SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 14 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date or earliest event reported) January 26, 1995
MasTec, Inc.
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Delaware 0-3797 59-1259279
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(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
8600 N.W. 36th Street, Miami, Florida 33166
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (305) 599-1800
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(Former Name or Former Address, if Changed Since Last Report)
MasTec, Inc.
FORM 8-K
Item 5. Other events
On January 26, 1995 MasTec, Inc. (the "Company") entered into a loan
agreement with Barclays Business Credit, Inc. (n/k/a Shawmut Capital
Corporation). The loan agreement has three sub-facilities which are as
follows:
A. $12 million ten year term loan secured by certain equipment was
used to refinance existing term debt.
B. $15 million revolving credit loan facility collateralized by
certain amounts receivable and inventory, which may be used
for working capital.
C. $12.5 million equipment loan facility available for the
purchase of new and used equipment.
The rate of interest payable under the facility is, at the Company's option,
a function of the prime rate or a spreadd over LIBOR.
As of February 9, 1995 no amounts had been advanced under the revolving credit
or equipment loan facilities.
A copy of the loan and security agreement is attached as Exhibit 10.
The press release attached as Exhibit 28 was issued on February 6, 1995.
MasTec, Inc.
Signatures
FORM 8-K
Pursuant to the requirement of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MasTec, Inc.
Registrant
Date: February 9, 1995
/s/ Carlos A. Valdes
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Carlos A. Valdes
Senior Vice President-Finance
(Principal Financial Officer
and
Authorized Officer of the Registrant)
EXHIBIT 10
BARCLAYS BUSINESS CREDIT, INC.
WITH
MASTEC, INC.
BURNUP & SIMS OF CALIFORNIA, INC.
BURNUP & SIMS OF THE CAROLINAS, INC.
BURNUP & SIMS COMMUNICATIONS SERVICES, INC.
BURNUP & SIMS COMTEC, INC.
BURNUP & SIMS NETWORK DESIGNS, INC.
BURNUP & SIMS TSI, INC.
BURNUP & SIMS TELECOM OF FLORIDA, INC.
BURNUP & SIMS OF TEXAS, INC.
CHURCH & TOWER, INC.
CHURCH & TOWER FIBER TEL, INC.
CHURCH & TOWER OF FLORIDA, INC.
CHURCH & TOWER OF TN, INC.
DESIGNED TRAFFIC INSTALLATION, INC.
LECTRO PRODUCTS, INC.
SOUTHEASTERN PRINTING COMPANY, INC.
CC-II, INC.
(AS BORROWERS)
and
MASTEC INTERNATIONAL, INC.
MASTEC WIRELESS, INC.
BURNUP & SIMS ENTERPRISES, INC.
BURNUP: SIMS OF MISSISSIPPI, INC.
BURNUP & SIMS COMMUNICATIONS SERVICES OF FLORIDA, INC.
CAL TECHNICAL SERVICES, INC.
CAPSCAN CABLE COMPANY, INC.
GDSI, INC.
CONSTRUCTION EQUIPMENT SYSTEMS CORPORATION
MASTEC EQUIPMENT COMPANY, INC.
TELINK, INC.
(AS SURETIES)
LOAN AND SECURITY AGREEMENT
TABLE OF CONTENTS
Page
SECTION 1. CREDIT FACILITY . . . . . . . . . . . . . 1
1.1 Revolving Credit Loans . . . . . . . . . . . . . 1
1.2 Equipment Loans . . . . . . . . . . . . . . . . . 2
1.3 Term Facility . . . . . . . . . . . . . . . . . . 3
1.4 Mandatory Prepayments . . . . . . . . . . . . . . 4
1.5 Use of Proceeds . . . . . . . . . . . . . . . . . 4
SECTION 2. INTEREST, FEES AND CHARGES . . . . . . . 4
2.1 Interest . . . . . . . . . . . . . . . . . . . . 4
2.2 Default Rate of Interest . . . . . . . . . . . . 8
2.3 Maximum Interest . . . . . . . . . . . . . . . . 8
2.4 Computation of Interest and Fees . . . . . . . . 8
2.5 Commitment Fee . . . . . . . . . . . . . . . . . 8
2.6 Letter of Credit Fees . . . . . . . . . . . . . . 9
2.7 Unused Line Fee . . . . . . . . . . . . . . . . . 9
2.8 [INTENTIONALLY OMITTED.] . . . . . . . . . . . . 9
2.9 Audit and Appraisal Fees . . . . . . . . . . . . 9
2.10 Reimbursement of Expenses . . . . . . . . . . . . 9
2.11 Bank Charges . . . . . . . . . . . . . . . . . . 10
2.12 Indemnity re: LIBOR . . . . . . . . . . . . . . . 10
SECTION 3. LOAN ADMINISTRATION . . . . . . . . . . . . 10
3.1 Manner of Borrowing Revolving Credit Loans . . . 10
3.2 Payments . . . . . . . . . . . . . . . . . . . . 12
3.3 Mandatory and Permissive Prepayments . . . . . . 12
3.4 Application of Payments and Collections . . . . . 13
3.5 All Loans to Constitute One Obligation . . . . . 14
3.6 Loan Account . . . . . . . . . . . . . . . . . . 14
3.7 Statements of Account . . . . . . . . . . . . . . 14
3.8 Joint and Several Liability . . . . . . . . . . . 14
SECTION 4. TERM AND TERMINATION . . . . . . . . . . . . 15
4.1 Term of Agreement . . . . . . . . . . . . . . . . 15
4.2 Termination . . . . . . . . . . . . . . . . . . . 15
SECTION 5. SECURITY INTERESTS . . . . . . . . . . . . 16
5.1 Security Interest in Collateral . . . . . . . . . 16
5.2 Lien Perfection; Further Assurances . . . . . . . 17
SECTION 6. COLLATERAL ADMINISTRATION . . . . . . . . . 17
6.1 General . . . . . . . . . . . . . . . . . . . . . 17
6.2 Administration of Accounts . . . . . . . . . . . 19
6.3 Administration of Inventory . . . . . . . . . . . 21
6.4 Administration of Equipment . . . . . . . . . . . 21
6.5 Payment of Charges . . . . . . . . . . . . . . . 21
SECTION 7. REPRESENTATIONS AND WARRANTIES . . . . . . 21
7.1 General Representations and Warranties . . . . . . 21
7.2 [INTENTIONALLY OMITTED]. . . . . . . . . . . . . . 29
7.3 Survival of Representations and Warranties . . . . 29
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS . . . . . . . 29
8.1 Affirmative Covenants . . . . . . . . . . . . . . . 29
8.2 Negative Covenants . . . . . . . . . . . . . . . . 31
8.3 Specific Financial Covenants . . . . . . . . . . . 35
SECTION 9. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . 36
9.1 Documentation . . . . . . . . . . . . . . . . . . . 36
9.2 No Default . . . . . . . . . . . . . . . . . . . . 38
9.3 Other Loan Documents . . . . . . . . . . . . . . . 38
9.4 Availability . . . . . . . . . . . . . . . . . . . 38
9.5 No Litigation . . . . . . . . . . . . . . . . . . . 38
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT . . 38
10.1 Events of Default . . . . . . . . . . . . . . . . . 38
10.2 Acceleration of the Obligations . . . . . . . . . . 41
10.3 Other Remedies . . . . . . . . . . . . . . . . . . 41
10.4 Remedies Cumulative; No Waiver . . . . . . . . . . 42
SECTION 11. MISCELLANEOUS . . . . . . . . . . . . . . . . . . 43
11.1 Power of Attorney . . . . . . . . . . . . . . . . . 43
11.2 Indemnity . . . . . . . . . . . . . . . . . . . . . 44
11.3 Modification of Agreement; Sale of Interest . . . . 44
11.4 Severability . . . . . . . . . . . . . . . . . . . 45
11.5 Successors and Assigns . . . . . . . . . . . . . . 45
11.6 Cumulative Effect; Conflict of Terms . . . . . . . 45
11.7 Execution in Counterparts . . . . . . . . . . . . . 45
11.8 Notice . . . . . . . . . . . . . . . . . . . . . . 46
11.9 Lender's Consent . . . . . . . . . . . . . . . . 46
11.10 Credit Inquiries . . . . . . . . . . . . . . . . 47
11.11 Time of Essence . . . . . . . . . . . . . . . . . 47
11.12 Entire Agreement . . . . . . . . . . . . . . . . 47
11.13 Interpretation . . . . . . . . . . . . . . . . . 47
11.14 GOVERNING LAW; CONSENT TO FORUM . . . . . . . . . 47
11.15 WAIVERS BY SURETIES AND BORROWERS . . . . . . . . 48
LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT is made this 26th day of January,
1995, by and among BARCLAYS BUSINESS CREDIT, INC. ("Lender"), a
Connecticut corporation with an office at 200 Glastonbury Road,
Glastonbury, CT 06033 and MasTec, Inc. ("MasTec"), a Delaware corporation,
each other entity comprising the Telecommunication Group (as defined in
Appendix A hereto); Southeastern Printing Company, Inc. ("Southeastern
Printing"), a Florida corporation, CC-II, Inc., a Delaware corporation, and
Lectro Products, Inc. ("Lectro"), a Delaware corporation; (collectively
"Borrowers" and singly each is a "Borrower"), and the Sureties (as defined
in Appendix A hereto); each with its chief executive office at 8600 N.W.
36th Street, Miami, Florida 33166.
Capitalized terms used in this Agreement have the meanings assigned to
them in Appendix A, General Definitions. Accounting terms not otherwise
specifically defined herein shall be construed in accordance with GAAP,
consistently applied.
SECTION 1. CREDIT FACILITY
Subject to the terms and conditions of, and in reliance upon the
representations and warranties made in, this Agreement and the other Loan
Documents, Lender agrees to make a Total Credit Facility of up to
$39,500,000.00 available upon Borrowers' request therefor, as follows:
1.1 Revolving Credit Loans.
1.1.1 Loans. Lender agrees, for so long as no
Default or Event of Default exists and subject to the corresponding
Borrowing Bases, to make Revolving Credit Loans to, and for the joint and
several benefit of, Borrowers from time to time, as requested by Borrowers
in the manner set forth in subsection 3.1.1 hereof. Revolving Credit Loans
may be made by Lender to the Telecommunication Group up to a maximum
principal amount equal to the Telecommunication Group Borrowing Base,
Revolving Credit Loans may be made to Southeastern Printing up to a maximum
principal amount equal to the Southeastern Printing Borrowing Base and
Revolving Credit Loans may be made to Lectro and CC-II, Inc. up to a
maximum principal amount equal to the Lectro Borrowing Base. In no event
and at no time, however, shall the aggregate amount outstanding of all
Revolving Credit Loans exceed $15,000,000. If (i) the unpaid balance of
Revolving Credit Loans made to the Telecommunication Group exceeds the
Telecommunication Borrowing Base, or (ii) the unpaid balance of Revolving
Credit Loans made to Southeastern Printing exceed the Southeastern Printing
Borrowing Base, or (iii) the unpaid balance of Revolving Credit Loans made
to Lectro and CC-II, Inc. exceed the Lectro Borrowing Base, or (iv) the
unpaid balance of any Revolving Credit Loans exceed any other limitations
set forth in this Agreement, then such excess Revolving Credit Loans shall
nevertheless constitute Obligations that are due and payable on demand,
secured by the Collateral and entitled to all the benefits thereof. Each
Borrower is jointly and severally liable for all Obligations. All
Revolving Credit Loans shall be repayable in accordance with the terms
hereof and the Revolving Credit Note.
1.1.2 Reserves. Lender shall have the right to
establish reserves in such amounts, and with respect to such matters, as
Lender shall deem reasonably necessary or appropriate, against the
Borrowing Bases, or any of them, with respect to amounts which may be due
or become due by any Borrower to any Person to the extent such amounts may
be or become, secured by a Lien on, or trust over, any Property of such
Borrower (other than Permitted Liens), the existence, operation or
enforcement of which may have an adverse effect on the value, quality,
collectability or enforceability of the Collateral.
1.1.3 Letters of Credit. Lender agrees, for so
long as no Default or Event of Default exists and if requested by
Borrowers, to issue its, or cause to be issued by one of Lender's
Affiliates, Letters of Credit for the account of any Borrower, provided
that the LC Amount at any time shall not exceed $6,000,000 and that
reserves will be established against the applicable Borrowing Base
availability in the amount equal to the LC Amount dependent upon the
Borrower(s) account for which the Letter of Credit is issued. No Letter of
Credit may have an expiration date that is after the last day of the
Original Term or the then applicable Renewal Term. Any amounts paid by
Lender in connection with any Letter of Credit shall be treated as
Revolving Credit Loans, shall be secured by all of the Collateral and shall
bear interest and be payable at the same rate and in the same manner as
Revolving Credit Loans.
1.2 Equipment Loans. As a part of the Total Credit Facility, Lender
hereby establishes a subfacility pursuant to which Lender agrees, for so
long as no Default or Event of Default exists, to make Loans ("Equipment
Loans") to Borrowers from time to time from and after the Closing Date and
until the last day of the Original Term to finance Borrowers' purchases of
eligible Equipment for use in Borrowers' business. Each Equipment Loan may
not exceed (i) 90% of the purchase price of new Equipment being acquired,
and (ii) 85% of the purchase price of used Equipment being acquired. The
purchase price relating to such Equipment shall be deemed to be the lower
of the actual cost of the Equipment or the fair market value of the
Equipment as determined by referenced to the "Green Guide" or similar
industry publication, net of charges and fees, including, without
limitation, freight, taxes and installation costs and all other "soft"
costs. Each Equipment Loan shall be secured by all of the Collateral and
shall be evidenced by a Master Equipment Note. In conjunction with each
Equipment Loan, Borrowers shall deliver to Lender a copy of the invoice
relating to the acquisition cost of such Equipment, documentation
evidencing delivery and receipt of such Equipment and all documentation
necessary to ensure that Lender has a valid, first priority, perfected
security interest in such Equipment including UCC-1 financing statements
and, if applicable, certificates of title or manufacturers certificate of
origin along with all documentation (fully executed) necessary to have
Lender's first lien and security interest noted on certificates of title
relating titled Equipment. The principal amount of all Equipment Loans
made hereunder shall not exceed, in the aggregate, $12,500,000, provided
that the outstanding balance of all Equipment Loans during the first year
of the Original Term shall not exceed $6,500,000. Each Equipment Loan will
be payable commencing January 1 of the year immediately following the year
in which such Equipment Loan is made and shall be repaid in equal quarterly
installments of principal on the first day of each January, April, July and
October of each calendar year based on a four (4) year amortization
schedule with payment in full to be made at the earlier to occur of the (a)
scheduled final repayment date based on a four year amortization, (b) last
day of the Original Term or, if applicable, any Renewal Term, or (c)
termination of the Credit Facility as provided for herein.
1.3 Term Facility.
1.3.1 Term Loan. Lender agrees to make a term loan ("Term
Loan") available to Borrowers in the principal amount of $10,947,416.17
provided, however, that Borrower shall draw down no less than $9,500,000 as
of the Closing Date. The amount equal to the difference between
$10,947,416.17, and the amount of such initial draw on the Closing Date may
be drawn down during the first year of the Original Term and shall be used
solely to finance 100% of the acquisition cost of new and used Equipment
(net of freight, taxes, installation as to and other "soft costs"). Prior
to such advance, Borrowers shall deliver to Lender invoices relating to the
acquisition of such Equipment, documentation evidencing the delivery and
receipt of such Equipment and all documentation necessary to ensure that
Lender has a valid, first priority, perfected security interest in such
Equipment including UCC-1 financing statements and, if applicable,
certificates of title or manufacturers certificate of origin along with all
documentation (fully executed) necessary to have Lender's first lien and
security interest noted on certificates of title relating titled Equipment.
Each advance under the Term Loan shall be in an amount equal to at least
$250,000. Each advance under the Term Loan shall be repayable quarterly
based upon a ten year amortization, in equal quarterly installments of
principal on the first day of each January, April, July and October, with
the entire amount of such advance due upon the earlier to occur of the (a)
scheduled final repayment date based on a ten year amortization, (b) last
day of the Original Term or, if applicable, any Renewal Term, or (c)
termination of the Credit Facility as provided for herein.
1.3.2 Supplemental Term Loan. Lender agrees to make a loan
in the amount of $1,052,583.83 ("Supplemental Term Loan") as of the Closing
Date. The principal amount of the Supplemental Term Loan shall be due and
payable in 25 consecutive monthly installments commencing on March 1, 1995
and continuing on the first day of each month thereafter, comprised of 24
equal payments of $41,666.67 and a final (25th) installment due on March
1, 1997 equal to the aggregate outstanding principal amount of the
Supplemental Term Loan, along with all accrued and unpaid interests, fees,
costs and expenses.
1.4 Mandatory Prepayments. Except as otherwise provided herein,
Borrowers shall make mandatory prepayments to be applied to the Term Loan,
Supplemental Term Loan or the Equipment Loans (in such order as Lender may
in its sole discretion deem appropriate) upon the sale and with the
proceeds received from the sale of any Equipment. All prepayments will be
applied to unpaid installments in the inverse order of maturity. The
Revolving Credit Loans, Term Loan, Supplemental Term Loan and the Equipment
Loans shall be secured by all of the Collateral.
1.5 Use of Proceeds. The Loans shall be used solely for the
satisfaction of existing Indebtedness of Borrowers to First Union National
Bank of Florida and for Borrowers' general working capital purposes
including Equipment acquisitions, and for such other purposes in a manner
consistent with the provisions of this Agreement and all applicable laws.
SECTION 2. INTEREST, FEES AND CHARGES
2.1 Interest.
2.1.1 Revolving Credit Interest:
(a) Rate Options. At the time of each Revolving
Credit Loan under the Revolving Credit Facility, and thereafter from time
to time, MasTec, on behalf of the Borrowers shall have the right, subject
to the terms and conditions of this Agreement and provided no Default or
Event of Default has occurred, to designate to Lender in writing that all,
or a portion of the Revolving Credit Loans shall bear interest at either
the (i) Revolving Credit LIBOR Rate or (ii) Base Rate. Interest on each
portion thereof shall accrue and be paid at the time and rate applicable to
the respective option selected by MasTec, on behalf of the Borrowers, or
otherwise governing under the terms of this Agreement. If for any reason
the Revolving Credit LIBOR Rate option is unavailable or is not properly
selected in accordance with the terms hereof, the Base Rate shall apply.
The rate of interest on Revolving Credit Base Rate Loans shall increase or
decrease by an amount equal to any increase or decrease in the Base Rate
effective as of the opening of business on the day that any such change in
the Base Rate occurs.
(i) Revolving Credit LIBOR Rate Option:
(A) Requests. Provided no Default or Event of Default
has occurred, and subject to the provisions of this Section 2.1.1 (a)(i) if
Borrowers desire to have the Revolving Credit LIBOR Rate apply to all or a
porti521on of the Revolving Credit Loans, MasTec, on behalf of the Borrowers,
shall give Lender a written irrevocable request no later than 12:00 P.M.
Eastern time on the third (3rd) Business Day prior to the requested
borrowing date specifying (i) the date the Revolving Credit LIBOR Rate
shall apply (which shall be a Business Day), (ii) the LIBOR Interest
Period, and (iii) the amount to be subject to the Revolving Credit LIBOR
Rate provided that such amount shall be an integral multiple of Five
Hundred Thousand Dollars ($500,000.00). In no event may Borrowers have
outstanding at any time LIBOR Rate Loans with more than five (5) different
LIBOR Interest Periods.
