SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
The Securities Act of 1934
Date of Report (Date of earliest event reported) June 19, 1996
- ------------------------------------------------------------------------------
EMCOR Group, Inc.
- ------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
Delaware 0-2315 11-2125338
- ------------------------------------------------------------------------------
(State or other (Commission (I.R.S. Employer
jurisdiction File Number) Identification No.)
of incorporation)
101 Merritt Seven, Norwalk, CT 06851
---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (203)849-7800
-------------------
N/A
- ------------------------------------------------------------------------------
(Former Name or Former Address, if Changed Since Last Report.)
Exhibit Index is located
at Page 4
Page 1 of 114
<PAGE>
Item 5. Other Events
On June 21, 1996, EMCOR Group, Inc. issued a press release regarding a Credit
Agreement by and among it and Certain of Its Subsidiaries and Harris Trust and
Savings Bank individually and as Agent and the Lenders which are or become
parties thereto dated as of June 19, 1996. A copy of the press release is
attached hereto as Exhibit 99 and is incorporated herein by reference.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(c) Exhibits:
Exhibit No. Description
4 * U.S. $100,000,000 Credit Agreement by and among
EMCOR Group, Inc. and Certain of Its Subsidiaries and
Harris Trust and Savings Bank individually and as Agent and
the Lenders which are or become parties thereto dated as of
June 19, 1996.
99 * Press Release issued June 21, 1996.
* Filed herewith.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
EMCOR Group, Inc.
By /s/ Frank T. MacInnis
---------------------
Frank T. MacInnis
Chairman, President and
Chief Executive Officer
Dated: June 25, 1996
<PAGE>
Exhibit No. Description
- -----------------------------
4 ** U.S. $100,000,000 Credit Agreement by and among
EMCOR Group, Inc. and Certain of Its Subsidiaries and
Harris Trust and Savings Bank individually and as Agent and
the Lenders which are or become parties thereto dated as of
June 19, 1996.
99 * Press Release issued June 21, 1996.
* Filed herewith.
<PAGE>
U.S. $100,000,000
CREDIT AGREEMENT
BY AND AMONG
EMCOR GROUP, INC.
AND
CERTAIN OF ITS SUBSIDIARIES
AND
HARRIS TRUST AND SAVINGS BANK
INDIVIDUALLY AND AS AGENT
AND
THE LENDERS
WHICH ARE OR BECOME PARTIES HERETO
DATED AS OF JUNE 19, 1996
<PAGE>
Table of Contents
SECTION 1 THE REVOLVING CREDIT................................................10
Section 1.1. Revolving Credit.................................................10
Section 1.2. Revolving Loans..................................................11
Section 1.3. Letters of Credit................................................11
(a) General Terms........................................................11
(b) Applications.........................................................11
(c) The Reimbursement Obligation.........................................12
(d) The Participating Interests..........................................13
(e) Indemnification......................................................13
Section 1.4. The Sublimit.....................................................14
Section 1.5. Manner of Borrowing Revolving Loans..............................14
(a) Generally............................................................14
(b) Agent Reliance on Bank Funding.......................................14
Section 1.6. Appointment of Company as Agent for Borrowers;
Reliance by Agent................................................15
(a) Appointment..........................................................15
(b) Reliance.............................................................15
SECTION 2. INTEREST...........................................................15
Section 2.1. Rate.............................................................15
Section 2.2. Computation of Interest..........................................15
Section 2.3. Capital Adequacy.................................................16
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND NOTATIONS.............16
Section 3.1. Commitment Fee...................................................16
Section 3.2. Other Fees.......................................................16
Section 3.3. Letter of Credit Fees............................................16
Section 3.4. Voluntary Prepayments............................................17
Section 3.5. Mandatory Prepayment.............................................17
Section 3.6. Voluntary Terminations...........................................17
Section 3.7. Place and Application............................................17
Section 3.8. Notations and Requests...........................................19
SECTION 4. THE COLLATERAL AND THE GUARANTEES..................................19
Section 4.1. The Collateral...................................................19
Section 4.2. The Guarantees...................................................20
<PAGE>
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................20
Section 5.1. Organization and Qualification..................................20
Section 5.2. Subsidiaries....................................................20
Section 5.3. Corporate Authority and Validity of Obligations.................21
Section 5.4. Use of Proceeds; Margin Stock...................................21
Section 5.5. Financial Reports...............................................22
Section 5.6. No Material Adverse Change......................................22
Section 5.7. Full Disclosure.................................................22
Section 5.8. Good Title......................................................22
Section 5.9. Litigation and Other Controversies..............................23
Section 5.10. Taxes...........................................................23
Section 5.11. Approvals.......................................................23
Section 5.12. Affiliate Transactions..........................................23
Section 5.13. Investment Company; Public Utility Holding Company..............23
Section 5.14. ERISA...........................................................23
Section 5.15. Compliance with Laws............................................24
Section 5.16. Other Agreements................................................24
Section 5.17. No Default......................................................24
SECTION 6. CONDITIONS PRECEDENT...............................................24
Section 6.1. All Credit Utilization..........................................24
Section 6.2. Initial Credit Utilization......................................25
Section 6.3. Activation of the Commitments...................................27
SECTION 7. COVENANTS........................................................28
Section 7.1. Maintenance of Business.........................................28
Section 7.2. Maintenance of Property.........................................29
Section 7.3. Taxes and Assessments...........................................29
Section 7.4. Insurance.......................................................29
Section 7.5. Financial Reports and Rights of Inspection......................29
Section 7.6. Adjusted Tangible Net Worth.....................................31
Section 7.7. Leverage Ratio..................................................32
Section 7.8. Interest Coverage Ratio.........................................32
Section 7.9. Current Ratio...................................................32
Section 7.10. Indebtedness for Borrowed Money.................................32
Section 7.11. Liens...........................................................33
Section 7.12. Investments, Acquisitions, Loans, Advances and Guarantees ......35
Section 7.13. Capital and Certain other Restricted Expenditures...............38
Section 7.14. Mergers, Consolidations and Sales...............................38
Section 7.15. Maintenance of Restricted Subsidiaries..........................39
Section 7.16. Dividends and Certain Other Restricted Payments.................39
Section 7.17. ERISA...........................................................40
Section 7.18. Compliance with Laws............................................41
Section 7.19. Burdensome Contracts With Affiliates............................41
Section 7.20. Amendments to Subordinated Debt.................................41
Section 7.21. No Changes in Fiscal Year.......................................41
Section 7.22. Formation of Subsidiaries.......................................41
Section 7.23. Change in the Nature of Business................................41
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.....................................42
Section 8.1. Events of Default................................................42
Section 8.2. Non-Bankruptcy Defaults..........................................43
Section 8.3. Bankruptcy Defaults..............................................44
Section 8.4. Collateral for Undrawn Letters of Credit.........................44
SECTION 9. DEFINITIONS INTERPRETATIONS......................................44
Section 9.1. Definitions......................................................44
Section 9.2. Interpretation...................................................54
SECTION 10. THE AGENT AND THE ISSUERS.........................................55
Section 10.1. Appointment and Authorization...................................55
Section 10.2. Rights as a Lender..............................................55
Section 10.3. Standard of Care................................................55
Section 10.4. Costs and Expenses..............................................56
Section 10.5. Indemnity.......................................................56
Section 10.6. Conflict........................................................57
SECTION 11. MISCELLANEOUS...................................................57
Section 11.1. Withholding Taxes..............................................57
Section 11.2. Holidays.......................................................58
Section 11.3. No Waiver, Cumulative Remedies.................................58
Section 11.4. Waivers, Modifications and Amendments..........................59
Section 11.5. Costs and Expenses.............................................59
Section 11.6. Stamp Taxes....................................................60
Section 11.7. Survival of Representations and Indemnities....................60
Section 11.8. Construction...................................................60
Section 11.9. Addresses for Notices..........................................60
Section 11.10. Obligations Several............................................60
Section 11.11. Headings.......................................................60
Section 11.12. Severability of Provisions.....................................60
Section 11.13. Counterparts...................................................61
Section 11.14. Binding Nature and Governing Law...............................61
Section 11.15. Entire Understanding...........................................61
Section 11.16. Extensions of the Commitments..................................61
Section 11.17. Participations.................................................61
Section 11.18. Assignment Agreements..........................................61
Section 11.19. Terms of Collateral Documents not Superseded...................62
Section 11.20. Personal Jurisdiction..........................................63
(a) Exclusive Jurisdiction...............................................63
(b) Other Jurisdictions..................................................63
Section 11.21. Currency.......................................................63
Section 11.22. Currency Equivalence...........................................63
Section 11.23. One Lender.....................................................64
Signature Page................................................................65
EXHIBIT A - Revolving Credit Note
EXHIBIT B - Form of Opinion of Counsel
EXHIBIT C - Borrowing Base Certificate
EXHIBIT D - Compliance Certificate
EXHIBIT E - Assignment and Acceptance
SCHEDULE I - Compliance Calculations
SCHEDULE 5.2 - Subsidiaries
SCHEDULE 7.10 - Indebtedness
SCHEDULE 7.11 - Liens
SCHEDULE 7.12 - Investments, Loans, Advances and Guarantees
<PAGE>
EMCOR GROUP, INC.
CREDIT AGREEMENT
Harris Trust and Savings Bank
Chicago, Illinois
and the other Lenders from time to time party hereto
Gentlemen:
The undersigned, EMCOR Group, Inc., a Delaware corporation (the
"Company"), and DYN Specialty Contracting Inc., a Virginia corporation ("DYN"),
apply to you for your several commitments, subject to all of the terms and
conditions hereof and on the basis of the representations and warranties
hereinafter set forth, to make a revolving credit (the "Revolving Credit")
available to the Borrowers, all as more fully hereinafter set forth, all for the
purpose of replacing the MES Revolving Credit Agreement and the Dynalectric
Revolving Credit Agreement.
SECTION 1. THE REVOLVING CREDIT.
Section 1.1. Revolving Credit. Subject to all of the terms and conditions
hereof, each Lender, by its acceptance hereof, severally agrees to extend a
Revolving Credit to the Borrowers in the amount of its commitment to extend the
Revolving Credit set forth on the applicable signature page hereof or on the
Assignment Agreement to which it is a party (its "Commitment" and cumulatively
for all the Lenders, the "Commitments") (subject to any reductions thereof
pursuant to the terms hereof) prior to the Termination Date. Subject to the
terms and conditions hereof, such Revolving Credit may be availed of by each
Borrower in its discretion from time to time, be repaid and used again, during
the period from the date hereof to and including the Termination Date. The
Revolving Credit, subject to all of the terms and conditions hereof, may be
utilized by any one or more of the Borrowers in the form of Revolving Loans and
Letters of Credit, all as more fully hereinafter set forth; provided, however,
that the aggregate amount of the Revolving Loans and L/C Obligations outstanding
at any one time from all the Borrowers taken together shall not at any time
exceed the lesser of the Activated Commitments then in effect or the Borrowing
Base as shown on the most recent Borrowing Base Certificate; provided further,
however, that the aggregate amount outstanding at any time on Revolving Loans
made to each Borrower, and L/C Obligations in respect of Letters of Credit
issued for such Borrower's sole or joint account, shall not exceed such
Borrower's Sublimit as then determined and computed. For all purposes of this
Agreement, where a determination of the used, unused or available amount of the
Commitments is necessary, Credit Utilizations payable in an Alternative Currency
shall be converted into their U.S. Dollar Equivalent as of the date of issuance
(in the case of a Letter of Credit) and as of the spot date (in the case of a
Borrowing). Such conversions shall be made on the date of each Credit
Utilization in an Alternative Currency as to that Credit Utilization and all
Credit Utilizations shall be converted into their U.S. Dollar Equivalent as of
the last day of each month or at the time of each Credit Utilization should the
Agent so elect; such conversions to be based on the applicable spot currency
conversion ratio as reported in the Wall Street Journal as of the applicable
date or time. If the last day of a month is not a Business Day, such conversion
shall be made as of the next Business Day. The obligations of the Lenders
hereunder are several and not joint and no Lender shall under any circumstances
be obligated to extend credit hereunder in excess of its Activated Commitment.
The Agent shall promptly notify the Company of such determination of a U.S.
Dollar Equivalent and of the basis therefor. All Borrowings shall be repaid in
the currency in which they were borrowed.
Section 1.2. Revolving Loans. Subject to all of the terms and conditions
hereof, the Revolving Credit may be availed of in the form of loans
(individually a "Revolving Loan" and collectively the "Revolving Loans"). Each
Borrowing of Revolving Loans shall, except to the extent otherwise agreed in
writing by all Lenders, be made ratably by the Lenders in accordance with their
Percentages. Each Borrowing of Revolving Loans shall be in a minimum amount of
$1,000,000 or such greater amount which is an integral multiple of $100,000. All
Revolving Loans made by a Lender to a particular Borrower shall be evidenced by
a single Revolving Credit Note of such Borrower, (individually a "Revolving
Credit Note" and collectively the "Revolving Credit Notes") payable to the order
of such Lender, each Revolving Credit Note to be in the form (with appropriate
insertions) attached hereto as Exhibit A. Without regard to the face principal
amount of each Lender's Revolving Credit Note, the actual principal amount at
any time outstanding and owing by each Borrower on account thereof shall be the
sum of all Revolving Loans then or theretofore made thereon by such Lender to
such Borrower less all payments actually received thereon.
Section 1.3. Letters of Credit
(a) General Terms. Subject to the terms, conditions and limitations hereof
(including those set forth in Section 1.1 hereof), as part of the Revolving
Credit, the Applicable Issuer shall issue Financial Letters of Credit or
Performance Letters of Credit (each a "Letter of Credit") for the account of any
one or more of the Borrowers in U.S. Dollars or an Alternative Currency in an
aggregate undrawn face amount up to the amount of the L/C Commitment as to all
Borrowers, but subject to any applicable Sublimit in the case of a given
Borrower. Each Letter of Credit shall be issued by the Applicable Issuer, but
each Lender shall be obligated to reimburse the Applicable Issuer for its
Percentage of the amount of each drawing thereunder and, accordingly, the
undrawn face amount of each Letter of Credit shall constitute usage of the
Commitment of each Lender pro rata in accordance with each Lender's Percentage.
Each Letter of Credit shall conform to the Issuer's policies as to form and
shall be a Letter of Credit which the Applicable Issuer may lawfully issue. Each
Letter of Credit shall support payment of an obligation of the Borrower who
applies for same or an obligation of a Subsidiary of same which is a Restricted
Subsidiary or of a joint venture described in Section 7.12(m) or 7.12(n) of
which the applicant or one of its Restricted Subsidiaries is a member.
(b) Applications. At any time before the Termination Date, the Applicable
Issuer shall, subject to all of the terms and conditions hereof, at the request
of the Company (which is acting on behalf of the Borrowers pursuant to Section
1.6 hereof), issue one or more Letters of Credit for the account of any one or
more of the Borrowers, in a form satisfactory to the Applicable Issuer, in an
aggregate face amount as set forth above, upon the receipt of an application for
the relevant Letter of Credit in the form customarily prescribed by the
Applicable Issuer for the type of Letter of Credit in question, duly executed by
the Borrower for whose account such Letter of Credit was issued (each an
"Application"). Each Letter of Credit issued hereunder shall (a) be payable in
U.S. Dollars or an Alternative Currency and (b) expire not later than the
earlier of (i) eighteen (18) months from the date of issuance (or be cancelable
not later than eighteen (18) months from the date of issuance and each renewal)
or (ii) the Termination Date. Notwithstanding anything contained in any
Application to the contrary, (i) the applicable Borrower's obligation to pay
fees in connection with each Letter of Credit shall be as exclusively set forth
in Section 3.3 hereof, (ii) except as otherwise provided in Section 3.5 hereof,
prior to the existence of an Event of Default, the Applicable Issuer will not
call for the funding by the Borrower of any amount under a Letter of Credit, or
any other form of collateral security for the Borrower's obligations in
connection with such Letter of Credit, before being presented with a drawing
thereunder, and (iii) if the Applicable Issuer is not timely reimbursed for the
amount of any drawing under a Letter of Credit on the date such drawing is paid,
the Borrower's obligation to reimburse the Applicable Issuer for the amount of
such drawing shall bear interest (which the relevant Borrower hereby promises to
pay) from and after the date such drawing is paid at a rate per annum equal to
the sum of 2% plus the Applicable Margin plus the Applicable Index Rate from
time to time in effect. The Issuers will promptly notify the Agent of each
request for a Letter of Credit and of issuance of a Letter of Credit. If an
Issuer issues any Letters of Credit with expiration dates that are automatically
extended unless such Issuer gives notice that the expiration date will not so
extend beyond its then scheduled expiration date, such Issuer will give such
notice of non-renewal before the time necessary to prevent such automatic
extension if before such required notice date (i) the expiration date of such
Letter of Credit if so extended would be after the Termination Date, (ii) the
Commitments have been terminated, or (iii) an Event of Default exists and the
Required Lenders have given the Issuer instructions not to so permit the
extension of the expiration date of such Letter of Credit. Without limiting the
generality of the foregoing, each Issuer's obligation to issue, amend or extend
the expiration date of a Letter of Credit is subject to the conditions of
Section 6, the other terms of this Section 1.3 and the other provisions of this
Agreement and such Issuer will not issue, amend or extend the expiration date of
any Letter of Credit if any Lender notifies such Issuer of any failure to
satisfy or otherwise comply with such conditions, terms and other provisions and
directs the Issuer not to take such action.
(c) The Reimbursement Obligation. Subject to Section 1.3(b) hereof, the
obligation of a Borrower to reimburse the Applicable Issuer for all drawings
under a Letter of Credit issued for such Borrower's account (a "Reimbursement
Obligation") shall be governed by the Application related to such Letter of
Credit, except that reimbursement of each drawing shall be made in immediately
available funds at the designated office of such Issuer by no later than 12:00
Noon (local time at the issuing office of the Issuer) on the date when such
drawing is paid. If the relevant Borrower does not make any such reimbursement
payment on the date due and the Participating Lenders fund their participations
therein in the manner set forth in Section 1.3(d) below, then all payments
thereafter received by the Applicable Issuer in discharge of any of the relevant
Reimbursement Obligations shall be distributed in accordance with Section 1.3(d)
below.
(d) The Participating Interests. Each Lender, by its acceptance hereof,
severally agrees to purchase from the Applicable Issuer, and the Applicable
Issuer hereby agrees to sell to each such Lender (a "Participating Lender"), an
undivided percentage participating interest (a "Participating Interest"), to the
extent of its Percentage, in each Letter of Credit issued by, and each
Reimbursement Obligation owed to, the Applicable Issuer. Upon any failure by a
Borrower to pay any Reimbursement Obligation in respect of a Letter of Credit
issued for such Borrower's account at the time required on the date the related
drawing is paid, as set forth in Section 1.3(c) above, or if the Applicable
Issuer is required at any time to return to a Borrower or to a trustee,
receiver, liquidator, custodian or other Person any portion of any payment of
any Reimbursement Obligation, each Participating Lender shall, not later than
the Business Day it receives a certificate from the Applicable Issuer to such
effect, if such certificate is received before 1:00 p.m. (local time at the
office of the Issuer), or not later than the following Business Day, if such
certificate is received after such time, pay to the Applicable Issuer an amount
equal to its Percentage of such unpaid or recaptured Reimbursement Obligation
together with interest on such amount accrued from the date the related payment
was made by the Applicable Issuer to the date of such payment by such
Participating Lender at a rate per annum equal to (i) from the date the related
payment was made by the Applicable Issuer to the date two (2) Business Days
after payment by such Participating Lender is due hereunder, the Federal Funds
Rate for each such day and (ii) from the date two (2) Business Days after the
date such payment is due from such Participating Lender to the date such payment
is made by such Participating Lender, the Applicable Index Rate in effect for
each such day. Each such Participating Lender shall thereafter be entitled to
receive its Percentage of each payment received in respect of the relevant
Reimbursement Obligation and of interest paid thereon, with the Applicable
Issuer retaining its Percentage as a Lender hereunder.
The several obligations of the Participating Lenders to the Issuers under
this Section 1.3 shall be absolute, irrevocable and unconditional under any and
all circumstances whatsoever (except, to the extent such Borrower is relieved
from its obligation to reimburse the Applicable Issuer for a drawing under a
Letter of Credit because of the Applicable Issuer's gross negligence or willful
misconduct in determining that documents received under the Letter of Credit
comply with the terms thereof) and shall not be subject to any set-off,
counterclaim or defense to payment which any Participating Lender may have or
have had against any one or more of the Borrowers, the Agent, any other Lender
or any other Person whatsoever. Without limiting the generality of the
foregoing, such obligations shall not be affected by any Default or Event of
Default or by any reduction or termination of any Commitment of any Lender, and
each payment by a Participating Lender under this Section 1.3 shall be made
without any offset, abatement, withholding or reduction whatsoever. The Agent
shall be entitled to offset amounts received for the account of a Lender under
this Agreement against unpaid amounts due from such Lender hereunder (whether as
fundings of participations, indemnities or otherwise).
(e) Indemnification. Each of the Participating Lenders shall, to the
extent of their respective Percentages, indemnify the Issuers (to the extent not
reimbursed by the Borrowers) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from the applicable Issuer's gross negligence or willful
misconduct) that the Issuers may suffer or incur in connection with any Letter
of Credit. The obligations of the Participating Lenders under this Section
1.3(e) and all other parts of this Section 1.3 shall survive termination of this
Agreement and of all other L/C Documents.
