UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) OCTOBER 17, 2005
EMCOR Group, Inc.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware
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(State or Other Jurisdiction of Incorporation)
1-8267 11-2125338
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(Commission File Number) (I.R.S. Employer Identification No.)
301 Merritt Seven, Norwalk, CT 06851
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(Address of Principal Executive Offices) (Zip Code)
(203) 849-7800
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions (see General Instruction A.2. below):
_ Written communications pursuant to Rule 425 under the Securities Act
(17 CFR 230.425)
_ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
_ Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
_ Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
Item 1.01. Entry into a Material Definitive Agreement.
On October 14, 2005, EMCOR Group, Inc. (the "Company"), Comstock Canada
Ltd., a wholly-owned subsidiary of the Company ("Comstock"), and EMCOR
Group (UK) plc., a wholly-owned subsidiary of the Company ("EMCOR UK"),
entered into an Amended and Restated Credit Agreement (the "Credit
Agreement") effective October 17, 2005 with Harris N.A, as Agent, The
Governor and Company of Bank of Scotland, Syndication Agent, and LaSalle
Bank National Association, JPMorgan Chase Bank, N.A. and U.S. Bank National
Association, as Co-Documentation Agents and certain other lenders listed on
the signature pages thereof (collectively, the "Lenders"). The Credit
Agreement amends and restates the Credit Agreement dated as of September
26, 2002, as amended (the "Former Credit Agreement"), among the Company,
Comstock and EMCOR UK, Harris N.A., as Agent, and the lenders listed on the
signature pages thereto. The Former Credit Agreement was filed as Exhibit 4
to the Company's Form 8-K filed on October 4, 2002.
The Credit Agreement establishes a revolving credit facility under which
the Company may borrow up to $350,000,000. Comstock and EMCOR UK may borrow
a portion of the $350,000,000 directly from the Lenders, as provided in the
Credit Agreement. If the Company so desires it may identify one or more
additional lenders (which may include existing Lenders) willing to
participate, or increase their participation, in the Credit Agreement, and
thereby increase the Company's maximum borrowings under the Credit
Agreement by up to an additional $150,000,000, provided that such
additional lender is acceptable, in their respective reasonable judgment,
to Harris N.A. and each Lender which has outstanding, at the time of the
increased commitment, a letter of credit issued by it pursuant to the
Credit Agreement.
The Credit Agreement contains financial covenants, representations and
warranties and events of default and has a 5-year term. The Credit
Agreement is secured by substantially all of the assets of the Company and
substantially all of the assets of substantially all of its subsidiaries
pursuant to a Security Agreement and Pledge Agreement. The Company's
obligations under the Credit Agreement are guaranteed by substantially all
of its subsidiaries pursuant to a Guaranty.
The Credit Agreement is attached hereto as Exhibit 4.1.
The foregoing description of the Credit Agreement does not purport to be
complete and is qualified in its entirety by reference to the full text of
the Credit Agreement, attached hereto as Exhibit 4.1.
Item 1.02. Termination of a Material Definitive Agreement.
As described above in Item 1.01, the Former Credit Agreement is amended and
restated in its entirety by the Credit Agreement.
Item 9.01. Financial Statements and Exhibits.
(c) Exhibits.
Exhibit Number Description of Exhibits
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4.1 Amended and Restated Credit Agreement
dated October 14, 2005 and effective
October 17, 2005
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this Report to be signed on its behalf
by the undersigned hereunto duly authorized.
EMCOR GROUP, INC.
Date: October 17, 2005 By: /s/ Mark A. Pompa
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Name: Mark A. Pompa
Title: Senior Vice President -
Chief Accounting Officer
and Treasurer
EXHIBIT INDEX
Exhibit Number Description
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4.1 Amended and Restated Credit Agreement
dated October 14, 2005 and effective
October 17, 2005
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AMENDED AND RESTATED CREDIT AGREEMENT
by and among
EMCOR GROUP, INC.
and
CERTAIN OF ITS SUBSIDIARIES
and
HARRIS N.A. (successor by merger to Harris Trust and Savings Bank),
individually and as Agent
and
the Lenders
which are or become parties hereto
Dated as of October 14, 2005
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THE GOVERNOR AND COMPANY OF BANK OF SCOTLAND,
as Syndication Agent
and
LASALLE BANK NATIONAL ASSOCIATION,
JPMORGAN CHASE BANK, N.A., AND
U.S. BANK, NATIONAL ASSOCIATION,
as Co-Documentation Agents
================================================================================
TABLE OF CONTENTS
PAGE
SECTION 1. THE REVOLVING CREDIT......... ...............................1
Section 1.1. Revolving Credit..............................................1
Section 1.2. Revolving Loans...............................................2
Section 1.3. Letters of Credit.............................................2
(a) General Terms.................................................2
(b) Applications..................................................3
(c) The Reimbursement Obligation..................................4
(d) The Participating Interests...................................4
(e) Indemnification...............................................5
Section 1.4. Manner of Borrowing Revolving Loans...........................5
(a) Generally.....................................................5
(b) Agent Reliance on Bank Funding................................6
Section 1.5. Minimum Borrowing Amounts.....................................6
Section 1.6. Maturity of Loans.............................................7
Section 1.7. Appointment of Company as Agent for Borrowers;
Reliance by Agent............................................7
(a) Appointment...................................................7
(b) Reliance......................................................7
Section 1.8. Swing Loans...................................................7
Section 1.9. Default Rate..................................................9
Section 1.10. Increase in Commitment.......................................10
SECTION 2. INTEREST.....................................................10
Section 2.1. Domestic Rate Loans..........................................10
Section 2.2. Eurodollar Loans.............................................10
Section 2.3. Rate Determinations..........................................11
Section 2.4. Computation of Interest......................................11
Section 2.5. Funding Indemnity............................................11
Section 2.6. Change of Law................................................11
Section 2.7. Unavailability...............................................12
Section 2.8. Increased Cost and Reduced Return............................12
Section 2.9. Lending Offices..............................................13
Section 2.10. Discretion of Lender as to Manner of Funding.................13
Section 2.11. Capital Adequacy.............................................14
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.......14
Section 3.1. Commitment Fee...............................................14
Section 3.2. Other Fees...................................................14
Section 3.3. Letter of Credit Fees........................................14
Section 3.4. Voluntary Prepayments........................................15
Section 3.5. Mandatory Prepayments and Commitment Reductions..............15
Section 3.6. Voluntary Terminations.......................................16
Section 3.7. Place and Application........................................16
Section 3.8. Notations and Requests.......................................18
SECTION 4. THE COLLATERAL AND THE GUARANTEES............................18
Section 4.1. The Collateral...............................................18
Section 4.2. The Guarantees...............................................20
SECTION 5. REPRESENTATIONS AND WARRANTIES...............................20
Section 5.1. Organization and Qualification...............................20
Section 5.2. Subsidiaries.................................................21
Section 5.3. Corporate Authority and Validity of Obligations..............21
Section 5.4. Use of Proceeds; Margin Stock................................22
Section 5.5. Financial Reports............................................22
Section 5.6. No Material Adverse Change...................................22
Section 5.7. Full Disclosure..............................................22
Section 5.8. Good Title...................................................23
Section 5.9. Litigation and Other Controversies...........................23
Section 5.10. Taxes........................................................23
Section 5.11. Approvals....................................................23
Section 5.12. Affiliate Transactions.......................................23
Section 5.13. Investment Company; Public Utility Holding Company...........23
Section 5.14. ERISA........................................................24
Section 5.15. Compliance with Laws.........................................24
Section 5.16. Other Agreements.............................................24
Section 5.17. No Default...................................................24
Section 5.18. Solvency.....................................................24
SECTION 6. CONDITIONS PRECEDENT.........................................25
Section 6.1. All Credit Utilizations......................................25
Section 6.2. Initial Credit Utilization...................................26
Section 6.3. Post-Closing Matters.........................................28
SECTION 7. COVENANTS....................................................28
Section 7.1. Maintenance of Business......................................28
Section 7.2. Maintenance of Property......................................28
Section 7.3. Taxes and Assessments........................................28
Section 7.4. Insurance....................................................28
Section 7.5. Financial Reports and Rights of Inspection...................29
Section 7.6. Minimum Net Worth............................................31
Section 7.7. Leverage Ratio...............................................31
Section 7.8. Interest Coverage Ratio......................................31
Section 7.9. Reserved.....................................................31
Section 7.10. Indebtedness for Borrowed Money..............................31
Section 7.11. Liens........................................................33
Section 7.12. Investments, Acquisitions, Loans, Advances and Guarantees....35
Section 7.13. Capital and Certain other Restricted Expenditures............39
Section 7.14. Mergers, Consolidations and Sales............................39
Section 7.15. Maintenance of Restricted Subsidiaries.......................40
Section 7.16. Dividends and Certain Other Restricted Payments..............41
Section 7.17. ERISA........................................................41
Section 7.18. Compliance with Laws.........................................42
Section 7.19. Burdensome Contracts With Affiliates.........................42
Section 7.20. No Changes in Fiscal Year....................................42
Section 7.21. Formation of Subsidiaries....................................42
Section 7.22. Change in the Nature of Business.............................42
Section 7.23. Use of Proceeds..............................................42
SECTION 8. EVENTS OF DEFAULT AND REMEDIES...............................43
Section 8.1. Events of Default............................................43
Section 8.2. Non-Bankruptcy Defaults......................................45
Section 8.3. Bankruptcy Defaults..........................................45
Section 8.4. Collateral for Undrawn Letters of Credit.....................45
SECTION 9. DEFINITIONS INTERPRETATIONS..................................46
Section 9.1. Definitions..................................................46
Section 9.2. Interpretation...............................................61
SECTION 10. THE AGENT AND THE ISSUERS....................................62
Section 10.1. Appointment and Authorization................................62
Section 10.2. Rights as a Lender...........................................62
Section 10.3. Standard of Care.............................................62
Section 10.4. Costs and Expenses...........................................63
Section 10.5. Indemnity....................................................64
Section 10.6. Quebec Matters...............................................64
Section 10.7. Conflict.....................................................64
Section 10.8. Hedging Liability............................................64
Section 10.9. Designation of Additional Agents.............................64
Section 10.10. Authorization to Release or Subordinate or Limit Liens.......65
Section 10.11. Authorization to Enter into, and Enforcement of, the
Collateral Documents.......................................65
SECTION 11. MISCELLANEOUS................................................65
Section 11.1. Withholding Taxes............................................65
Section 11.2. Holidays.....................................................67
Section 11.3. No Waiver, Cumulative Remedies...............................67
Section 11.4. Amendments...................................................67
Section 11.5. Costs and Expenses...........................................68
Section 11.6. Stamp Taxes..................................................68
Section 11.7. Survival of Representations and Indemnities..................68
Section 11.8. Construction.................................................69
Section 11.9. Addresses for Notices........................................69
Section 11.10. Obligations Several..........................................69
Section 11.11. Headings.....................................................69
Section 11.12. Severability of Provisions...................................69
Section 11.13. Counterparts.................................................69
Section 11.14. Binding Nature and Governing Law.............................69
Section 11.15. Entire Understanding.........................................70
Section 11.16. Participations...............................................70
Section 11.17. Assignment Agreements........................................70
Section 11.18. Terms of Collateral Documents not Superseded.................71
Section 11.19. PERSONAL JURISDICTION........................................71
(a) EXCLUSIVE JURISDICTION.......................................71
(b) OTHER JURISDICTIONS..........................................71
Section 11.20. Currency.....................................................72
Section 11.21. Currency Equivalence.........................................72
Section 11.22. Change in Currency...........................................73
Section 11.23. Interest Rate Limitation.....................................73
Signature Page............................. ...................................1
EXHIBIT A-1 - Revolving Credit Note
EXHIBIT A-2 - Swing Note
EXHIBIT B - Form of Opinion of Counsel
EXHIBIT C - Compliance Certificate
EXHIBIT D - Assignment and Acceptance
EXHIBIT E - Commitment Amount Increase Request SCHEDULE I - Compliance
Calculations SCHEDULE 1.1 - Commitments SCHEDULE 1.3 - Existing Letters of
Credit SCHEDULE 4.2 - The Guarantors SCHEDULE 5.2 -Subsidiaries SCHEDULE 5.9 -
Litigation SCHEDULE 7.10 - Indebtedness SCHEDULE 7.11 - Liens SCHEDULE 7.12 -
Investments, Loans, Advances and Guarantees
EMCOR GROUP, INC.
AMENDED AND RESTATED CREDIT AGREEMENT
Harris N.A. (successor by merger to Harris Trust and Savings Bank), individually
and as Agent Chicago, Illinois
and the other Lenders from time to time party hereto
Ladies and Gentlemen:
The undersigned, EMCOR Group Inc., a Delaware corporation (the "Company"),
Comstock Canada Ltd., a Canadian corporation ("Comstock Canada"), and EMCOR
Group (UK) plc., a United Kingdom public limited company ("EMCOR UK"), refer to
the Credit Agreement dated as of September 26, 2002, as amended and currently in
effect among the Company, Comstock Canada, EMCOR UK and you (such Credit
Agreement as amended is referred to as the "Existing Agreement") pursuant to
which you agreed to make a revolving credit (the "Revolving Credit") available
to the Borrowers, all as more fully set forth therein. The Company, Comstock
Canada and EMCOR UK request you to amend the Existing Agreement to, among other
things, extend the Termination Date, to make certain further amendments to the
Existing Agreement and, for the sake of convenience and clarity, to restate the
Existing Agreement in its entirety as so amended. Accordingly, upon your
acceptance hereof in the space provided for that purpose below and upon
satisfaction of the conditions precedent to effectiveness hereinafter set forth,
the Existing Agreement and all of the Exhibits thereto shall be amended and as
so amended shall be restated in their entirety to read as follows:
SECTION 1. THE REVOLVING CREDIT.
Section 1.1. Revolving Credit. Subject to all of the terms and conditions
hereof, each Lender, by its acceptance hereof, severally agrees to extend a
Revolving Credit to the Borrowers in the amount of its commitment to extend the
Revolving Credit set forth opposite its name on Schedule 1.1 hereto or on the
Assignment Agreement to which it is a party (its "Commitment" and cumulatively
for all the Lenders, the "Commitments") (subject to any reductions thereof
pursuant to the terms hereof) prior to the Termination Date. Subject to the
terms and conditions hereof, such Revolving Credit may be availed of by each
Borrower in its discretion from time to time, be repaid and used again, during
the period from the date hereof to and including the Termination Date. The
Revolving Credit, subject to all of the terms and conditions hereof, may be
utilized by any one or more of the Borrowers in the form of Revolving Loans and
Letters of Credit, all as more fully hereinafter set forth; provided, however,
that the aggregate amount of the Revolving Loans, Swing Loans and L/C
Obligations outstanding at any one time of all the Borrowers when taken together
with the amount of outstanding borrowings and letters of credit under the
Canadian Facility, if any, shall not at any time exceed the Commitments,
provided, further, that in addition to, and not in substitution for, the
foregoing requirement: (i) the aggregate outstanding amount of L/C Obligations
shall in no event exceed $125,000,000 at any one time outstanding, (ii) the
aggregate amount of Revolving Loans made to the U.K. Borrowers when taken
together with the aggregate amount of L/C Obligations with respect to Letters of
Credit issued for the account of the U.K. Borrowers and their respective
Subsidiaries shall in no event exceed $50,000,000 at any one time outstanding,
and (iii) the aggregate amount of Revolving Loans made to the Canadian Borrowers
and of L/C Obligations with respect to Letters of Credit issued for the account
of the Canadian Borrowers and their respective Subsidiaries when taken together
with the aggregate outstanding amount of loans made under the Canadian Facility,
if any, and letters of credit issued thereunder shall in no event exceed
$50,000,000 at any one time outstanding (the "Sublimits"). The obligations of
the Lenders hereunder are several and not joint and no Lender shall under any
circumstances be obligated to extend credit hereunder in excess of its
Commitment.
For all purposes of this Agreement, where a determination of the used,
unused or available amount of the Commitments or of the outstanding amount of
Credit Utilizations is necessary, Credit Utilizations payable in an Alternative
Currency shall be converted into their U.S. Dollar Equivalent. Such conversions
shall be made on the date of each Credit Utilization in an Alternative Currency
as to that Credit Utilization and all Credit Utilizations shall be converted
into their U.S. Dollar Equivalent as of the last day of each month or at the
time of each Credit Utilization should the Agent so elect. If the last day of a
month is not a Business Day, such conversion shall be made as of the next
Business Day. The Agent shall promptly notify the Company of such determination
of a U.S. Dollar Equivalent and of the basis therefor. All Credit Utilizations
and interest thereon shall be repaid in the currency in which they were
effected.
Section 1.2. Revolving Loans. Subject to all of the terms and conditions
hereof, the Revolving Credit may be availed of in the form of loans
(individually a "Revolving Loan" and collectively the "Revolving Loans"). Each
Borrowing of Revolving Loans shall, except to the extent otherwise agreed in
writing by all Lenders, be made ratably by the Lenders in accordance with their
Percentages. Each Borrowing of Revolving Loans shall be in the minimum amount
specified in Section 1.5 hereof. All Revolving Loans made by a Lender to a
particular Borrower shall be evidenced by a single Revolving Credit Note of such
Borrower (individually a "Revolving Credit Note" and collectively the "Revolving
Credit Notes") payable to the order of such Lender, each Revolving Credit Note
to be in the form (with appropriate insertions) attached hereto as Exhibit A.
Without regard to the face principal amount of each Lender's Revolving Credit
Note, the actual principal amount at any time outstanding and owing by each
Borrower on account of Revolving Loans shall be the sum of all Revolving Loans
then or theretofore made thereon by such Lender to such Borrower less all
payments actually received thereon.
Section 1.3. Letters of Credit.
(a) General Terms. Subject to the terms, conditions and limitations
hereof (including those set forth in Section 1.1 hereof), as part of the
Revolving Credit, the Applicable Issuer shall issue Financial Letters of
Credit or Performance Letters of Credit (each a "Letter of Credit") for the
account of any one or more of the Borrowers in, as requested by the Company
acting on behalf of the applicable Borrower, U.S. Dollars or an Alternative
Currency. Notwithstanding anything contained herein to the contrary, those
certain letters of credit issued at the Company's request for the account
of the applicable Borrowers by Harris N.A. or by any other Applicable
Issuer and listed on Schedule 1.3 hereof (the "Existing Letters of Credit")
shall each constitute a "Letter of Credit" herein for all purposes of this
Agreement, to the same extent, and with the same force and effect, as if
such Existing Letters of Credit had been issued under this Agreement at the
request of the Company on behalf of the applicable Borrowers. Each Letter
of Credit shall be issued by the Applicable Issuer, but each Lender shall
be obligated to reimburse the Applicable Issuer for its Percentage of the
amount of each drawing thereunder and, accordingly, the undrawn face amount
of each Letter of Credit shall constitute usage of the Commitment of each
Lender pro rata in accordance with each Lender's Percentage. Each Letter of
Credit shall conform to the Applicable Issuer's policies as to form and
shall be a Letter of Credit which the Applicable Issuer may lawfully issue.
Each Letter of Credit shall support payment of an obligation of the
Borrower who applies for same or an obligation of a Subsidiary of same
which is a Restricted Subsidiary or of a Person described in subsections
(j), (n) or (o) of Section 7.12 in which the applicant or one of its
Restricted Subsidiaries has an equity interest.
(b) Applications. At any time before the Termination Date, the
Applicable Issuer shall, subject to all of the terms and conditions hereof,
at the request of the Company (which is acting on behalf of the Borrowers
pursuant to Section 1.7 hereof), issue one or more Letters of Credit, in a
form satisfactory to the Applicable Issuer, in an aggregate face amount as
set forth above, upon the receipt of an application for the relevant Letter
of Credit in the form customarily prescribed by the Applicable Issuer for
the type of Letter of Credit in question, duly executed by the Borrower for
whose account such Letter of Credit was issued (each an "Application").
Notwithstanding anything contained herein to the contrary, the applications
executed by the Borrowers with respect to the Existing Letters of Credit
shall each constitute an "Application" herein. Each Letter of Credit issued
hereunder shall (a) be payable, as determined by the Company acting on
behalf of the applicable Borrower, in U.S. Dollars or an Alternative
Currency and (b) expire not later than (i) the Termination Date for Letters
of Credit issued by Harris N.A. and (ii) the date which is five days prior
to the Termination Date for Letters of Credit issued by an Applicable
Issuer other than Harris N.A. Notwithstanding anything contained in any
Application to the contrary, (i) the applicable Borrower's obligation to
pay fees in connection with each Letter of Credit shall be as exclusively
set forth in Section 3.3 hereof, (ii) except as otherwise provided in
Section 3.5 hereof, prior to the existence of an Event of Default, the
Applicable Issuer will not call for the funding by the Borrower of any
amount under a Letter of Credit, or any other form of collateral security
(other than the Collateral and the Guarantees) for the Borrower's
obligations in connection with such Letter of Credit, before being
presented with a drawing thereunder, and (iii) if the Applicable Issuer is
not timely reimbursed for the amount of any drawing under a Letter of
Credit on the date such drawing is paid, the Borrower's obligation to
reimburse the Applicable Issuer for the amount of such drawing shall bear
interest (which the relevant Borrower hereby promises to pay) from and
after the date such drawing is paid at a rate per annum equal to the sum of
2% plus the Applicable Margin for Eurodollar Loans from time to time in
effect. The Issuer will promptly notify the Agent of each request for a
Letter of Credit and of the issuance of a Letter of Credit and the Agent
shall promptly thereafter so notify each of the Lenders. If an Issuer
issues any Letters of Credit with expiration dates that are automatically
extended unless such Issuer gives notice that the expiration date will not
so extend beyond its then scheduled expiration date, such Issuer 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 after the Termination
Date, (ii) the Commitments have been terminated, or (iii) an Event of
Default exists and the Required Lenders have given the Issuer instructions
not to so permit the extension of the expiration date of such Letter of
Credit. Without limiting the generality of the foregoing, the parties
hereto hereby confirm and agree that each Issuer's obligation to issue,
amend or extend the expiration date of a Letter of Credit is subject to the
conditions of Section 6, the other terms of this Section 1.3 and the other
provisions of this Agreement and such Issuer will not issue, amend or
extend the expiration date of any Letter of Credit if any Lender notifies
such Issuer of any Default or Event of Default that is continuing and
directs the Issuer not to take such action.
(c) The Reimbursement Obligation. Subject to Section 1.3(b) hereof,
the obligation of a Borrower to reimburse the Applicable Issuer for all
drawings under a Letter of Credit issued for such Borrower's account (a
"Reimbursement Obligation") shall be governed by the Application related to
such Letter of Credit, except that reimbursement of each drawing shall be
made in immediately available funds at the designated office of such Issuer
by no later than 12:00 Noon (local time at the issuing office of the
Issuer) on the date when such drawing is paid. If the relevant Borrower
does not make any such reimbursement payment on the date due and the
Participating Lenders (as hereinafter defined) fund their participations
therein in the manner set forth in Section 1.3(d) below, then all payments
thereafter received by the Applicable Issuer in discharge of any of the
relevant Reimbursement Obligations shall be distributed in accordance with
Section 1.3(d) below.
(d) The Participating Interests. Each Lender, by its acceptance
hereof, severally agrees to purchase from the Applicable Issuer, and the
Applicable Issuer hereby agrees to sell to each such Lender (a
"Participating Lender"), an undivided percentage participating interest (a
"Participating Interest"), to the extent of its Percentage, in each Letter
of Credit issued by, and each Reimbursement Obligation owed to, the
Applicable Issuer. Upon any failure by a Borrower to pay any Reimbursement
Obligation in respect of a Letter of Credit issued for such Borrower's
account at the time required on the date the related drawing is paid, as
set forth in Section 1.3(c) above, or if the Applicable Issuer is required
at any time to return to a Borrower or to a trustee, receiver, liquidator,
custodian or other Person any portion of any payment of any Reimbursement
Obligation, each Participating Lender shall, not later than the Business
Day it receives a certificate from the Applicable Issuer to such effect, if
such certificate is received before 1:00 p.m. (local time at the office of
the Issuer), or not later than the following Business Day, if such
certificate is received after such time, pay to the Applicable Issuer an
amount equal to its Percentage of such unpaid or recaptured Reimbursement
Obligation together with interest on such amount accrued from the date the
related payment was made by the Applicable Issuer to the date of such
payment by such Participating Lender at a rate per annum equal to (i) from
the date the related payment was made by the Applicable Issuer to the date
two (2) Business Days after payment by such Participating Lender is due
hereunder, the Federal Funds Rate for each such day and (ii) from the date
two (2) Business Days after the date such payment is due from such
Participating Lender to the date such payment is made by such Participating
Lender, the rate per annum determined by adding the Applicable Margin to
the Domestic Rate in effect for each such day. Each such Participating
Lender shall thereafter be entitled to receive its Percentage of each
payment received in respect of the relevant Reimbursement Obligation and of
interest paid thereon, with the Applicable Issuer retaining its Percentage
as a Lender hereunder.
The several obligations of the Participating Lenders to the Issuers
under this Section 1.3 shall be absolute, irrevocable and unconditional
under any and all circumstances whatsoever (except, to the extent such
Borrower is relieved from its obligation to reimburse the Applicable Issuer
for a drawing under a Letter of Credit due solely to the Applicable
Issuer's gross negligence or willful misconduct in determining that
documents received under the Letter of Credit comply with the terms thereof
as determined by a final, non-appealable judgment of a court of competent
jurisdiction) and shall not be subject to any set-off, counterclaim or
defense to payment which any Participating Lender may have or have had
against any one or more of the Borrowers, the Agent, any other Lender or
any other Person whatsoever. Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event
of Default or by any reduction or termination of any Commitment of any
Lender, and each payment by a Participating Lender under this Section 1.3
shall be made without any offset, abatement, withholding or reduction
whatsoever. The Agent shall be entitled to offset amounts received for the
account of a Lender under this Agreement against unpaid amounts due from
such Lender hereunder (whether as fundings of participations, indemnities
or otherwise).
(e) Indemnification. Each of the Participating Lenders shall, to the
extent of their respective Percentages, indemnify the Issuers (to the
extent not reimbursed by the Borrowers) against any cost, expense
(including reasonable counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result solely from the applicable
Issuer's gross negligence or willful misconduct as determined by a final,
non-appealable judgment of a court of competent jurisdiction) that the
Issuers may suffer or incur in connection with any Letter of Credit. The
obligations of the Participating Lenders under this Section 1.3(e) and all
other parts of this Section 1.3 shall survive termination of this Agreement
and of all other L/C Documents.
Section 1.4. Manner of Borrowing Revolving Loans.
(a) Generally. The Company (which is acting on behalf of the Borrowers
pursuant to Section 1.7 hereof) shall give the Agent notice (which shall be
irrevocable and may be written or oral, but if oral, promptly confirmed in
writing) by 10:00 a.m. (Central Time) on any Business Day of each request
for a Borrowing of Revolving Loans, in each case specifying the Borrower to
which the proceeds of such Borrowing are to be disbursed, the amount of
each such Borrowing, the currency of such Borrowing (which must be U.S.
Dollars or an Alternative Currency, except that Domestic Rate Loans shall
only be available in U.S. Dollars), the date such Borrowing is to be made,
which shall be not less than three Business Days following the date of such
notice in the case of a Borrowing in an Alternative Currency or a Borrowing
of Eurodollar Loans, but which may be the same day in the case of a
Borrowing of Domestic Rate Loans, whether the Borrowing is to be of
Domestic Rate Loans or Eurodollar Loans and, in all cases other than a
Borrowing of Domestic Rate Loans, of the Interest Period selected therefor.
The Agent shall promptly notify each Lender of its receipt of each such
notice. Not later than 1:00 p.m. on the date specified for any Borrowing,
each Lender shall make the proceeds of its Revolving Loan comprising part
of such Borrowing available in immediately available funds to the Agent in
Chicago except (i) in the case of Revolving Loans denominated in an
Alternative Currency, which shall be made available at such office as the
Agent has previously specified in a notice to each Lender in such funds
which are then customary for the settlement of international transactions
in such currency and no later than such local time as is necessary for such
funds to be received and transferred to the relevant Borrower for same day
value on the date of the relevant Borrowing and (ii) to the extent such
Borrowing is a reborrowing, in whole or in part, of the principal amount of
a maturing Borrowing of Loans to the same Borrower and in the same currency
(a "Refunding Borrowing"), in which case each Bank shall record the
Revolving Loan made by it as a part of such Refunding Borrowing on its
books or records or on a schedule to the Note held by it, and shall effect
the repayment, in whole or in part, as appropriate, of its maturing
Revolving Loan through the proceeds of such new Revolving Loan. Subject to
all of the terms and conditions hereof, the proceeds of each Lender's
Revolving Loan denominated in U.S. Dollars shall be made available to the
relevant Borrower on the date requested at the office of the Agent in
Chicago and the proceeds of each Lender's Revolving Loans denominated in an
Alternative Currency at such office as the Agent has previously agreed to
with the relevant Borrower, in each case in the type of funds received by
the Agent from the Lenders. The Lenders' obligations to make Revolving
Loans in an Alternative Currency or to provide or participate in Letters of
Credit payable in an Alternative Currency shall always be subject to such
Alternative Currency being freely available to each of them in the relevant
market. If any Lender reasonably determines that such currency requested is
unavailable to it in the amount and for the term requested it shall so
notify the Agent within two hours of its receipt of the aforesaid notice
and the Agent shall promptly notify the Company and each other Lender of
its receipt of such notice and the request of the Company for the Borrowing
in the Alternative Currency in question shall otherwise be deemed
withdrawn. Borrowing notices shall otherwise be irrevocable.
(b) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Lender before the time when such Lender is scheduled to make
payment to the Agent of the proceeds of a Revolving Loan that such Lender
does not intend to make such payment, the Agent may assume that such Lender
has made such payment when due and the Agent may in reliance upon such
assumption (but shall not be required to) make available to the relevant
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 such
Borrower attributable to such Lender together with interest thereon in
respect of each day during the period commencing on the date such amount
was made available to such Borrower and ending on (but excluding) the date
such Lender pays such amount to the Agent at a rate per annum equal to the
Federal Funds Rate or, in the case of a Revolving Loan denominated in an
Alternative Currency, the cost to the Agent of funding the amount it
advanced to fund such Lender's Revolving Loan, as determined by the Agent.
If such amount is not received from such Lender by the Agent immediately
upon demand, the applicable Borrower will, on demand, repay to the Agent
the proceeds of the Revolving Loan attributable to such Lender with
interest thereon at a rate per annum equal to the interest rate applicable
to the relevant Revolving Loan.
Section 1.5. Minimum Borrowing Amounts. Each Borrowing of Domestic Rate
Loans shall be in an amount not less than $2,000,000, or such greater amount
which is an integral multiple of $100,000, and each Borrowing of Eurodollar
Loans shall be in an amount not less than $5,000,000, or such greater amount
which is an integral multiple of $100,000.
Section 1.6. Maturity of Loans. Each Eurodollar Loan and Swing Loan shall
mature and become due and payable on the last day of the Interest Period
applicable thereto, provided that, subject to the terms and conditions of this
Agreement, a Eurodollar Loan may be refunded through a Refunding Borrowing. Each
Domestic Rate Loan shall mature and become due and payable on the Termination
Date.
Section 1.7. Appointment of Company as Agent for Borrowers; Reliance by
Agent.
(a) Appointment. Each Borrower irrevocably appoints the Company as its
agent hereunder to make requests on such Borrower's behalf under Section 1
hereof for Borrowings to be made by such Borrower and for Letters of Credit
to be issued for such Borrower's account and to take any other action
contemplated by the Loan Documents with respect to credit extended
hereunder to such Borrower. The Agent and the Lenders shall be entitled to
conclusively presume that any action by the Company under the Loan
Documents is taken on behalf of any one or more of the Borrowers whether or
not the Company so indicates.
(b) Reliance. All requests for Borrowings and selection of interest
rates, currencies and Interest Periods to be applicable thereto may be
written or oral, including by telephone or telecopy. The Borrowers agree
that the Agent may rely on any such notice given by any person the Agent in
good faith believes is an Authorized Representative without the necessity
of independent investigation (the Borrowers hereby indemnifying the Agent
and Lenders from any liability or loss ensuing from such reliance), and in
the event any such telephonic or other oral notice conflicts with any
written confirmation, such oral or telephonic notice shall govern if the
Agent has acted in reliance thereon.
Section 1.8. Swing Loans.
(a) Generally. Subject to the terms and conditions hereof, as part of
the Revolving Credit, the Agent agrees to make loans to the Company under
the Swing Line (individually a "Swing Loan" and collectively the "Swing
Loans") which shall not in the aggregate at any time outstanding exceed the
Swing Line Sublimit. The Swing Loans may be availed of the Company from
time to time and Borrowings thereunder may be repaid and used again during
the period ending on the Termination Date; provided that each Swing Loan
must be repaid on the last day of the Interest Period applicable thereto.