(B) LIBOR Interest Periods. Revolving Credit LIBOR
Rate Loans shall be selected by MasTec on behalf of Borrowers for a LIBOR
Interest Period; provided, however, that if the LIBOR Interest Period would
otherwise end on a day which shall not be a London Business Day, such LIBOR
Interest Period shall be extended to the next preceding or succeeding
London Business Day as is the Bank's custom in the market to which such
Revolving Credit LIBOR Rate Loan relates. All accrued and unpaid interest
on a Revolving Credit LIBOR Rate Loan shall be repaid in full on the day
the applicable LIBOR Rate Period expires. Interest shall also be due and
payable, for a Revolving Credit LIBOR Rate Loan having a LIBOR Interest
Period of six (6) months on the last day of the third month of such six (6)
month period, as if such six (6) month period was actually two three (3)
month periods. No LIBOR Interest Period with respect to the Revolving
Credit may end after the Revolving Credit Maturity Date. Subject to all of
the terms and conditions applicable to a request to convert all or a
portion of the Revolving Credit Loans to a Revolving Credit LIBOR Rate
Loan, MasTec, on behalf of the Borrowers may extend a Revolving Credit
LIBOR Rate Loan as of the last day of the LIBOR Interest Period to a new
Revolving Credit LIBOR Rate Loan. If MasTec, on behalf of the Borrowers
fails to notify the Lender of the LIBOR Interest Period for a subsequent
Revolving Credit LIBOR Rate Loan at least three (3) Business Days prior to
the last day of the then current LIBOR Interest Period of an outstanding
Revolving Credit LIBOR Rate Loan, then such outstanding Revolving Credit
LIBOR Rate Loan shall, at the end of the applicable LIBOR Interest Period
accrue interest at the Base Rate.
(C) Unavailability. If MasTec, on behalf of the
Borrowers shall have requested the rate based on the Adjusted LIBOR Rate in
accordance with this Section 2.1.1(a)(i) and Lender shall have determined
that Eurodollar deposits equal to the amount of the principal of the
requested Revolving Credit LIBOR Rate Loan and for the LIBOR Interest
Period specified are unavailable, or that by reason of circumstances
affecting Eurodollar markets, adequate means do not exist for ascertaining
the rate based on the Adjusted LIBOR Rate applicable to the specified LIBOR
Interest Period, Lender shall promptly give notice of such determination to
MasTec, on behalf of the Borrowers that the rate based on the Adjusted
LIBOR Rate is not available. A good faith determination by Lender
hereunder based on Lender's best efforts shall be prima facie evidence of
the correctness of the fact and amount of such additional costs or
unavailability. Upon such a determination, (i) the obligation to convert
to, or maintain a Revolving Credit LIBOR Rate Loan at the rate based on the
Adjusted LIBOR Rate shall be suspended until Lender shall have notified
MasTec, on behalf of the Borrowers that such conditions shall have ceased
to exist, and (ii) the portion of the Revolving Credit Loan subject to the
request or requested conversion shall accrue interest at the Base Rate.
2.1.2 Term Interest:
(a) Rate Options. On the Closing Date, at the time of
each Equipment Loan and thereafter from time to time, MasTec, on behalf of
the Borrowers, shall have the right, subject to the terms and conditions of
this Agreement, and provided no Default or Event of Default has occurred,
to designate to Lender in writing that all, or a portion of the outstanding
principal balance of the Term Loan or the Equipment Loan (as so designated
to Lender in writing) shall bear interest at either the (i) Term LIBOR Rate
or (ii) Base Rate. Interest on each portion thereof shall accrue and be
paid at the time and rate applicable to the respective option selected by
MasTec, on behalf of the Borrowers or otherwise governing under the terms
of this Agreement. If for any reason an option is unavailable, MasTec, on
behalf of the Borrowers may designate another option. If MasTec, on behalf
of the Borrowers does not elect any such option or, if, for any reason the
Term LIBOR Rate is not available, the Term Loan and Equipment Loan shall
bear interest at the Base Rate. The rate of interest on the Base Rate
Loans shall increase or decrease by an amount equal to any increase or
decrease in the Base Rate, effective as of the opening of business on the
date that any such change in the Base Rate occurs.
(i) Term LIBOR Rate Option:
(A) Requests. Provided no Default or Event of Default
has occurred, and subject to the provisions of this Section 2.1.2(a)(i) if
Borrowers desire to have the Term LIBOR Rate apply to all or a portion of
the Term Loan or the Equipment Loan (as so designated to Lender in
writing), MasTec, on behalf of the Borrowers, shall give Lender a written
irrevocable request no later than 12:00 P.M. Eastern Time on the third
(3rd) Business Day prior to the requested borrowing date specifying (i) the
date the Term LIBOR Rate shall apply (which shall be a Business Day), (ii)
the LIBOR Interest Period, (iii) the Loan to which the Term LIBOR Rate
shall apply, and (iv) the amount of the Loan to be subject to the Term
LIBOR Rate; provided that such amount shall be an integral multiple of Five
Hundred Thousand Dollars ($500,000.00). In no event may Borrowers have
outstanding at any time LIBOR Rate Loans with more than five (5) different
LIBOR Interest Periods.
(B) LIBOR Interest Periods. Term LIBOR Rate Loans
shall be selected for a LIBOR Interest Period during which the Term LIBOR
Rate is applicable; provided, however, that if the LIBOR Interest Period
would otherwise end on a day which shall not be a London Business Day, such
LIBOR Interest Period shall be extended to the next preceding or succeeding
London Business Day as is the Bank's custom in the market in which such
Term LIBOR Rate Loans relates. All accrued and unpaid interest on a Term
LIBOR Rate Loan shall be repaid in full on the day the applicable LIBOR
Interest Period expires. Interest shall also be due and payable for a Term
LIBOR Rate Loan having a LIBOR Interest Period of six (6) months on the
last day of the third month of such six (6) month period, as if such six
(6) month period was actually two three (3) month periods. No LIBOR
Interest Period with respect to the Term Loan or the Equipment Loan may end
after the applicable maturity due date for such Loan. Subject to all of
the terms and conditions applicable to a request to convert all or a
portion of the Term Loan or an Equipment Loan to a Term LIBOR Rate Loan,
Borrowers may extend a Term LIBOR Rate Loan as of the last day of the LIBOR
Interest Period to a new Term LIBOR Rate Loan. If MasTec, on behalf of the
Borrowers fails to notify Lender of the LIBOR Interest Period for a
subsequent Term LIBOR Rate Loan at least three (3) Business Days prior to
the last day of the then current LIBOR Interest Period of an outstanding
Term LIBOR Rate Loan, then such outstanding Term LIBOR Rate Loan shall, at
the end of the applicable LIBOR Interest Period accrue interest at the Base
Rate or at such other rate designated by MasTec, on behalf of the Borrowers
in accordance with the terms of this Agreement.
(C) Unavailability. If MasTec, on behalf of the
Borrowers shall have requested the rate based on the Adjusted LIBOR Rate in
accordance with Section 2.1.2(a)(i) and Lender shall have determined that
Eurodollar deposits equal to the amount of the principal of the requested
Term LIBOR Rate Loan and for the LIBOR Interest Period specified are
unavailable, or that by reason of circumstances affecting Eurodollar
markets, adequate means do not exist for ascertaining the rate based on the
Adjusted LIBOR Rate applicable to the specified LIBOR Interest Period,
Lender shall promptly give notice of such determination to MasTec, on
behalf of the Borrowers that the rate based on the Adjusted LIBOR Rate is
not available. A good faith determination by Lender hereunder based on
Lender's best efforts shall be prima facie evidence of the correctness of
the fact and amount of such additional costs or unavailability. Upon such
a determination, (i) the obligation to convert to, or maintain a Term LIBOR
Rate Loan at the rate based on the Adjusted LIBOR Rate shall be suspended
until Lender shall have notified MasTec, on behalf of the Borrowers that
such conditions shall have ceased to exist, and (ii) unless another
interest rate option is designated in accordance with the terms of this
Agreement, the portion of the Term Loan and/or the Equipment Loan subject
to the request or requested conversion shall accrue interest at the Base
Rate.
2.1.3 Supplemental Term Loan Interest. Interest shall accrue
on the Supplemental Term Loan at a per annum rate equal to 7.7% and be paid
monthly on the fifth day of each calendar month.
2.2 Default Rate of Interest. Upon and after the occurrence of
an Event of Default, and during the continuation thereof, the principal
amount of all Loans shall bear interest at a rate per annum equal to 2%
above the interest rate otherwise applicable thereto (the "Default Rate")
and, upon the expiration of each then current Libor Interest Period(s),
each LIBOR Rate Loan shall convert to a Base Rate Loan, subject to the
Default Rate, if applicable.
2.3 Maximum Interest. In no event whatsoever shall the aggregate of
all amounts deemed interest hereunder or under the Notes and charged or
collected pursuant to the terms of this Agreement or pursuant to the Notes
exceed the highest rate permissible under any law which a court of
competent jurisdiction shall, in a final determination, deem applicable
hereto. If any provisions of this Agreement or the Notes are in
contravention of any such law, the rate hereunder shall automatically be
reduced to the maximum rate permitted by applicable law, and Lender shall,
in its discretion, apply such excess to the principal balance of the Loans
or other outstanding obligations of Borrowers or refund such excess to
Borrowers, and such provisions shall be deemed amended to conform thereto.
2.4 Computation of Interest and Fees. Interest, Letter of Credit
fees, and unused line fees and collection charges hereunder shall be
calculated daily and shall be computed on the actual number of days elapsed
over a year of 360 days. For the purpose of computing interest hereunder,
all items of payment received by Lender shall be deemed applied by Lender
on account of the Obligations (subject to final payment of such items) upon
receipt by Lender of good funds.
2.5 Commitment Fee. On the Closing Date, Borrower shall pay to
Lender in immediately available funds $81,250 representing one-half of the
$162,500 commitment fee, all of which is fully earned and nonrefundable on
the Closing Date. Borrowers shall also pay to Lender on the earlier of (i)
the first anniversary of the Closing Date or (ii) termination of the Credit
Facility, $81,250 representing the balance of the $162,500 commitment fee.
2.6 Letter of Credit Fees. Borrowers shall pay to Lender for Letters
of Credit a fee equal to one and one-half percent (1-1/2%) per annum of the
aggregate face amount of such Letters of Credit outstanding from time to
time during the term of this Agreement, plus all normal and customary
charges associated with the issuance thereof, which fees and charges shall
be deemed fully earned upon issuance of each such Letter of Credit, shall
be due and payable in arrears, on the first Business Day of each month and
shall not be subject to rebate or proration upon the termination of this
Agreement for any reason.
2.7 Unused Line Fee. Borrowers shall pay to Lender a fee equal to
one quarter of one percent (1/4%) per annum of the average monthly amount
by which the Total Credit Facility exceeds the aggregate outstanding amount
of all Loans and the LC Amount, provided however that for purposes of this
calculation, the Total Credit Facility shall be deemed to be reduced by
$6,000,000 for the first year of the Original Term. The unused line fee
shall be payable monthly in arrears on the first day of each calendar month
hereafter.
2.8 [INTENTIONALLY OMITTED.]
2.9 Audit and Appraisal Fees. Borrowers shall pay to Lender audit
and appraisal fees in accordance with Lender's current schedule of fees in
effect from time to time in connection with audits and appraisals of
Borrowers' books and records and such other matters as Lender shall deem
appropriate, plus all out-of-pocket expenses incurred by Lender in
connection with such audits and appraisals; provided that, so long as no
Event of Default has occurred, all such audit and appraisal fees incurred
during any calendar year shall not exceed $5,000. Subject to the
immediately preceding proviso, audit and appraisal fees shall be payable on
the first day of the month following the date of issuance by Lender of a
request for payment thereof to Borrowers.
2.10 Reimbursement of Expenses. If, at any time or times regardless
of whether or not an Event of Default then exists, Lender incurs legal or
accounting expenses or any other out-of-pocket costs or expenses in
connection with (i) the negotiation and preparation of this Agreement or
any of the other Loan Documents; (ii) any amendment, modification, analysis
or termination of this Agreement or any of the other Loan Documents and the
transactions contemplated thereby; (iii) any litigation, contest, dispute,
suit, proceeding or action (whether instituted by Lender, Borrowers or any
other Person) in any way relating to the Collateral, this Agreement or any
of the other Loan Documents or any Borrower's affairs; (iv) any attempt to
enforce any rights of Lender against Borrowers or any Borrower or any other
Person which may be obligated to Lender by virtue of this Agreement or any
of the other Loan Documents, including, without limitation, the Account
Debtors; or (v) any attempt to inspect, verify, protect, preserve, restore,
collect, sell, liquidate or otherwise dispose of or realize upon the
Collateral; then all such legal and accounting expenses, other out-of-
pocket costs and expenses of Lender shall be charged to Borrowers. All
amounts chargeable to Borrowers under this Section 2.10 shall be
Obligations secured by all of the Collateral, shall be payable on demand to
Lender and shall bear interest from the date such demand is made until paid
in full at the rate applicable to Revolving Credit Loans from time to time.
Borrowers shall also reimburse Lender for expenses incurred by Lender in
its administration of the Collateral to the extent and in the manner
provided in Section 6 hereof.
2.11 Bank Charges. Borrowers shall pay to Lender, on demand, any and
all fees, costs or expenses which Lender pays to a bank or other similar
institution arising out of or in connection with the establishment of a
lock box, dominion, cash collateral or similar type of account, including
(i) the forwarding to Borrowers or any other Person on behalf of Borrowers,
by Lender, of proceeds of Loans made by Lender to Borrowers pursuant to
this Agreement, by wire transfer or otherwise, and (ii) the depositing for
collection, by Lender, of any check or item of payment received or
delivered to Lender on account of the Obligations.
2.12 Indemnity re: LIBOR. Each Borrower hereby indemnifies Lender and
holds Lender harmless from and against any and all losses or expenses that
Lender may sustain or incur as a consequence of any prepayment or any
Default by the Borrowers in the payment of the principal of or interest on
any LIBOR Rate Loan or failure by the Borrowers to complete a borrowing of,
a prepayment of or conversion of or to a LIBOR Rate Loan after notice
thereof has been given, including (but not limited to) any interest payable
by Lender to lenders of funds obtained by it in order to make or maintain
its LIBOR Rate Loans hereunder, and any other loss or expense incurred by
Lender by reason of the liquidation or reemployment of deposits or other
funds acquired by Lender to make, continue, convert into or maintain, a
LIBOR Rate Loan.
SECTION 3. LOAN ADMINISTRATION
3.1 Manner of Borrowing Revolving Credit Loans. Borrowings under the
Credit Facility established pursuant to Section 1 hereof shall be as
follows:
3.1.1 Loan Requests. A request for a Revolving Credit Loan
shall be made, or shall be deemed to be made, in the following manner: (i)
Borrowers may give Lender notice of the intention to borrow, in which
notice Borrowers shall specify the amount of the proposed borrowing and the
proposed borrowing date (which shall be a Business Day), no later than
12:00 P.M. Eastern time on the proposed borrowing date, provided, however,
that no such request may be made at a time when there exists a Default or
an Event of Default; and (ii) the becoming due of any amount required to be
paid under this Agreement or the Term Note or Master Equipment Note,
whether as interest or for any other Obligation, shall be deemed
irrevocably to be a request for a Revolving Credit Loan on the due date in
the amount required to pay such interest or other Obligation. As an
accommodation to Borrowers, Lender may permit telephonic requests for Loans
and electronic transmittal of instructions, authorizations, agreements or
reports to Lender by Borrowers. Unless Borrowers specifically direct
Lender in writing not to accept or act upon telephonic or electronic
communications from Borrowers, Lender shall have no liability to Borrowers
for any loss or damage suffered by Borrowers as a result of Lender's
honoring of any requests, execution of any instructions, authorizations or
agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Lender by Borrowers and
Lender shall have no duty to verify the origin of any such communication or
the authority of the person sending it.
3.1.2 Disbursement. Borrowers hereby irrevocably authorize
Lender to disburse the proceeds of each Revolving Credit Loan requested, or
deemed to be requested, pursuant to this subsection 3.1.2 as follows: (i)
the proceeds of each Revolving Credit Loan requested under subsection
3.1.1(i) shall be disbursed by Lender in lawful money of the United States
of America in immediately available funds, in the case of the initial
borrowing, in accordance with the terms of the written disbursement letter
from Borrowers, and in the case of each subsequent borrowing, by wire
transfer to such bank account as may be agreed upon by Borrowers and Lender
from time to time or elsewhere if pursuant to a written direction from
Borrowers; and (ii) the proceeds of each Revolving Credit Loan requested
under subsection 3.1.1(ii) shall be disbursed by Lender by way of direct
payment of the relevant interest or other Obligation.
3.1.3 Authorization. Borrowers hereby irrevocably authorize
Lender, in Lender's sole discretion to advance to Borrowers, and to charge
to Borrowers' Loan Account hereunder as a Revolving Credit Loan, a sum
sufficient to pay Borrowers' Obligations as and when such Obligations are
due and payable, provided however that so long as no Event of Default has
occurred and Borrowers have continued to authorize direct payment of such
Obligations through an appropriate ACH account, Lender will not charge
Borrowers' Loan Account until 5 days after the date each such Obligation is
due and payable.
3.1.4 Borrowing Base Certificates. Borrowers shall deliver
to Lender the Borrowing Base Certificates on a monthly basis, no later than
the tenth (10th) Business Day after the end of each fiscal monthly period;
provided however that Lender reserves the right to request delivery of such
Borrowing Base Certificates on a more frequent basis subject to Borrowers'
ability to produce such Borrowing Base Certificates in a more timely
manner.
3.2 Payments. Except where evidenced by notes or other instruments
issued or made by Borrowers to Lender specifically containing payment
provisions which are in conflict with this Section 3.2 (in which event the
conflicting provisions of said notes or other instruments shall govern and
control), the Obligations shall be payable as follows:
3.2.1 Principal. Principal payable on account of Revolving
Credit Loans shall be payable by Borrowers to Lender immediately upon the
earliest of (i) the receipt by Lender or Borrowers of any proceeds of any
of the Collateral other than Equipment, (ii) the occurrence of an Event of
Default in consequence of which Lender elects to accelerate the maturity
and payment of the Obligations, or (iii) termination of this Agreement
pursuant to Section 4 hereof.
3.2.2 Interest. Except as provided in subsections
2.1.1(a)(i)(B) and 2.1.2.(a)(i)(B), interest accrued on the Loans shall be
due on the earliest of (i) the first calendar day of each month (for the
immediately preceding month), computed through the last calendar day of the
preceding month, (ii) the occurrence of an Event of Default in consequence
of which Lender elects to accelerate the maturity and payment of the
Obligations or (iii) termination of this Agreement pursuant to Section 4
hereof.
3.2.3 Costs, Fees and Charges. Costs, fees and charges
payable pursuant to this Agreement shall be payable by Borrowers as and
when provided in Section 2 hereof, to Lender or to any other Person
designated by Lender in writing.
3.2.4 Other Obligations. The balance of the Obligations
requiring the payment of money shall be payable by Borrowers to Lender as
and when provided in this Agreement, the Notes, the Other Agreements or the
Security Documents, or on demand, whichever is earlier.
