EXHIBIT 4.14
EIGHTH AMENDMENT
TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT
THIS EIGHTH AMENDMENT TO THIRD AMENDED AND RESTATED SECURED CREDIT
AGREEMENT (this "AMENDMENT") is entered into as of August 12, 2002, among QUANTA
SERVICES, INC., a Delaware corporation ("BORROWER"), the Lenders (defined
below), and BANK OF AMERICA, N.A., f/k/a NationsBank, N.A., as administrative
agent for the Lenders (in such capacity, the "AGENT"). Capitalized terms used
but not defined in this Amendment have the meaning given them in the Credit
Agreement (defined below).
RECITALS
A. The Borrower is party to that certain Third Amended and Restated
Secured Credit Agreement dated as of June 14, 1999 (as amended by the First
Amendment dated as of September 21, 1999, the Second Amendment dated as of March
21, 2000, the Third Amendment and Consent dated as of June 15, 2000, the Fourth
Amendment dated as of October 27, 2000, the Fifth Amendment dated as of November
9, 2000, the Sixth Amendment dated as of October 17, 2001, the Seventh Amendment
dated as of February 12, 2002, and as it may be further amended, restated or
supplemented from time to time, the "CREDIT AGREEMENT"), among the Borrower,
Agent, and the lenders from time to time party to the Credit Agreement (each a
"LENDER" and collectively, the "LENDERS").
B. The Borrower, the Agent, and the Lenders have agreed to amend the
Credit Agreement subject to the terms and conditions set out in this Amendment.
NOW THEREFORE, in consideration of good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the undersigned agree
as follows:
1. Amendment to Section 1.1 (Definitions). SECTION 1.1 of the Credit
Agreement is hereby amended (a) to delete the defined terms "MANAGEMENT FEE" and
"MANAGEMENT FEE TERMINATION PAYMENT", (b) to amend and restate the defined terms
"ACQUISITION", "APPLICABLE MARGIN", "COMMITMENT AMOUNT", "EBIT", "EBITDA",
"MINIMUM INTEREST COVERAGE RATIO", "NON-CASH Charges", and "UTILICORP", and (c)
to add the following new defined terms "CONSOLIDATED NET ACCOUNTS",
"CONSOLIDATED NET Assets", "CONSOLIDATED NET PP&E", "MINIMUM ASSET COVERAGE
RATIO" and "PERMITTED CHARGES", in each case in their appropriate alphabetical
order:
""ACQUISITION" means, a direct or indirect purchase by the
Borrower or any of its Subsidiaries for cash, stock, or other
securities or property, whether in one or more related
transactions, of all or substantially all of the assets or 50%
or more THAN 50% of voting securities or other equity
interests of a Person or a business unit, division or group of
a Person.
"APPLICABLE MARGIN" means, for Base Rate Loans or LIBOR Loans,
as applicable, for any day at such times as the relevant
Funded Debt to EBITDA Ratio is in one of the following ranges,
the percentage per annum set forth opposite such Funded Debt
to EBITDA Ratio for such Loans for each tier of the following
pricing grid:
<Table>
<Caption>
Funded Debt to
Tier EBITDA Ratio LIBOR Loans Base Rate Loans
---- ------------ ----------- ---------------
I. Greater than or equal to 3.5 to 1.0 3.50% 2.00%
II. Greater than or equal to 3.0 to 1.0 but 3.00% 1.50%
less than 3.5 to 1.0
III. Greater than or equal to 2.5 to 1.0 but 2.50% 1.00%
less than 3.0 to 1.0
IV. Greater than or equal to 2.0 to 1.0 but 2.00% 0.50%
less than 2.5 to 1.0
V. Less than 2.0 to 1.0 1.50% 0.00%
</Table>
For the period from August 12, 2002, through the earlier of
(a) the date the Compliance Certificate and financial
statements required by SECTION 6.6(a)(ii) and SECTION 6.6(b),
for the fiscal quarter ended September 30, 2002, are required
to be provided to the Agent, and (b) the date such Compliance
Certificate and financial statements are provided to the
Agent, the Applicable Margin for LIBOR Loans and for Base Rate
Loans determined as of such quarter shall be equal to the
respective Applicable Margins in tier I on the above pricing
grid. Thereafter, the Applicable Margin shall be set according
to the tiers on the above pricing grid as determined by the
Agent based on the applicable Compliance Certificate and
financial statements required by SECTION 6.6(a) and SECTION
6.6(b), and any change in the Applicable Margin shall be
effective as of the earlier of (a) the date such Compliance
Certificate and financial statements are required to be
provided to the Agent, and (b) the date such Compliance
Certificate and financial statements are provided to the
Agent. If Borrower fails to timely provide to the Agent the
Compliance Certificate and the financial statements, then from
the period beginning the first day after the date such
Compliance Certificate and financial statements are required
to be provided to the Agent and ending on the date such items
are actually provided to the Agent, the respective Applicable
Margins for LIBOR Loans and for Base Rate Loans shall be the
Applicable Margins in tier I on the above pricing grid."
""COMMITMENT AMOUNT" means, an amount equal to (a) from the
Effective Date through August 11, 2002, $350,000,000, (b) from
August 12, through March 31, 2003, $275,000,000, (c) from
April 1, 2003 through December 31, 2003, $250,000,000, and (d)
from January 1, 2004 through the Commitment Termination Date,
$225,000,000, in each case as such amount may be reduced from
time to time pursuant to the terms of this Agreement."
""CONSOLIDATED NET ACCOUNTS" means, as of any date of
determination, accounts receivable set out in the consolidated
balance sheet of the Borrower and its Subsidiaries as accounts
receivable, net of allowances, and in each case, as determined
in accordance with GAAP."
""CONSOLIDATED NET ASSETS" means, as of any date of
determination, the sum of (a) Consolidated Net Accounts, plus
(b) Consolidated Net PP&E."
""CONSOLIDATED NET PP&E" means, as of any date of
determination, the difference of (a) total property, plant and
equipment of the Borrower and its Subsidiaries set out in the
consolidated balance sheet of the Borrower and its
Subsidiaries, minus (b) accumulated depreciation expense
attributed to such items, set out in the consolidated balance
sheet of the Borrower and its Subsidiaries as "property and
equipment, net", and in each case, as determined in accordance
with GAAP."
""EBIT" means, for any period, on a trailing four fiscal
quarter basis, the sum of Consolidated Net Income plus,
without duplication, each of the following to the
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extent actually deducted in determining Consolidated Net
Income: (a) Consolidated Interest Expense; (b) provisions for
taxes based on income or revenues; (c) provisions made in
accordance with SFAS 142, which taken together with all other
charges previously taken in connection with SFAS 142, do not,
in the aggregate, exceed $800,000,000; (d) to the extent
applicable, Permitted Charges; and (e) non-cash charges
related to the Borrower's stock option program or stock
compensation plan as required to be taken pursuant to GAAP, in
each case calculated on a consolidated basis for the Borrower
and its Subsidiaries and as determined in accordance with
GAAP."
""EBITDA" means, for any period, on a trailing four fiscal
quarter basis (using the historical financial results of any
business acquired in an Acquisition through the Effective
Date, to the extent applicable, all on a pro forma basis,
consistent with SEC regulations), the sum of Consolidated Net
Income plus, without duplication, each of the following to the
extent actually deducted in determining Consolidated Net
Income: (a) Consolidated Interest Expense; (b) provisions for
taxes based on income or revenues; (c) the amount of all
depreciation and amortization expense deducted in determining
Consolidated Net Income; (d) charges taken in accordance with
SFAS 142, which when taken together with all other charges
previously taken in connection with SFAS 142, do not, in the
aggregate, exceed $800,000,000; (e) without duplication,
Permitted Charges; and (f) without duplication, Non-Cash
Charges, all calculated on a consolidated basis for the
Borrower and its Subsidiaries and as determined in accordance
with GAAP. Upon the consummation of any Acquisition after the
Effective Date, EBITDA may be calculated, subject to the
immediately following sentence, using a calculation which (y)
includes the historical financial results of the acquired
business on a pro forma trailing four fiscal quarter basis
(consistent with SEC regulations), and (z) assumes that the
consummation of such Acquisition (and the incurrence,
refinancing, or assumption of any Indebtedness in connection
with such Acquisition) occurred on the first day of the
trailing four fiscal quarter period. The foregoing adjustment
to EBITDA to take into account an Acquisition may only be made
if the balance sheet and statements of income, retained
earnings, and cash flows of the acquired Person (or the Person
from whom the assets, securities or other equity interests
were acquired), are in compliance with SEC regulations and
requirements regarding the preparation and presentation of
historical financial information and pro forma financial
information."