Each Swing Loan shall be in a minimum amount of $250,000 or such greater
amount which is an integral multiple of $100,000.
(b) Swing Note. The Swing Loans made to the Company by the Agent shall
be evidenced by a single promissory note of the Company issued to the Agent
in the form of Exhibit A-2 hereto. Such promissory note is referred to
herein as the "Swing Note".
(c) Interest on Swing Loans. Each Swing Loan shall bear interest until
maturity (whether by acceleration or otherwise) at a rate per annum equal
to (i) the sum of the Domestic Rate plus the Applicable Margin for Domestic
Rate Loans under the Revolving Credit as from time to time in effect
(computed on the basis of a year of 365 or 366 days, as the case may be,
for the actual number of days elapsed) or (ii) the Agent's Quoted Rate (as
hereinafter defined) (computed on the basis of a year of 360 days for the
actual number of days elapsed). Interest on each Swing Loan shall be due
and payable prior to such maturity on the last day of each Interest Period
applicable thereto.
(d) Requests for Swing Loans. The Company shall give the Agent prior
notice (which may be written or oral) no later than 12:00 Noon (Chicago
time) on the date upon which the Company requests that any Swing Loan be
made of the amount and date of such Swing Loan, and the Interest Period
requested therefor. Within 30 minutes after receiving such notice, the
Agent shall in its discretion quote an interest rate to the Company at
which the Agent would be willing to make such Swing Loan available to the
Company for the Interest Period so requested (the rate so quoted for a
given Interest Period being herein referred to as "Agent's Quoted Rate").
The Company acknowledges and agrees that the interest rate quote is given
for immediate and irrevocable acceptance. If the Company does not so
immediately accept the Agent's Quoted Rate for the full amount requested by
the Company for such Swing Loan, the Agent's Quoted Rate shall be deemed
immediately withdrawn and such Swing Loan shall bear interest at the rate
per annum determined by adding the Applicable Margin for Domestic Rate
Loans under the Revolving Credit to the Domestic Rate as from time to time
in effect. Subject to the terms and conditions hereof, the proceeds of such
Swing Loan shall be made available to the Company on the date so requested
at the offices of the Agent in Chicago, Illinois. Anything contained in the
foregoing to the contrary notwithstanding, (i) the obligation of the Agent
to make Swing Loans shall be subject to all of the terms and conditions of
this Agreement and (ii) the Agent shall not be obligated to make more than
one Swing Loan during any one day.
(e) Refunding Loans. In its sole and absolute discretion, the Agent
may at any time, on behalf of the Company (which hereby irrevocably
authorizes the Agent to act on its behalf for such purpose) and with notice
to the Company, request each Lender to make a Revolving Loan in the form of
a Domestic Rate Loan in an amount equal to such Lender's Percentage of the
amount of the Swing Loans outstanding on the date such notice is given.
Unless an Event of Default described in Section 8.1(k) or 8.1(l) exists
with respect to the Company, regardless of the existence of any other Event
of Default, each Lender shall make the proceeds of its requested Revolving
Loan available to the Agent, in immediately available funds, at the Agent's
principal office in Chicago, Illinois, before 12:00 Noon (Chicago time) on
the Business Day following the day such notice is given. The proceeds of
such Borrowing of Revolving Loans shall be immediately applied to repay the
outstanding Swing Loans.
(f) Participations. If any Lender refuses or otherwise fails to make a
Revolving Loan when requested by the Agent pursuant to Section 1.8(e) above
(due to the existence of an Event of Default described in Section 8.1(k) or
8.1(l) exists with respect to the Company or otherwise), such Lender will,
by the time and in the manner such Revolving Loan was to have been funded
to the Agent, purchase from the Agent an undivided participating interest
in the outstanding Swing Loans in an amount equal to its Percentage of the
aggregate principal amount of Swing Loans that were to have been repaid
with such Revolving Loans. Each Lender that so purchases a participation in
a Swing Loan shall thereafter be entitled to receive its Percentage of each
payment of principal received on the Swing Loan and of interest received
thereon accruing from the date such Lender funded to the Agent its
participation in such Loan. The several obligations of the Lenders under
this Section shall be absolute, irrevocable, and unconditional under any
and all circumstances whatsoever and shall not be subject to any set-off,
counterclaim or defense to payment which any Lender may have or have had
against the Company, any other Borrower, any Guarantor, any other Lender or
any other Person whatever. Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event
of Default or by any reduction or termination of the Commitments of any
Lender, and each payment made by a Lender under this Section shall be made
without any offset, abatement, withholding or reduction whatsoever.
Section 1.9. Default Rate. Notwithstanding anything to the contrary
contained herein, while any Event of Default exists or after acceleration, the
relevant Borrower shall pay interest (after as well as before entry of judgment
thereon to the extent permitted by law) on the principal amount of all Loans
owing by it at a rate per annum equal to:
(a) for any Domestic Rate Loan or any Swing Loan bearing interest
based on the Domestic Rate, the sum of 2.0% plus the Applicable Margin plus
the Domestic Rate from time to time in effect;
(b) for any Eurodollar Loan denominated in U.S. Dollars or any Swing
Loan bearing interest at the Agent's Quoted Rate, the sum of 2.0% plus the
rate of interest in effect thereon at the time of such Event of Default
until the end of the Interest Period applicable thereto and, thereafter, at
a rate per annum equal to the sum of 2.0% plus the Applicable Margin for
Domestic Rate Loans plus the Domestic Rate from time to time in effect; and
(c) for any Eurodollar Loan denominated in an Alternative Currency,
the sum of 2.0% plus the rate of interest in effect thereon at the time of
such Event of Default until the end of the Interest Period applicable
thereto and, thereafter at a rate per annum equal to the sum of the
Applicable Margin, plus a rate of two percent (2.0%) plus the rate of
interest per annum as determined by the Agent (rounded upwards, if
necessary, to the nearest whole multiple of one-sixteenth of one percent
(1/16%)) at which overnight or weekend deposits of the appropriate currency
(or, if such amount due remains unpaid more than three Business Days, then
for such other period of time not longer than six months as the Agent may
elect in its absolute discretion) for delivery in immediately available and
freely transferable funds would be offered by the Agent to major banks in
the interbank market upon request of such major banks for the applicable
period as determined above and in an amount comparable to the unpaid
principal amount of any such Loan (or, if the Agent is not placing deposits
in such currency in the interbank market, then the Agent's cost of funds in
such currency for such period).
provided, however, that in the absence of acceleration, any adjustments pursuant
to this Section shall be made at the election of the Agent, acting at the
request or with the consent of the Required Lenders, with written notice to the
Borrowers. While any Event of Default exists or after acceleration, interest
shall be paid on demand of the Agent at the request or with the consent of the
Required Lenders.
Section 1.10. Increase in Commitment. Provided no Default or Event of
Default has occurred and is continuing, the Company may, on any Business Day on
or prior to the Termination Date, from time to time, increase the aggregate
amount of the Commitments up to a maximum amount of $500,000,000 by delivering a
Commitment Amount Increase Request in the form of Exhibit E hereto at least five
(5) Business Days prior to the desired effective date of such increase (the
"Commitment Amount Increase") identifying an additional Lender acceptable to the
Agent and each Applicable Issuer in their reasonable discretion or additional
Commitment agreed to be made by any existing Lender (each such additional Lender
or existing Lender (in its capacity as such) being referred to as an "Additional
Lender") and the amount of its Commitment (or additional amount of its
Commitment). The effective date of the Commitment Amount Increase shall be
agreed upon by the Company, such Additional Lender and the Agent (whose
agreement shall not be unreasonably withheld or delayed). Upon the effectiveness
thereof, each Additional Lender shall advance Revolving Loans and purchase
Participating Interests in all then outstanding Letters of Credit in an amount
sufficient such that after giving effect to such Revolving Loans and purchases
each Lender (including such Additional Lender) shall have outstanding its
respective Percentage of the aggregate Revolving Loans and Participating
Interests then outstanding. It shall be a condition to such effectiveness that
no Eurodollar Loans be outstanding on the date of such effectiveness and that
the Company shall not have terminated any portion of the Commitments pursuant to
Section 3.5(a) hereof. The Company agrees to pay any reasonable fees or expenses
of the Agent (including reasonable fees and disbursements of counsel) relating
to any Commitment Amount Increase. Notwithstanding anything herein to the
contrary, no Lender shall have any obligation to increase its Commitment and no
Lender's Commitment shall be increased without its consent thereto, and each
Lender may at its option, unconditionally and without cause, decline to increase
its Commitment.
SECTION 2. INTEREST.
Section 2.1. Domestic Rate Loans. Each Domestic Rate Loan shall bear
interest (which the relevant Borrower promises to pay in arrears at the times
herein provided) at the rate per annum determined by adding the Applicable
Margin to the Domestic Rate as in effect from time to time, provided that if a
Domestic Rate Loan is not paid when due (whether by lapse of time, acceleration
or otherwise), such Revolving Loan shall bear interest (which the relevant
Borrower promises to pay at the times hereinafter provided), whether before or
after judgment, and until payment in full thereof, at the rate per annum
specified in Section 1.9 hereof. Interest on the Domestic Rate Loans shall be
payable in arrears on the last day of each calendar month (beginning on the
first of such dates after the date hereof) and at maturity of the Revolving
Credit Notes and interest after maturity shall be due and payable upon demand.
Section 2.2. Eurodollar Loans. Each Eurodollar Loan shall bear interest
(which the relevant Borrower promises to pay in arrears at the times herein
provided) on the unpaid principal amount thereof from time to time outstanding
from the date of the Borrowing of such Eurodollar Loan until maturity (whether
by acceleration or otherwise) at a rate per annum equal to the sum of the
Applicable Margin plus Adjusted LIBOR, payable on the last day of the applicable
Interest Period and at maturity (whether by acceleration or otherwise), and, if
the applicable Interest Period is longer than three months, on the date
occurring three months after the date of the Borrowing of such Loan; provided
that if a Eurodollar Loan is not paid when due (whether by acceleration or
otherwise), such Loan shall bear interest (which the relevant Borrower promises
to pay at the times herein provided) from the date such payment was due until
paid in full, payable on demand, at the rate per annum specified in Section 1.9
hereof.
Section 2.3. Rate Determinations. The Agent shall determine each interest
rate applicable to the Loans hereunder in accordance herewith, and its
determination thereof shall be deemed prima facie correct.
Section 2.4. Computation of Interest. All interest on Domestic Rate Loans
shall be computed on the basis of a year of 365 or 366 days, as the case may be,
for the actual number of days elapsed. All interest on Eurodollar Loans and
Swing Loans bearing interest at the Agent's Quoted Rate (and unless otherwise
stated herein, all fees, charges and commissions due hereunder) shall be
computed on the basis of a year of 360 days for the actual number of days
elapsed, except for Eurodollar Loans denominated in Pounds Sterling which shall
be computed on the basis of a year of 365 or 366 days, as the case may be.
Section 2.5. Funding Indemnity. If any Lender shall incur any loss, cost or
expense (including, without limitation, any loss of profit, and any loss, cost
or expense incurred by reason of the liquidation or re-employment of deposits or
other funds acquired by such Lender to fund or maintain any Eurodollar Loan or
Swing Loan or the relending or reinvesting of such deposits or amounts paid or
prepaid to such Lender) as a result of:
(i) any payment or prepayment of a Eurodollar Loan or Swing Loan
on a date other than the last day of its Interest Period for any
reason,
(ii) any failure (because of a failure to meet the conditions of
Borrowing or otherwise) by a Borrower to borrow or refund a Eurodollar
Loan or Swing Loan on the date specified in a notice given pursuant to
this Agreement,
(iii) any failure by a Borrower to make any payment of principal
on any Eurodollar Loan or Swing Loan when due (whether by acceleration
or otherwise), or
(iv) any acceleration of the maturity of a Eurodollar Loan or
Swing Loan as a result of the occurrence of any Event of Default
hereunder,
then, upon the demand of such Lender, the applicable 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
Company, with a copy to the Agent, 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) and the amounts shown on such certificate shall be deemed
prima facie correct.
Section 2.6. 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 Loans in an Alternative Currency or Eurodollar Loans, such
Lender shall promptly give notice thereof to the Borrower and such Lender's
obligations to make or maintain Eurodollar Loans or Loans in an Alternative
Currency (as applicable) under this Agreement shall terminate until it is no
longer unlawful for such Bank to make or maintain such Loans. The applicable
Borrower shall prepay on demand the outstanding principal amount of any such
affected 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 applicable
Borrower may then elect to borrow the principal amount of the affected Loans
from such Lender by means of Domestic Rate Loans which Loans shall not be made
ratably by the Lenders but only from such affected Lender.
Section 2.7. Unavailability. If prior to the commencement of any Interest
Period for any Borrowing of Eurodollar Loans:
(a) the Agent determines that deposits in the applicable currency (in
the applicable amounts) are not being offered to it in the eurocurrency
interbank market for such Interest Period, or that by reason of
circumstances affecting the interbank eurocurrency market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR, or
(b) the Required Lenders notify the Agent that (i) LIBOR as determined
by the Agent will not adequately and fairly reflect the cost to such
Lenders of funding their Loans in the currency in question for such
Interest Period or (ii) that the making or funding of Loans in the relevant
currency has become impracticable, in either case as a result of an event
occurring after the date hereof which in the opinion of such Lenders
materially adversely affects such Loans,
then and in any such event the Agent shall not less than two days prior to the
commencement of such Interest Period, give notice thereof to the Company and the
Lenders, whereupon until the Agent notifies the Company that the circumstances
giving rise to such suspension no longer exist, the obligations of the Lenders
to make Loans in the currency so affected or to make Eurodollar Loans (as
applicable) shall be suspended.
Section 2.8. Increased Cost and Reduced Return. If, on or after the date
hereof, the adoption of any applicable law, rule or regulation, or any change
therein, 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) with any request or directive (whether or not having the force
of law) of any such authority, central bank or comparable agency:
(i) shall subject any Lender (or its applicable lending office)
to any tax, duty or other charge with respect to any of its Eurodollar
Loans, its Revolving Credit Notes, its Letter(s) of Credit, or its
participation in any thereof, or its obligation to make Loans, issue a
Letter of Credit, or to participate therein, or shall change the basis
of taxation of payments to any Lender (or its applicable lending
office) of the principal of or interest on any of its Eurodollar
Loans, Letter(s) of Credit, or participations therein or any other
amounts due under this Agreement in respect of its Eurodollar Loans,
Letter(s) of Credit, or participations therein or its obligation to
make Eurodollar Loans, issue a Letter 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
applicable lending office is located); or
(ii) shall impose, modify or deem 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, but excluding with respect to any such requirement
included in an applicable Eurocurrency Reserve Percentage) against
assets of, deposits with or for the account of, or credit extended by,
any Lender (or its applicable lending office) or shall impose on any
Lender (or its lending office) or on the interbank market any other
condition affecting its Revolving Loans, its Revolving Credit Notes,
its Letter(s) of Credit, or its participation in any thereof, any of
its obligation to make Revolving Loans, to issue a Letter of Credit,
or to participate therein;
and the result of any of the foregoing is to increase the cost to such Lender
(or its lending office) of making or maintaining any Revolving Loan in the
currency requested or issuing or maintaining a Letter of Credit, or
participating therein, or to reduce the amount of any sum received or receivable
by such Lender (or its applicable lending office) under this Agreement or under
its Notes with respect thereto, by an amount in each case deemed by such Lender,
in its reasonable judgment, to be material, then, within fifteen (15) days after
demand by such Lender (with a copy to the Agent), the Company shall be obligated
to pay to such Lender such additional amount or amounts as will compensate such
Lender for such increased cost or reduction.
Each Lender that determines to seek compensation under this Section 2.8
shall notify the Company and the Agent of the circumstances that entitle the
Lender to such compensation pursuant to this Section 2.8 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 reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender. A certificate of any
Lender claiming compensation under this Section 2.8 and setting forth the
additional amount or amounts to be paid to it hereunder shall be deemed prima
facie correct. In determining such amount, such Lender may use any reasonable
averaging and attribution methods.
Section 2.9. Lending Offices. Each Lender may, at its option, elect to make
its Loans hereunder at the branch, office or affiliate specified on the
appropriate signature page hereof (each a "Lending Office") for each type of
Revolving 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 notice to the
Company and the Agent (but such funds shall in any event be made available to
the Company at the office of the Agent as herein provided for), provided that
the Company shall not be required to reimburse any Lender under any of the
provisions of this Section 2 for any cost which such Lender would not have
incurred but for changing its lending or funding branch unless the Company
consented in writing to such change.
Section 2.10. 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 under this Agreement shall be made as if each Lender had actually
funded and maintained each Eurodollar Loan through the purchase of deposits in
the relevant market and in the relevant currency having a maturity corresponding
to such Eurodollar Loan's Interest Period and bearing an interest rate equal to
Adjusted LIBOR for the currency in question for such Interest Period.
Section 2.11. Capital Adequacy. If any Lender shall determine that any
applicable law, rule or regulation regarding capital adequacy instituted after
the date hereof, or any change in the interpretation or administration of any
applicable law, rule or regulation regarding capital adequacy by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by such 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 as a consequence of its obligations hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Lender could have achieved but for such law, rule, regulation, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time as specified by such Lender the Company shall pay on
demand such additional amount or amounts as will compensate such Lender for such
reduction. A certificate of any Lender claiming compensation under this Section
2.11 and setting forth the additional amount or amounts to be paid to it
hereunder in reasonable detail shall be prima facie evidence thereof. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.
Section 3.1. Commitment Fee. For the period from the Closing Date to and
including the Termination Date, the Borrowers shall pay to the Agent for the
account of the Lenders a non-refundable commitment fee at the rate per annum
equal to the Applicable Margin (computed on the basis of a year of 360 days and
actual days elapsed) on the average daily Unused Commitments; provided however
that for any calendar quarter during which the average daily outstanding balance
of Revolving Loans, Swing Loans and L/C Obligations is less than 25% of the
aggregate Commitments the rate per annum set forth above shall increase by
0.05%. Such fee is due and payable in arrears on the last day of each calendar
quarter (commencing with the first of such dates after the date hereof) and on
the Termination Date.
Section 3.2. Other Fees. The Company shall pay to the Agent such other and
additional fees as may from time to time be agreed to between the Company and
the Agent.
Section 3.3. Letter of Credit Fees. The applicable Borrowers shall pay to
the Agent, for the ratable account of the Lenders, a fee on the amount of the
L/C Obligations from time to time outstanding computed (i) at the Applicable
Margin in the case of Financial Letters of Credit and (ii) the Applicable Margin
less the rate of 3/4 of 1% per annum in the case of Performance Letters of
Credit, subject to a minimum of 0.50% (in each case computed on the basis of a
year of 360 days and actual days elapsed), each such fee to be due and payable
quarterly in arrears on the last day of each calendar quarter and on the
Termination Date. In addition, on the date of issuance of each Letter of Credit
the applicable Borrower shall pay the Applicable Issuer for its own account an
issuance fee of 1/8 of 1% of the face amount of such Letter of Credit, such fee
to be retained by the Applicable Issuer for its own account. In addition, the
applicable Borrower shall pay to the Applicable Issuer such issuing, processing,
drawing, amendment and other fees and charges as the Applicable Issuer
customarily imposes in connection with the issuance of letters of credit of the
type in question, the payment of drafts thereunder or amendments thereto.
Section 3.4. Voluntary Prepayments. The Borrowers shall have the privilege
of prepaying without premium or penalty (except as set forth in Section 2.5
above) and in whole or in part (but, if in part, then: (i) in an amount not less
than $2,000,000, or such lesser amount as may then be outstanding, and (ii) in
each case, in an amount such that the minimum amount required for a Borrowing
pursuant to Section 1.5 hereof remains outstanding) any Borrowing of Eurodollar
Loans at any time upon three (3) Business Days prior notice by the Borrower to
the Agent or, in the case of a Borrowing of Domestic Rate Loans or Swing Loans,
notice delivered by the Borrower to the Agent no later than 10:00 a.m. (Chicago
time) on the date of prepayment, such prepayment to be made by the payment of
the principal amount to be prepaid and, in the case of any Eurodollar Loans or
Swing Loans, accrued interest thereon to the date fixed for prepayment plus any
amounts due the Lenders under Section 2.5 hereof.
Section 3.5. Mandatory Prepayments and Commitment Reductions.
(a) Commitments. In the event that the aggregate amount of Revolving
Loans, Swing Loans and L/C Obligations shall at any time and for any reason
exceed the Commitments or the aggregate amount of Revolving Loans, Swing
Loans and L/C Obligations owing from any Borrower shall exceed any
applicable Sublimit, in each case for any reason (including changes in
currency rates), the Borrowers shall immediately and without notice or
demand pay the amount of the excess to the Agent as and for a mandatory
prepayment on the Revolving Credit Notes or, if the Revolving Loans have
been paid in full but L/C Obligations are outstanding, then and in any such
event, such excess shall be paid over to the Agent to be applied against,
or held as collateral security for, as applicable, such L/C Obligations.
(b) Asset Dispositions. (i) If any Borrower or any Restricted
Subsidiary shall at any time or from time to time make or agree to make a
Disposition or shall suffer an Event of Loss resulting in Net Cash Proceeds
in excess of $5,000,000 individually or on a cumulative basis in any fiscal
year of the Borrowers, to the extent the aggregate amount of all such Net
Cash Proceeds received by the Borrowers and the Restricted Subsidiaries
during the period from and including the date hereof to and including the
date of such Disposition or Event of Loss exceed 10% of the book value of
assets of the Borrowers and the Restricted Subsidiaries as of such date,
then (x) the Company shall promptly notify the Agent of such proposed
Disposition or Event of Loss (including the amount of the estimated Net
Cash Proceeds to be received by such Borrower or such Subsidiary in respect
thereof) and (y) such Net Cash Proceeds shall be paid over to the Agent
promptly upon receipt by such Borrower or such Restricted Subsidiary of the
Net Cash Proceeds of such Disposition or Event of Loss for application as
set forth herein. Immediately upon receipt by the Borrower or such
Restricted Subsidiary of such Net Cash Proceeds, the Commitments shall
ratably terminate in an aggregate amount equal to 100% of the amount of all
such Net Cash Proceeds and the Agent shall apply such Net Cash Proceeds to
the payment of all amounts, if any, required by Section 3.5(c) hereof;
provided that in the case of each Disposition and Event of Loss so long as
no Default or Event of Default shall have occurred and is then continuing,
if the Company states in its notice of such event that the applicable
Borrower or the applicable Subsidiary intends to reinvest, within 180 days
of the applicable Disposition or receipt of Net Cash Proceeds from an Event
of Loss, the Net Cash Proceeds thereof in assets similar to the assets
which were subject to such Disposition or Event of Loss, then the Agent
shall deposit such Net Cash Proceeds in the Collateral Account and the
Commitments shall not so terminate under this Section to the extent such
Net Cash Proceeds are actually reinvested in such similar assets within
such 180-day period. Concurrently with any such reinvestment, the Agent
shall return the amount of such Net Cash Proceeds to be reinvested to the
Company. Promptly after the end of such 180-day period, in the event that
the applicable Borrower or Restricted Subsidiary has not reinvested any of
such Net Cash Proceeds in such similar assets, the Commitments shall
immediately terminate in an amount equal to 100% of such Net Cash Proceeds
and the Agent shall promptly apply such Net Cash Proceeds to the payment of
all amounts, if any, required by Section 3.5(c) below and release the
balance thereof to the Company. In the event and to the extent that any
Commitment reduction pursuant to this Section 3.5(b) does not require a
prepayment of Loans or prefunding of L/C Obligations pursuant to Section
3.5(c) below, the Agent shall promptly return the Net Cash Proceeds not
required for such purpose to the Company.
(c) Commitment Terminations. The Borrowers shall, on each date the
Commitments are reduced pursuant to Section 3.5(b) or 3.6 hereof, prepay
the Revolving Loans, Swing Loans, and, if necessary, prefund the L/C
Obligations by the amount necessary to reduce the sum of the aggregate
principal amount of Revolving Loans, Swing Loans, and L/C Obligations then
outstanding to the amount to which the Commitments have been so reduced.
Section 3.6. Voluntary Terminations. The Borrowers shall have the privilege
without any penalty or fee upon five Business Days' prior notice from the
Company (which need not be joined in by any Borrower) to the Agent (which shall
promptly notify the Lenders) to ratably terminate the Commitments in whole or in
part (but if in part then in the amount of $5,000,000 or such greater amount
which is an integral multiple of $100,000, unless the Commitments shall be less
than $5,000,000); provided that the Commitments may not be reduced to an amount
less than the sum of all Revolving Loans and all L/C Obligations then
outstanding unless there is deposited with the Agent as cash collateral for such
Revolving Loans and L/C Obligations cash in the amount by which the same exceed
the amount of the Commitments. Any termination of the Revolving Commitments
below any Sublimit or the Swing Line Sublimit then in effect shall reduce such
Sublimit or Swing Line Sublimit, as applicable, by a like amount. The Agent
shall give prompt notice to each Lender of any such termination of the
Commitments.
Section 3.7. Place and Application. All payments of principal, interest and
fees shall be made to the Agent at its office at 111 West Monroe Street,
Chicago, Illinois (or at such other place as the Agent may specify) in
immediately available and freely transferable funds at the place of payment by
no later than 12:00 Noon Central Time on the due date thereof or, if such
payment is to be made in an Alternative Currency, by no later than 12:00 Noon
local time at the place of payment to such office as the Agent has previously
specified; provided however that reimbursements of drawings under Letters of
Credit shall be made to the Applicable Issuer. Any payments received by the
Agent or such Applicable Issuer after such time shall be deemed received as of
the opening of business on the next Business Day. All such payments shall be
made (i) in U.S. Dollars, in immediately available funds at the place of
payment, or (ii) in the case of Revolving Loans or reimbursement of drawings
under a Letter of Credit in an Alternative Currency, in such Alternative
Currency in such funds then customary for settlement of international
transactions in such currency. All such payments shall be made without set-off
or counterclaim and without reduction for, and free from, any and all present or
future taxes, levies, imposts, duties, fees, charges, deductions, withholdings,
restrictions or conditions of any nature imposed by any government or political
subdivision or taxing authority thereof. Except as herein provided, all payments
shall be received for the ratable account of the Lenders and shall be
distributed by the Agent to the Lenders in accordance with their Percentages on
the date the Agent receives payment, or if the Agent receives payment later than
12:00 Noon Central Time, then no later than the next Business Day. Any amount
prepaid on the Revolving Credit Notes may, subject to all of the terms and
conditions hereof, be borrowed, repaid and borrowed again. Unless the applicable
Borrower otherwise requests, each prepayment shall be first applied to such
Borrower's Domestic Rate Loans and then to its Eurodollar Loans in the order in
which their Interest Periods expire. Any prepayment of Eurodollar Loans shall be
accompanied by any amount due the Lenders under Section 2.5 hereof but
acceptance of any such prepayment without such a payment being made shall not
preclude a later demand by the Lenders for such payment.
Anything contained herein to the contrary notwithstanding, all payments and
collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Agent or any of the Lenders after
the occurrence of an Event of Default shall be remitted to the Agent and
distributed as follows:
(a) first, to the payment of any outstanding costs and expenses
incurred by the Agent in monitoring, verifying, protecting, preserving or
enforcing the Liens on the Collateral or by the Agent in protecting,
preserving or enforcing rights under the Loan Documents, and in any event
all costs and expenses of a character which the Borrowers have agreed to
pay under Section 11.5 hereof (such funds to be retained by the Agent for
its own account unless the Agent has previously been reimbursed for such
costs and expenses by the Lenders, in which event such amounts shall be
remitted to the Lenders to reimburse them for payments theretofore made to
the Agent);
(b) second, to the payment of principal and interest on the
Swing Note until paid in full;
(c) third, to the payment of any outstanding interest or
other fees or amounts due under the Revolving Credit Notes and the
other Loan Documents, in each case other than for principal or in
reimbursement or collateralization of L/C Obligations, ratably as among
the Agent and the Lenders in accord with the amount of such interest
and other fees or amounts owing each;
(d) fourth, to the payment of the principal of the Revolving
Credit Notes and any unpaid Reimbursement Obligations and to the Agent
to be held as collateral security for any other L/C Obligations (until
the Agent is holding an amount of cash equal to the then outstanding
amount of all such L/C Obligations), and Hedging Liability, the
aggregate amount paid to or held as collateral security for the Lenders
and, in the case of Hedging Liability, their Affiliates, to be
allocated pro rata in accordance with the then aggregate unpaid amounts
owing to each holder thereof;
(e) fifth, to the Agent and the Lenders ratably in accordance
with the amounts of any other indebtedness, obligations or liabilities
of the Borrowers owing to each of them and secured by the Collateral
Documents unless and until all such indebtedness, obligations and
liabilities have been fully paid and satisfied; and
(f) sixth, to the Company on behalf of the Borrowers (each
Borrower hereby agreeing that its recourse for its share of such
payment shall be to the Company and not the Agent or any Lender) or
whoever else may be lawfully entitled thereto.
Section 3.8. Notations and Requests. All Borrowings made against the
Revolving Credit Notes or the Swing Note, the Borrower which made such
Borrowings, the rates of interest applicable thereto, the maturity thereof and
the currency in which each such Borrowing is denominated, shall be recorded by
the Lenders on their books or, at their option in any instance, endorsed on the
reverse side of the Revolving Credit Notes or Swing Note, as applicable, and the
unpaid principal balances and status, rates and currencies so recorded or
endorsed by the Lenders shall be prima facie evidence in any court or other
proceeding brought to enforce the Revolving Credit Notes or Swing Note of the
principal amount remaining unpaid thereon, the Borrower which made the
Borrowings evidenced thereby, the currencies in which such Borrowings are
payable, the interest rates applicable thereto and the maturity thereof. Prior
to any negotiation of any Revolving Credit Note or Swing Note, the Lender
holding such Revolving Credit Note shall endorse thereon the outstanding amount
of Borrowings evidenced thereby, the currencies in which the same are payable,
the rates of interest applicable thereto and the maturities thereof.
SECTION 4. THE COLLATERAL AND THE GUARANTEES.
Section 4.1. The Collateral. The Obligations and Hedging Liability (i) of
the U.S. Borrowers shall be secured by valid and perfected first Liens on all
inventory, accounts receivable, equipment and other personal property (as
further described in the Collateral Documents) of the U.S. Borrowers and the
U.S. Subsidiaries which are Guarantors and, subject to the provisions of this
Section 4.1, all capital stock of all Guarantors, together with all instruments,
securities, chattel paper and intangibles of the U.S. Borrowers and the U.S.
Subsidiaries which are Guarantors and all proceeds of the foregoing, and (ii) of
the U.K. Borrowers and the Canadian Borrowers shall be secured by valid and
perfected first Liens on all inventory, accounts receivable, equipment and
personal property (as further described in the Collateral Documents) of the U.S.
Borrowers, U.K. Borrowers, the Canadian Borrowers, the U.S. Subsidiaries which
are Guarantors, the U.K. Subsidiaries which are Guarantors and the Canadian
Subsidiaries which are Guarantors, subject to the provisions of this Section
4.1, all capital stock of all Guarantors, together with all instruments,
securities, chattel paper and intangibles of the U.S. Borrowers, the U.K.