3.3 Mandatory and Permissive Prepayments.
3.3.1 Proceeds of Sale, Loss, Destruction or condemnation of
Collateral. If any Borrower sells any of the Equipment, or if any of the
Collateral is lost or destroyed or taken by condemnation, Borrowers shall
pay to Lender, unless otherwise agreed by Lender, as and when received by
Borrowers and as a mandatory prepayment of either the Term Loan or the
Equipment Loan (or the Supplemental Term Loan if the Term Loan and Equipment
Loan have been repaid in full), as determined by Lender, a sum equal to the
proceeds (including insurance payments) received by Borrowers from such sale,
loss, destruction or condemnation; provided that so long as no Event of
Default shall have occurred, the proceeds received pursuant to this section
shall first be applied to those portions of the Term Loan and Equipment Loan
bearing interest at the Base Rate in the inverse order of maturity, and then
to the portion of the Loans subject to the Term LIBOR Rate, provided however,
that to the extent there are no portions of the Term Loan or Equipment Loan
bearing interest at the Base Rate and no Event of Default shall have
occurred, Borrowers may elect, if there is sufficient Aggregate Adjusted
Availability, to retain such proceeds, in which case Lender shall establish
a reserve against the Borrowing Base(s) in the amount of such proceeds. At
such time as the LIBOR Interest Period(s) relating to Term LIBOR Rate Loans
in the aggregate amount at least equal to the amount of such proceeds ends,
the amount of such proceeds shall be paid to Lender and applied to reduce
such portion of the Term Loan or Equipment Loan (or the Supplemental Term
Loan, if applicable) in the inverse order of maturity as Lender may
determine in which case the foregoing reserve shall be eliminated.
3.3.2 LIBOR Rate Loans. No portion of the LIBOR Rate Loans
may be prepaid during a LIBOR Interest Period (other than regularly
scheduled amortization payments under the Term Loan or the Equipment Loan
or mandatory prepayments thereof as provided in subsection 3.3.1) unless
the Borrowers first satisfy in full their obligations under Section 2.12
above arising from such prepayment.
3.3.3 Prepayment. Except as otherwise provided herein, the
Loans may be prepaid in whole or in part at any time without penalty or
premium, provided that any partial prepayments of term indebtedness shall
be applied in the inverse order of maturity.
3.4 Application of Payments and Collections. Subject to
subsection 2.2 of this Agreement, all items of payment received by Lender
by 2:00 p.m., Eastern time, on any Business Day shall be deemed received on
that Business Day. All items of payment received after 2:00 p.m., Eastern
time, on any Business Day shall be deemed received on the following
Business Day. Borrowers irrevocably waive the right to direct the
application of any and all payments and collections at any time or times
hereafter received by Lender from or on behalf of Borrowers, and Borrowers
do hereby irrevocably agree that Lender shall have the continuing exclusive
right to apply and reapply any and all such payments and collections
received at any time or times hereafter by Lender or its agent against the
Obligations, in such manner as Lender may deem advisable, notwithstanding
any entry by Lender upon any of its books and records. If, as the result
of collections of Accounts as authorized by subsection 6.2.6 hereof, a
credit balance exists in the Loan Account, such credit balance shall not
accrue interest in favor of Borrowers, but shall be available to Borrowers
at any time or times for so long as no Default or Event of Default exists,
provided however, that interest shall accrue at the Base Rate if and to the
extent the credit balance at any time exceeds the outstanding Obligations.
Such credit balance shall not be applied or be deemed to have been applied
as a prepayment of the Term Loan, Supplemental Term Loan or the Equipment
Loan, except that Lender may, at its option, offset such credit balance
against any of the Obligations upon and after the occurrence of an Event of
Default.
3.5 All Loans to Constitute One Obligation. The Loans shall
constitute one general Obligation of Borrowers, jointly and severally, and
shall be secured by Lender's Lien upon all of the Collateral.
3.6 Loan Account. Lender shall enter all Loans as debits to the Loan
Account and shall also record in the Loan Account all payments made by
Borrowers on any Obligations and all proceeds of Collateral which are
finally paid to Lender, and may record therein, in accordance with
customary accounting practice, other debits and credits, including interest
and all charges and expenses properly chargeable to Borrowers.
3.7 Statements of Account. Lender will account to Borrowers monthly
with a statement of Loans, charges and payments made pursuant to this
Agreement, and such account rendered by Lender shall be deemed final,
binding and conclusive upon Borrowers unless Lender is notified by
Borrowers in writing to the contrary. Such notice shall only be deemed an
objection to those items specifically objected to therein.
3.8 Joint and Several Liability.
3.8.1. Joint and Several Liability - MasTec and, subject only
to the terms of Subsection 3.8.3 hereof, the other Borrowers, shall be
jointly and severally liable for all Obligations regardless of, inter alia,
which Borrower(s) requested (or received the proceeds of) a particular
Loan.
3.8.2 Authorization of MasTec by Other Borrowers - Each of
the other Borrowers hereby irrevocably authorizes MasTec to give notices,
make requests, make payments, receive payments and notices, give receipts
and otherwise take action on behalf of such Borrower under and with respect
to any Loan Document, including, without limitation, with regard to
provisions herein referring to notices or requests being given by or to
"MasTec, on behalf of the Borrowers" and similar provisions.
3.8.3 Maximum Amount of Joint and Several Liability - Without
limiting the effect of Section 11.14 hereof, to the extent that mandatory
and non-waivable provisions of applicable law (including but not limited to
any applicable laws pertaining to fraudulent conveyance and any applicable
business corporation laws) otherwise would render the other Loan Documents
invalid or unenforceable, such Borrower's obligations hereunder and under
the other Loan Documents shall be limited to the maximum amount which does
not result in such invalidity or unenforceability.
SECTION 4. TERM AND TERMINATION
4.1 Term of Agreement. Subject to Lender's right to cease
making Loans to Borrowers upon or after the occurrence of any Default or
Event of Default, this Agreement shall be in effect for a period of five
(5) years from the date hereof, through and including January 26, 2000 (the
"Original Term"), and this Agreement shall automatically renew itself for
one-year periods thereafter (the "Renewal Terms"), unless terminated as
provided in Section 4.2 hereof.
4.2 Termination.
4.2.1 Termination by Lender. Lender may upon 180 days prior
notice, terminate this Agreement as of the last day of the Original Term or
the then current Renewal Term. In addition, Lender may terminate this
Agreement without notice upon or at any time after the occurrence of an
Event of Default.
4.2.2 Termination by Borrowers. Upon at least 90 days prior
written notice to Lender, Borrowers may, at their option, terminate this
Agreement; provided, however, no such termination shall be effective until
Borrowers have paid all of the Obligations, including without limitation,
the Termination Charges set forth in Section 4.2.3 below, in immediately
available funds and all Letters of Credit have expired or have been cash
collateralized to Lender's satisfaction. Any notice of termination given
by Borrowers shall be irrevocable unless Lender otherwise agrees in
writing, and Lender shall have no obligation to make any Loans or issue or
procure any Letters of Credit on or after the termination date stated in
such notice. Borrowers may elect to terminate this Agreement in its
entirety only. No section of this Agreement or type of Loan available
hereunder may be terminated singly.
4.2.3 Termination Charges. At the effective date of
termination of this Agreement for any reason during the second and third
years of the Original Term, Borrowers shall pay to Lender (in addition to
the then outstanding principal, accrued interest and other charges owing
under the terms of this Agreement and any of the other Loan Documents) as
liquidated damages for the loss of the bargain and not as a penalty, an
amount equal to the product of (a) the prior 12 months average aggregate
outstanding principal balance of the Loans plus the average outstanding
face amount of issued and outstanding Letters of Credit times (b) 1% if
termination occurs during the second 12-month period of the Original Term;
and .5% if termination occurs during the third 12 month period of the
Original Term.
4.2.4 Effect of Termination. All of the Obligations shall be
immediately due and payable upon the termination date stated in any notice
of termination of this Agreement. All undertakings, agreements, covenants,
warranties and representations of Borrowers contained in the Loan Documents
shall survive any such termination and Lender shall retain its Liens in the
Collateral and all of its rights and remedies under the Loan Documents
notwithstanding such termination until Borrowers have paid the Obligations
to Lender, in full, in immediately available funds, including without
limitation any applicable termination charge, if any and cash
collateralization of all Letters of Credit. Notwithstanding the purported
payment in full of the Obligations, in the event that any Obligations,
contingent or otherwise, remain outstanding or unsatisfied, such as
potential loss or damage as a result of dishonored checks or other items of
payment received by Lender from Borrowers or any Account Debtor and applied
to the Obligations, Lender shall not be required to terminate its security
interest in the Collateral for a period of 91 days from the date of such
payment, unless, at its option, (i) it shall have received a written
agreement, executed by Borrowers and by any Person whose loans or other
advances to Borrowers are used in whole or in part to satisfy the
Obligations, indemnifying Lender from any such loss or damage; or (ii) it
shall have retained such monetary reserves and Liens on the Collateral for
such period of time as Lender, in its reasonable discretion, may deem
necessary to protect Lender from any such loss or damage.
SECTION 5. SECURITY INTERESTS
5.1 Security Interest in Collateral. To secure the prompt payment
and performance to Lender of the Obligations, each Borrower and Surety
hereby grants to Lender a continuing first Lien upon all of such Borrower's
or Surety's assets, including all of the following Property and interests
in Property of such Borrower and/or Surety, whether now owned or existing
or hereafter created, acquired or arising and wheresoever located:
(1) Accounts;
(2) Inventory (except that owned by any member of the
Telecommunication Group);
(3) Equipment (excluding such Equipment specifically
listed on Exhibit 8.2.5 hereto);
(4) General Intangibles;
(v) Fixtures;
(vi) Deposit Accounts;
(vii) All monies and other Property of any kind now
or at any time or times hereafter in the possession or under the
control of Lender or a bailee or Affiliate of Lender;
(viii) All books and records (including, without
limitation, customer lists, credit files, computer programs,
print-outs, and other computer materials and records) of such Borrower
or Surety pertaining to any of (i) through (vii) above; and
(ix) All accessions to, substitutions for and all
replacements, products and cash and non-cash proceeds of all of the
foregoing above, including, without limitation, proceeds of and
unearned premiums with respect to, insurance policies insuring any of
the Collateral.
5.2 Lien Perfection; Further Assurances. At Lender's request, each
Borrower and Surety shall execute such UCC-1 financing statements as are
required by the Code and such other instruments, assignments or documents
as are necessary to perfect Lender's Lien upon any of the Collateral and
shall take such other action as may be required to perfect or to continue
the perfection of Lender's Lien upon the Collateral, including without
limitation immediate delivery of all items for which Lender must receive
possession to obtain a perfected security interest (including without
limitation, all instruments, certificates of title, documents of title and
chattel paper) and delivery of all documentation, fully executed or coupled
with necessary powers of attorney, sufficient to have Lender's first lien
noted on the certificates of title, if any, corresponding to Equipment
comprising a portion of the Collateral. Unless prohibited by applicable
law, each Borrower and Surety hereby authorizes Lender to execute and file
any such financing statement on such Borrower's behalf. The parties agree
that a carbon, photographic or other reproduction of this Agreement or any
financing statement shall be sufficient as a financing statement and may be
filed in any appropriate office in lieu thereof. At Lender's request, each
Borrower and Surety shall also promptly execute or cause to be executed and
shall deliver to Lender any and all documents, instruments and agreements
deemed necessary by Lender to give effect to or carry out the terms or
intent of the Loan Documents.
SECTION 6. COLLATERAL ADMINISTRATION
6.1 General
6.1.1 Location of Collateral. All Collateral, other than
vehicles or Equipment in transit, will at all times be kept by Borrowers or
Sureties at one or more of the business locations set forth in Exhibit
6.1.1 hereto and shall not, without the prior written approval of Lender,
be moved therefrom except, prior to an Event of Default and Lender's
acceleration of the maturity of the Obligations in consequence thereof, for
(i) removals in connection with dispositions of Equipment that are
authorized by subsection 8.2.9 hereof and (ii) removals in the ordinary
course of business; provided that Borrowers deliver to Lender no later than
the tenth (10th) Business Day following the end of each fiscal quarterly
period an updated list of Collateral locations for each item of Collateral
that has changed locations during the immediately prior quarter; and
provided further that in the event any item of Collateral is moved to a
jurisdiction in which Lender has not filed UCC-1 financing statements
naming the owner of such item as Debtor, Borrowers will so notify Lender on
the first day of the month immediately following such move and execute such
UCC-1 financing statements as are necessary to maintain Lender's perfected
security interest in the Collateral.
6.1.2 Insurance of Collateral. Borrowers and Sureties shall
maintain and pay for insurance upon all Collateral wherever located and
with respect to Borrowers' business, covering casualty, hazard, public
liability, flood (if required) and such other risks in such amounts and
with such insurance companies as are reasonably satisfactory to Lender.
Borrowers shall deliver the original certificate of insurance and certified
copies of Borrowers' insurance policies to Lender with satisfactory
Lender's Loss Payable endorsements, naming Lender as Lender Loss Payee,
assignee, mortgagee or additional insured, as appropriate. Each policy of
insurance or endorsement shall contain a clause requiring the insurer to
give not less than 30 days prior written notice to Lender in the event of
cancellation of the policy for any reason whatsoever and a clause
specifying that the interest of Lender shall not be impaired or invalidated
by any act or neglect of any Borrower or the owner of the Property or by
the occupation of the premises for purposes more hazardous than are
permitted by said policy. If Borrowers fail to provide and pay for such
insurance, Lender may, at its option, but shall not be required to, procure
the same and charge Borrowers therefor. Borrowers agree to deliver to
Lender, promptly as rendered, true copies of all reports made in any
reporting forms to insurance companies with respect to matters materially
affecting or concerning the Collateral.
6.1.3 Protection of Collateral. All expenses of protecting,
storing, warehousing, insuring, handling, maintaining and shipping the
Collateral, any and all excise, property, sales, and use taxes imposed by
any state, federal, or local authority on any of the Collateral or in
respect of the sale thereof shall be borne and paid by Borrowers. If
Borrowers fail to promptly pay any portion thereof when due, Lender may, at
its option, but shall not be required to, pay the same and charge Borrowers
therefor. Lender shall not be liable or responsible in any way for the
safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is
in Lender's actual possession) or for any diminution in the value thereof,
or for any act or default of any warehouseman, mechanic, carrier,
forwarding agency, or other person whomsoever, but the same shall be at
Borrowers' sole risk.
6.2 Administration of Accounts.
6.2.1 Records, Schedules and Assignments of Accounts.
Borrowers shall keep accurate and complete records of its Accounts and all
payments and collections thereon and shall submit to Lender on such
periodic basis as Lender shall request a sales and collections report for
the preceding period, in form satisfactory to Lender. On or before the
twentieth day of each fiscal monthly period from and after the date hereof,
Borrowers shall deliver to Lender, in form acceptable to Lender, a detailed
aged trial balance of all Accounts existing as of the last day of the
preceding fiscal month ("Schedule of Accounts"), and, upon Lender's request
therefor, evidence that services have been provided and the original copy
of all documents, including, without limitation, repayment histories and
present status reports relating to the Accounts so scheduled and such other
matters and information relating to the status of then existing Accounts as
Lender shall reasonably request. In addition, if Accounts in an aggregate
face amount in excess of $250,000.00 become ineligible because they fall
within one of the specified categories of ineligibility set forth in the
definition of Eligible Accounts or otherwise established by Lender,
Borrowers shall notify Lender of such occurrence on the first Business Day
following such occurrence and the Borrowing Bases shall thereupon be
adjusted to reflect such occurrence. If requested by Lender, Borrowers
shall execute and deliver to Lender formal written assignments of all of
its Accounts weekly or daily, which shall include all Accounts that have
been created since the date of the last assignment, together with copies of
invoices or invoice registers related thereto.
6.2.2 Discounts, Allowances, Disputes. If Borrowers grant
any discounts, allowances or credits that are not shown on the face of the
invoice for the Account involved, Borrowers shall report such discounts,
allowances or credits, as the case may be, to Lender as part of the next
required Schedule of Accounts. If any amounts due and owing in excess of
$50,000.00 are in dispute between any Borrower and any Account Debtor,
Borrowers shall provide Lender with written notice thereof at the time of
submission of the next Schedule of Accounts, explaining in detail the
reason for the dispute, all claims related thereto and the amount in
controversy. Upon and after the occurrence of an Event of Default, Lender
shall have the right to settle or adjust all disputes and claims directly
with the Account Debtor and to compromise the amount or extend the time for
payment of the Accounts upon such terms and conditions as Lender may deem
advisable, and to charge the deficiencies, costs and expenses thereof,
including attorney's fees, to Borrowers.
6.2.3 Taxes. If an Account includes a charge for any tax
payable to any governmental taxing authority, Lender is authorized (without
any obligation or duty on Lender's part), in its sole discretion, following
the fifteenth (15th) day after notice from Lender to Borrowers that such
tax is payable, to pay the amount thereof to the proper taxing authority
for the account of Borrowers and to charge Borrowers therefor, provided,
however that Lender shall not be liable for any taxes to any governmental
taxing authority that may be due by Borrowers.
6.2.4 Account Verification. Following the occurrence of an
Event of Default, any of Lender's officers, employees or agents shall have
the right, at any time or times hereafter, in the name of Lender, any
designee of Lender or Borrowers, to verify the validity, amount or any
other matter relating to any Accounts by mail, telephone, telegraph or
otherwise. Borrowers shall cooperate fully with Lender in an effort to
facilitate and promptly conclude any such verification process.
6.2.5 Maintenance of Dominion Account. Following (i) the
occurrence of an Event of Default or (ii) the Aggregate Adjusted
Availability under the Borrowing Bases dropping to an amount less than
$2,000,000, and if requested by Lender, Borrowers shall procure, maintain
and pay for a Dominion Account pursuant to a lockbox arrangement, with a
bank(s), acceptable to Lender. Borrowers shall issue to any such banks an
irrevocable letter of instruction directing such banks to deposit all
payments or other remittances received in the lockbox to the Dominion
Account for application on account of the Obligations. All funds deposited
in the Dominion Account shall immediately become the property of Lender and
Borrowers shall obtain the agreement by such banks in favor of Lender to
waive any offset rights against the funds so deposited. Lender assumes no
responsibility for such lockbox arrangement, including, without limitation,
any claim of accord and satisfaction or release with respect to deposits
accepted by any bank thereunder.
6.2.6 Collection of Accounts, Proceeds of
Collateral. To expedite collection, Borrowers shall endeavor in the first
instance to make collection of its Accounts for Lender. All remittances
received by Borrowers on account of Accounts, together with the proceeds of
any other Collateral, shall be held as Lender's property by Borrowers as
trustee of an express trust for Lender's benefit. Lender retains the right
at all times after the occurrence of a Default or an Event of Default to
notify Account Debtors that Accounts have been assigned to Lender and to
collect Accounts directly in its own name and to charge the collection
costs and expenses, including attorneys' fees to Borrowers. Lender has no
duty to protect, insure, collect or realize upon the Accounts or preserve
rights therein.
6.3 Administration of Inventory.
6.3.1 Records and Reports of Inventory. Southeastern
Printing and Lectro shall keep accurate and complete records of their
Inventory. They shall furnish to Lender Inventory reports with respect to
Inventory included in the Borrowing Bases, in form and detail satisfactory
to Lender at such times as Lender may request, but at least once each
month, not later than the twentieth day of such fiscal monthly period.