Section 1.4. The Sublimit. $5,000,000 of the Commitments shall be
available exclusively to DYN but the Company may at its discretion by notice
to the Agent increase such Sublimit (but not beyond the amount of the
Activated Commitments).
Section 1.5. Manner of Borrowing Revolving Loans. (a) Generally. The
Company (which is acting on behalf of the Borrowers pursuant to Section 1.6
hereof) shall give the Agent notice (which may be written or oral, but if oral,
promptly confirmed in writing) by 10:00 a.m. on any Business Day of each request
for a Borrowing of Revolving Loans, in each case specifying the Borrower to
which the proceeds of such Borrowing are to be disbursed, the amount of each
such Borrowing, the currency of such Borrowing (which must be U.S. Dollars or an
Alternative Currency) and the date such Borrowing is to be made, which shall be
not less than two Business Day's hence in the case of a Borrowing in an
Alternative Currency other than Canadian dollars and one day hence in the case
of a Borrowing in Canadian dollars, but which may be the same day in the case of
a Borrowing in U.S. Dollars. The Agent shall promptly notify each Lender of its
receipt of each such notice. Not later than 1:00 p.m. on the date specified for
any Borrowing, each Lender shall make the proceeds of its Revolving Loan
comprising part of such Borrowing available in immediately available funds to
the Agent in Chicago except in the case of Revolving Loans denominated in an
Alternative Currency, which shall be made available at such office as the Agent
has previously specified in a notice to each Lender in such funds which are then
customary for the settlement of international transactions in such currency and
no later than such local time as is necessary for such funds to be received and
transferred to the relevant Borrower for same day value on the date of the
relevant Borrowing. Subject to all of the terms and conditions hereof, the
proceeds of each Lender's Revolving Loan denominated in U.S. Dollars shall be
made available to the relevant Borrower on the date requested at the office of
the Agent in Chicago and the proceeds of each Lender's Revolving Loans
denominated in an Alternative Currency at such office as the Agent has
previously agreed to with the relevant Borrower, in each case in the type of
funds received by the Agent from the Lenders. The Lenders' obligations to make
Revolving Loans in an Alternative Currency or to provide or participate in
Letters of Credit payable in an Alternative Currency shall always be subject to
such Alternative Currency being freely available to each of them in the relevant
market. Borrowing notices shall be irrevocable.
(b) Agent Reliance on Bank Funding. Unless the Agent shall have been
notified by a Lender before the time when such Lender is scheduled to make
payment to the Agent of the proceeds of a Revolving Loan that such Lender does
not intend to make such payment, the Agent may assume that such Lender has made
such payment when due and the Agent may in reliance upon such assumption (but
shall not be required to) make available to the relevant Borrower the proceeds
of the Revolving Loan to be made by such Lender and, if any Lender has not in
fact made such payment to the Agent, such Lender shall, on demand, pay to the
Agent the amount made available to such Borrower attributable to such Lender
together with interest thereon in respect of each day during the period
commencing on the date such amount was made available to such Borrower and
ending on (but excluding) the date such Lender pays such amount to the Agent at
a rate per annum equal to the Federal Funds Rate or, in the case of a Revolving
Loan denominated in an Alternative Currency, the cost to the Agent of funding
the amount it advanced to fund such Lender's Revolving Loan, as determined by
the Agent. If such amount is not received from such Lender by the Agent
immediately upon demand, the applicable Borrower will, on demand, repay to the
Agent the proceeds of the Revolving Loan attributable to such Lender with
interest thereon at a rate per annum equal to the interest rate applicable to
the relevant Revolving Loan.
Section 1.6. Appointment of Company as Agent for Borrowers;
Reliance by Agent
(a) Appointment. Each Borrower irrevocably appoints the Company as its
agent hereunder to make requests on such Borrower's behalf under Section 1
hereof for Borrowings to be made by such Borrower and for Letters of Credit to
be issued for such Borrower's account and to take any other action contemplated
by the Loan Documents with respect to credit extended hereunder to such
Borrower. The Agent and the Lenders shall be entitled to conclusively presume
that any action by the Company under the Loan Documents is taken on behalf of
any one or more of the Borrowers whether or not the Company so indicates.
(b) Reliance. All requests for Borrowings and selection of interest rates
to be applicable thereto may be written or oral, including by telephone or
telecopy. The Borrowers agree that the Agent may rely on any such notice given
by any person the Agent in good faith believes is an Authorized Representative
without the necessity of independent investigation (the Borrowers hereby
indemnifying the Agent and Lenders from any liability or loss ensuing from such
reliance), and in the event any such telephonic or other oral notice conflicts
with any written confirmation, such oral or telephonic notice shall govern if
the Agent has acted in reliance thereon.
SECTION 2. INTEREST.
Section 2.1. Rate. Each Revolving Loan shall bear interest (which the
relevant Borrower promises to pay at the times herein provided) at the rate per
annum determined by adding the Applicable Margin to the Applicable Index Rate as
in effect from time to time, provided that if a Revolving Loan is not paid when
due (whether by lapse of time, acceleration or otherwise), such Revolving Loan
shall bear interest (which the relevant Borrower promises to pay at the times
hereinafter provided), whether before or after judgment, and until payment in
full thereof, at the rate per annum determined by adding 2% to the sum of the
Applicable Margin and the Applicable Index Rate as in effect from time to time.
Interest on the Revolving Loans shall be payable on the last day of each
calendar month (beginning on the first of such dates after the date hereof) and
at maturity of the Revolving Credit Notes and interest after maturity shall be
due and payable upon demand.
Section 2.2. Computation of Interest. All interest on the Revolving Credit
Notes (and unless otherwise stated herein, all fees, charges and commissions due
hereunder), shall be computed on the basis of a year of 360 days for the actual
number of days elapsed.
Section 2.3. Capital Adequacy. If any Lender shall determine that any
applicable law, rule or regulation regarding capital adequacy instituted after
the date hereof, or any change in the interpretation or administration of any
applicable law, rule or regulation regarding capital adequacy by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof or compliance by such Lender (or its
lending office) with any request or directive regarding capital adequacy
(whether or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital as a consequence of its obligations hereunder or the
Letters of Credit or credit extended by it hereunder to a level below that which
such Lender could have achieved but for such law, rule, regulation, change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount reasonably deemed by such Lender to be material,
then from time to time as specified by such Lender the relevant Borrower shall
pay on demand such additional amount or amounts as will compensate such Lender
for such reduction. A certificate of any Lender claiming compensation under this
Section 2.3 and setting forth the additional amount or amounts to be paid to it
hereunder in reasonable detail shall be prima facie evidence thereof. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
SECTION 3. FEES, PAYMENTS, REDUCTIONS, APPLICATIONS AND
NOTATIONS.
Section 3.1. Commitment Fee. For the period from the date hereof to and
including the Termination Date, the Borrowers shall pay to the Agent for the
account of the Lenders a commitment fee at the rate of 1/2 of 1% per annum on
the average daily unused amount of the Activated Commitments hereunder. Such fee
is payable in arrears on the last day of each calendar quarter (commencing with
the first of such dates after the date hereof) and on the Termination Date.
Section 3.2. Other Fees. The Company shall pay to the Agent such
other and additional fees as may from time to time be agreed to between the
Company and the Agent.
Section 3.3. Letter of Credit Fees. On the date of issuance of each Letter
of Credit and on each anniversary date thereof the applicable Borrower shall pay
to the Agent, for the ratable account of the Lenders, a fee on the face amount
of the Letter of Credit for the period thereafter during which the same is
scheduled to be outstanding or for one year, whichever is the lesser, computed
at the rate of 3% per annum for such period (in the case of Financial Letters of
Credit) and 1.5% per annum for such period (in the case of Performance Letters
of Credit). In addition, on the date of issuance of each Letter of Credit the
applicable Borrower shall pay the Applicable Issuer for its own account a fee of
1/4 of 1% of the face amount of such Letter of Credit, such fee to be retained
by the Applicable Issuer for its own account. In addition, the applicable
Borrower shall pay to the Applicable Issuer such issuing, processing, drawing,
amendment and other fees and charges as the Applicable Issuer customarily
imposes in connection with the issuance of letters of credit of the type in
question, the payment of drafts thereunder or amendments thereto.
Section 3.4. Voluntary Prepayments. The Borrowers shall have the privilege
of prepaying without premium or penalty and in whole or in part (but if in part,
then in an amount not less than $1,000,000 and thereafter in integral multiples
of $100,000) the Revolving Credit Notes at any time upon notice from the Company
(which need not be joined in by any Borrower) to the Agent prior to 11:00 a.m.
on the date fixed for prepayment, each such prepayment to be made by the payment
of the principal amount to be prepaid and, if such prepayment prepays the
Borrowings from a particular Borrower in full, accrued interest thereon to the
date of prepayment. Any amounts so prepaid may, subject to all of the terms and
conditions hereof, be borrowed, repaid and borrowed again.
Section 3.5. Mandatory Prepayment. In the event that the aggregate amount
of the Revolving Loans and the L/C Obligations shall at any time and for any
reason exceed the Borrowing Base or the Activated Commitments or any applicable
Sublimit, each as then determined and computed, the Borrowers shall immediately
and without notice or demand pay the amount of the excess to the Agent as and
for a mandatory prepayment on the Revolving Credit Notes or, if the Revolving
Loans have been paid in full but L/C Obligations are outstanding, then and in
any such event, such excess shall be paid over to the Agent to be applied
against, or held as collateral security for, as applicable, such L/C
Obligations.
Section 3.6. Voluntary Terminations. The Borrowers shall have the
privilege upon two Business Days' prior notice from the Company (which need not
be joined in by any Borrower) to the Agent (which shall promptly notify the
Lenders) to ratably terminate the Commitments in whole or in part (but if in
part then in the amount of $1,000,000 or such greater amount which is an
integral multiple of $100,000); provided that the Activated Commitments may not
be reduced to an amount less then the sum of all Revolving Loans and all L/C
Obligations then outstanding unless there is deposited with the Agent as cash
collateral for such Revolving Loans and L/C Obligations cash in the amount by
which the same exceed the amount of the Activated Commitments. All partial
terminations of the Commitments hereunder shall automatically reduce the L/C
Commitment in each case as from time to time in effect hereunder, by the same
percentage as the percentage termination in the Commitments. No termination of
the Commitments may be reinstated.
Section 3.7. Place and Application. All payments of principal, interest
and fees shall be made to the Agent at its office at 111 West Monroe Street,
Chicago, Illinois (or at such other place as the Agent may specify) in
immediately available and freely transferable funds at the place of payment by
no later than 12:00 Noon on the due date thereof or, if such payment is to be
made in an Alternative Currency, by no later than 12:00 Noon local time at the
place of payment to such office as the Agent has previously specified; provided
however that reimbursements of drawings under Letters of Credit shall be made to
the Applicable Issuer. Any payments received by the Agent or such Applicable
Issuer after such time shall be deemed received as of the opening of business on
the next Business Day. All such payments shall be made (i) in U.S. Dollars, in
immediately available funds at the place of payment, or (ii) in the case of
Revolving Loans or reimbursement of drawings under a Letter of Credit in an
Alternative Currency, in such Alternative Currency in such funds then customary
for settlement of international transactions in such currency. All such payments
shall be made without set-off or counterclaim and without reduction for, and
free from, any and all present or future taxes, levies, imposts, duties, fees,
charges, deductions, withholdings, restrictions or conditions of any nature
imposed by any government or political subdivision or taxing authority thereof.
Except as herein provided, all payments shall be received for the ratable
account of the Lenders and shall be promptly distributed by the Agent to the
Lenders in accordance with their Percentages. Any amount prepaid on the
Revolving Credit Notes may, subject to all of the terms and conditions hereof,
be borrowed, repaid and borrowed again.
Anything contained herein to the contrary notwithstanding, all payments
and collections received in respect of the Obligations and all proceeds of the
Collateral received, in each instance, by the Agent or any of the Lenders after
the occurrence of an Event of Default shall, subject to the terms of the
Intercreditor Agreement, be remitted to the Agent and distributed as follows:
(a) first, to the payment of any outstanding costs and expenses incurred
by the Agent in monitoring, verifying, protecting, preserving or enforcing the
Liens on the Collateral or by the Agent in protecting, preserving or enforcing
rights under the Loan Documents, and in any event all costs and expenses of a
character which the Borrowers have agreed to pay under Section 11.5 hereof (such
funds to be retained by the Agent for its own account unless the Agent has
previously been reimbursed for such costs and expenses by the Lenders, in which
event such amounts shall be remitted to the Lenders to reimburse them for
payments theretofore made to the Agent);
(b) second, to the payment of any outstanding interest or other fees or
amounts due under the Revolving Credit Notes and the other Loan Documents, in
each case other than for principal or in reimbursement or collateralization of
L/C Obligations, ratably as among the Agent and the Lenders in accord with the
amount of such interest and other fees or amounts owing each;
(c) third, to the payment of the principal of the Revolving Credit Notes
and any unpaid Reimbursement Obligations and to the Agent to be held as
collateral security for any other L/C Obligations (until the Agent is holding an
amount of cash equal to the then outstanding amount of all such L/C
Obligations), the aggregate amount paid to or held as collateral security for
the Lenders to be allocated pro rata as among the Lenders in accordance with the
then respective aggregate unpaid principal balances of their Revolving Loans and
their interests in the Letters of Credit;
(d) fourth, to the Agent and the Lenders ratably in accordance with the
amounts of any other indebtedness, obligations or liabilities of the Borrowers
owing to each of them and secured by the Collateral Documents unless and until
all such indebtedness, obligations and liabilities have been fully paid and
satisfied; and
(e) fifth, to the Company on behalf of the Borrowers (each Borrower hereby
agreeing that its recourse for its share of such payment shall be to the Company
and not the Agent or any Lender) or whoever else may be lawfully entitled
thereto.
Section 3.8. Notations and Requests. All Borrowings made against the
Revolving Credit Notes, the Borrower which made such Borrowings, the rates of
interest applicable thereto and the currency in which each such Borrowing is
denominated, shall be recorded by the Lenders on their books or, at their option
in any instance, endorsed on the reverse side of the Revolving Credit Notes and
the unpaid principal balances and status, rates and currencies so recorded or
endorsed by the Lenders shall be prima facie evidence in any court or other
proceeding brought to enforce the Revolving Credit Notes of the principal amount
remaining unpaid thereon, the Borrower which made the Borrowings evidenced
thereby, the currencies in which such Borrowings are payable and the interest
rates applicable thereto. Prior to any negotiation of any Revolving Credit Note,
the Lender holding such Revolving Credit Note shall endorse thereon the
outstanding amount of Borrowings evidenced thereby, the currencies in which the
same are payable and the rates of interest applicable thereto.
SECTION 4. THE COLLATERAL AND THE GUARANTEES
Section 4.1. The Collateral. The Obligations shall be secured by valid and
perfected first Liens on all inventory, accounts receivable, equipment and other
goods of the Borrowers and the Guarantors, together with all instruments,
securities, chattel paper and intangibles of the Borrowers and the Guarantors
and all proceeds of the foregoing, provided however that unless and until the
Required Lenders otherwise elect (i) the Borrowers and the Guarantors shall not
be required to note the Agent's Lien on any certificate of title issued for a
vehicle or to perfect a Lien on fixtures or on inventory or equipment
temporarily located at job sites outside of the jurisdiction where its chief
executive office is located and (ii) no Guarantor, the fair market value of
whose assets aggregates less than $250,000 shall be required to grant Liens on
its assets to the Agent, further provided that (i) Liens on those accounts
receivable of DYN, B & B Contracting & Supply Company, Dynalectric Company,
Dynalectric Company of Nevada, Contra Costa Electric Inc. and KDC Inc. arising
under contracts for which Reliance Surety Company and/or its Affiliates have
provided payment and/or performance bonds and inventory, materials and equipment
purchased for, installed in or allocated to any such contracts may be subject to
prior Liens in favor of Reliance Surety Company and/or its Affiliates to secure
obligations in connection with payment and performance bonds issued by Reliance
Surety Company or its Affiliates, (ii) no Lien need be granted on any asset
subject to a lien permitted by Section 7.11(e) (i), (j), (k), (l), (as to Liens
on fixed assets only), (m) or (n) (insofar as (n) relates to the extension,
renewal or replacement of a Lien permitted by the subsections of Section 7.11
identified in this clause (ii)), (iii) no Lien need be granted on the capital
stock of an Unrestricted Subsidiary or on the capital stock or assets of
Designated Foreign Restricted Subsidiaries, (iv) no Lien need be granted on the
capital stock of MES Holdings Corporation, a Delaware corporation if and so long
as the grant of such a Lien is prohibited by any debt agreement to which the
Company is a party, (v) Liens need not be granted on the stock or assets of
EMCOR U.K. Limited and its Restricted Subsidiaries until the Tranche B
Activation Date and Liens need not be granted on the stock of the Canadian
Subsidiaries, and the Canadian Subsidiaries need not grant a Lien on their
assets, until the Tranche C Activation Date, (vi) no Liens need be granted on
real property unless and until the Required Lenders so require (vii) Liens
granted may be subject to Liens permitted by clauses (a), (b) and (h) of Section
7.11 hereof, (viii) Liens need not be perfected on notes receivable having a
fair value of less than $1,000,000 in any instance and $5,000,000 in the
aggregate or on bonds or notes of the City of New York pledged to the City of
New York in lieu of retainage and (ix) Liens need not be perfected on equity
securities (other than capital stock of Restricted Subsidiaries required to be
pledged by the other provisions of this Section 4.1.) having a fair value of
less than $1,000,000 in any instance and $5,000,000 in the aggregate. The
Borrowers agree that they will, and will cause the Guarantors to, from time to
time at the request of the Agent or the Required Lenders execute and deliver
such documents and do such acts and things as the Agent or the Required Lenders
may reasonably request in order to provide for or perfect such Liens on the
Collateral.
Section 4.2. The Guarantees. The Obligations shall be fully guaranteed by
the Guarantors, provided that (i) until the Tranche B Activation Date,
Guarantees need not be provided by those Guarantors listed under the heading "to
be provided by Tranche B Activation Date" on Schedule 4.2, (ii) until the
Tranche C Activation Date Guarantees need not be provided by those Guarantors
listed under the heading "to be provided by Tranche C Activation Date" on
Schedule 4.2, and (iii) unless and until the Consolidation Date, the right to
enforce the Guarantees of DYN and its Restricted Subsidiaries of the obligations
of the Company and its other Restricted Subsidiaries shall be subject to the
terms of the Intercreditor Agreement. Subject to the forgoing limitations the
Required Lenders may from time to time require any Restricted Subsidiary (other
than a captive insurance company which is a Restricted Subsidiary) to provide a
Guarantee and Liens on its assets in which event the Company shall within 30
days of request cause such Restricted Subsidiary to execute and deliver a
Guarantee to the Agent together with such supporting resolutions, opinions and
other showings as the Agent may reasonably require.
SECTION 5. REPRESENTATIONS AND WARRANTIES
Each Borrower represents and warrants to the Agent and the Lenders as
follows:
Section 5.1. Organization and Qualification. Each Borrower is duly
organized, validly existing and in good standing as a corporation under the laws
of the jurisdiction in which it is incorporated or organized, as the case may
be, has full and adequate corporate power to own its Property and conduct its
business as now conducted, and is duly licensed or qualified and in good
standing in each jurisdiction in which the failure to be so qualified would have
a Material Adverse Effect.
Section 5.2. Subsidiaries. Each Restricted Subsidiary is duly organized,
validly existing and in good standing (or their equivalents under applicable
local law) under the laws of the jurisdiction in which it is incorporated or
organized, as the case may be, has full and adequate power to own its Property
and conduct its business as now conducted, and is duly licensed or qualified and
in good standing in each jurisdiction in which the failure to be so qualified
would have a Material Adverse Effect. As of the date hereof, Schedule 5.2 hereto
identifies each Subsidiary, the jurisdiction of its incorporation or
organization, as the case may be, the percentage of issued and outstanding
shares of each class of its capital stock or other equity interests owned by the
Company and the Subsidiaries and, if such percentage is not 100% (excluding
directors' qualifying shares as required by law), a description of each class of
its authorized capital stock and other equity interests and the number of shares
of each class issued and outstanding and the Company will notify the Agent of
any material changes in such information. All of the outstanding shares of
capital stock and other equity interests of each Subsidiary are validly issued
and outstanding and fully paid and nonassessable (except for the provisions of
Section 630 of the Business Corporation Law of the State of New York, as to New
York Corporations) and all such shares and other equity interests indicated on
Schedule 5.2 as owned by the Company or a Subsidiary are as of the date hereof
owned, beneficially and of record, by the Company or such Subsidiary free and
clear of all Liens not permitted hereby. There are no outstanding commitments or
other obligations of any Restricted Subsidiary to issue, and no options,
warrants or other rights of any Person to acquire, any shares of any class of
capital stock or other equity interests of any Restricted Subsidiary.