""MINIMUM ASSET COVERAGE RATIO" means, when determined, the
ratio of (a) Consolidated Net Assets, to (b) Senior Debt."
""MINIMUM INTEREST COVERAGE RATIO" means, for any period, on a
trailing four fiscal quarter basis, the ratio of (a) EBIT, to
(b) the sum of Consolidated Interest Expense (excluding any
Make-Whole Amount (as defined in the Note Purchase Agreement)
or Modified Make-Whole Amount (as defined in the Note Purchase
Agreement), as applicable, paid in connection with asset sales
which result in a mandatory prepayment on the Senior Notes)),
plus the amount of any dividend or distribution recognized in
respect of the Preferred Stock during such period."
""NON-CASH CHARGES" means, for any period, the amount of
non-cash charges determined in accordance with GAAP; provided
that, if any cash outlay is made during such period in respect
of such non-cash charge, only the amount of such
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non-cash charge which exceeds the amount of the cash outlay
may be added back to Consolidated Net Income for purposes of
calculating EBITDA."
""PERMITTED CHARGES" means, for any period, on a trailing four
fiscal quarter basis, expenses, write-offs or losses, which in
each case have been (a) paid, incurred or realized on or
before June 30, 2003, (b) disclosed to the Agent in such
detail as the Agent deems acceptable, and (c) determined in
accordance with GAAP, and which relate to:
(a) employee terminations, equipment sales, operating
lease termination expenses, and real estate lease terminations
(including related clean-up and moving charges) which, in the
aggregate do not exceed $29,000,000, provided that, cash
payments in connection with the items under this clause (a),
may not, in the aggregate, exceed $20,000,000,
(b) accounts receivable, notes receivable, retainage,
costs and earnings in excess of billing, and other amounts
which (i) are either (A) set out in the consolidated balance
sheet of the Borrower and its Subsidiaries for the fiscal
quarter ended June 30, 2002 as net of allowances or (B)
disclosed in writing to the Agent on August 12, 2002 or (ii)
relate to the contractual obligations of Borrower or its
Subsidiaries existing on June 30, 2002 as disclosed in writing
to the Agent on August 12, 2002, and which have been charged
off as doubtful for collection, provided that, all such
amounts under clauses (i) and (ii) may not, in the aggregate,
exceed $62,000,000(as adjusted for future recoveries),
(c) the proxy contest with Utilicorp, and which do
not, in the aggregate, exceed $13,000,000, and
(d) (i) advisory, legal, and bank fees and expenses
in connection with the negotiation, execution and delivery of
the Eighth Amendment to this Agreement (including any related
amendment to the Senior Notes in connection therewith) and
related third party due diligence conducted on behalf of the
Agent in connection therewith, and which do not, in the
aggregate, exceed $3,500,000, and (ii) non-cash expenses
related to prior financing transaction costs which have been
capitalized and are required to be expensed in accordance with
GAAP."
""UTILICORP" means Aquila, Inc., a Delaware corporation (f/k/a
UtiliCorp United Inc.)."
2. Amendments to Section 2.10 (Mandatory Prepayments of Loans). SECTION
2.10 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following SECTION 2.10:
"Section 2.10 Mandatory Prepayment of Loans.
(a) If the aggregate principal amount of outstanding Loans and
L/C Obligations shall at any time for any reason exceed the
Commitment Amount then in effect, the Borrower shall,
immediately and without notice or demand, pay the amount of
such excess to the Agent for the ratable benefit of the
Lenders as a prepayment of the Loans and, if all Loans have
been paid, a pre-funding of Letters of Credit pursuant to the
provisions of SECTION 7.4.
(b) If, on or after August 12, 2002, the Borrower or any of
the Subsidiaries issues any additional Senior Notes under the
Note Purchase Agreement, then the
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Borrower shall promptly, without notice or demand, pay all
proceeds from such issuance (net of usual and customary
transaction costs and expenses actually incurred in connection
with such issuance) to the Agent for the ratable benefit of
the Lenders as a prepayment of the Loans and if all Loans have
been paid, as a pre-funding of Letters of Credit pursuant to
the provisions of SECTION 7.4, and upon such issuance, the
Commitment Amount shall be automatically and permanently
reduced by an amount equal to the amount of the net proceeds
from such issuance.
(c) If, on or after August 12, 2002, the Borrower or any of
its Subsidiaries issues any Funded Debt, which, in the
aggregate, exceeds $15,000,000, other than the Indebtedness
referenced in SUBSECTION (b) above, then the Borrower shall
promptly, without notice or demand, pay all proceeds from such
issuance (net of usual and customary transaction costs and
expenses actually incurred in connection with such issuance)
to the Agent for the ratable benefit of the Lenders and the
holders of the Senior Notes (based on the proportion of the
Commitment Amount under this Agreement and the proportion of
the outstanding principal amount of the Senior Notes to the
sum of both) as a prepayment respectively of (i) the Loans,
and if all Loans have been paid, a pre-funding of Letters of
Credit pursuant to the provisions of SECTION 7.4, and upon
such issuance, the Committed Amount shall be automatically and
permanently reduced by an amount equal to the amount of the
proceeds of such issuance required to be paid to the Agent
under this SECTION 2.10(c)(i), and (ii) the Senior Notes.
(d) If, on or after August 12, 2002, the Borrower receives
proceeds from the collection of accounts receivable to the
extent such proceeds represent a portion of accounts
receivable which had been written off by the Borrower as
doubtful for collection, then the Borrower shall promptly,
without notice or demand, pay the portion of such net proceeds
which had been written off to the Agent for the ratable
benefit of the Lenders and the holders of the Senior Notes
(based on the proportion of the Commitment Amount under this
Agreement and the proportion of the outstanding principal
amount of the Senior Notes to the sum of both) as a prepayment
respectively of (i) the Loans, and if all Loans have been
paid, a pre-funding of Letters of Credit pursuant to the
provisions of SECTION 7.4, and upon such issuance, the
Committed Amount shall be automatically and permanently
reduced by an amount equal to the amount of the proceeds of
such collection required to be paid to the Agent under this
SECTION 2.10(d)(i), and (ii) the Senior Notes.
(e) If any asset disposition occurs under SECTIONS 6.16(d) and
(E), the Borrower shall comply with the prepayment provisions
in such SECTIONS 6.16(d) and (e).
(f) Any mandatory prepayment of Loans pursuant to this
Agreement shall not be limited by the notice provision for
prepayments set forth in SECTION 2.9, but immediately upon
determining the need to make any such prepayment, the Borrower
shall notify the Agent of such required prepayment. Each such
prepayment shall be accompanied by a payment of all accrued
and unpaid interest on the Loans prepaid and any applicable
breakage fees and funding losses pursuant to SECTION 2.12."