Borrowers, the Canadian Borrowers, the U.S. Subsidiaries which are Guarantors,
the U.K. Subsidiaries which are Guarantors and the Canadian Subsidiaries which
are Guarantors and all proceeds of the foregoing; provided however that unless
and until the Required Lenders otherwise elect (i) the Borrowers and the
Guarantors shall not be required to note the Agent's Lien on any certificate of
title issued for a vehicle or to perfect a Lien on fixtures and (ii) no
Guarantor, the fair market value of whose assets aggregate less than $1,000,000
shall be required to grant Liens on its assets to the Agent, further provided
that (i) Liens on (a) any contract (or modification thereof) (a "Contract") to
which any Guarantor is a party ("Contractor"), the performance of which is
guaranteed by any bond, undertaking, instrument of guarantee or any
continuation, extension, alteration, renewal or substitution thereof, executed
by any bonding company of a Contractor; (b) any subcontract or purchase order
and against any legal entity and its bonding company which has contracted with a
Contractor to furnish labor, materials, equipment, and supplies in connection
with any Contract; (c) monies, Contract balances, due or to become due any
Contractor on any Contract, including all monies earned or unearned which are
unpaid at the time of notification by a bonding company to the obligee of the
bonding company's rights under any agreement of indemnity with a Contractor; (d)
any actions, causes of action, claims or demands whatsoever which a Contractor
may have or acquire against any party to a Contract or arising out of or in
connection with any Contract, including but not limited to those against
obligees and design professionals any bonding company or binding companies of
any obligee; (e) any and all rights, title, interest in, or use of any patent,
copyright or trade secret which is or may be necessary for the completion of any
bonded work; (f) all monies due or to become due to a Contractor on any policy
of insurance relating to any claims arising out of the performance of any
Contract or to premium refunds, including, but not limited to, builders risk,
fire, employee dishonesty or workers' compensation policies; (g) all supplies,
tools, plants, material, inventory, and equipment (whether completely
manufactured or not), wherever located, which have been or hereafter may be
purchased, used, or acquired for use, entirely or partly, in connection with or
to be incorporated into the matter that is the subject of any Contract; and (h)
all amounts that may be owing from time to time by a bonding company to a
Contractor or any Guarantor in any capacity including, without limitation, any
balance or share belonging to such Contractor or Guarantor or any deposit or
other account with a bonding company, may be subject to prior Liens in favor of
bonding companies to secure obligations in connection with such payment and
performance bonds; (ii) no Lien need be granted on any asset subject to a lien
permitted by Section 7.11(e), (i), (l) (as to Liens on fixed assets only) or (m)
(iii) no Lien need be granted on the capital stock of an Unrestricted Subsidiary
or on the capital stock or assets of Designated Foreign Restricted Subsidiaries,
(iv) no Liens need be granted on real property unless and until the Required
Lenders so require, (v) Liens granted may be subject and subordinate to Liens
permitted by clauses (a), (b), (c), (e), (f), (g), (h), (j), (k), (n), (o) and
(q) of Section 7.11 hereof, (vi) Liens need not be perfected by possession or
control (but may be perfected by the filing of a financing statement) on notes
receivable having a fair value of less than $1,000,000 in any instance and
$5,000,000 in the aggregate or on bonds or notes pledged to the City of New York
in lieu of retainage, (vii) Liens need not be perfected by possession or control
(but may be perfected by the filing of a financing statement) on equity
securities (other than capital stock of Restricted Subsidiaries to the extent
required hereby) having a fair value of less than $1,000,000 in any instance and
[$5,000,000] in the aggregate and (viii) no lien need be granted on any
contract, license, permit or franchise, that validly prohibits the creation,
attachment, or perfection of a security interest in favor of the Agent of a
security interest in such contract, license, permit or franchise (or in any
rights or property obtained by such Person under such contract, license, permit
or franchise), (ix) no lien need be granted on any rights or property to the
extent that any valid and enforceable law or regulation applicable to such
rights or property prohibits the creation of a security interest therein, and
(x) no lien need be granted on any rights or property to the extent that such
rights or property secure purchase money financing therefor permitted by this
Credit Agreement and the agreements providing such purchase money financing
prohibit the creation of a further security interest therein. The Borrowers
agree that they will, and will cause the Guarantors to, from time to time at the
request of the Agent or the Required Lenders execute and deliver such documents,
security agreements, assignments, pledges, hypothecs or charges and do such acts
and things as the Agent or the Required Lenders may reasonably request in order
to provide for or perfect such Liens on the Collateral. Notwithstanding anything
to the contrary contained herein or in any other Loan Document, the Collateral
owned by the U.K Subsidiaries and the Canadian Subsidiaries (including without
limitation equity interests in other U.K. Subsidiaries and Canadian
Subsidiaries) shall secure solely the indebtedness, liabilities and obligations
of the U.K. Subsidiaries and the Canadian Subsidiaries hereunder and under the
other Loan Documents and not the indebtedness, liabilities and obligations of
the U.S. Borrowers and the U.S. Subsidiaries hereunder and under the other Loan
Documents. Notwithstanding the foregoing, the portion of the capital stock of
each U.K. Subsidiary and Canadian Subsidiary owned by a U.S. Corporation and
constituting Collateral in excess of 65% of the total issued and outstanding
capital stock of such Subsidiary (herein, the "Excess Stock Collateral") shall
secure only the indebtedness liabilities and obligations of the Canadian
Subsidiaries and/or U.K. Subsidiaries hereunder and under the other Loan
Documents. In no event shall the Excess Stock Collateral secure the
indebtedness, liabilities and obligations of the U.S. Borrowers or the U.S.
Subsidiaries hereunder or under the other Loan Documents. Notwithstanding the
foregoing, no Lien need be granted on the capital stock of a captive insurance
company or captive surety company if the granting of such Lien would violate
applicable law or require the consent of any applicable regulatory body.
Section 4.2. The Guarantees. The Obligations and Hedging Liability (i) of
the U.S. Borrowers shall be fully guaranteed by the Company and the U.S.
Subsidiaries which are Guarantors and (ii) of the U.K. Borrowers and the
Canadian Borrowers shall be fully guaranteed by the Company, the U.S.
Subsidiaries, the U.K. Subsidiaries and the Canadian Subsidiaries in each case
which are Guarantors. Subject to 4.1, the Required Lenders may from time to time
require any Restricted Subsidiary (other than Restricted Subsidiaries which are
not Wholly-Owned Subsidiaries and any captive insurance company or captive
surety company which is a Restricted Subsidiary) to provide a Guarantee and
Liens on its assets in which event the Company shall within 30 days of request
cause such Restricted Subsidiary to execute and deliver a Guarantee to the Agent
together with such supporting resolutions, opinions and other showings as the
Agent may reasonably require.
SECTION 5. REPRESENTATIONS AND WARRANTIES.
Each Borrower represents and warrants to the Agent and the Lenders as
follows:
Section 5.1. Organization and Qualification. Each Borrower is duly
organized, validly existing and in good standing (or their equivalents under
applicable local law) as a corporation, limited liability company or partnership
under the laws of the jurisdiction in which it is incorporated or organized, as
the case may be, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the failure to be so qualified would have
a Material Adverse Effect.
Section 5.2. Subsidiaries. Except as set forth in the Side Letter (as
hereinafter defined), each Restricted Subsidiary is duly organized, validly
existing and in good standing (or their equivalents under applicable local law)
under the laws of the jurisdiction in which it is incorporated or organized, as
the case may be, has full and adequate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the failure to be so qualified or in good
standing would have a Material Adverse Effect. As of the date hereof, Schedule
5.2 hereto identifies each Restricted Subsidiary, the jurisdiction of its
incorporation or organization, as the case may be, the percentage of issued and
outstanding shares of each class of its capital stock or other equity interests
owned by the Company and the Restricted Subsidiaries and, if such percentage is
not 100% (excluding directors' qualifying shares as required by law), a
description of each class of its authorized capital stock and other equity
interests and the number of shares of each class issued and outstanding and the
Company will notify the Agent of any material changes in such information. All
of the outstanding shares of capital stock and other equity interests of each
such Subsidiary are validly issued and outstanding and fully paid and
nonassessable (except for the provisions of Section 630 of the Business
Corporation Law of the State of New York, as to New York Corporations) and as of
the date hereof all such shares and other equity interests indicated on Schedule
5.2 as owned by the Company or a Restricted Subsidiary are as of the date hereof
owned, beneficially and of record, by the Company or such Restricted Subsidiary
free and clear of all Liens not permitted hereby. There are no outstanding
commitments or other obligations of any Restricted Subsidiary to issue, and no
options, warrants or other rights of any Person to acquire, any shares of any
class of capital stock or other equity interests of any Restricted Subsidiary
except in favor of the Company or a Restricted Subsidiary.
Section 5.3. Corporate Authority and Validity of Obligations. Each Borrower
has full right and authority to enter into this Agreement and the other Loan
Documents to which it is a party, to make the borrowings herein provided for, to
issue the Revolving Credit Notes in evidence thereof, to grant to the Agent the
Liens provided for in the Collateral Documents being executed by it, and to
perform all of its obligations hereunder and under the other Loan Documents to
which it is a party. Each Guarantor has full right and authority to enter into
the Loan Documents to which it is a party, to grant to the Agent the Liens
provided for in the Collateral Documents executed by it and to perform all of
its obligations under such Loan Documents. The Loan Documents have been duly
authorized, executed and delivered by the Borrowers and Guarantors and
constitute valid and binding obligations of the Borrowers and Guarantors
enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law); and this Agreement and the other Loan Documents do not, nor does the
performance or observance by any Borrower or Guarantor of any of the matters and
things herein or therein provided for, contravene or constitute a default under
any provision of law or any judgment, injunction, order or decree binding upon
any Borrower or Guarantor or any provision of the charter, articles of
incorporation or organization or by-laws of any Borrower or Guarantor or any
covenant, indenture or agreement of the Borrowers or Guarantors or affecting any
of their Properties, or result in the creation or imposition of any Lien on any
Property of the Borrowers or Guarantors.
Section 5.4. Use of Proceeds; Margin Stock. The Borrowers shall use the
proceeds of the Revolving Loans and other extensions of credit made available
hereunder solely for their general corporate purposes (including ordinary course
of business refunding of indebtedness and acquisitions and investments permitted
hereunder). Neither the Borrowers nor any Subsidiary is engaged in the business
of extending credit for the purpose of purchasing or carrying margin stock
(within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System), and no part of the proceeds of any Revolving Loan or any other
extension of credit made hereunder will be used to purchase or carry any such
margin stock or to extend credit to others for the purpose of purchasing or
carrying any such margin stock.
Section 5.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 2004 and the related
consolidated statements of operations, cash flows and shareholder's equity of
the Company and its subsidiaries for the fiscal year then ended, and
accompanying notes thereto, which consolidated financial statements are
accompanied by the audit report of Ernst & Young LLP, an independent registered
public accounting firm, and the unaudited interim condensed consolidated balance
sheet of the Company and its subsidiaries as at June 30, 2005 and the related
interim condensed consolidated statements of operations, cash flows and
shareholder's equity of the Company and its subsidiaries for the six (6) months
then ended heretofore furnished to the Lenders, fairly present the consolidated
financial condition of the Company and its subsidiaries as at said dates and the
results of their operations and cash flows for the periods then ended in
conformity with generally accepted accounting principles applied on a consistent
basis, but subject, in the case of such interim condensed financial statements
on the related notes thereto (the "Notes"), to year end audit adjustments which
are not expected to be material. Neither the Company nor any Restricted
Subsidiary has, to the best of its knowledge, contingent liabilities which could
reasonably be expected to have a Material Adverse Effect other than as indicated
on such financial statements or, as to each reaffirmation of this sentence's
representation and warranty in the future, on the most recent financial
statements or the related notes thereto which are to be provided to the Lenders
pursuant to Section 7.5 hereof or other than as set forth in that certain Side
Letter dated October 14, 2005 from the Company to the Agent (the "Side Letter").
Section 5.6. No Material Adverse Change. Since December 31, 2004, there has
been no change in the condition (financial or otherwise) or business prospects
of the Company and its Restricted Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
Section 5.7. Full Disclosure. The statements and information furnished by
or on behalf of the Borrowers to the Agent and the Lenders through the date
hereof in connection with the negotiation of this Agreement and the other Loan
Documents and the commitments by the Lenders to provide all or part of the
financing contemplated hereby do not, taken as a whole, contain any untrue
statements of a material fact or omit a material fact necessary to make the
material statements contained herein or therein not misleading, the Lenders
acknowledging that as to any projections furnished to the Lenders by or on
behalf of the Borrowers, the Borrowers only represent that the same were
prepared on the basis of information and estimates the Borrowers believed to be
reasonable.
Section 5.8. Good Title. Except to the extent heretofore disclosed on the
Schedules to this Agreement or in the Side Letter, as of the date hereof the
Company and the Restricted Subsidiaries have good and marketable title to their
real property and good and merchantable title to the balance of their assets as
reflected on the most recent balance sheets of the Company and its Restricted
Subsidiaries furnished to the Lenders (except for sales of assets by the
Borrowers and their Restricted Subsidiaries in the ordinary course of business),
subject to no Liens other than such thereof as are permitted by Section 7.11
hereof.
Section 5.9. Litigation and Other Controversies. Except as disclosed on
Schedule 5.9 hereof or in the Side Letter, there is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
any Borrower threatened, against the Borrower or any Restricted Subsidiary which
if adversely determined would (a) impair the validity or enforceability of, or
impair the ability of any Borrower or Guarantor to perform its obligations
under, this Agreement or any other Loan Document or (b) have a Material Adverse
Effect.
Section 5.10. Taxes. All tax returns which, to the best knowledge of the
Company, are required to be filed by the Company or any Restricted Subsidiary in
any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Company or any Restricted Subsidiary or upon
any of their respective Properties, income or franchises, which are shown to be
due and payable in such returns, have been paid to the extent due, in each case
except where the failure to do so would not cause a Material Adverse Effect. The
Borrowers do not know of any material proposed additional tax assessment against
them or the Restricted Subsidiaries for which adequate provision in accordance
with GAAP has not been made in their respective financial statements. Adequate
provisions in accordance with GAAP for taxes on the books of the Company, each
other Borrower and each Restricted Subsidiary have been made for all open years,
and for its current fiscal period.
Section 5.11. Approvals. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Borrowers or any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrowers or Guarantors of this
Agreement or any other Loan Document, other than the stockholders of Guarantors.
Section 5.12. Affiliate Transactions. No Borrower nor any Restricted
Subsidiary is a party to any contract or agreement with any of its Affiliates
(other than contracts and agreements between and among the Borrowers and
Restricted Subsidiaries) on terms and conditions which are less favorable to
such Borrower or such Restricted Subsidiary than would be usual and customary in
similar contracts or agreements between Persons not affiliated with each other
than any such contract or agreement which could not reasonably be expected to
have a Material Adverse Effect.
Section 5.13. Investment Company; Public Utility Holding Company. No
Borrower nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "public utility holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 5.14. ERISA. Except to the extent heretofore disclosed in writing
to the Lenders, each Borrower and each other member of its Controlled Group has
fulfilled its obligations under the minimum funding standards of and is in
compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any material liability to the PBGC or a
Plan (other than material liabilities arising in the future under a
multiemployer plan as defined in Section 4001(c)(3) of ERISA which could not
reasonably be expected to have a Material Adverse Effect) under Title IV of
ERISA other than a material liability to the PBGC for premiums under Section
4007 of ERISA. As of the date hereof no Borrower nor any Restricted Subsidiary
has any contingent liabilities with respect to any post-retirement benefits
under a Welfare Plan, other than liability for continuation coverage described
in Article 6 of Title I of ERISA.
Section 5.15. Compliance with Laws. Each Borrower and each Restricted
Subsidiary is in compliance with the requirements of all federal, governmental
(whether national, supra-national or otherwise), state, provincial and local
laws, rules and regulations applicable to or pertaining to their Properties or
business operations (including, without limitation, the Occupational Safety and
Health Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), except for such non-compliance with
the same which could not reasonably be expected to have any Material Adverse
Effect. No Borrower nor any Restricted Subsidiary has received notice to the
effect that its operations are not in compliance with any of the requirements of
applicable federal, governmental (whether national, supra-national or
otherwise), state, provincial or local environmental, health and safety statutes
and regulations or are the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect.
Section 5.16. Other Agreements. No Borrower nor any Restricted Subsidiary
is in default under the terms of any covenant, indenture or agreement of or
affecting the Borrowers, any Restricted Subsidiary or any of their Properties,
which default if uncured could reasonably be expected to have a Material Adverse
Effect.
Section 5.17. No Default. No Default or Event of Default has occurred and
is continuing.
Section 5.18. Solvency. Each Borrower is solvent, able to pay its debts as
they become due, and has sufficient capital to carry on its business and all
businesses in which it is about to engage.
SECTION 6. CONDITIONS PRECEDENT.
The obligation of each Lender to advance, continue or convert any Loan
(other than the continuation of, or conversion into, a Domestic Rate Loan) or of
the Issuer to issue, extend the expiration date (including by not giving notice
of non-renewal) of or increase the amount of any Letter of Credit under this
Agreement, shall be subject to the following conditions precedent:
Section 6.1. All Credit Utilizations. The obligation of the Lenders to
provide any Borrower with any Credit Utilization (including the first such
Credit Utilization) shall be subject to the conditions precedent that as of the
time of each such Credit Utilization:
(a) each of the representations and warranties set forth herein and in
the other Loan Documents shall be and remain true and correct as of said
time, except to the extent the same expressly relate to an earlier date (in
which case such representation and/or warranty shall be true and correct as
of such earlier date);
(b) the Borrowers and Guarantors shall be in compliance with all of
the terms and conditions hereof and of the other Loan Documents, and no
Default or Event of Default shall have occurred and be continuing or would
occur as a result of such Credit Utilization;
(c) after giving effect to such Credit Utilization, (a) the aggregate
principal amount of all Revolving Loans, Swing Loans and L/C Obligations
(when taken together with the aggregate amount of loans and letters of
credit outstanding under the Canadian Facility) shall not exceed the
Commitments then in effect, (b) the aggregate principal amount of the
Revolving Loans made to any Borrower and of L/C Obligations in respect of
Letters of Credit issued for such Borrower's account shall not exceed any
applicable Sublimit, (c) the aggregate principal amount of Swing Loans
outstanding to the Company shall not exceed the Swing Line Sublimit and (d)
the aggregate outstanding amount of L/C Obligations shall not exceed the
lesser of the Commitments or $125,000,000;
(d) such Credit Utilization shall not violate any order, judgment or
decree of any court or other authority or any provision of law or
regulation applicable to the Agent or any Lender (including, without
limitation, Regulation U of the Board of Governors of the Federal Reserve
System) as then in effect (the Lenders acknowledging that as of the date
hereof they know of none of such other than the restrictions of Regulation
U);
(e) in the case of the issuance of any Letter of Credit, the
Applicable Issuer shall have received a properly completed Application
therefor and, in the case of an extension or increase in the amount of the
Letter of Credit, the Applicable Issuer shall have received a written
request therefor, in a form acceptable to the Applicable Issuer, with such
Application or written request, in each case to be accompanied by the fees
required by this Agreement;
(f) in any case in which a Loan is to be made available to a Borrower
to enable the acquisition of shares in a company incorporated in England
and Wales, the applicable Borrower shall have complied with the provisions
of Chapter VI of the Companies Act 1985 (or any statutory re-enactment of
that Act) and obtained all such approvals and other matters as are required
by that chapter to the satisfaction of the Agent; and
(g) in any case in which a Loan is to be made available to a Canadian
Borrower, neither the Agent nor any Lender shall have received any order or
demand in respect of any one or more of the Canadian Borrowers under
Section 224.1(1) of the Income Tax Act (Canada) or any similar federal or
provincial statute.
Any request made by or on behalf of the Borrowers to the Agent or an Issuer for
a Credit Utilization hereunder shall be deemed to constitute a representation
and warranty that the foregoing statements are true and correct.
Section 6.2. Initial Credit Utilization. Except as otherwise contemplated
by Section 6.3 hereof, before or concurrently with the initial Credit
Utilization:
(a) the Agent shall have received for each Lender this Agreement duly
executed by the Borrower and the Lenders;
(b) the Agent shall have received for each Lender such Lender's duly
executed Notes of the Borrowers dated the date hereof and otherwise in
compliance with the provisions hereof;
(c) the Agent shall have received the Collateral Documents duly
executed by the Borrowers and the Guarantors, together with (i) original
stock certificates or other similar instruments or securities representing
substantially all of the issued and outstanding shares of capital stock or
other equity interests in the Restricted Subsidiaries as of the date
hereof, (ii) stock powers for the Collateral consisting of the stock or
other equity interest in each Restricted Subsidiary executed in blank and
undated, (iii) UCC and PPSA financing statements to be filed against the
Borrower and each Subsidiary, as debtor, in favor of the Agent, as secured
party, (iv) patent, trademark, and copyright collateral agreements, to the
extent requested by the Agent, and (v) deposit account, securities account,
and commodity account control agreements to the extent requested by the
Agent, in each case to the extent required by Section 4.1 hereof;
(d) the Agent shall have received evidence of insurance required to be
maintained under the Loan Documents, naming the Agent as mortgagee and loss
payee;
(e) the Agent shall have received for each Lender copies of each
Borrower's and each Guarantor's articles of incorporation and bylaws (or
comparable organizational documents) and any amendments thereto, certified
in each instance by its Secretary or Assistant Secretary;
(f) the Agent shall have received for each Lender copies of
resolutions of each Borrower's and each Guarantor's Board of Directors (or
similar governing body) authorizing the execution, delivery and performance
of this Agreement and the other Loan Documents to which it is a party and
the consummation of the transactions contemplated hereby and thereby,
together with specimen signatures of the persons authorized to execute such
documents on each Borrower's and each Guarantor's behalf, all certified in
each instance by its Secretary or Assistant Secretary;
(g) the Agent shall have received for each Lender copies of the
certificates of good standing for each Borrower and each Guarantor (dated
no earlier than 30 days prior to the date hereof) from the office of the
secretary of the state or other applicable governmental office in its
incorporation or organization;
(h) the Agent shall have received for each Lender a list of each
Borrower's Authorized Representatives;
(i) the Agent shall have received for itself and for the Lenders the
initial fees called for by Section 3.2 hereof;
(j) each Lender shall have received such evaluations and
certifications as it may reasonably require (including a compliance
certificate in the form attached hereto as Exhibit C containing compliance
calculations of the financial covenants as of June 30, 2005) in order to
satisfy itself as to the value of the Collateral, the financial condition
of the Borrowers and the Guarantors, and the lack of material contingent
liabilities of the Borrowers and the Guarantors;
(k) the Agent shall have received financing statement, tax, and
judgment lien search results against the Property of each Borrower and each
Guarantor evidencing the absence of Liens on its Property except as
permitted by Section 7.11 hereof and searches (in form and substance
satisfactory to the Agent) conducted at all relevant registries affecting
the Borrowers, the Guarantors or their respective Property and all
registrations reasonably required by the Agent in respect of the Liens
created under the Collateral Documents shall have been completed;
(l) the Company shall have terminated the Existing Credit Agreement in
accordance with the terms thereof;
(m) the Agent shall have received for each Lender the favorable
written opinion of counsel to the Borrowers and each Guarantor, in form and
substance satisfactory to the Agent, and legal opinions of foreign counsel
and supporting documentation therefor with respect to, among other things,
the liens on capital stock or other equity interests of Foreign
Subsidiaries required by Section 4.1 hereof; and
(n) the Agent shall have received for the account of the Lenders such
other agreements, instruments, documents, certificates, and opinions as the
Agent may reasonably request.
Section 6.3. Post-Closing Matters. Notwithstanding anything contained
herein to the contrary, the Company shall use its best efforts to satisfy the
conditions precedent set forth in Sections 6.2(c), (d), (e), (f), (g), (h), (k)
and (l) with respect to the U.K. Subsidiaries and the Canadian Subsidiaries not
later than 90 days following the date hereof. It being understood and agreed
that unless and until the Agent determines in its sole discretion foregoing
conditions have been satisfied, neither the U.K. Borrowers nor the Canadian
Borrowers (or the Company on their behalf) shall be permitted to request
Borrowings or Letters of Credit hereunder.
SECTION 7. COVENANTS.
The Borrowers agree that, so long as any credit is available to or in use
by or any amount is owing by the Borrowers hereunder, except to the extent
compliance in any case or cases is waived in writing by the Required Lenders:
Section 7.1. Maintenance of Business. The Borrowers will, and will cause
each Restricted Subsidiary to, preserve and keep in force and effect its
corporate existence and all leases, licenses and permits necessary to the proper
conduct of its and their respective businesses except with respect to any
Restricted Subsidiary to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect, provided that the
foregoing shall not preclude the termination or discontinuance of any of such in
connection with a sale or other disposition of substantially all of the assets
of the Restricted Subsidiary in question or the merger or dissolution of same in
each instance to the extent permitted by Section 7.14 hereof.
Section 7.2. Maintenance of Property. The Borrowers will maintain, preserve
and keep their material plant, Properties and equipment used in the conduct of
their respective businesses in good repair, working order and condition
(ordinary wear and tear excepted), will from time to time make all needful and
proper repairs, renewals, replacements, additions and betterments thereto so
that at all times the overall efficiency thereof shall be preserved and
maintained in all material respects, and will cause each Restricted Subsidiary
so to do in respect of its material plant, Properties and equipment.
Section 7.3. Taxes and Assessments. The Borrowers will duly pay and
discharge, and will cause each Restricted Subsidiary to duly pay and discharge,
all taxes, rates, assessments, fees and governmental charges upon or against the
Borrowers or any Restricted Subsidiary or against their respective Properties,
in each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Borrowers will insure and keep insured, and
will cause each Restricted Subsidiary to insure and keep insured, with insurance
companies reasonably believed by them to be good and responsible, all insurable
Property owned by them which is of a character usually insured by Persons
similarly situated and operating like Properties against loss or damage from
such hazards and risks, and in such amounts, as are insured by Persons similarly
situated and operating like Properties, and the Borrowers will insure, and cause
each Restricted Subsidiary to insure, such other hazards and risks (including
employers' and public liability risks) with insurance companies reasonably
believed by them to be good and responsible as and to the extent usually insured
by Persons similarly situated and conducting similar businesses, it being agreed
that the foregoing shall not preclude the Borrowers and the Restricted
Subsidiaries from directly or indirectly self insuring risks as and to the
extent prudent and customary for companies similarly situated. The Borrowers
shall in any event maintain insurance on the Collateral to the extent required
by the Collateral Documents. The Borrowers will upon request of the Agent
furnish a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section 7.4.
Section 7.5. Financial Reports and Rights of Inspection. The Borrowers
shall, and shall cause each Restricted Subsidiary to, maintain a system of
accounting in accordance with GAAP and shall furnish to the Agent, each Lender
and each of their duly authorized representatives such information respecting
the business and financial condition of the Borrowers and their Restricted
Subsidiaries as the Agent or such Lender may reasonably request; and without any
request, shall furnish to the Lenders:
(a) as soon as available, and in any event within forty-five (45) days
after the close of each quarterly accounting period of the Company a copy
of the condensed consolidated and consolidating balance sheet of the
Company and its subsidiaries as of the last day of such period and the
condensed consolidated (and consolidating in the case of the statement of
operations only) statements of operations for such period and for the
fiscal year to date and statements of cash flows and shareholder's equity
of the Company and its subsidiaries for the fiscal year to date, each in
reasonable detail and showing in comparative form the figures for the
corresponding date and period in the previous fiscal year, in the case of
the condensed consolidated financial statements only, prepared by the
Company in accordance with GAAP (subject to year end audit adjustments
which are not expected to be material and to the absence of footnotes);
provided, however, that (i) consolidated financial statements need not be
submitted for the last quarterly accounting period in each fiscal year and
(ii) the consolidating balance sheet and consolidating statement of
operations called for by this Section 7.5(b) for the last quarterly
accounting period in each fiscal year may be submitted concurrently with
the submittal of the audited financial statements for such fiscal year
called for by Section 7.5(c) hereof;
(b) as soon as available, and in any event within ninety (90) days
after the close of each annual accounting period of the Company, a copy of
the consolidated balance sheet of the Company and its subsidiaries as of
the last day of the period then ended and the consolidated statements of
operations, cash flows and shareholder's equity of the Company and its
subsidiaries for the period then ended, and accompanying notes thereto,
each in reasonable detail showing in comparative form the figures for the
previous fiscal year, accompanied by an unqualified opinion, in accordance
with generally accepted auditing standards, of Ernst & Young LLP or another
independent registered public accounting firm of national standing,
selected by the Company and reasonably satisfactory to the Required
Lenders;
(c) within the period provided in subsection (b) above, the written
statement of the accountants who certified the audit report thereby
required that in the course of their audit they have obtained no knowledge
of any Default or Event of Default, or, if such accountants have obtained
knowledge of any such Default or Event of Default, they shall disclose in
such statement the nature and period of existence thereof;
(d) as soon as available, and in any event within forty-five (45) days
after the close of each quarterly accounting period of the Company, an
accounts receivable and accounts payable aging, together with a backlog or
work-in-progress report and claims report (detailing individual claims for
which the amount recorded on books of the Company is in excess of
$5,000,000), each in reasonable detail prepared by the Company;
(e) promptly after receipt of final copies thereof, any additional
written reports, management letters or other detailed information contained
in writing concerning significant aspects of any Borrower's or any
Restricted Subsidiary's operations and financial affairs given to it by its
independent public accountants;
(f) as soon as available, and in any event within ninety (90) days
following the end of each fiscal year of the Company, a copy of the
Company's consolidated and consolidating operating budget for the following
fiscal year, such operating budget to show the Company's projected
consolidated and consolidating revenues, expenses and net income and to be
in reasonable detail prepared by the Company and in form reasonably
satisfactory to the Agent; and
(g) promptly after knowledge thereof shall have come to the attention
of the chief executive or chief financial officer of any Borrower, written
notice of (i) any pending litigation or governmental proceeding or labor
controversy against any Borrower or Restricted Subsidiary which could
reasonably be expected to have a Material Adverse Effect or (ii) any
threatened litigation, governmental proceeding or labor controversy against
any Borrower or Restricted Subsidiary which the Company or such Borrower or
Restricted Subsidiary in good faith believes could reasonably be expected
to have a Material Adverse Effect or (iii) the occurrence of any Default or
Event of Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to
subsections (a) and (b) of this Section 7.5 shall be accompanied by a written
certificate in the form attached hereto as Exhibit C signed by an Authorized
Representative of the Company to the effect that to the best of such officer's
knowledge and belief 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 Company to
remedy the same. Such certificate submitted as of the last day of a calendar
quarter shall also set forth the calculations supporting such statements in
respect of Sections 7.6, 7.7, 7.8, 7.9 and 7.13 of this Agreement as well as the
calculation of the Applicable Margins.
The Borrowers will, and will cause each Restricted Subsidiary to, permit
the Agent, the Lenders and their duly authorized representatives to visit and
inspect any of the Properties of the Borrowers and Restricted Subsidiaries, to
examine all of their books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants (and by this provision the Borrowers authorize such
accountants to discuss with the Lenders (and such Persons as any Lender may
designate, subject to reasonable arrangements for confidentiality) the finances
and affairs of the Borrowers and the Restricted Subsidiaries) all upon
reasonable notice at such reasonable times and as often as may be reasonably
requested.
Section 7.6. Minimum Net Worth. The Company will at all times maintain Net
Worth of not less than the Minimum Required Amount. For purposes of this Section
7.6, the term "Minimum Required Amount" shall mean, as of any time, the sum of
(i) $400,000,000 plus (ii) 50% of Net Income for each fiscal quarter of the
Company (if Net Income for such fiscal quarter is positive) ending on or after
December 31, 2005.
Section 7.7. Leverage Ratio. The Company will as of the last day of each
calendar quarter maintain the Leverage Ratio of not more than 3.25 to 1.
Section 7.8. Interest Coverage Ratio. The Company will as of the last day
of each calendar quarter maintain the Interest Coverage Ratio of not less than
2.5 to 1.
Section 7.9. Reserved.
