & Xxxxx
shall be utilized at any time for purposes other than funding and
carrying loans to Operating Companies (the "Operating Company
Loans") or, in the case of Letters of Credit, to support obligations
of Operating Companies. The Operating Company Loans shall be
evidenced by promissory notes of the Operating Companies which are
pledged to the Agent as collateral security for the Obligations.
Letters of Credit shall be deemed to support obligations of
Operating Companies if they support payment of obligations incurred
by a Borrower for the benefit of Operating Companies and
notwithstanding the fact that they may similarly benefit Borrowers
or other subsidiaries thereof."
(b) Section 1.3 (Letters of Credit).
Section 1.3(b) of the Credit Agreement shall be amended by adding
the following immediately after the first sentence thereof:
"Each Application executed after December 23, 1996 shall also be
co-signed by each Restricted Subsidiary which is liable in respect
of the obligation supported thereby (pursuant to which co-signature
such Restricted Subsidiaries shall become liable for the
reimbursement obligations in respect of the related Letter of
Credit) and, in the case of Letters of Credit which support
obligations undertaken by a Borrower for the benefit of itself
and/or one or more Restricted Subsidiaries (such as letters of
credit issued in connection with insurance arrangements which
benefit Restricted Subsidiaries), by all Restricted Subsidiaries
benefited thereby."
(c) Section 4. The Collateral and the Guarantees..
Section 4 of the Credit Agreement shall be amended by adding the
following Section 4.3 thereto:
"Section 4.3. Certain Guarantees and Collateral. Anything contained
in Section 4.1, 4.2 or 6.3(b) hereof to the contrary notwithstanding
and whether or not the other conditions precedent to the Tranche B
Activation shall have occurred, by not later than April 30, 1997 the
conditions contained in clauses (ii) (construed without regard to
the parenthetical clause thereof), (iii), (iv) and (v) of Section
6.3(b) shall be satisfied."
(d) Section 4.1 (The Collateral).
Clause (viii) of the second proviso to the first sentence of Section
4.1 of the Credit Agreement shall be amended by adding the following immediately
after the phrase "in the aggregate":
"(except that the notes evidencing the Operating Company Loans shall
be delivered to the Agent and the liens thereon perfected)".
(e) Section 6.3. Activation of the Commitments. The last sentence of
Section 6.3 of the Credit Agreement shall be amended and as so amended shall be
restated in its entirety to read as follows:
"Upon any Tranche D Activation occurring subsequent to the
activation accomplished by the December 24, 1996 Second Amendment to
Credit Agreement and upon the occurrence of any Tranche B Activation
or Tranche C Activation the Commitment of Xxxxxx Trust and Savings
Bank shall be reduced by the amount of the activation in question.
Fifty percent of each such reduction shall be taken against the
amount of the Commitment of Xxxxxx Trust and Savings Bank which was
an Activated Commitment prior to giving effect to the activation in
question unless and until the Activated Commitment of Xxxxxx Trust
and Savings Bank is reduced to $25,000,000 after which all of such
reductions shall be taken against the inactive portion of the Xxxxxx
Trust and Savings Bank Commitment."
(f) Section 9.1 (Definitions).
Section 9.1 of the Credit Agreement shall be amended by inserting
the following definitions therein in alphabetical order:
"Drake & Xxxxx" shall mean Drake & Xxxxx Engineering Ltd., a United
Kingdom corporation.
"Operating Company" shall mean any Restricted Subsidiary whose
principal activity consists of the conduct of a trade or business
rather than the ownership of equity securities or intangible assets
or the provision of administrative or other support services to
companies engaged in the operation of a trade or business or the
ownership of tangible assets."
"Operating Company Loan" shall mean a loan from a Borrower other
than Drake & Xxxxx to an Operating Company authorized by resolutions
of the Board of Directors of such Operating Company which is (i)
payable upon demand, bears interest at the prime commercial rate,
the lender's cost of funding such loan or another rate of interest
or index rate which is fair and reasonable to both the borrower and
the lender and be payable in a stated maximum principal amount, and
(ii) evidenced by a promissory note of the applicable Operating
Company, reasonably acceptable to the Agent payable to the order of
the applicable Borrower upon demand, which note has been endorsed in
blank or to the Agent for collateral purposes and delivered to the
Agent and as to which the Operating Company in question has executed
as of or prior to the time of determination an acknowledgement of
pledge in favor of the Agent in the form attached hereto as Exhibit
F.