3. Amendment to Section 3.1 (Fees). SECTION 3.1(a) of the Credit
Agreement is hereby deleted in its entirety and replaced with the following
SECTION 3.1(a):
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"(a) Commitment Fee. For the period from August 12,
2002, to and including the Commitment Termination Date the
Borrower shall pay to the Agent for the ratable account of the
Lenders, a Commitment Fee (computed on a basis of a
365/366-day year and actual days elapsed) on an amount equal
to the average daily difference between (i) the sum of the
Commitment Amount and (ii) the outstanding Revolving Loans and
L/C Obligations, such Commitment Fee to be calculated, for any
day, at such times as the relevant Funded Debt to EBITDA Ratio
is in one of the following tiers, based upon the Commitment
Fee Percentage per annum set forth opposite the corresponding
Funded Debt to EBITDA Ratio in same tier set forth below,
times such amount:
<Table>
<Caption>
Commitment Fee
Tier Funded Debt to EBITDA Ratio Percentage
---- --------------------------- --------------
I. Greater than or equal to 3.5 to 1.0 0.500%
II. Greater than or equal to 3.0 to 1.0 but less than 0.500%
3.5 to 1.0
III. Greater than or equal to 2.5 to 1.0 but less than 0.500%
3.0 to 1.0
IV. Greater than or equal to 2.0 to 1.0 but less than 0.375%
2.5 to 1.0
V. Less than 2.0 to 1.0 0.375%
</Table>
For the period from August 12, 2002, through the date the
Compliance Certificate and financial statements required by
SECTION 6.6(a)(ii) and SECTION 6.6(b), for the fiscal quarter
ended September 30, 2002, are required to be provided to the
Agent, the applicable Commitment Fee Percentage determined as
of such quarter shall be equal to the percentage in tier I,
and thereafter, the Commitment Fee Percentage shall be set by
the Agent at the same time and in the same manner as the
Applicable Margin is set. Such Commitment Fees shall be
payable in arrears commencing on September 30, 2002, and on
the last Business Day of each calendar quarter thereafter and
on the Maturity Date unless the Commitments are terminated in
whole on an earlier date, in which event the Commitment Fee
for the period to but not including the date of such
termination shall be paid in whole on the date of such
termination. If Borrower fails to timely provide to the Agent
the Compliance Certificate and the financial statements, then
from the period beginning the first day after the date such
Compliance Certificate and financial statements are required
to be provided to the Agent and ending on the date such items
are actually provided to the Agent, the Commitment Fee shall
be the Commitment Fee in tier I on the above pricing grid."
4. Amendment to Section 5.19 (Year 2000 Compliance). SECTION 5.19 of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following SECTION 5.19:
"Section 5.19 [Intentionally Omitted]."
5. Amendment to Section 6.6(a) (Financial Reports and Other
Information). SECTION 6.6(a) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following SECTION 6.6(a):
"(a) The Borrower and its Subsidiaries will maintain
a system of accounting in such manner as will enable
preparation of financial statements in accordance with
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GAAP and will furnish to the Agent and its authorized
representatives such information about the business and
financial condition of the Borrower and its Subsidiaries,
including, without limitation, any corporate documents and
records, within such time period, as the Agent or any Lender
may reasonably request; and, without any request, will furnish
to the Agent:
(i) within forty-five (45) days after the
end of each month of each fiscal year of the
Borrower, (A) the unaudited consolidated balance
sheet of the Borrower and its Subsidiaries as at the
end of such month and the related unaudited
consolidated statements of income for such month and
for the portion of the fiscal year ended with the
last day of such month, in form and detail acceptable
to the Agent, provided that, the Borrower is not
required to furnish financial statements under this
clause (i) for the months required under clauses (ii)
and (iii) below, and (B) (i) an accounts receivable
aging summary, and (ii) a status report on (y) the
items described in clause (b)(ii) of the definition
of "Permitted Charges", and (z) the 20 largest
accounts receivable of the Borrower, all of which
under this clause (B) shall be in form and detail
reasonably acceptable to the Agent;
(ii) within forty-five (45) days after the
end of each fiscal quarter of each fiscal year of the
Borrower, the consolidated balance sheet of the
Borrower and its Subsidiaries as at the end of such
fiscal quarter and the related consolidated
statements of income and retained earnings and of
cash flows for such fiscal quarter and for the
portion of the fiscal year ended with the last day of
such fiscal quarter, and a summary of asset
dispositions during such period and in the aggregate
to date under SECTION 6.16(c), (d) and (e), all of
which under this clause (ii) shall be in form and
detail satisfactory to the Agent and in the case of
consolidated statements, in the form filed with the
SEC and within five (5) days thereafter, a
certificate of an officer of the Borrower acceptable
to the Agent that such financial reports fairly
present the financial condition of the Borrower and
its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash
flows for the periods indicated and that they have
been prepared in accordance with GAAP, in each case,
subject to normal year-end audit adjustments and the
omission of any footnotes as permitted by the SEC;
and
(iii) within one hundred twenty (120) days
after the end of each fiscal year of the Borrower,
consolidated and consolidating balance sheets of the
Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated and
consolidating statements of income and consolidated
statements of retained earnings and of cash flows for
such fiscal year and setting forth consolidated
comparative figures for the preceding fiscal year and
certified by an officer of the Borrower acceptable to
the Agent to the effect that such statements fairly
present the financial condition of the Borrower and
its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash
flows, and in the case of the consolidated
statements, audited by an independent
nationally-recognized accounting firm acceptable to
the Agent."
6. Amendment to Section 6.6(b)(Financial Reports and Other
Information). SECTION 6.6(b) of the Credit Agreement is hereby deleted in its
entirety and replaced with the following SECTION 6.6(b):
"(b) (i) Each financial statement furnished to the
Agent pursuant to SECTION 6.6(a)(i) shall be accompanied by a
Compliance Certificate
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substantially in the form of EXHIBIT 6.6 showing the
Borrower's compliance with the Minimum Asset Coverage Ratio.
(ii) Each financial statement furnished to
the Agent pursuant to SECTION 6.6(a)(ii) and (iii)
shall be accompanied by (i) a written certificate
signed by an officer of the Borrower acceptable to
the Agent to the effect that (x) no Default or Event
of Default has occurred during the period covered by
such statements or, if any such Default or Event of
Default has occurred during such period, setting
forth a description of such Default or Event of
Default and specifying the action, if any, taken by
the Borrower to remedy the same, and (y) the
representations and warranties contained herein are
true and correct in all material respects as though
made on the date of such certificate, except to the
extent that any such representation or warranty
relates solely to an earlier date, in which case it
was true and correct as of such earlier date and
except as otherwise described therein, as a result of
the transactions expressly permitted hereunder or as
previously disclosed to the Lenders, and (ii) a
Compliance Certificate substantially in the form of
EXHIBIT 6.6 showing the Borrower's compliance with
the financial covenants set out herein."
7. Amendments to Section 6.11 (Restrictions on Fundamental Changes).
SECTION 6.11 of the Credit Agreement is hereby deleted in its entirety and
replaced with the following SECTION 6.11:
"Restrictions on Fundamental Changes. Neither the Borrower nor
any of its Subsidiaries shall be a party to any merger into or
consolidation with, make an Acquisition or otherwise purchase
or acquire all or substantially all of the assets or stock of,
any other Person, or sell all or substantially all of its
assets or stock (other than as permitted under SECTION 6.16),
except the Borrower may purchase or otherwise acquire all or
substantially all of the stock or assets of, or otherwise
acquire by merger or consolidation, any of its Subsidiaries,
and any such Subsidiary may merge into, or consolidate with,
or purchase or otherwise acquire all or substantially all of
the assets or stock of or sell all or substantially all of its
assets or stock to, any other Subsidiary of the Borrower or
the Borrower, in each case so long as (a) if the transaction
is with the Borrower, the Borrower shall be the surviving
entity to any such merger or consolidation, or (b) if the
transaction is not with the Borrower, a domestic Subsidiary
shall be the surviving entity to any such merger or
consolidation. Except as otherwise permitted in this SECTION
6.11, the Borrower shall not sell or dispose of any capital
stock of or its ownership interest in any of the Guarantors or
any other Subsidiaries which it may form. Borrower shall give
the Agent the notice required under SECTION 6.9."