Section 7.10. Indebtedness for Borrowed Money. The Borrowers shall not, nor
shall they permit any of the Restricted Subsidiaries to, issue, incur, assume,
create or have outstanding any Indebtedness for Borrowed Money; provided,
however, that the foregoing shall not restrict nor operate to prevent:
(a) the Obligations and Hedging Liability;
(b) long-term secured indebtedness of the Borrowers in an aggregate
principal amount not to exceed an amount equal to $200,000,000 (less the
aggregate principal amount of all Commitment Amount Increases pursuant to
Section 1.10 hereof at any one time outstanding) on terms and conditions
reasonably satisfactory to the Required Lenders including without
limitation that the holders of such indebtedness have entered into an
intercreditor agreement with the Agent in form and substance reasonably
satisfactory to the Required Lenders;
(c) the obligations listed and described on Schedule 7.10 attached
hereto and guarantees specifically permitted by Section 7.12 hereof;
(d) (i) indebtedness of the Canadian Subsidiaries arising under the
Canadian Facility and guaranties thereof by the Company and other
Restricted Subsidiaries and (ii) unless and until the initial credit
utilization under the Canadian Facility, indebtedness of the Canadian
Subsidiaries aggregating not more than $10,000,000 at any one time
outstanding and guarantees of up to $5,000,000 thereof by the Company and
Restricted Subsidiaries;
(e) Indebtedness of the Company to Restricted Subsidiaries, of
Restricted Subsidiaries to the Company and of Restricted Subsidiaries to
Restricted Subsidiaries provided that (i) the aggregate amount of such
indebtedness of EMCOR U.K. Limited and its Restricted Subsidiaries shall be
limited to $50,000,000 at any one time outstanding, (ii) the aggregate
amount of such indebtedness of the Canadian Subsidiaries and its Restricted
Subsidiaries shall be limited to $50,000,000 at any one time outstanding
and (iii) the aggregate amount of such indebtedness of Restricted
Subsidiaries which Indebtedness for Borrowed Money is permitted solely by
Section 7.10(k) hereof shall not exceed $10,000,000 at any one time
outstanding;
(f) obligations consisting of deferred payment obligations of the
Company and any of the Restricted Subsidiaries for insurance premiums or
incurred by Company or any of its Restricted Subsidiaries in respect of
funds borrowed for the payment of such premiums in either case in the
ordinary course of business and consistent with past practices;
(g) guarantees of Indebtedness for Borrowed Money, or Performance
Guarantees given by, of Foreign Subsidiaries and Nesma EMCOR Company Ltd.
and guarantees of or incurrence of liability for letters of credit
supporting Indebtedness for Borrowed Money of Persons in which the Company
and the Restricted Subsidiaries are permitted to invest pursuant to
subsections (n) and (o) of Section 7.12; provided that the aggregate amount
of Indebtedness for Borrowed Money and of Performance Guarantees so
permitted to be incurred, guaranteed or supported pursuant to the
provisions of this subsection (g) shall not exceed $25,000,000 at any one
time outstanding less the amount invested pursuant to Section 7.12(q)
hereof;
(h) Indebtedness for Borrowed Money in addition to that otherwise
permitted hereunder; provided that at the time of incurrence of such
indebtedness and after giving effect thereto the aggregate principal amount
of Indebtedness for Borrowed Money of the Company and its Restricted
Subsidiaries incurred during the twelve-month period ended on the date of
the incurrence in question and permitted solely by this Section 7.10(h)
does not exceed 2.0% of the arithmetic average of the unrealized revenue
from contracts in progress of the Company and its Restricted Subsidiaries
(computed in accord with the past practice of the Company) as of the last
day of each of the four calendar quarters most recently ended prior to the
date of the computation in question;
(i) liabilities in respect of letters of credit not otherwise
permitted by this Section 7.10 if payment of such letters of credit is
fully supported by a Letter of Credit;
(j) indebtedness under Interest Rate Protection and Other Hedging
Agreements entered into to hedge a risk of the Company and/or its
Restricted Subsidiaries and not for speculation;
(k) indebtedness of any Person existing at the time such Person
becomes a Restricted Subsidiary or assumed in connection with the
acquisition of assets of such Person and not incurred in contemplation of
such Person being acquired or becoming a Restricted Subsidiary or such
assets being acquired provided the aggregate amount of such indebtedness
permitted pursuant to this Section 7.10(k) shall not exceed $20,000,000 at
any one time outstanding;
(l) any renewals, extensions or replacements of Indebtedness for
Borrowed Money permitted under this Section 7.10 in an aggregate amount not
in excess of the Indebtedness for Borrowed Money being renewed, extended or
replaced;
(m) Indebtedness for Borrowed Money of District Chilled General
Partnership, provided that the aggregate principal amount of such
indebtedness permitted under this Section 7.10(m) shall not exceed
$75,000,000 at any one time outstanding; and
(n) obligations arising out of agreements with respect to the issuance
of credit cards or debit cards to employees of the Company or any
Restricted Subsidiary for use in connection with the business and affairs
of such entities.
(o) obligations arising out of agreements with respect to the
execution or processing of electronic transfer of funds by automatic
clearing house transfer, wire transfer, or otherwise to or from any deposit
account of the Company or any Restricted Subsidiary, the acceptance for
deposit or the honoring for payment of any check, draft, or other item with
respect to any such deposit accounts, and other deposit disbursement, and
cash management services afforded to the Company and/or any Restricted
Subsidiary.
Section 7.11. Liens. The Borrowers shall not, nor shall they permit the
Restricted Subsidiaries to, create, incur or permit to exist any Lien of any
kind on any Property owned by the Borrowers or any Restricted Subsidiary;
provided, however, that the foregoing shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's compensation,
unemployment insurance, old age benefits, social security obligations,
taxes, assessments, statutory obligations or other similar charges, good
faith cash deposits in connection with the foregoing or in connection with
tenders, contracts or leases to which the Borrowers or any of their
Restricted Subsidiaries are a party or other cash deposits required to be
made in the ordinary course of business, provided in each case that the
obligation is not for borrowed money and that the obligation secured is not
overdue or, if overdue, is being contested in good faith by appropriate
proceedings which prevent enforcement of the matter under contest and
adequate reserves have been established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers', or
other similar Liens arising in the ordinary course of business with respect
to obligations which are not due or which are being contested in good faith
by appropriate proceedings which prevent enforcement of the matter under
contest;
(c) the pledge of assets for the purpose of securing an appeal, stay
or discharge in the course of any legal proceeding, provided that the
aggregate amount of liabilities of the Borrowers and their Restricted
Subsidiaries secured by a pledge of assets permitted under this subsection,
including interest and penalties thereon, if any, shall not be in excess of
$15,000,000 at any one time outstanding;
(d) the Liens granted in favor of the Agent for the benefit of the
Lenders pursuant to the Collateral Documents;
(e) Liens on Property of the Borrowers or of any Restricted
Subsidiaries created solely for the purpose of securing indebtedness
permitted by Section 7.10(h) hereof representing or incurred to finance,
refinance or refund the purchase price of such Property or representing the
interest of the lessor under a Capital Lease, provided that no such Lien
shall extend to or cover other Property of the Borrowers or any Restricted
Subsidiary other than the respective Property so acquired, and the
principal amount of indebtedness secured by any such Lien shall at no time
exceed the original purchase price of such Property;
(f) Liens on the stock and assets of the Canadian Subsidiaries
securing the indebtedness permitted by Section 7.10(e) hereof and liens on
assets of the Company and other Restricted Subsidiaries securing the
Canadian Facility;
(g) Liens in favor of bonding companies and their affiliates to the
extent described in clause (i) of the second proviso of Section 4.1 hereof;
(h) rights of subrogation and similar rights of issuers of surety
bonds and unperfected lien rights of such issuers to assets associated with
projects which they have bonded;
(i) restrictions on the disbursement or withdrawal of funds deposited
by Restricted Subsidiaries in bank accounts maintained by them in the
ordinary course of business consistent with past practice which are
maintained in connection with specific construction projects or contracts
from which payments and disbursements with respect to such contracts or
projects are to be made;
(j) Liens on insurance policies arising in connection with the
deferred payment of premiums or the financing thereof in the ordinary
course of business;
(k) Liens consisting of cash collateral deposits made in connection
with the insurance programs of the Company and its Restricted Subsidiaries
and liens on up to (pound)135,000 of cash collateral securing reimbursement
obligations owing to Barclays Bank in connection with demand performance
bonds which it has issued and rights of a depository bank to offset
balances in any account maintained with it by a Subsidiary incorporated
under the laws of United Kingdom against debit balances in any other
account maintained with it by such Subsidiary or any other U.K. Subsidiary
(it being acknowledged by the Lenders that such rights of offset shall be
superior to any rights they may have in and to such accounts or the
balances as are from time to time standing on deposit therein);
(l) Liens existing on any property of a corporation at the time such
corporation becomes a Restricted Subsidiary which Liens were not created,
incurred or assumed in contemplation thereof, provided that no such Liens
shall extend to or cover any other property of the Company or any
Restricted Subsidiary;
(m) the Liens listed and described on Schedule 7.11 attached hereto;
(n) any extension, renewal or replacement (or successive extensions,
renewals or replacements) of Liens permitted by this Section 7.11 without
any increase in the amount of indebtedness secured thereby or in the assets
subject to such Liens;
(o) pari passu Liens on the Collateral created solely for the purpose
of securing indebtedness permitted by Section 7.10(b) hereof; and
(p) liens on deposits provided in connection with long-term
maintenance contracts of facilities Borrowers and Restricted Subsidiaries
located in the United Kingdom relating to United Kingdom private finance
initiatives.
Section 7.12. Investments, Acquisitions, Loans, Advances and Guarantees.
The Borrowers shall not, nor shall they permit any of the Restricted
Subsidiaries to, directly or indirectly, make, retain or have outstanding any
investments (whether through purchase of stock or obligations or otherwise) in,
or loans or advances (other than for relocation and travel advances and other
loans made to employees in the ordinary course of business) to, any other
Person, or acquire all or any substantial part of the assets or business of any
other Person or division thereof, or be or become liable as endorser, guarantor,
surety or otherwise for any debt, obligation or undertaking of any other Person
(other than of the Company or any Restricted Subsidiary), or otherwise agree to
provide funds for payment of the obligations of another, or supply funds thereto
or invest therein or otherwise assure a creditor of another against loss, or
apply for or become liable to the issuer of a letter of credit which supports an
obligation of another, or subordinate any claim or demand it may have to the
claim or demand of any other Person; provided, however, that the foregoing shall
not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of America
or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided
that any such obligations shall mature within one year of the date of
issuance thereof;
(b) investments in commercial paper maturing within 270 days of the
date of issuance thereof which has been accorded one of the two highest
ratings available from the Standard & Poor's Ratings Group of McGraw Hill
Companies, Moody's Investors Service, Inc. or any other nationally
recognized credit rating agency of similar standing providing similar
ratings;
(c) investments in money market funds which in turn invest primarily
in investments of the types described in clauses (a), b and (d) of this
Section 7.12;
(d) investments in certificates of deposit issued by any commercial
bank organized under the laws of Canada or the United States or (as to
investments of EMCOR U.K. Limited and its Subsidiaries) the United Kingdom
in each case having capital, surplus and undivided profits of not less than
$500,000,000 or by any Lender in each case maturing within one year from
the date of issuance thereof or in Eurodollar time deposits maturing not
more than one year from the date of acquisition thereof placed with any
Lender or other such commercial bank (to the extent investments in
certificates of deposit issued by such other bank are permitted by this
subsection) or in banker's acceptances endorsed by any Lender or other such
commercial bank (to the extent investments in certificates of deposit
issued by such other bank are permitted by this subsection) and maturing
within nine months of the date of acceptance;
(e) endorsement of items for deposit or collection of commercial paper
received in the ordinary course of business;
(f) the investments, loans, advances and guarantees listed and
described on Schedule 7.12 attached hereto;
(g) the Guarantees and guarantees referred to in and permitted by
Section 7.10 hereof;
(h) (i) an amount equal to all investments of the Company and
Restricted Subsidiaries as of the date hereof in, and present loans and
advances by the Company and Restricted Subsidiaries to, Unrestricted
Subsidiaries and (ii) future investments in, and loans and advances,
(including subordinated loans) to, Unrestricted Subsidiaries for asset
preservation and to preserve existing operations aggregating not more than
$1,500,000 at any one time outstanding;
(i) Loans and advances (including subordinated loans and advances)
between the Company and its Restricted Subsidiaries if and to the extent
that the corresponding indebtedness is permitted by Section 7.10 hereof;
provided, however, that the aggregate principal amount of loans and
advances by the Company and its Restricted Subsidiaries to Restricted
Subsidiaries which are not Guarantors shall not exceed $25,000,000 in the
aggregate at any one time outstanding;
(j) Permitted Acquisitions and investments in Strategic Ventures
organized within and conducting more than fifty percent of their business
in the United States of America ("Domestic Strategic Ventures"), so long as
(i) no Default or Event of Default exists or would exist after giving
effect to the Permitted Acquisition or investment in question, (ii) the
total amount expended by the Company and its Restricted Subsidiaries for
any such Permitted Acquisition or investment does not exceed $100,000,000
unless the Required Lenders otherwise agree in writing, (iii) the aggregate
amount of all investments by the Company and its Restricted Subsidiaries in
Domestic Strategic Ventures which do not constitute Restricted Subsidiaries
that are also Guarantors shall not exceed $100,000,000 made during the term
of this Agreement unless the Required Lenders otherwise agree in writing,
and (iv) the total amount expended by the Company and its Restricted
Subsidiaries on account of all such Permitted Acquisitions and investments
shall not exceed $300,000,000 during the term of this Agreement unless the
Required Lenders otherwise agree in writing (provided, that this limitation
shall not apply to any single acquisition unrelated to any other
acquisition or series of acquisitions, the total amount expended for which
does not exceed $25,000,000); provided that (i) the portion of the
consideration for any acquisition which is payable in capital stock of the
Company shall be excluded from the foregoing calculations, (ii)
indebtedness of the Persons acquired which indebtedness exists at the time
of acquisition shall not be treated as an amount expended by the Company or
a Restricted Subsidiary in connection with the acquisition unless such
indebtedness was incurred in contemplation of the acquisition and (iii)
payments made by the Company or a Restricted Subsidiary on account of an
acquisition paid subsequent to the consummation of the acquisition in
question and where the payment in question is contingent upon the earnings,
profits, net cash flow or other measure of profitability or success of the
Person acquired shall be treated as amounts expended by the Company or a
Restricted Subsidiary on account of such acquisition only when paid or when
the amount to be paid has become fixed and determined, whichever first
occurs, and such amounts shall count against the limitations on the amount
which the Company and its Restricted Subsidiaries may subsequently expend
on account of acquisitions and investments in Domestic Strategic Ventures
for purposes of this Section 7.12(j) but shall not otherwise be deemed to
constitute a breach of this Section 7.12(j) in the event that such amounts,
together with amounts theretofore expended on account of acquisitions and
investments, would exceed the dollar limits set forth herein; provided
further that nothing in this Section 7.12(j) shall supersede the
restrictions of 7.12(i) or 7.12(p) hereof with respect to loans and
advances to and investments in Restricted Subsidiaries which are not
Guarantors;
(k) acquisitions of assets (including stock, notes and other evidences
of indebtedness) and subordinations of claims as a part of good faith
collection efforts on doubtful accounts;
(l) Performance Guarantees;
(m) notes and other deferred payment obligations (other than general
partnership and similar interests) acquired by the Company or any
Restricted Subsidiary in connection with the sale or other disposition of
assets permitted hereby;
(n) investments of the Company or any Restricted Subsidiary made in
the ordinary course of business in connection with joint ventures, Persons
or other similar pooling of efforts in respect to a specific project or
series of related specific projects for a limited or fixed duration and
formed to conduct business of the type in which the Company or such
Restricted Subsidiary is presently engaged and guarantees of obligations
of, and incurrence of liabilities in respect of letters of credit for, such
joint ventures or Persons;
(o) investments or acquisitions of interests in Strategic Ventures
organized outside of the United States of America and conducting more than
50% of their business outside of the United States ("Foreign Strategic
Ventures"), provided that the aggregate amount so invested or expended
subsequent to the date hereof in connection with any given Foreign
Strategic Venture shall not exceed $20,000,000 unless the Required Lenders
otherwise agree in writing;
(p) the present investment of the Company and Restricted Subsidiaries
in Restricted Subsidiaries, the present and future investment of Restricted
Subsidiaries in the Company and future investments by the Company and
Restricted Subsidiaries in Restricted Subsidiaries or in a Restricted
Subsidiary formed as a captive insurer or surety company; provided,
however, that the aggregate amount of investments by the Company and its
Restricted Subsidiaries in Restricted Subsidiaries which are not Guarantors
shall not exceed $25,000,000 at any one time outstanding;
(q) investments in Foreign Subsidiaries, provided that the aggregate
amount so invested or expended subsequent to the date hereof shall not
exceed $25,000,000 at any one time outstanding less the amount of
Indebtedness for Borrowed Money guaranteed pursuant to Section 7.10(g)
hereof;
(r) guarantees by any Person outstanding at the time such Person
becomes a Restricted Subsidiary or in connection with the acquisition of
assets of such Person and outstanding at the time such Person becomes a
Restricted Subsidiary and not in either case incurred in contemplation of
such Person being acquired or becoming a Restricted Subsidiary or such
assets being acquired; provided that the aggregate amount of indebtedness
guaranteed by such Person pursuant to guarantees permitted solely by this
Section 7.12(r) when aggregated with the amount of indebtedness permitted
solely by Section 7.10(k) hereof shall not exceed $20,000,000 at any one
time outstanding;
(s) contingent obligations arising from the issuance of performance
guarantees, assurances, indemnities, bonds, letters of credit, or similar
agreements in the ordinary course of business in respect of the contracts
(other than contracts for Indebtedness for Borrowed Money) of Nesma EMCOR
Company Ltd. for the benefit of surety companies or for the benefit of
others to induce such others to forgo the issuance of a surety bond in
their favor;
(t) Third Party Performance Guarantees existing on the date of the
Monumental Acquisition;
(u) Guarantees by the Company and/or its Restricted Subsidiaries of
the Indebtedness for Borrowed Money permitted by Section 7.10(m) hereof in
an aggregate principal amount not in excess of $75,000,000 at any one time
outstanding; provided, however, that to the extent the Company and/or any
Restricted Subsidiary is solely liable (rather than jointly and severally
liable together with the other partners (and/or their respective
Affiliates) in District) as guarantor of any of such Indebtedness for
Borrowed Money, the amount of such Indebtedness for Borrowed Money for
which the Company and/or such Restricted Subsidiary is solely liable shall
not in any event exceed two thirds of that portion of Indebtedness for
Borrowed Money of District which is solely guaranteed by the other partners
(and/or their respective Affiliates) in District;
(v) loans and advances made by the Company or any Restricted
Subsidiary to vendors, suppliers and contractors in the ordinary course of
its business in an aggregate amount not in excess of $5,000,000 at any one
time outstanding;
(w) lease, utility and other similar deposits arising in the ordinary
course of the Company's or any Restricted Subsidiary's business;
(x) investments not otherwise permitted by this Section 7.12 in an
aggregate amount not in excess of $25,000,000 at any one time outstanding;
and
(y) additional investments in District in an amount not in excess of
$4,000,000.
In determining the amount of investments, acquisitions, loans, advances and
guarantees permitted under this Section 7.12, investments and acquisitions shall
always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 7.13. Capital and Certain other Restricted Expenditures. The
Borrowers will not, nor will they permit any Restricted Subsidiary to, make, or
(without duplication) become obligated to make, any Capital Expenditure (other
than Capital Expenditures which constitute Permitted Acquisitions and
investments permitted by Section 7.12(j), (n) or (o) hereof) or apply for a
letter of credit (whether hereunder or otherwise) supporting an obligation of
any Strategic Venture described in Section 7.12(o) or guarantee any Indebtedness
for Borrowed Money of any such Strategic Venture, if after giving effect thereto
the aggregate amount expended (other than in the form of capital stock of the
Company) for such purposes during the twelve-month period ending on the date of
the expenditure in question when taken together with the face amount of such
letters of credit issued during such period and such indebtedness so guaranteed
incurred during such period, would exceed the sum of (i) 2.00% of the arithmetic
average of the unrealized revenue from contracts in progress of the Company and
its Restricted Subsidiaries (computed in accord with the past practice of the
Company) as of the last day of each of the four calendar quarters most recently
completed prior to the computation in question, (ii) the net cash proceeds
received by the Company and the Restricted Subsidiaries during the same period
from sales of assets (including stock of Restricted Subsidiaries permitted by
Sections 7.14 and/or 7.15 hereof but excluding sales of inventory in the
ordinary course of business) and (iii) the maximum amount of dividends which the
Company could pay under Section 7.16 as of the date of the expenditure or
application in question.
Section 7.14. Mergers, Consolidations and Sales. The Company shall not, nor
shall it permit any of its Restricted Subsidiaries to, be a party to any merger,
consolidation or dissolution, or sell, transfer, lease or otherwise dispose of
all or any substantial part of the Property of the Company and the Restricted
Subsidiaries, taken as a whole, including any disposition of Property as part of
a sale and leaseback transaction (unless such transaction would be permitted had
it been structured as a purchase money mortgage or Capital Lease and is treated
as such for purposes of this Agreement), or in any event sell or discount (with
or without recourse) any of its notes or accounts receivable (other than sales
of accounts receivable by the Company and its Restricted Subsidiaries to any
Restricted Subsidiary, sale and leaseback transactions between the Company or
any of its Restricted Subsidiaries and any Restricted Subsidiary and sales or
discounts of doubtful accounts or notes taken in satisfaction of same);
provided, however, that this Section 7.14 shall not apply to nor operate to
prevent the Borrowers or any of the Restricted Subsidiaries from selling their
inventory in the ordinary course of its business or from selling equipment which
is obsolete, worn out, or no longer needed for the operation of the business of
the Company and the Restricted Subsidiaries or which is promptly replaced with
equipment of at least equal utility nor shall the foregoing prohibit (i) mergers
of Restricted Subsidiaries with and into the Company and sales by Restricted
Subsidiaries of all or substantially all of their assets to the Company, (ii)
mergers of Restricted Subsidiaries with each other and sales of all or
substantially all of the assets of a Restricted Subsidiary to another Restricted
Subsidiary provided in each case that if either of the two Restricted
Subsidiaries in question is a Guarantor, the survivor of the transaction in
question remains a Guarantor and all such actions are taken as the Agent
requires to preserve its Liens on the Collateral, (iii) the dissolution or
liquidation of any Restricted Subsidiary whose activities are no longer, in the
opinion of the Chief Executive Officer or the Board of Directors of the Company,
necessary for the operation of the business of the Company and its Restricted
Subsidiaries taken as a whole, provided always that no Default or Event of
Default has occurred and is continuing or will result therefrom and if the
Restricted Subsidiary to be dissolved or liquidated is a Guarantor, all of its
assets remaining after the dissolution or liquidation in question are
transferred to another Guarantor and all such actions, if any, are taken as the
Agent may reasonably require in order to insure that it has a Lien on the assets
so transferred of the priority required by Section 4.1 hereof. The term
"substantial" as used herein shall mean the sale, transfer, lease or other
disposition of assets of the Company or the Restricted Subsidiaries, whether in
one or a series of transactions having a value when aggregated with the value of
assets of all other such sales, transfers, leases or other dispositions during
the period from and including the date hereof to and including the date of such
sale, transfer, lease or other disposition, would exceed 10% of the book value
of assets of the Company and the Restricted Subsidiaries as of such date. The
Agent shall release its Lien on any Property sold pursuant to the foregoing
provisions if no Default or Event of Default has occurred and is continuing or
would result therefrom.
Section 7.15. Maintenance of Restricted Subsidiaries. The Borrowers shall
not assign, sell or transfer, or permit any Restricted Subsidiary to issue,
assign, sell or transfer, any shares of capital stock of a Restricted Subsidiary
(other than to the Company or another Restricted Subsidiary); provided that the
foregoing shall not operate to prevent (i) the issuance, sale and transfer to
any person of any shares of capital stock of a Restricted Subsidiary (a) for the
purpose of qualifying, and to the extent legally necessary to qualify, such
person as a director of such Subsidiary or (b) solely for the purpose of
permitting such Subsidiary to carry on a licensed business or (ii) the sale of
all or a minority interest in the capital stock of a Restricted Subsidiary if
but only if (a) no Default or Event of Default has occurred and is continuing or
will result from the sale of same, (b) the sale of such capital stock is not a
sale of a substantial part of the assets of the Company and the Restricted
Subsidiaries taken as a whole (as the term "substantial" is defined in Section
7.14 hereof), (c) the Chief Executive Officer or the Board of Directors of the
Company has determined that the continued ownership of the Restricted Subsidiary
(or the minority interest therein to be disposed of) in question is no longer
appropriate in light of the then needs and strategic objectives of the Company
and its Restricted Subsidiaries taken as a whole and (d) in the case of the sale
of all the Capital Stock of a Restricted Subsidiary all indebtedness of such
Restricted Subsidiary to the Company or any other Restricted Subsidiary is paid
in full, and all guarantees or other support undertakings provided by the
Company or other Restricted Subsidiaries in respect of such disposed Restricted
Subsidiary are discharged, concurrently with the sale in question, provided that
then existing Performance Guarantees or guaranties in respect of surety bonds
with respect to such a Restricted Subsidiary need not be so discharged as to
jobs which commenced prior to the completion of such sale. Concurrently with the
sale of all of the capital stock of a Restricted Subsidiary permitted hereby,
the Agent is authorized and directed to release any Guarantee provided by such
Restricted Subsidiary and any Lien on the stock or assets of such Restricted
Subsidiary and such entity shall no longer constitute a Restricted Subsidiary
hereunder. Except as set forth in the Side Letter, the Borrowers shall not
permit any Restricted Subsidiary to enter into any contract or agreement after
the date hereof prohibiting or restricting such Restricted Subsidiary from
paying dividends or making loans and advances to the Company except in the case
of a Restricted Subsidiary formed or acquired to be a captive insurer or a
captive surety.
Section 7.16. Dividends and Certain Other Restricted Payments. The Company
will not during any fiscal year (a) declare or pay any dividends on or make any
other distributions in respect of any class or series of its capital stock
(except for dividends payable solely in its capital stock) or (b) directly or
indirectly purchase, redeem or otherwise acquire or retire any of its capital
stock or any options or warrants therefor except out of the net proceeds of a
substantially concurrent issuance and sale of capital stock or options or
warrants therefor (collectively, "Restricted Payments") if after giving effect
thereto (i) the aggregate amount expended for all such purposes subsequent to
the date hereof would exceed the difference between (x) $50,000,000 plus (but
not minus in the case of a deficit) 50% of Net Income for the period (taken as a
single accounting period) from the date hereof to the last day of the calendar
quarter most recently completed prior to the Restricted Payment in question and
(y) any portion of the amount computed pursuant to clause (x) hereof which was
used to justify a transaction under Section 7.13 pursuant to clause (iii)
thereof and (ii) no Default or Event of Default shall have occurred and be
continuing.
Section 7.17. ERISA. The Borrowers shall, and shall cause each of the
Restricted Subsidiaries to, promptly pay and discharge all obligations and
liabilities arising under ERISA of a character which if unpaid or unperformed
might result in the imposition of a Lien against any of their Properties. The
Borrowers shall, and shall cause each of the Restricted Subsidiaries to,
promptly notify the Agent and each Lender of (i) the occurrence of any
reportable event (as defined in ERISA) with respect to any employee benefit plan
subject to Title IV of ERISA (other than a multiemployer plan) sponsored or
contributed to by either of the Borrowers or any member of the Controlled Group
(a "Plan") with respect to which the PBGC has neither waived the 30 day
reporting requirement nor issued a public announcement that the penalty
applicable to a failure to report will not apply, (ii) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or appointment of
a trustee therefor, (iii) its intention to terminate any Plan or withdraw from
any multiemployer plan if such termination or withdrawal could reasonably be
expected to have a Material Adverse Effect, and (iv) the occurrence of any other
event with respect to any Plan which would result in the incurrence by the
Borrowers or any of their Restricted Subsidiaries of any material liability,
fine or penalty, or any material increase in the contingent liability of the
Borrowers or any of the Restricted Subsidiaries with respect to any
post-retirement Welfare Plan benefit which could reasonably be expected to have
a Material Adverse Effect.
Section 7.18. Compliance with Laws. The Company shall, and shall cause each
of its Restricted Subsidiaries to, comply in all respects with the requirements
of all foreign (whether national, supra-national or otherwise), federal, state,
provincial, and local laws, rules, regulations, ordinances and orders applicable
to or pertaining to their Properties or business operations, non-compliance with
which could have a Material Adverse Effect or could result in a Lien upon any of
their Property material to the Company and the Restricted Subsidiaries taken as
a whole.
Section 7.19. Burdensome Contracts With Affiliates. The Company shall not,
nor shall it permit any of its Restricted Subsidiaries to, enter into any
contract, agreement or business arrangement with any of its Affiliates (other
than with or among Restricted Subsidiaries and the Company) on terms and
conditions which are less favorable to the Company or any such Restricted
Subsidiary than would be usual and customary in similar contracts, agreements or
business arrangements between Persons not affiliated with each other.
Section 7.20. No Changes in Fiscal Year. The Company shall not change its
fiscal year from its present basis without the prior written consent of the
Required Lenders.
Section 7.21. Formation of Subsidiaries. The Company will not, and will not
permit any Restricted Subsidiary to, form or acquire any Subsidiary except in
connection with acquisitions permitted by Section 7.12 hereof and the formation
of new subsidiaries if in any such case and in either such instance the newly
formed or acquired Subsidiary shall, if the Required Lenders so request and to
the extent required by this Agreement, execute and deliver a Guarantee and grant
Liens on its assets of the priority required by Section 4.1 hereof (and provide
the Agent with such documentation therefore and such supporting documentation,
including opinions of counsel, as it may reasonably request). Each Subsidiary
acquired or formed pursuant hereto shall constitute a Restricted Subsidiary
unless the Required Lenders otherwise agree in writing.
Section 7.22. Change in the Nature of Business. The Company shall not, and
shall not permit any of the Restricted Subsidiaries to, engage in any business
or activity if as a result the general nature of the business of the Company and
the Restricted Subsidiaries would be changed in any material respect from the
general nature of the business engaged in by the Company and the Restricted
Subsidiaries on the date of this Agreement.
Section 7.23. Use of Proceeds. The Borrowers shall use the proceeds of the
initial Credit Utilization hereunder to the extent necessary to repay all
indebtedness, obligations (other than L/C Obligations) and liabilities
outstanding under the Existing Agreement and all Credit Utilizations thereafter
for the purposes set forth in, or otherwise permitted by, Section 5.4 hereof.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following shall
constitute an Event of Default hereunder:
(a) default in the payment when due of all or any part of the
principal of the Revolving Credit Notes (whether at the stated maturity
thereof or at any other time provided for in this Agreement) or of any
Reimbursement Obligation and any such default continues for 1 Business Day
after notice thereof from the Agent to the Company;
(b) default in the payment when due of all or part of the interest on
any Revolving Credit Note (whether the stated maturity thereof or at any
other time provided for in this Agreement) or of any fee or other amount
payable hereunder or under any other Loan Document and any such default
continues for 5 Business Days after notice thereof from the Agent to the
Company;
(c) default in the observance or performance of any covenant set forth
in Sections 7.6, 7.7, 7.8, 7.13, 7.14, 7.15, or 7.16 hereof or of any
provision in any Loan Document dealing with the maintenance of insurance on
the Collateral;
(d) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within thirty
days after the earlier of (i) the date on which such failure shall first
become known to any officer of the Company or (ii) written notice thereof
to the Company by the Agent;
(e) any representation or warranty made herein or in any of the other
Loan Document or in any certificate furnished to the Agent or the Lenders
pursuant hereto or thereto or in connection with any transaction
contemplated hereby or thereby proves untrue in any material respect as of
the date of the issuance or making thereof;
(f) any event occurs or condition exists (other than those described
in subsections (a) through (e) above) which is specified as an event of
default under any of the other Loan Documents and any period of grace
applicable thereto shall have elapsed, or any of the Loan Documents shall
for any reason not be or shall cease to be in full force and effect, or any
of the Loan Documents is declared to be null and void, or any of the
Collateral Documents shall for any reason fail to create a valid and
perfected Lien in favor of the Agent in any material amount of Collateral
purported to be covered thereby of the priority required by Section 4.1
hereof;
(g) default shall occur under any evidence of Indebtedness for
Borrowed Money aggregating in excess of $10,000,000 issued, assumed or
guaranteed by any of the Borrowers or any Restricted Subsidiary or under
any indenture, agreement or other instrument under which the same may be
issued, and such default shall continue for a period of time sufficient to
permit the acceleration of the maturity of any such Indebtedness for
Borrowed Money (whether or not such maturity is in fact accelerated)
without being waived or any such Indebtedness for Borrowed Money shall not
be paid when due (whether by demand, lapse of time, acceleration or
otherwise);
(h) any judgment or judgments, writ or writs or warrant or warrants of
attachment, or any similar process or processes in an aggregate amount in
excess of $500,000 (provided, that in determining such $500,000 amount
there shall be deducted therefrom the amount which is covered by insurance
from any insurer which has acknowledged its liability thereon) shall be
entered or filed against the Borrowers or any of the Material Restricted
Subsidiaries or against any of the Property or assets of any of them and
remains undischarged, unvacated, unbonded or unstayed for a period of
thirty days;
(i) any party obligated on any Guarantee shall purport to disavow,
revoke, discontinue, repudiate or terminate such Guarantee or such
Guarantee shall otherwise cease to have force or effect;
(j) any Change of Control occurs;
(k) any Borrower or Material Restricted Subsidiary shall (i) have
entered involuntarily against it an order for relief under the United
States Bankruptcy Code, as amended, the Canadian Bankruptcy Code, as
amended, or any analogous action is taken under any other applicable law
relating to bankruptcy or insolvency, (ii) not pay, admit in writing its
inability to pay, or be deemed under applicable law not to be able to pay,
its debts generally as they become due, (iii) make an assignment for the
benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in,
the appointment of a receiver, receiver-manager, receiver and manager,
interim receiver, administrative receiver, administrator, custodian,
trustee, examiner, liquidator or similar official for it or any substantial
part of its Property, (v) institute any proceeding seeking to have entered
against it an order for relief under the United States Bankruptcy Code, as
amended, or the Canadian Bankruptcy Code, as amended 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 fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, or (vi) fail to
contest in good faith any appointment or proceeding described in Section
8.1(l) hereof; or
(l) a custodian, receiver, receiver-manager, receiver and manager,
interim receiver, administrative receiver, administrator, trustee,
examiner, liquidator or similar official shall be appointed for any
Borrower or Material Restricted Subsidiary or any substantial part of any
of their Property, or a proceeding described in Section 8.1(k)(v) shall be
instituted against any Borrower or Material Restricted Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed
or unstayed for a period of sixty days.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default described
in subsections 8.1(a) to 8.1(j), both inclusive, has occurred and is continuing,
the Agent shall, upon request of the Required Lenders by notice to the Company,
take any or all of the following actions:
(a) terminate the obligation of the Lenders to extend any further credit
hereunder on the date (which may be the date thereof) stated in such notice; and
(b) declare the principal of and the accrued interest on the Revolving
Credit Notes to be forthwith due and payable and thereupon the Revolving Credit
Notes, including both principal and interest, and all fees, charges, commissions
and other Obligations payable hereunder, shall be and become immediately due and
payable without further demand, presentment, protest or notice of any kind.