Southeastern Printing and Lectro shall conduct a physical inventory no less
frequently than annually and shall provide to Lender a report based on each
such physical inventory promptly thereafter, together with such supporting
information as Lender shall request.
6.3.2 Returns of Inventory. If at any time or times
hereafter, any Account Debtor returns any Inventory to Southeastern
Printing or Lectro, the shipment of which generated an Account on which
such Account Debtor is obligated in excess of $250,000, such party shall
immediately notify Lender of the same, specifying the reason for such
return and the location, condition and intended disposition of the returned
Inventory.
6.4 Administration of Equipment.
6.4.1 Records and Schedules of Equipment. Each Borrower
shall keep accurate records itemizing and describing the kind, type,
quality, quantity and value of its Equipment and all dispositions made in
accordance with the terms of this Agreement, and shall furnish Lender with
a current schedule containing the foregoing information on at least an
annual basis and more often if requested by Lender. Borrowers shall
deliver to Lender any and all evidence of ownership of the Equipment.
6.4.2 [INTENTIONALLY OMITTED].
6.5 Payment of Charges. All amounts chargeable to Borrowers under
Section 6 hereof shall be Obligations secured by all of the Collateral,
shall be payable on demand and shall bear interest from the date such
advance was made until paid in full at the rate applicable to Revolving
Credit Loans from time to time.
SECTION 7. REPRESENTATIONS AND WARRANTIES
7.1 General Representations and Warranties. To induce Lender to
enter into this Agreement and to make advances hereunder, each Borrower and
Surety, jointly and severally warrants, represents and covenants to Lender
that:
7.1.1. Organization and Qualification. Each Borrower and
Surety is a corporation duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation. Each
Borrower and Surety is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each state or jurisdiction
listed on Exhibit 7.1.1 hereto and in all other states and jurisdictions
where the character of its Properties or the nature of its activities make
such qualification necessary or in which the failure of such Borrower or
Surety to be so qualified would have a material adverse effect on the
financial condition, business or Properties of such Borrower or Surety.
7.1.2 Corporate Power and Authority. Each Borrower and
Surety and its Subsidiaries is duly authorized and empowered to enter into,
execute, deliver and perform this Agreement and each of the other Loan
Documents to which it is a party. The execution, delivery and performance
of this Agreement and each of the other Loan Documents have been duly
authorized by all necessary corporate action and do not and will not (i)
require any consent or approval of the shareholders of such Borrower or
Surety or any of its Subsidiaries; (ii) contravene such Borrower's or
Surety's or any of its Subsidiaries' charter, articles or certificate of
incorporation or by-laws; (iii) violate, or cause such Borrower or Surety
or any of its Subsidiaries to be in default under, any provision of any
law, rule, regulation, order, writ, judgment, injunction, decree,
determination or award in effect having applicability to such Borrower or
Surety or any of its Subsidiaries; (iv) result in a breach of or constitute
a default under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which such Borrower or Surety or any of
its Subsidiaries is a party or by which it or its Properties may be bound
or affected; or (v) result in, or require, the creation or imposition of
any Lien upon or with respect to any of the Properties now owned or
hereafter acquired by such Borrower or Surety or any of its Subsidiaries.
7.1.3 Legally Enforceable Agreement. This Agreement is, and
each of the other Loan Documents when delivered under this Agreement will
be, a legal, valid and binding obligation of each Borrower and Surety
enforceable against it in accordance with its respective terms.
7.1.4 Capital Structure. Exhibit 7.1.4 hereto states (i) the
correct name of each of the Subsidiaries of any Borrower, its jurisdiction
of incorporation and the percentage of its Voting Stock owned by such
Borrower, (ii) the name of each Borrower's corporate or joint venture
Affiliates and the nature of the affiliation, (iii) the number, nature and
holder of all outstanding Securities of each Borrower and each Subsidiary
of each Borrower and (iv) the number of authorized, issued and treasury
shares of each Borrower and each Subsidiary of each Borrower. Each
Borrower has good title to all of the shares it purports to own of the
stock of each of its Subsidiaries, free and clear in each case of any Lien
other than Permitted Liens. All such shares have been duly issued and are
fully paid and non-assessable. There are no outstanding options to
purchase, or any rights or warrants to subscribe for, or any commitments or
agreements to issue or sell, or any Securities or obligations convertible
into, or any powers of attorney relating to, shares of the capital stock of
any Borrower or any of its Subsidiaries. There are no outstanding
agreements or instruments binding upon any shareholder of MasTec or any
Borrower's relating to the ownership of its shares of capital stock except
as set forth on Exhibit 7.1.4.
7.1.5 Corporate Names. Neither any Borrower nor any of its
Subsidiaries has been known as or used any corporate, fictitious or trade
names except those listed on Exhibit 7.1.5 hereto. Except as set forth on
Exhibit 7.1.5, neither any Borrower nor any of its Subsidiaries has been
the surviving corporation of a merger or consolidation or acquired all or
substantially all of the assets of any Person.
7.1.6 Business Locations; Agent for Process. Each Borrower's
and Surety's chief executive office and other places of business are as
listed on Exhibit 6.1.1 hereto. During the preceding one-year period, no
Borrower nor Surety has had an office, place of business or agent for
service of process other than as listed on Exhibit 6.1.1. Except as shown
on Exhibit 6.1.1, no Equipment or Inventory is stored with a bailee,
warehouseman or similar party, nor is any Inventory consigned to any
Person.
7.1.7 Title to Properties; Priority of Liens. Each Borrower
and Surety has good, indefeasible and marketable title to and fee simple
ownership of, or valid and subsisting leasehold interests in, all of its
real Property and good title to all of the Collateral and all of its other
Property, in each case, free and clear of all Liens except Permitted Liens.
Each Borrower has either paid or discharged all lawful claims which, if
unpaid, might become a Lien against any Properties of any Borrower or
Surety that is not a Permitted Lien. The Liens granted to Lender under
Section 5 hereof are first priority Liens, subject only to Permitted Liens.
7.1.8 Accounts. Lender may rely, in determining, from time
to time, which Accounts are Eligible Accounts, on all statements and
representations made by Borrowers with respect to any Account or Accounts.
Unless otherwise indicated in writing to Lender, with respect to each
Account which at any time is submitted to Lender as being an Eligible
Account:
(i) It is genuine and in all respects what it
purports to be, and it is not evidenced by a judgment;
(ii) It arises out of a completed, bona fide sale
and delivery of goods or rendition of services by a Borrower in the
ordinary course of its business and in accordance with the terms and
conditions of all purchase orders, contracts or other documents
relating thereto and forming a part of the contract between that
Borrower and the Account Debtor;
(iii) It is for a liquidated amount maturing as
stated in the duplicate invoice covering such sale or rendition of
services, a copy of which has been furnished or is available to
Lender;
(iv) Such Account, and Lender's security interest
therein, is not, and will not (by voluntary act or omission of any
Borrower) be in the future, subject to any offset, Lien, deduction,
defense, dispute, counterclaim or any other adverse condition except
for disputes resulting in returned goods, where the amount in
controversy is deemed by Lender to be immaterial, and each such
Account is absolutely owing to that Borrower and is not contingent in
any respect or for any reason;
(v) No Borrower has made any agreement with any
Account Debtor thereunder for any extension, compromise, settlement or
modification of any such Account or any deduction therefrom, except
discounts or allowances which are granted by such Borrower in the
ordinary course of its business for prompt payment and which are
reflected in the calculation of the net amount of each respective
invoice related thereto and are reflected in the Schedules of Accounts
submitted to Lender pursuant to subsection 6.2.1 hereof;
(vi) There are no facts, events or occurrences
which in any way impair the validity or enforceability of any Accounts
or tend to reduce the amount payable thereunder from the face amount
of the invoice and statements delivered to Lender with respect
thereto;
(vii) To the best of each Borrower's knowledge, the
Account Debtor thereunder (1) had the capacity to contract at the time
any contract or other document giving rise to the Account was executed
and (2) such Account Debtor is Solvent; and
(viii) To the best of Borrower's knowledge, there
are no proceedings or actions which are threatened or pending against
any Account Debtor thereunder which might result in any material
adverse change in such Account Debtor's financial condition or the
collectibility of such Account.
7.1.9 Equipment. The Equipment is in good operating
condition and repair, and all necessary replacements of and repairs thereto
shall be made so that the value and operating efficiency of the Equipment
shall be maintained and preserved, reasonable wear and tear excepted and
subject to market fluctuations. No Borrower will permit any of the
Equipment to become affixed to any real Property leased to such Borrower so
that an interest arises therein under the real estate laws of the
applicable jurisdiction unless the landlord of such real Property has
executed a landlord waiver or leasehold mortgage in favor of and in form
acceptable to Lender, and no Borrower will permit any of the Equipment to
become an accession to any personal Property other than Equipment that is
subject to first priority Liens in favor of Lender.
7.1.10 Financial Statements; Fiscal Year. The Consolidated
and Consolidating balance sheets of Borrowers and such other Persons
described therein (including the accounts of all Subsidiaries of a Borrower
for the respective periods during which a Subsidiary relationship existed)
as of September 30, 1994, and the related statements of income and changes
in stockholder's equity and consolidated statements of cash flow for the
periods ended on such dates, have been prepared in accordance with GAAP,
and present fairly the financial positions of each Borrower at such dates
and the results of such Borrower's operations for such periods. Since
September 30, 1994, there has been no material change in the condition,
financial or otherwise, of any Borrower and no change in the aggregate
value of Equipment owned by any Borrower, except changes in the ordinary
course of business, none of which individually or in the aggregate has been
materially adverse. The fiscal year of each Borrower and each of its
Subsidiaries ends on December 31 of each year.
7.1.11 Full Disclosure. The financial statements referred to
in subsection 7.1.10 hereof do not, nor does this Agreement or any other
written statement of any Borrower to Lender, contain any untrue statement
of a material fact or omit a material fact necessary to make the statements
contained therein or herein not misleading. There is no fact which any
Borrower has failed to disclose to Lender which otherwise is required to be
disclosed in a publicly filed document, including those documents filed
with the Securities and Exchange Commission, which materially affects
adversely or, so far as such Borrower can reasonably foresee, will
materially affect adversely the Properties, business, prospects, profits or
condition (financial or otherwise) of Borrowers collectively, or the
ability of Borrowers to perform this Agreement or the other Loan Documents.
7.1.12 Solvent Financial Condition. Each Borrower and its
Subsidiaries is now and, after giving effect to the Loans to be made and
the Letters of Credit to be issued hereunder, at all times will be,
Solvent.
7.1.13 Surety Obligations. Neither any Borrower nor any of
its Subsidiaries is obligated as surety or indemnitor under any surety or
similar bond or other contract issued or entered into or any agreement to
assure payment, performance or completion of performance of any undertaking
or obligation of any Person, except for indemnity of issuers of performance
bonds and letters of credit.
7.1.14 Taxes. Each Borrower's federal tax identification
number and the federal tax identification number of each Borrower's
Subsidiaries is shown on Exhibit 7.1.14 hereto. Each Borrower and each of
its Subsidiaries has filed all federal, state and local tax returns and
other reports it is required by law to file and has paid, or made provision
for the payment of, all taxes, assessments, fees, levies and other
governmental charges upon it, its income and Properties as and when such
taxes, assessments, fees, levies and charges that are due and payable,
unless and to the extent any thereof are being actively contested in good
faith and by appropriate proceedings and such Borrower maintains reasonable
reserves on its books therefor. The provision for taxes on the books of
each Borrower and its Subsidiaries are adequate in all material respects,
for all years not closed by applicable statutes, and for its current fiscal
year.
7.1.15 Brokers. There are no claims for brokerage
commissions, finder's fees or investment banking fees in connection with
the transactions contemplated hereby, except for the obligation to Houlihan
Lokey Howard & Zukin, in the amount of $370,882.92, which is the sole
obligation and responsibility of Borrowers. Each Borrower represents that
it has not committed the Lender to the payment of any brokerage fee,
commission or charge in connection with this transaction. If any such
claim is made against Lender by any broker, finder or agent or other
person, Borrowers hereby indemnify, defend and save Lender harmless against
such claim and further will defend, with counsel satisfactory to Lender,
any action or actions to recover on such claim, at Borrowers' own cost and
expense, including Lender's reasonable counsel fees. Borrowers further
agree that until any such claim or demand is adjudicated in Lender's favor,
the amount demanded shall be deemed a liability of Borrowers under this
Agreement.
7.1.16 Patents, Trademarks, Copyrights and Licenses. Each
Borrower and its Subsidiaries owns or possesses all the patents,
trademarks, service marks, trade names, copyrights and licenses necessary
for the present and planned future conduct of its business without any
known conflict with the rights of others. All such patents, trademarks,
service marks, tradenames, copyrights, licenses and other similar rights
are listed on Exhibit 7.1.16 hereto.
7.1.17 Governmental Consents. Each Borrower and Surety and
its Subsidiaries has, and is in good standing with respect to, all
governmental consents, approvals, licenses, authorizations, permits,
certificates, inspections and franchises reasonably necessary to continue
to conduct in all material respects its business as heretofore or proposed
to be conducted by it and to own or lease and operate its Properties as now
owned or leased by it.
7.1.18. Compliance with Laws. Each Borrower and Surety and
their respective Subsidiaries has duly complied with, and its Properties,
business operations and leaseholds are in compliance in all material
respects with, the provisions of all federal, state and local laws, rules
and regulations applicable to such Borrower, Surety or such Subsidiary, as
applicable, its Properties or the conduct of its business and there have
been no citations, notices or orders of noncompliance issued to such
Borrower, Surety or any Subsidiary under any such law, rule or regulation
which would have a material adverse effect on the Borrowers or their
Subsidiaries. Each Borrower, Surety and Subsidiary has established and
maintains an adequate monitoring system to insure that it remains in
compliance with all federal, state and local laws, rules and regulations
applicable to it. No Inventory has been produced in violation of the Fair
Labor Standards Act (29 U.S.C. 201 et seq.), as amended.
7.1.19 Restrictions. Neither any Borrower nor any of its
Subsidiaries is a party or subject to any contract, agreement, or charter
or other corporate restriction, which materially and adversely affects its
business or the use or ownership of any of its Properties. Neither any
Borrower nor any of its Subsidiaries is a party or subject to any contract
or agreement which restricts its right or ability to incur Indebtedness,
other than as set forth on Exhibit 7.1.19 hereto, none of which prohibit
the execution of or compliance with this Agreement or the other Loan
Documents by any Borrower or any of its Subsidiaries, as applicable.
7.1.20 Litigation. Except as set forth on Exhibit 7.1.20
hereto, there are no actions, suits, proceedings or investigations pending,
or to the knowledge of any Borrower, threatened, against or affecting any
Borrower or any of its Subsidiaries, or the business, operations,
Properties, prospects, profits or condition of any Borrower or any of its
Subsidiaries. Neither any Borrower nor any of its Subsidiaries is in
default with respect to any order, writ, injunction, judgment, decree or
rule of any court, governmental authority or arbitration board or tribunal.
7.1.21 No Defaults. No event has occurred and no condition
exists which would, upon or after the execution and delivery of this
Agreement or any Borrower's performance hereunder, constitute a Default or
an Event of Default. Neither any Borrower nor any of its Subsidiaries is
in default, and no event has occurred and no condition exists which
constitutes, or which with the passage of time or the giving of notice or
both would constitute, a default in the payment of any material
Indebtedness to any Person for Money Borrowed.
7.1.22 Leases. Exhibit 7.1.22(a) hereto is a complete listing
of all capitalized leases of each Borrower and its Subsidiaries and Exhibit
7.1.22(b) hereto is a complete listing of all operating leases of Borrower
and its Subsidiaries. Each Borrower and its Subsidiaries is in full
compliance with all of the material terms of each of its respective
capitalized and operating leases.
7.1.23 Pension Plans. Except as disclosed on Exhibit 7.1.23
hereto, neither any Borrower nor any of its Subsidiaries has any Plan.
Each Borrower and each of its Subsidiaries is in full compliance with all
of the material requirements of ERISA and the regulations promulgated
thereunder with respect to each Plan. No fact or situation that could
result in a material adverse change in the financial condition of any
Borrower or any of its Subsidiaries exists in connection with any Plan.
Neither any Borrower nor any of its Subsidiaries has any withdrawal
liability in connection with a Multiemployer Plan.
7.1.24 Trade Relations. There exists no actual or threatened
termination, cancellation or limitation of, or any modification or change
in, the business relationship between any Borrower or any of its
Subsidiaries and any customer or any group of customers whose purchases
individually or in the aggregate are material to the business of the
Borrowers or their Subsidiaries, or with any material supplier, and there
exists no present condition or state of facts or circumstances which would
materially affect adversely the Borrowers or their Subsidiaries or prevent
the Borrowers or any of its Subsidiaries from conducting such business
after the consummation of the transaction contemplated by this Agreement in
substantially the same manner in which it has heretofore been conducted.
7.1.25 Labor Relations. Except as described on Exhibit 7.1.25
hereto, neither any Borrower nor any of its Subsidiaries is a party to any
collective bargaining agreement. There are no material grievances,
disputes or controversies with any union or any other organization of any
Borrower's or any of its Subsidiaries' employees, or threats of strikes,
work stoppages or any asserted pending demands for collective bargaining by
any union or organization.
7.1.26 Interrelatedness of MasTec, Borrowers and other
Sureties. The business operations of each member of the Telecommunications
Group, Surety and MasTec are interrelated and complement one another, and
such companies have a common business purpose, with inter-company
bookkeeping and accounting adjustments used to separate their respective
Properties, Indebtedness, and transactions. To permit their uninterrupted
and continuous operations, such companies now require and will from time to
time hereafter require funds for general business purposes. The proceeds
of Revolving Credit Loans and the making of the Term Loan, the Supplemental
Term Loan and the Equipment Loan will directly or indirectly benefit
MasTec, Sureties and each Borrower hereunder severally and jointly,
regardless of which Borrower requests or receives part or all of the
proceeds of such Loans.
7.2 [INTENTIONALLY OMITTED].
7.3 Survival of Representations and Warranties. All representations
and warranties of each Borrower, Surety contained in this Agreement or any
of the other Loan Documents shall survive the execution, delivery and
acceptance thereof by Lender and the parties thereto and the closing of the
transactions described therein or related thereto.
SECTION 8. COVENANTS AND CONTINUING AGREEMENTS
8.1 Affirmative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, each
Borrower and MasTec covenants that, unless otherwise consented to by Lender
in writing, it shall:
8.1.1 Visits and Inspections. Subject to Section 2.9 above,
permit representatives of Lender, from time to time, as often as may be
reasonably requested, but only during normal business hours, to visit and
inspect the Properties of any Borrower and each of its Subsidiaries,
inspect, audit and make extracts from its books and records, and discuss
with its officers, its employees and its independent accountants, such
Borrower's and each of its Subsidiaries' business, assets, liabilities,
financial condition, business prospects and results of operations.
8.1.2 Notices. Promptly notify Lender in writing of the
occurrence of any event or the existence of any fact which renders any
representation or warranty in this Agreement or any of the other Loan
Documents inaccurate, incomplete or misleading in any material respect.