8. Amendments to Section 6.15 (Loans, Advances and Investments).
SECTION 6.15 of the Credit Agreement is hereby amended by deleting SUBSECTIONS
(f), (g), (h) and (k) in their entirety and replacing them with SUBSECTIONS (f),
(g), (h), and (k) respectively, as follows:
" (f) to the extent permitted by, and in compliance
with, applicable law, loans to employees of the Borrower or
any of its Subsidiaries, provided that all such loans shall
not exceed $2,000,000 at any one time;
(g) Investments made in Persons other than Borrower
or its Subsidiaries, provided that, such Investment made after
June 30, 2002 may not, in the aggregate, exceed $2,000,000;
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(h) [intentionally omitted];
. . .
(k) [intentionally omitted];"
9. Amendment to Section 6.16 (Transfer of Assets). SECTION 6.16 of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following SECTION 6.16:
"Section 6.16 Transfer of Assets. The Borrower and its
Subsidiaries shall not permit any sale, transfer, conveyance,
assignment or other disposition of any asset of the Borrower
or any of its Subsidiaries except:
(a) transfers of inventory in the ordinary course of
business;
(b) the retirement or replacement of assets (with
assets of equal or greater value) in the ordinary course of
business;
(c) transfers of any assets among (i) the Borrower
and its non-domestic Subsidiaries not to exceed, in the
aggregate, $5,000,000, or (ii) the Borrower and any of its
domestic Subsidiaries;
(d) sales, transfers or conveyances of accounts
receivable for fair and adequate consideration and for cash,
and all proceeds from the sale, transfer or conveyance of such
assets shall be paid to the Agent, for the ratable benefit of
the Lenders and the holders of the Senior Notes (based on the
proportion of the Commitment Amount under this Agreement and
the proportion of the outstanding principal amount of the
Senior Notes to the sum of both) as a prepayment respectively
of (i) the Loans, and if all Loans have been paid, a
pre-funding of Letters of Credit pursuant to the provisions of
SECTION 7.4, and upon such disposition, the Commitment Amount
shall be automatically and permanently reduced by an amount
equal to the amount of such proceeds required to be paid to
the Agent pursuant to this SECTION 6.16(d)(i), and (ii) the
Senior Notes; and
(e) to the extent not included in clauses (a) through
(d) above, dispositions of ASSETS, for fair and adequate
consideration and for cash, provided that, dispositions under
this SUBSECTION (e) may not, in the aggregate, exceed
$50,000,000 in book value during the term of this Agreement,
and all proceeds from the disposition of such assets (net of
usual and customary transaction costs and expenses actually
incurred in connection with such disposition) shall be paid to
the Agent, for the ratable benefit of the Lenders and the
holders of the Senior Notes (based on the proportion of the
Commitment Amount under this Agreement and the proportion of
the outstanding principal amount of the Senior Notes to the
sum of both) as a prepayment respectively of (i) the Loans,
and if all Loans have been paid, a pre-funding of Letters of
Credit pursuant to the provisions of SECTION 7.4, and upon
such disposition, the Commitment Amount shall be automatically
and permanently reduced by an amount equal to the amount of
such proceeds required to be paid to the Agent pursuant to
this SECTION 6.16(e)(i), and (ii) the Senior Notes. Amounts
required to the paid to the Lenders and the holders of the
Senior Notes under this SECTION 6.16(e) shall be made on the
date the Compliance Certificate and financial statements are
required to be delivered under SECTION 6.6(b), provided that,
in the event asset sales during a
9
month under this SECTION 6.16(e) exceed $1,000,000 in book
value in the aggregate, amounts required to be paid to the
Lenders and the holders of the Senior Notes pursuant to this
SECTION 6.16(e) as a result of all such assets sales which
have occurred during such month shall be made within 15 days
after the end of such month."
10. Amendments to Section 6.19 (Capital Expenditures). SECTION 6.19 of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following SECTION 6.19:
"Section 6.19 Capital Expenditures.
(a) Neither the Borrower nor any of its Subsidiaries
shall make or commit to make Capital Expenditures greater than
(i) for fiscal year 2002, $60,000,000, and (ii) for fiscal
year 2003 and each fiscal year thereafter, $50,000,000. No
portion of any annual limit may be carried forward to a
subsequent fiscal year.
(b) In addition to the annual limits under SECTION
6.19(a), if the Borrower executes an eligible contract, then
the Borrower may make Capital Expenditures in respect of such
contract in an amount equal to the lesser of (i) the actual
amount required by such contract, and (ii) $15,000,000,
provided that, (A) in respect of each such contract, Capital
Expenditures not made within 12 months after the date of such
contract shall be applied against the annual limits under
SECTION 6.19(a), and (B) the amount of Capital Expenditures
under this SECTION 6.19(b) for all such contracts may not, in
the aggregate, exceed $15,000,000 in any fiscal year. Upon
execution of each eligible contract, the Borrower shall
promptly deliver a copy of such contract to the Administrative
Agent, together with a summary of the Capital Expenditures
required by such contract in form and detail acceptable to the
Administrative Agent. As used in this SECTION 6.19(b),
"ELIGIBLE CONTRACT" means, a utility outsourcing contract with
revenues to the Borrower of at least $75,000,000 during any 12
consecutive month period prior to 18 months after execution of
such contract."
11. Amendment to Section 6.20 (Minimum Consolidated Net Worth). SECTION
6.20 of the Credit Agreement is hereby deleted in its entirety and replaced with
the following SECTION 6.20:
"Section 6.20 Minimum Consolidated Net Worth. The Borrower
will maintain a minimum Consolidated Net Worth of not less
than an amount equal to the sum of (a) 90% of Consolidated Net
Worth as of June 30, 2002 (determined without giving effect to
any adjustments made in accordance with SFAS 142), plus (b)
for each fiscal quarter ended prior to (but not on) such date
of determination, commencing with the fiscal quarter ended
September 30, 2002, the total of (i) an amount equal to 75% of
Consolidated Net Income for such fiscal quarter, if positive,
plus (ii) an amount equal to 100% of the amount of any equity
issuance by the Borrower, including equity issued in a
secondary offering or equity issued to acquire another entity
in an Acquisition, minus (iii) any distributions to
shareholders of any Subchapter S corporation acquired in an
Acquisition as a result of operations of such corporation
prior to the closing of the Acquisition, minus (iv) Permitted
Charges referenced in clauses (a) and (b) of such definition
which are applicable to such period, and minus (v) without
duplication, charges taken in accordance with SFAS 142 in
accordance with GAAP, which when taken together with all other
charges previously taken in connection with SFAS 142, do not,
in the aggregate, exceed $800,000,000. Increases in
Consolidated
10
Net Worth required after June 30, 2002 shall be appropriately
adjusted to eliminate any adverse effects on the Consolidated
Net Worth of the Borrower occasioned by the expensing of
Modified Make-Whole Amounts (as defined in the Note Purchase
Agreement) paid pursuant to Section 4.4 of Amendment No. 1 to
the Note Purchase Agreement. The calculation of Consolidated
Net Worth under this SECTION 6.20 shall not take into
consideration the non-cash charges related to the Borrower's
stock option program or stock compensation plan as required to
be taken pursuant to GAAP ."