Section 5.3. Corporate Authority and Validity of Obligations. Each
Borrower has full right and authority to enter into this Agreement and the other
Loan Documents to which it is a party, to make the borrowings herein provided
for, to issue the Revolving Credit Notes in evidence thereof, to grant to the
Agent the Liens provided for in the Collateral Documents being executed by it,
and to perform all of its obligations hereunder and under the other Loan
Documents to which it is a party. Each Guarantor has full right and authority to
enter into the Loan Documents to which it is a party, to grant to the Agent the
Liens provided for in the Collateral Documents executed by it and to perform all
of its obligations under such Loan Documents. The Loan Documents have been duly
authorized, executed and delivered by the Borrowers and Guarantors and
constitute valid and binding obligations of the Borrowers and Guarantors
enforceable in accordance with their terms except as enforceability may be
limited by bankruptcy, insolvency or similar laws affecting creditors' rights
generally and general principles of equity (regardless of whether the
application of such principles is considered in a proceeding in equity or at
law); and this Agreement and the other Loan Documents do not, nor does the
performance or observance by any Borrower or Guarantor of any of the matters and
things herein or therein provided for, contravene or constitute a default under
any provision of law or any judgment, injunction, order or decree binding upon
any Borrower or Guarantor or any provision of the charter, articles of
incorporation or organization or by-laws of any Borrower or Guarantor or any
covenant, indenture or agreement of the Borrowers or Guarantors or affecting any
of their Properties, or result in the creation or imposition of any Lien on any
Property of the Borrowers or Guarantors.
Section 5.4. Use of Proceeds; Margin Stock. The Borrowers shall use the
proceeds of the Revolving Loans and other extensions of credit made available
hereunder solely for their general corporate purposes (including ordinary course
of business refunding of indebtedness) provided that the Company shall not use
the proceeds of any Loan to fund a loan or advance to DYN or its Restricted
Subsidiaries. Neither the Borrowers nor any Subsidiary is engaged in the
business of extending credit for the purpose of purchasing or carrying margin
stock (within the meaning of Regulation U of the Board of Governors of the
Federal Reserve System), and no part of the proceeds of any Revolving Loan or
any other extension of credit made hereunder will be used to purchase or carry
any such margin stock or to extend credit to others for the purpose of
purchasing or carrying any such margin stock.
Section 5.5. Financial Reports. The consolidated balance sheet of the
Company and its Subsidiaries as at December 31, 1995 and the related
consolidated statements of operations, cash flows and shareholder's equity of
the Company and its Subsidiaries for the fiscal year then ended, and
accompanying notes thereto, which consolidated financial statements are
accompanied by the audit report of Arthur Andersen LLP, independent public
accountants, and the unaudited interim condensed consolidated balance sheet of
the Company and its Subsidiaries as at March 31, 1996 and the related interim
condensed consolidated statements of operations, cash flows and shareholder's
equity of the Company and its Subsidiaries for the three (3) months then ended
and the unaudited interim condensed consolidating balance sheet of the Company
and its Subsidiaries as of March 31, 1996 and the related interim condensed
consolidating statement of operations for the three (3) months then ended
heretofore furnished to the Lenders, fairly present the consolidated financial
condition of the Company and its Subsidiaries as at said dates and the results
of their operations and cash flows for the periods then ended in conformity with
generally accepted accounting principles applied on a consistent basis, but
subject, in the case of such interim condensed financial statements, to year end
audit adjustments which are not expected to be material. Neither the Company nor
any Restricted Subsidiary has, to the best of its knowledge, contingent
liabilities which could reasonably be expected to have a Material Adverse Effect
other than as indicated on such financial statements or, as to each
reaffirmation of this sentence's representation and warranty in the future, on
the most recent financial statements or the related notes thereto which are
provided to the Lenders furnished pursuant to Section 7.5 hereof.
Section 5.6. No Material Adverse Change. Since March 31, 1996, there has
been no change in the condition (financial or otherwise) or business prospects
of the Company and its Restricted Subsidiaries which could reasonably be
expected to have a Material Adverse Effect.
Section 5.7. Full Disclosure. The statements and information furnished to
the Agent and the Lenders through the date hereof in connection with the
negotiation of this Agreement and the other Loan Documents and the commitments
by the Lenders to provide all or part of the financing contemplated hereby do
not, taken as a whole, contain any untrue statements of a material fact or omit
a material fact necessary to make the material statements contained herein or
therein not misleading, the Lenders acknowledging that as to any projections
furnished to Lenders, the Borrowers only represent that the same were prepared
on the basis of information and estimates the Borrowers believed to be
reasonable.
Section 5.8. Good Title. Except to the extent heretofore disclosed in
writing to the Lenders, the Company and the Restricted Subsidiaries have good
and marketable title to their real property and good and merchantable title to
the balance of their assets as reflected on the most recent balance sheets of
the Company and its Restricted Subsidiaries furnished to the Lenders (except for
sales of assets by the Borrowers and their Restricted Subsidiaries in the
ordinary course of business), subject to no Liens other than such thereof as are
permitted by Section 7.11 hereof.
Section 5.9. Litigation and Other Controversies. There is no litigation or
governmental proceeding or labor controversy pending, nor to the knowledge of
any Borrower threatened, against the Borrower or any Restricted Subsidiary which
if adversely determined would (a) impair the validity or enforceability of, or
impair the ability of any Borrower or Guarantor to perform its obligations
under, this Agreement or any other Loan Document or (b) have a Material Adverse
Effect.
Section 5.10. Taxes. All tax returns which, to the best knowledge of the
Company, are required to be filed by the Company or any Restricted Subsidiary in
any jurisdiction have, in fact, been filed, and all taxes, assessments, fees and
other governmental charges upon the Company or any Restricted Subsidiary or upon
any of their respective Properties, income or franchises, which are shown to be
due and payable in such returns, have been paid to the extent due. The Borrowers
do not know of any material proposed additional tax assessment against them or
the Restricted Subsidiaries for which adequate provision in accordance with GAAP
has not been made in their respective financial statements. Adequate provisions
in accordance with GAAP for taxes on the books of the Company, each other
Borrower and each Restricted Subsidiary have been made for all open years, and
for its current fiscal period.
Section 5.11. Approvals. No authorization, consent, license, or exemption
from, or filing or registration with, any court or governmental department,
agency or instrumentality, nor any approval or consent of the stockholders of
the Borrowers or any other Person, is or will be necessary to the valid
execution, delivery or performance by the Borrowers or Guarantors of this
Agreement or any other Loan Document other than consents required under debt
agreements which will be paid in full and discharged concurrently with the
initial Credit Utilization hereunder and consents which have been obtained and
are in full force and effect.
Section 5.12. Affiliate Transactions. No Borrower nor any Restricted
Subsidiary is a party to any contract or agreement with any of its Affiliates
(other than contracts and agreements between and among the Borrowers and
Restricted Subsidiaries) on terms and conditions which are less favorable to
such Borrower or such Restricted Subsidiary than would be usual and customary in
similar contracts or agreements between Persons not affiliated with each other.
Section 5.13. Investment Company; Public Utility Holding Company. No
Borrower nor any Subsidiary is an "investment company" or a company "controlled"
by an "investment company" within the meaning of the Investment Company Act of
1940, as amended, or a "public utility holding company" within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
Section 5.14. ERISA. Each Borrower and each other member of its Controlled
Group has fulfilled its obligations under the minimum funding standards of and
is in compliance in all material respects with ERISA and the Code to the extent
applicable to it and has not incurred any liability to the PBGC or a Plan (other
than liabilities arising in the future under a multiemployer plan as defined in
Section 4001(c)(3) of ERISA which could not reasonably be expected to have a
Material Adverse Effect) under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA. As of the date hereof no Borrower
nor any Subsidiary has any contingent liabilities with respect to any
post-retirement benefits under a Welfare Plan, other than liability for
continuation coverage described in article 6 of Title I of ERISA and an
approximately $800,000 liability in connection with Jamaica Water Supply Company
("JWSC") for which JWSC has set aside funds.
Section 5.15. Compliance with Laws. Each Borrower and each Restricted
Subsidiary is in compliance with the requirements of all federal, governmental
(whether national, supra-national or otherwise), state and local laws, rules and
regulations applicable to or pertaining to their Properties or business
operations (including, without limitation, the Occupational Safety and Health
Act of 1970, the Americans with Disabilities Act of 1990, and laws and
regulations establishing quality criteria and standards for air, water, land and
toxic or hazardous wastes and substances), except for such non-compliance with
the same which could not reasonably be expected to have any Material Adverse
Effect. No Borrower nor any Restricted Subsidiary has received notice to the
effect that its operations are not in compliance with any of the requirements of
applicable federal, governmental (whether national, supra-national or
otherwise), state or local environmental, health and safety statutes and
regulations or are the subject of any governmental investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could reasonably be expected to have a Material Adverse Effect.
Section 5.16. Other Agreements. No Borrower nor any Restricted Subsidiary
is in default under the terms of any covenant, indenture or agreement of or
affecting the Borrowers, any Restricted Subsidiary or any of their Properties,
which default if uncured could reasonably be expected to have a Material Adverse
Effect. The Company has delivered a true copy of the Series C Indenture to the
Lenders. The only conditions or requirements beyond the control of the Company
to the occurrence of the Consolidation Date are amendments to the Intercreditor
Agreement.
Section 5.17. No Default. No Default or Event of Default has
occurred and is continuing.
SECTION 6. CONDITIONS PRECEDENT
Section 6.1. All Credit Utilization. The obligation of the Lenders to
provide any Borrower with any Credit Utilization (including the first such
Credit Utilization) shall be subject to the conditions precedent that as of the
time of each such Credit Utilization:
(a) each of the representations and warranties set forth herein and in the
other Loan Documents shall be and remain true and correct as of said time,
except to the extent the same expressly relate to an earlier date;
(b) the Borrowers and Guarantors shall be in compliance with all of the
terms and conditions hereof and of the other Loan Documents, and no Default or
Event of Default shall have occurred and be continuing or would occur as a
result of such Credit Utilization;
(c) after giving effect to such Credit Utilization, (i) the aggregate
principal amount of all Revolving Loans and L/C Obligations outstanding under
the Revolving Credit shall not exceed the lesser of (x) the Activated
Commitments then in effect and (y) the Borrowing Base as then determined and
computed and (ii) the aggregate principal amount of the Revolving Loans made to
any Borrower and of L/C Obligations in respect of Letters of Credit issued for
such Borrower's account shall not exceed any applicable Sublimit;
(d) such Credit Utilization shall not violate any order, judgment or
decree of any court or other authority or any provision of law or regulation
applicable to the Agent or any Lender (including, without limitation, Regulation
U of the Board of Governors of the Federal Reserve System) as then in effect
(the Lenders acknowledging that as of the date hereof they know of none of such
other than the restrictions of Regulation U); and
(e) in the case of the issuance of any Letter of Credit, the Applicable
Issuer shall have received a properly completed Application therefor and, in the
case of an extension or increase in the amount of the Letter of Credit, the
Applicable Issuer shall have received a written request therefor, in a form
acceptable to the Applicable Issuer, with such Application or written request,
in each case to be accompanied by the fees required by this Agreement.
Any request made by or on behalf of the Borrowers to the Agent or an
Issuer for a Credit Utilization hereunder shall be deemed to constitute a
representation and warranty that the foregoing statements are true and correct.
Section 6.2. Initial Credit Utilization. At or prior to the time
of the initial Credit Utilization, the following conditions precedent shall
also have been satisfied or waived in writing:
(a) the Agent shall have received the following for the account of the
Lenders (each to be properly executed and completed) and the same shall have
been approved as to form and substance by all of the Lenders:
(i) the Revolving Credit Notes;
(ii) the Collateral Documents and the UCC financing statements
requested by the Agent in connection therewith;
(iii) copies (executed or certified as may be appropriate) of
resolutions of the Board of Directors of each Borrower and Guarantor authorizing
the execution, delivery and performance of the Loan Documents to which it is a
party and all other documents relating thereto;
(iv) an incumbency certificate in a form satisfactory to the
Lenders;
(v) a good standing certificate for each Borrower and Guarantor,
dated as of a date no earlier than thirty days prior to the date hereof, from
the appropriate governmental offices in the jurisdiction of its incorporation;
(vi) articles of incorporation and by-laws for each Borrower and
Guarantor certified by such Borrower's or Guarantor's corporate Secretary
or other appropriate officer;
(vii) evidence of the maintenance of insurance by the Borrowers
and Guarantors as required hereby or by the Collateral Documents;
(viii) the Guarantees; and
(ix) the Agent shall receive the originals of all stock certificates
and other negotiable documents included within the Collateral together with
appropriate signed stock powers or other instruments of transfer therefor or
irrevocable arrangements for the receipt of same shall have been made which are
satisfactory to the Agent.
(b) the UCC financing statements requested in connection with the
Collateral Documents shall have been duly filed in the manner required by law so
as to reflect the security interest granted by the Collateral Documents, to the
extent such perfection can be effected by the filing of UCC financing
statements;
(c) the Lenders shall have received a certificate in substantially the
form of Exhibit C setting forth the computation of the Borrowing Base as of such
time;
(d) the Agent and the Lenders shall have received evidence in form and
substance satisfactory to them that the Series A Notes and all indebtedness
outstanding under the MES Revolving Credit Agreement and the Dynalectric
Revolving Credit Agreement will be paid in full concurrently with funding of the
initial Credit Utilization, that the credit facilities provided for in such
credit agreements will thereupon be cancelled (it being understood that this
Agreement is intended to replace the credit facilities provided by such
agreements) and that all Liens securing all of such indebtedness will be
promptly discharged of record, provided that in the case of the Series A Notes,
if the Company is precluded from effecting such a full repayment because of any
requirement for advance notice of prepayment or redemption then and in any such
event and provided that such redemption may be lawfully effected within 30 days
of the date hereof, the Company may in lieu of complying with the foregoing give
irrevocable notice of redemption in compliance with all requirements applicable
to the redemption of the Series A Notes and deposit the full redemption price
(including accrued interest) either with the trustee for the holders of the
Series A Notes or with the Agent, any such deposit to be irrevocable;
(e) the Water Companies shall have been sold and the Company shall have
received cash therefor in an amount not less than the sum of $15,000,000 and an
amount equal to the amount necessary to pay the Series A Notes in full;
(f) the Agent shall have entered into an Intercreditor Agreement
satisfactory to it in form and substance with Reliance Surety Company and its
Affiliates;
(g) the Lenders shall have received and approved a description of the self
insurance and/or risk retention program of the Company and the Restricted
Subsidiaries; and
(h) all legal matters incident to the transactions contemplated hereby
shall be acceptable to the Lenders and their counsel and the Agent shall have
received for the account of the Lenders the favorable written opinion of counsel
to the Borrowers and the Guarantors in substantially the form of Exhibit B
hereto with such exceptions and qualifications as are satisfactory to the
Lenders and their counsel.
Section 6.3. Activation of the Commitments. (a) Initial Activation. It is
understood and agreed that the initial Activated Commitments shall be
$50,000,000 and such activation shall occur upon satisfaction of the conditions
set forth in Section 6.2 hereof. The Guarantors shall initially consist of those
corporations listed on Schedule 4.2 hereto under the heading of "Initial
Guarantors" and each of such Guarantors shall provide Liens on those of its
assets embraced within the term "Collateral" of the priority called for by
Section 4.1 hereof. The balance of the Commitments shall be activated upon
satisfaction of the conditions set forth below (it being understood that all
references below to the provision of Commitments by other Lenders shall be
cumulative, i.e., increases in Commitments justifying a particular activation
may not be used to justify a different activation). Anything contained herein to
the contrary notwithstanding, no level of Commitment Activation shall occur if
at the time a Default or an Event of Default has occurred and is continuing.
Activations may occur in any order.
(b) Tranche B Activation. The Tranche B Activation shall be in the amount
of $20,000,000 and shall, subject to all of the other terms and conditions
hereof, be conditioned on the occurrence of the following: (i) additional
Lenders shall have provided additional Commitments of $20,000,000, (ii) all
indebtedness permitted by Section 7.10(d) hereof shall have been paid in full
and all Liens securing such indebtedness shall have been discharged, (or
arrangements for such payment in full (effective with the first utilization of
the amount of Commitments so activated) and for such discharges have been made
which are satisfactory to the Agent) (iii) the Guarantors listed under the
heading "To be provided by Tranche B Activation Date" shall have executed and
delivered Guarantees and provided first Liens on those of their assets embraced
within the term of "Collateral", (iv) EMCOR International, Inc. shall have
provided first Liens on the capital stock of its Restricted Subsidiaries (other
than that of the Designated Foreign Restricted Subsidiaries and the Canadian
Subsidiaries) and (v) all such Liens shall have been duly perfected in the
manner required by law so as to be effective against the purchasers from and
creditors of such Guarantors and all conditions set forth in Section 6.2 (or
their equivalents under applicable law) shall have been satisfied with respect
to such Guarantors and grants of Liens on their assets.
(c) Tranche C Activation. The Tranche C Activation shall be in the amount
of $5,000,000 and shall occur upon satisfaction of the following conditions: (i)
additional Lenders shall have provided additional Commitments in the amount of
$5,000,000, (ii) all indebtedness permitted by Section 7.10(e) hereof shall have
been fully paid and satisfied and all Liens securing such indebtedness shall
have been discharged, (or arrangements for such payment in full (effective with
the first utilization of the amount of Commitments so activated) and for such
discharges have been made which are satisfactory to the Agent), (iii) the
Guarantors listed under the heading "To be Provided by Tranche C Activation
Date" shall have provided Guarantees and first Liens on their assets embraced
within the term "Collateral", (iv) EMCOR International, Inc. shall have provided
first Liens on the capital stock of the Canadian Subsidiaries, and (v) all such
Liens shall have been properly perfected so as to be effective against all
creditors of and purchasers from such Guarantors and all conditions set forth in
Section 6.2 (or their equivalents under applicable law) shall have been
satisfied with respect to such Guarantees and such grants of Liens.
(d) Tranche D Activation. The Tranche D Activation shall be in the amount
of $25,000,000 and may occur in one or more transactions as additional Lender
Commitments are received. The Tranche D Activation shall be subject to the
satisfaction of the following conditions: (i) additional Lenders shall have
provided Commitments in twice the amount of the Tranche D Activation in question
(it being understood that Tranche D Activation may occur in steps as additional
Lender Commitments are provided); and (ii) no part of the Tranche D Activation
shall occur prior to the later of September 30, 1996 or receipt by the Agent of
evidence satisfactory to it that EBITDA has been not less than $7,500,000 for
each of two successive quarters.
Upon the occurrence of the Tranche B Activation, the Tranche C Activation
or the Tranche D Activation, the Commitment of Harris Trust and Savings Bank
shall be reduced by the amount of the activation in question provided that the
amount of the Commitment of Harris Trust and Savings Bank which was an Activated
Commitment prior to giving effect to activation in question shall only be
reduced in the case of a Tranche D Activation and in that case the Activated
Commitment of Harris Trust and Savings Bank shall be reduced by 50% of the
amount of the Tranche D Activation in question.
SECTION 7. COVENANTS.
The Borrowers agree that, so long as any credit is available to or in use
by or any amount is owing by the Borrowers hereunder, except to the extent
compliance in any case or cases is waived in writing by the Required Lenders:
Section 7.1. Maintenance of Business. The Borrowers will, and will cause
each Restricted Subsidiary to, preserve and keep in force and effect its
corporate existence and all leases, licenses and permits necessary to the proper
conduct of its and their respective businesses, provided that the foregoing
shall not preclude the termination or discontinuance of any of such in
connection with a sale or other disposition of substantially all of the assets
of the Restricted Subsidiary in question or the merger or dissolution of same in
each instance to the extent permitted by Section 7.14 hereof.
Section 7.2. Maintenance of Property. The Borrowers will maintain,
preserve and keep their material plant, Properties and equipment used in the
conduct of their respective businesses in good repair, working order and
condition (ordinary wear and tear excepted), will from time to time make all
needful and proper repairs, renewals, replacements, additions and betterments
thereto so that at all times the overall efficiency thereof shall be preserved
and maintained, and will cause each Restricted Subsidiary so to do in respect of
its plant, Properties and equipment.
Section 7.3. Taxes and Assessments. The Borrowers will duly pay and
discharge, and will cause each Restricted Subsidiary to duly pay and discharge,
all taxes, rates, assessments, fees and governmental charges upon or against the
Borrowers or any Restricted Subsidiary or against their respective Properties,
in each case before the same become delinquent and before penalties accrue
thereon, unless and to the extent that the same are being contested in good
faith and by appropriate proceedings which prevent enforcement of the matter
under contest and adequate reserves are provided therefor.
Section 7.4. Insurance. The Borrowers will insure and keep insured, and
will cause each Restricted Subsidiary to insure and keep insured, with insurance
companies reasonably believed by them to be good and responsible, all insurable
Property owned by them which is of a character usually insured by Persons
similarly situated and operating like Properties against loss or damage from
such hazards and risks, and in such amounts, as are insured by Persons similarly
situated and operating like Properties, and the Borrowers will insure, and cause
each Restricted Subsidiary to insure, such other hazards and risks (including
employers' and public liability risks) with insurance companies reasonably
believed by them to be good and responsible as and to the extent usually insured
by Persons similarly situated and conducting similar businesses, it being agreed
that the foregoing shall not preclude the Borrowers and the Restricted
Subsidiaries from directly or indirectly self insuring risks as and to the
extent prudent and customary for companies similarly situated. The Borrowers
shall in any event maintain insurance on the Collateral to the extent required
by the Collateral Documents. The Borrowers will upon request of the Agent
furnish a certificate setting forth in summary form the nature and extent of the
insurance maintained pursuant to this Section 7.4.