Without limiting the generality of the foregoing, the Agent, upon request
of the Required Lenders, shall be entitled to realize upon and enforce all of
its rights and remedies under the Collateral Documents and proceed by any other
action, suit, remedy or proceeding as authorized or permitted by this Agreement,
the Collateral Documents or at law or in equity.
Section 8.3. Bankruptcy Defaults. When any Event of Default described in
subsection 8.1(k) or 8.1(l) has occurred and is continuing, then the unpaid
balance of the Revolving Credit Notes, including both principal and interest,
and all fees, charges, commissions and other Obligations payable hereunder,
shall immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligation of the Lenders to extend further credit
pursuant to any of the terms hereof shall immediately terminate. Without
limiting the generality of the foregoing, the Agent, upon request of the
Required Lenders, shall be entitled to realize upon and enforce all of its
rights and remedies under the Collateral Documents and proceed by any other
action, suit, remedy or proceeding and authorized or permitted by this
Agreement, the Collateral Documents or at law or in equity.
Section 8.4. Collateral for Undrawn Letters of Credit.
(a) If and when(x) any Event of Default, other than an Event of
Default described in subsections (k) or (l) of Section 8.1, has occurred
and is continuing, the Borrowers shall, upon demand of the Agent, and (y)
any Event of Default described in subsections (k) or (l) of Section 8.1 has
occurred or (z) any Letter of Credit is outstanding on the Termination Date
(whether or not any Event of Default has occurred), the Borrowers shall,
without notice or demand from the Agent, either (i) immediately pay to the
Agent the full amount of each Letter of Credit to be held by the Agent as
provided in subsection (b) below or (ii) provide a back-up letter of credit
for the benefit of the Agent in a stated amount equal to the full amount of
all Letters of Credit then outstanding which letter of credit shall give
the Agent the unconditional right to make drawings thereunder upon receipt
of a drawing request under any Letter of Credit and otherwise be in form
and substance satisfactory to the Agent and issued by an issuer
satisfactory to the Agent in its sole discretion, the Borrowers agreeing to
immediately make each such payment or provide such back-up letter of credit
and acknowledging and agreeing the Agent would not have an adequate remedy
at law for failure of the Borrowers to honor any such demand and that the
Agent shall have the right to require the Borrowers to specifically perform
such undertaking whether or not any draws had been made under the Letters
of Credit.
(b) All amounts prepaid pursuant to subsection (a) above or paid over
to the Agent pursuant to Section 3.5(b) hereof shall be held by the Agent
in one or more separate collateral accounts (each 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) (i) with respect to amounts prepaid pursuant to subsection (a)
above, to the reimbursement of any payment 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 Obligations or (ii) with respect to amounts paid
over to the Agent pursuant to Section 3.5(b) hereof, as set forth in
Section 3.5(b), as applicable. The Account shall be held in the name of and
subject to the exclusive dominion and control of the Agent for the benefit
of the Agent, the Lenders and the Applicable Issuer. If and when requested
by the Borrower, the Agent shall invest funds held in the Collateral
Account from time to time in direct obligations of, or obligations the
principal of and interest on which are unconditionally guaranteed by, the
United States of America with a remaining maturity of one year or less,
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 amounts due and owing from any
Borrower to the Applicable Issuer, the Agent or the Lenders; provided,
however, that if (i) the Borrowers shall have made payment of all such
obligations referred to in subsection (a) above or Section 3.5(b), as
applicable, (ii) all relevant preference or other disgorgement periods
relating to the receipt of such payments have passed, and (iii) with
respect to amounts prepaid pursuant to subsection (a) above only, no
Letters of Credit, Commitments, Loans or other Obligations remain
outstanding hereunder (other than unasserted indemnity obligations which
survive the termination hereof), then the Agent shall release to the
Company any remaining amounts held in the Collateral Account.
SECTION 9. DEFINITIONS INTERPRETATIONS.
Section 9.1. Definitions. The following terms when used herein have the
following meanings:
"Acquired Business" means the entity or assets acquired by a Borrower or
Restricted Subsidiary in an Acquisition, whether before or after the date
hereof.
"Acquisition" means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person
(other than a Person that is a Subsidiary), or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is a Subsidiary) provided that a
Borrower or Restricted Subsidiary is the surviving entity.
"Additional Lender" is defined in Section 1.11 hereof.
"Adjusted EBIT" means, with reference to any period, EBIT for such period
calculated on a pro forma basis in good faith by the Company and established to
the reasonable satisfaction of the Agent as if each Acquisition which occurred
during such period had taken place on the first day of such period (including
adjustments for non-recurring expenses and income reasonably determined by the
Company in good faith and established to the reasonable satisfaction of the
Agent).
"Adjusted EBITDA" means, with reference to any period, EBITDA for such
period calculated on a pro forma basis in good faith by the Company and
established to the reasonable satisfaction of the Agent as if each Acquisition
which occurred during such period had taken place on the first day of such
period (including adjustments for non-recurring expenses and income reasonably
determined by the Company in good faith and established to the reasonable
satisfaction of the Agent).
"Adjusted LIBOR" means, for any Interest Period, a rate per annum
determined in accordance with the following formula:
Adjusted LIBOR = LIBOR
___________________________________
1 - Eurocurrency Reserve Percentage
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 41%
or more of the securities having ordinary voting power for the election of
directors or governing body of a corporation or 41% or more of the partnership
or other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person.
"Agent" shall mean Harris N.A. and any successor thereto appointed pursuant
to Section 10.1 hereof.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Alternative Currency" means Canadian dollars, pounds sterling, South
African rand, Euro and any other currency (other than United States Dollars)
approved as such in writing by all Lenders, in each case for so long as such
currency is readily available to all the Lenders and is freely transferable and
freely convertible to U.S. Dollars and the Dow Jones Telerate Service or Reuters
Monitor Money Rates Service (or any successor to either) reports a LIBOR for
such currency for interest periods of one, two, three and six calendar months;
provided that if any Lender provides written notice to the Company (with a copy
to the Agent) that any currency control or other exchange regulations are
imposed in the country in which any such Alternative Currency is issued and that
in the reasonable opinion of such Lender funding a Loan in such currency is
impractical, then such currency shall cease to be an Alternative Currency
hereunder until such time as all the Lenders reinstate such country's currency
as an Alternative Currency.
"Applicable Issuer" means the Issuer of Letters of Credit for the account
of a particular Borrower or Borrowers or in a particular jurisdiction or
jurisdictions.
"Applicable Margin" shall mean the rate per annum specified below for the
Leverage Ratio and type of Loan or fee for which the Applicable Margin is being
determined:
LEVEL I LEVEL II LEVEL III LEVEL IV LEVEL V
Leverage Ratio <1.00x =1.00x and <1.50x =1.50x and <2.00x =2.00x and <2.50x =2.50x
Domestic Rate 0% 0% 0% 0% 0.50%
Loan Margin
Eurodollar Loan 1.00% 1.25% 1.50% 1.75% 2.25%
Margin and L/C Fee*
Commitment Fee .25% .30% .35% .40% .50%
provided, however, that the foregoing is subject to the following:
(i) the Leverage Ratio, Adjusted EBITDA and Interest Coverage
Ratio shall be determined as at the last day of each fiscal quarter of
the Company commencing with the fiscal quarter ending September 30,
2005, with any adjustment in the Applicable Margins resulting from a
change therein to be effective five (5) Business Days after receipt by
the Agent of the financial statements for such quarter called for by
Section 7.5(b) hereof (provided that if such financial statements are
not submitted within the time limitations of Section 7.5(b) and would
result in an increase in the Applicable Margins, then such Applicable
Margins shall be increased effective five Business Days after the last
date when such financial statements could have been submitted in
compliance with Section 7.5(b) hereof);
(ii) the Applicable Margins for the period from the date hereof
through the first redetermination pursuant to clause (i) above shall
be those set forth above for Level I; and
(iii) each determination of the Applicable Margins pursuant to
the foregoing shall remain in effect until the Applicable Margins are
next redetermined pursuant to the foregoing.
"Application" is defined in Section 1.3(b) hereof.
"Assignment Agreement" means an Assignment and Acceptance entered into by a
Lender and an assignee in accordance with Section 11.18 hereof substantially in
the form of Exhibit D hereto or in such other form as may be agreed to by all
parties thereto.
"Authorized Representative" means the Chief Executive Officer, the
President, the Chief Financial Officer, the Senior Vice President -- Chief
Accounting Officer, the Controller, the Treasurer, the Assistant Treasurer or
any further or different persons so named by any Authorized Representative in a
written notice to the Agent.
"Borrowers" means (a) the U.S. Borrowers, (b) the Canadian Borrowers and
(c) the U.K. Borrowers, with (i) the term "Borrowers" to mean the Borrowers,
collectively, and, also each individually, and (ii) all promises and covenants
(including promises to pay) and representations and warranties of and by the
Borrowers made in the Loan Documents or any instruments or documents delivered
pursuant thereto to be and constitute the several promises, covenants,
representations and warranties of and by each and all of such corporations,
except to the extent explicitly otherwise provided. The term "Borrower"
appearing in such singular form shall be deemed a reference to any of the
Borrowers unless the context in which such term is used shall otherwise require.
"Borrowing" shall mean the total of Revolving Loans or Swing Loans made to
a given Borrower by all the Lenders on a single date, in a single currency and
having the same maturity. Borrowings of Revolving Loans are made and maintained
ratably from each of the Lenders according to their Percentages except to the
extent otherwise agreed in writing by all Lenders. Borrowings of Swing Loans are
made by the Agent in accordance with the procedures set forth in Section 1.8
hereof.
"Business Day" means any day other than a Saturday or Sunday on which banks
are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to a Borrowing or payment in an Alternative
Currency or to a conversion of a Credit Utilization into U.S. Dollars, a day on
which banks and foreign exchange markets are open for business in the city where
disbursements of, conversions of, or payments on such Borrowings are to be made.
"Canadian Borrowers" means and includes Comstock Canada and such other
Restricted Subsidiaries organized under the Federal laws of Canada or the laws
of a Province of Canada as may from time to time be designated as such in
writing by the Company and approved as such in writing by all Lenders (but
subject to such conditions and limitations as either the Company or the Lenders
may impose).
"Canadian Facility" shall mean a loan and letter of credit facility not in
excess of $25,000,000 extended to one or more of the Canadian Subsidiaries by a
lender licensed to carry on a lending business in Canada and reasonably
acceptable to the Required Lenders (the "Canadian Lender") and being on terms
and conditions reasonably acceptable to the Required Lenders (including without
limitation in respect of Liens to be granted to such lender and the priority of
any such Liens in relation to the Liens created under the Collateral Documents).
"Canadian Bankruptcy Code" mans the Bankruptcy and Insolvency Act (Canada)
and the Companies' Creditors Arrangement Act (Canada).
"Canadian Subsidiaries" means and includes the Canadian Borrowers and such
other Subsidiaries as are organized under the Federal laws of Canada or the laws
of a Province of Canada.
"Capital Expenditures" means, for any period, capital expenditures of the
Company and its Restricted Subsidiaries during such period as defined and
classified in accordance with GAAP consistently applied but in any event
excluding acquisitions and investments which are described in and permitted by
Section 7.12(j) hereof.
"Capital Lease" means any lease of Property (whether real or personal)
which in accordance with GAAP is required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown on
the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Change in Control" means that (i) more than 25% of the Voting Stock of the
Company shall at any time and for any reason be owned, either legally or
beneficially, by any Person or group of Persons acting in concert or (ii) Frank
MacInnis shall cease to be the chief executive officer of the Company and/or
Leicle Chesser shall cease to be the chief financial officer of the Company
and/or either such person shall cease to have the duties and responsibilities
normally associated with such positions and in any instance covered by clause
(ii) the person in question shall not be replaced within sixty days by a person
or persons of established experience and reputation, with respect to the duties
required of the holder of such an office, who has been approved by a majority of
the Board of Directors of the Company and who has not been affiliated with any
member of the Board or any business or other enterprise with which a Board
member is affiliated or (iii) (1) another corporation merges into the Company or
the Company consolidates with or merges into any other corporation or (2) the
Company conveys, transfers or leases all or substantially all its assets to any
person or group, in one transaction or a series of transactions other than any
conveyance, transfer or lease between the Company and a wholly owned subsidiary
of the Company, in each case, in one transaction or a series of related
transactions with the effect that a Person or group becomes the beneficial owner
of more than 25% of the Voting Stock of the surviving or transferee corporation
of such transaction or series; or (iv) during any period of two consecutive
years, individuals who at the beginning of such period constituted the Company's
Board of Directors (together with any new directors whose election by the
Company's Board of Directors, or whose nomination for election was previously so
approved) cease for any reason to constitute a majority of the Directors then in
office.
"Closing Date" means October 17, 2005.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all Properties, rights, interests and privileges from
time to time subject to the Liens granted to the Agent by the Collateral
Documents or required so to be by the terms hereof.
"Collateral Account" is defined in Section 8.4(b) hereof.
"Collateral Documents" means all security agreements, pledge agreements,
hypothecs, assignments, financing statements, debentures and other documents as
shall from time to time secure the Revolving Credit Notes or any other
Obligations.
"Commitments" is defined in Section 1.1 hereof.
"Company" is defined in the introductory paragraph hereof.
"Comstock Canada" is defined in the introductory paragraph hereof.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Credit Utilization" means any Borrowing and any issuance of a Letter of
Credit.
"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.
"Disposition" means the sale, lease, conveyance or other disposition of
Property.
"District" means District Chilled General Partnership, a Maryland
partnership.
"Domestic Rate" means a fluctuating interest rate per annum equal at all
times to the greater of:
(a) the rate of interest announced by Harris N.A. from time to time as
its prime commercial rate as in effect on such day, with any change in such
rate resulting from a change in said prime commercial rate to be effective
as of the date of the relevant change in said prime commercial rate; or
(b) the sum of (x) the rate determined by the Agent to be the average
(rounded upwards, if necessary, to the next higher 1/100 of 1% of the rates
per annum quoted to the Agent at approximately 10:00 a.m. Chicago time (or
as soon thereafter as is practicable) on the day of determination (or, if
such day is not a Business Day, on the immediately preceding Business Day)
by two or more Federal funds brokers selected by the Agent for the sale to
the Agent at face value of Federal funds in the secondary market in an
amount equal or comparable to the principal amount owed to the Lenders for
which such rate is being determined, plus (y) 1/2 of 1%.
"Domestic Rate Loan" means a Revolving Loan bearing interest as specified
in Section 2.1 hereof.
"Earn-Out Obligations" means an obligation the payment of which is
dependent upon the future performance of an asset or assets the sale of which
gave rise to such obligation.
"EBIT" means, with reference to any period, as determined for the Company
and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP,
Net Income for such period plus all amounts deducted in arriving at such Net
Income amount in respect of (i) Interest Expense for such period, and (ii)
federal, state, provincial, foreign and local income taxes for such period.
"EBITDA" means, with reference to any period, as determined for the Company
and its Restricted Subsidiaries on a consolidated basis in accordance with GAAP,
Net Income for such period plus all amounts deducted in arriving at such Net
Income amount in respect of (i) Interest Expense for such period, and (ii)
federal, state, provincial, foreign and local income taxes for such period, and
(iii) all amounts properly charged for depreciation of fixed assets and
amortization of intangible assets during such period on the books of the Company
and its Restricted Subsidiaries.
"Eligible Line of Business" means any business engaged in as of the date of
this Agreement by any Borrower or any Restricted Subsidiary.
"EMCOR UK" is defined in the introductory paragraph hereof.
"EMU Legislation" means the legislative measures of the European Council
for the introduction of, changeover to, or operation of a single or unified
European currency being part of the implementation of the Third Stage.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means any (i) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Company, (ii) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the Code) with any Borrower, and (iii) member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as the Company, any
corporation described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"Euro" means the single lawful currency for the time being of the
Participating Member States.
"Eurocurrency Reserve Percentage" means, for any Borrowing in a currency,
the daily average for the applicable Interest Period of the maximum rate,
expressed as a decimal, at which reserves (including, without limitation, any
supplemental, marginal and emergency reserves) are imposed during such Interest
Period by the Board of Governors of the Federal Reserve System (or any
successor) on "eurocurrency liabilities", as defined in such Board's Regulation
D (or in respect of any other category of liabilities that includes deposits by
reference to which the interest rate on Loans in the relevant currency is
determined or any category of extensions of credit or other assets that include
loans by non-United States offices of any Lender to United States residents),
subject to any amendments of such reserve requirement by such Board or its
successor, taking into account any transitional adjustments thereto. For
purposes of this definition, the Loans shall be deemed to be "eurocurrency
liabilities" as defined in Regulation D without benefit or credit for any
prorations, exemptions or offsets under Regulation D.
"Eurodollar Loan" means a Revolving Loan bearing interest as specified in
Section 2.2 hereof.
"Event of Default" means any event or condition specified as such in
Section 8.1 hereof.
"Event of Loss" means, with respect to any Property, any of the following:
(a) any loss, destruction or damage of such Property or (b) any condemnation,
seizure, or taking, by exercise of the power of eminent domain or otherwise, of
such Property, or confiscation of such Property or the requisition of the use of
such Property.
"Excess Cash" means, at any time the same is to be determined, the amount
by which all cash, cash equivalents and marketable securities held by the
Company and the U.S. Subsidiaries which are Guarantors in accounts maintained
with the Agent or any Lender in the United States exceeds $25,000,000.
"Existing Agreement" is defined in the introductory paragraph hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (b) of the definition of Domestic Rate.
"Financial Letter of Credit" means a Letter of Credit (whether standby or
commercial) that is not, as reasonably determined by the Agent, a Performance
Letter of Credit.
"Foreign Subsidiary" means as to any particular corporation or other
entity, any other corporation or limited liability company organized under the
laws of and conducting business primarily in a jurisdiction which is not part of
the United States, the United Kingdom or Canada and (i) at least 39% of the
outstanding Voting Stock of which is at the time directly or indirectly owned by
such parent corporation or limited liability company or by one or more other
corporations or limited liability companies or other entities which are
themselves subsidiaries of such parent corporation or limited liability company
(ii) the Company of a Subsidiary of the Company has effective control over such
corporation or limited liability company, and (iii) is not designated as an
"Unrestricted Subsidiary".
"GAAP" means generally accepted accounting principles as in effect from
time to time.
"Guarantees" means instruments of guarantee from the Guarantors of the
Obligations satisfactory in form and substance to the Agent.
"Guarantors" means those entities listed on Schedule 4.2 hereto and such
other Restricted Subsidiaries (other than Restricted Subsidiaries which are not
Wholly-Owned Subsidiaries and any captive insurance company or captive surety
company which is a Restricted Subsidiary) as the Required Lenders may from time
to time designate as Guarantors in a written notice to the Company provided that
such Subsidiary has assets in excess of $1,000,000 or such other Restricted
Subsidiaries as the Company may from time to time designate.
"Hedging Liability" means the liability of any Borrower or any Subsidiary
to any of the Lenders, or any Affiliates of such Lenders, in respect of any
interest rate swap agreements, interest rate cap agreements, interest rate
collar agreements, interest rate floor agreements, interest rate exchange
agreements, foreign currency contracts, currency swap contracts, or other
similar interest rate or currency hedging arrangements as such Borrower or such
Subsidiary, as the case may be, may from time to time enter into with any one or
more of the Lenders party to this Agreement or their Affiliates.
"Hostile Acquisition" means the acquisition of the capital stock or other
equity interests of a Person through a tender offer or similar solicitation of
the owners of such capital stock or other equity interests which has not been
approved (prior to such acquisition) by resolutions of the Board of Directors of
such Person or by similar action if such Person is not a corporation, and as to
which such approval has not been withdrawn.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) all indebtedness created, assumed or incurred in any manner by such
Person or in respect of which such Person is directly or indirectly liable,
whether by guarantee, commitment to purchase, undertaking to maintain the
solvency, liquidity or a balance sheet condition of the obligor, or otherwise
representing (i) money borrowed (including by the issuance of debt securities),
(ii) indebtedness for the deferred purchase price of property or services (other
than trade accounts payable arising in the ordinary course of business and
Earn-Out Obligations), (iii) indebtedness secured by any Lien upon Property of
such Person, whether or not such Person has assumed or become liable for the
payment of such indebtedness but if such Person is not liable then such
indebtedness shall be included at the lesser of the amount thereof or the fair
market value of the Property securing same, (iv) Capitalized Lease Obligations
of such Person and (v) all obligations of such Person on or with respect to
letters of credit (other than letters of credit which support payment of
obligations which do not constitute Indebtedness for Borrowed Money of any
Person), and bankers' acceptances. Performance Guarantees do not constitute
Indebtedness for Borrowed Money.
"Interest Coverage Ratio" means as at any date the same is to be determined
the ratio of (i) Adjusted EBIT for the period of twelve calendar months then
ending to (ii) Net Interest Expense for the same period.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense but
excluding fees payable under Sections 3.1 and 3.2 hereof) and letter of credit
fees and commissions of the Borrowers and the Restricted Subsidiaries for such
period determined in accordance with GAAP, but interest paid through the
issuance of securities to the holders of the indebtedness in question having a
maturity of more than one year from the date of issuance and being of no higher
ranking or priority than the indebtedness in question shall not be included in
Interest Expense.
"Interest Period" means the period commencing on the date a Borrowing is
advanced or continued through a new Interest Period and ending: (a) in the case
of a Eurodollar Loan, 1, 2, 3, or 6 months thereafter and (b) in the case of a
Swing Loan, on the date 1 to 5 Business Days thereafter as mutually agreed to by
the Company and the Agent; provided, however, that:
(i) an Interest Period may not extend beyond the Termination
Date;
(ii) 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 be extended to the next succeeding Business Day, provided
that, if such extension would cause the last day of an Interest Period
to occur in the following calendar month, the last day of such
Interest Period shall be the immediately preceding Business Day; and
(iii) 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 numerically corresponding day
in the month in which such an Interest Period is to end or if such an
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.
"Interest Rate Protection and Other Hedging Agreements" means one or more
of the following agreements entered into by one or more financial institutions:
(a) interest rate protection agreements (including, without
limitation, interest rate swaps, caps, floors, collars and similar
agreements),
(b) foreign exchange contracts, currency swap agreements or other,
similar agreements or arrangements designed to protect against fluctuations
in currency values and/or
(c) other types of hedging agreements from time to time.
"Issuer" means Harris N.A. and any other Lender approved by the Required
Lenders and the Company as an issuer of Letters of Credit to a particular
Borrower or Borrowers hereunder or for use in a particular jurisdiction.
"L/C Documents" means the Letters of Credit, any draft or other document
presented in connection with a drawing thereunder, the Applications and this
Agreement.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lenders" shall mean from time to time the parties hereto other than the
Borrowers, including any assignee pursuant to Section 11.18 hereof.
"Letter of Credit" is defined in Section 1.3(a) hereof.
"Leverage Ratio" means, as of any time the same is to be determined, the
ratio of (x) Total Funded Debt minus Excess Cash as of such date, to (y)
Adjusted EBITDA for the period of twelve calendar months then ending.
"LIBOR" means, for an Interest Period, (a) the LIBOR Index Rate for such
Interest Period, if such rate is available, and (b) if the LIBOR Index Rate
cannot be determined, the average rate of interest per annum (rounded upwards,
if necessary, to the nearest one hundred-thousandth of a percentage point) at
which deposits in the relevant currency in immediately available funds are
offered to the Agent at 11:00 a.m. (London, England time) two (2) Business Days
before the beginning of such Interest Period by major banks in the interbank
eurocurrency market for delivery on the first day of and for a period equal to
such Interest Period in an amount equal or comparable to the principal amount of
the Borrowing in such currency scheduled to be made by the Agent.
"LIBOR Index Rate" means, for any Interest Period, the rate per annum
(rounded upwards, if necessary, to the next higher one hundred-thousandth of a
percentage point) for deposits in the relevant currency for a period equal to
such Interest Period, which appears on the Telerate Page 3750 (or any other
appropriate page) for the applicable currency, as of 11:00 a.m. (London, England
time) on the day two (2) Business Days before the commencement of such Interest
Period. The Agent will provide the Company with evidence of such rate upon its
request.
"Lien" means any mortgage, lien, pledge, charge, hypothec or security
interest of any kind or nature (whether fixed or floating or of any ambulatory
or non-crystallized nature or otherwise) in respect of any Property, including
the interest of a vendor or lessor under any conditional sale, Capital Lease or
other title retention arrangement.
"Loan Documents" means this Agreement, the Revolving Credit Notes, the
Swing Note, the L/C Documents, the Guarantees and the Collateral Documents and
each other instrument or document to be delivered hereunder or thereunder or
otherwise in connection therewith.
"Loans" means and includes Domestic Rate Loans, Eurodollar Loans and Swing
Loans.
"Material Adverse Effect" means, with respect to any act, omission or
occurrence, any of the following consequences in the reasonable judgment of the
Required Lenders:
(a) the material impairment of the ability of the Company or of the
Company and the Guarantors taken as a whole to pay or perform their
obligations under or pursuant to the Loan Documents;
(b) any material adverse change in the assets, liabilities, financial
condition, operations or business prospects of the Company and its
Restricted Subsidiaries taken as whole, or
(c) any material impairment in the right of the Company and its
Restricted Subsidiaries taken as whole to carry on their business
substantially as now conducted.
"Material Restricted Subsidiary" means, as of any date of determination,
any Restricted Subsidiary with a Net Worth at such time greater than $1,000,000.
"Monumental" means Monumental Investment Corporation, a Maryland
corporation.
"Monumental Acquisition" means the purchase by the Company of all of the
outstanding common stock of Monumental pursuant to that certain Stock Purchase
Agreement dated as of April 5, 1999, among the Company and the stockholders of
Monumental.
"Net Cash Proceeds" means, as applicable, (a) with respect to any
Disposition by a Person, cash and cash equivalent proceeds received by or for
such Person's account, net of (i) reasonable direct costs relating to such
Disposition and (ii) sale, use or other transactional taxes paid or payable by
such Person as a direct result of such Disposition and (b) with respect to any
Event of Loss of a Person, cash and cash equivalent proceeds received by or for
such Person's account (whether as a result of payments made under any applicable
insurance policy therefor or in connection with condemnation proceedings or
otherwise), net of reasonable direct costs incurred in connection with the
collection of such proceeds, awards or other payments.
"Net Income" for any period means the net income of the Company and the
Restricted Subsidiaries for such period computed on a consolidated basis in
accordance with GAAP and, without limiting the foregoing, after deduction from
gross income of all expenses and provisions, including provisions for taxes on
or measured by income, but excluding any gains or losses on the sale or other
disposition of investments or fixed or capital assets, any extraordinary gains
and losses, the cumulative effect of accounting changes (as that term is defined
under GAAP) any taxes on such excluded gains, and any tax deductions or credits
on account of any such excluded losses.
"Net Interest Expense" means, for any period, Interest Expense less all
interest income received by the Company and its Restricted Subsidiaries during
such period, as determined on a consolidated basis in accordance with GAAP.
"Net Worth" means, as of any time the same is to be determined, the total
shareholders' equity (including capital stock, additional paid-in-capital,
warrants, accumulated other comprehensive income (as defined under GAAP) and
retained earnings but after deducting treasury stock and, excluding minority
interests in Restricted Subsidiaries) which would appear on the balance sheet of
the Company and its Restricted Subsidiaries determined on a consolidated basis
in accordance with GAAP.
"Notes" means and includes the Revolving Credit Notes and the Swing Note.
"Obligations" shall mean any and all indebtedness, obligations and
liabilities of the Borrowers and any of them to the Lenders or any of them or
the Agent or Issuers now or hereafter arising hereunder or under any of the
other Loan Documents.
"PPSA" means the Personal Property Security Act in effect from time to time
in each province and territory of Canada (and the Civil Code of Quebec in the
Province of Quebec).
"Participating Member State" means each State so described in any EMU
Legislation.
"Percentage" means, for each Lender, the percentage of the Commitments
represented by such Lender's Commitment or, if the Commitments have been
terminated, the percentage held by such Lender (including through participation
interests in L/C Obligations) of the aggregate principal amount of all
outstanding Obligations.
"Performance Guarantees" means, in respect of the Company or any of the
Restricted Subsidiaries, contingent obligations arising from the issuance of
performance guarantees, assurances, indemnities, bonds, letters of credit, or
similar agreements in the ordinary course of business in respect of the
contracts (other than contracts for Indebtedness for Borrowed Money) of the
Company, any Restricted Subsidiary, any Person in which the Company or a
Restricted Subsidiary has an equity interest.
"Performance Letters of Credit" means a Letter of Credit that, as
reasonably determined by the Agent, assures that the applicable Borrower will
fulfill a contractual non-financial obligation.
"Permitted Acquisition" means any Acquisition with respect to which all of
the following conditions shall have been satisfied:
(a) the Acquired Business is in an Eligible Line of Business and has
its primary operations within the United States of America or Canada;
(b) the Acquisition shall not be a Hostile Acquisition;
(c) if the aggregate consideration for such Acquisition is greater
than or equal to $25,000,000 (including as consideration all deferred
payment obligations but excluding any related Earn-Out Obligations), the
financial statements of the Acquired Business for the most recently
completed fiscal year of such Acquired Business shall have been audited or
reviewed by one of the "Big Four" accounting firms or by another
independent accounting firm of national or regional repute or otherwise
reasonably satisfactory to the Agent, or if such financial statements have
not been audited by such an accounting firm, (i) such financial statements
shall have been approved by the Agent and (ii) the Acquired Business has
undergone a successful so called businessman's review by one of the "Big
Four" accounting firms as part of the Company's due diligence on the
Acquisition;
(d) if the aggregate consideration (including as such consideration
any indebtedness of the Acquired Business assumed or guaranteed by the
Company or a Restricted Subsidiary) for such Acquisition is greater than or
equal to $25,000,000 (including as consideration all deferred payment
obligations and a reasonable estimate (satisfactory to the Agent) of any
related Earn-Out Obligations), after giving effect to the Acquisition the
Borrowers shall have Unused Commitments of not less than $100,000,000;
(e) after giving effect to the Acquisition, no Default or Event of
Default shall exist, including with respect to the covenants contained in
Sections 7.6, 7.7, 7.8 and 7.9 hereof on a pro forma basis.
"Person" shall mean any person, firm, corporation, limited liability
company, partnership, joint venture or other entity.
"Property" shall mean, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"Refunding Borrowing" is defined in Section 1.4(a) hereof.
"Required Lenders" shall mean at any time Lenders whose Commitments
aggregate 51% or more.
"Restricted Payments" is defined in Section 7.16 hereof.
"Restricted Subsidiaries" means those Subsidiaries designated as such on
Schedule 5.2 hereof and all other Subsidiaries becoming Restricted Subsidiaries
pursuant hereto. Foreign Subsidiaries are not Restricted Subsidiaries.
"Revolving Credit Notes" shall mean the Revolving Credit Notes (including
notes issued pursuant to Section 11.18 hereof) and "Revolving Credit Note" shall
mean any of the Revolving Credit Notes.
"Revolving Loans" is defined in Section 1.2 hereof.
"Strategic Ventures" means joint ventures, limited liability companies,
partnerships, corporations or similar pooling of efforts entered into for the
purpose of expanding the mechanical, electrical and/or facilities services,
businesses of the Company or any Restricted Subsidiary or entering or expanding
a business related to such businesses and includes Restricted Subsidiaries that
are not Guarantors.
"Sublimits" is defined in Section 1.1 hereof.
"Subsidiary" means, as to any particular parent corporation or other
entity, any other entity at least 50.1% of the outstanding Voting Stock of which
is at the time directly or indirectly owned by such parent corporation or
limited liability company or by any one or more other corporations or limited
liability companies or other entities which are themselves subsidiaries of such
parent corporation or limited liability company.
"Swing Line" means the credit facility for making one or more Swing Loans
described in Section 1.8 hereof.
"Swing Line Sublimit" means $35,000,000, as reduced pursuant to the terms
hereof.
"Swing Loan" and "Swing Loans" each is defined in Section 1.8 hereof.
"Telerate Page "3750" means the display designated as "Page 3750", on the
Telerate Service (or such other page as may replace Page 3750 on that service or
such other service as may be nominated by the British Bankers' Association as
the information vendor for the purpose of displaying British Bankers'
Association interest settlement rates.