12. Amendments to Section 6.21 (Minimum Interest Coverage Ratio).
SECTION 6.21 of the Credit Agreement is hereby deleted in its entirety and
replaced with the following SECTION 6.21:
"Section 6.21 Minimum Interest Coverage Ratio. The Borrower
will maintain a Minimum Interest Coverage Ratio not less than
the ratio set out below for the applicable period:
For the period ending June 30, 2002: 3.00 to 1.00
For the period ending September 30, 2002: 2.40 to 1.00
For the period ending December 31, 2002: 2.00 to 1.00
For the period ending March 31, 2003: 1.70 to 1.00
For the period ending June 30, 2003: 1.90 to 1.00
For the period ending September 30, 2003: 2.10 to 1.00
For the period ending December 31, 2003
and thereafter: 2.30 to 1.00"
13. Amendments to Section 6.22 (Funded Debt to EBITDA Ratio). SECTION
6.22 of the Credit Agreement is hereby deleted in its entirety and replaced with
following SECTION 6.22:
"Section 6.22 Funded Debt to EBITDA Ratio. The Borrower will
maintain a maximum Funded Debt to EBITDA Ratio not greater
than the ratio set out below for the applicable period:
For the period ending June 30, 2002: 3.50 to 1.00
For the period ending September 30, 2002: 4.30 to 1.00
For the period ending December 31, 2002: 4.40 to 1.00
For the period ending March 31, 2003: 4.50 to 1.00
For the period ending June 30, 2003: 4.10 to 1.00
For the period ending September 30, 2003: 4.00 to 1.00
For the period ending December 31, 2003
and thereafter: 3.50 to 1.00"
11
14. Amendments to Section 6.23 (Senior Debt to EBITDA). SECTION 6.23 of
the Credit Agreement is hereby deleted in its entirety and replaced with the
following SECTION 6.23:
"Section 6.23 Senior Debt to EBITDA. The Borrower will
maintain a maximum Senior Debt to EBITDA Ratio not greater
than the ratio set out below for the applicable period:
For the period ending June 30, 2002: 3.00 to 1.00
For the period ending September 30, 2002: 3.10 to 1.00
For the period ending December 31, 2002: 3.10 to 1.00
For the period ending March 31, 2003: 3.10 to 1.00
For the period ending June 30, 2003: 2.80 to 1.00
For the period ending September 30, 2003: 2.75 to 1.00
For the period ending December 31, 2003
and thereafter: 2.50 to 1.00"
15. Amendment to Section 6 (Covenants). Existing SECTION 6.24 of the
Credit Agreement is hereby re-numbered as SECTION 6.25 and existing SECTION 6.25
of the Credit Agreement is hereby re-numbered SECTION 6.24 and deleted in its
entirety and replaced with the following SECTION 6.24:
"6.24. Minimum Asset Coverage. The Borrower will maintain a
Minimum Asset Coverage Ratio not less than the ratio set out
below for the applicable period:
Through December 31, 2002: 1.55 to 1.00
Thereafter: 1.65 to 1.00"
16. Amendment to Section 6 (Covenants). SECTION 6 of the Credit
Agreement is hereby amended by adding a new SECTION 6.26 in its appropriate
numerical order as follows:
"6.26. Maintenance of Most Favored Lender Status. The
Borrower hereby acknowledges and agrees that if, on or before
June 30, 2004, the Borrower shall enter into any agreement or
amendment with any lender or holder of its Funded Debt which
provides for the benefit of any such lender or holder, any
covenant that is in addition to, or more favorable to such
Person than the covenants contained in this Agreement, then,
and in each and any such event, the covenants in this
Agreement shall be, and shall be deemed to be, without any
further action on the part of the Borrower or any other Person
being necessary or required, amended to afford the Lenders the
same benefits and rights with respect to such matters as such
agreements or amendments provide to any such other lender or
holder. In addition, if the Borrower amends the Note Purchase
Agreement or the Senior Notes to increase the Applicable
Margin (as defined in the Note Purchase Agreement) paid to the
holders of the Senior Notes, the Borrower will execute and
deliver to the Lenders an amendment to this Agreement to
provide the Lenders a corresponding increase in the Applicable
Margin. The Borrower will promptly deliver to the Agent a copy
of each such
12
agreement or amendment entered into after the date hereof.
Without limiting the effectiveness of the first sentence of
this SECTION 6.26, the Borrower agrees, no later than thirty
(30) days following the date of such agreement or amendment,
to enter into such documentation as the Majority Lenders may
reasonably request to evidence the amendments provided for in
this SECTION 6.26."
17. Amendment to Section 7.1 (Events of Default). SECTION 7.1(b) of the
Credit Agreement is hereby deleted in its entirety and replaced with the
following SECTION 7.1(b):
"(b) default by the Borrower in the observance or
performance of any covenant set out in SECTIONS 6.6(e),
6.10(a), 6.11, 6.16, 6.21, 6.22, 6.23 6.24, 6.25, or 6.26."
18. Amendment to Exhibit 6.6 (Form of Compliance Certificate). EXHIBIT
6.6 to the Credit Agreement is hereby deleted in its entirety and replaced with
EXHIBIT 6.6 attached to this Amendment.
19. Amendments to Schedules. SCHEDULES 1.1, 2.2, and 5.1 to the Credit
Agreement are hereby deleted in their entirety and replaced with SCHEDULES 1.1,
2.2, and 5.1 attached to this Amendment.
20. Conditions. This Amendment shall not be effective until:
(a) it has been duly executed and delivered by
Borrower, each Guarantor, and at least the Majority Lenders,
(b) a related amendment to the Note Purchase
Agreement and other documents required in connection therewith
have been executed and delivered in form and substance
satisfactory to the Agent and the Majority Lenders,
(c) the Agent has received a certificate of the
Secretary (or Assistant Secretary) and the President (or a
Vice President) of each of the Borrower and its Subsidiaries
containing specimen signatures of the individuals authorized
to execute on behalf of such Person this Amendment or any
other documents provided for in this Amendment, together with
(i) copies of resolutions of the Board of Directors (or
similar governing body) of such Person authorizing the
execution and delivery of this Amendment and of all other
documents to be executed by or actions to be taken by such
Person in connection with the execution and delivery of this
Amendment, and (ii) copies of such Person's organizational and
governing documents, or a certification by the Borrower or
Guarantor, as applicable, that no changes have been made to
such documents since the date last delivered to the Agent,
(d) the Agent has received a written certificate
signed by an officer of the Borrower acceptable to the Agent
as to (i) the absence of any action, suit, investigation or
proceeding pending or threatened in any court or before any
arbitrator or governmental authority that could reasonably be
expected to materially and adversely affect (A) the financial
condition of the Borrower or its Subsidiaries, or (B) the
ability of the Borrower and its Subsidiaries to perform their
respective obligations under the Credit Documents, as amended
by the Amendment, and (ii) the absence of a material breach of
any representation, warranty or agreement of the Borrower set
out in the Credit Documents,
13
(e) the completion of all due diligence with respect
to the Borrower and its Subsidiaries in scope and
determination satisfactory to the Agent and the Majority
Lenders,
(f) the Agent has received one or more legal opinions
in form and substance satisfactory to the Agent from the
Borrower's General Counsel or from Vinson & Elkins L.L.P., the
Borrower's special counsel, and
(g) the Agent has received such other documents, if
any, as the Agent may reasonably request.
21. Post Closing Conditions. The following post closing conditions
shall be satisfied by the periods set out below, and the covenants in this
SECTION 21 shall be deemed to constitute covenants set forth in the Credit
Agreement, and failure to perform or observe any term in this SECTION 21 shall
constitute an Event of Default.
(a) Diligence and Collateral Review. Within sixty
(60) days after the date of this Amendment, the Agent will
cause, at the Borrower's sole cost and expense, a nationally
recognized accounting firm acceptable to the Agent, Borrower
and the holders of the Senior Notes to perform and complete
due diligence, including without limitation, a collateral
review and examination of the Borrower's and its Subsidiaries'
accounts receivable, work-in-process and backlog and other
matters in a manner which is satisfactory to the Agent and the
Majority Lenders.