8.1.3 Financial Statements. Keep, and cause each Subsidiary
to keep, adequate records and books of account with respect to its business
activities in which proper entries are made in accordance with GAAP
reflecting all its financial transactions; and cause to be prepared and
furnished to Lender the following (all to be prepared in accordance with
GAAP applied on a consistent basis, unless MasTec's certified public
accountants concur in any change therein and such change is disclosed to
Lender and is consistent with GAAP):
(i) not later than 90 days after the close of
each fiscal year of MasTec, unqualified audited financial statements
of MasTec as of the end of such year (except for a qualification for a
change in accounting principles with which the accountant concurs), on
a Consolidated basis (along with uncertified consolidating income
statements, balance sheets and statements of cash flows to be included
as supplemental schedules) certified by a firm of independent
certified public accountants of recognized standing selected by
Borrower but acceptable to Lender;
(ii) not later than 45 days after the end of each
fiscal quarter hereafter, unaudited interim financial statements of
MasTec and its Subsidiaries as of the end of such month and of the
portion of Borrowers' financial year then elapsed, on a Consolidated
and Consolidating basis along with certified by the principal
financial officer of MasTec as prepared in accordance with GAAP and
fairly presenting the Consolidated and Consolidating financial
position and results of operations of Borrowers and its Subsidiaries
for such month and period subject only to changes from audit and
year-end adjustments and except that such statements need not contain
notes;
(iii) promptly after the sending or filing thereof,
as the case may be, copies of any proxy statements, financial
statements or reports which any Borrower has made available to its
shareholders and copies of any regular, periodic and special reports
or registration statements which any Borrower files with the
Securities and Exchange Commission or any governmental authority which
may be substituted therefor, or any national securities exchange;
(iv) promptly after the filing thereof, copies of
any annual report to be filed with ERISA in connection with each Plan;
and
(v) such other data and information (financial
and otherwise) as Lender, from time to time, may reasonably request,
bearing upon or related to the Collateral or Borrowers' and each of
its Subsidiaries' financial condition or results of operations.
Concurrently with the delivery of the financial statements
described in clause (i) of this subsection 8.1.3, Borrowers shall forward
to Lender a copy of the accountants' letter to Borrowers' management that
is prepared in connection with such financial statements and also shall
cause to be prepared and shall furnish to Lender a certificate of the Chief
Financial Officer certifying that, based upon his examination of the
financial statements of Borrowers and their Subsidiaries, he is not aware
of any Default or Event of Default, or, if he is aware of such Default or
Event of Default, specifying the nature thereof, and acknowledging, in a
manner satisfactory to Lender, that he is aware that Lender is relying on
such financial statements in making its decisions with respect to the
Loans. Concurrently with the delivery of the financial statements
described in clauses (i) and (ii) of this subsection 8.1.3, or more
frequently if requested by Lender, Borrowers shall cause to be prepared and
furnished to Lender a Compliance Certificate in the form of Exhibit 8.1.3
hereto executed by the Chief Financial Officer of MasTec, on behalf of the
Borrowers.
8.1.4 Landlord and Storage Agreements. Upon request, provide
Lender with copies of all agreements between any Borrower or any of its
Subsidiaries and any landlord or warehouseman which owns any premises at
which any Equipment may, from time to time, be kept.
8.1.5 [INTENTIONALLY OMITTED].
8.1.6 Projections. No later than 30 days prior to the end of
each fiscal year of MasTec, deliver to Lender Projections of MasTec in form
and substance satisfactory to Lender for the forthcoming fiscal year
prepared on a quarterly basis; provided however that Lender hereby agrees
that such projections will be treated as confidential in nature and shall
not be disclosed to or shared with any Person, other than Lender, its
parent, affiliates, officers, employees, agents, successors and assigns and
except as may otherwise be required by applicable law, rule, regulation,
subpoena and/or court order.
8.1.7 Compliance with Laws. Each Borrower and Surety shall
comply, in all material respects with all federal, state and local laws,
rules and regulations applicable to each such entity.
8.2 Negative Covenants. During the term of this Agreement, and
thereafter for so long as there are any Obligations to Lender, each
Borrower and Surety covenants that, unless Lender has first consented
thereto in writing, it will not:
8.2.1 Mergers; Consolidations; Acquisitions. Merge or
consolidate, or permit any Subsidiary of any Borrower to merge or
consolidate, with any Person except mergers between and among Borrowers or
Sureties (provided Lender receives prior written notice), nor acquire, nor
permit any of its Subsidiaries to acquire, all or any substantial part of
the Properties of any Person, with the exception of acquisitions of Persons
or Properties engaged in business line(s) in which the Borrowers are
currently engaged, and further provided that (i) after giving effect to any
such transaction, Borrowers shall have Aggregate Adjusted Availability in
an amount equal to at least $2,500,000 and (ii) Borrowers shall obtain
Lender's prior written consent for any merger, consolidation or acquisition
with any Person having assets valued under GAAP in excess of $5,000,000 or
where the aggregate amount of assets of all Persons involved in all
mergers, consolidations or acquisitions with Borrowers, or any of them, in
any fiscal year exceeds $15,000,000.
8.2.2 Loans. Make, or permit any Subsidiary of any Borrower
to make, any loans or other advances of money (other than for salary,
travel advances, advances against commissions and other similar advances in
the ordinary course of business) to any Person, except (i) loans among
Borrowers and the Sureties and (ii) loans to Persons not a party to this
Agreement if no Default or Event of Default has occurred, and after giving
effect to such loans, no Default or Event of Default will result and
Borrowers will have Aggregate Adjusted Availability in an amount equal to
at least $2,500,000.
8.2.3 Total Indebtedness. Create, incur, assume, or suffer
to exist, or permit any Subsidiary of Borrower to create, incur or suffer
to exist, any Indebtedness, except as otherwise permitted in this Agreement
and:
(i) Obligations owing to Lender;
(ii) Subordinated Debt existing on the date of
this Agreement;
(iii) Indebtedness of any Subsidiary of any
Borrower to such Borrower;
(iv) accounts payable to trade creditors and
current operating expenses (other than for Money Borrowed) which are
not aged more than 120 days from billing date or more than 30 days
from the due date, in each case incurred in the ordinary course of
business and paid within such time period, unless the same are being
actively contested in good faith and by appropriate and lawful
proceedings; and each Borrower or such Subsidiary shall have set aside
such reserves, if any, with respect thereto as are required by GAAP
and deemed adequate by such Borrower or such Subsidiary and its
independent accountants;
(v) Obligations to pay Rentals permitted by
subsection 8.2.13;
(vi) Purchase Money Indebtedness; and
(vii) contingent liabilities arising out of
endorsements of checks and other negotiable instruments for deposit or
collection in the ordinary course of business.
8.2.4 Affiliate Transactions. Enter into, or be a party to,
or permit any Subsidiary of Borrower to enter into or be a party to, any
transaction with any Affiliate of Borrower or stockholder, except in the
ordinary course of and pursuant to the reasonable requirements of such
Borrower's or such Subsidiary's business and upon fair and reasonable terms
which are fully disclosed to Lender to the extent disclosure is required by
the rules and regulations of the Securities and Exchange Commission and are
no less favorable to such Borrower than would obtain in a comparable arm's
length transaction with a Person not an Affiliate or stockholder of such
Borrower or such Subsidiary.
8.2.5 Limitation on Liens. Create or suffer to exist, or
permit any Subsidiary of any Borrower to create or suffer to exist, any
Lien upon any of its Property (including without limitation the stock of
any Subsidiaries or of National Beverage Corporation owned or held by
MasTec), income or profits, whether now owned or hereafter acquired,
except:
(i) Liens at any time granted in favor of Lender;
(ii) Liens for taxes (excluding any Lien imposed
pursuant to any of the provisions of ERISA) not yet due, or being
contested in the manner described in subsection 7.1.14 hereto, but
only if in Lender's judgment such Lien does not adversely affect
Lender's rights or the priority of Lender's Lien in the Collateral;
(iii) Liens arising in the ordinary course of any
Borrower's business by operation of law or regulation, but only if
payment in respect of any such Lien is not at the time required and
such Liens do not, in the aggregate, materially detract from the value
of the Property of such Borrower or materially impair the use thereof
in the operation of such Borrower's business;
(iv) Purchase Money Liens securing Purchase Money
Indebtedness;
(v) Liens securing Indebtedness of one of
Borrower's Subsidiaries to such Borrower or another such Subsidiary;
(vi) Liens securing Bonds issued pursuant to
Indemnity Agreements only to the extent such Liens cover Property on
the site of the contractual work referred to in the Bonds and the
rights of Borrowers in and to subcontracts and related general
intangibles associated with the Bonded services and further provided
that the aggregate value of the Property covered by such Liens does
not represent a material portion of Borrowers' Collateral;
(vii) such other Liens as appear on Exhibit 8.2.5
hereto; and
(viii) such other Liens as Lender may hereafter
approve in writing.
8.2.6 Subordinated Debt. Make, or permit any Subsidiary of
any Borrower to make, any payment of any part or all of any Subordinated
Debt or take any other action or omit to take any other action in respect
of any Subordinated Debt, except, if no Event of Default is then
outstanding, (i) scheduled payments permitted in accordance with the
Subordinated Debentures issued under an Indenture dated as of November 15,
1980 between Burnup & Sims, Inc. and Chemical Bank, as Trustee, and (ii)
prepayments of such Subordinated Debentures (A) from proceeds of the sale
of Property not constituting Collateral or (B) using other funds so long as
the making of such proposed prepayment would not, under the terms hereof,
cause a violation of Section 8.3.1 hereof (such determination being made by
recalculating Cash Flow as of the most recently completed fiscal quarter
and treating such proposed prepayment as if made in such quarter).
8.2.7 Distributions. Declare or make, or permit any
Subsidiary of any Borrower to declare or make, any Distributions except
Distributions in the form of dividends from a Subsidiary to a Borrower and,
if no Event of Default has occurred or would occur after giving effect
thereto, annual Distributions from MasTec to its shareholders in an
aggregate amount not to exceed 50% of MasTec's Net Income.
8.2.8 Capital Expenditures. Make Capital Expenditures
(including, without limitation, by way of capitalized leases) which, in the
aggregate, as to Borrowers and its Subsidiaries, exceed $15,000,000 during
any fiscal year of Borrowers.
8.2.9 Disposition of Assets. Sell, lease or otherwise
dispose of any of, or permit any Subsidiary of any Borrower to sell, lease
or otherwise dispose of any Collateral, including any disposition of
Property as part of a sale and leaseback transaction, to or in favor of any
Person, excepting, so long as no Event of Default is outstanding hereunder,
(i) sales of Inventory in the ordinary course of business, (ii) a transfer
of Collateral to a Borrower by a Subsidiary of a Borrower or another
Borrower, or (iii) dispositions of Equipment which is part of the
Collateral in the ordinary course of business so long as (A) the
consideration is reasonably equivalent to the fair market value of the
Equipment transferred and (B) all proceeds are immediately remitted in full
to Lender.
8.2.10 [INTENTIONALLY OMITTED]
8.2.11 [INTENTIONALLY OMITTED]
8.2.12 Restricted Investment. Make or have, or permit any
Subsidiary of any Borrower to make or have, any Restricted Investment.
8.2.13 Leases. Become, or permit any of its Subsidiaries to
become, a lessee under any lease (other than a lease under which Borrowers
or any of its Subsidiaries is lessor) of real Property if the aggregate
Rentals payable during any current or future period of 12 consecutive
months under the lease in question and all other leases under which
Borrower or any of its Subsidiaries is then lessee would exceed
$15,000,000. The term "Rentals" means, as of the date of determination,
all payments which the lessee is required to make by the terms of any
lease.
8.2.14 Tax Consolidation. File or consent to the filing of
any consolidated income tax return with any Person other than MasTec.
8.3 Specific Financial Covenants. During the term of this
Agreement, and thereafter for so long as there are any Obligations to
Lender, Borrowers covenant that, unless otherwise consented to by Lender in
writing, they shall:
8.3.1 Cash Flow. Achieve Cash Flow, on a consolidated basis,
of not less than the amount shown below for the period corresponding
thereto:
For the three-month period
ending December 31, 1994 ($ 1,000,000)
For the three-month period
ending March 31, 1995 -0-
For the six-month period
ending June 30, 1995 $ 500,000
For the nine-month period
ending September 30, 1995 $ 1,000,000
For the twelve-month period
ending December 31, 1995, and
for the twelve-month period
ending on each fiscal quarter
thereafter $ 1,500,000
8.3.2 Minimum Adjusted Tangible Net Worth. Maintain at all
times an Adjusted Tangible Net Worth, on a consolidated basis, of not less
than the amount shown below for the period corresponding thereto:
From Closing through June 30, 1995 $47,000,000
From July 1, 1995 through
December 31, 1995 $48,500,000
From January 1, 1996 through
December 31, 1996 $50,000,000
From January 1, 1997 through
December 31, 1997 $53,000,000
From January 1, 1998 through
December 31, 1998 $56,000,000
From January 1, 1999 through
December 31, 1999 $59,000,000
From January 1, 2000 and at
all times thereafter $62,000,000
SECTION 9. CONDITIONS PRECEDENT
Notwithstanding any other provision of this Agreement or any of
the other Loan Documents, and without affecting in any manner the rights of
Lender under the other sections of this Agreement, Lender shall not be
required to make any Loan under this Agreement unless and until each of the
following conditions has been and continues to be satisfied:
9.1 Documentation. Lender shall have received, in form and substance
satisfactory to Lender and its counsel, a duly executed copy of this
Agreement and the other Loan Documents, together with such additional
documents, instruments and certificates as Lender and its counsel shall
require in connection therewith from time to time, all in form and
substance satisfactory to Lender and its counsel, including, without
limitation, the following:
(A) Certified copies of Borrowers casualty insurance policies,
together with Lender Loss Payable endorsements on Lender's standard form of
Lender Loss Payee naming Lender as lender loss payee or mortgagee, as
applicable, and certified copies of Borrowers' liability insurance
policies, together with endorsements naming Lender as additional insured;
(B) Landlord waivers with respect to all premises leased by
Borrower and which are disclosed on Exhibit 7.1.22(b) attached hereto;
(C) Certified copies of (i) resolutions of each Borrower's and
Surety's board of directors authorizing the execution and delivery of this
Agreement and the Loan Documents and the performance of all transactions
contemplated hereby and thereby, (ii) each Borrower's and Surety's by-laws,
and (iii) an incumbency certificate of each Borrower and Surety;
(D) A copy of the Articles or Certificate of Incorporation of
each Borrower and Surety, and all amendments thereto, certified by the
Secretary of State or other appropriate official of its jurisdiction of
incorporation;
(E) Good standing certificates for each Borrower and Surety,
issued by the Secretary of State or other appropriate official of each
Borrower's and Surety's jurisdiction of incorporation and each jurisdiction
where the conduct of such Borrower's or Surety's business activities or the
ownership of its Properties necessitates qualification;
(F) A closing certificate signed by the Chief Executive Officer
of each Borrower dated as of the date hereof, stating that (i) the
representations and warranties set forth in Section 7 hereof are true and
correct on and as of such date, (ii) each Borrower is on such date in
compliance with all the terms and provisions set forth in this Agreement
and (iii) on such date no Default or Event of Default has occurred or is
continuing;
(G) The Security Documents duly executed, accepted and
acknowledged by or on behalf of each of the signatories thereto;
(H) The Other Agreements duly executed and delivered by each
Borrower and/or Surety;
(I) The favorable, written opinion of Carlos & Abbott, P.A.,
counsel to MasTec and the Borrowers, as to the transactions contemplated by
this Agreement and any of the other Loan Documents;
(J) Certificates of title for each item of Collateral, ownership
of which is evidenced by a certificate of title, along with all
documentation (fully executed) necessary to have Lender's first Lien noted
thereon.
(K) Written instruction from Borrowers directing the application
of proceeds of the initial Loans made pursuant to this Agreement, and an
initial Borrowing Base Certificate from Borrowers;
(L) Payoff Agreements from First Union National Bank;
(M) Payment of all fees and expenses (including attorneys' fees)
owing hereunder;
(N) Surety Agreement executed by the Sureties; and
(O) Such other documents, instruments and agreements as Lender
shall reasonably request in connection with the foregoing matters.
9.2 No Default. No Default or Event of Default shall exist.
9.3 Other Loan Documents. Each of the conditions precedent set forth
in the other Loan Documents shall have been satisfied.
9.4 Availability. Lender shall have determined that immediately
after Lender has made the initial Loans and issued the initial Letters of
Credit contemplated hereby, and paid all closing costs incurred in
connection with the transactions contemplated hereby, Aggregate Adjusted
Availability shall not be less than $8,000,000.
9.5 No Litigation. No action, proceeding, investigation, regulation
or legislation shall have been instituted, threatened or proposed before
any court, governmental agency or legislative body to enjoin, restrain or
prohibit, or to obtain damages in respect of, or which is related to or
arises out of this Agreement or the consummation of the transactions
contemplated hereby, or which might have a material adverse effect upon the
creditworthiness or condition, operations or prospects (financial or
otherwise) of Borrower.
SECTION 10. EVENTS OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT
10.1 Events of Default. The occurrence of one or more of the
following events shall constitute an "Event of Default":
10.1.1 Payment of Obligations. Borrowers shall fail to pay
any Obligations owing hereunder or under the Notes, or any other of the
Obligations, within five (5) Business Days of the due date thereof (whether
due at stated installment due date, or maturity, on demand, upon
acceleration, or otherwise).
10.1.2 Misrepresentations. Any representation, warranty or
other statement made or furnished to Lender by or on behalf of any
Borrower, any Surety or any Subsidiary of any Borrower or any Surety in
this Agreement, any of the other Loan Documents or any instrument,
certificate or financial statement furnished in compliance with or in
reference thereto proves to have been false or misleading in any material
respect when made or furnished or when reaffirmed pursuant to Section 7.2
hereof.
10.1.3 Breach of Specific Covenants. Borrowers or Sureties
shall fail or neglect to perform, keep or observe any covenant contained in
Sections 5.2, 8.1.1, 8.2 or 8.3.1 hereof on the date that Borrowers are
required to perform, keep or observe such covenant.
10.1.4 Breach of Other Covenants. Borrowers or Sureties shall
fail or neglect to perform, keep or observe any covenant contained in this
Agreement (other than a covenant which is dealt with specifically elsewhere
in Section 10.1 hereof) and the breach of such other covenant is not cured
to Lender's satisfaction within 15 days after the sooner to occur of
Borrowers' receipt of notice of such breach from Lender or the date on
which such failure or neglect first becomes known to the President, Senior
Vice President Finance or Senior Vice President Operations, of MasTec.
10.1.5 Default Under Security Documents/
Other Agreements. Any event of default shall occur under, or
Borrowers or MasTec shall default in the performance or observance of any
term, covenant, condition or agreement contained in, any of the Security
Documents; or the Other Agreements and such default shall continue beyond
any applicable grace period.
10.1.6 Other Defaults. There shall occur any default or event
of default on the part of any Borrower or MasTec under any agreement,
document or instrument to which any Borrower or MasTec is a party or by
which any Borrower, MasTec or any of their Property is bound, creating or
relating to any Indebtedness (other than the Obligations) which might have
a material adverse effect upon the Collateral, creditworthiness or
conditions, operations or prospects (financial or otherwise) of MasTec or
Borrowers collectively.
10.1.7 Uninsured Losses. Any material loss, theft, damage or
destruction of any of the Collateral not fully covered (subject to such
deductibles as Lender shall have permitted) by insurance.
10.1.8 Adverse Changes. There shall occur any material
adverse change in the financial condition or business prospects of MasTec
or the Borrowers collectively.