"Termination Date" means October 17, 2010 or such earlier date on which the
Commitments are terminated in whole pursuant to Sections 3.5, 3.6, 8.2 or 8.3
hereof.
"Third Party Performance Guarantees" means Performance Guarantees issued by
Monumental to support contractual obligations of third parties.
"Third Stage" means third stage of European economic and monetary union
pursuant to the Treaty on European Union.
"Total Funded Debt" means, at any time the same is to be determined, the
aggregate of all Indebtedness for Borrowed Money of the Company and its
Restricted Subsidiaries at such time, including all Indebtedness for Borrowed
Money of any other Person which is directly or indirectly guaranteed by the
Company or any of its Restricted Subsidiaries or which the Company or any of its
Restricted Subsidiaries has agreed (contingently or otherwise) to purchase or
otherwise acquire or in respect of which the Company or any of its Restricted
Subsidiaries has otherwise assured a creditor against loss.
"Treaty on European Union" means the Treaty of Rome of March 25, 1957, as
amended by the Single European Act of 1986 and the Maastricht Treaty (which was
signed at Maastricht on February 7, 1992, and came into force on November 1,
1993, as amended from time to time).
"U.K. Borrowers" means and includes EMCOR UK and such other Restricted
Subsidiaries organized under the laws of the United Kingdom as may from time to
time be designated as such in writing by the Company and approved as such in
writing by all Lenders (but subject to such conditions and limitations as either
the Company or the Lenders may impose).
"U.K. Subsidiaries" means the U.K. Borrowers and such other Subsidiaries
organized under the laws of the United Kingdom.
"U.S. Borrowers" mean the Company and such other Restricted Subsidiaries
organized under the laws of the United States of America as may from time to
time be designated as such in writing by the Company and approved as such in
writing by all Lenders (but subject to such conditions and limitations as either
the Company or Lenders may impose).
"U.S. Dollars" or "$" means lawful currency of the United States of
America.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would be
realized by converting an Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent, at approximately 11:00 a.m.
(London time) on the date on which a computation thereof is to be made, to major
banks in the interbank foreign exchange market for the purchase of U.S. Dollars
for such Alternative Currency.
"U.S. Subsidiaries" means the Subsidiaries of the Company organized under
the laws of the United States of America as may from time to time be designated
as such in writing by the Company and approved as such in writing by all Lenders
(but subject to such conditions and limitations as either the Company or Lenders
may impose).
"Unrestricted Subsidiaries" means those Subsidiaries designated as such on
Schedule 5.2 hereof.
"Unused Commitments" means, at any time, the difference between the
Commitments then in effect and the aggregate outstanding principal amount of
Revolving Loans and L/C Obligations.
"Voting Stock" of any Person means capital stock or other equity interests
of any class or classes (however designated) having ordinary power for the
election of directors of such Person, other than stock having such power only by
reason of the happening of a contingency.
"Welfare Plan" means a "welfare plan" as defined in Section 3(l) of ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued and
outstanding shares of capital stock (other than directors' qualifying shares as
required by law and other than shares held by others for licensing purposes) or
other equity interests are owned by the Company and/or one or more wholly-owned
subsidiaries within the meaning of this definition.
Section 9.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement.
Section 9.3. Capital Stock. All references in this Agreement to "capital
stock" shall be deemed to include a reference to shares and all references to
"stockholders" shall be deemed to include references to shareholders (where
appropriate).
SECTION 10. THE AGENT AND THE ISSUERS.
Section 10.1. Appointment and Authorization. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders acknowledge and agree
that the Agent and the Issuers are not a trustee or other fiduciary for them.
The Agent or an Issuer may resign at any time by sending twenty (20) days prior
written notice to the Borrowers and the Lenders and may be removed by the
Required Lenders upon twenty (20) days prior written notice to the Borrowers and
the Lenders. In the event of any such resignation or removal, the Required
Lenders may appoint a new agent or issuer, with the consent of the Borrowers
(which consent shall not be required if any Default or Event of Default has
occurred and is continuing and which consent, if required, shall not be
unreasonably withheld), which shall succeed to all the rights, powers and duties
of the Agent or applicable Issuer (but only as to Letters of Credit issued by
the new Issuer) hereunder and under the other Loan Documents. Any resigning or
removed Agent or Issuer shall be entitled to the benefit of all the protective
provisions hereof with respect to its acts as an agent or issuer hereunder, but
no successor Agent or Issuer shall in any event be liable or responsible for any
actions of its predecessor. If the Agent resigns or is removed and no successor
is appointed, the rights and obligations of such Agent shall be automatically
assumed by the Required Lenders and (i) the Borrowers and Guarantors shall be
directed to make all payments due each Lender hereunder directly to such Lender
and (ii) the Agent's rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Lenders as their interests
may appear.
Section 10.2. Rights as a Lender. The Agent and the Issuers have and
reserve all of the rights, powers and duties hereunder and under the other Loan
Documents as any Lender may have and may exercise the same as though they were
not the Agent or an Issuer and the terms "Lender" or "Lenders" as used herein
and in all of such documents shall, unless the context otherwise expressly
indicates, include the Agent and Issuers in their individual capacities as
Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent and the Issuers make no
representations or warranties of any kind or character to the Lenders with
respect to the validity, enforceability, genuineness, perfection, value, worth
or collectibility hereof or of the Revolving Credit Notes or any of the other
Obligations or of any of the other Loan Documents or of the Liens provided for
thereby or of any other documents called for hereby or thereby or of the
Collateral. The Agent need not verify the worth or existence of the Collateral.
Neither the Agent nor the Issuers nor any director, officer, employee, agent or
representative thereof (including any security trustee therefor) shall in any
event be liable for any clerical errors or errors in judgment, inadvertence or
oversight, or for action taken or omitted to be taken by it or them hereunder or
under the other Loan Documents or in connection herewith or therewith except to
the extent the same is solely a result of its or their own gross negligence or
willful misconduct as determined by a final, non-appealable judgment of a court
of competent jurisdiction. The Agent and the Issuers shall incur no liability
under or in respect of this Agreement or the other Loan Documents by acting upon
any notice, certificate, warranty, instruction or statement (oral or written) of
anyone (including anyone in good faith believed by them to be authorized to act
on behalf of any Borrower), unless they have actual knowledge of the
untruthfulness of same. The Agent and the Issuers may execute any of their
duties hereunder by or through employees, agents, and attorneys-in-fact and
shall not be answerable to the Lenders for the default or misconduct of any such
agents or attorneys-in-fact selected with reasonable care. The Agent and the
Issuers shall be entitled to advice of counsel concerning all matters pertaining
to the agencies hereby created and their duties hereunder, and shall incur no
liability to anyone and be fully protected in acting upon the advice of such
counsel. The Agent and the Issuers shall be entitled to assume that no Default
or Event of Default exists unless notified to the contrary by a Lender. The
Agent and the Issuers shall in all events be fully protected in acting or
failing to act in accord with the instructions of the Required Lenders. Upon the
occurrence of an Event of Default hereunder, the Agent shall take such action
with respect to the enforcement of the Liens on the Collateral and the
preservation and protection thereof as it shall be directed to take by the
Required Lenders but unless and until the Required Lenders have given such
direction the Agent shall take or refrain from taking such actions as it deems
appropriate and in the best interest of all Lenders. The Agent shall in all
cases be fully justified in failing or refusing to act hereunder and under the
other Loan Documents unless it shall be indemnified to its satisfaction by the
Lenders against any and all liability and expense which may be incurred by the
Agent by reason of taking or continuing to take any such action. The Agent may
treat the owner of any Revolving Credit Note as the holder thereof until written
notice of transfer shall have been filed with the Agent signed by such owner in
form satisfactory to the Agent. Each Lender acknowledges that it has
independently and without reliance on the Agent, the Issuers or any other Lender
and based upon such information, investigations and inquiries as it deems
appropriate made its own credit analysis and decision to extend credit to the
Borrowers. It shall be the responsibility of each Lender to keep itself informed
as to the creditworthiness of the Borrowers and the Guarantors and the Agent and
Issuers shall have no liability to any Lender with respect thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the Agent
and the Issuers for all costs and expenses suffered or incurred by them or any
security trustee in performing their duties hereunder and under the other Loan
Documents, or in the exercise of any right or power imposed or conferred upon
them hereby or thereby, to the extent that they are not promptly reimbursed for
same by the Borrowers or out of the Collateral, all such costs and expenses to
be borne by the Lenders ratably in accordance with the amounts of their
respective Commitments.
Section 10.5. Indemnity. The Lenders shall ratably indemnify and hold the
Agent, the Issuers and their directors, officers, employees, agents,
representatives or attorneys-in-fact (including as such any security trustee
therefor), harmless from and against any liabilities, losses, costs or expenses
suffered or incurred by them hereunder or under the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Borrowers or out of the Collateral and except to the extent that
any event giving rise to a claim was caused solely by the gross negligence or
willful misconduct of the party seeking to be indemnified as determined by a
final, non-appealable judgment of a court of competent jurisdiction.
Section 10.6. Quebec Matters. For the purposes of any Collateral Documents
to be granted by any one or more of the Borrowers in favor of the Agent to the
extent that such Collateral Documents will be governed by the laws of the
Province of Quebec, the Agent shall be the holder of an irrevocable power of
attorney for all present and future Lenders. Any future Lender under the Credit
Agreement, by the execution of an Assignment Agreement in accordance with the
provisions of Section 11.17, shall be deemed to have irrevocably ratified the
power of attorney granted to the Agent in the immediately proceeding sentence.
The Lenders and the Borrowers agree that notwithstanding Section 32 of the Act
respecting the Special Powers of Legal Persons (Quebec), the Agent may, as the
Person holding the power of attorney of the Lenders, acquire any debentures or
other title of indebtedness secured by any hypothec granted by any one or more
of the Borrowers to the Agent pursuant to the laws of the Province of Quebec.
Section 10.7. Conflict. In the event of a conflict between the provisions
of this Section 10 and the provisions of any Collateral Document regarding the
rights, duties and obligations of the Agent, the provisions of this Section 10
shall govern.
Section 10.8. Hedging Liability. By virtue of a Lender's execution of this
Agreement or an assignment agreement pursuant to Section 11.17 hereof, as the
case may be, any Affiliate of such Lender with whom any Borrower or any
Subsidiary has entered into an agreement creating Hedging Liability shall be
deemed a Lender party hereto for purposes of any reference in a Loan Document to
the parties for whom the Agent is acting, it being understood and agreed that
the rights and benefits of such Affiliate under the Loan Documents consist
exclusively of such Affiliate's right to share in payments and collections out
of the Collateral and the Guarantees as more fully set forth in Section 3.7
hereof. In connection with any such distribution of payments and collections,
the Agent shall be entitled to assume no amounts are due to any Lender or its
Affiliate with respect to Hedging Liability unless such Lender has notified the
Agent in writing of the amount of any such liability owed to it or its Affiliate
prior to such distribution.
Section 10.9. Designation of Additional Agents. The Agent shall have the
continuing right, with the consent of the Company (such consent not to be
unreasonably withheld or delayed) for purposes hereof, at any time and from time
to time to designate one or more of the Lenders (and/or its or their Affiliates)
as "syndication agents," "documentation agents," "arrangers," or other
designations for purposes hereto, but such designation shall have no substantive
effect, and such Lenders and their Affiliates shall have no additional powers,
duties or responsibilities as a result thereof.
Section 10.10. Authorization to Release or Subordinate or Limit Liens. The
Agent is hereby irrevocably authorized by each of the Lenders to (a) release any
Lien covering any Collateral that is sold, transferred, or otherwise disposed of
in accordance with the terms and conditions of this Agreement and the relevant
Collateral Documents (including a sale, transfer, or disposition permitted by
the terms of Section 7.14 hereof or which has otherwise been consented to in
accordance with Section 11.4 hereof), (b) release or subordinate any Lien on
Collateral consisting of goods financed with purchase money indebtedness or
under a Capital Lease to the extent such purchase money indebtedness or
Capitalized Lease Obligation, and the Lien securing the same, are permitted by
Sections 7.10(h) and 7.11(e) hereof, and (c) reduce or limit the amount of the
indebtedness secured by any particular item of Collateral to an amount not less
than the estimated value thereof to the extent necessary to reduce mortgage
registry, filing and similar tax.
Section 10.11. Authorization to Enter into, and Enforcement of, the
Collateral Documents. The Agent is hereby irrevocably authorized by each of the
Lenders to execute and deliver the Collateral Documents on behalf of each of the
Lenders and their Affiliates and to take such action and exercise such powers
under the Collateral Documents as the Agent considers appropriate, provided the
Agent shall not amend the Collateral Documents unless such amendment is agreed
to in writing by the Required Lenders. Each Lender acknowledges and agrees that
it will be bound by the terms and conditions of the Collateral Documents upon
the execution and delivery thereof by the Agent. Except as otherwise
specifically provided for herein, no Lender (or its Affiliates) other than the
Agent shall have the right to institute any suit, action or proceeding in equity
or at law for the foreclosure or other realization upon any Collateral or for
the execution of any trust or power in respect of the Collateral or for the
appointment of a receiver or for the enforcement of any other remedy under the
Collateral Documents; it being understood and intended that no one or more of
the Lenders (or their Affiliates) shall have any right in any manner whatsoever
to affect, disturb or prejudice the Lien of the Agent (or any security trustee
therefor) under the Collateral Documents by its or their action or to enforce
any right thereunder, and that all proceedings at law or in equity shall be
instituted, had, and maintained by the Agent (or its security trustee) in the
manner provided for in the relevant Collateral Documents for the benefit of the
Lenders and their Affiliates.
SECTION 11. MISCELLANEOUS.
Section 11.1. Withholding Taxes.
(a) Payments Free of Withholding.Except as otherwise required by law
and subject to Section 11.1(b) hereof, each payment by each Borrower and
each Guarantor under this Agreement or the other Loan Documents shall be
made without withholding for or on account of any present or future taxes
(other than overall net income taxes (but not withholdings) on the
recipient imposed by a jurisdiction where it is domiciled or has an
established place of business) imposed by or within the jurisdiction in
which such Borrower or such Guarantor is domiciled, any jurisdiction from
which such Borrower or such Guarantor makes any payment, or (in each case)
any political subdivision or taxing authority thereof or therein. If any
such withholding is so required, the Borrower or relevant Guarantor 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 each Lender and the Agent
free and clear of such taxes (including such taxes on such additional
amount) is equal to the amount which that Lender or the Agent (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 such taxes, penalties
or interest (including without limitation, for the avoidance of doubt, any
taxes, penalties or interest attributable to any amounts reimbursed
pursuant to the provisions hereof) the Borrowers shall reimburse the Agent
or that Lender for that payment on demand in the currency in which such
payment was made. If the Borrowers or any Guarantor pay any such taxes,
penalties or interest, they shall deliver official tax receipts evidencing
that payment or certified copies thereof to the Lender or Agent on whose
account such withholding was made (with a copy to the Agent if not the
recipient of the original) on or before the thirtieth day after payment. If
any Lender or the Agent determines it has received or been granted a credit
against or relief or remission for, or repayment of, any taxes paid or
payable by it because of any taxes, penalties or interest paid by the
Borrowers or any Guarantor and evidenced by such a tax receipt, such Lender
or Agent shall, to the extent it can do so without prejudice to the
retention of the amount of such credit, relief, remission or repayment, pay
to the Borrowers or such Guarantor as applicable, such amount as such
Lender or Agent reasonably determines is attributable to such deduction or
withholding and which will leave such Lender or Agent (after such payment)
in no better or worse position than it would have been in if the Borrowers
or Guarantors had not been required to make such deduction or withholding.
Nothing in this Agreement shall interfere with the right of each Lender and
the Agent to arrange its tax affairs in whatever manner it thinks fit nor
oblige any Lender or the Agent to disclose any information relating to its
tax affairs or any computations in connection with such taxes.
(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 Borrowers and the Agent on or before the earlier of the
date the initial Borrowing is made hereunder and thirty (30) days after the
date hereof, two duly completed and signed copies of either Form W8-BEN
(relating to such Lender and entitling it to a complete exemption from
withholding under the Code on all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents and the Revolving Loans) or
Form W8-ECI (relating to all amounts to be received by such Lender,
including fees, pursuant to the Loan Documents and the Revolving Loans) of
the United States Internal Revenue Service. Thereafter and from time to
time, each Lender shall submit to the Borrowers 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) requested by the
Company in a written notice, directly or through the Agent, to such Lender
and (ii) required under then-current United States law or regulations to
avoid or reduce United States withholding taxes on payments in respect of
all amounts to be received by such Lender, including fees, pursuant to the
Loan Documents or the Revolving Loans. Notwithstanding the foregoing, (i) a
Lender which becomes a Lender after the date hereof shall not be required
to submit a Form W8-BEN or Form W8-ECI 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).
(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 Borrowers or Agent any form or certificate that such Lender is
obligated to submit pursuant to subsection (b) of this Section 11.1. 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
Company 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. If
any Lender can avoid the effect of any such change in law, regulation or
treaty or in the application or interpretation thereof, whether by changing
its lending office or otherwise, it undertakes to do so if the same can be
accomplished without disadvantage to it. If some, but not all, of the
Lenders are affected by a change of the type described herein, such Lender
agrees that it will at the request of the Company assign its Obligations to
another Lender under and pursuant to the conditions set forth in Section
11.17 hereof.
Section 11.2. Holidays. If any payment of principal or interest on any of
the Revolving Credit Notes or any fees shall fall due on a Saturday, Sunday or
on another day which is a legal holiday for lenders in the State of Illinois,
(i) interest at the rates such Notes bear for the period prior to maturity shall
continue to accrue on such principal from the stated due date thereof to and
including the next succeeding Business Day and (ii) such principal, interest and
fees shall be payable on such succeeding Business Day.
Section 11.3. No Waiver, Cumulative Remedies. No delay or failure on the
part of the Agent, any Issuer or any Lender or on the part of the Agent, any
Issuer or any holder of any of the Obligations in the exercise of any power or
right shall operate as a waiver thereof, nor as an acquiescence in any default
nor shall any single or partial exercise of any power or right preclude any
other or further exercise of any other power or right. The rights and remedies
hereunder of the Agent, the Issuers, Lenders and of the holders of any of the
Obligations are cumulative to, and not exclusive of, any rights or remedies
which any of them would otherwise have.
Section 11.4. Amendments. Any provision of this Agreement or the other Loan
Documents may be amended or waived if, but only if, such amendment or waiver is
in writing and is signed by (a) the Borrowers, (b) the Required Lenders, and (c)
if the rights or duties of the Agent or an Issuer are affected thereby, the
Agent or such Issuer, as applicable; provided that:
(i) no amendment or waiver pursuant to this Section 11.4 shall
(A) increase any Commitment of any Lender without the consent of such
Lender or (B) reduce the amount of or postpone the date for any
scheduled payment of any principal of or interest on any Loan or of
any Reimbursement Obligation or of any fee payable hereunder without
the consent of the Lender to which such payment is owing or which has
committed to make such Loan or Letter of Credit (or participate
therein) hereunder; and
(ii) no amendment or waiver pursuant to this Section 11.4 shall,
unless signed by each Lender, increase the aggregate Commitments of
the Lenders, change the definitions of Termination Date or Required
Lenders, change the provisions of this Section 11.4, release any
material guarantor or any substantial part of the Collateral (except
as otherwise provided for in the Loan Documents), or affect the number
of Lenders required to take any action hereunder or under any other
Loan Document;
Section 11.5. Costs and Expenses. The Borrowers agree to pay on demand all
reasonable costs and expenses of the Agent in connection with the negotiation,
preparation, execution, delivery, recording or filing or release of the Loan
Documents or in connection with any consents hereunder or thereunder or waivers
or amendments hereto or thereto or assignments pursuant hereto, including the
reasonable fees and expenses of counsel for the Agent with respect to all of the
foregoing, and all recording, filing, insurance or other fees, costs and taxes
incident to perfecting a Lien upon the collateral security for the Revolving
Credit Notes and the other Obligations, and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Agent, the Issuers, the
Lenders or any other holders of the Obligations in connection with any Default
or Event of Default or in connection with the enforcement of the Loan Documents,
and all reasonable costs, fees and taxes of the types enumerated above incurred
in supplementing (and recording or filing supplements to) the Collateral
Documents in connection with assignments contemplated by Section 11.17 hereof if
counsel to the Agent believes such supplements to be appropriate or desirable.
The Borrowers agree to indemnify and save the Lenders, the Issuers, the Agent
and any security trustee for the Agent or the Lenders harmless from any and all
liabilities, losses, costs and expenses incurred by the Lenders, the Issuers or
the Agent in connection with any action, suit or proceeding brought against the
Agent or the Issuers, any security trustee or any Lender by any Person which
arises out of the transactions contemplated or financed by any of the Loan
Documents or out of any action or inaction by the Agent, any security trustee or
any Lender thereunder, except for such thereof as is caused by the gross
negligence or willful misconduct of the party seeking to be indemnified. The
provisions of this Section 11.5 and the protective provisions of Section 2
hereof shall survive payment of the Obligations.
Section 11.6. Stamp Taxes. The Borrowers agree that they will pay any
documentary, stamp or similar taxes payable in respect to this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit to it is then in use or available.
Section 11.7. Survival of Representations and Indemnities. All
representations and warranties made herein or in any of the other Loan Documents
or in certificates given pursuant hereto or thereto shall survive the execution
and delivery of this Agreement and the other Loan Documents, and shall continue
in full force and effect with respect to the date as of which they were made as
long as any credit is in use or available hereunder. All indemnities and other
provisions relative to reimbursement to the Agent, the Issuers and the Lenders
of amounts sufficient to protect the yield of the Agent, the Issuers and the
Lenders with respect to the Loans and Letters of Credit, shall survive the
termination of this Agreement and the payment of the Obligations.
Section 11.8. Construction. The parties hereto acknowledge and agree that
this Agreement shall not be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that all
parties hereto contributed substantially to the negotiation and preparation of
this Agreement.
Section 11.9. Addresses for Notices. Unless specifically provided otherwise
hereunder, all communications provided for herein shall be in writing and shall
be deemed to have been given or made when served personally or three days after
being deposited in the United States mail addressed, if to any Borrower, in each
case to such Borrower in care of the Company at 301 Merritt Seven Corporate
Park, Norwalk, Connecticut 06851, Attention: Chairman of the Board, and if to
the Lenders at their addresses as shown on the signature pages hereof or on any
Assignment Agreement, or at such other address as shall be designated by any
party hereto in a written notice given to each party pursuant to this Section
11.9.
Section 11.10. Obligations Several. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.
Section 11.11. Headings. Article and Section headings used in this
Agreement are for convenience of reference only and are not a part of this
Agreement for any other purpose.
Section 11.12. Severability of Provisions. Any provision of this Agreement
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. All rights, remedies and powers provided in
this Agreement and other Loan Documents may be exercised only to the extent that
the exercise thereof does not violate any applicable mandatory provisions of
law, and all the provisions of this Agreement and other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or other Loan Documents invalid or
unenforceable.
Section 11.13. Counterparts. This Agreement may be executed in any number
of counterparts, and by different parties hereto on separate counterparts, and
all such counterparts taken together shall be deemed to constitute one and the
same instrument.
Section 11.14. Binding Nature and Governing Law. This Agreement shall be
binding upon the Borrowers and their successors and assigns, and shall inure to
the benefit of the Lenders and the benefit of their successors and assigns,
including any subsequent holder of an interest of the Revolving Credit Notes.
This Agreement and the rights and duties of the parties hereto shall be
construed and determined in accordance with, and shall be governed by the
internal laws of the State of Illinois without regard to principles of conflicts
of law. No Borrower may assign its rights or obligations hereunder without the
written consent of all of the Lenders.
Section 11.15. Entire Understanding. This Agreement, together with the
other Loan Documents and any agreements between the Company and the Agent
concerning fees, constitute the entire understanding of the parties with respect
to the subject matter hereof and any prior agreements, whether written or oral,
with respect thereto are superseded hereby.
Section 11.16. Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other financial institution (a
"Participant") provided that (i) no Participant shall thereby acquire any direct
rights under this Agreement, (ii) no Lender shall agree with a Participant not
to exercise any of its rights hereunder without the consent of such Participant
except for rights which under the terms hereof may only be exercised by all
Lenders, (iii) no sale of a participation in extensions of credit shall in any
manner relieve the selling Lender of its obligations hereunder and (iv) the
Borrowers shall not be responsible for the costs incurred by any Lender in
connection with such participations.
Section 11.17. Assignment Agreements. Each Lender may, from time to time
upon at least five Business Days' notice to the Agent, assign to other financial
institutions all or part of its rights and obligations under this Agreement
(including without limitation the indebtedness evidenced by the Revolving Credit
Notes then owned by such assigning Lender, together with an equivalent
proportion of its obligation to make Revolving Loans and participate in Letters
of Credit hereunder) pursuant to an Assignment Agreement; provided, however,
that (i) unless the Company (provided that the consent of the Company shall not
be required after the occurrence and during the continuance of any Default or
Event of Default) and the Agent otherwise consents each such assignment shall be
of a constant, and not a varying, percentage of the assigning Lender's rights
and obligations under this Agreement and the assignment shall cover the same
percentage of such Lender's Commitment, Revolving Loans, Revolving Credit Note
and interests in Letters of Credit; (ii) unless the Agent otherwise consents,
the assigning Lender shall assign all of its Commitment, Revolving Loans,
Revolving Credit Note and interests in the Letters of Credit or the aggregate
amount thereof being assigned pursuant to each such assignment (determined as of
the effective date of the relevant Assignment Agreement) shall be an amount
which shall in no event be less than $10,000,000 and shall be an integral
multiple of $1,000,000; (iii) the Agent and the Company (which is acting on its
own behalf and pursuant to Section 1.6 hereof on behalf of the Borrowers as
well) must each consent (provided that the consent of the Company shall not be
required after the occurrence and during the continuance of any Default or Event
of Default), which consent shall not be unreasonably withheld (provided that the
Company may withhold its consent to an assignment by the Agent in its sole
discretion if after giving effect thereto the Agent would have a Commitment,
computed prior to giving effect to any reductions or terminations of the
Commitments, of less than $25,000,000) and shall be evidenced by execution of a
counterpart of the relevant Assignment Agreement in the space provided thereon
for such acceptance, to each such assignment to a party which was not an
original signatory of this Agreement and (v) the assigning Lender must pay to
the Agent a processing and recordation fee of $3,500 except that no such fee
shall be payable in the case of an assignment to an Affiliate of such assigning
Lender. Upon the execution of each Assignment Agreement by the assigning Lender
thereunder, the assignee lender thereunder, the Company (provided that any such
Assignment Agreement entered into after the occurrence and during the
continuation of any Default or Event of Default shall not require the Company's
execution) and the Agent and payment to such assigning Lender by such assignee
lender of the purchase price for the portion of the indebtedness of the
Borrowers being acquired by it, (i) such assignee lender shall thereupon become
a "Lender" for all purposes of this Agreement with a Commitment in the amount
set forth in such Assignment Agreement and with all the rights, powers and
obligations afforded a Lender hereunder, (ii) such assigning Lender shall have
no further liability for funding the portion of its Commitment assumed by such
other Lender and (iii) the address for notices to such assignee Lender shall be
as specified in the Assignment Agreement executed by it. Concurrently with the
execution and delivery of such Assignment Agreement, the Borrowers shall each
execute and deliver Revolving Credit Notes to the assignee Lender, (all such
Revolving Credit Notes to constitute "Revolving Credit Notes" for all purposes
of the Loan Documents) and if the assignment is of the full Commitment of the
assigning Lender, the assignor Lender shall thereupon return the Revolving
Credit Notes theretofore issued to it to the Company marked "canceled" and if
such assignment is not an assignment of the full Commitment of such assignor,
the assignor shall return its Revolving Credit Note and new appropriate
Revolving Credit Notes shall be issued to the assignee and assignor. If an
assignor is an Issuer its rights and obligations as Issuer shall be unaffected
by any assignment. Notwithstanding the foregoing, (i) any Lender may at any
time, without the consent of the Company or the Agent, assign all or a portion
of its rights under the Loan Documents to any of its Affiliates or any Lender
which is an original signatory hereto, and (ii) any Lender may at any time,
without the consent of the Company or the Agent, assign and pledge all or a
portion of its rights under the Loan Documents to a Federal Reserve Bank;
provided, however, that no such assignment under clause (ii) of this sentence
shall release the transferor Lender from its obligations hereunder or cause such
Federal Reserve Bank to become a "Lender" hereunder.
Section 11.18. Terms of Collateral Documents not Superseded. Nothing
contained herein shall be deemed or construed to permit any act or omission
which is prohibited by the terms of any Collateral Document, the covenants and
agreements contained herein being in addition to and not in substitution for the
covenants and agreements contained in the Collateral Documents.
Section 11.19. PERSONAL JURISDICTION and Jury Trial Waivers.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (b), THE
AGENT, THE LENDERS AND THE BORROWERS agree THAT ALL DISPUTES AMONG THEM
ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, AND
WHETHER ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE resolved
ONLY BY (AND EACH OF THEM FOR THE BENEFIT OF THE OTHERS HEREBY IRREVOCABLY
SUBMITS TO THE JURISDICTION OF) THE state OR FEDERAL COURTS LOCATED IN COOK
COUNTY, ILLINOIS, BUT EACH OF THE AGENT, THE LENDERS AND THE BORROWERS
ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A
COURT LOCATED OUTSIDE OF COOK COUNTY, ILLINOIS. THE BORROWERS WAIVE IN ALL
DISPUTES ANY OBJECTION THAT THEY MAY HAVE TO THE LOCATION OF THE COURT
CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWERS AGREE THAT THE AGENT, AND EACH
OF THE LENDERS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWERS OR
THEIR PROPERTY ("PROPERTY") IN A COURT IN ANY LOCATION OR JURISDICTION TO
ENABLE THE AGENT OR ANY LENDER TO REALIZE ON PROPERTY, OR TO ENFORCE A
JUDGMENT OR OTHER COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER
AND, WITHOUT PREJUDICE TO THE GENERALITY OF THE FOREGOING, EACH BORROWER
AGREES THAT THE AGENT OR ANY LENDER SHALL BE ENTITLED TO COMMENCE
PROCEEDINGS (WHETHER FOR THE PURPOSE OF OBTAINING OR ENFORCING ANY ORDER OR
JUDGMENT OR OTHERWISE HOWSOEVER) IN THE COURTS OF THE JURISDICTIONS WHERE
SUCH BORROWER OR ANY OF ITS PROPERTY IS LOCATED.
(c) Jury Trial Waiver. The Borrowers, the Agent, and each Lender
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relating to any Loan Document or the
transactions contemplated thereby.
Section 11.20. Currency. Each reference in this Agreement to U.S.
Dollars or to an Alternative Currency (the "relevant currency") is of the
essence. To the fullest extent permitted by law, the obligation of each
Borrower in respect of any amount due in the relevant currency under this
Agreement or the L/C Documents shall, notwithstanding any payment in any
other currency (whether pursuant to a judgment or otherwise), be discharged
only to the extent of the amount in the relevant currency that the Agent,
Issuer or Lender entitled to receive such payment may, in accordance with
normal banking procedures, purchase with the sum paid in such other
currency (after any premium and costs of exchange) on the Business Day
immediately following the day on which such party receives such payment. If
the amount in the relevant currency so purchased for any reason falls short
of the amount originally due in the relevant currency, the Borrowers shall
pay such additional amounts, in the relevant currency, as may be necessary
to compensate for the shortfall. Any obligations of the Borrowers not
discharged by such payment shall, to the fullest extent permitted by
applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, shall continue in full force and effect.
Section 11.21. Currency Equivalence. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from any
Borrower on the Obligations in the currency expressed to be payable herein
or in an Application or under the Revolving Credit Notes (the "specified
currency") into another currency, the parties agree that the rate of
exchange used shall be that at which in accordance with normal banking
procedures the Agent could purchase the specified currency with such other
currency on the Business Day preceding that on which final judgment is
given. The obligation of each Borrower in respect of any such sum due to
the Agent, any Issuer or any Lender on the Obligations shall,
notwithstanding any judgment in a currency other than the specified
currency, be discharged only to the extent that on the Business Day
following receipt by the Agent, such Issuer or such Lender, as applicable,
of any sum adjudged to be so due in such other currency, the Agent, such
Issuers or such Lender, as applicable, may in accordance with normal
banking procedures purchase the specified currency with such other
currency. If the amount of the specified currency so purchased is less than
the sum originally due to the Agent, such Issuers or such Lender in the
specified currency, the Borrowers agree, as a separate obligation and
notwithstanding any such judgment, to indemnify the Agent, such Issuers or
such Lender, as the case may be, against such loss, and if the amount of
the specified currency so purchased exceeds the amount originally due to
the Agent, such Issuer or such Lender in the specified currency, the Agent,
such Issuer or such Lender, as the case may be, agrees to remit such excess
to the Borrowers.