Section 7.5. Financial Reports and Rights of Inspection. The Borrowers
shall, and shall cause each Restricted Subsidiary to, maintain a system of
accounting in accordance with sound accounting practice and shall furnish to the
Agent, each Lender and each of their duly authorized representatives such
information respecting the business and financial condition of the Borrowers and
their Restricted Subsidiaries as the Agent or such Lender may reasonably
request; and without any request, shall furnish to the Lenders:
(a) as soon as available, and in any event within sixty (60) days
after the last day of each monthly accounting period, a Borrowing Base
certificate in the form attached hereto as Exhibit C showing the computation of
the Borrowing Base in reasonable detail as of the close of business on the last
day of such period, prepared by the Company and certified to by an Authorized
Representative of the Company;
(b) as soon as available, and in any event within sixty (60) days
after the close of each monthly accounting period of the Company a copy of the
condensed consolidated and consolidating balance sheet of the Borrowers and the
Restricted Subsidiaries as of the last day of such period and the condensed
consolidated (and consolidating in the case of the statement of operations only)
statements of operations, cash flows and shareholder's equity of the Borrowers
and the Restricted Subsidiaries for such period and for the fiscal year-to-date
period then ended, each in reasonable detail and showing in comparative form the
figures for the corresponding date and period in the previous fiscal year in the
case of the condensed consolidated financial statements only, prepared by the
Company in accordance with GAAP (subject to year end audit adjustments which are
not expected to be material and to the absence of footnotes) and accompanied by
(or submitted separately, in the case of the last such period in each fiscal
year) reports for the Borrowers and the Restricted Subsidiaries as of the close
of such month of work in process, accounts receivable and accounts payable all
in forms acceptable to the Agent provided, however, that (i) consolidated
financial statements need not be submitted for the last monthly accounting
period in each fiscal year and (ii) the consolidating financial statements
called for by this Section 7.5(b) for the last monthly accounting period in each
fiscal year may be submitted concurrently with the submittal of the audited
financial statements for such fiscal year called for by Section 7.5(c) hereof;
(c) as soon as available, and in any event within one hundred five
(105) days after the close of each annual accounting period of the Company, a
copy of the consolidated balance sheet of the Borrowers and their Subsidiaries
as of the last day of the period then ended and the consolidated statements of
operations, cash flows and shareholder's equity of the Borrowers and their
Subsidiaries for the period then ended, and accompanying notes thereto, each in
reasonable detail showing in comparative form the figures for the previous
fiscal year, accompanied by an unqualified opinion thereon of Arthur Andersen
LLP or another firm of independent public accountants of recognized national
standing, selected by the Company and reasonably satisfactory to the Required
Lenders, to the effect that the consolidated financial statements have been
prepared in accordance with GAAP and present fairly in accordance with GAAP the
consolidated financial condition of the Borrowers and their Subsidiaries as of
the close of such fiscal year and the consolidated results of their operations
and cash flows for the fiscal year then ended and that an examination of such
accounts in connection with such financial statements has been made in
accordance with generally accepted auditing standards and, accordingly, such
examination included such tests of the accounting records and such other
auditing procedures as were considered necessary in the circumstances;
(d) within the period provided in subsection (c) above, the written
statement of the accountants who certified the audit report thereby required
that in the course of their audit they have obtained no knowledge of any Default
or Event of Default, or, if such accountants have obtained knowledge of any such
Default or Event of Default, they shall disclose in such statement the nature
and period of existence thereof;
(e) promptly after receipt of final copies thereof, any additional
written reports, management letters or other detailed information contained in
writing concerning significant aspects of any Borrower's or any Restricted
Subsidiary's operations and financial affairs given to it by its independent
public accountants; and
(f) promptly after knowledge thereof shall have come to the
attention of the chief executive or chief financial officer of any Borrower,
written notice of (i) any pending litigation or governmental proceeding or labor
controversy against any Borrower or Restricted Subsidiary which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect or
(ii) any threatened litigation, governmental proceeding or labor controversy
against any Borrower or Restricted Subsidiary which the Company or such Borrower
or Restricted Subsidiary in good faith believes could reasonably be expected to
have a Material Adverse Effect or (iii) the occurrence of any Default or Eveof
Default hereunder.
Each of the financial statements furnished to the Lenders pursuant to
subsections (b) and (c) of this Section 7.5 shall be accompanied by a written
certificate in the form attached hereto as Exhibit D signed by an Authorized
Representative of the Company to the effect that to the best of such officer's
knowledge and belief no Default or Event of Default has occurred during the
period covered by such statements or, if any such Default or Event of Default
has occurred during such period, setting forth a description of such Default or
Event of Default and specifying the action, if any, taken by the Company to
remedy the same. Such certificate submitted as of the last day of a calendar
quarter shall also set forth the calculations supporting such statements in
respect of Sections 7.6, 7.7, 7.8, 7.9 and 7.13 of this Agreement as well as the
calculation of the Applicable Margin and shall be accompanied by a report in
reasonable detail of all litigation, arbitrations and mediations being
prosecuted by the Company and its Restricted Subsidiaries against customers
where the amount claimed is $1,000,000 or more and is carried as an asset at
$500,000 or more on the books of the Company or a Restricted Subsidiary.
The Borrowers will, and will cause each Restricted Subsidiary to, permit
the Agent, the Lenders and their duly authorized representatives to visit and
inspect any of the Properties of the Borrowers and Restricted Subsidiaries, to
examine all of their books of account, records, reports and other papers, to
make copies and extracts therefrom, and to discuss their respective affairs,
finances and accounts with their respective officers, employees and independent
public accountants (and by this provision the Borrowers authorize such
accountants to discuss with the Lenders (and such Persons as any Lender may
designate, subject to reasonable arrangements for confidentiality) the finances
and affairs of the Borrowers and the Restricted Subsidiaries) all at such
reasonable times and as often as may be reasonably requested.
Section 7.6. Adjusted Tangible Net Worth. The Company will at all times
subsequent to June 30, 1996 during each fiscal year maintain Adjusted Tangible
Net Worth of not less than $125,000,000 plus (but not minus if a negative) 50%
of Net Income for the period from January 1, 1996 to the last day of the
immediately preceding fiscal year.
Section 7.7. Leverage Ratio. The Company will at all times
maintain a Leverage Ratio of not more than .45 to 1.
Section 7.8. Interest Coverage Ratio. The Company will as of the last day
of each calendar quarter have a ratio for the four most recently completed
calendar quarters of EBITDA to Interest Expense of not less than 1.85 to 1 in
the case of determinations made with respect to a computation period ending on
or prior to December 31, 1997 and not less than 2 to 1 in the case of each
determination made thereafter; provided that such ratio shall be computed as of
June 30, 1996 for the quarter then ending, as of September 30, 1996 for the
period of two calendar quarters then ending and as of December 31, 1996 for the
period of three calendar quarters then ending.
Section 7.9. Current Ratio. The Company will at all times maintain a
ratio, computed on a consolidated basis for the Company and the Restricted
Subsidiaries, of current assets to current liabilities (each determined in
accordance with GAAP) of not less than 1 to 1.
Section 7.10. Indebtedness for Borrowed Money. The Borrowers shall not,
nor shall they permit any of the Restricted Subsidiaries to, issue, incur,
assume, create or have outstanding any Indebtedness for Borrowed Money;
provided, however, that the foregoing shall not restrict nor operate to prevent:
(a) the Obligations;
(b) Subordinated Debt;
(c) the obligations listed and described on Schedule 7.10
attached hereto and guarantees specifically permitted by Section 7.12
hereof;
(d) unless and until the Tranche B Activation Date has occurred,
indebtedness of EMCOR U.K. Limited and its Restricted Subsidiaries aggregating
not more than (pound)25,000,000 at any one time outstanding and guarantees
thereof by EMCOR International, Inc. and/or EMCOR U.K. Limited and its
Restricted Subsidiaries;
(e) unless and until the Tranche C Activation Date has occurred,
indebtedness of the Canadian Subsidiaries aggregating not more than $10,000,000
at any one time outstanding; and guarantees of up to $5,000,000 thereof by the
Company and Restricted Subsidiaries.
(f) Indebtedness of the Company to Restricted Subsidiaries, of
Restricted Subsidiaries to the Company and of Restricted Subsidiaries to
Restricted Subsidiaries provided that \(i) indebtedness of EMCOR U.K. Limited
and its Restricted Subsidiaries shall be limited to (pound)7,500,000 until the
Tranche B Activation Date and $35,000,000 thereafter and (ii) indebtedness of
the Canadian Subsidiaries and its Restricted Subsidiaries shall be limited to
$5,000,000 until the Tranche C Activation Date and $10,000,000 thereafter;
(g) obligations consisting of deferred payment obligations of the
Company and any of the Restricted Subsidiaries for insurance premiums or
incurred by Company or any of its Restricted Subsidiaries in respect of funds
borrowed for the payment of such premiums in either case in the ordinary course
of business and consistent with past practices;
(h) Indebtedness for Borrowed Money of Designated Foreign Restricted
Subsidiaries (and guarantees thereof by the Company, EMCOR International, Inc.
and Restricted Subsidiaries of EMCOR International, Inc.) and guarantees of or
incurrence of liability for letters of credit supporting, Indebtedness for
Borrowed Money of Persons in which the Company and the Restricted Subsidiaries
are permitted to invest pursuant to subsection (n) of Section 7.12; provided
that the aggregate amount of Indebtedness for Borrowed Money so permitted to be
incurred, guaranteed or supported pursuant to the provisions of this subsection
(h) shall not exceed (pound)5,000,000 at any one time outstanding;
(i) Indebtedness for Borrowed Money in addition to that otherwise
permitted hereunder provided that at the time of incurrence of such indebtedness
and after giving effect thereto the aggregate principal amount of Indebtedness
for Borrowed Money of the Company and its Restricted Subsidiaries incurred
during the twelve-month period ended on the date of the incurrence in question
and permitted solely by this Section 7.10(i) donot exceed seven-tenths of 1% of
the arithmetic average of the unrealized revenue from contracts in progress of
the Company and its Restricted Subsidiaries (computed in accord with the past
practice of the Company) as of the last day of each of the four calendar
quarters most recently ended prior to the date of the computation in question;
(j) liabilities in respect of letters of credit not otherwise
permitted by this Section 7.10 if payment of such letters of credit is fully
supported by a Letter of Credit; and,
(k) any renewals, extensions or replacements of Indebtedness for
Borrowed Money permitted under this Section 7.10 in an aggregate amount not in
excess of the Indebtedness for Borrowed Money being renewed, extended or
replaced.
Section 7.11. Liens. The Borrowers shall not, nor shall they permit the
Restricted Subsidiaries to, create, incur or permit to exist any Lien of any
kind on any Property owned by the Borrowers or any Restricted Subsidiary;
provided, however, that the foregoing shall not apply to nor operate to prevent:
(a) Liens arising by statute in connection with worker's
compensation, unemployment insurance, old age benefits, social security
obligations, taxes, assessments, statutory obligations or other similar charges,
good faith cash deposits in connection with the foregoing or in connection with
tenders, contracts or leases to which the Borrowers or any of their Restricted
Subsidiaries are a party or other cash deposits required to be made in the
ordinary course of business, provided in each case that the obligation is not
for borrowed money and that the obligation secured is not overdue or, if
overdue, is being contested in good faith by appropriate proceedings which
prevent enforcement of the matter under contest and adequate reserves have been
established therefor;
(b) mechanics', workmen's, materialmen's, landlords', carriers',
osimilar Liens arising in the ordinary course of business with respect to
obligations which are not due or which are being contested in good faith by
appropriate proceedings which prevent enforcement of the matter under contest;
(c) the pledge of assets for the purpose of securing an appeal, stay
or discharge in the course of any legal proceeding, provided that the aggregate
amount of liabilities of the Borrowers and their Restricted Subsidiaries secured
by a pledge of assets permitted under this subsection, including interest and
penalties thereon, if any, shall not be in excess of $500,000 at any one time
outstanding;
(d) the Liens granted in favor of the Agent for the benefit of
the Lenders pursuant to the Collateral Documents;
(e) Liens on Property of the Borrowers or of any Restricted
Subsidiaries created solely for the purpose of securing indebtedness permitted
by Section 7.10(i) hereof representing or incurred to finance, refinance or
refund the purchase price of such Property, provided that no such Lien shall
extend to or cover other Property of the Borrowers or any Restricted Subsidiary
other than the respective Property so acquired, and the principal amount of
indebtedness secured by any such Lien shall at no time exceed the original
purchase price of such Property;
(f) Liens on the stock and assets of EMCOR U.K. Limited and on
the assets of the corporations identified in subsections (d) and (e) of
Section 7.10 hereof securing the indebtedness permitted by such
subsections and/or unless and until the Tranche B Activation Date has
occurred, securing Performance Guarantees;
(g) Liens in favor of Reliance Surety Company and its
Affiliates described in clause (i) of the second proviso to Section 4.1
hereof;
(h) rights of subrogation and similar rights of issuers of surety
bonds and unperfected lien rights of such issuers to assets associated with
projects which they have bonded;
(i) restrictions on the disbursement or withdrawal of funds
deposited by Restricted Subsidiaries in bank accounts maintained by them in the
ordinary course of business consistent with past practice which are maintained
in connection with specific construction projects or contracts from which
payments and disbursements with respect to such contracts or projects are to be
made;
(j) Liens on insurance policies arising in connection with the
deferred payment of premiums or the financing thereof in the ordinary course of
business;
(k) Liens consisting of cash collateral deposits made in
connection with the insurance program of the Company and its Restricted
Subsidiaries;
(l) Liens existing on any property of a corporation at the time such
corporation becomes a Restricted Subsidiary which Liens were not created,
incurred or assumed in contemplated thereof, provided that no such Liens shall
extend to or cover any other property of the Company or any Restricted
Subsidiary;
(m) the Liens listed and described on Schedule 7.11 attached
hereto;
(n) any extension, renewal or replacement (or successive extensions,
renewals or replacements) of Liens permitted by this Section 7.11 without any
increase inamount of indebtedness secured thereby or in the assets subject to
such Liens;
(o) Liens on the capital stock of MES Holding Corporation
securing the Series A Notes unless and until the Series A Notes are
redeemed; and
(p) Liens on assets of Designated Foreign Restricted Subsidiaries
securing indebtedness thereof permitted by Section 7.10 hereof or securing
Performance Guarantees.
Section 7.12. Investments, Acquisitions, Loans, Advances and Guarantees.
The Borrowers shall not, nor shall they permit any of the Restricted
Subsidiaries to, directly or indirectly, make, retain or have outstanding any
investments (whether through purchase of stock or obligations or otherwise) in,
or loans or advances (other than for relocation and travel advances and other
cash advances made to employees in the ordinary course of business) to, any
other Person, or acquire all or any substantial part of the assets or business
of any other Person or division thereof, or be or become liable as endorser,
guarantor, surety or otherwise for any debt, obligation or undertaking of any
other Person, or otherwise agree to provide funds for payment of the obligations
of another, or supply funds thereto or invest therein or otherwise assure a
creditor of another against loss, or apply for or become liable to the issuer of
a letter of credit which supports an obligation of another, or subordinate any
claim or demand it may have to the claim or demand of any other Person;
provided, however, that the foregoing shall not apply to nor operate to prevent:
(a) investments in direct obligations of the United States of
America or of any agency or instrumentality thereof whose obligations constitute
full faith and credit obligations of the United States of America, provided that
any such obligations shall mature within one year of the date of issuance
thereof;
(b) investments in commercial paper maturing within 270 days of the
date of issuance thereof which has been accorded one of the two highest ratings
available from the Standard & Poor's Ratings Group of McGraw Hill Companies,
Moody's Investors Service, Inc. or any other nationally recognized credit rating
agency of similar standing providing similar ratings;
(c) investments in certificates of deposit issued by any commercial
bank organized under the laws of Canada or the United States or (as to
investments of EMCOR U.K. Limited and its Subsidiaries) the United Kingdom in
each case having capital, surplus and undivided profits of not less than
$500,000,000 or by any Lender in each case maturing within one year from the
date of issuance thereof or in Eurodollar time deposits maturing not more than
one year from the date of acquisition thereof placed with any Lender or other
such commercial bank (to the extent investments in certificates of deposit
issued by such other bank are permitted by this subsection) or in banker's
acceptances endorsed by any Lender or other such commercial bank (to the extent
investments in certificates of deposit issued by such other bank are permitted
by this subsection) and maturing within nine months of the date of acceptance;
(d) endorsement of items for deposit or collection of
commercial paper received in the ordinary course of business;
(e) the investments, loans, advances and guarantees listed and
described on Schedule 7.12 attached hereto;
(f) the Guarantees and guarantees referred to in and permitted
by Section 7.10 hereof;
(g) (i) the present investment of the Company and Restricted
Subsidiaries in, and present loans and advances by the Company and Restricted
Subsidiaries to, Unrestricted Subsidiaries and (ii) future investments in, and
loans and advances, (including subordinated loans) to, Unrestricted Subsidiaries
for asset preservation and to preserve existing operations aggregating not more
than $1,500,000 at any one time outstanding;
(h) Loans and advances (including subordinated loans and advances)
between the Company and its Restricted Subsidiaries if and to the extent that
the corresponding indebtedness is permitted by Section 7.10 hereof;
(i) acquisitions by the Company or any Restricted Subsidiary of all
or substantially all of the assets or business of any other Person or division
thereof, or of all or substantially all of the Voting Stock of a Person, so long
as (i) no Default or Event of Default exists or would exist after giving effect
to such acquisition, (ii) the Board of Directors or other governing body of such
Person whose Property or Voting Stock is being so acquired has approved the
terms of such acquisition, and (iii) the total amount expended by the Company
and its Restricted Subsidiaries for such acquisitions (other than the
contemplated acquisition of the Tucker Company) does not aggregate in excess of
the amount permitted by Section 7.13 hereof;
(j) acquisitions of assets (including notes and other evidences
of indebtedness) and subordinations of claims as a part of good faith
collection efforts on doubtful accounts;
(k) Performance Guarantees;
(l) notes and other deferred payment obligations (other than general
partnership and similar interests) acquired by the Company or any Restricted
Subsidiary in connection with the sale or other disposition of assets permitted
hereby;
(m) investments of the Company or any Restricted Subsidiary made in
the ordinary course of business in connection with joint ventures, corporations
or other similar pooling of efforts in respect to a specific project or series
of related specific projects for a limited or fixed duration and formed to
conduct business of the type in which the Company or such Restricted Subsidiary
is presently engaged consistent with past practices and guarantees of
obligations of, and incurrence of liabilities in respect of letters of credit
for, such joint ventures or corporations;
(n) investments in joint ventures, corporations or similar pooling
of efforts organized outside of and conducting its business outside of the
United States of America entered into for the purpose of expanding the
mechanical and/or electrical business of the Company or any Restricted
Subsidiary into a jurisdiction in which it has not previously conducted
substantial business, provided that the aggregate amount invested or expended in
connection with the foregoing purposes shall not aggregate in excess of the
amount permitted by Section 7.13 hereof;
(o) investments in money market funds which in turn invest
primarily in investments of the types described in clauses (a) through
(c) of this Section 7.12;
(p) the present investment of the Company and Restricted
Subsidiaries in Restricted Subsidiaries and future investments by them in
Restricted Subsidiaries which are Guarantors or in a Restricted Subsidiary
formed as a captive insurer; and
(q) investments by Designated Foreign Restricted Subsidiaries in
short term high quality investments which are regarded in their countries of
domicile as being similar in type and used for similar purposes to those
described in clauses (a), (b), (c) or (o) of this Section 7.12.
In determining the amount of investments, acquisitions, loans, advances
and guarantees permitted under this Section 7.12, investments and acquisitions
shall always be taken at the original cost thereof (regardless of any subsequent
appreciation or depreciation therein), loans and advances shall be taken at the
principal amount thereof then remaining unpaid, and guarantees shall be taken at
the amount of obligations guaranteed thereby.
Section 7.13. Capital and Certain other Restricted Expenditures. The
Borrowers will not, nor will they permit any Restricted Subsidiary to, make, or
(without duplication) become obligated to make, any Capital Expenditure or make
any acquisition permitted solely by Section 7.12(i) hereof or make any
investment described in Section 7.12(n) hereof or apply for a letter of credit
(whether hereunder or otherwise) supporting an obligation of any joint venture
or other Person described in Section 7.12(n) or guarantee any Indebtedness of
Borrowed Money of any such Person, if after giving effect thereto the aggregate
amount expended (other than in the form of capital stock of the Company) for
such purposes during the twelve-month period ending on the date of the
expenditure in question when taken together with the face amount of such letters
of credit issued during such period and such indebtedness so guaranteed incurred
during such period, would exceed the sum of (i) 1% of the arithmetic average of
the unrealized revenue from contracts in progress of the Company and its
Restricted Subsidiaries (computed in accord with the past practice of the
Company) as of the last day of each of the four calendar quarters most recently
completed prior to the computation in question (ii) the net cash proceeds
received by the Company and the Restricted Subsidiaries during the same period
from sales of assets (including stock of Restricted Subsidiaries) permitted by
Sections 7.14 and/or 7.15 hereof and (iii) the maximum amount of dividends which
the Company could pay under Section 7.16(i) as of the date of the expenditure or
application in question.