10.1.9 Insolvency and Related Proceedings. Any Borrower shall
cease to be Solvent or shall suffer the appointment of a receiver, trustee,
custodian or similar fiduciary, or shall make an assignment for the benefit
of creditors, or any petition for an order for relief shall be filed by or
against any Borrower under the Bankruptcy Code (if against any Borrower,
the continuation of such proceeding for more than 30 days), or any Borrower
shall make any offer of settlement, extension or composition to their
respective unsecured creditors generally.
10.1.10 Business Disruption; Condemnation. There shall occur a
cessation of a substantial part of the business of the Borrowers
collectively for a period which significantly affects the Borrowers'
capacity to continue their business, on a profitable basis; or any Borrower
or any Subsidiary of a Borrower shall suffer the loss or revocation of any
license or permit now held or hereafter acquired by such Borrower or
Subsidiary which is necessary to the continued or lawful operation of its
business and which loss or revocation might have a material adverse effect
on Borrowers' operations or prospects (financial or otherwise)
collectively; or Borrowers or any of them shall be enjoined, restrained or
in any way prevented by court, governmental or administrative order from
conducting all or any material part of their business affairs on a
collective basis; or any material lease or agreement pursuant to which any
Borrower leases, uses or occupies any Property shall be canceled or
terminated prior to the expiration of its stated term; or any part of the
Collateral shall be taken through condemnation or the value of such
Property shall be impaired through condemnation.
10.1.11 Change of Management. Jorge Mas shall cease to be the
President of MasTec or MasTec, directly or indirectly, shall cease to own a
majority of the issued and outstanding capital stock of each Borrower.
10.1.12 ERISA. A Reportable Event shall occur which Lender, in
its sole discretion, shall determine in good faith constitutes grounds for
the termination by the Pension Benefit Guaranty Corporation of any Plan or
for the appointment by the appropriate United States district court of a
trustee for any Plan, or if any Plan shall be terminated or any such
trustee shall be requested or appointed, or if any Borrower or any
Subsidiary of any Borrower is in "default" (as defined in Section
4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan
resulting from such Borrower's or such Subsidiary's complete or partial
withdrawal from such Plan.
10.1.13 Challenge to Agreement. Any Borrower or any Subsidiary
of any Borrower shall challenge or contest in any action, suit or
proceeding the validity or enforceability of this Agreement, or any of the
other Loan Documents, the legality or enforceability of any of the
Obligations or the perfection or priority of any Lien granted to Lender.
10.1.14 Criminal Forfeiture. Any Borrower or any Subsidiary of
any Borrower shall be criminally indicted or convicted under any law, or
become subject to any other proceeding or investigation that could lead to
a forfeiture of a material portion of any such Borrower's Property.
10.1.15 Judgments. Any final judgment is entered against any
Borrower or Surety for the payment of money in excess of $1,000,000 which
is not fully and unconditionally covered by insurance or for which
Borrowers have not established a cash or cash equivalent reserve in the
amount of such judgment and such judgment shall continue unsatisfied and in
effect for a period of thirty (30) consecutive days without being vacated,
discharged, satisfied or bonded pending appeal; or writ of attachment or
similar process is filed against any Borrower, any Subsidiary of any
Borrower, any of the Collateral or any other material portion of their
respective Property.
10.2 Acceleration of the Obligations. Without in any way
limiting the right of Lender to demand payment of any portion of the
Obligations payable on demand in accordance with Section 3.2 hereof, or to
cease making Loans, upon or at any time after the occurrence of an Event of
Default, all or any portion of the Obligations shall, at the option of
Lender and without presentment, demand protest or further notice by Lender,
become at once due and payable and Borrowers shall forthwith pay to Lender,
the full amount of such Obligations, provided, that upon the occurrence of
an Event of Default specified in subsection 10.1.9 hereof, all of the
Obligations shall become automatically due and payable without declaration,
notice or demand by Lender.
10.3 Other Remedies. Upon and after the occurrence of an Event
of Default, Lender shall have and may exercise from time to time the
following rights and remedies:
10.3.1 All of the rights and remedies of a secured party under
the Code or under other applicable law, and all other legal and equitable
rights to which Lender may be entitled, all of which rights and remedies
shall be cumulative and shall be in addition to any other rights or
remedies contained in this Agreement or any of the other Loan Documents,
and none of which shall be exclusive.
10.3.2 The right to take immediate possession of the
Collateral, and to (i) require Borrowers and Sureties to assemble the
Collateral, at Borrowers' expense, and make it available to Lender at a
place designated by Lender which is reasonably convenient to both parties,
and (ii) enter any premises where any of the Collateral shall be located
and to keep and store the Collateral on said premises until sold (and if
said premises be the Property of a Borrower or Surety, such Borrower or
Surety agrees not to charge Lender for storage thereof).
10.3.3 The right to sell or otherwise dispose of all or any
Collateral in its then condition, or after any further manufacturing or
processing thereof, at public or private sale or sales, with such notice as
may be required by law, in lots or in bulk, for cash or on credit, all as
Lender, in its sole discretion, may deem advisable. Borrowers and Sureties
agree that 10 days written notice to Borrowers or any Borrower of any
public or private sale or other disposition of Collateral shall be
reasonable notice thereof, and such sale shall be at such locations as
Lender may designate in said notice. Lender shall have the right to
conduct such sales on a Borrower's premises, without charge therefor, and
such sales may be adjourned from time to time in accordance with applicable
law. Lender shall have the right to sell, lease or otherwise dispose of
the Collateral, or any part thereof, for cash, credit or any combination
thereof, and Lender may purchase all or any part of the Collateral at
public or, if permitted by law, private sale and, in lieu of actual payment
of such purchase price, may set off the amount of such price against the
Obligations. The proceeds realized from the sale of any Collateral may be
applied, first to the costs, expenses and attorneys' fees incurred by
Lender in collecting the Obligations, in enforcing the rights of Lender
under the Loan Documents and in collecting, retaking, completing,
protecting, removing, storing, advertising for sale, selling and delivering
any Collateral, second to the interest due upon any of the Obligations; and
third, to the principal of the Obligations. If any deficiency shall arise,
each Borrower and/or Surety shall remain jointly and severally liable to
Lender therefor.
10.3.4 Lender is hereby granted a license or other right to
use, without charge, each Borrower's and Surety's labels, patents,
copyrights, rights of use of any name, trade secrets, tradenames,
trademarks and advertising matter, or any Property of a similar nature, as
it pertains to the Collateral, in advertising for sale and selling any
Collateral and each Borrower's and Surety's rights under all licenses and
all franchise agreements shall inure to Lender's benefit.
10.3.5 Lender may, at its option, require Borrowers to deposit
with Lender funds equal to the LC Amount and, if Borrowers fail to promptly
make such deposit, Lender may advance such amount as a Revolving Credit
Loan. Any such deposit or advance shall be held by Lender as a reserve to
fund future drawings against such Letters of Credit. Interest shall accrue
on such deposits (i) at the lowest per annum rate applicable to any portion
of the outstanding Loans or (ii) at the then applicable per annum rate for
deposit accounts offered by Bank in the event that the only outstanding
Obligations of Borrowers are those directly related to the issued and
undrawn Letters of Credit. Such interest shall first be applied to the
outstanding balance of the Revolving Credit Loans and then to the other
outstanding Obligations of Borrowers, in such order as Lender may decide.
At such time as all Letters of Credit have been drawn upon or expired, any
amounts remaining in such reserve shall be applied against any outstanding
Obligations, or, if all Obligations have been indefeasibly paid in full,
returned to Borrowers.
10.4 Remedies Cumulative; No Waiver. All covenants, conditions,
provisions, warranties, guaranties, indemnities, and other undertakings of
Borrowers and Sureties contained in this Agreement and the other Loan
Documents, or in any document referred to herein or contained in any
agreement supplementary hereto or in any schedule given to Lender or
contained in any other agreement between Lender and Borrowers, heretofore,
concurrently, or hereafter entered into, shall be deemed cumulative to and
not in derogation or substitution of any of the terms, covenants,
conditions, or agreements of Borrowers and/or Sureties herein contained.
The failure or delay of Lender to require strict performance by Borrowers
and/or Sureties of any provision of this Agreement or to exercise or
enforce any rights, Liens, powers, or remedies hereunder or under any of
the aforesaid agreements or other documents or security or Collateral shall
not operate as a waiver of such performance, Liens, rights, powers and
remedies, but all such requirements, Liens, rights, powers, and remedies
shall continue in full force and effect until all Loans and all other
Obligations owing or to become owing from Borrowers to Lender shall have
been fully satisfied. None of the undertakings, agreements, warranties,
covenants and representations of Borrowers contained in this Agreement or
any of the other Loan Documents and no Event of Default by Borrowers under
this Agreement or any other Loan Documents shall be deemed to have been
suspended or waived by Lender, unless such suspension or waiver is by an
instrument in writing specifying such suspension or waiver and is signed by
a duly authorized representative of Lender and directed to Borrowers.
SECTION 11. MISCELLANEOUS
11.1 Power of Attorney. Each Borrower hereby irrevocably
designates, makes, constitutes and appoints Lender (and all Persons
designated by Lender) as such Borrower's true and lawful attorney (and
agent-in-fact) and Lender, or Lender's agent, may, without notice to such
Borrower and in either such Borrower's or Lender's name, but at the cost
and expense of such Borrower:
11.1.1 At such time or times upon or after the occurrence of a
Default or an Event of Default as Lender or said agent, in its sole
discretion, may determine, endorse such Borrower's name on any checks,
notes, acceptances, drafts, money orders or any other evidence of payment
or proceeds of the Collateral which come into the possession of Lender or
under Lender's control.
11.1.2 At such time or times upon or after the occurrence of
an Event of Default as Lender or its agent in its sole discretion may
determine: (i) demand payment of the Accounts from the Account Debtors,
enforce payment of the Accounts by legal proceedings or otherwise, and
generally exercise all of such Borrower's rights and remedies with respect
to the collection of the Accounts; (ii) in a commercially reasonable
manner, settle, adjust, compromise, discharge or release any of the
Accounts or other Collateral or any legal proceedings brought to collect
any of the Accounts or other Collateral; (iii) in a commercially reasonable
manner, sell or assign any of the Accounts and other Collateral upon such
terms, for such amounts and at such time or times as Lender deems
advisable; (iv) take control, in any manner, of any item of payment or
proceeds relating to any Collateral; (v) prepare, file and sign such
Borrower's name to a proof of claim in bankruptcy or similar document
against any Account Debtor or to any notice of lien, assignment or
satisfaction of lien or similar document in connection with any of the
Collateral; (vi) receive, open and dispose of all mail addressed to such
Borrower and to notify postal authorities to change the address for
delivery thereof to such address as Lender may designate; (vii) endorse the
name of such Borrower upon any of the items of payment or proceeds relating
to any Collateral and deposit the same to the account of Lender on account
of the Obligations; (viii) endorse the name of such Borrower upon any
chattel paper, document, instrument, invoice, freight bill, bill of lading
or similar document or agreement relating to the Accounts, and any other
Collateral; (ix) use such Borrower's stationery and sign the name of such
Borrower to verifications of the Accounts and notices thereof to Account
Debtors; (x) use the information recorded on or contained in any data
processing equipment and computer hardware and software relating to the
Accounts, Inventory, Equipment and any other Collateral; (xi) make and
adjust claims under policies of insurance; and (xii) do all other acts and
things necessary, in Lender's determination, to fulfill such Borrower's
obligations under this Agreement.
11.2 Indemnity. Each Borrower hereby agrees to indemnify Lender and
hold Lender harmless from and against any liability, loss, damage, suit,
action or proceeding ever suffered or incurred by Lender (including
reasonable attorneys' fees and legal expenses) as the result of such
Borrower's failure to observe, perform or discharge such Borrower's duties
hereunder. In addition, each Borrower shall defend Lender against and save
it harmless from all claims of any Person with respect to the Collateral.
Without limiting the generality of the foregoing, these indemnities shall
extend to any claims asserted against Lender by any Person under any
Environmental Laws or similar laws by reason of such Borrower's or any
other Person's failure to comply with laws applicable to solid or hazardous
waste materials or other toxic substances. Notwithstanding any contrary
provision in this Agreement, the obligation of such Borrower under this
Section 11.2 shall survive the payment in full of the Obligations and the
termination of this Agreement.
11.3 Modification of Agreement; Sale of Interest. This Agreement may
not be modified, altered or amended, except by an agreement in writing
signed by Borrowers and Lender. No Borrower may sell, assign or transfer
any interest in this Agreement, any of the other Loan Documents, or any of
the Obligations, or any portion thereof, including, without limitation,
such Borrower's rights, title, interests, remedies, powers, and duties
hereunder or thereunder. Each Borrower hereby consents to Lender's
participation, sale, assignment, transfer or other disposition, at any time
or times hereafter, of this Agreement and any of the other Loan Documents,
or of any portion hereof or thereof, including, without limitation,
Lender's rights, title, interests, remedies, powers, and duties hereunder
or thereunder; provided, however, that prior to an Event of Default, such
participation, sale, assignment or transfer shall only be to an entity not
specifically identified on Exhibit 11.3 hereto. In the case of an
assignment, the assignee shall have, to the extent of such assignment, the
same rights, benefits and obligations as it would if it were "Lender"
hereunder and Lender shall be relieved of all obligations hereunder upon
any such assignments. Each Borrower agrees that it will use its best
efforts to assist and cooperate with Lender in any manner reasonably
requested by Lender to effect the sale of participations in or assignments
of any of the Loan Documents or any portion thereof or interest therein,
including, without limitation, assisting in the preparation of appropriate
disclosure documents. Each Borrower further agrees that Lender may
disclose credit information regarding each Borrower and its Subsidiaries to
any potential participant or assignee.
11.4 Severability. Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under applicable law, but if any provision of this Agreement shall be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of
this Agreement.
11.5 Successors and Assigns. This Agreement, the Other Agreements and
the Security Documents shall be binding upon and inure to the benefit of
the successors and assigns of Borrowers, Sureties and Lender permitted
under Section 11.3 hereof.
11.6 Cumulative Effect; Conflict of Terms. The provisions of the
Other Agreements and the Security Documents are hereby made cumulative with
the provisions of this Agreement. Except as otherwise provided in Section
3.2 hereof and except as otherwise provided in any of the other Loan
Documents by specific reference to the applicable provision of this
Agreement, if any provision contained in this Agreement is in direct
conflict with, or inconsistent with, any provision in any of the other Loan
Documents, the provision contained in this Agreement shall govern and
control.
11.7 Execution in Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed
to be an original and all of which counterparts taken together shall
constitute but one and the same instrument.
11.8 Notice. Except as otherwise provided herein, all notices,
requests and demands to or upon a party hereto, to be effective, shall be
in writing and shall be sent by certified or registered mail, return
receipt requested, by personal delivery against receipt, by overnight
courier or by facsimile and, unless otherwise expressly provided herein,
shall be deemed to have been validly served, given or delivered immediately
when delivered against receipt, one Business Day after deposit in the mail,
postage prepaid, or with an overnight courier or, in the case of facsimile
notice, when sent, addressed as follows:
If to Lender: Barclays Business Credit, Inc.
200 Glastonbury Boulevard
Glastonbury, CT 06033
Attention: Northeast Loan
Administration
Facsimile No.: 203-657-7759
With a copy to: Blank, Rome, Comisky & McCauley
1200 Four Penn Center Plaza
Philadelphia, PA 19103
Attention: Harvey I. Forman, Esq.
Facsimile No.: 215-569-5555
If to Borrowers
or Sureties: MasTec, Inc.
8600 N.W. 36th Street, 8th Floor
Miami, FL 33166
Attention: Carlos A. Valdes
Facsimile No.: 305-599-1572
With a copy to: Carlos & Abbott, P.A.
999 Ponce de Leon Boulevard
Suite 1150
Coral Gables, FL 33134
Attention: Eliot C. Abbott, Esq.
Facsimile No.: 305-443-8617
or to such other address as each party may designate for itself by notice
given in accordance with this Section 11.8; provided, however, that any
notice, request or demand to or upon Lender pursuant to subsections 2.1.1.,
2.1.2, 3.1.1 or 4.2.2 hereof shall not be effective until received by
Lender.
11.9 Lender's Consent. Whenever Lender's consent is required to be
obtained under this Agreement, any of the Other Agreements or any of the
Security Documents as a condition to any action, inaction, condition or
event, Lender shall be authorized to give or withhold such consent in its
reasonable discretion and to condition its consent upon the giving of
additional collateral security for the Obligations, the payment of money or
any other matter.
11.10 Credit Inquiries. MasTec hereby authorizes and permits Lender
to respond to usual and customary credit inquiries from third parties
concerning Mastec and upon a credit inquiry from a third party concerning
another Borrower, Lender agrees to endeavor to contact such Borrower prior
to responding to any such inquiry, but Lender shall not incur any liability
should it fail to do so prior to responding to such credit inquiry.
11.11 Time of Essence. Time is of the essence of this Agreement, the
Other Agreements and the Security Documents.
11.12 Entire Agreement. This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed
by the parties in connection therewith or with reference thereto, embody
the entire understanding and agreement between the parties hereto and
thereto with respect to the subject matter hereof and thereof and supersede
all prior agreements, understandings and inducements, whether express or
implied, oral or written.
11.13 Interpretation. No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or
judicial authority by reason of such party having or being deemed to have
structured or dictated such provision.
11.14 GOVERNING LAW; CONSENT TO FORUM. THIS AGREEMENT SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF
FLORIDA; PROVIDED, HOWEVER, THAT IF ANY OF THE COLLATERAL SHALL BE LOCATED
IN ANY JURISDICTION OTHER THAN FLORIDA, THE LAWS OF SUCH JURISDICTION SHALL
GOVERN THE METHOD, MANNER AND PROCEDURE FOR FORECLOSURE OF LENDER'S LIEN
UPON SUCH COLLATERAL AND THE ENFORCEMENT OF LENDER'S OTHER REMEDIES IN
RESPECT OF SUCH COLLATERAL TO THE EXTENT THAT THE LAWS OF SUCH JURISDICTION
ARE DIFFERENT FROM OR INCONSISTENT WITH THE LAWS OF FLORIDA. AS PART OF
THE CONSIDERATION FOR NEW VALUE RECEIVED, AND REGARDLESS OF ANY PRESENT OR
FUTURE DOMICILE OR PRINCIPAL PLACE OF BUSINESS OF ANY BORROWER, SURETY OR
LENDER, EACH BORROWER AND SURETY HEREBY CONSENTS AND AGREES THAT THE COURTS
OF THE STATE OF FLORIDA OR, AT LENDER'S OPTION, THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF FLORIDA, SHALL HAVE JURISDICTION TO HEAR
AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN BORROWERS AND/OR SURETIES AND
LENDER PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR
RELATED TO THIS AGREEMENT. EACH BORROWER AND SURETY EXPRESSLY SUBMITS AND
CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN
ANY SUCH COURT, AND EACH BORROWER AND SURETY HEREBY WAIVES ANY OBJECTION
WHICH SUCH BORROWER MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION,
IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING
OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT.