Section 11.22. Change in Currency.
(a) If more than one currency or currency unit are at the same time
recognized by the central bank of any country as the lawful currency of
that country, (i) any reference in any Loan Documents to, and any
obligations arising under any Loan Documents in, the currency of that
country shall be translated into, and paid in, the currency or currency
unit designated by the Agent, after consultation with the Borrowers and the
Lenders and (ii) any translation from one currency or currency unit to
another shall be at the official rate of exchange recognized by the central
bank of that country for the conversion of that currency or currency unit
into the other, rounded up or down by the Agent, acting reasonably.
(b) If a change in any currency of a country occurs, the Loan
Documents will, to the extent the Agent (acting reasonably) specifies is
necessary, be amended to comply with any generally accepted conventions and
market practice in any relevant interbank market and otherwise to reflect
the change in currency and, if there is no generally accepted convention or
market practice, or the Agent considers, in its absolute discretion, that
there is no generally accepted convention or market practice, in such
manner and to such extent as the Agent specifies. The Agent will notify the
other parties to the relevant Loan Documents of any such amendment, which
shall be binding on all the parties to that Loan Document.
(c) The Borrowers shall, from time to time immediately on demand by
the Agent, pay to the Agent for the account of any Lender the amount of any
costs or increased costs incurred by, or of any reduction in any amount
payable to or in the effective return on its capital pursuant to, or of
interest or other return foregone by, such Lender or any holding company of
such Lender as a result of any change in the currency of a country.
Section 11.23. Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan to any
Borrower, together with all fees, charges and other amounts which are treated as
interest on such Loan under applicable law (collectively, the "Charges"), shall
exceed the maximum lawful rate permitted by applicable law (the "Maximum Rate")
which may be contracted for, charged, taken, received or reserved by any one or
more of the Lenders holding such Loan in accordance with applicable law, the
rate of interest payable in respect of such Loan hereunder, together with all
Charges payable in respect thereof, shall be limited to the Maximum Rate and, to
the extent lawful, the interest and Charges that would have been payable with
respect to such Loan but were not payable as a result of the operation of this
Section 11.23 shall be cumulated and the interest and Charges payable to such
Lender or Lenders in respect of other Loans shall be increased (but not above
the Maximum Rate therefor) until such cumulated amount, together with interest
thereon at the rate set out herein, to the date of repayment, shall be have been
received by such Lender or Lenders.
[SIGNATURE PAGES TO FOLLOW]
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of this 14th day of October, 2005.
EMCOR GROUP, INC.
By ____________________________________________
Its__________________________________________
COMSTOCK CANADA, LTD.
By _____________________________________________
Its__________________________________________
EMCOR GROUP (UK) plc.
By _____________________________________________
Its__________________________________________
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it should
receive or obtain any payment (whether by voluntary payment, by realization upon
collateral, by the exercise of rights of setoff or banker's lien, by
counterclaim or cross action, or by the enforcement of any rights under the
Amended and Restated Credit Agreement, the Revolving Credit Notes or the
Collateral Documents or otherwise) in respect of the Obligations, in a greater
amount than such Lender would have received had such payment been made to the
Agent and been distributed among the Lenders as contemplated by Section 3.7
hereof, then in that event the Lender receiving such disproportionate payment
shall purchase for cash without recourse from the other Lenders an interest in
the Obligations owed to such Lenders in such amount as shall result in a
distribution of such payment as contemplated by Section 3.7 hereof. In the event
any payment made to a Lender and shared with the other Lenders pursuant to the
provisions hereof is ever recovered from such Lender, the Lenders receiving a
portion of such payment hereunder shall restore the same to the payor Lender,
with interest to the extent payable by the payor. In the event any amount paid
to an Issuer under the Applications shall ever be recovered from such Issuer,
each Lender shall reimburse such Issuer for its pro rata share of the amount so
recovered with interest to the extent payable by the Issuer.
HARRIS N.A.
By
Its__________________________________________
111 West Monroe Street
Chicago, Illinois 60690
Attention: Joann Holman, Director
HARRIS NESBITT FINANCING, INC.
By
Its__________________________________________
111 West Monroe Street
Chicago, Illinois 60690
Attention: Joann Holman, Director
THE GOVERNOR AND COMPANY OF BANK OF SCOTLAND
By
Its__________________________________________
7th Floor, 155 Bishopsgate,
Bishopsgate Exchange,
London, EC2M7YB
Attention: Martin Griffiths
LASALLE BANK NATIONAL ASSOCIATION
By
Its__________________________________________
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Rick Kress
SOVEREIGN BANK
By
Its__________________________________________
75 State Street
MA 1SST04-10
Boston, Massachusetts 02109
Attention: Daniel Grondin
U.S. BANK, NATIONAL ASSOCIATION
By
Its__________________________________________
425 Walnut Street
8th Floor
Cincinnati, Ohio 45202
Attention: Richard W. Nelter
BANK OF AMERICA, N.A.
By
Its Credit Products Officer
1185 Avenue of the Americas
Mail Code: NY55090208
New York, New York 10036
Attention: Richard Williams
JPMORGAN CHASE BANK, N.A.
By
Its__________________________________________
241 North Central Avenue
21st Floor, Dept. AZ1-1179
Phoenix, Arizona 85004
Attention: Brad Richards
WEBSTER BANK, NATIONAL ASSOCIATION
By
Its_________________________________________
80 Elm Street
New Haven, Connecticut 06510
Attention: Barbara Keegan
BANK HAPOALIM B.M.
By:
Its_________________________________________
By
Its_________________________________________
225 N. Michigan Avenue
Suite 900
Chicago, Illinois 60601-7601
Attention: Michael J. Byrne
BANK OF MONTREAL
By
Its__________________________________________
115 South LaSalle Street
Chicago, Illinois 60603
Attention: Rose Metzger, Managing Director
EXHIBIT A-1
REVOLVING CREDIT NOTE
October 14, 2005
For value received, the undersigned, _____________________, a
________________ corporation ("Borrower"), hereby promises to pay to the order
of ________________________ ______________________ (the "Lender"), at the
principal office of Harris N.A. in Chicago, Illinois, in the currency of each
Revolving Loan evidenced hereby in accordance with Section 1 of the Credit
Agreement, the aggregate unpaid principal amount of each Revolving Loans made by
the Lender to the Borrower pursuant to the Credit Agreement on the due date
therefore as specified in the Credit Agreement, together with interest on the
principal amount of each Revolving Loan from time to time outstanding hereunder
at the rates, and payable in the manner and on the dates specified in the Credit
Agreement.
The Lender shall record on its books or records or on a schedule attached
to this Note, which is a part hereof, each Revolving Loan made by it pursuant to
the Credit Agreement, any repayment of principal and interest and the principal
balances from time to time outstanding hereon, and the currency in which made,
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on a schedule to this Note, shall be prima facie
evidence of the same, provided, however, that the failure of the Lender to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrowers to repay all Revolving Loans
made to them pursuant to the Credit Agreement together with accrued interest
thereon.
This Note is one of the Revolving Credit Notes referred to in the Amended
and Restated Credit Agreement dated as of October 14, 2005, among the Borrowers,
Harris N.A., as Agent, and the Lenders from time to time party thereto (the
"Credit Agreement"), and this Note and the holder hereof are entitled to all the
benefits provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement.
This Note is issued by the Borrower under the terms and provisions of the
Credit Agreement and is secured by the Collateral Documents, and this Note and
the holder hereof are entitled to all of the benefits and security provided for
thereby or referred to therein, to which reference is hereby made for a
statement thereof. This Note may be declared to be, or be and become, due prior
to its expressed maturity, voluntary prepayments may be made hereon, and certain
prepayments are required to be made hereon, all in the events, on the terms and
with the effects provided in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflicts
of law.
The Borrower hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral herefor. The Borrower hereby
waives presentment for payment and demand.
By _____________________________________________
Its__________________________________________
EXHIBIT A-2
SWING NOTE
October 14, 2005
For value received, the undersigned, EMCOR Group, Inc., a Delaware
corporation ("Borrower"), hereby promises to pay to the order of Harris N.A.
(the "Lender"), at the principal office of Harris N.A. in Chicago, Illinois, in
the currency of each Swing Loan evidenced hereby in accordance with Section 1 of
the Credit Agreement, the aggregate unpaid principal amount of each Swing Loans
made by the Lender to the Borrower pursuant to the Credit Agreement on the due
date therefore as specified in the Credit Agreement, together with interest on
the principal amount of each Swing Loan from time to time outstanding hereunder
at the rates, and payable in the manner and on the dates specified in the Credit
Agreement.
The Lender shall record on its books or records or on a schedule attached
to this Note, which is a part hereof, each Swing Loan made by it pursuant to the
Credit Agreement, any repayment of principal and interest and the principal
balances from time to time outstanding hereon, and the currency in which made,
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on a schedule to this Note, shall be prima facie
evidence of the same, provided, however, that the failure of the Lender to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrowers to repay all Swing Loans made
to them pursuant to the Credit Agreement together with accrued interest thereon.
This Note is one of the Swing Notes referred to in the Amended and Restated
Credit Agreement dated as of October 14, 2005, among the Borrowers, Harris N.A.,
as Agent, and the Lenders from time to time party thereto (the "Credit
Agreement"), and this Note and the holder hereof are entitled to all the
benefits provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement.
This Note is issued by the Borrower under the terms and provisions of the
Credit Agreement and is secured by the Collateral Documents, and this Note and
the holder hereof are entitled to all of the benefits and security provided for
thereby or referred to therein, to which reference is hereby made for a
statement thereof. This Note may be declared to be, or be and become, due prior
to its expressed maturity, voluntary prepayments may be made hereon, and certain
prepayments are required to be made hereon, all in the events, on the terms and
with the effects provided in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflicts
of law.
The Borrower hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral herefor. The Borrower hereby
waives presentment for payment and demand.
EMCOR GROUP, INC.
By _____________________________________________
Its__________________________________________
EXHIBIT B
FORM OF OPINION OF COUNSEL
October 14, 2005
Harris N.A., as Agent
111 West Monroe Street
Chicago, IL 60690 and
Lenders from time to time party to
the Amended and Restated
Credit Agreement hereinafter identified
Ladies and Gentlemen:
I am Executive Vice President and General Counsel of EMCOR Group, Inc., a
Delaware corporation (the "Company"), and have acted as counsel to the Company
and the corporations, limited liability companies and limited partnerships
listed on Exhibit A hereto (the "Domestic Guarantors", and collectively with the
Company, the "Organizations") in connection with the Amended and Restated Credit
Agreement dated as of October 14, 2005 (the "Credit Agreement") by and among the
Company and certain of its subsidiaries and Harris N.A., individually and as
Agent, and the Lenders which are or become parties thereto, pursuant to which a
revolving credit facility is being made available by you to the Company,
Comstock Canada Ltd., a Canadian corporation, and EMCOR Group (UK) plc., a
United Kingdom public limited company (collectively, the "Borrowers").
This opinion is being delivered pursuant to Section 6.2(m) of the Credit
Agreement. Capitalized terms used and not defined herein shall have the
respective meanings assigned to such terms in the Credit Agreement.
In connection with this opinion, I have reviewed the Credit Agreement; the
form of Revolving Credit Note and Swing Note; the form of Amended and Restated
Guaranty Agreement dated as of October 14, 2005 made by the Guarantors (as such
term is defined in such Guaranty Agreement), including the Company and other
entities substantially owned, directly or indirectly, by the Company, in favor
of the Guaranteed Creditors (as such term is defined in such Guaranty Agreement)
and the form of Assumption and Supplemental Guaranty Agreement included as
Exhibit A to such Guaranty Agreement; the form of Amended and Restated Pledge
Agreement dated as of October 14, 2005 by and among the Pledgors (as such term
is defined in such Pledge Agreement), including the Company and other entities
substantially owned, directly or indirectly by the Company, and Harris (as such
term is defined in such Pledge Agreement), as Agent, and the form of Amendment
to Pledge Agreement included as Schedule B to such Pledge Agreement and the form
of Assumption and Supplemental Pledge Agreement included as Schedule C to such
Pledge Agreement; the form of Amended and Restated Security Agreement dated as
of October 14, 2005 by and among the Debtors (as such term is defined in such
Security Agreement), including the Company and other entities substantially
owned, directly or indirectly, by the Company, and Harris (as such term is
defined in such Security Agreement), as Agent, and the form of Assumption and
Supplemental Security Agreement included as Schedule G to such Security
Agreement (collectively, the "Loan Documents").
I have also reviewed and am familiar with:
(i) a copy of the certificate of incorporation (or other similar
organization document) of each Organization which is a corporation,
certified by the Secretary, Clerk, Assistant Secretary or Assistant
clerk of such Organization;
(ii) a copy of the certificate of formation (or other similar
organization document) of each Domestic Guarantor which is a limited
liability company, certified by the Members, a Manager or the
Assistant Secretary of such Domestic Guarantor;
(iii) a copy of the certificate of limited partnership of each
Domestic Guarantor which is a limited partnership, certified by a
general partner of such Domestic Guarantor;
(iv) a certificate (or equivalent thereof), dated as of a date no
earlier than 30 days prior to the date hereof, as to the good standing
and/or legal existence of each Organization issued by the Secretary of
State of the state of such Organization's organization provided such
state issues such certificate or equivalent;
(v) a copy of the by-laws of each Organization which is a
corporation, certified by the Secretary or the Assistant Secretary or
Clerk or Assistant Clerk of such Organization as being the by-laws of
such Organization as in effect on the date hereof;
(vi) a copy of the limited liability company agreement of each
Domestic Guarantor which is a limited liability company, certified by
Members, a Manager or the Assistant Secretary of such Domestic
Guarantor as being the limited liability company agreement or
operating agreement of such Domestic Guarantor as in effect on the
date hereof;
(vii) a copy of the limited partnership agreement of each
Domestic Guarantor which is a limited partnership, certified by the
Secretary of the general partner of such Domestic Guarantor as being
the limited partnership agreement of such Domestic Guarantor as in
effect on the date hereof;
(viii) copies of certain resolutions adopted by the board of
directors of each Organization which is a corporation, authorizing the
execution, delivery and performance of the terms and provisions of the
Loan Documents to which such Organization is party, each certified by
the Secretary or Assistant Secretary or Clerk or Assistant Clerk of
such Organization;
(ix) copies of certain resolutions adopted by the members or
Board of Managers of each Domestic Guarantor which is a limited
liability company, authorizing the execution, delivery and performance
of the terms and provisions of the Loan Documents to which such
Domestic Guarantor is party, each certified by Members, a Manager or
the Assistant Secretary of such Domestic Guarantor; and
(x) copies of certain resolutions adopted by the general partner
of each Domestic Guarantor which is a limited partnership, authorizing
the execution, delivery, and performance of the terms and provisions
of the Loan Documents to which such Domestic Guarantor is a party,
each certified by the Secretary of the general partner of such
Domestic Guarantor.
I also have examined such other corporate, limited liability company and
limited partnership documents and records and such other agreements,
certificates, opinions, instruments, papers, statutes and authorities, and have
made such examinations of law, as I have deemed necessary as a basis for the
opinions below.
In such examinations, I have assumed the genuineness of all signatures
(other than those of representatives of the Organizations), the completeness and
authenticity of all records and all documents submitted to me as originals and
the conformity to original documents of the documents supplied to me as copies.
As to various questions of fact material to such opinions, I have relied upon
representations and warranties of each of the Organizations contained in the
Loan Documents and upon statements and certificates of the officers, Members or
a Manager of the Organizations or of officers of the general partners of
Organizations that are limited partnerships and of other parties to the Loan
Documents and of public officials, and upon public records. I have not conducted
a search of or otherwise examined the records of any court.
For purposes of the opinions hereinafter expressed, I have assumed that (a)
each party to any Loan Document (other than the Organizations) has the power to
enter into and perform all of its obligations thereunder, (b) each such party
(other than the Organizations) has taken all necessary actions to authorize the
due execution, delivery and performance of such Loan Document by it, and (c)
each such Loan Document is the legal, valid and binding obligation of each such
party (other than the Organizations) thereto.
The opinions set forth in numbered paragraph 3 below with respect to the
legality, validity, binding effect and enforceability of any Loan Document are
subject to the effect of bankruptcy, insolvency, moratorium, fraudulent
conveyance and similar laws relating to or affecting creditors' rights generally
and court decisions with respect thereto, and I express no opinion with respect
to the application of equitable principles to any Loan Document in any
proceeding, whether at law or in equity.
I express no opinion as to the enforceability of provisions of the Loan
Documents which: (a) restrict access to legal or equitable remedies; (b) purport
to waive or affect any rights to notices; (c) contain a covenant by a party to
take actions the taking of which is discretionary with or subject to the
approval of another party or which are otherwise subject to contingencies the
fulfillment of which is not within the control of the party so covenanting; (d)
purport to limit the Agent's obligations to exercise reasonable care in the
custody and preservation of collateral in accordance with the Uniform Commercial
Code of the State of New York; (e) purport to exculpate a party from, or
indemnify a party against, its own negligence or failure to act in good faith or
in accordance with standards of commercial reasonableness; (f) purport to allow
the Agent to establish evidentiary standards for suit or proceedings to enforce
such Loan Documents; (g) purport to allow the Agent to set off and apply
deposits of any Organization to its obligations under the Loan Documents without
prior notice having been given to any Organization, or as to the enforceability
of any waiver by any Organization of demand or of rights to set-off or
counterclaim; (h) relate to delay, election or omission of enforcement of
remedies; (i) relate to severability; or (j) purport to constitute waivers of
rights of subrogation, reimbursement, contribution, exoneration or indemnity by
any Organization. I also point out that legal and equitable principles require
good faith and fair dealing by the Agent and may require the Agent to exercise
its rights and remedies under the Loan Documents in a reasonable manner,
including, but not limited to, consideration by the Agent of the materiality of
any breach by any Organization and of the consequences of such breach to the
Agent. Furthermore, certain other provisions as to rights, remedies, covenants
and limitations contained in the Loan Documents are subject to legal or
equitable principles relating to the strict or specific enforcement of such
rights, remedies, covenants and limitations. However, subject to the effect of
bankruptcy, insolvency, moratorium, fraudulent conveyance and similar laws
relating to or affecting creditors' rights generally and court decisions with
respect thereto, the limitations referred to in this paragraph and/or in other
parts of this opinion, do not, in my opinion, make the remedies and procedures
which will be afforded to the Agent inadequate for the realization of the
substantive benefits purported to be provided under the Loan Documents.
I also point out that the enforceability of the above-referenced Security
Agreement and the security interests created thereby may be subject to rights of
account debtors and any claims or defenses of such persons against any
Organization. Moreover, in the case of receivables that are due from the United
States or any state thereof or any department of the United States or any state
thereof, the right to collect upon such receivables may be limited by the
Assignment of Claims Act, 31 U.S.C.A. ss. 3727 (1989) and any applicable state
law relating to the assignment of claims against such State.
I express no opinion with respect to the right, title or interest of any
Organization in or to any property, the existence, location or description of
any Collateral (as such term is defined in the Loan Documents), or the priority
or perfection of any security interest or other Lien in any of the Collateral
(as such term is defined in the Loan Documents) or any other Lien referred to in
the Loan Documents.
When reference is made in this opinion to "knowledge" or to what is "known
to me", it means my actual knowledge and in this regard it is noted that I have
not made any special review, investigation or inquiry in connection with
rendering the opinion with respect to the matters so qualified.
I am admitted to practice law in the State of New York and I do not purport
to be expert on, or to express any opinion herein concerning, any law other than
the laws of the State of New York, the federal laws of the United States of
America and the General Corporation Law of the State of Delaware. For the
purposes of this opinion, I have assumed that the laws of the States of
Illinois, and of the state of incorporation or organization of each of the
Organizations not incorporated or organized in Delaware or New York, are
identical to the laws of the State of New York. For the purpose of the due
certification of status in the first sentence of my opinion in numbered
paragraph 1 below, I have relied solely upon certificates of public officials of
the states of organization of each of the Organizations. For purposes of my
opinion expressed in the second sentence of numbered paragraph 1 below in
respect of due qualification and good standing as a foreign organization, I am
relying solely on the representations and warranties of each of the
Organizations contained in the Loan Documents.
Based upon and subject to the foregoing, I am of the opinion that:
1. Each of the Organizations which is a corporation is a validly
existing corporation in good standing under the laws of its jurisdiction of
incorporation and has the corporate power and authority to transact the
business in which it is engaged as now conducted, and each of the
Organizations which is a limited liability company or a limited partnership
is a legally existing limited liability company or limited partnership,
respectively, in good standing or in existence under the laws of its
jurisdiction of organization and has the power and authority to transact
the business in which it is engaged and now conducted. Each of the
Organizations is duly qualified and in good standing as a foreign
corporation or limited liability company, as the case may be, in all of the
states in which, to my knowledge, failure to be so qualified would have a
Material Adverse Effect.
2. The Company has the corporate power to borrow and apply for Letters
of Credit from you. Each Domestic Guarantor has the corporate, limited
liability company, limited partnership, or other power to guarantee all of
the indebtedness, obligations and liabilities of the Company and the other
Borrowers to you pursuant to the Credit Agreement. Each Organization has
the corporate, limited liability company, limited partnership, or other
power to mortgage, pledge, assign and otherwise encumber its assets and
properties as collateral security for such borrowings, letter of credit
liabilities and guarantees, to execute and deliver the Loan Documents
executed by it and to which it is a party and to observe and perform all of
the terms and provisions of such Loan Documents. The execution and delivery
of the Loan Documents executed by each of the Organizations does not, nor
will the observance and performance of any of the terms and provisions
thereof, violate any law or the certificate of incorporation, certificate
of formation, by-laws, limited liability company agreement, operating
agreement, or limited partnership agreement (or other similar documents) of
any such Organization or, to my knowledge, any covenant, indenture or
agreement to which such Organization is a party.
3. The Loan Documents executed by each Organization have been duly
authorized by all necessary corporate, limited liability company, limited
partnership, or other action, have been executed and delivered by the
proper officers or other representatives of such Organization and
constitute valid and binding agreements of such Organization, enforceable
against it in accordance with the respective terms of such Loan Documents.
4. Except as may be required in order to perfect the Liens
contemplated by the Loan Documents, no order, authorization, consent,
license or exemption of, or filing or registration with, any court or
governmental department, agency, instrumentality or regulatory body of the
United States of America or the State of New York is or will be required in
connection with the lawful execution and delivery of the Loan Documents by
each Organization party thereto or the performance by each such
Organization of any of the terms of the Loan Documents.
5. To my knowledge, after due inquiry, except as disclosed on Schedule
5.9 of the Credit Agreement or the Side Letter or in the notes to the
financial statements of the Company as at and for the fiscal year ended
December 31, 2005 or in the Company's Form 10-Q for the fiscal quarter
ended June 30, 2005, there is no action, suit, proceeding or investigation
at law or in equity before or by any court or public body pending or
threatened against any Organization or any of its assets or properties
which, if adversely determined, could result in a Material Adverse Effect.
This opinion letter is furnished solely for your benefit in connection with
matters relating to the Loan Documents and may not be used or relied upon by any
other person or for any other purpose without my prior written consent.
Very truly yours,
Sheldon I. Cammaker
Executive Vice President
and General Counsel
EXHIBIT C
EMCOR GROUP, INC.
COMPLIANCE CERTIFICATE
FOR THE MONTH ENDING __________
To: Harris N.A.
as Agent under, and the Lenders
party to the Amended and Restated
Credit Agreement described below
This Compliance Certificate is furnished to the Lenders pursuant to the
requirements of Section 7.5 of the Amended and Restated Credit Agreement dated
as of October 14, 2005, by and between EMCOR Group, Inc., a Delaware corporation
(the "Company"), Comstock Canada, Ltd., a Canadian corporation, EMCOR Group (UK)
plc, a United Kingdom public limited company and Harris N.A. as agent thereunder
(the "Agent") and the Lenders named therein (the "Credit Agreement"). Unless
otherwise defined herein, the terms used in this Compliance Certificate have the
meanings ascribed thereto in the Credit Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Company;
2. I have reviewed the terms of the Credit Agreement and I have made, or
have caused to be made under my supervision, a detailed review of the
transactions and conditions of the Borrowers and Restricted Subsidiaries during
the accounting period covered by the financial statements being furnished
concurrently with this Certificate;
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or the occurrence of any event
which constitutes a Default or an Event of Default at any time during or at the
end of the accounting period covered by the accompanying financial statements or
as of the date of this Certificate, except as set forth immediately below;
4. The financial statements required by Section 7.5 of the Credit Agreement
and being furnished to you concurrently with this Certificate are true, correct
and complete as of the dates and for the periods covered thereby; and
5. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrowers' compliance with certain covenants of the Credit
Agreement, all of which data and computations are true, complete and correct and
have been made in accordance with the relevant Sections of the Credit Agreement.
*
6. Also attached hereto is a summary of claims with a recorded value of
over $5,000,000 in litigation, mediation or arbitration.*
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrowers have taken, is taking, or proposes to
take with respect to each such condition or event:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
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The foregoing certifications, together with the computations set forth in
Schedule I attached hereto and the financial statements furnished concurrently
with this Certificate in support hereof, are made and delivered as of this
______ day of _______________, 20___.
EMCOR GROUP, INC.
By:
Title:_____________________________________
(Type or Print Name)
SCHEDULE I
EMCOR GROUP, INC.
COMPLIANCE CALCULATIONS
FOR OCTOBER 14, 2005
AMENDED AND RESTATED CREDIT AGREEMENT
CALCULATIONS AS OF _______________, 20__
================================================================================
A. MINIMUM NET WORTH (SECTION 7.6)
1. Net Worth $_______
2. $400,000,000 plus 50% of Net Income for each Fiscal Quarter of
the Company
ending on or after December 31, 2005 $_______
3. Line A1 is at least equal to line A2
4. Company is in Compliance Yes/No
B. LEVERAGE RATIO (SECTION 7.7)
1. Total Funded Debt $_______
2. Excess Cash $_______
3. Line B1 minus B2 $_______
4. Net Income for past 12 calendar months $_______
5. Interest Expense for past 12 calendar months $_______
6. Income taxes for past 12 calendar months $_______
7. Depreciation of fixed assets for past 12 calendar months $_______
8. Amortization of intangible assets during part 12 calendar months$_______
9. Sum of Lines B4, B5, B6, B8 and B9 $_______
10. Adjustments resulting from Acquisitions during past
12 calendar months (whether positive or negative) $_______
11. Sum of Lines B9 and B10 $_______
12. Ratio of Line B3 to Line B11 _______
13. Ratio of Line B11 shall not be more than 3.25 to 1
14. Company is in Compliance Yes/No
C. INTEREST COVERAGE RATIO (SECTION 7.8)
1. Net Income for past 12 calendar months $_______
2. Interest Expenses for past 12 calendar months $_______
3. Income taxes for past 12 calendar months $_______
4. Sum of Lines C1, C2 and C3 $_______
5. Adjustments resulting from Acquisitions of the
past 12 calendar months (whether positive or negative) $_______
6. Sum of Line C4 and C5 $_______
7. Interest Expense for past 12 calendar months $_______
8. All interest income received during past 12 calendar months $_______
9. Line C7 minus Line C8 $_______
10. Ratio of Line C6 to Line C9 $_______
11. C10 shall not be less than 2.5 to 1
12. Company is in Compliance Yes/No
D. CAPITAL AND OTHER RESTRICTED EXPENDITURES (SECTION 7.13)
1. Capital Expenditures (not including Capital Expenditures
which constitute Permitted Acquisitions) $________
2. Face amount of Letters of Credit issued during
past 12 calendar months $________
3. Aggregate amount expended to guarantee Indebtedness for Money
Borrowed for any Strategic Venture (not including
capital stock of the Company) $________
4. Sum of Lines D1, D2 and D3 $________
5. 2.00% of the arithmetic average of unrealized revenue from
contracts in progress as of last day of past four
calendar quarters then ended $________
6. Net cash proceeds from the sale of assets for past four
calendar quarters then ended $________
7. Maximum amount of dividends which company could pay
as of date of expenditure or application in question $________
8. Sum of Lines D5, D6 and D7 $________
9. Line D4 shall not exceed Line D8
10. Company is in Compliance Yes/No
EXHIBIT D
ASSIGNMENT AND ACCEPTANCE
Dated _____________, 20_____
Reference is made to the Amended and Restated Credit Agreement dated as of
October 14, 2005 (the "Credit Agreement") among EMCOR Group, Inc., the other
Borrowers, the Lenders (as defined in the Credit Agreement) and Harris N.A., as
Agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement are
used herein with the same meaning.
_____________________________________________________ (the "Assignor") and
_________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a _______% interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's Commitment as in effect on the Effective
Date and the Revolving Loans, if any, owing to the Assignor on the Effective
Date and the Assignor's Percentage of any outstanding L/C Obligations, if any.
2. The Assignor (i) represents and warrants that as of the date hereof (A)
its Commitment is $____________, (B) the aggregate outstanding principal amount
of Revolving Loans made by it under the Credit Agreement that have not been
repaid is $____________ and a description of the interest rates and currencies
for such Revolving Loans is attached as Schedule 1 hereto, and (C) the aggregate
principal amount of Assignor's outstanding L/C Obligations is $___________ and a
description of the expiry date, amount and account party for such L/C
Obligations is also attached as Schedule 1 hereto; (ii) represents and warrants
that it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim, lien,
or encumbrance of any kind; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents or any other instrument or document furnished pursuant
thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or any
Guarantor or the performance or observance by any Borrower or any Guarantor of
any of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received copies of the Credit
Agreement, together with copies of the most recent financial statements
delivered to the Lenders pursuant to in Sections 7.5(a), (b) and (c) thereof and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment and Acceptance;
(ii) agrees that it will, independently and without reliance upon the Agent, the
Assignor or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) appoints and
authorizes the Agent to take such action as Agent on its behalf and to exercise
such powers under the Loan Documents as are delegated to the Agent by the terms
thereof, together with such powers as are reasonably incidental thereto; (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Credit Agreement are required to be
performed by it as a Lender; and (v) specifies as its lending offices (and
address for notices) the offices set forth beneath its name on the signature
pages hereof.
4. As consideration for the assignment and sale contemplated in Section 1
hereof, the Assignee shall pay to the Assignor on the Effective Date (as
hereinafter defined) in federal funds an amount equal to the percentage
specified in Section One of the balance of Revolving Loans outstanding on such
date. It is understood that commitment and/or Letter of Credit fees accrued to
the date hereof with respect to the interest assigned hereby are for the account
of the Assignor and such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same for the account
of such other party to the extent of such other party's interest therein and
shall promptly pay the same to such other party.
5. The effective date for this Assignment and Acceptance shall be
_____________, 20___ (the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Company for its
acceptance and to the Agent for acceptance and recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Credit Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment and letter of credit fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
8. In accordance with Section 11.18 of the Credit Agreement, the Assignee
requests and directs that the Agent prepare and cause the Borrowers to execute
and deliver to the Assignee Revolving Credit Notes payable to the Assignee.
9. This Assignment and Acceptance shall be governed by, and construed in
accordance with, the laws of the State of Illinois.
[ASSIGNOR LENDER]
By:
Title:
[ASSIGNEE LENDER]
By:
Title:
Lending Office (and
address for
notices):
Accepted and consented this
____ day of ___________, 20__
EMCOR GROUP, INC.
By:______________________________________________
Title:
Accepted and consented to by the Agent this
_______ day of ___________, 20__
HARRIS N.A., as Agent
By:______________________________________________
Title:
F-4
F-1
EXHIBIT E
COMMITMENT AMOUNT INCREASE REQUEST
_______________, 20__
Harris N.A.
as Agent (the "Agent")
for the Lenders referred to below
111 West Monroe Street
Chicago, Illinois 60603
Attention: Joann Holman, Director
Re: Amended and Restated Credit Agreement
dated as of October 14, 2005
among EMCOR Group, Inc., the Lenders party thereto and
Harris N.A., as Agent
(as amended, modified or supplemented from
time to time, the "Credit Agreement"),
--------------------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with the Credit Agreement, the Company hereby requests that
the Agent consent to an increase in the aggregate Commitments (the "Commitment
Amount Increase"), in accordance with Section 1.11 of the Credit Agreement, to
be effected by [an increase in the Commitment of [name of existing Lender] the
addition of [name of Additional Lender] (the "Additional Lender") as a Lender
under the terms of the Credit Agreement]. Capitalized terms used herein without
definition shall have the same meanings herein as such terms have in the Credit
Agreement.
After giving effect to such Commitment Amount Increase, and upon the
effectiveness of the Commitment Amount Increase, the Commitment of [the Lender
increasing its Commitment] [the Additional Lender] will be as set forth on
Attachment I hereto.