Section 7.14. Mergers, Consolidations and Sales. The Company shall not,
nor shall it permit any of its Restricted Subsidiaries to, be a party to any
merger, consolidation or dissolution, or sell, transfer, lease or otherwise
dispose of all or any substantial part of its Property, including any
disposition of Property as part of a sale and leaseback transaction, or in any
event sell or discount (with or without recourse) any of its notes or accounts
receivable (other than sales or discounts of doubtful accounts or notes taken in
satisfaction of same); provided, however, that this Section 7.14 shall not apply
to nor operate to prevent the Borrowers or any of the Restricted Subsidiaries
from selling their inventory in the ordinary course of its business or from
selling equipment which is obsolete, worn out, or no longer needed for the
operation of the business of the Company and the Restricted Subsidiaries or
which is promptly replaced with equipment of at least equal utility nor shall
the foregoing prohibit (i) mergers of Restricted Subsidiaries with and into the
Company and sales by Restricted Subsidiaries of all or substantially all of
their assets to the Company (ii) mergers of Restricted Subsidiaries with each
other and sales of all or substantially all of the assets of a Restricted
Subsidiary to another Restricted Subsidiary provided in each case that if either
of the two Restricted Subsidiaries in question is a Guarantor, the survivor of
the transaction in question remains a Guarantor and all such actions are taken
as the Agent requires to preserve its Liens on the Collateral, (iii) the
dissolution of any Restricted Subsidiary whose activities are no longer, in the
opinion of the Board of Directors of the Company, necessary for the operation of
the business of the Company and its Restricted Subsidiaries taken as a whole,
provided always that no Default or Event of Default has occurred and is
continuing or will result therefrom and if the Restricted Subsidiary to be
dissolved is a Guarantor, all of its assets remaining after the dissolution in
question are transferred to another Guarantor and all such actions, if any, are
taken as the Agent may reasonably require in order to insure that it has a Lien
on the assets so transferred of the priority required by Section 4.1 hereof. The
foregoing provisions to the contrary notwithstanding, prior to the Consolidation
Date, DYN and its Restricted Subsidiaries shall not engage in any transaction
otherwise permitted by clauses (i), (ii) or (iii) of the foregoing proviso. The
term "substantial" as used herein shall mean the sale, transfer, lease or other
disposition of five percent (5%) or more of the total consolidated assets of the
Company and the Restricted Subsidiaries in any calendar year, whether in one or
a series of transactions. The Agent shall release its Lien on any Property sold
pursuant to the foregoing provisions if no Default or Event of Default has
occurred and is continuing or would result therefrom.
Section 7.15. Maintenance of Restricted Subsidiaries. The Borrowers shall
not assign, sell or transfer, or permit any Restricted Subsidiary to issue,
assign, sell or transfer, any shares of capital stock of a Restricted
Subsidiary; provided that the foregoing shall not operate to prevent (i) the
issuance, sale and transfer to any person of any shares of capital stock of a
Restricted Subsidiary solely for the purpose of qualifying, and to the extent
legally necessary to qualify, such person as a director of such Subsidiary or
(ii) the sale of all of the capital stock of a Restricted Subsidiary if but only
if (a) no Default or Event of Default has occurred and is continuing or will
result from the sale of same, (b) the sale of such capital stock is not a sale
of a substantial part of the assets of the Company and the Restricted
Subsidiaries (as the term "substantial" is defined in Section 7.14 hereof), (c)
the Board of Directors of the Company has determined that the continued
ownership of the Restricted Subsidiary in question is no longer appropriate in
light of the then needs and strategic objectives of the Company and its
Restricted Subsidiaries taken as a whole and (d) all indebtedness of such
Restricted Subsidiary to the Company or any other Restricted Subsidiary is paid
in full, and all guarantees or other support undertakings provided by the
Company or other Restricted Subsidiaries are discharged, concurrently with the
sale in question, provided that then existing Performance Guarantees need not be
so discharged as to jobs in progress at the time the sale is completed.
Concurrently with the sale of the capital stock of a Restricted Subsidiary
permitted hereby, the Agent is authorized and directed to release any Guarantee
provided by such Restricted Subsidiary and any Lien on the stock or assets of
such Restricted Subsidiary. The Borrower shall not permit any Restricted
Subsidiary to enter into any contract or agreement after the date hereof
prohibiting or restricting such Restricted Subsidiary from paying dividends or
making loans and advances to the Company except in the case of a Restricted
Subsidiary formed or acquired to be a captive insurer.
Section 7.16. Dividends and Certain Other Restricted Payments. The Company
will not during any fiscal year (a) declare or pay any dividends on or make any
other distributions in respect of any class or series of its capital stock
(except for dividends payable solely in its capital stock) or (b) directly or
indirectly purchase, redeem or otherwise acquire or retire any of its capital
stock or any options or warrants therefor or (c) directly or indirectly make any
payment of principal on or in respect of any Subordinated Debt or otherwise
acquire, prepay or retire any of such Subordinated Debt, in each case prior to
the maturities thereof or prior to any other times required for payment thereof
as are in force and effect as of the date hereof; provided, however, that the
foregoing shall not apply to nor operate to prevent:
(i) the declaration and payment of non-excepted dividends and the
non- excepted purchase, redemption or other acquisition or retirement of capital
stock or warrants or options of the Company occurring in each case after
December 31, 1997 if after giving effect thereto (aa) the aggregate amount
expended by the Company for such purposes during the period commencing on the
first day of the third fiscal quarter preceding the fiscal quarter in which the
declaration or payment in question occurred and ending on the date of the
declaration or payment in question would not exceed 50% of Net Income for the
period of four consecutive fiscal quarters most recently completed plus the net
amount received by the Company from the sale of its capital stock or warrants
therefore during such period or thereafter and through the date of the
declaration or payment in question less any portion of such net amount used to
justify a payment under clause (ii) below and also less any portion of the
amount as otherwise computed pursuant to this clause (i) which was used to
justify a transaction under Section 7.13 pursuant to clause (iii) thereof and
(bb) no Default or Event of Default shall have occurred and be continuing;
(ii) non-excepted principal payments or acquisitions, pre-payments
or retirements of Subordinated Debt if after giving effect thereto (aa) the
aggregate amount paid by the Company for the foregoing purposes during the
period commencing on the first day of the third fiscal quarter preceding the
fiscal quarter in which the payment in question occurred and ending on the date
of the payment in question would not exceed the difference for the period of
four consecutive fiscal quarters most recently completed between (A) Net Income
plus the amount by which Net Income was reduced as a result of depreciation of
fixed assets and the amortization of intangibles plus the net amount received by
the Company from the sale of its capital stock or warrants therefor during such
period or thereafter and through the date of the payment in question less any
portion of such net amount used to justify a payment under clause (i) above and
(B) the amount expended by the Company and its Restricted Subsidiaries for
Capital Expenditures and for acquisitions permitted by Section 7.12(i) and
investments in ventures provided solely by Section 7.12(n) hereof and (bb) no
Default or Event of Default shall have occurred and be continuing.
Nothing herein contained shall affect, impair or limit the rights of the
Lenders or the Agent acting on their behalf to serve any notice on the Company,
the holders of Subordinated Debt or any trustee or agent therefor blocking,
limiting or otherwise precluding the making of payments on account of such
Subordinated Debt on and subject to the conditions to service of any such notice
contained in the instruments applicable to such Subordinated Debt nor shall
anything contained herein be deemed to permit the Company to make any payment on
account of Subordinated Debt precluded by any such notice properly given or by
the instruments setting forth the terms applicable to such Subordinated Debt.
Section 7.17. ERISA. The Borrowers shall, and shall cause each of the
Restricted Subsidiaries to, promptly pay and discharge all obligations and
liabilities arising under ERISA of a character which if unpaid or unperformed
might result in the imposition of a Lien against any of their Properties. The
Borrowers shall, and shall cause each of the Restricted Subsidiaries to,
promptly notify the Agent and each Lender of (i) the occurrence of any
reportable event (as defined in ERISA) with respect to any employee benefit plan
subject to Title IV of ERISA (other than a multiemployer plan) sponsored or
contributed to by either of the Borrowers or any member of the Controlled Group
(a "Plan") with respect to which the PBGC has neither waived the 30 day
reporting requirement nor issued a public announcement that the penalty
applicable to a failure to report will not apply, (ii) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or appointment of
a trustee therefor, (iii) its intention to terminate any Plan or withdraw from
any multiemployer plan if such termination or withdrawal could reasonably be
expected to have a Material Adverse Effect, and (iv) the occurrence of any other
event with respect to any Plan which would result in the incurrence by the
Borrowers or any of their Restricted Subsidiaries of any material liability,
fine or penalty, or any material increase in the contingent liability of the
Borrowers or any of the Restricted Subsidiaries with respect to any
post-retirement Welfare Plan benefit which could reasonably be expected to have
a Material Adverse Effect.
Section 7.18. Compliance with Laws. The Company shall, and shall cause
each of its Restricted Subsidiaries to, comply in all respects with the
requirements of all foreign (whether national, supra-national or otherwise),
federal, state and local laws, rules, regulations, ordinances and orders
applicable to or pertaining to their Properties or business operations,
non-compliance with which could have a Material Adverse Effect or could result
in a Lien upon any of their Property material to the Company and the Restricted
Subsidiaries taken as a whole.
Section 7.19. Burdensome Contracts With Affiliates. The Company shall not,
nor shall it permit any of its Restricted Subsidiaries to, enter into any
contract, agreement or business arrangement with any of its Affiliates (other
than with or among Restricted Subsidiaries and the Company) on terms and
conditions which are less favorable to the Company or any such Restricted
Subsidiary than would be usual and customary in similar contracts, agreements or
business arrangements between Persons not affiliated with each other.
Section 7.20. Amendments to Subordinated Debt. The Company shall
not amend or modify the subordination provisions applicable to any
Subordinated Debt.
Section 7.21. No Changes in Fiscal Year. The Company shall not
change its fiscal years from its present basis without the prior written
consent of the Required Lenders.
Section 7.22. Formation of Subsidiaries. The Company will not, and will
not permit any Restricted Subsidiary to, form or acquire any Subsidiary except
for acquisitions permitted by Section 7.11 hereof and the formation of new
subsidiaries if in any such case and either of such instances the newly formed
or acquired Subsidiary shall, if the Required Lenders so request, execute and
deliver a Guarantee and grant Liens on its assets of the priority required by
Section 4.1 hereof (and provide the Agent with such documentation therefore and
such supporting documentation, including opinions of counsel, as it may
reasonably request). Each Subsidiary acquired or formed pursuant hereto shall
constitute a Restricted Subsidiary unless the Required Lenders otherwise agree
in writing.
Section 7.23. Change in the Nature of Business. The Company shall not, and
shall not permit any of the Restricted Subsidiaries to, engage in any business
or activity if as a result the general nature of the business of the Company and
the Restricted Subsidiaries would be changed in any material respect from the
general nature of the business engaged in by the Company and the Restricted
Subsidiaries on the date of this Agreement.
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.
Section 8.1. Events of Default. Any one or more of the following
shall constitute an Event of Default hereunder:
(a) default in the payment when due of all or any part of the
principal of the Revolving Credit Notes (whether at the stated maturity thereof
or at any other time provided for in this Agreement) or of any Reimbursement
Obligation and any such default continues for 1 Business Day after notice
thereof from the Agent to the Company;
(b) default in the payment when due of all or part of the interest
on any Revolving Credit Note (whether the stated maturity thereof or at any
other time provided for in this Agreement) or of any fee or other amount payable
hereunder or under any other Loan Document and any such default continues for 5
Business Days after notice thereof from the Agent to the Company;
(c) default in the observance or performance of any covenant set
forth in Sections 7.6, 7.7, 7.8, 7.9, 7.13, 7.14, 7.15, 7.16, or 7.20 hereof or
of any provision in any Loan Document dealing with the maintenance of insurance
on the Collateral;
(d) default in the observance or performance of any other provision
hereof or of any other Loan Document which is not remedied within thirty days
after the earlier of (i) the date on which such failure shall first become known
to any officer of the Company or (ii) written notice thereof to the Company by
the Agent;
(e) any representation or warranty made herein or in any of the
other Loan Document or in any certificate furnished to the Agent or the Lenders
pursuant hereto or thereto or in connection with any transaction contemplated
hereby or thereby proves untrue in any material respect as of the date of the
issuance or making thereof;
(f) any event occurs or condition exists (other than those described
in subsections (a) through (d) above) which is specified as an event of default
under any of the other Loan Documents and any period of grace applicable thereto
shall have elapsed, or any of the Loan Documents shall for any reason not be or
shall cease to be in full force and effect, or any of the Loan Documents is
declared to be null and void, or any of the Collateral Documents shall for any
reason fail to create a valid and perfected Lien in favor of the Agent in any
Collateral purported to be covered thereby of the priority required by Section
4.1 hereof;
(g) default shall occur under any evidence of Indebtedness for
Borrowed Money aggregating in excess of $500,000 issued, assumed or guaranteed
by any of the Borrowers or any Restricted Subsidiary or under any indenture,
agreement or other instrument under which the same may be issued, and such
default shall continue for a period of time sufficient to permit the
acceleration of the maturity of any such Indebtedness for Borrowed Money
(whether or not such maturity is in fact accelerated) without being waived or
any such Indebtedness for Borrowed Money shall not be paid when due (whether by
demand, lapse of time, acceleration or otherwise);
(h) any judgment or judgments, writ or writs or warrant or warrants
of attachment, or any similar process or processes in an aggregate amount in
excess of $250,000 and which is not fully covered by insurance from any insurer
who has acknowledged its liability thereon shall be entered or filed against the
Borrowers or any of the Restricted Subsidiaries or against any of the Property
or assets of any of them and remains undischarged, unvacated, unbonded or
unstayed for a period of thirty days;
(i) any party obligated on any Guarantee shall purport to disavow,
revoke, repudiate or terminate such Guarantee or such Guarantee shall otherwise
cease to have force or effect;
(j) any Change of Control occurs;
(k) any Borrower, Guarantor or Restricted Subsidiary shall (i) have
entered involuntarily against it an order for relief under the United States
Bankruptcy Code, as amended, or any analogous action is taken under any other
applicable law relating to bankruptcy or insolvency, (ii) not pay, admit in
writing its inability to pay, or be deemed under applicable law not to be able
to pay, its debts generally as they become due, (iii) make an assignment for the
benefit of creditors, (iv) apply for, seek, consent to, or acquiesce in, the
appointment of a receiver, administrative receiver, administrator, custodian,
trustee, examiner, liquidator or similar official for it or any substantial part
of its Property, (v) institute any proceeding seeking to have entered against it
an order for relief under the United States Bankruptcy Code, as amended, to
adjudicate it insolvent, or seeking dissolution, winding up, liquidation,
reorganization, arrangement, adjustment or composition of it or its debts under
any law relating to bankruptcy, insolvency or reorganization or relief of
debtors or fail to file an answer or other pleading denying the material
allegations of any such proceeding filed against it, or (vi) fail to contest in
good faith any appointment or proceeding described in Section 8.1(l) hereof;
(l) a custodian, receiver, administrative receiver, administrator,
trustee, examiner, liquidator or similar official shall be appointed for any
Borrower, Guarantor or Restricted Subsidiary or any substantial part of any of
their Property, or a proceeding described in Section 8.1(k)(v) shall be
instituted against any Borrower, Guarantor or Restricted Subsidiary, and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of sixty days.
Section 8.2. Non-Bankruptcy Defaults. When any Event of Default
described in subsections 8.1(a) to 8.1(j), both inclusive, has occurred and
is continuing, the Agent shall, upon request of the Required Lenders by
notice to the Company, take any or all of the following actions:
(a) terminate the obligation of the Lenders to extend any further
credit hereunder on the date (which may be the date thereof) stated in such
notice; and
(b) declare the principal of and the accrued interest on the
Revolving Credit Notes to be forthwith due and payable and thereupon the
Revolving Credit Notes, including both principal and interest, and all fees,
charges, commissions and other Obligations payable hereunder, shall be and
become immediately due and payable without further demand, presentment, protest
or notice of any kind.
Section 8.3. Bankruptcy Defaults. When any Event of Default described in
subsection 8.1(k) or 8.1(l) has occurred and is continuing, then the unpaid
balance of the Revolving Credit Notes, including both principal and interest,
and all fees, charges, commissions and other Obligations payable hereunder,
shall immediately become due and payable without presentment, demand, protest or
notice of any kind, and the obligation of the Lenders to extend further credit
pursuant to any of the terms hereof shall immediately terminate.
Section 8.4. Collateral for Undrawn Letters of Credit. If and when (x) any
Event of Default, other than an Event of Default described in subsections (k) or
(l) of Section 8.1, has occurred and is continuing, the Borrowers shall, upon
demand of the Agent, and (y) any Event of Default described in subsections (k)
or (l) of Section 8.1 has occurred or (z) any Letter of Credit is outstanding on
the Termination Date (whether or not any Event of Default has occurred), the
Borrowers shall, without notice or demand from the Agent, immediately pay to the
Agent the full amount of each Letter of Credit, the Borrowers agreeing to
immediately make each such payment and acknowledging and agreeing the Agent
would not have an adequate remedy at law for failure of the Borrowers to honor
any such demand and that the Agent shall have the right to require the Borrowers
to specifically perform such undertaking whether or not any draws had been made
under the Letters of Credit.
SECTION 9. DEFINITIONS INTERPRETATIONS
Section 9.1. Definitions. The following terms when used herein
have the following meanings:
"Activated Commitments" shall mean the amounts of the Commitments which
have been activated pursuant to Section 6.3 hereof.
"Adjusted Tangible Net Worth" means, as of any time the same is to be
determined, the sum of Tangible Net Worth and Subordinated Debt.
"Affiliate" means any Person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to control another Person for the purposes of this
definition if such Person possesses, directly or indirectly, the power to
direct, or cause the direction of, the management and policies of the other
Person, whether through the ownership of voting securities, common directors,
trustees or officers, by contract or otherwise; provided that, in any event for
purposes of this definition, any Person that owns, directly or indirectly, 20%
or more of the securities having ordinary voting power for the election of
directors or governing body of a corporation or 20% or more of the partnership
or other ownership interests of any other Person (other than as a limited
partner of such other Person) will be deemed to control such corporation or
other Person.
"Agent" shall mean Harris Trust and Savings Bank and any successor thereto
appointed pursuant to Section 10.1 hereof.
"Agreement" means this Credit Agreement, as the same may be amended,
modified or restated from time to time in accordance with the terms hereof.
"Alternative Currency" means Canadian dollars, pounds sterling and any
other currency (other than United States Dollars) approved as such in writing by
all Lenders in each case only to the extent readily available to each Lender.
"Applicable Index Rate" means the Domestic Rate or, as to a particular
Borrower, any other interest rate index which may have been approved in writing
by the Company, such Borrower and all Lenders.
"Applicable Issuer" means the Issuer of Letters of Credit for the account
of a particular Borrower or Borrowers or in a particular jurisdiction or
jurisdictions.
"Applicable Margin" means two percent per annum provided, however, that
(i) if as of the last day of any calendar quarter the ratio of Senior Debt
computed as of such day to EBITDA for the twelve month period then ending is 1.5
to 1 or less or Adjusted Tangible Net Worth is $150,000,000 or more, then, and
in any such event, the Applicable Margin for the three months commencing with
the second month following the close of such calendar quarter shall be one
percent per annum and (ii) if as of the last day of any calendar quarter the
ratio of Senior Debt computed as of such day to EBITDA for the twelve month
period then ending is 2.5 to 1 or less, but greater than 1.5 to 1 (and clause
(i) above is inapplicable) then the Applicable Margin for the three month period
commencing with the second month following the close of such calendar quarter
shall be 1.5 percent per annum.
"Application" is defined in Section 1.3(b).
"Assignment Agreement" means an Assignment and Acceptance entered into by
a Lender and an assignee in accordance with Section 11.18 hereof substantially
in the form of Exhibit E hereto.
"Authorized Representative" means the Chief Executive Officer, the
President, the Chief Financial Officer, the Vice President and Controller or the
Vice President and Treasurer, or any further or different persons so named by
any Authorized Representative in a written notice to the Agent.
"Borrowers" means (a) the Company, (b) DYN and (c) such other Restricted
Subsidiaries as may from time to time be designated as such in writing by the
Company and approved as such in writing by all Lenders (but subject to such
conditions and limitations as either the Company or the Lenders may impose),
with (i) the term "Borrowers" to mean the Borrowers, collectively, and, also,
each individually, and (ii) all promises and covenants (including promises to
pay) and representations and warranties of and by the Borrowers made in the Loan
Documents or any instruments or documents delivered pursuant thereto to be and
constitute the joint and several promises, covenants, representations and
warranties of and by each and all of such corporations, except to the extent
explicitly otherwise provided. The term "Borrower" appearing in such singular
form shall be deemed a reference to any of the Borrowers unless the context in
which such term is used shall otherwise require.
"Borrowing" shall mean the total of Revolving Loans made to a given
Borrower by all the Lenders on a single date. Borrowings are made and maintained
ratably from each of the Lenders according to their Percentages except to the
extent otherwise agreed in writing by all Lenders.