EACH BORROWER AND SURETY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS,
COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES
THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH BORROWER OR SURETY AT THE
ADDRESS SET FORTH IN THIS AGREEMENT AND THAT SERVICE SO MADE SHALL BE
DEEMED COMPLETED UPON THE EARLIER OF SUCH BORROWER'S OR SURETY'S ACTUAL
RECEIPT THEREOF OR 3 DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE
PREPAID. NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO AFFECT
THE RIGHT OF LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW, OR TO PRECLUDE THE ENFORCEMENT BY LENDER OF ANY JUDGMENT OR ORDER
OBTAINED IN SUCH FORUM OR THE TAKING OF ANY ACTION UNDER THIS AGREEMENT TO
ENFORCE SAME IN ANY OTHER APPROPRIATE FORUM OR JURISDICTION.
11.15 WAIVERS BY SURETIES AND BORROWERS. EACH BORROWER AND SURETY
WAIVES (i) THE RIGHT TO TRIAL BY JURY (WHICH LENDER HEREBY ALSO WAIVES) IN
ANY ACTION, SUIT, PROCEEDING OR COUNTERCLAIM OF ANY KIND ARISING OUT OF OR
RELATED TO ANY OF THE LOAN DOCUMENTS, THE OBLIGATIONS OR THE COLLATERAL:
(ii) PRESENTMENT, DEMAND AND PROTEST AND NOTICE OF PRESENTMENT, PROTEST,
DEFAULT, NON PAYMENT, MATURITY, RELEASE, COMPROMISE, SETTLEMENT, EXTENSION
OR RENEWAL OF ANY OR ALL COMMERCIAL PAPER, ACCOUNTS, CONTRACT RIGHTS,
DOCUMENTS, INSTRUMENTS CHATTEL PAPER AND GUARANTIES AT ANY TIME HELD BY
LENDER ON WHICH BORROWER OR SURETY MAY IN ANY WAY BE LIABLE AND HEREBY
RATIFIES AND CONFIRMS WHATEVER LENDER MAY DO IN THIS REGARD; (iii) NOTICE
PRIOR TO TAKING POSSESSION OR CONTROL OF THE COLLATERAL OR ANY BOND OR
SECURITY WHICH MIGHT BE REQUIRED BY ANY COURT PRIOR TO ALLOWING LENDER TO
EXERCISE ANY OF LENDER'S REMEDIES; (iv) THE BENEFIT OF ALL VALUATION,
APPRAISEMENT AND EXEMPTION LAWS; (v) NOTICE OF ACCEPTANCE HEREOF; AND (vi)
ALL RIGHTS IT MAY HAVE AT ANY TIME (WHETHER ARISING DIRECTLY OR INDIRECTLY,
BY OPERATION OF LAW OR CONTRACT) TO ASSERT ANY CLAIM AGAINST THE OTHER
BORROWERS OR SURETIES OR ANY OF THEM, ON ACCOUNT OF PAYMENTS MADE UNDER
THIS AGREEMENT, INCLUDING WITHOUT LIMITATION ANY AND ALL RIGHTS OF
SUBROGATION, REIMBURSEMENT, EXONERATION, CONTRIBUTION OR INDEMNITY UNTIL
SUCH TIME AS THE OBLIGATIONS ARE REPAID IN FULL. EACH BORROWER AND SURETY
ACKNOWLEDGES THAT THE FOREGOING WAIVERS ARE A MATERIAL INDUCEMENT TO
LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING UPON THE
FOREGOING WAIVERS IN ITS FUTURE DEALINGS WITH SUCH BORROWER. EACH BORROWER
AND SURETY WARRANTS AND REPRESENTS THAT IT HAS REVIEWED THE FOREGOING
WAIVERS WITH ITS LEGAL COUNSEL AND HAS KNOWINGLY AND VOLUNTARILY WAIVED ITS
JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL COUNSEL. IN THE EVENT
OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL
BY THE COURT.
IN WITNESS WHEREOF, this Agreement has been duly executed in
Philadelphia, Pennsylvania on the day and year specified at the beginning
of this Agreement.
BORROWERS:
WITNESS: MASTEC, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Sr Vice President-Finance
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS OF CALIFORNIA, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS OF THE CAROLINAS, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS COMMUNICATIONS SERVICES, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS COMTEC, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS NETWORK DESIGNS, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS TSI, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS TELECOM OF FLORIDA, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS OF TEXAS, INC.
/s/ Elito C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CHURCH & TOWER, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CHURCH & TOWER FIBER TEL, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CHURCH & TOWER OF FLORIDA, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CHURCH & TOWER OF TN, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: DESIGNED TRAFFIC INSTALLATION, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Treasurer
Title: _____________________[SEAL]
WITNESS: LECTRO PRODUCTS, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: SOUTHEASTERN PRINTING COMPANY, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CC-II, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
SURETIES:
WITNESS: MASTEC INTERNATIONAL, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: MASTEC WIRELESS, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS ENTERPRISES, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP: SIMS OF MISSISSIPPI, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: BURNUP & SIMS COMMUNICATIONS SERVICES OF
FLORIDA, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CAL TECHNICAL SERVICES, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CAPSCAN CABLE COMPANY, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: GDSI, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: CONSTRUCTION EQUIPMENT SYSTEMS CORPORATION
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: MASTEC EQUIPMENT COMPANY, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
WITNESS: TELINK, INC.
/s/ Eliot C. Abbott /s/ Carlos A. Valdes
_________________________ By: ______________________________
Vice President
Title: _____________________[SEAL]
LENDER:
Accepted in Philadelphia, PA:
BARCLAYS BUSINESS CREDIT, INC.
/s/ Howard Handman
By: _________________________
Sr. Vice President
Title: ______________________
APPENDIX A
GENERAL DEFINITIONS
When used in the Loan and Security Agreement dated as of January 26,
1995, by and among Barclays Business Credit, Inc. ("Lender"), a Connecticut
corporation with an office at 200 Glastonbury Road, Glastonbury, CT 06033
and MasTec, Inc., each other entity comprising the Telecommunication Group;
Southeastern Printing Company, Inc. ("Southeastern Printing"); CC-II, Inc.;
and Lectro Products, Inc. ("Lectro"), (collectively "Borrowers" and singly
each is a "Borrower"), and the Sureties, each entity listed above having
its chief executive office at 8600 N.W. 36th Street, Miami, Florida 33166,
the following terms shall have the following meanings (terms defined in the
singular to have the same meaning when used in a plural and vice versa):
Account Debtor - any Person who is or may become obligated under
or on account of an Account.
Accounts - collectively, all Accounts, contract rights, Chattel
Paper, Instruments and Documents, whether now owned or hereafter
created or acquired by any Borrower or in which any Borrower now has
or hereafter acquired any interest.
Adjusted LIBOR Rate - For any LIBOR Interest Period, as applied
to either a Revolving Credit LIBOR Rate Loan or Term LIBOR Rate Loan
the rate per annum (rounded upwards, if necessary to the next 1/16 of
1%) determined pursuant to the following formula:
Adjusted Libor Rate = Libor Rate
------------------------
(1.00 - Reserve Percentage)
For purposes hereof, "Libor Rate" shall mean the arithmetic average of
the rates of interest per annum (rounded upwards, if necessary to the
next 1/16 of 1%) at which Bank is offered deposits of United States
Dollars in the interbank eurodollar loan market on or about 2:00 P.M.
New York time two (2) Business Days prior to the commencement of such
LIBOR Interest Period on amounts substantially equal to the Revolving
Credit LIBOR Rate Loan or Term LIBOR Rate Loan as to which MasTec, on
behalf of the Borrowers may elect the Adjusted LIBOR Rate to be
applicable, with a maturity of comparable duration to the LIBOR
Interest Period selected by MasTec, on behalf of the Borrowers for
such Revolving Credit LIBOR Rate Loan or Term LIBOR Rate Loan.
Adjusted Tangible Net Worth - at any date, the amount by which
all the assets of Borrowers, on a consolidated basis, excluding
intangible assets as that term is defined under GAAP, exceed all of
Borrowers' liabilities, as will be shown on the consolidated balance
sheet of Borrowers prepared as of such date in accordance with GAAP
but excluding all purchase accounting adjustments related to the
Burnup & Sims acquisition as well as all intangible assets acquired in
acquisitions occurring subsequent to the Closing Date.
Affiliate - a Person (other than a Subsidiary): (i) which
directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with, a Person; (ii)
which beneficially owns or holds 5% or more of any class of the Voting
Stock of a Person; or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity
interest) of which is beneficially owned or held by a Person or a
Subsidiary of a Person.
Agreement - the Loan and Security Agreement referred to in the
first sentence of this Appendix A, all Exhibits thereto and this
Appendix A, all as amended, modified, replaced or restated from time
to time.
Aggregate Adjusted Availability - an amount equal to the lesser
of the aggregate amounts of the Borrowing Bases or $15,000,000, less
the sum of (i) the amount of Revolving Credit Loans as of the date of
calculation plus (ii) all sums due and owing to trade creditors which
remain outstanding beyond normal trade terms or special terms granted
by trade creditors, plus (iii) any reserves against the Borrowing
Bases, plus (iv) if applicable, closing payments and expenses.
Availability - the amount of money which Borrowers are entitled
to borrow from time to time as Revolving Credit Loans, such amount
being the difference derived when the sum of the principal amount of
Revolving Credit Loans then outstanding to the Telecommunication
Group, Southeastern Printing and Lectro (including any amounts which
Lender may have paid for the account of such Borrower(s) pursuant to
any of the Loan Documents and which have not been reimbursed by
Borrowers) and the reserves held against the corresponding Borrowing
Bases, if any, subtracted from the corresponding Borrowing Bases. If
the amount outstanding to the Telecommunication Group, Southeastern
Printing and Lectro, respectively is equal to or greater than the
corresponding Borrowing Base, the corresponding Availability is 0.
Bank - Shawmut Bank Connecticut, N.A.
Base Rate - the rate of interest generally announced or quoted by
CitiBank, N.A. from time to time as its prime rate for commercial
loans, whether or not such rate is the lowest rate charged by
CitiBank, N.A. to its most preferred borrowers; and, if such prime
rate for commercial loans is discontinued by CitiBank, N.A. as a
standard, a comparable reference rate designated by Lender as a
substitute therefor shall be the Base Rate.
Base Rate Loans - collectively, all loans subject to the Base
Rate.
Borrowing Base(s) - collectively the Telecommunication Group
Borrowing Base, the Southeastern Printing Borrowing Base and the
Lectro Borrowing Base (each individually a "Borrowing Base").
Borrowing Base Certificates - the certificates signed by the
chief executive or chief financial officer of Borrowers showing the
status of the Telecommunication Group's, Southeastern Printing's and
Lectro's Accounts and Inventory, outstanding Revolving Credit Loans
and other information in the form of Exhibit A-1 to the Agreement.
Business Day - any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of Florida or the
State of Connecticut, or is a day on which banking institutions
located in such states are closed.
Capital Expenditures - expenditures made or liabilities incurred
for the acquisition of any fixed assets or improvements, replacements,
substitutions or additions thereto which have a useful life of more
than one year, including the total principal portion of Capitalized
Lease Obligations.
Capitalized Lease Obligation - any Indebtedness represented by
obligations under a lease that is required to be capitalized for
financial reporting purposes in accordance with GAAP.
Cash Flow - with respect to any fiscal period, means Net Income
of the Borrower, minus or plus non-cash gains or losses, respectively,
from sales of non-current assets, plus depreciation, amortization and
deferred taxes minus Fixed Charges and minus all Distributions paid
during such period. For purposes hereof, the term "Fixed Charges"
means the principal amounts actually paid during such fiscal period
with respect to the Term Loan, the Equipment Loan, Supplemental Term
Loan, Capitalized Lease Obligations, non-financed Capital Expenditures
and payment on any other long-term debt obligations.
Closing Date - the date on which all of the conditions precedent
in Section 9 of the Agreement are satisfied and the initial Loan is
made or the initial Letter of Credit is issued under the Agreement.
Code - the Uniform Commercial Code as adopted and in force in the
State of Florida, as from time to time in effect.
Collateral - all of the Property and interests in Property
described in Section 5 of the Agreement, and all other Property and
interests in Property that now or hereafter secure the payment and
performance of any of the Obligations.
Consolidated and Consolidating - the consolidation and
consolidating in accordance with GAAP of the accounts or other items
as to which such term applies.
Credit Facility - the Revolving Credit Facility, Term Loan,
Supplemental Term Loan, Equipment Loan and Letters of Credit.
Default - an event or condition the occurrence of which would,
with the lapse of time or the giving of notice, or both, become an
Event of Default.
Default Rate - as defined in subsection 2.1.3 of the Agreement.
Deposit Account(s) - a demand, time, savings, operating or like
account maintained with a bank, savings and loan association, credit
union or like organization into which Borrowers, or any of them, or
any Person on any Borrower's behalf, deposits proceeds of the
Collateral.
Dilution Rate - the rate, expressed as a percentage of the
aggregate dollar amount of all returns, allowances and other
miscellaneous noncash credits arising in connection with Borrowers'
Eligible Accounts over the total reduction of the aggregate amount of
Borrowers' Eligible Accounts, measured on a quarterly basis.
Distribution - in respect of any corporation means and includes:
(i) the payment of any dividends or other distributions on capital
stock of the corporation (except distributions in such stock) and (ii)
the redemption or acquisition of Securities unless made
contemporaneously from the net proceeds of the sale of Securities.
Dominion Account - a special account of Lender established by
Borrowers pursuant to the Agreement at a bank selected by Borrowers,
but acceptable to Lender in its reasonable discretion, and over which
Lender shall have sole and exclusive access and control for withdrawal
purposes.
EBIT - with respect to any fiscal period, the sum of Borrowers'
Consolidated net earnings (or loss) before interest expense and taxes
for said period as determined in accordance with GAAP.
Eligible Account - an Account arising in the ordinary course of
any Borrower's business from the sale of goods or rendition of
services which Lender, in its sole credit judgment, deems to be an
Eligible Account. Without limiting the generality of the foregoing,
no Account shall be an Eligible Account if:
(i) it arises out of a sale made by a Borrower to
a Subsidiary or an Affiliate of a Borrower or to a Person
controlled by an Affiliate of a Borrower; or
(ii) it is due or unpaid for more than 90 days
after the original invoice date; or
(iii) it is due or unpaid for more than 60 days
from the original due date shown on the invoice; or
(iv) 50% or more of the Accounts from the Account
Debtor are not deemed Eligible Accounts hereunder; or
(v) the total unpaid Accounts of the Account
Debtor exceed 20% of the net amount of all Eligible Accounts, to
the extent of such excess (provided however that such
concentration limitation shall not be applicable to Accounts
owing from Bell South or its Affiliates); or
(vi) any covenant, representation or warranty
contained in the Agreement with respect to such Account has been
breached; or
(vii) the Account Debtor is also a Borrower's
creditor or supplier, or the Account Debtor has disputed
liability with respect to such Account or has made any claim with
respect to any other Account due from such Account Debtor to any
Borrower (but only to the extent of such disputed liability or
claim), or the Account otherwise is or may become subject to any
right of setoff by the Account Debtor; or
(viii) the Account Debtor has commenced a voluntary
case under the federal bankruptcy laws, as now constituted or
hereafter amended, or made an assignment for the benefit of
creditors, or a decree or order for relief has been entered by a
court having jurisdiction in the premises in respect of the
Account Debtor in an involuntary case under the federal
bankruptcy laws, as now constituted or hereafter amended, or any
other petition or other application for relief under the federal
bankruptcy laws has been filed against the Account Debtor, or if
the Account Debtor has failed, suspended business, ceased to be
Solvent, or consented to or suffered a receiver, trustee,
liquidator or custodian to be appointed for it or for all or a
significant portion of its assets or affairs; or
(ix) it arises from a sale to an Account Debtor
outside the United States, unless the sale is on letter of
credit, guaranty or acceptance terms, in each case acceptable to
Lender in its sole discretion; or
(x) it arises from a sale to the Account Debtor
on a bill-and-held, guaranteed sale, sale-or-return, sale-on-
approval, assignment or any other repurchase or return basis or
arises from services provided to the Account Debtor which have
not yet been fully performed; or
(xi) the Account Debtor is the United States of
America or any department, agency or instrumentality thereof,
unless the Borrower assigns its right to payment of such Account
to Lender, in a manner satisfactory to Lender, so as to comply
with the Assignment of Claims Act of 1940 (31 U.S.C. 203 et
seq., as amended); or
(xii) the Account is not at all times subject to
Lender's duly perfected, first priority security interest and no
other Lien other than a Permitted Lien; or
(xiii) the goods giving rise to such Account have
not been delivered to and accepted by the Account Debtor or the
services giving rise to such Account have not been performed by
the Borrower and accepted by the Account Debtor or the Account
otherwise does not represent a final sale; or
(xiv) the Account is evidenced by Chattel Paper or
an Instrument of any kind, or has been reduced to judgment; or
(xv) the Borrower has made any agreement with the
Account Debtor for any deduction therefrom, except for discounts
or allowances which are made in the ordinary course of business
for prompt payment and which discounts or allowances are
reflected in the calculation of the face value of each invoice
related to such Account; or
(xvi) the Borrower has made an agreement with the
Account Debtor to extend the time of payment thereof; or
(xvii) such Account arises out of a bonded contract
and the aggregate of all Accounts arising out of bonded contracts
(including such Account), exceed $5,000,000, in the aggregate.
Eligible Inventory - such raw material and work in process
Inventory of Southeastern Printing or Lectro, which Lender, in its
sole credit judgment, deems to be Eligible Inventory. Without
limiting generality of the foregoing, no inventory shall be Eligible
Inventory if:
(i) it is not raw materials or work in process
that is, in Lender's opinion, readily marketable in its current
form; or
(ii) it is not in good, new and saleable
condition; or
(iii) it is slow moving, obsolete or
unmerchantable; or
(iv) it does not meet all standards imposed by any
governmental agency or authority; or
(v) it does not conform in all respects to the
warranties and representations set forth in the agreement; or
(vi) it is not at all times subject to Lender's
duly perfected, first priority security interest and not other
Lien except a Permitted Lien; or
(vii) it is not situated at a location in
compliance with the agreement or in transit.
Environmental Laws - all federal, state and local laws, rules,
regulations, ordinances, programs, permits, guidances, orders and
consent decrees relating to health, safety and environmental matters.
Equipment - collectively, all machinery, apparatus, equipment,
fittings, furniture, fixtures and other tangible personal Property
(other than Inventory) of every kind and description used in any
Borrower's operations or owned by any Borrower or in which such
Borrower has an interest, whether now owned or hereafter acquired by
any Borrower and wherever located, and all parts, accessories and
special tools and all increases and accessions thereto and
substitutions and replacements therefor.
Equipment Loan - collectively, the Loans to be made by Lender to
Borrowers pursuant to Subsection 1.2 of the Agreement.
ERISA - the Employee Retirement Income Security Act of 1974, as
amended, and all rules and regulations from time to time promulgated
thereunder.
Event of Default - as defined in Section 10.1 of the Agreement.
GAAP - generally accepted accounting principles in the United
States of America in effect from time to time.
General Intangibles - collectively, all personal property of any
Borrower (including things in action) other than goods, Accounts,
Chattel Paper, Documents, Instruments and money, whether now owned or
hereafter created or acquired by any Borrower and shall include
without limitation, books and records, patents, trademarks,
tradenames, and rights under contracts to perform or provide service.