[Include paragraphs 1-4 for an Additional Lender]
1. The Additional Lender hereby confirms that it has received a copy of the
Credit Agreement and the exhibits and schedules related thereto, together with
copies of the documents which were required to be delivered under the Credit
Agreement as a condition to the making of the Loans and other extensions of
credit thereunder. The Additional Lender acknowledges and agrees that it has
made and will continue to make, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it has
deemed appropriate, its own credit analysis and decisions relating to the Credit
Agreement. The Additional Lender further acknowledges and agrees that the Agent
has not made any representations or warranties about the credit worthiness of
the Company or any other party to the Credit Agreement or with respect to the
legality, validity, sufficiency or enforceability of the Credit Agreement or the
value of any security therefor.
2. Except as otherwise provided in the Credit Agreement, effective as of
the date of acceptance hereof by the Agent, the Additional Lender (i) shall be
deemed automatically to have become a party to the Credit Agreement and have all
the rights and obligations of a "Lender" under the Credit Agreement as if it
were an original signatory thereto and (ii) agrees to be bound by the terms and
conditions set forth in the Credit Agreement as if it were an original signatory
thereto.
3. The Additional Lender hereby advises you of the following administrative
details with respect to its Loans and Commitment:
(A) Notices:
Institution Name:_________________
Address: _______________________
_______________________
Telephone: _______________________
Facsimile: ______________________
(B) Payment Instructions:
THIS AGREEMENT SHALL BE DEEMED TO BE A CONTRACTUAL OBLIGATION UNDER, AND
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.
The Commitment Amount Increase shall be effective when the executed consent
of the Agent is received or otherwise in accordance with Section 1.11 of the
Credit Agreement, but not in any case prior to ___________________, ____. It
shall be a condition to the effectiveness of the Commitment Amount Increase that
(i) all fees and expenses referred to in Section 1.11 of the Credit Agreement
shall have been paid and (ii) no Eurodollar Loans shall be outstanding on the
date of such effectiveness.
The Company hereby certifies that no Default or Event of Default has
occurred and is continuing.
Please indicate the Agent's consent to such Commitment Amount Increase by
signing the enclosed copy of this letter in the space provided below.
Very truly yours,
EMCOR GROUP, INC.
By ____________________________________
Name:_______________________________
Title:______________________________
[ADDITIONAL LENDER/LENDER INCREASING
COMMITMENTS]
By:
Name:_____________________________
Title:____________________________
The undersigned hereby consents
on this __ day of _____________, ___
to the above-requested Commitment
Amount Increase.
HARRIS N.A.,
as Agent
By:________________________________________
Name:_________________________________
Title:________________________________
ATTACHMENT I
LENDER COMMITMENT
SCHEDULE 1.1
COMMITMENTS
LENDER COMMITMENT PERCENTAGE
Harris N.A. $35,000,000 10.00%
Harris Nesbitt Financing, Inc. $25,000,000 7.14%
The Governor and Company of Bank of Scotland $60,000,000 17.14%
LaSalle Bank National Association $40,000,000 11.43%
Sovereign Bank $35,000,000 10.00%
U.S. Bank, National Association $40,000,000 11.43%
Bank of America, N.A. $25,000,000 7.14%
JPMorgan Chase Bank, N.A. $40,000,000 11.43%
Webster Bank, National Association $15,000,000 4.29%
Bank Hapoalim B.M. $10,000,000 2.86%
Bank of Montreal $25,000,000 7.14%
TOTAL $350,000,000 100%
=========== ====
SCHEDULE 1.3
EXISTING LETTERS OF CREDIT
Number Beneficiary Amount Expiry Date
H19624OS ACE American Insurance Company $ 863,110 9/30/2006
H19637OS ACE Property & Casualty Insurance $ 662,070 10/1/2006
Company
H19638OS Transportation Insurance Company $ 2,353,000 10/1/2006
and/or Continental Casualty
Company and/or American Casualty
Company of Reading, PA
H19644OS CNA Risk Management $ 6,177,000 9/1/2006
H19645OS The Travelers Casualty & Surety $ 900,000 12/31/2005
Company of America
H19646OS CNA Risk Management $ 1,685,000 9/1/2006
H19647OS CNA Risk Management $ 835,000 9/1/2006
H19651OS American Casualty Company of $ 9,187,000 9/30/2006
Reading, PA and/or Continental
Casualty Company and/or
Transportation Insurance Company
S559178 American Casualty Company of $14,683,000 10/1/2006
Reading, PA and Continental
Casualty Company and
Transportation Insurance Company
S574136 Transportation Insurance Company $17,003,000 10/1/2006
and American Casualty Company of
Reading, PA and Continental
Casualty Company
H19640OS Reliance Insurance Company $ 500,000 7/23/2006
H19649OS County of Los Angeles $ 194,037 2/28/2006
H19654OS Los Angeles County $ 92,283 4/30/2006
H62175OS Los Angeles County $ 403,116 12/22/2005
H62176OS County of LA $ 104,345 12/15/2005
H19653OS City of Chicago $ 5,000 12/31/2006
S561252 Southeast Corridor Constructors $ 8,481,050 9/15/2007
S582002 Ontario Power Generation CAD 250,000 6/15/2006
H19663 Canadian Imperial Bank of Commerce CAD: 500,000 12/24/2005
SCHEDULE 4.2
GUARANTORS
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
EMCOR Group, Inc. Delaware
Consolidated Engineering Services, Inc. Maryland 100% EMCOR Facilities
Services, Inc.
Aircond Corporation
Georgia 100% Consolidated Engineering
Services, Inc.
The Betlem Service Corporation
New York 100% Consolidated Engineering
Services, Inc.
CES Facilities Management Services,
Inc. Maryland 100% Consolidated Engineering
Services, Inc.
Combustioneer Corporation
Maryland 100% Consolidated Engineering
Services, Inc.
Commonwealth Air Conditioning and
Heating, Inc. Massachusetts 100% Consolidated Engineering
Services, Inc.
Illingworth Corporation
Wisconsin 100% Consolidated Engineering
Services, Inc.
New England Mechanical Services of
Massachusetts, Inc. Massachusetts 100% New England Mechanical
Services, Inc.
New England Mechanical Services, Inc.
Connecticut 100% Consolidated Engineering
Services, Inc.
Trimech Corporation New Jersey 100% Consolidated Engineering
Services, Inc.
Trimech Plumbing, L.L.C. Delaware 90% Consolidated Engineering
Services, Inc.
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
Viox Services, Inc. Ohio 100% Consolidated Engineering
Services, Inc.
Dyn Specialty Contracting, Inc. Virginia 100% EMCOR Construction
Services, Inc.
Dynalectric Company Delaware 100% DYN Specialty
Contracting, Inc.
Dynalectric Company of Nevada Nevada 100% DYN Specialty
Contracting, Inc.
Contra Costa Electric, Inc. California 100% DYN Specialty
Contracting, Inc.
B&B Contracting & Supply Company Texas 100% DYN Specialty
Contracting, Inc.
KDC, Inc. California 100% DYN Specialty
Contracting, Inc.
EMCOR Construction Delaware 100% MES Holdings Corp.
Services, Inc.
EMCOR Mechanical/Electrical Services Delaware 100% EMCOR Construction
(East), Inc. Services, Inc.
Heritage Mechanical Services, Inc. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Forest Electric Corp. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. of L.I. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
Penguin Maintenance and Services, Inc. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Penguin Air Conditioning Corp. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
R.S. Harritan & Company, Inc. Virginia 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
J. C. Higgins Corp. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Labov Mechanical, Inc. Delaware 100% J.C. Higgins Corp.
Labov Plumbing, Inc. Delaware 90% Labov Mechanical, Inc.
Duffy Mechanical Corp. Maryland 100% EMCOR Construction
Services, Inc.
EMCOR Hyre Electric Co. of Indiana, Inc. Delaware 100% EMCOR Construction
Services, Inc.
Dynalectric Company of Ohio Ohio 100% EMCOR Construction
Services, Inc.
Gibson Electric Co., Inc. New Jersey 100% EMCOR Construction
Services, Inc.
Dynalectric of Michigan, Inc. Delaware 100% EMCOR Construction
Services, Inc.
University Mechanical & Engineering California 100% EMCOR Construction
Contractors, Inc. Services, Inc.
Pace Mechanical Services, Inc. Michigan 100% University Mechanical &
Engineering Contractors,
Inc.
UMS Facilities Consulting, Inc. Delaware 100% EMCOR Facilities
Services, Inc.
The Fred B. DeBra Co. Delaware 100% EMCOR Construction
Services, Inc.
University Mechanical & Engineering Arizona 100% University Mechanical &
Contractors, Inc. Engineering Contractors,
Inc., a California
corporation
Hansen Mechanical Contractors, Inc. Nevada 100% University Mechanical &
Engineering Contractors,
Inc., a California
corporation
Trautman & Shreve, Inc. Colorado 100% University Mechanical &
Engineering Contractors,
Inc., a California
corporation
EMCOR Gowan, Inc. Texas 100% EMCOR Construction
Services, Inc.
EMCOR International, Inc. Delaware 100% MES Holdings Corporation
Marelich Mechanical Co., Inc. California 100% EMCOR Construction
Services, Inc.
Design Air, Limited Washington 100% EMCOR Construction
Services, Inc.
Inte-Fac Corp. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
EMCOR Facilities Services, Inc. Delaware 100% MES Holdings Corporation
Mesa Energy Systems, Inc. California 100% EMCOR Facilities
Services, Inc.
BALCO, Inc. Massachusetts 100% EMCOR Facilities
Services, Inc.
Building Technology Engineers, Inc. Massachusetts 100% EMCOR Facilities
Services, Inc.
BTE Service, Inc. Massachusetts 100% EMCOR Facilities
Services, Inc.
EMCOR Energy Services, Inc. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Monumental Investment Corporation Maryland 100% MES Holdings Corporation
The Poole and Kent Corporation Maryland 100% Monumental Investment
Corporation
Poole and Kent - Connecticut, Inc. Maryland 100% Monumental Investment
Corporation
Poole and Kent - New England, Inc. Maryland 100% Monumental Investment
Corporation
Monumental Heating, Ventilating and Air Maryland 100% Monumental Investment
Conditioning Contractors, Inc. Corporation
Forti/Poole and Kent, L. L. C. Maryland 99% Monumental Heating,
Ventilating and Air
Conditioning Company, Inc.
1% HVAC, LTD.
HVAC, Ltd. Maryland 100% Monumental Investment
Corporation
Great Monument Construction Company Maryland 100% HVAC, Ltd.
Atlantic Coast Mechanical, Inc. Maryland 100% HVAC, Ltd.
Environmental Engineering Company Maryland 100% Monumental Investment
Corporation
The Poole and Kent Company Maryland 100% Monumental Investment
Corporation
Poole and Kent Distributors, Inc. Maryland 100% The Poole and Kent Company
MES Holdings Corporation
Poole & Kent Company of Florida Delaware 100%
EMCOR-CSI Holding Co. Delaware 100% MES Holdings Corporation
CSUSA Holdings L. L. C. Delaware 100% EMCOR CSI Holding Co.
CS48 Acquisition Corp. Delaware 100% CSUSA Holdings, LLC
Shambaugh & Son, L.P. Texas General Partner CSUSA Holdings, LLC
Shambaugh & Son, L.P. Texas Limited Partner CS48 Acquisition Corp.
Border Electric Co., L.P. Texas General Partner CSUSA Holdings, LLC
Border Electric Co., L.P. Texas Limited Partner CS48 Acquisition Corp.
Border Mechanical Co., L.P. Texas General Partner CSUSA Holdings, LLC
Border Mechanical Co., L.P. Texas Limited Partner CS48 Acquisition Corp.
AM Contractors 1, Inc. Michigan 100% EMCOR CSI Holding Co.
Central Mechanical Construction Co., Inc. Delaware 100% EMCOR CSI Holding Co.
E. L. Pruitt Company Delaware 100% EMCOR CSI Holding Co
.
F & G Mechanical Corporation Delaware 90% EMCOR CSI Holding Co
.
F & G Plumbing, Inc. New Jersey 100% F & G Mechanical
Corporation
F & G Management, Inc. Delaware 100% EMCOR CSI Holding Co.
Gotham Air Conditioning Service, Inc. Delaware 100% EMCOR CSI Holding Co.
Hillcrest Sheet Metal, Inc. Delaware 100% EMCOR CSI Holding Co
.
Kilgust Mechanical, Inc. Delaware 100% EMCOR CSI Holding Co.
Kuempel Service, Inc. Ohio 100% EMCOR CSI Holding Co.
EMCOR Services Midwest, Inc. Delaware 100% Consolidated Engineering
Services, Inc.
Lowrie Electric Company, Inc. Tennessee 100% EMCOR CSI Holding Co
.
Mandell Mechanical Corporation New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Maximum Refrigeration & Air Conditioning Delaware 100% EMCOR CSI Holding Co.
Corp.
Meadowlands Fire Protection Corp. New Jersey 100% EMCOR CSI Holding Co.
North Jersey Mechanical Contractors, Inc. New Jersey 100% EMCOR CSI Holding
Co.
Nogle & Black Mechanical, Inc. Delaware 100% EMCOR CSI Holding Co.
The Fagan Company Kansas 100% EMCOR CSI Holding
Co.
Walker J Walker, Inc. Tennessee 100% EMCOR CSI Holding
Co.
MES Holdings Corporation Delaware 100% EMCOR Group, Inc.
EMCOR (UK) Limited UK 100% EMCOR International Inc.
EMCOR Group (UK) plc UK 100% EMCOR (UK) Limited
Drake & Scull Airport Services, Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Facilities Services Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Engineering Services Ltd. UK 100% EMCOR Group (UK) plc
Drake & Scull International, Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Rail Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Engineering Services Ltd UK 100% EMCOR Group (UK) plc
Drake & Scull Holdings Ltd. UK 100% EMCOR Group (UK) plc
Delcommerce (Contract Services) Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull (Scotland)Ltd. UK 100% EMCOR (UK) Limited
DSE (Far East) Ltd. UK 100% EMCOR Group (UK) plc
BL Distribution UK 100% EMCOR (UK) Limited
Drake & Scull Properties, Ltd. UK 100% EMCOR (UK) Limited
Businessland Holdings Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Holdings LP Canada 99.9% 3072454 Nova Scotia
Company
0.1% 3072455 Nova Scotia
Company
3072455 Nova Scotia Company Canada 100% EMCOR International, Inc.
Comstock Canada, Ltd. Canada 100% 3072454 Nova Scotia
Company
3072454 Nova Scotia Company Canada 100% EMCOR International, Inc.
Comstock Power Ltd. Canada 100% Comstock Canada, Ltd.
SCHEDULE 5.2
RESTRICTED SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
Aircond Corporation Georgia 100% Consolidated Engineering Services,
Inc.
Aircond-Atlanta Corporation Georgia 100% Aircond Corporation
The Betlem Service Corporation New York 100% Consolidated Engineering Services,
Inc.
CES Facilities Management Maryland 100% Consolidated Engineering Services,
Services, Inc. Inc.
Combustioneer Corporation Maryland 100% Consolidated Engineering Services,
Inc.
Commonwealth Air Conditioning and Massachusetts 100% Consolidated Engineering Services,
Heating, Inc. Inc.
Consolidated Engineering Services, Maryland 100% EMCOR Facilities Services, Inc.
Inc.
Illingworth Corporation Wisconsin 100% Consolidated Engineering Services,
Inc.
New England Mechanical Services of Massachusetts 100% New England Mechanical Services,
Massachusetts, Inc. Inc.
New England Mechanical Services, Inc. Connecticut 100% Consolidated Engineering Services,
Inc.
Trimech Corporation New Jersey 100% Consolidated Engineering Services,
Inc.
Trimech Plumbing, L.L.C. Delaware 90% Consolidated Engineering Services,
Inc.
Viox Services, Inc. Ohio 100% Consolidated Engineering Services,
Inc.
DYN Specialty Contracting, Inc. Virginia 100% EMCOR Construction Services, Inc.
Dynalectric Company Delaware 100% DYN Specialty Contracting, Inc.
Dynalectric Company of Nevada Nevada 100% DYN Specialty Contracting, Inc.
Contra Costa Electric, Inc. California 100% DYN Specialty Contracting, Inc.
B&B Contracting & Supply Company Texas 100% DYN Specialty Contracting, Inc.
KDC, Inc. California 100% DYN Specialty Contracting, Inc.
EMCOR Construction Services, Inc. Delaware 100% MES Holdings Corp.
Defender Indemnity, Ltd. Vermont 100% EMCOR Risk Holdings, Inc.
EMCOR Risk Holdings, Inc. Delaware 100% MES Holdings Corp.
EMCOR Mechanical/Electrical Delaware 100% EMCOR Construction Services, Inc.
Services, (East), Inc.
Heritage Mechanical Services, Inc. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Heritage M & S, Inc. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. Delaware 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. of L.I. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Forest Electric Corp. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Penguin Maintenance and Services, Delaware 100% EMCOR Mechanical/Electrical
Inc. Services (East), Inc.
Inte-Fac Corp. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Penguin Air Conditioning Corp. New York 100% EMCOR Mechanical/Electrical
Services (East), Inc.
R.S. Harritan & Company, Inc. Virginia 100% EMCOR Mechanical/Electrical
Services (East), Inc.
J.C. Higgins Corp. Delaware 100% EMCOR Mechanical/Electrical
Services (East), Inc.
Labov Mechanical, Inc. Delaware 100% J.C. Higgins Corp.
Labov Plumbing, Inc. Delaware 90% Labov Mechanical, Inc.
Duffy Mechanical Corp. Maryland 100% EMCOR Construction Services, Inc.
EMCOR Facilities Services, Inc. Delaware 100% MES Holdings Corp.
Mesa Energy Systems, Inc. California 100% EMCOR Facilities Services, Inc.
Newcomb Anderson Associates California 100% EMCOR Facilities Services, Inc.
UMS Facilities Consulting, Inc. Delaware 100% EMCOR Facilities Services, Inc.
EMCOR Hyre Electric Co. of Indiana Delaware 100% EMCOR Construction Services, Inc.
Dynalectric Company of Ohio Ohio 100% EMCOR Construction Services, Inc.
Dynalectric of Michigan, Inc. Delaware 100% EMCOR Construction Services, Inc.
Gibson Electric Co., Inc. New Jersey 100% EMCOR Construction Services, Inc.
The Fred B. DeBra Co. Delaware 100% EMCOR Construction Services, Inc.
University Mechanical & Engineering California 100% EMCOR Construction Services, Inc.
Contractors, Inc.
Pace Mechanical Services, Inc. Michigan 100% University Mechanical &
Engineering Contractors, Inc.
University Mechanical & Engineering Arizona 100% University Mechanical &
Contractors, Inc. Engineering Contractors, Inc., a
California corporation
MES Holdings Corporation Delaware 100% EMCOR Group, Inc.
Hansen Mechanical Contractors, Inc. Nevada 100% University Mechanical &
Engineering Contractors, Inc., a
California corporation
Trautman & Shreve, Inc. Colorado 100% University Mechanical &
Engineering Contractors, Inc., a
California corporation
Marelich Mechanical Co., Inc. California 100% EMCOR Construction Services, Inc.
Design Air, Limited Washington 100% EMCOR Construction Services, Inc.
EMCOR Gowan, Inc. Texas 100% EMCOR Construction Services, Inc.
EMCOR International, Inc. Delaware 100% MES Holdings Corp.
EMCOR Energy Services, Inc. Delaware 100% EMCOR Mechanical/Electrical
Services (East), Inc.
BTE Service, Inc. Massachusetts 100% EMCOR Facilities Services, Inc
Building Technology Engineers, Inc. Massachusetts 100% EMCOR Facilities Services, Inc
BALCO, Inc. Massachusetts 100% EMCOR Facilities Services, Inc
Monumental Investment Corporation Maryland 100% MES Holdings Corporation
The Poole and Kent Corporation Maryland 100% Monumental Investment Corporation
Poole and Kent - Connecticut, Inc. Maryland 100% Monumental Investment Corporation
Poole and Kent - Maryland 100% Monumental Investment Corporation
New England, Inc.
Poole & Kent Company of Florida Delaware 100% MES Holdings Corporation
Monumental Heating, Ventilating and Maryland 100% Monumental Investment Corporation
Air Conditioning Contractors, Inc.
Forti/Poole and Kent L.L.C. Maryland 99% Monumental Heating, Ventilating
and Air Conditioning Contractors,
Inc.
1% HVAC, Ltd.
Environmental Engineering Company Maryland 100% Monumental Investment Corporation
HVAC, Ltd. Maryland 100% Monumental Investment Corporation
Atlantic Coast Mechanical, Inc. Maryland 100% HVAC, Ltd.
Great Monument Construction Company Maryland 100% HVAC, Ltd.
The Poole and Kent Company Maryland 100% Monumental Investment Corporation
Poole and Kent Distributors, Inc. Maryland 100% The Poole and Kent Company
EMCOR-CSI Holdings Co. Delaware 100% MES Holdings Corporation
CSUSA Holdings L.L.C. Delaware 100% EMCOR CSI Holding Co.
CS48 Acquisition Corp. Delaware 100% CSUSA Holdings L.L.C.
Shambaugh & Son, L.P. Texas General Partner CSUSA Holdings L.L.C.
Shambaugh & Son, L.P. Texas Limited Partner CS48 Acquisition Corp.
Border Electric Co., L.P. Texas General Partner CSUSA Holdings L.L.C.
Border Electric Co., L.P. Texas Limited Partner CS48 Acquisition Corp.
Border Mechanical Co., L.P. Texas General Partner CSUSA Holdings L.L.C.
Border Mechanical Co., L.P. Texas Limited Partner CS48 Acquisition Corp.
AM Contractors 1, Inc. Michigan 100% EMCOR CSI Holding Co.
Central Mechanical Construction Co., Delaware 100% EMCOR CSI Holding Co.
Inc.
E.L. Pruitt Company Delaware 100% EMCOR CSI Holding Co.
F & G Management, Inc. Delaware 100% EMCOR CSI Holding Co.
County Road Mechanical, Inc. Delaware 100% EMCOR CSI Holding Co.
F & G Mechanical Corporation Delaware 90% EMCOR CSI Holding Co.
F & G Plumbing, Inc. New Jersey 100% F & G Mechanical Corporation
Gotham Air Conditioning Service, Inc. Delaware 100% EMCOR CSI Holding Co.
Hillcrest Sheet Metal, Inc. Delaware 100% EMCOR CSI Holding Co.
Kilgust Mechanical, Inc. Delaware 100% EMCOR CSI Holding Co.
Kuempel Service, Inc. Ohio 100% EMCOR CSI Holding Co.
Lowrie Electric Company, Inc. Tennessee 100% EMCOR CSI Holding Co.
Mandell Mechanical Corporation New York 100% EMCOR Mechanical/
Electrical Services (East), Inc.
Maximum Refrigeration & Air Delaware 100% EMCOR CSI Holding Co.
Conditioning Corp.
Meadowlands Fire Protection Corp. New Jersey 100% EMCOR CSI Holding Co.
NJM Service Co., Inc. New Jersey 100% EMCOR CSI Holding Co.
Nogle & Black Mechanical, Inc. Delaware 100% EMCOR CSI Holding Co.
North Jersey Mechanical Contractors, New Jersey 100% EMCOR CSI Holding Co.
Inc.
The Fagan Company Kansas 100% EMCOR CSI Holding Co.
Walker-J-Walker, Inc. Tennessee 100% EMCOR CSI Holding Co.
CBRE Technical Services, L.L.C. Delaware 50.1% EMCOR Facilities Services, Inc.
EMCOR Services Midwest, Inc. Delaware 100% Consolidated Engineering Services,
Inc.
3972455 Nova Scotia Company Canada 100% EMCOR International, Inc.
Comstock Canada, Ltd. Canada 100% 3072454 Nova Scotia Company
3072454 Nova Scotia Company Canada 100% EMCOR International, Inc.
Comstock Power Ltd. Canada 100% Comstock Canada, Ltd.
EMCOR Holdings LP Canada 99% 3072454 Nova Scotia Company
EMCOR (UK) Limited UK 100% EMCOR International, Inc.
EMCOR Group (UK) plc UK 100% EMCOR (UK) Limited
EMCOR Facilities Services Ltd. UK 100% EMCOR Group (UK) plc
Drake & Scull Airport Services, Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Energy Services, Ltd. UK 100% EMCOR Group (UK) plc
Drake & Scull International, Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Rail Ltd. UK 100% EMCOR Group (UK) plc
EMCOR Engineering Services, Ltd. UK 100% EMCOR Group (UK) plc
Drake &Scull Holdings Ltd. UK 100% EMCOR Group (UK) plc
Delcommerce (Contract Services) Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull (Scotland) Ltd. UK 100% EMCOR (UK) Limited
DSE (Far East) Ltd. UK 100% EMCOR Group (UK) plc
BL Distribution Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull Properties, Ltd. UK 100% EMCOR (UK) Limited
Businessland Holdings UK 100% EMCOR Group (UK) plc
FOREIGN SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
EMCOR (Cayman Islands) Ltd. Cayman Islands 100% EMCOR International Inc.
NESMA EMCOR Company Ltd. Saudi Arabia 50% EMCOR (Cayman Islands) Ltd.
Drake & Scull (Cayman Islands) Ltd. Cayman Islands 100% EMCOR International Inc.
Drake & Scull Assarain l.l.c. Oman 49% Drake & Scull (Cayman Islands) Ltd.
Drake & Scull International Egypt Egypt 50% Drake & Scull International LLC
Drake & Scull International Qatar Qatar 50% Drake & Scull International LLC
EMCOR Drake & Scull International Jebel Ali Free Zone 100% Drake & Scull (Cayman Islands) Ltd.
Limited
JWP Technical Services (Malaysia) Malaysia 100% EMCOR International Inc.
Sdn Bhd
YDS Engineering Ltd. (Hong Kong) Hong Kong 50% EMCOR Group (UK) plc
Drake & Scull France EURL France 100% EMCOR Group (UK) plc
Langgit Tinggi Sdn Bhd Malaysia 100% EMCOR (UK) Ltd.
Poole and Kent, Ltd. Bermuda 100% Monumental Investment Corporation
Atlas Indemnity, Ltd. Bermuda 100% EMCOR Risk Holdings, Inc.
University Mechanical deMexico S.A. Mexico 98% University Mechanical &
Dec.V. Engineering Contractors, Inc.
UNRESTRICTED SUBSIDIARIES
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
Afgo Engineering Corp. of Washington Delaware 100% Sellco Corporation
Antwerp Education Center N.V. Belgium 100% Sellco Corporation
Businessland Canada Ltd. Canada 100% JWP Information Services, Inc.
Businessland (Hong Kong) Limited Hong Kong 100% JWP Information Services, Inc.
Drake & Scull France SARL France 100% Sellco Corporation
Guzovsky/JWP Electrical Inc. Rhode Island 100% Sellco Corporation
Jamaica Water Securities Corp. New York 100% Sellco Corporation
JWP Espana SA Spain 100% Sellco Corporation
JWP France SARL France 100% Sellco Corporation
JWP/HCII Corp. Delaware 100% Sellco Corporation
JWP Information Services, Inc. California 100% Sellco Corporation
JWP Information Services SARL France 100% Sellco Corporation
JWP TS Corp. New Jersey 100% Sellco Corporation
Micro Avenue Belgium 100% Sellco Corporation
MicroCom Belgium 100% Sellco Corporation
Sivea Benelux Belgium 100% Sellco Corporation
SLR Constructors Inc. New York 100% Sellco Corporation
Teletime Limited Ontario 100% Sellco Corporation
Sellco Corporation Delaware 100% EMCOR Group, Inc.
JWP Energy Products, Inc. Idaho 100% EMCOR Group, Inc.
JWP Telecom, Inc. Delaware 100% EMCOR Group, Inc.
Standard Telecommunications New Jersey 100% JWP Telecom, Inc.
Equipment, Inc.
MEC Constructors, Inc. Delaware 100% EMCOR Group, Inc.
JWP Technical Services (C.N.M.I.), Northern Marianas 100% MEC Constructors, Inc.
Inc.
JWP Thailand Ltd. Thailand 100% MEC Constructors, Inc.
SCHEDULE 5.9
LITIGATION
The information set forth in the Legal Proceedings Sections of the
Company's Form 10-K for the year ended December 31, 2004 and of the Company's
Form 10-Q for the Quarter ended June 30, 2005 is hereby incorporated herein by
reference thereto.
SCHEDULE 7.10
INDEBTEDNESS
1. Monumental Investment Corp.
Monumental is obligated in respect of obligations arising out of or
incurred in connection with the sale of by the Maryland Energy Financing
Administration (the "Administration") of Maryland Energy Financing
Administration Limited Obligation Local District Cooling Facilities Revenue
Bonds (Comfort Link Project) 2001 series in the principal amount of
$25,000,000 and the loan in December 2001 of such bond proceeds by the
Administration to District Chilled Water General Partnership d/b/a Comfort
Link ("Comfort Link") of which Monumental is a general partner, including
Monumental's obligations to guarantee the payment of such indebtedness and
related costs and expenses by Comfort Link.
2. University Mechanical & Engineering Contractors, Inc.
$384,000 note payable to former shareholder.
3. EMCOR U.K. Limited and its subsidiaries ("UK Borrowing Group")
The UK Borrowing Group has guaranteed the obligations of its members in
respect of bonds issued by surety companies. Certain of these obligations
are secured by a lien upon the assets of each member.
4. EMCOR Group, Inc. and various EMCOR Subsidiaries
a. $4.0 million payable under finance leases and purchase money
mortgages.
b. EMCOR and its subsidiaries have guaranteed the obligations of one
another in respect of bonds issued by surety companies. Certain of
these obligations are secured by a lien upon the assets of each
guarantor.
5. EMCOR Group (UK) plc
D&S and EMCOR (UK) Limited are guarantors of a Saudi Investment Bank credit
facility of NESMA EMCOR Saudi Arabia Ltd. which guaranteed amount is not to
exceed (pound)450,000 (approximately $625,000).
6. The information contained in Schedules 7.11 and 7.12 is hereby incorporated
herein by reference thereto.
SCHEDULE 7.11
LIENS
1. EMCOR and various EMCOR Subsidiaries
a. EMCOR subsidiaries have obtained bonds from surety companies. The
agreements pursuant to which the bonds were issued and will be issued
in the future provide that EMCOR and certain EMCOR subsidiaries grant
liens upon certain of their assets in favor of the bonding companies.
b. Miscellaneous finance leases and purchase money mortgages of EMCOR
subsidiaries approximately $4.0 million.
2. UK Companies
a. Debenture by Drake & Scull Properties Limited, EMCOR Group (UK) plc,
EMCOR Facilities Services Limited, EMCOR (UK) Limited, Drake & Scull
Airport Services Limited, Delcommerce (Contract Services) Limited,
Drake & Scull Holding Limited in favor of Travelers Surety Company.
b. Letter of Charge in favor of The Bank of Scotland by EMCOR Group (IK)
plc.
c. Bank Account Security Deed relating to Peacehaven Schools PFI Project
in favor of ING Bank by EMCOR Facilities Services Limited.
SCHEDULE 7.12
INVESTMENTS, LOANS AND ADVANCES
INVESTMENTS AMOUNT OF INVESTMENT PAYEE OR HOLDER
----------- -------------------- ---------------
1. State of Israel Bonds $40,000 aggregate principal amount Welsbach Electric Corp.
2. Colony Holdings Ltd. 60,000 shares --12% interest Monumental Investment Corp.
(Bermuda)
3. District Chilled Water 40% General Partnership in interest; Monumental Investment Corp.
Partnership equity approximately $20,000,000
4. Baltimore Ravens License (right) for 16 seats The Poole & Kent Corporation
5. T.P.C. of Boston $35,000 investment in country J. C. Higgins Corp.
club membership
6. Ice Contractors, LLC. 6% interest in ice arena JWP/Hyre Electric Co. of Indiana, Inc.
7. United Trades Insurance One preferred share E.L. Pruitt Company
Company One ordinary share
8. Cash Surrender Value of $1,229,000 Penguin Air Condition Corp.
split dollar insurance policy
9. Specialty Trade Insurance $15,000 investment in mutual insurance Shambaugh & Son, LP
Company company
10. Cash Surrender Value of $709,000 Shambaugh & Son, LP
split dollar life insurance
policy
11. Drake & Scull International 25% Interest Drake & Scull (Cayman Islands) Ltd
llc (Abu Dhabi)
12. F&G Mechanical Inc. 90 shares - 45% interest F&G Mechanical Corp.
(New York)
GUARANTEES
1. The information contained in Schedules 7.10 and 7.11 is hereby incorporated
herein by reference thereto. --------
* L/C Fee for Performance Letters of Credit is .75% per annum below these
amounts subject to a minimum of 0.50%. * Include only quarterly.