"Borrowing Base" means forty percent of the difference between (a)
Eligible Accounts Receivable and (b) amounts recorded for costs in excess of
billings as an asset which represents disputed items in excess of the amounts
specifically permitted by the applicable contracts, other than amounts covered
by change orders properly executed pursuant thereto. Eligible Accounts
Receivable means all ordinary billed trade accounts receivable of the Company
and the Restricted Subsidiaries (i) in which the Agent has a valid and perfected
Lien of the priority required by Section 4.1 hereof, (ii) which are not subject
to any defense, offset or counterclaim which has been claimed (or if they are
subject to a defense, offset or counterclaim, the amount of same has been
deducted in the computation of Eligible Accounts Receivable), (iii) which are
not otherwise in dispute or anticipated to be disputed unless the amount in
question has been deducted in computing Eligible Accounts Receivable, and (iv)
which have been billed and either have been outstanding for not more than 90
days after the due date on the relevant invoice (which due date shall be
computed in accord with the past practices of the Company and its Restricted
Subsidiaries) or payment of same has not been made within 90 days solely because
the amount unpaid represents retainage not due the Company or its Restricted
Subsidiaries until completion of the project in question or achievement of an
agreed upon completion milestone in accord with the custom and practice in the
construction industry and the Company and its Restricted Subsidiaries have no
reason to believe that the amount of such retainage will not be paid when due,
provided that there shall be excluded from Eligible Accounts Receivable (i) any
accounts receivable otherwise included therein from account debtors who are
bankrupt or insolvent or who have otherwise suspended payment of their
obligations to the Company and its Restricted Subsidiaries in respect to the
contract or job in question or as to which any proceeding (including litigation,
arbitration or mediation) is pending seeking to collect or enforce collection of
same and (ii) unless and until the Consolidation Date has occurred, the amount
by which 40% of the difference between Eligible Accounts Receivable of DYN and
its Restricted Subsidiaries otherwise included in the Borrowing Base and amounts
related to DYN and its Restricted Subsidiaries described in clause (b) of the
first sentence of this definition exceeds 66-2/3% of Modified Net Worth.
"Business Day" means any day other than a Saturday or Sunday on which
banks are not authorized or required to close in Chicago, Illinois and, if the
applicable Business Day relates to a Borrowing or payment in an Alternative
Currency or to a conversion of a Credit Utilization into U.S. Dollars, a day on
which banks and foreign exchange markets are open for business in the city where
disbursements of or payments on such Borrowings are to be made.
"Canadian Subsidiaries" means JWP NRO Holdings, Inc., EMCOR Canada Ltd.
and Comstock Canada Ltd.
"Capital Expenditures" means, for any period, capital expenditures of the
Company and its Restricted Subsidiaries during such period as defined and
classified in accordance with GAAP consistently applied.
"Capital Lease" means any lease of Property (whether real or personal)
which in accordance with GAAP is required to be capitalized on the balance sheet
of the lessee.
"Capitalized Lease Obligation" means the amount of the liability shown on
the balance sheet of any Person in respect of a Capital Lease determined in
accordance with GAAP.
"Change in Control" means that (i) more than 25% of the Voting Stock of
the Company shall at any time and for any reason be owned, either legally or
beneficially, by any Person or group of Persons acting in concert or (ii) Frank
MacInnis shall cease to be the chief executive officer of the Company and/or
Leicle Chesser shall cease to be the chief financial officer of the Company
and/or either such person shall cease to have the duties and responsibilities
normally associated with such positions and in any instance covered by clause
(ii) the person in question shall not be replaced within sixty days by a person
or persons of established experience and reputation, both with respect to the
duties required of the holder of such an office and in the contracting or a
related industry, who has been approved by a majority of the Board of Directors
of the Company and who has not been affiliated with any member of the Board or
any business or other enterprise with which a Board member is affiliated.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
"Collateral" means all Properties, rights, interests and privileges from
time to time subject to the Liens granted to the Agent by the Collateral
Documents or required so to be by the terms hereof.
"Collateral Documents" means all security agreements, pledge agreements,
assignments, financing statements, debentures and other documents as shall from
time to time secure the Revolving Credit Notes or any other Obligations.
"Commitments" is defined in Section 1.1 hereof.
"Company" is defined in the introductory paragraph.
"Consolidation Date" means the date on which the Intercreditor Agreement
has been modified in a manner satisfactory to the Required Lenders so as to
eliminate any restrictions contained therein on the right of the Agent to fully
enforce the Guarantees from DYN and its Restricted Subsidiaries upon the
occurrence of an Event of Default and eliminating any undertaking of the Agent
to release or discharge such Guarantee.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Company or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Credit Utilization" means any Borrowing and any issuance of a Letter
of Credit.
"Default" means any event or condition the occurrence of which would, with
the passage of time or the giving of notice, or both, constitute an Event of
Default.
"Designated Foreign Restricted Subsidiaries" means a Restricted Subsidiary
which conducts business primarily outside of the United States, the United
Kingdom and Canada.
"Domestic Rate" means a fluctuating interest rate per annum equal at all
times to the greater of:
(a) the rate of interest announced by Harris Trust and Savings Bank
from time to time as its prime commercial rate as in effect on such day, with
any change in such rate resulting from a change in said prime commercial rate to
be effective as of the date of the relevant change in said prime commercial
rate; or
(b) the sum of (x) the rate determined by the Agent to be the
average (rounded upwards, if necessary, to the next higher 1/100 of 1% of the
rates per annum quoted to the Agent at approximately 10:00 a.m. Chicago time (or
as soon thereafter as is practicable) on the day of determination (or, if such
day is not a Business Day, on the immediately preceding Business Day) by two or
more Federal funds brokers selected by the Agent for the sale to the Agent at
face value of Federal funds in the secondary market in an amount equal or
comparable to the principal amount owed to the Lenders for which such rate is
being determined, plus (y) 1/2 of 1%.
"DYN" is defined in the introductory paragraph.
"Dynalectric Revolving Credit Agreement" means the Revolving Credit
Agreement dated as of December 14, 1994 by and among DYN, certain Subsidiaries
thereof and the lenders party thereto, as amended.
"EBITDA" means, with reference to any period, as determined for the
Company and its Restricted Subsidiaries on a consolidated basis in accordance
with GAAP, Net Income for such period plus all amounts deducted in arriving at
such Net Income amount in respect of (i) Interest Expense for such period, plus
(ii) federal, state, foreign and local income taxes for such period, plus (iii)
all amounts properly charged for depreciation of fixed assets and amortization
of intangible assets during such period on the books of the Company and its
Restricted Subsidiaries.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" means any (i) corporation which is a member of the same
controlled group of corporations (within the meaning of Section 414(b) of the
Code) as the Company, (ii) partnership or other trade or business (whether or
not incorporated) under common control (within the meaning of Section 414(c) of
the Code) with any Borrower, and (iii) member of the same affiliated service
group (within the meaning of Section 414(m) of the Code) as the Company, any
corporation described in clause (i) above or any partnership or trade or
business described in clause (ii) above.
"Event of Default" means any event or condition specified as such in
Section 8.1 hereof.
"Federal Funds Rate" means the fluctuating interest rate per annum
described in part (x) of clause (b) of the definition of Domestic Rate.
"Financial Letter of Credit" means a Letter of Credit that is not, as
reasonably determined by the Agent, a Performance Letter of Credit.
"GAAP" means generally accepted accounting principles as in effect from
time to time, applied by the Company and its Restricted Subsidiaries on a basis
consistent with the preparation of the Company's December 31, 1995 consolidated
financial statements furnished to the Lenders.
"Guarantees" means instruments of guarantee from the Guarantors of the
Obligations satisfactory in form and substance to the Agent.
"Guarantors" means those corporations listed on Schedule 4.2 hereto and
such other Restricted Subsidiaries as the Required Lenders may from time to time
designate as Guarantors in a written notice to the Company or as the Company may
from time to time designate.
"Indebtedness for Borrowed Money" means for any Person (without
duplication) all indebtedness created, assumed or incurred in any manner by such
Person or in respect of which such Person is directly or indirectly liable,
whether by guarantee, commitment to purchase, undertaking to maintain the
solvency, liquidity or a balance sheet condition of the obligor, or otherwise
representing (i) money borrowed (including by the issuance of debt securities),
(ii) indebtedness for the deferred purchase price of property or services (other
than trade accounts payable arising in the ordinary course of business), (iii)
indebtedness secured by any Lien upon Property of such Person, whether or not
such Person has assumed or become liable for the payment of such indebtedness
but if such Person is not liable then such indebtedness shall be included at the
lesser of the amount thereof or the fair market value of the Property securing
same, (iv) Capitalized Lease Obligations of such Person and (v) all obligations
of such Person on or with respect to letters of credit (other than letters of
credit which support payment of obligations which do not constitute Indebtedness
for Borrowed Money of any Person), bankers' acceptances and other extensions of
credit whether or not representing obligations for borrowed money. Performance
Guarantees do not constitute Indebtedness for Borrowed Money.
"Intercreditor Agreement" means an intercreditor agreement with Reliance
Surety Company and certain of its Affiliates.
"Interest Expense" means, with reference to any period, the sum of all
interest charges (including imputed interest charges with respect to Capitalized
Lease Obligations and all amortization of debt discount and expense but
excluding fees payable under Sections 3.1 and 3.2 hereof) and letter of credit
fees and commissions of the Borrowers and the Restricted Subsidiaries for such
period determined in accordance with GAAP, but interest paid through the
issuance of securities to the holders of the indebtedness in question having a
maturity of more than one year from the date of issuance and being of no higher
ranking or priority than the indebtedness in question shall not be included in
Interest Expense nor shall interest accruing but not paid on the promissory note
of the Company dated December 15, 1994 in the principal amount of $5,464,133.78
and payable to Sellco Corporation be included in Interest Expense.
"Issuer" means Harris Trust and Savings Bank and any other Lender approved
by the Required Lenders and the Company as an issuer of Letters of Credit to a
particular Borrower or Borrowers hereunder or for use in a particular
jurisdiction.
"L/C Commitment" means $50,000,000 no more than $40,000,000 of which shall
be in use in the form of Financial Letters of Credit, in each case as the same
may be reduced pursuant to Section 3.6 hereof and provided that (i) the L/C
Commitment shall never exceed the Activated Commitments as from time to time
outstanding and (ii) the L/C Commitment is a part of, and not additive to, the
Activated Commitments.
"L/C Documents" means the Letters of Credit, any draft or other document
presented in connection with a drawing thereunder, the Applications and this
Agreement.
"L/C Obligations" means the aggregate undrawn face amounts of all
outstanding Letters of Credit and all unpaid Reimbursement Obligations.
"Lenders" shall mean Harris Trust and Savings Bank and all other lenders
becoming parties hereto pursuant to Section 11.18 hereof.
"Letter of Credit" is defined in Section 1.3(a).
"Leverage Ratio" means, as of any time the same is to be determined, the
ratio of (x) Senior Debt to (y) the sum of Senior Debt and Adjusted Tangible Net
Worth.
"Lien" means any mortgage, lien, pledge, charge or security interest of
any kind or nature (whether fixed or floating or of any ambulatory or
non-crystallized nature or otherwise) in respect of any Property, including the
interest of a vendor or lessor under any conditional sale, Capital Lease or
other title retention arrangement.
"Loan Documents" means this Agreement, the Revolving Credit Notes, the L/C
Documents, the Guarantees, the Intercreditor Agreement and the Collateral
Documents and each other instrument or document to be delivered hereunder or
thereunder or otherwise in connection therewith.
"Material Adverse Effect" means, with respect to any act, omission or
occurrence, any of the following consequences in the reasonable judgment of the
Required Lenders:
(a) The material impairment of the ability of the Company or of
the Company and the Guarantors taken as a whole to pay or perform their
obligations under or pursuant to the Loan Documents;
(b) Any material adverse change in the assets, liabilities,
financial condition, operations or business prospects of the Company and
its Restricted Subsidiaries taken as whole, or;
(c) any material impairment in the right of the Company and its
Restricted Subsidiaries taken as whole to carry on their business substantially
as now conducted.
"MES Revolving Credit Agreement" means the Revolving Credit Agreement
dated as of December 14, 1994 among the Company, MES Holdings Corporation and
the lenders party thereto, as amended.
"Modified Net Worth" means Tangible Net Worth computed on a consolidated
basis for DYN and its Restricted Subsidiaries plus any amount by which such
Tangible Net Worth was reduced as a result of clause (i) of the definition of
that term less (or plus in the event the following calculation yields a negative
number) the amount by which all amounts owing DYN and its Restricted
Subsidiaries (other than ordinary trade accounts payable) from the Company and
its other Restricted Subsidiaries exceeds all amounts owing the Company and such
other Restricted Subsidiaries (other than ordinary trade accounts payable) from
DYN and its Restricted Subsidiaries. The phrase "ordinary trade accounts
payable" shall only include accounts payable of the type which the party in
question customarily incurs to unaffiliated third parties and which are payable
on ordinary industry terms.
"Net Income" for any period means the net income of the Company and the
Restricted Subsidiaries for such period computed on a consolidated basis in
accordance with GAAP and, without limiting the foregoing, after deduction from
gross income of all expenses and provisions, including provisions for taxes on
or measured by income, but excluding any gains or losses on the sale or other
disposition of investments or fixed or capital assets (except that the gain on
the sale of the Water Companies shall be included in Net Income), any
extraordinary gains and losses, any taxes on such excluded gains, and any tax
deductions or credits on account of any such excluded losses.
"Obligations" shall mean any and all indebtedness, obligations and
liabilities of the Borrowers and any of them to the Lenders or any of them or
the Agent or Issuers now or hereafter arising hereunder or under any of the
other Loan Documents.
"Percentage" means, for each Lender, the percentage of the Activated
Commitments represented by such Lender's Activated Commitment or, if the
Commitments have been terminated, the percentage held by such Lender (including
through participation interests in L/C Obligations) of the aggregate principal
amount of all outstanding Obligations.
"Performance Guarantees" means, in respect of the Company or any of the
Restricted Subsidiaries, contingent obligations arising from the issuance of
performance guarantees, assurances, indemnities, bonds, letters of credit, or
similar agreements in the ordinary course of business in respect of the
contracts (other than contracts for Indebtedness for Borrowed Money) of the
Company, any Restricted Subsidiary, any joint venture of which the Company or a
Restricted Subsidiary is a member or Unique Construction Company for the benefit
of surety companies or for the benefit of others to induce such others to forego
the issuance of a surety bond in their favor.
"Performance Letters of Credit" means a Letter of Credit that, as
reasonably determined by the Agent, assures that the applicable Borrower will
fulfill a contractual non-financial obligation, that is, an obligation that does
not entail the payment of money.
"Person" shall mean any person, firm, corporation partnership, joint
venture or other entity.
"Property" shall mean, as to any Person, all types of real, personal,
tangible, intangible or mixed property owned by such Person whether or not
included in the most recent balance sheet of such Person and its subsidiaries
under GAAP.
"Required Lenders" shall mean at any time Lenders whose Commitments
aggregate 66-2/3% or more of the total Commitments or if at the time no
Commitments are outstanding, Lenders holding 66-2/3% or more of the aggregate
outstanding principal balance of the Revolving Credit Notes and the credit risk
with respect to the Letters of Credit.
"Restricted Subsidiaries" means those Subsidiaries designated as such
on Schedule 5.2 hereof and all other Subsidiaries becoming Restricted
Subsidiaries pursuant hereto. Designated Foreign Restricted Subsidiaries are
Restricted Subsidiaries.
"Revolving Credit Notes" shall mean the Revolving Credit Notes (including
notes issued pursuant to Section 11.18 hereof) and "Revolving Credit Note" shall
mean any of the Revolving Credit Notes.
"Revolving Loans" is defined in Section 1.2 hereof.
"Series A Notes" means the Company's 7% Senior Secured Notes due 1997 and
all "payment in kind" obligations incurred in connection therewith.
"Series C Indenture" means the Indenture dated as of December 15, 1994 by
and between the Company, MES Holdings Corporation and Fleet Bank of Connecticut
(formerly known as Shawmut Bank Connecticut, N.A.) as amended and modified from
time to time.
"Series C Notes" means the 11 percent Series C Notes of the Company due
2001 issued pursuant to the terms of the Series C Indenture together with any
"payment in kind" obligations or securities issued pursuant thereto.
"Senior Debt" means all Indebtedness for Borrowed Money of the Company
and/or the Restricted Subsidiaries other than Subordinated Debt.
"Sublimits" means (i) the limitations placed upon the amount of the
Activated Commitments which may be utilized by either the Company or DYN
pursuant to Section 1.4 hereof and (ii) any other limitations and restrictions,
whether now existing or hereafter arising, placed by the Company and the Lenders
on the portion of the Activated Commitments or of any type of Credit Utilization
thereunder, which may be availed of by a particular Borrower.
"Subordinated Debt" means the Series C Notes and any other Indebtedness
for Borrowed Money of the Company which is (i) on terms (including maturity and
interest rate) acceptable to the Required Lenders and (ii) subordinated to the
prior payment in full of the Obligations pursuant to written subordination
provisions approved by the Required Lenders.
"Subsidiary" means, as to any particular parent corporation, (i) any other
corporation at least 51% of the outstanding Voting Stock of which is at the time
directly or indirectly owned by such parent corporation or by any one or more
other corporations or other entities which are themselves subsidiaries of such
parent corporation, and (ii) any corporation organized under the laws of and
conducting business primarily in a jurisdiction which is not part of the United
States of America, the United Kingdom or Canada which would meet the
requirements of clause (i) if at least 51% of its Voting Stock was owned as
required by clause (i) and such ownership percentage is not less than 39%, the
Company or a Subsidiary meeting the requirements of clause (i) has effective
control over such corporation and such entity is accounted for for all purposes
of this Agreement using the equity method of accounting.
"Tangible Net Worth" means, as of any time the same is to be determined,
the total shareholders' equity (including capital stock, additional
paid-in-capital, warrants and retained earnings but after deducting treasury
stock and, excluding minority interests in Restricted Subsidiaries) which would
appear on the balance sheet of the Company and its Restricted Subsidiaries
determined on a consolidated basis in accordance with GAAP, less the sum of (i)
the aggregate book value of all assets which would be classified as intangible
assets under GAAP, including, without limitation, goodwill, patents, trademarks,
trade names, copyrights, franchises and deferred charges (including, without
limitation, unamortized debt discount and expense, organization costs and
deferred research and development expense) and similar assets and (ii) the
write-up of assets above cost, other than write-ups of assets to fair market
value in connection with acquisitions as permitted by GAAP.
"Termination Date" means June 19, 1999 or such earlier date on which the
Commitments are terminated in whole pursuant to Sections 3.6, 8.2 or 8.3 hereof
or such later date to which the Commitments are extended pursuant to Section
11.16 hereof.
"Tranche B Activation Date", "Tranche C Activation Date" and "Tranche D
Activation Date" means, respectively, the date of the relevant activation of the
Commitments pursuant to Section 6.3 hereof.
"Unrestricted Subsidiaries" means those Subsidiaries designated as such
on Schedule 5.2 hereof.
"U.S. Dollar Equivalent" means the amount of U.S. Dollars which would be
realized by converting an Alternative Currency into U.S. Dollars in the spot
market at the exchange rate quoted by the Agent, at approximately 11:00 a.m.
(London time) on the date on which a computation thereof is to be made, to major
banks in the interbank foreign exchange market for the purchase of U.S. Dollars
for such Alternative Currency.
"U.S. Dollars" or "$" means lawful currency of the United States of
America.
"Voting Stock" of any Person means capital stock or other equity interests
of any class or classes (however designated) having ordinary power for the
election of directors of such Person, other than stock having such power only by
reason of the happening of a contingency.
"Water Companies" means Jamaica Water Supply Company and Sea Cliff
Water Company.
"Welfare Plan" means a "welfare plan" as defined in Section 3(l) of
ERISA.
"Wholly-Owned Subsidiary" means a Subsidiary of which all of the issued
and outstanding shares of capital stock (other than directors' qualifying shares
as required by law) or other equity interests are owned by the Company and/or
one or more wholly-owned subsidiaries within the meaning of this definition.
Section 9.2. Interpretation. The foregoing definitions are equally
applicable to both the singular and plural forms of the terms defined. The words
"hereof", "herein", and "hereunder" and words of like import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement. All references to time of day herein are references
to Chicago, Illinois time unless otherwise specifically provided. Where the
character or amount of any asset or liability or item of income or expense is
required to be determined or any consolidation or other accounting computation
is required to be made for the purposes of this Agreement, it shall be done in
accordance with GAAP except where such principles are inconsistent with the
specific provisions of this Agreement. SECTION 10. THE AGENT AND THE ISSUERS
Section 10.1. Appointment and Authorization. Each Lender hereby appoints
and authorizes the Agent to take such action as agent on its behalf and to
exercise such powers hereunder and under the other Loan Documents as are
designated to the Agent by the terms hereof and thereof together with such
powers as are reasonably incidental thereto. The Lenders acknowledge and agree
that the Agent and the Issuers are not a trustee or other fiduciary for them.
The Agent or an Issuer may resign at any time by sending twenty (20) days prior
written notice to the Borrowers and the Lenders and may be removed by the
Required Lenders upon twenty (20) days prior written notice to the Borrowers and
the Lenders. In the event of any such resignation or removal, the Required
Lenders may appoint a new agent or issuer after consultation with the Borrowers
(which nonetheless shall be bound by the decision of the Required Lenders in
their sole discretion), which shall succeed to all the rights, powers and duties
of the Agent or applicable Issuer (but only as to Letters of Credit issued by
the new Issuer) hereunder and under the other Loan Documents. Any resigning or
removed Agent or Issuer shall be entitled to the benefit of all the protective
provisions hereof with respect to its acts as an agent or issuer hereunder, but
no successor Agent or Issuer shall in any event be liable or responsible for any
actions of its predecessor. If the Agent resigns or is removed and no successor
is appointed, the rights and obligations of such Agent shall be automatically
assumed by the Required Lenders and (i) the Borrowers and Guarantors shall be
directed to make all payments due each Lender hereunder directly to such Lender
and (ii) the Agent's rights in the Collateral Documents shall be assigned
without representation, recourse or warranty to the Lenders as their interests
may appear.