In addition, the definitions of the terms "Lenders" and "Required Lenders"
shall be amended and as so amended shall be restated in their entirety to read
as follows:
""Lenders" shall mean Xxxxxx Trust and Savings Bank, LaSalle
National Bank, Bank of Scotland and all other lenders becoming
parties hereto pursuant to Section 11.18 hereof."
""Required Lenders" shall mean at any time Lenders whose Percentages
aggregate 66 and 2/3% or more."
(g) Sections 10.4 and 10.5 (Costs and Expenses and Indemnity). Sections
10.4 and 10.5 of the Credit Agreement shall be amended by striking the last
sentence of each of such Sections.
(h) Section 11.1(b) (U.S. Withholding Tax Exemption). Section 11.1(b) of
the Credit Agreement shall be amended by inserting the following at the end
thereof:
Notwithstanding the foregoing, (i) a Lender which becomes a Lender
after the date hereof shall not be required to submit a Form 1001 or
Form 4224 until the date it becomes a Lender; and (ii) a Lender
shall have no obligations to provide either such Form (or successor
form) subsequent to the date it becomes a Lender if such Lender is
excused from doing so pursuant to Section 11.1(c).
5. Exhibits.
The Credit Agreement shall be amended by adding Exhibit F thereto in the
form annexed hereto.
6. Conditions Precedent to Effectiveness.
This Second Amendment to Credit Agreement shall become effective upon
satisfaction of each of the following conditions precedent:
(a) The Agent shall have received counterparts hereof which, taken
together, bear the signatures of the Borrowers, the Lenders and EMCOR (UK)
Limited;
(b) The Agent shall have received a Revolving Credit Note of Drake & Xxxxx
Engineering Ltd. for each Lender in such Lender's pro rata share of the Sublimit
of Drake & Xxxxx Engineering Ltd. (each such Revolving Credit Note to constitute
a "Revolving Credit Note" and a "Note" for all purposes of the Loans Documents);
(c) The Agent shall have received Resolutions of the Board of Directors of
Drake & Xxxxx Engineering Ltd. authorizing its becoming a Borrower party to the
Credit Agreement, the execution and delivery by it of Revolving Credit Notes and
its becoming liable in respect of loans and letters of credit as a "Borrower"
hereunder;
(d) The Agent shall have received an acknowledgement from each of the
Guarantors that Drake & Xxxxx Engineering Ltd. shall be treated as a "Borrower"
for purpose of its Guaranty;
(e) the Agent shall have received for each of LaSalle National Bank and
Bank of Scotland a Revolving Credit Note of each Borrower properly signed and
completed;
(f) each of LaSalle National Bank and Bank of Scotland shall have received
such non-refundable fees as may have been agreed to between them and the
Borrowers; and
(g) the Agent shall have paid to each of LaSalle National Bank and The Bank
of Scotland their respective Percentages of all Letter of Credit fees payable
under the first sentence of Section 3.3 of the Credit Agreement for the period
from the date this Second Amendment to Credit Agreement becomes effective
through the date through which such fees have been paid.
Upon satisfaction of the foregoing conditions precedent to effectiveness
the Agent shall so notify the Company and the Lenders and (i) EMCOR (UK) Limited
shall cease to be a "Borrower" hereunder and shall cease to be obligated under
the London Underground Application, Drake & Xxxxx shall become a Borrower with a
Sublimit as set forth above, the outstanding Revolving Loans from the Lenders to
EMCOR (UK) Limited shall automatically be deemed refunded by Revolving Loans in
a like amount made by the Lenders to Drake & Xxxxx (all with the same force and
effect as though Drake & Xxxxx Engineering Ltd. had always been a Borrower under
the Credit Agreement and had been the initial Borrower on such Revolving Loans)
and in consideration thereof an equivalent amount of indebtedness of Drake &
Xxxxx owing to EMCOR (UK) Limited shall be deemed paid and satisfied and (ii)
there shall be such nonratable borrowings and repayments of Revolving Loans
under the Credit Agreement as shall be necessary so that after giving effect
thereto the percentages of the Activated Commitments in use (including usage
through participation in Letter of Credit liabilities and the amount of
Revolving Loans owing each Lender) are identical. The Borrowers hereby authorize
and direct the Agent to effect the foregoing nonratable borrowings and
repayments by calling for borrowings from Bank of Scotland and LaSalle National
Bank on their behalf and applying them to the repayment of Revolving Loans owing
Xxxxxx Trust and Savings Bank in the amounts necessary to effectuate the
foregoing. If this Second Amendment to Credit Agreement does become effective
then on or before January 17, 1997 the Company shall cause all Restricted
Subsidiaries benefited by the Letters of Credit identified on numbered lines 2
and 3 of Schedule I hereto to become jointly liable with the Company for
reimbursing all drafts drawn thereunder in a manner reasonably satisfactory to
the Required Lenders.