(b) Real Estate Collateral. Within sixty (60) days
after the date of this Amendment, the Borrower shall, and
shall cause its Subsidiaries to execute and deliver mortgages
or deeds of trust, as applicable and in form and substance
satisfactory to the Agent (as collateral agent for the Lenders
and the holders of the Senior Notes), granting to the Agent
for the ratable benefit of the Lenders and the holders of the
Senior Notes, a first priority Lien upon, and security
interest in, the real property owned by the following
Subsidiaries:
(i) Dillard Smith Construction Company,
(ii) Golden State Utility Co.,
(iii) H.L. Chapman Pipeline Construction, Inc.,
(iv) Mears Group, Inc.,
(v) North Houston Pole Line, L.P.,
(vi) PAR Electrical Contractors, Inc.,
(vii) Potelco, Inc.,
(viii) R.A. Waffensmith & Company, Inc.,
(ix) Sumter Utilities, Inc., and
(x) Underground Construction Co., Inc.
14
Such foregoing property shall be subject to no other Liens
other than Permitted Liens. In addition, the Borrower shall,
at its sole cost and expense, deliver such surveys, mortgagee
title policies, environmental assessment reports, evidence of
insurance from an insurer acceptable to the Agent naming the
Agent as "loss payee" and "additional insured", as the case
may be, and other related documents reasonably requested by
the Agent, in each case in form and substance satisfactory to
the Agent.
(c) Lien Search. Upon execution of this Amendment, at
the Borrower's sole cost and expense, the Borrower shall order
a uniform commercial code Lien search, and promptly upon its
receipt it shall provide the Agent with the results of such
Lien search and copies of filings indicated therein as
requested by the Agent. Promptly upon receipt of such Lien
search, the parties shall amend and restate SCHEDULE 5.12 and
SCHEDULE 6.13 to the Credit Agreement with a summary of such
Lien search results reflecting only Permitted Liens.
22. Fees and Expenses. The Borrower agrees to pay (a) to Agent for the
benefit of each Lender that executes and delivers this Amendment on or before
12:00 noon Central Time, August 12, 2002, an amendment fee equal to .375% of
such Lender's Commitment (after giving effect to this Amendment), and (b) the
reasonable fees and expenses of counsel to Agent for services rendered in
connection with the preparation, negotiation and execution of this Amendment.
23. Representations and Warranties. The Borrower and the Guarantors
represent and warrant to the Lenders that (a) they possess all requisite power
and authority to execute, deliver and comply with the terms of this Amendment,
(b) this Amendment has been duly authorized and approved by all requisite
corporate, partnership or limited liability company action, as applicable, by
the Borrower and the Guarantors, (c) no consent of any Person is required for
the execution and delivery of this Amendment by the Borrower and its
Subsidiaries, (d) the execution and delivery of this Amendment by the Borrower
and the Guarantors will not violate their respective organizational documents,
(e) the representations and warranties in each Credit Document to which they are
a party are true and correct in all material respects on and as of the date of
this Amendment as though made on the date of this Amendment (except to the
extent that such representations and warranties speak to a specific date), (f)
each is in full compliance with all covenants and agreements contained in each
Credit Document to which it is a party, and (g) no Default or Event of Default
exists as of the date of this Amendment.
24. Scope of Amendment and Consent; Reaffirmation; Release. After this
Amendment becomes effective, all references to the Credit Agreement shall refer
to the Credit Agreement as amended by this Amendment. Except as affected by this
Amendment, the Credit Documents are unchanged and continue in effect. If there
is any inconsistency between the terms of the Credit Agreement (as amended by
this Amendment) and any other Credit Document, the terms of the Credit Agreement
shall control and such other Credit Document shall be deemed to be amended
hereby to conform to the terms of the Credit Agreement. The Borrower and the
Guarantors hereby reaffirm their respective obligations under the Credit
Documents and agree that all Credit Documents to which they are a party remain
in full force and effect and continue to evidence their respective legal, valid
and binding obligations enforceable in accordance with their terms (as the same
are affected by this Amendment). The Borrower and the Guarantors hereby release
the Agent and the Lenders from any liability for actions or failures to act in
connection with the Credit Documents prior to the date of this Amendment. This
Amendment shall be binding upon and inure to the benefit of each of the
undersigned and their respective successors and permitted assigns.
15
25. Miscellaneous.
(a) No Waiver of Defaults. This Amendment does not
constitute a waiver of, or a consent to, (i) any present or
future violation of or default under any provision of the
Credit Documents, or (ii) the Lenders' right to insist upon
future compliance with each term, covenant, condition and
provision of the Credit Documents.
(b) Form. Each agreement, document, instrument or
other writing to be executed and delivered or otherwise
furnished to the Agent as a condition to the effectiveness of
this Amendment must be in form and substance satisfactory to
the Agent and its counsel.
(c) Multiple Counterparts. This Amendment may be
executed in any number of counterparts with the same effect as
if all signatories have signed the same document. All
counterparts must be construed together to constitute one and
the same instrument. Facsimile signatures shall be given the
same effect as original signatures.
(d) Governing Law. This Amendment and the other
Credit Documents must be construed, and their performance
enforced, under Texas law.
(e) Entirety. THE CREDIT DOCUMENTS, AS AMENDED BY
THIS AMENDMENT, REPRESENT THE FINAL AGREEMENT BETWEEN THE
BORROWER, GUARANTORS, THE AGENT, AND THE LENDERS AND MAY NOT
BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS BY THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
[SIGNATURES AND GUARANTORS' CONSENT AND AGREEMENT APPEAR ON FOLLOWING PAGES.]
16
EXECUTED as of the date first written above.
QUANTA SERVICES, INC.
By: /s/ NICK GRINDSTAFF
--------------------------------------
Nick Grindstaff
Treasurer
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ SUZANNE M. PAUL
--------------------------------------
Suzanne M. Paul, Vice President
BANK OF AMERICA, N.A.,
as a Lender
By: /s/ GARY L. MINGLE
--------------------------------------
Gary L. Mingle
Senior Vice President
BANK ONE, NA,
as a Documentation Agent and as a Lender
By: /s/ DENNIS WARREN
--------------------------------------
Name: Dennis Warren
------------------------------------
Title: First Vice President
-----------------------------------
FLEET NATIONAL BANK
(f/k/a Bank Boston, N.A.), as a
Documentation Agent and as a Lender
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
[SIGNATURE PAGE TO EIGHTH AMENDMENT
TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT]
CREDIT LYONNAIS NEW YORK BRANCH,
as a Managing Agent and as a Lender
By: /s/ ANITA KOC
--------------------------------------
Name: Anita Koc
------------------------------------
Title: Senior Vice President
-----------------------------------
THE BANK OF NOVA SCOTIA,
as a Managing Agent and as a Lender
By: /s/ LIZ HANSON
--------------------------------------
Name: Liz Hanson
------------------------------------
Title: Director
-----------------------------------
NATIONAL CITY BANK,
as a Lender
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
LASALLE BANK NATIONAL ASSOCIATION,
as a Lender
By: /s/ RICHARD J. KRESS
--------------------------------------
Name: Richard J. Kress
------------------------------------
Title: First Vice Preisdent
-----------------------------------
WACHOVIA BANK, NATIONAL ASSOCIATION (f/k/a
First Union National Bank) as a Lender
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
COMERICA BANK,
as a Lender
By: /s/ WILLIAM S. ROGERS
--------------------------------------
Name: William S. Rogers
------------------------------------
Title: Vice President
-----------------------------------
[SIGNATURE PAGE TO EIGHTH AMENDMENT
TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT]
THE BANK OF TOKYO-MITSUBISHI, THE BANK OF TOKYO-MITSUBISHI, LTD.,
LTD., as a Lender as a Lender
By: /s/ JOEY POWELL By: /s/ JOHN M. MEARNS
------------------------------ ---------------------------------
Name: Joey Powell Name: John M. Mearns
---------------------------- -------------------------------
Title: Officer Title: Vice President & Manager
--------------------------- ------------------------------
JPMORGAN CHASE BANK,
as a Lender
By: /s/ MICHAEL D. PICKERD
---------------------------------
Name: Michael D. Pickerd
-------------------------------
Title: Senior Vice President
------------------------------
GUARANTY FEDERAL BANK, F.S.B.,
as a Lender
By: /s/ SCOTT L. BREWER
---------------------------------
Name: Scott L. Brewer
-------------------------------
Title: VP
------------------------------
SUNTRUST BANK, ATLANTA,
as a Lender
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
DEUTSCHE BANK TRUST COMPANY NEW YORK,
as a Lender
By: /s/ ALEXANDER BICI
---------------------------------
Name: Alexander Bici
-------------------------------
Title: Vice President
------------------------------
[SIGNATURE PAGE TO EIGHTH AMENDMENT
TO THIRD AMENDED AND RESTATED SECURED CREDIT AGREEMENT]
GUARANTORS' CONSENT AND AGREEMENT
As an inducement to the Lenders to execute, and in consideration of the
Lenders' execution of this Amendment, each of the undersigned hereby consents to
this Amendment and agrees that the same shall in no way release, diminish,
impair, reduce or otherwise adversely affect the obligations and liabilities of
the undersigned under their respective Guaranties described in the Credit
Agreement executed by the undersigned, or any agreements, documents or
instruments executed by any of the undersigned, all of which obligations and
liabilities are, and shall continue to be, in full force and effect. This
consent and agreement shall be binding upon the undersigned, and their
respective successors and assigns, and shall inure to the benefit of the
Lenders, and their respective successors and assigns.