Indebtedness - as applied to a Person means, without duplication
(i) all items, which in accordance with GAAP
would be included in determining total liabilities as shown on
the liability side of a balance sheet of such Person as at the
date as of which Indebtedness is to be determined, including,
without limitation, Capitalized Lease Obligations,
(ii) all obligations of other Persons which such
Person has guaranteed,
(iii) all reimbursement obligations in connection
with letters of credit or letter of credit guaranties issued for
the account of such Person, and
(iv) in the case of Borrowers and Sureties
(without duplication), the Obligations.
LC Amount - at any time, the aggregate undrawn face amount of all
Letters of Credit then outstanding.
Lectro Borrowing Base - As at any date of determination thereof,
an amount equal to the lesser of:
(i) $2,500,000 minus the LC Amount relating to Letters
of Credit issued for the account of Lectro and CC-II, Inc.; or
(ii) an amount equal to:
(a) 85% (or such lesser rate as Lender may apply based
on its evaluation of the quality, value, collectability
and/or enforceability of the Collateral as well as
Borrowers' financial and operating condition and prospects)
of the net amount of Lectro's and CC-II, Inc.'s Eligible
Accounts outstanding at such date (provided however, that
the advance rate shall be reduced to 80% if the Borrowers'
Dilution Rate with respect to their Eligible Accounts
exceeds 7% and provided further that such advance rate may
be further reduced in Lender's sole discretion if the
Dilution Rate exceeds 12%);
PLUS
(b) the lesser of (i) $1,500,000 or (ii) 50% of
calculated the value of the net amount of Lectro's Eligible
Inventory as of such date calculated at the lower of cost or
market value on a first in, first out basis;
MINUS
(c) the LC Amount relating to Letters of Credit issued
for the account of Lectro and CC-II, Inc.
For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and
all returns, rebates, discounts (which may, at Lender's option, be
calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such Accounts at
such time.
Letter of Credit - any letter of credit issued by Lender or any
of Lender's Affiliates for the account of a Borrower.
LIBOR Interest Period - a period of one, two, three or six months
duration during which the Revolving Credit LIBOR Rate or Term LIBOR Rate,
as the case may be, is applicable.
LIBOR Rate Loans - collectively, all Revolving Credit LIBOR Rate
Loans and Term LIBOR Rate Loans.
Lien - any interest (whether legal or equitable) in Property
securing an obligation owed to, or a claim by, a Person other than the
owner of the Property, whether such interest is based on common law,
statute or contract and including, without limitation, the security
interest, security title or lien arising from a security agreement,
mortgage, deed of trust, deed to secure debt, encumbrance, pledge,
conditional sale or trust receipt, or a lease, consignment or bailment
for security purposes or through rights of subrogation. The term
"Lien" shall also include reservations, exceptions, encroachments,
easements, rights-of-way, covenants, conditions, restrictions, leases
and other title exceptions and encumbrances affecting Property. For
the purpose of the Agreement, Borrower shall be deemed to be the owner
of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which
title to the Property has been retained by or vested in some other
Person for security purposes.
Loan Account - the loan account established on the books of
Lender pursuant to Section 3.6 of the Agreement.
Loan Documents - the Agreement, the Notes, the Other Agreements
and the Security Documents, all as may be extended, modified, amended,
restated, renewed, substituted or replaced from time to time.
Loans - all loans and advances of any kind made by Lender
pursuant to the Agreement.
London Business Day - Any Business Day on which banks in London,
England are open for business.
Master Equipment Note - the secured promissory note to be
executed by Borrowers on or about the Closing Date in favor of Lender
to evidence Borrowers' obligation to pay the Equipment Loan which
shall be in the form of Exhibit A-2 to the Agreement.
Money Borrowed - means (i) Indebtedness arising from the lending
of money by any Person to a Borrower; (ii) Indebtedness, whether or
not in any such case arising from the lending by any Person of money
to a Borrower, (A) which is represented by notes payable or drafts
accepted that evidence extensions of credit, (B) which constitutes
obligations evidenced by bonds, debentures, notes or similar
instruments, or (C) upon which interest charges are customarily paid
(other than accounts payable) or that was issued or assumed as full or
partial payment for Property; (iii) Indebtedness that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with
respect to letters of credit or guaranties of letters of credit and
(v) Indebtedness of a Borrower under any guaranty of obligations that
would constitute Indebtedness for Money Borrowed under clauses (i)
through (iii) hereof, if owed directly by Borrower.
Multiemployer Plan - has the meaning set forth in Section
4001(a)(3) of ERISA.
Net Income - the Consolidated Net Income after taxes of Borrowers
as such would appear on Borrowers' Consolidated statement of income,
prepared in accordance with GAAP.
Notes - collectively, the Revolving Credit Note, the Term Note,
and the Master Equipment Note and the Promissory Note, each as may be
extended, modified, amended, restated, renewed, substituted or
replaced from time to time.
Obligations - all Loans and all other advances, debts,
liabilities, obligations, covenants and duties, together with all
interest, fees and other charges thereon, owing, arising, due or
payable from Borrowers or any Borrower, or Sureties or any of Surety,
to Lender of any kind or nature, present or future, whether or not
evidenced by any note, guaranty or other instrument, whether arising
under the Agreement or any of the other Loan Documents or otherwise
whether direct or indirect (including those acquired by assignment),
absolute or contingent, primary or secondary, due or to become due,
now existing or hereafter arising and however acquired. The term
includes without limitation, all interest, charges, fees, expenses,
attorneys' fees, and any other sums chargeable to Borrowers, Sureties
or any of them, or any Borrower, under any of the Loan Documents.
Original Term - as defined in Section 4.1 of the Agreement.
Other Agreements - any and all agreements, instruments and
documents (other than the Agreement and the Security Documents),
heretofore, now or hereafter executed by any Borrower, Surety, any
Subsidiary of any Borrower or any other third party and delivered to
Lender in respect of the transactions contemplated by the Agreement,
all as may be extended, modified, amended, restated, renewed,
substituted or replaced from time to time.
Participating Lender - each Person who shall be granted the right
by Lender to participate in any of the Loans described in the
Agreement and who shall have entered into a participation agreement in
form and substance satisfactory to Lender.
Permitted Liens - any Lien of a kind specified in subsection
8.2.5 of the Agreement.
Person - an individual, partnership, corporation, limited
liability company, joint stock company, land trust, business trust, or
unincorporated organization, or a government or agency or political
subdivision thereof.
Plan - an employee benefit plan now or hereafter maintained for
employees of Borrower that is covered by Title IV of ERISA.
Promissory Note - the secured promissory note to be executed by
Borrowers on the Closing Date in favor of Lender to evidence
Borrowers' obligation to repay the Supplemental Term Loan, which shall
be in the form of Exhibit A-5 to the Agreement.
Projections - The Borrowers' forecasted Consolidated (a) balance
sheets, (b) profit and loss statements, (c) cash flow statements, and
(d) capitalization statements, all prepared on a consistent basis with
the Borrowers' historical financial statements, together with
appropriate supporting details and a statement of underlying
assumptions.
Property - any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
Purchase Money Indebtedness - means and includes (i) Indebtedness
(other than the Obligations) for the payment of all or any part of the
purchase price of any fixed assets, (ii) any Indebtedness (other than
the Obligations) incurred at the time of or within 10 days prior to or
after the acquisition of any fixed assets for the purpose of financing
all or any part of the purchase price thereof, and (iii) any renewals,
extensions or refinancings thereof, but not any increases in the
principal amounts thereof outstanding at the time.
Purchase Money Lien - a Lien upon fixed assets which secures
Purchase Money Indebtedness, but only if such Lien shall at all times
be confined solely to the fixed assets the purchase price of which was
financed through the incurrence of the Purchase Money Indebtedness
secured by such Lien.
Regulation D - Regulation D of the Board of Governors of the
Federal Reserve System, comprising Part 204 of Title 12, Code of
Federal Regulations, as amended, and any successor thereto.
Reserve - For any day, that reserve (expressed as a decimal)
which is in effect (whether or not actually incurred) with respect to Bank
on such day, as prescribed by the Board of Governors of the Federal Reserve
System (or any successor or any other banking authority to which Bank is
subject including any board or governmental or administrative agency of the
United States or any other jurisdiction to which Bank is subject), for
determining the maximum reserve requirement (including without limitation
any basic, supplemental, marginal or emergency reserves) for Eurocurrency
liabilities as defined in Regulation D.
Reserve Percentage - For Bank on any day, that percentage
(expressed as a decimal) which is in effect on such day, prescribed by the
Board of Governors of the Federal Reserve System (or any successor or any
other banking authority to which Lender is subject, including any board or
governmental or administrative agency of the United States or any other
jurisdiction to which Bank is subject) for determining the maximum reserve
requirement (including without limitation any basic, supplemental, marginal
or emergency reserves) for (i) deposits of United States Dollars or (ii)
Eurocurrency liabilities as defined in Regulation D, in each case used to
fund a Revolving Credit LIBOR Rate Loan or Term LIBOR Rate Loan subject to
an Adjusted LIBOR Rate. The Adjusted LIBOR Rate shall be adjusted
automatically on and as of the effective day of any change in the Reserve
Percentage.
Renewal Terms - as defined in Section 4.1 of the Agreement.
Reportable Event - any of the events set forth in Section 4043(b)
of ERISA.
Restricted Investment - any investment made in cash or by
delivery of Property to any Person, whether by acquisition of stock,
Indebtedness or other obligation or Security, or by loan, advance or
capital contribution, or otherwise, or in any Property except the
following:
(i) investments in one or more Subsidiaries of a
Borrower to the extent existing on the Closing Date;
(ii) Property to be used in the ordinary course of
business;
(iii) Current Assets (as would appear on Borrowers'
Consolidated financial statement) arising from the sale of goods
and services in the ordinary course of business of Borrower and
its Subsidiaries;
(iv) investments in direct obligations of the United
States of America, or any agency thereof or obligations
guaranteed by the United States of America, provided that such
obligations mature within one year from the date of acquisition
thereof;
(v) investments in certificates of deposit maturing
within one year from the date of acquisition issued by a bank or
trust company organized under the laws of the United States or
any state thereof having capital surplus and undivided profits
aggregating at least $100,000,000;
(vi) investments in commercial paper given an A rating
by a national credit rating agency and maturing not more than 270
days from the date of creation thereof; and
(vii) investments in and transactions with other
Borrowers.
Revolving Credit Base Rate Loan - that portion of the Revolving
Credit Loans that bears interest at the Base Rate.
Revolving Credit Facility - the credit facility established for
Borrowers by Lender under and pursuant to the terms of this Agreement
under which Revolving Credit Loans may be made from time to time.
Revolving Credit LIBOR Rate - a per annum rate equal to the sum
of the Adjusted LIBOR Rate plus 225 basis points.
Revolving Credit LIBOR Rate Loan - that portion of the Revolving
Credit Loans on which interest accrues at the Revolving Credit LIBOR Rate.
Revolving Credit Loan - a Loan made by Lender as provided in
Section 1.1 of the Agreement.
Revolving Credit Maturity Date - the last day of the Original
Term or, if any Renewal Term is in effect, then the last day of such
Renewal Term.
Revolving Credit Note - the secured promissory note to be
executed by Borrowers on the Closing Date in favor of Lender to
evidence Borrowers' obligation to repay the Revolving Credit Loans,
which shall be in the form of Exhibit A-3 to the Agreement.
Schedule of Accounts - as defined in subsection 6.4.1 of the
Agreement.
Security - shall have the same meaning as in Section 2(1) of the
Securities Act of 1933, as amended.
Security Documents - any mortgages and all other instruments and
agreements now or at any time hereafter securing the whole or any part
of the Obligations, all as may be modified, amended, restated,
renewed, substituted or replaced from time to time.
Solvent - as to any Person, such Person (i) owns Property whose
fair saleable value is greater than the amount required to pay all of
such Person's Indebtedness (including contingent debts), (ii) is able
to pay all of its Indebtedness as such Indebtedness matures and (iii)
has capital sufficient to carry on its business and transactions and
all business and transactions in which it is about to engage.
Southeastern Printing Borrowing Base - As at any date of
determination thereof, an amount equal to the lesser of:
(i) $1,500,000 minus the aggregate LC Amount relating
to Letters of Credit issued for the members of Southeastern
Printing; or
(ii) an amount equal to:
(a) 85% of the net amount of Southeastern
Printing's Eligible Accounts outstanding at such date
(provided however, that the advance rate shall be reduced to
80% if the Borrowers' Dilution Rate with respect to their
Eligible Accounts exceeds 7% and provided further that such
advance rate may be further reduced in Lender's sole
discretion if the Dilution Rate exceeds 12%);
PLUS
(b) the lesser of (i) $1,000,000 or (ii) 50% of
calculated the value of the net amount of Southeastern
Printing's Eligible Inventory as of such date calculated at
the lower of cost or market value on a first in, first out
basis;
MINUS
(c) the aggregate LC Amount relating to Letters
of Credit issued for the members of Southeastern Printing.
For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and
all returns, rebates, discounts (which may, at Lender's option, be
calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such Accounts at
such time.
Subordinated Debt - Indebtedness of any Borrower that is
subordinated to the Obligations in a manner satisfactory to Lender,
including, without limitation, those certain Subordinated Debentures
issued pursuant to that certain Indenture dated November 15, 1981
between Burnup & Sims, Inc. and Chemical Bank, as Trustee.
Subsidiary - any corporation of which a Person owns, directly or
indirectly through one or more intermediaries, more than 50% of the
Voting Stock at the time of determination.
Supplemental Term Loan - the Loan described in subsection 1.3.2
of the Agreement.
Sureties - MasTec International, Inc., MasTec Wireless, Inc.,
Burnup & Sims Enterprises, Inc., Burnup: Sims of Mississippi, Inc.,
Burnup & Sims Communications Services of Florida, Inc., Cal Technical
Services, Inc., Capscan Cable Company, Inc., GDSI, Inc., Construction
Equipment Systems Corporation, MasTec Equipment Company, Inc. and
Telink, Inc.
Telecommunication Group - collectively, MasTec, Inc., Burnup &
Sims of California, Inc., a Delaware corporation, Burnup & Sims of the
Carolinas, Inc., a Delaware corporation, Burnup & Sims Communications
Services, Inc., a Delaware corporation, Burnup & Sims Comtec, Inc., a
Delaware corporation, Burnup & Sims Network Designs, Inc., a Delaware
corporation, Burnup & Sims TSI, Inc., a Delaware corporation, Burnup &
Sims Telecom of Florida, Inc., a Florida corporation, Burnup & Sims of
Texas, Inc., a Texas corporation, Church & Tower, Inc., a Florida
corporation, Church & Tower Fiber Tel, Inc., a Delaware corporation,
Church & Tower of Florida, Inc., a Florida corporation, Church & Tower
of TN, Inc., a Delaware corporation, and Designed Traffic
Installation, Inc., a Florida corporation.
Telecommunication Group Borrowing Base - As at any date of
determination thereof, an amount equal to the lesser of:
(i) $15,000,000 minus the aggregate LC Amount relating
to Letters of Credit issued for the members of the
Telecommunication Group; or
(ii) an amount equal to:
(a) 85% of the net amount of the
Telecommunication Group's Eligible Accounts outstanding at
such date (provided however, that the advance rate shall be
reduced to 80% if the Borrowers' Dilution Rate with respect
to their Eligible Accounts exceeds 7% and provided further
that such advance rate may be further reduced in Lender's
sole discretion if the Dilution Rate exceeds 12%).
MINUS
(b) the aggregate LC Amount relating to Letters
of Credit issued for members of the Telecommunication Group.
For purposes hereof, the net amount of Eligible Accounts at any
time shall be the face amount of such Eligible Accounts less any and
all returns, rebates, discounts (which may, at Lender's option, be
calculated on shortest terms), credits, allowances or excise taxes of
any nature at any time issued, owing, claimed by Account Debtors,
granted, outstanding or payable in connection with such Accounts at
such time.
Term Base Rate Loan - that portion of the Term Loan and the
Equipment Loan that bears interest at the Base Rate.
Term LIBOR Rate - a per annum rate equal to the sum of the
Adjusted LIBOR Rate plus 250 basis points.
Term LIBOR Rate Loan - that portion of the Term Loan and
Equipment Loan (as designated by MasTec on behalf of Borrowers in
accordance with the terms of the Agreement) that bears interest at the
Term LIBOR Rate.
Term Loan - the Loan described in subsection 1.3.1 of the
Agreement.
Term Note - the secured promissory note to be executed by
Borrowers on or about the Closing Date in favor of Lender to evidence
Borrowers' obligation to pay the Term Loan, which shall be in the form
of Exhibit A-4 to the Agreement.
Total Credit Facility - $39,500,000.
Voting Stock - Securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors
(or Persons performing similar functions).
Other Terms. All other terms contained in the Agreement shall
have, when the context so indicates, the meanings provided for by the
Code to the extent the same are used or defined therein.
Certain Matters of Construction. The terms "herein", "hereof"
and "hereunder" and other words of similar import refer to the
Agreement as a whole and not to any particular section, paragraph or
subdivision. Any pronoun used shall be deemed to cover all genders.
The section titles, table of contents and list of exhibits appear as a
matter of convenience only and shall not affect the interpretation of
the Agreement. All references to statutes and related regulations
shall include any amendments of same and any successor statutes and
regulations. All references to any of the Loan Documents shall
include any and all modifications thereto and any and all extensions
or renewals thereof.
List Of Exhibits
Exhibit A-1 Borrowing Base Certificate
Exhibit A-2 Master Equipment Note
Exhibit A-3 Revolving Credit Note
Exhibit A-4 Term Note
Exhibit A-5 Promissory Note
Exhibit 6.1.1 Borrower's and each Subsidiary's Business Locations
Exhibit 7.1.1 Jurisdictions in which Borrower and each Subsidiary is
Authorized to do Business
Exhibit 7.1.4 Capital Structure of Borrower
Exhibit 7.1.5 Corporate Names
Exhibit 7.1.14 Tax Identification Numbers of Subsidiaries
Exhibit 7.1.16 Patents, Trademarks, Copyrights and Licenses
Exhibit 7.1.19 Contracts Restricting Borrower's Right to Incur Debts
Exhibit 7.1.20 Litigation
Exhibit 7.1.22(a) Capitalized Leases
Exhibit 7.1.22(b) Operating Leases
Exhibit 7.1.23 Pension Plans
Exhibit 7.1.25 Labor Contracts
Exhibit 8.1.3 Compliance Certificate
Exhibit 8.2.5 Permitted Liens
Exhibit 11.3 Ineligible Participants
EXHIBIT 28
For Immediate Release From MasTec, Inc.
February 6, 1995 8600 N.W. 36 Street, 8th. Floor
Miami, Florida 33166
Telephone (305) 599-1800 Fax (305) 599-1572
For More Information: Tina Zagerman
Corporate Offices
MasTec Receives $39.5 Million Credit Facility
MIAMI, Fla. - MasTec, Inc., (NASDAQ:MASX) announced today that it has
entered into a new $39.5 million credit facility with Barclays Business
Credit in New York.
The facility, which is a combination of three sub-facilities will be used
to refinance existing term debt and provide an additional $30 million in
availability for general corporate purposes. The facility contains certain
financial covenants typical of a credit agreement of this nature.
Carlos A. Valdes, Senior Vice President of Finance, stated, "The multi-use
credit facility we have secured enhances the Company's overall financial
picture and provides an external source of funding to support our growth
strategy."
Opening the Lines of Communications worldwide, MasTec is one of the
nation's leading, diversified telecommunications service and infrastructure
providers, serving clients throughout the United States, Latin America, the
Caribbean and the Pacific Rim.
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