If the conditions precedent to effectiveness set forth in this Section 6
have not been satisfied by the close of business on December 31, 1996, any party
hereto may upon written or telecopy notice to the Agent withdraw its signature
hereto, in which event this agreement shall be of no further force or effect.
7. Miscellaneous.
Except as specifically amended hereby all of the terms, conditions and
provisions of the Credit Agreement shall stand and remain unchanged and in full
force and effect. No reference to this Second Amendment to Credit Agreement need
be made in any instrument or document at any time referring to the Credit
Agreement, a reference to the Credit Agreement in any of such to be deemed to be
a reference to the Credit Agreement as amended hereby. This Second Amendment to
Credit Agreement shall be construed in accordance with an governed by the laws
of Illinois and may be executed in counterparts and by separate parties on
separate counterparts, each to constitute an original but all one and the same
instrument.
Dated as of this 24th day of December 1996.
EMCOR Group, Inc.
BY /S/ Xxxxx X. XxxXxxxx
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Its Chairman of the Board, President
Dyn Specialty Contracting Inc.
BY /s/ Xxxxx X. XxxXxxxx
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Its Executive Vice President
EMCOR (UK) Limited
BY /s/ Xxxxx X. XxxXxxxx
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Its Director
Drake & Xxxxx Engineering Ltd.
BY /s/ Xxxxx X. XxxXxxxx
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Its Director
Accepted and agreed as of the date last above written.
Commitment (both active and
inactive): $78,250,000 Xxxxxx Trust and Savings Bank
Activated Commitment: $43,250,000
Percentage: 66.538462%
By /s/ Xxxxxx X. Xxxx
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Its Vice President
Activated Commitment: $11,750,000 BANK OF SCOTLAND
Percentage: 18.076923%
By /s/ Xxxxxxxxx Xxxxxx
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Its Vice President
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx
Activated Commitment: $10,000,000 LASALLE NATIONAL BANK
Percentage: 15.384615%
By /s/ Xxxxxx X. Xxxxxxxx
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Its First Vice President
000 Xxxxx XxXxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Exhibit F
Acknowledgement of Pledge
Xxxxxx Trust and Savings,
as Agent
Chicago, Illinois
Gentlemen:
Each of the undersigned may from time to time receive loans and advances
from EMCOR Group Inc. and/or Dyn Specialty Contracting Inc. (the "Lenders").
This will serve to confirm that all such loans and advances will be evidenced by
demand promissory notes in the form heretofore submitted to you (the "Notes").
Each of the undersigned acknowledge that the lending companies will be pledging
the Notes to you as Agent for certain other from time to time lenders to the
lending companies. Each of the undersigned acknowledge that you shall have the
right to demand payment of the Notes by notice to the undersigned at its
addresses shown below and each of the undersigned agrees that it shall pay the
full balance of its Notes together with accrued interest thereon, to you at your
offices in Chicago, Illinois upon such demand.
VERY TRULY YOURS,
[Insert Names and Addresses of Operating Companies]
Schedule I
Letters of Credit and Revolving Loans
Outstanding as of December 23, 1996
Letters of Credit
Applicant Amount Expiration Date
1. EMCOR (UK) Limited (pound)7,387,754 12/31/96
(Drake & Xxxxx after
giving effect to amendment)
2. EMCOR Group, Inc. $12,210,022 10/1/97
3. EMCOR Group, Inc. up to $12,160,475 9/30/97
Revolving Loans
BORROWER Amount
EMCOR Group, Inc. -0-
DYN Specialty -0-
Contracting, Inc.
EMCOR (UK) Limited -$14,200,000