Section 10.2. Rights as a Lender. The Agent and the Issuers have and
reserve all of the rights, powers and duties hereunder and under the other Loan
Documents as any Lender may have and may exercise the same as though they were
not the Agent or an Issuer and the terms "Lender" or "Lenders" as used herein
and in all of such documents shall, unless the context otherwise expressly
indicates, include the Agent and Issuers in their individual capacities as
Lender.
Section 10.3. Standard of Care. The Lenders acknowledge that they have
received and approved copies of the Loan Documents and such other information
and documents concerning the transactions contemplated and financed hereby as
they have requested to receive and/or review. The Agent and the Issuers make no
representations or warranties of any kind or character to the Lenders with
respect to the validity, enforceability, genuineness, perfection, value, worth
or collectibility hereof or of the Revolving Credit Notes or any of the other
Obligations or of any of the other Loan Documents or of the Liens provided for
thereby or of any other documents called for hereby or thereby or of the
Collateral. The Agent need not verify the worth or existence of the Collateral
and may rely exclusively on reports of the Company in computing the Borrowing
Base. Neither the Agent nor the Issuers nor any director, officer, employee,
agent or representative thereof (including any security trustee therefor) shall
in any event be liable for any clerical errors or errors in judgment,
inadvertence or oversight, or for action taken or omitted to be taken by it or
them hereunder or under the other Loan Documents or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct.
The Agent and the Issuers shall incur no liability under or in respect of this
Agreement or the other Loan Documents by acting upon any notice, certificate,
warranty, instruction or statement (oral or written) of anyone (including anyone
in good faith believed by them to be authorized to act on behalf of any
Borrower), unless they have actual knowledge of the untruthfulness of same. The
Agent and the Issuers may execute any of their duties hereunder by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders for the default or misconduct of any such agents or attorneys-in-fact
selected with reasonable care. The Agent and the Issuers shall be entitled to
advice of counsel concerning all matters pertaining to the agencies hereby
created and their duties hereunder, and shall incur no liability to anyone and
be fully protected in acting upon the advice of such counsel. The Agent and the
Issuers shall be entitled to assume that no Default or Event of Default exists
unless notified to the contrary by a Lender. The Agent and the Issuers shall in
all events be fully protected in acting or failing to act in accord with the
instructions of the Required Lenders. Upon the occurrence of an Event of Default
hereunder, the Agent shall take such action with respect to the enforcement of
the Liens on the Collateral and the preservation and protection thereof as it
shall be directed to take by the Required Lenders but unless and until the
Required Lenders have given such direction the Agent shall take or refrain from
taking such actions as it deems appropriate and in the best of interest of all
Lenders. The Agent shall in all cases be fully justified in failing or refusing
to act hereunder and under the other Loan Documents unless it shall be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by the Agent by reason of taking or continuing to
take any such action. The Agent may treat the owner of any Revolving Credit Note
as the holder thereof until written notice of transfer shall have been filed
with the Agent signed by such owner in form satisfactory to the Agent. Each
Lender acknowledges that it has independently and without reliance on the Agent,
the Issuers or any other Lender and based upon such information, investigations
and inquiries as it deems appropriate made its own credit analysis and decision
to extend credit to the Borrowers. It shall be the responsibility of each Lender
to keep itself informed as to the creditworthiness of the Borrowers and the
Guarantors and the Agent and Issuers shall have no liability to any Lender with
respect thereto.
Section 10.4. Costs and Expenses. Each Lender agrees to reimburse the
Agent and the Issuers for all costs and expenses suffered or incurred by them or
any security trustee in performing their duties hereunder and under the other
Loan Documents, or in the exercise of any right or power imposed or conferred
upon them hereby or thereby, to the extent that they are not promptly reimbursed
for same by the Borrowers or out of the Collateral, all such costs and expenses
to be borne by the Lenders ratably in accordance with the amounts of their
respective Commitments. If any Lender fails to reimburse the Agent or an Issuer
for its share of any such costs and expenses, such costs and expenses shall be
paid pro rata by the remaining Lenders, but without in any manner releasing the
defaulting Lender from its liability hereunder.
Section 10.5. Indemnity. The Lenders shall ratably indemnify and hold the
Agent, the Issuers and their directors, officers, employees, agents,
representatives or attorneys-in-fact (including as such any security trustee
therefor), harmless from and against any liabilities, losses, costs or expenses
suffered or incurred by them hereunder or under the other Loan Documents or in
connection with the transactions contemplated hereby or thereby, regardless of
when asserted or arising, except to the extent they are promptly reimbursed for
the same by the Borrowers or out of the Collateral and except to the extent that
any event giving rise to a claim was caused by the gross negligence or willful
misconduct of the party seeking to be indemnified. If any Lender defaults in its
obligations hereunder, its share of the obligations shall be paid pro rata by
the remaining Lenders, but without in any manner releasing the defaulting Lender
from its liability hereunder.
Section 10.6. Conflict. In the event of a conflict between the
provisions of this Section 10 and the provisions of any Collateral Document
regarding the rights, duties and obligations of the Agent, the provisions of
this Section 10 shall govern.
SECTION 11. MISCELLANEOUS.
Section 11.1. Withholding Taxes. (a) Payments Free of Withholding. Except
as otherwise required by law and subject to Section 11.1(b) hereof, each payment
by each Borrower and each Guarantor under this Agreement or the other Loan
Documents shall be made without withholding for or on account of any present or
future taxes (other than overall net income taxes (but not withholdings) on the
recipient imposed by a jurisdiction where it is domiciled or has an established
place of business) imposed by or within the jurisdiction in which such Borrower
or such Guarantor is domiciled, any jurisdiction from which such Borrower or
such Guarantor makes any payment, or (in each case) any political subdivision or
taxing authority thereof or therein. If any such withholding is so required, the
Borrower or relevant Guarantor shall make the withholding, pay the amount
withheld to the appropriate governmental authority before penalties attach
thereto or interest accrues thereon and forthwith pay such additional amount as
may be necessary to ensure that the net amount actually received by each Lender
and the Agent free and clear of such taxes (including such taxes on such
additional amount) is equal to the amount which that Lender or the Agent (as the
case may be) would have received had such withholding not been made. If the
Agent or any Lender pays any amount in respect of any such taxes, penalties or
interest the Borrowers shall reimburse the Agent or that Lender for that payment
on demand in the currency in which such payment was made. If the Borrowers or
any Guarantor pay any such taxes, penalties or interest, they shall deliver
official tax receipts evidencing that payment or certified copies thereof to the
Lender or Agent on whose account such withholding was made (with a copy to the
Agent if not the recipient of the original) on or before the thirtieth day after
payment. If any Lender or the Agent determines it has received or been granted a
credit against or relief or remission for, or repayment of, any taxes paid or
payable by it because of any taxes, penalties or interest paid by the Borrowers
or any Guarantor and evidenced by such a tax receipt, such Lender or Agent
shall, to the extent it can do so without prejudice to the retention of the
amount of such credit, relief, remission or repayment, pay to the Borrowers or
such Guarantor as applicable, such amount as such Lender or Agent reasonably
determines is attributable to such deduction or withholding and which will leave
such Lender or Agent (after such payment) in no better or worse position than it
would have been in if the Borrowers or Guarantors had not been required to make
such deduction or withholding. Nothing in this Agreement shall interfere with
the right of each Lender and the Agent to arrange its tax affairs in whatever
manner it thinks fit nor oblige any Lender or the Agent to disclose any
information relating to its tax affairs or any computations in connection with
such taxes.
(b) U.S. Withholding Tax Exemptions. Each Lender that is not a
United States person (as such term is defined in Section 7701(a)(30) of the
Code) shall submit to the Borrowers and the Agent on or before the earlier of
the date the initial Borrowing is made hereunder and thirty (30) days after the
date hereof, two duly completed and signed copies of either Form 1001 (relating
to such Lender and entitling it to a complete exemption from withholding under
the Code on all amounts to be received by such Lender, including fees, pursuant
to the Loan Documents and the Revolving Loans) or Form 4224 (relating to all
amounts to be received by such Lender, including fees, pursuant to the Loan
Documents and the Revolving Loans) of the United States Internal Revenue
Service. Thereafter and from time to time, each Lender shall submit to the
Borrowers and the Agent such additional duly completed and signed copies of one
or the other of such Forms (or such successor forms as shall be adopted from
time to time by the relevant United States taxing authorities) as may be (i)
requested by the Company in a written notice, directly othrough the Agent, to
such Lender and (ii) required under then-current United States law or
regulations to avoid or reduce United States withholding taxes on payments in
respect of all amounts to be received by such Lender, including fees, pursuant
to the Loan Documents or the Revolving Loans.
(c) Inability of Lender to Submit Forms. If any Lender determines,
as a result of any change in applicable law, regulation or treaty, or in any
official application or interpretation thereof, that it is unable to submit to
the Borrowers or Agent any form or certificate that such Lender is obligated to
submit pursuant to subsection (b) of this Section 11.1. or that such Lender is
required to withdraw or cancel any such form or certificate previously submitted
or any such form or certificate otherwise becomes ineffective or inaccurate,
such Lender shall promptly notify the Company and the Agent of such fact and the
Lender shall to that extent not be obligated to provide any such form or
certificate and will be entitled to withdraw or cancel any affected form or
certificate, as applicable. If any Lender can avoid the effect of any such
change in law, regulation or treaty or in the application or interpretation
thereof, whether by changing its lending office or otherwise, it undertakes to
do so if the same can be accomplished without disadvantage to it. If some, but
not all, of the Lenders are affected by a change of the type described herein,
such Lender agrees that it will at the request of the Company assign its
Obligations to another Lender under and pursuant to the conditions set forth in
Section 11.18 hereof.
Section 11.2. Holidays. If any payment of principal or interest on any of
the Revolving Credit Notes or any fees shall fall due on a Saturday, Sunday or
on another day which is a legal holiday for lenders in the States of Illinois,
(i) interest at the rates such Notes bear for the period prior to maturity shall
continue to accrue on such principal from the stated due date thereof to and
including the next succeeding Business Day and (ii) such principal, interest and
fees shall be payable on such succeeding Business Day.
Section 11.3. No Waiver, Cumulative Remedies. No delay or failure on the
part of the Agent, any Issuer or any Lender or on the part of the Agent, any
Issuer or any holder of any of the Obligations in the exercise of any power or
right shall operate as a waiver thereof, nor as an acquiescence in any default
nor shall any single or partial exercise of any power or right preclude any
other or further exercise of any other power or right. The rights and remedies
hereunder of the Agent, the Issuers, Lenders and of the holders of any of the
Obligations are cumulative to, and not exclusive of, any rights or remedies
which any of them would otherwise have.
Section 11.4. Waivers, Modifications and Amendments. Any provision hereof
or of any of the other Loan Documents may be amended, modified, waived or
released and any Default or Event of Default and its consequences may be
rescinded and annulled upon the written consent of the Required Lenders;
provided, however, that without the written consent of each Lender no such
amendment, modification or waiver shall increase the amount or extend the terms
of any Lender's Commitment or reduce the interest rate applicable to or extend
the maturity of its Revolving Credit Note or reduce the amount of the principal,
interest, fees or other amounts to which it is entitled hereunder or release any
guaranty of any Obligations (except for the releases and discharges required by
the Intercreditor Agreement) or release all or any substantial (in value) part
of the collateral security afforded by the Collateral Documents (except in
connection with a sale or other disposition thereof or as otherwise provided in
the Collateral Documents) or change this Section or change the definition of
"Required Lenders" or change the number of Lenders required to take any action
hereunder or under any of the other Loan Documents. No amendment, modification
or waiver of the Agents' or Issuer's protective provisions shall be effective
without the prior written consent of the Agent and the Issuers.
Section 11.5. Costs and Expenses. The Borrowers agree to pay on demand all
reasonable costs and expenses of the Agent in connection with the negotiation,
preparation, execution, delivery, recording or filing or release of the Loan
Documents or in connection with any consents hereunder or thereunder or waivers
or amendments hereto or thereto or assignments pursuant hereto, including the
reasonable fees and expenses of counsel for the Agent with respect to all of the
foregoing, and all recording, filing, insurance or other fees, costs and taxes
incident to perfecting a Lien upon the collateral security for the Revolving
Credit Notes and the other Obligations, and all reasonable costs and expenses
(including reasonable attorneys' fees) incurred by the Agent, the Issuers, the
Lenders or any other holders of the Obligations in connection with any Default
or Event of Default or in connection with the enforcement of the Loan Documents,
and all reasonable costs, fees and taxes of the types enumerated above incurred
in supplementing (and recording or filing supplements to) the Collateral
Documents in connection with assignments contemplated by Section 11.18 hereof if
counsel to the Agent believes such supplements to be appropriate or desirable.
The Borrowers agree to indemnify and save the Lenders, the Issuers, the Agent
and any security trustee for the Agent or the Lenders harmless from any and all
liabilities, losses, costs and expenses incurred by the Lenders, the Issuers or
the Agent in connection with any action, suit or proceeding brought against the
Agent or the Issuers, any security trustee or any Lender by any Person which
arises out of the transactions contemplated or financed by any of the Loan
Documents or out of any action or inaction by the Agent, any security trustee or
any Lender thereunder, except for such thereof as is caused by the gross
negligence or willful misconduct of the party seeking to be indemnified. The
provisions of this Section 11.5 and the protective provisions of Section 2
hereof shall survive payment of the Obligations.
Section 11.6. Stamp Taxes. The Borrowers agree that they will pay any
documentary, stamp or similar taxes payable in respect to this Agreement or any
other Loan Document, including interest and penalties, in the event any such
taxes are assessed, irrespective of when such assessment is made and whether or
not any credit to it is then in use or available.
Section 11.7. Survival of Representations and Indemnities. All
representations and warranties made herein or any of the other Loan Documents or
in certificates given pursuant hereto or thereto shall survive the execution and
delivery of this Agreement and the other Loan Documents, and shall continue in
full force and effect with respect to the date as of which they were made as
long as any credit is in use or available hereunder. All indemnities and other
provisions relative to reimbursement to the Agent, the Issuers and the Lenders
of amounts sufficient to protect the yield of the Agent, the Issuers and the
Lenders with respect to the Loans and Letters of Credit, shall survive the
termination of this Agreement and the payment of the Obligations.
Section 11.8. Construction. The parties hereto acknowledge and agree that
this Agreement shall not be construed more favorably in favor of one than the
other based upon which party drafted the same, it being acknowledged that all
parties hereto contributed substantially to the negotiation and preparation of
this Agreement.
Section 11.9. Addresses for Notices. Unless specifically provided
otherwise hereunder, all communications provided for herein shall be in writing
and shall be deemed to have been given or made when served personally or three
days after being deposited in the United States mail addressed, if to any
Borrower, in each case to such Borrower in care of the Company at 101 Merritt
Seven Corporate Park, Norwalk, Connecticut 06851, Attention: Chairman of the
Board and President, and if to the Lenders at their addresses as shown on the
signature pages hereof or on any Assignment Agreement, or at such other address
as shall be designated by any party hereto in a written notice given to each
party pursuant to this Section 11.9.
Section 11.10. Obligations Several. The obligations of the Lenders
hereunder are several and not joint. Nothing contained in this Agreement and no
action taken by the Lenders pursuant hereto shall be deemed to constitute the
Lenders a partnership, association, joint venture or other entity.
Section 11.11. Headings. Article and Section headings used in this
Agreement are for convenience of reference only and are not a part of this
Agreement for any other purpose.
Section 11.12. Severability of Provisions. Any provision of this Agreement
which is unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability of such
provision in any other jurisdiction. All rights, remedies and powers provided in
this Agreement and other Loan Documents may be exercised only to the extent that
the exercise thereof does not violate any applicable mandatory provisions of
law, and all the provisions of this Agreement and other Loan Documents are
intended to be subject to all applicable mandatory provisions of law which may
be controlling and to be limited to the extent necessary so that they will not
render this Agreement or other Loan Documents invalid or unenforceable.
Section 11.13. Counterparts. This Agreement may be executed in any
number of counterparts, and by different parties hereto on separate
counterparts, and all such counterparts taken together shall be deemed to
constitute one and the same instrument.
Section 11.14. Binding Nature and Governing Law. This Agreement shall be
binding upon the Borrowers and their successors and assigns, and shall inure to
the benefit of the Lenders and the benefit of their successors and assigns,
including any subsequent holder of an interest of the Revolving Credit Notes.
This Agreement and the rights and duties of the parties hereto shall be
construed and determined in accordance with, and shall be governed by the
internal laws of the State of Illinois without regard to principles of conflicts
of law. No Borrower may assign its rights hereunder without the written consent
of the Lenders.
Section 11.15. Entire Understanding. This Agreement, together with the
other Loan Documents and any agreements between the Company and the Agent
concerning fees, constitute the entire understanding of the parties with respect
to the subject matter hereof and any prior agreements, whether written or oral,
with respect thereto are superseded hereby.
Section 11.16. Extensions of the Commitments. Not less than 60 days or
more than 120 days prior to the then effective Termination Date, the Company
(acting on behalf of the Borrowers pursuant to Section 1.6 hereof) may advise
the Agent in writing of its desire to extend the Termination Date for an
additional 12 months (but not beyond June 19, 2001) and the Agent shall promptly
notify the Lenders of each such request; provided not more than one such request
for the extension of the Termination Date may be made in any one calendar year.
In the event that the Lenders are agreeable to such extension (it being
understood that any Lender may accept or decline such a request in its sole
discretion and on any terms such Lender may elect), the Borrowers, the Lenders,
the Guarantors and the Agent shall enter into such documents as the Agent may
reasonably deem necessary or appropriate to reflect such extension and to assure
that all extensions of credit pursuant to the Commitments as so extended are
secured by the Liens of the Collateral Documents and guaranteed by the
Guarantees, all costs and expenses incurred by the Agent in connection therewith
to be paid by the Borrowers.
Section 11.17. Participations. Any Lender may grant participations in its
extensions of credit hereunder to any other financial institution (a
"Participant") provided that (i) no Participant shall thereby acquire any direct
rights under this Agreement, (ii) no Lender shall agree with a Participant not
to exercise any of its rights hereunder without the consent of such Participant
except for rights which under the terms hereof may only be exercised by all
Lenders, (iii) no sale of a participation in extensions of credit shall in any
manner relieve the selling Lender of its obligations hereunder and (iv) the
Borrowers shall not be responsible for the costs incurred by any Lender in
connection with such participations.
Section 11.18. Assignment Agreements. Each Lender may, from time to time
upon at least five Business Days' notice to the Agent, assign to other financial
institutions all or part of its rights and obligations under this Agreement
(including without limitation the indebtedness evidenced by the Revolving Credit
Notes then owned by such assigning Lender, together with an equivalent
proportion of its obligation to make Revolving Loans and participate in Letters
of Credit hereunder) pursuant to an Assignment Agreement; provided, however,
that (i) each such assignment shall be of a constant, and not a varying,
percentage of the assigning Lender's rights and obligations under this Agreement
and the assignment shall cover the same percentage of such Lender's Commitment,
Revolving Loans, Revolving Credit Note and interests in Letters of Credit; (ii)
unless the Agent otherwise consents, the assigning Lender shall assign all of
its Commitment, Revolving Loans, Revolving Credit Note and interests in the
Letters of Credit or the aggregate amount thereof being assigned pursuant to
each such assignment (determined as of the effective date of the relevant
Assignment Agreement) shall be an amount which shall in no event be less than
$5,000,000 and shall be an integral multiple of $1,000,000; (iii) the Agent and
the Company (which is acting on its own behalf and pursuant to Section 1.6
hereof on behalf of the Borrowers as well) must each consent, which consent
shall not be unreasonably withheld (provided that the Company may withhold its
consent to an assignment by the Agent in its sole discretion if after giving
effect thereto the Agent would have an Activated Commitment, computed prior to
giving effect to any reductions or terminations of the Activated Commitments, of
less than $25,000,000) and shall be evidenced by execution of a counterpart of
the relevant Assignment Agreement in the space provided thereon for such
acceptance, to each such assignment to a party which was not an original
signatory of this Agreement and (v) the assigning Lender (other than the Lenders
party hereto as of the date hereof) must pay to the Agent a processing and
recordation fee of $3,000. Upon the execution of each Assignment Agreement by
the assigning Lender thereunder, the assignee lender thereunder, the Company and
the Agent and payment to such assigning Lender by such assignee lender of the
purchase price for the portion of the indebtedness of the Borrowers being
acquired by it, (i) such assignee lender shall thereupon become a "Lender" for
all purposes of this Agreement with a Commitment in the amount set forth in such
Assignment Agreement and with all the rights, powers and obligations afforded a
Lender hereunder, (ii) such assigning Lender shall have no further liability for
funding the portion of its Commitment assumed by such other Lender and (iii) the
address for notices to such assignee Lender shall be as specified in the
Assignment Agreement executed by it. Concurrently with the execution and
delivery of such Assignment Agreement, the Borrowers shall each execute and
deliver a Revolving Credit Note to the assignee Lender, (all such Revolving
Credit Notes to constitute "Revolving Credit Notes" for all purposes of the Loan
Documents) and if the assignment is of the full Commitment of the assigning
Lender, the assignor Lender shall thereupon return the Revolving Credit Notes
theretofore issued to it to the Company marked "canceled." If an assignor is an
Issuer its rights and obligations as Issuer shall be unaffected by any
assignment.