ADVANCED TECHNOLOGIES AND INSTALLATION CORPORATION
ALLTECK LINE CONTRACTORS (USA), INC.
ARBY CONSTRUCTION, INC.
AUSTIN TRENCHER, INC.
BRADFORD BROTHERS, INC.
CCLC, INC.
COMMUNICATION MANPOWER, INC.
COMPUTAPOLE, INC.
CONTI COMMUNICATIONS, INC.
CROCE ELECTRIC COMPANY, INC.
CROWN FIBER COMMUNICATIONS, INC.
DILLARD SMITH CONSTRUCTION COMPANY
DRIFTWOOD ELECTRICAL CONTRACTORS, INC.
ENVIRONMENTAL PROFESSIONAL ASSOCIATES, LIMITED
FIVE POINTS CONSTRUCTION CO.
GEM ENGINEERING CO., INC.
GOLDEN STATE UTILITY CO.
H. L. CHAPMAN PIPELINE CONSTRUCTION, INC.
HAINES CONSTRUCTION COMPANY
INTERMOUNTAIN ELECTRIC, INC.
IRBY CONSTRUCTION COMPANY
LINE EQUIPMENT SALES CO., INC.
LOGICAL LINK, INC.
MANUEL BROS., INC.
MEARS GROUP, INC.
MEJIA PERSONNEL SERVICES, INC.
METRO UNDERGROUND SERVICES, INC.
MUSTANG LINE CONTRACTORS, INC.
NETWORK COMMUNICATION SERVICES, INC.
NETWORK ELECTRIC COMPANY
NORTH PACIFIC CONSTRUCTION CO., INC.
NORTH SKY COMMUNICATIONS, INC.
NORTHERN LINE LAYERS, INC.
PAC WEST CONSTRUCTION, INC.
PAR ELECTRICAL CONTRACTORS, INC.
PARKSIDE SITE & UTILITY COMPANY CORPORATION
PARKSIDE UTILITY CONSTRUCTION CORP.
P.D.G. ELECTRIC COMPANY
POTELCO, INC.
GUARANTORS' CONSENT AND AGREEMENT
PROFESSIONAL TELECONCEPTS, INC.
PROFESSIONAL TELECONCEPTS, INC.
PWR FINANCIAL COMPANY
QPC, INC.
QSI, INC.
QUANTA HOLDINGS, INC.
QUANTA XXXI ACQUISITION, INC.
QUANTA LI ACQUISITION, INC.
QUANTA LIV ACQUISITION, INC.
QUANTA LVII ACQUISITION, INC.
QUANTA LVIII ACQUISITION, INC.
QUANTA LIX ACQUISITION, INC.
QUANTA LX ACQUISITION, INC.
QUANTA LXI ACQUISITION, INC.
QUANTA LXII ACQUISITION, INC.
QUANTA LXIII ACQUISITION, INC.
QUANTA LXIV ACQUISITION, INC.
QUANTA LXV ACQUISITION, INC.
QUANTA LXVI ACQUISITION, INC.
QUANTA LXVII ACQUISITION, INC.
QUANTA LXVIII ACQUISITION, INC.
QUANTA LXIX ACQUISITION, INC.
QUANTA LXX ACQUISITION, INC.
QUANTA LXXI ACQUISITION, INC.
QUANTA LXXII ACQUISITION, INC.
QUANTA LXXIII ACQUISITION, INC.
QUANTA UTILITY INSTALLATION CO., INC,
R. A. WAFFENSMITH & CO., INC.
RANGER FIELD SERVICES, INC.
SOUTHEAST PIPELINE CONSTRUCTION, INC.
SOUTHWESTERN COMMUNICATIONS, INC.
SOUTHWEST TRENCHING COMPANY, INC.
SPALJ CONSTRUCTION COMPANY
SPECIALTY DRILLING TECHNOLOGY, INC.
SUMTER UTILITIES, INC.
THE RYAN COMPANY, INC.
TOM ALLEN CONSTRUCTION COMPANY
TRANS TECH ACQUISITION, INC.
TRAWICK CONSTRUCTION COMPANY, INC.
TTGP, INC.
TTLP, INC.
TTM, INC.
TXLP, INC.
UNDERGROUND CONSTRUCTION CO., INC.
UTILCO, INC.
VCI TELCOM, INC.
GUARANTORS' CONSENT AND AGREEMENT
W.C. COMMUNICATIONS, INC.
W.H.O.M. CORPORATION
By: /s/ DANA GORDON
-------------------------------------------
Dana Gordon, President or Vice
President of each Guarantor
QDE LLC
QUANTA DELAWARE, INC.
QUANTA ASSET MANAGEMENT LLC
By: /s/ LINDA BUBACZ
-------------------------------------------
Linda Bubacz, President
BROWN ENGINEERING, LLC
By: Ranger Field Services, Inc., Its
Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
COAST TO COAST, LLC
By: Environmental Professional Associates,
Limited, a California corporation,
Its Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
DOT 05, LLC
TJADER, L.L.C.
OKAY CONSTRUCTION COMPANY, LLC
By: Spalj Construction Company, Its Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
GUARANTORS' CONSENT AND AGREEMENT
LAKE NORMAN PIPELINE, LLC
By: Bradford Brothers, Inc., Its Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
MEARS/CPG, LLC
MEARS ENGINEERING, LLC
MEARS/HDD, LLC
MEARS SERVICES, LLC
By: Mears Group, Inc., The Sole Member of
each of the foregoing limited
liability companies
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
S.K.S. PIPELINERS, LLC
By: Arby Construction, Inc., Its Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
TNS-VA, LLC
By: Professional Teleconcepts, Inc. (NY),
Its Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
LINECO LEASING, LLC
By: Mustang Line Contractors, Inc., Its
Sole Member
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
GUARANTORS' CONSENT AND AGREEMENT
AIRLAN TELECOM SERVICES, L.P.
NORTH HOUSTON POLE LINE, L.P.
LINDSEY ELECTRIC, L.P.
DIGCO UTILITY CONSTRUCTION, L.P.
By: Mejia Personnel Services, Inc., Its
General Partner
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
QUANTA SERVICES MANAGEMENT PARTNERSHIP, L.P.
QUANTA ASSOCIATES, L.P.
By: QSI, Inc., Its General Partner
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
TRANS TECH ELECTRIC, L.P.
By: TTGP, Inc., Its General Partner
By: /s/ DANA GORDON
----------------------------------
Dana Gordon, Vice President
PWR NETWORK, LLC
By: PWR Financial Company, Its Sole Member
By: /s/ DANA GORDON
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Dana Gordon, Vice President
Q RESOURCES, LLC
By: Quanta Holdings, Inc.
By: /s/ DANA GORDON
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Dana Gordon, Vice President
GUARANTORS' CONSENT AND AGREEMENT
QUANTA RECEIVABLES, L.P.
By: PWR Network, LLC, Its General Partner
By: PWR Financial Company, Its Sole
Member
By: /s/ DANA GORDON
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Dana Gordon, Vice President
GUARANTORS' CONSENT AND AGREEMENT
EXHIBIT 6.6
COMPLIANCE CERTIFICATE
Quanta Services, Inc. (the "BORROWER"), the various financial
institutions from time to time parties thereto (the "LENDERS"), and NationsBank,
N.A. d/b/a Bank of America, N.A., as Agent for the Lenders (in such capacity,
the "AGENT"), executed and delivered that certain Third Amended and Restated
Secured Credit Agreement dated as of June 14, 1999 (as amended, supplemented and
restated from time to time, the "CREDIT AGREEMENT"). Any term used but not
defined in this Compliance Certificate shall have the meaning given to it in the
Credit Agreement.
The undersigned, solely in his or her capacity as _________________ of
the Borrower hereby certifies to the Agent and the Lenders that:
A. This Compliance Certificate and the attached financial statements
are delivered on this ___ day of ____________, _______.
B. The attached financial statements are (check one) [ ] monthly
financial statements dated ________________, [ ] quarterly financial statements
dated __________________, [ ] annual financial statements dated
_____________________, and fairly present on a consolidated or consolidating
basis, as the case may be and as applicable, the balance sheet [,][and]
statements of income [ADD THE FOLLOWING FOR QUARTERLY AND ANNUAL FINANCIAL
STATEMENTS:, retained earnings and cash flows] of the Borrower and its
Subsidiaries covered thereby as of the date thereof and for the period covered
thereby, subject to normal year-end audit adjustments and the omission of any
footnotes as permitted by the SEC for any such financial statements that are
monthly or quarterly financial statements, [ADD THE FOLLOWING FOR QUARTERLY
REPORTING:, together with a summary of asset dispositions during such period and
in the aggregate to date under SECTION 6.16(c), (d) and (e) of the Credit
Agreement] [ADD THE FOLLOWING FOR MONTHLY REPORTING:, together with an accounts
receivable aging summary, and a status report on (i) the contractual obligations
of the Borrower as disclosed to the Agent described in CLAUSE (c)(ii) of the
definition of "Permitted Charges", and (ii) the top 20 accounts receivable of
the Borrower].
C. As of the date of the attached and with respect to the Borrower and
its Subsidiaries on a consolidated basis, the following (calculated in
accordance with the Credit Agreement):
1. CONSOLIDATED NET WORTH
a. CONSOLIDATED NET WORTH $
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b. Starting Consolidated Net Worth (90% of
Consolidated Net Worth as of
June 30, 2002 and determined
without giving effect to any
adjustments made in accordance
with SFAS 142) $
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c. 75% of positive Consolidated
Net Income for current fiscal
quarter commencing July 1, 2002 $
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d. 100% of any equity issuances $
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e. Subchapter S distributions $
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f. Permitted Charges (clauses (a) and (b)) $
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g. FASB 142 charges (when taken together
with all other charges previously taken
in connection with SFAS 142, shall not,
in the aggregate, exceed $800,000,000) $
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h. MINIMUM CONSOLIDATED NET WORTH
(SUM OF b, d AND d MINUS e, f, (AND g)
(Increases in Consolidated Net Worth
required after June 30, 2002 shall be
appropriately adjusted to eliminate any
adverse effects on the Consolidated Net
Worth of the Borrower occasioned by the
expensing of Modified Make-Whole Amounts
(as defined in the Note Purchase
Agreement) paid pursuant to Section 4.4
of Amendment No. 1 to the Note Purchase
Agreement. The calculation of
Consolidated Net Worth shall not take
into consideration the non-cash charges
related to the Borrower's stock option
program or stock compensation plan as
required to be taken pursuant to GAAP.) $
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2. MINIMUM INTEREST COVERAGE RATIO
a. EBIT $
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b. Consolidated Interest Expense (excluding
any make-whole payments made in connection
with asset sales which result in a
mandatory prepayment on the Senior Notes) $
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c. INTEREST COVERAGE RATIO
(RATIO OF a TO b) to 1.00
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d. MINIMUM INTEREST COVERAGE RATIO FOR
SUCH PERIOD to 1.00
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3. FUNDED DEBT TO EBITDA RATIO
a. FUNDED DEBT (SUM OF i, ii,
AND iii BELOW) $
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i. Indebtedness for borrowed money $
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ii. Reimbursement Obligations $
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iii. Capitalized Lease Obligations $
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b. EBITDA $
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c. FUNDED DEBT TO EBITDA RATIO
(RATIO OF a TO b) to 1.00
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d. MAXIMUM FUNDED DEBT TO EBITDA RATIO FOR
SUCH PERIOD to 1.00
-------
4. SENIOR DEBT TO EBITDA RATIO
a. Senior Debt $
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b. EBITDA $
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c. RATIO (RATIO OF a TO b) to 1.00
-------
d. MAXIMUM SENIOR DEBT TO EBITDA RATIO FOR
SUCH PERIOD to 1.00
-------
5. MINIMUM ASSET COVERAGE RATIO(1)
a. Consolidated Net Accounts $
---------------
b. Consolidated Net PP&E $
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c. CONSOLIDATED NET ASSETS (SUM OF a PLUS b) $
---------------
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(1) Minimum Asset Coverage Ratio is tested monthly. All other financial
covenants are tested quarterly, or annually in the case of Capital Expenditures.
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d. Senior Debt $
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d. ASSET COVERAGE RATIO (RATIO OF c TO d) to 1.00
-------
d. MINIMUM ASSET COVERAGE RATIO FOR
SUCH PERIOD to 1.00
-------
6. CAPITAL EXPENDITURES
a. Capital Expenditures for such period $
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b. Capital Expenditures fiscal year to date $
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c. Portion of Capital Expenditures fiscal
year to date, if any, in connection
with outsourcing utility contract equal
to or greater than $75,000,000 and
confirmed by the Agent (subset of b) $
---------------
d. MAXIMUM CAPITAL EXPENDITURES FOR SUCH
FISCAL YEAR (SUM OF (i) $50,000,000 FOR
2002 AND (ii) $60,000,000 FOR 2003 AND
THEREAFTER, PLUS c) $
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D. Attached hereto is back-up documentation (in form reasonably
acceptable to the Agent) showing information on a Subsidiary by Subsidiary basis
supporting the calculations of the financial covenants contained herein.
[FOR QUARTERLY AND ANNUAL COMPLIANCE CERTIFICATE INSERT THE FOLLOWING
SECTIONS E AND F:]
E. To the best of my knowledge after due inquiry, all of the
representations and warranties contained in the Credit Agreement are true and
correct on the date hereof as if made on the date hereof except, (i) to the
extent such representation and warranty relates solely to an earlier date in
which case it shall have been true and correct as of such earlier date, (ii) as
a result of the transactions expressly permitted under the Credit Agreement,
(iii) as previously disclosed to the Lenders or (iv) as to the following
matters: [Describe or attach a schedule of all such representations and
warranties that are no longer true or correct and, if applicable, what action
the Borrower has taken or proposes to take].
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]
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F. (Check EITHER 1 or 2) To the best of my knowledge after due
inquiry:
[ ] 1. As of the date hereof, no Default or Event of Default has
occurred and is continuing.
[ ] 2. As of the date hereof, no Default or Event of Default has
occurred and is continuing except the following matters:
[Describe all such Defaults or Events of Default, specifying
the nature, duration and status thereof and what action the
Borrower has taken or proposes to take with respect thereto].
Date: , .
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QUANTA SERVICES, INC.
By:
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Name:
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Title:
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