Section 11.19. Terms of Collateral Documents not Superseded. Nothing
contained herein shall be deemed or construed to permit any act or omission
which is prohibited by the terms of any Collateral Document, the covenants and
agreements contained herein being in addition to and not in substitution for the
covenants and agreements contained in the Collateral Documents.
<PAGE>
Section 11.20. PERSONAL JURISDICTION and Jury Trial Waives.
(a) EXCLUSIVE JURISDICTION. EXCEPT AS PROVIDED IN SUBSECTION (b), the
AGENT, THE LENDERS AND THE BORROWERS AGREE THAT ALL DISPUTES AMONG THEM ARISING
OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT, AND WHETHER ARISING IN
CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED ONLY BY (AND EACH OF
THEM FOR THE BENEFIT OF THE OTHERS HEREBY IRREVOCABLY SUBMITS TO THE
JURISDICTION OF) THE STATE OR FEDERAL COURTS LOCATED IN COOK COUNTY, Illinois,
BUT EACH OF THE AGENT, THE LENDERS AND THE BORROWERS ACKNOWLEDGE THAT ANY
APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF
COOK COUNTY, ILLINOIS. THE BORROWERS WAIVE IN ALL DISPUTES ANY OBJECTION THAT
THEY MAY HAVE TO THE LOCATION OF THE COURT CONSIDERING THE DISPUTE.
(b) OTHER JURISDICTIONS. THE BORROWERS AGREE THAT THE AGENT, AND each OF
THE LENDERS SHALL HAVE THE RIGHT TO PROCEED AGAINST THE BORROWERS OR THEIR
PROPERTY ("PROPERTY") IN A COURT IN ANY LOCATION OR JURISDICTION TO ENABLE THE
AGENT OR ANY LENDER TO REALIZE ON PROPERTY, OR TO ENFORCE A JUDGMENT OR OTHER
COURT ORDER ENTERED IN FAVOR OF THE AGENT OR ANY LENDER AND, WITHOUT PREJUDICE
TO THE GENERALITY OF THE FOREGOING, EACH BORROWER AGREES THAT THE AGENT OR ANY
LENDER SHALL BE ENTITLED TO COMMENCE PROCEEDINGS (WHETHER FOR THE PURPOSE OF
OBTAINING OR ENFORCING ANY ORDER OR JUDGMENT OR OTHERWISE HOWSOEVER) IN THE
COURTS OF THE JURISDICTIONS WHERE SUCH BORROWER OR ANY OF ITS PROPERTY IS
LOCATED.
(c) Jury Trial Waiver. The Borrowers, the Agent, and each Lender
hereby irrevocably waives any and all right to trial by jury in any legal
proceeding arising out of or relating to any Loan Document or the transactions
contemplated thereby.
Section 11.21. Currency. Each reference in this Agreement to U.S. Dollars
or to an Alternative Currency (the "relevant currency") is of the essence. To
the fullest extent permitted by law, the obligation of each Borrower in respect
of any amount due in the relevant currency under this Agreement or the L/C
Documents shall, notwithstanding any payment in any other currency (whether
pursuant to a judgment or otherwise), be discharged only to the extent of the
amount in the relevant currency that the Agent, Issuer or Lender entitled to
receive such payment may, in accordance with normal banking procedures, purchase
with the sum paid in such other currency (after any premium and costs of
exchange) on the Business Day immediately following the day on which such party
receives such payment. If the amount in the relevant currency so purchased for
any reason falls short of the amount originally due in the relevant currency,
the Borrowers shall pay such additional amounts, in the relevant currency, as
may be necessary to compensate for the shortfall. Any obligations of the
Borrowers not discharged by such payment shall, to the fullest extent permitted
by applicable law, be due as a separate and independent obligation and, until
discharged as provided herein, shall continue in full force and effect.
Section 11.22. Currency Equivalence. If for the purposes of obtaining
judgment in any court it is necessary to convert a sum due from any Borrower on
the Obligations in the currency expressed to be payable herein or in an
Application or under the Revolving Credit Notes (the "specified currency") into
another currency, the parties agree that the rate of exchange used shall be that
at which in accordance with normal banking procedures the Agent could purchase
the specified currency with such other currency on the Business Day preceding
that on which final judgment is given. The obligation of each Borrower in
respect of any such sum due to the Agent, any Issuer or any Lender on the
Obligations shall, notwithstanding any judgment in a currency other than the
specified currency, be discharged only to the extent that on the Business Day
following receipt by the Agent, such Issuer or such Lender, as applicable, of
any sum adjudged to be so due in such other currency, the Agent, such Issuers or
such Lender, as applicable, may in accordance with normal banking procedures
purchase the specified currency with such other currency. If the amount of the
specified currency so purchased is less than the sum originally due to the
Agent, such Issuers or such Lender in the specified currency, the Borrowers
agree, as a separate obligation and notwithstanding any such judgment, to
indemnify the Agent, such Issuers or such Lender, as the case may be, against
such loss, and if the amount of the specified currency so purchased exceeds the
amount originally due to the Agent, such Issuer or such Lender in the specified
currency, the Agent, such Issuer or such Lender, as the case may be, agrees to
remit such excess to the Borrowers.
Section 11.23. One Lender. If and so long as Harris Trust and Savings Bank
is the only Lender hereunder, Harris Trust and Savings Bank shall have all the
rights, powers and privileges afforded the Agent, the Lenders, the Required
Lenders and the Issuers hereunder and under the other Loan Agreements.
<PAGE>
Upon your acceptance hereof in the manner hereinafter set forth, this
Agreement shall be a contract between us for the purposes hereinabove set forth.
Dated as of this 19th day of June, 1996.
EMCOR GROUP, INC.
By: /s/ Frank T. MacInnis
Its:________________________
DYN SPECIALTY CONTRACTING INC.
By: /s/ Jeffrey M. Levy
Its:________________________
<PAGE>
Accepted and Agreed to at Chicago, Illinois as of the day and year last
above written.
Each of the Lenders hereby agrees with each other Lender that if it should
receive or obtain any payment (whether by voluntary payment, by realization upon
collateral, by the exercise of rights of setoff or banker's lien, by
counterclaim or cross action, or by the enforcement of any rights under the
Credit Agreement, the Revolving Credit Notes or the Collateral Documents or
otherwise) in respect of the Obligations, in a greater amount than such Lender
would have received had such payment been made to the Agent and been distributed
among the Lenders as contemplated by Section 3.7 hereof, then in that event the
Lender receiving such disproportionate payment shall purchase for cash without
recourse from the other Lenders an interest in the Obligations owed to such
Lenders in such amount as shall result in a distribution of such payment as
contemplated by Section 3.7 hereof. In the event any payment made to a Lender
and shared with the other Lenders pursuant to the provisions hereof is ever
recovered from such Lender, the Lenders receiving a portion of such payment
hereunder shall restore the same to the payor Lender, with interest to the
extent payable by the payor. In the event any amount paid to an Issuer under the
Applications shall ever be recovered from such Issuer, each Lender shall
reimburse such Issuer for its pro rata share of the amount so recovered with
interest to the extent payable by the Issuer. Amount and Percentage of
Commitment:
HARRIS TRUST AND SAVINGS BANK
$100,000,000.00
(100.0%)
By: /s/ Wes W. Frangul
Vice President
111 West Monroe Street
Chicago, Illinois 60690
Attention: Wes Frangul
<PAGE>
Exhibit A
Revolving Credit Note
_________________, 1996
For value received, the undersigned, _____________________, a
________________ corporation ("Borrower"), hereby promises to pay to the order
of _______________________________________________ (the "Lender") on the
Termination Date of the hereinafter defined Credit Agreement, at the principal
office of Harris Trust and Savings Bank in Chicago, Illinois, in the currency of
each Loan evidenced hereby in accordance with Section 1 of the Credit Agreement,
the aggregate unpaid principal amount of all Revolving Loans made by the Lender
to the Borrower pursuant to the Credit Agreement, together with interest on the
principal amount of each Revolving Loan from time to time outstanding hereunder
at the rates, and payable in the manner and on the dates specified in the Credit
Agreement.
The Lender shall record on its books or records or on a schedule attached
to this Note, which is a part hereof, each Revolving Loan made by it pursuant to
the Credit Agreement, any repayment of principal and interest and the principal
balances from time to time outstanding hereon, and the currency in which made,
provided that prior to the transfer of this Note all such amounts shall be
recorded on a schedule attached to this Note. The record thereof, whether shown
on such books or records or on a schedule to this Note, shall be prima facie
evidence of the same, provided, however, that the failure of the Lender to
record any of the foregoing or any error in any such record shall not limit or
otherwise affect the obligation of the Borrowers to repay all Revolving Loans
made to them pursuant to the Credit Agreement together with accrued interest
thereon.
This Note is one of the Revolving Credit Notes referred to in the Credit
Agreement dated as of June 19, 1996, among the Borrowers, Harris Trust and
Savings Bank, as Agent, and the Lenders from time to time party thereto (the
"Credit Agreement"), and this Note and the holder hereof are entitled to all the
benefits provided for thereby or referred to therein, to which Credit Agreement
reference is hereby made for a statement thereof. All defined terms used in this
Note, except terms otherwise defined herein, shall have the same meaning as in
the Credit Agreement.
This Note is issued by the Borrower under the terms and provisions of the
Credit Agreement and is secured by the Collateral Documents, and this Note and
the holder hereof are entitled to all of the benefits and security provided for
thereby or referred to therein, to which reference is hereby made for a
statement thereof. This Note may be declared to be, or be and become, due prior
to its expressed maturity, voluntary prepayments may be made hereon, and certain
prepayments are required to be made hereon, all in the events, on the terms and
with the effects provided in the Credit Agreement.
This Note shall be construed in accordance with, and governed by, the
internal laws of the State of Illinois without regard to principles of conflicts
of law.
The Borrower hereby promises to pay all costs and expenses (including
attorneys' fees) suffered or incurred by the holder hereof in collecting this
Note or enforcing any rights in any collateral herefor. The Borrower hereby
waives presentment for payment and demand.
------------------------------------
By:_________________________________
Its:______________________________
<PAGE>
Exhibit B
Form of Opinion of Counsel
__________________, 1996
Harris Trust and Savings Bank, as Agent
Chicago, Illinois
Lenders from time to time party to the
Credit Agreement hereinafter identified
Gentlemen:
We have served as counsel to EMCOR Group, Inc., a Delaware Corporation
(the "Company"), DYN Specialty Contracting Inc., a Virginia corporation ("DYN",
the Company and DYN being hereinafter referred to as the Borrowers) and the
corporations listed on Exhibit A hereto (the "Guarantors") in connection with a
revolving credit facility being made available by you to the Borrowers. This
opinion is delivered to you at the request of the Borrowers pursuant to Section
6.2 of the Credit Agreement dated as of _______________ between you and the
Borrowers (the "Credit Agreement") and capitalized terms used without definition
below have the meanings ascribed to them in the Credit Agreement.
As such counsel, we have supervised the taking of the corporate
proceedings necessary to authorize the execution and delivery of, and have
examined executed originals of, the Loan Documents described on Exhibit B
attached hereto. We have also examined and are familiar with:
(i) A copy of the articles of incorporation of each of the Borrowers
and Guarantors, each certified within ____ days hereof by the Secretary of the
State of incorporation of each such Borrower and Guarantor;
(ii) Certificates dated as of a date no earlier than ___ days prior
to the date hereof from the Secretary of the States of incorporation of the
Borrowers and Guarantors and in each other state where any of the Borrowers or
Guarantors is licensed or qualified to do business, as to the good standing of
each such corporation in those states;
(iii) A copy of the by-laws of each of the Borrowers and Guarantors
certified by the Secretary of such corporation as being the by-laws of such
corporation in effect at all times since ____________, 19___;
(iv) Copies of certain resolutions adopted by the board of directors
[and the stockholders] of each Borrower and Guarantor, certified by the
Secretary of such Borrower or Guarantor; and
(v) [Identify any other matters or items pertaining to
organization, authority and good standing;]
and we have also examined such other instruments and records and inquired into
such other factual matters and matters of law as we deem necessary or pertinent
to the formulation of the opinions hereinafter expressed. As to questions of
fact relevant to the opinions stated herein, we have relied upon information
obtained from the officers of each Borrower and Guarantor and other sources
believed by us responsible, and, with your permission, we have assumed, without
independent investigation, the accuracy of such information.
In rendering the opinions expressed below, we have examined originals, or
copies of originals certified to our satisfaction, of such agreements,
documents, certificates and other statements of government officials and
corporate officers and such other papers and evidence as we have deemed relevant
and necessary as a basis for such opinions. We have assumed the genuineness of
all signatures (other than those of any Borrowers and Guarantors), the
authenticity of all documents submitted to us as originals and the conformity
with the original documents of any copies thereof submitted to us for our
examination.
Based upon the foregoing, we are of the opinion that:
1. Each Borrower and Guarantor is a corporation duly organized and
validly existing and in good standing under the laws of its state of
incorporation with full and adequate corporate power and authority to carry on
its business as now conducted and is duly licensed or qualified and in good
standing in each jurisdiction wherein the conduct of its business or the assets
and Properties owned or leased by it require such licensing or qualification.
2. Each Borrower has full right, power and authority to borrow and
apply for Letters of Credit from you, each Guarantor has full right, power and
authority to guarantee all of the indebtedness, obligations and liabilities of
the Borrowers to you, and the Borrowers and the Guarantors each have full right,
power and authority to mortgage, pledge, assign and otherwise encumber their
assets and properties as collateral security for such borrowings, letter of
credit liabilities and guarantees, to execute and deliver the Loan Documents
executed by it and to observe and perform all the matters and things therein
provided for. The execution and delivery of the Loan Documents executed by the
Borrowers and Guarantors does not, nor will the observance or performance of any
of the matters or things therein provided for, contravene any provision of law
or of the articles of incorporation, charter or by-laws of any of the Borrowers
and Guarantors (there being no other agreements under which any of the Borrowers
are organized) or, to the best of our knowledge after due inquiry, of any
covenant, indenture or agreement binding upon or affecting any of the Borrowers
or Guarantors or any of their respective properties or assets.
3. The Loan Documents executed by the Borrowers and Guarantors have
been duly authorized by all necessary corporate action (no stockholder approval
being required), have been executed and delivered by the proper officers of each
Borrower and Guarantor and constitute valid and binding agreements of each
Borrower and Guarantor enforceable against them in accordance with their
respective terms, except as such terms may be limited by bankruptcy, insolvency
or similar laws and legal or equitable principles affecting or limiting the
enforcement of creditors' rights generally.
4. No order, authorization, consent, license or exemption of, or
filing or registration with, any court or governmental department, agency,
instrumentality or regulatory body, whether local, state or federal, is or will
be required in connection with the lawful execution and delivery of the Loan
Documents or the observance and performance by each Borrower and Guarantor of
any of the terms thereof.
5. To the best of our knowledge after due inquiry, there is no
action, suit, proceeding or investigation at law or in equity before or by any
court or public body pending or threatened against or affecting any Borrower or
Guarantor or any of their respective assets and properties which, if adversely
determined, could result in any material adverse change in the properties,
business, operations or financial condition of any Borrower or Guarantor or in
the value of the collateral security for your loans and other credit
accommodations to the Borrowers.
6. The Revolving Loans and L/C Obligations of the Company will
constitute "Senior Indebtedness" for purposes of the Series C Indenture.
[We note that many of the Loan Documents provide that they are governed by the
laws of Illinois. For purposes of our opinion as to the enforceability of such
Loan Documents, we have with your permission assumed that the laws of Illinois
do not differ in any respect pertinent to such opinion from the laws of
_____________.]
Respectfully submitted,
<PAGE>
Exhibit A
The Guarantors
<PAGE>
Exhibit B
(a) Credit Agreement by and between the Borrowers and Harris Trust and
Savings Bank ("Harris"), individually and as agent (Harris acting in its
capacity as agent being herein referred to as the "Agent");
(b) Revolving Credit Note of the Company payable to the order of
Harris in the principal sum of $________________;
(c) Revolving Credit Note of DYN payable to the order of Harris in
the principal sum of _____________________;
(d) Guarantees from ______________ to the Agent;
(e) Pledge Agreements from ______________, to the Agent;
(f) Security Agreements from _______________ to the Agent;
[NOTE: Other Collateral Documents to be added.]
The foregoing documents are herein collectively referred to as the "Loan
Documents".
<PAGE>
EXHIBIT C
EMCOR GROUP, INC.
BORROWING BASE CERTIFICATE
TO: Harris Trust and Savings Bank as Agent under, and the Lenders party to,
the Credit Agreement described below
Pursuant to the terms of the Credit Agreement dated as of __________, 1996
among us (the "Credit Agreement"), we submit this Borrowing Base Certificate to
you and certify that the information set forth below and on any attachments to
this Certificate is true, correct and complete as of the date of this
Certificate. Any capitalized terms used herein without definition shall have the
same meanings as such terms have in the Credit Agreement.
I. BORROWING BASE
A. BORROWING BASE
1. Gross accounts
DYN ____________
EMCOR EX DYN ____________ ____________
A1
2. Ineligible accounts identified
in Credit Agreement
DYN ____________
EMCOR EX DYN ____________ ____________
A2
3. Claims/disputed amounts not
included in A2 ____________
DYN ____________
EMCOR EX DYN ____________ ____________
A3
*4. DYN Sublimit
DYN Net Worth ____________
Less Net Due to DYN
or plus Net Due from DYN ____________
Total ____________
DYN Sublimit (66-2/3% of
total) ____________
-------------
A4
5. Borrowing Base
EMCOR EX DYN (A1 minus A2
and A3) x .4 ____________
DYN (Lesser of A1 minus A2 and
A3 x .4 or A4) ____________
------------
A5
B. ADVANCES/AVAILABILITY (SHORTFALL)
1. Revolving Loans ____________
B1
2. Letters of Credit ____________
B2
3. Total Advances (sum of
line B1 and B2) ____________
B3
4. Borrowing Base
(line A5) ____________
B4
5. Unused Availability
(B3 minus B4) ____________
B5
Dated as of this ____ day of ______________, 19___.
EMCOR GROUP, INC.
By:_________________________________
Its______________________________
- ------------------
*Eliminate DYN Sublimit Restrictions after the Consolidation Date
<PAGE>
EXHIBIT D
EMCOR GROUP, INC.
COMPLIANCE CERTIFICATE
FOR THE MONTH ENDING __________
To: Harris Trust and Savings Bank
as Agent under, and the Lenders
party to the Credit Agreement
described below
This Compliance Certificate is furnished to the Lenders pursuant to the
requirements of Section 7.5 of the Credit Agreement dated as of June 19, 1996,
by and between EMCOR Group, Inc., a Delaware corporation (the "Company"), DYN
Specialty Contracting Inc., a _____________ corporation ("DYN") and Harris Trust
and Savings Bank as agent thereunder (the "Agent") and the Lenders named therein
(the "Credit Agreement"). Unless otherwise defined herein, the terms used in
this Compliance Certificate have the meanings ascribed thereto in the Credit
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected ______________ of the Company;
2. We have reviewed the terms of the Credit Agreement and we have made, or
have caused to be made under our supervision, a detailed review of the
transactions and conditions of the Borrowers and Restricted Subsidiaries during
the accounting period covered by the financial statements being furnished
concurrently with this Certificate;
3. The examinations described in paragraph 2 did not disclose, and we have
no knowledge of, the existence of any condition or the occurrence of any event
which constitutes a Default or an Event of Default at any time during or at the
end of the accounting period covered by the accompanying financial statements or
as of the date of this Certificate, except as set forth immediately below;
4. The financial statements required by Section 7.5 of the Credit
Agreement and being furnished to you concurrently with this Certificate are
true, correct and complete as of the dates and for the periods covered
thereby; and
5. Schedule I attached hereto sets forth financial data and computations
evidencing the Borrowers' compliance with certain covenants of the Credit
Agreement, all of which data and computations are true, complete and correct and
have been made in accordance with the relevant Sections of the Credit Agreement.
1
6. Also attached hereto is a summary of accounts over $1,000,000 in
litigation, mediation or arbitration.*
Described below are the exceptions, if any, to paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrowers have taken, is taking, or proposes to
take with respect to each such condition or event:
------------------------------------------------
------------------------------------------------
------------------------------------------------
------------------------------------------------
The foregoing certifications, together with the computations set forth in
Schedule I attached hereto and the financial statements furnished concurrently
with this Certificate in support hereof, are made and delivered as of this
______ day of _______________, 19___.
EMCOR GROUP, INC.
By:_______________________________
Title:______________________________
(Type or Print Name)
*Include Only Quarterly.
<PAGE>
SCHEDULE I
EMCOR GROUP, INC.
COMPLIANCE CALCULATIONS
FOR __________________, 1996 CREDIT AGREEMENT
CALCULATIONS AS OF _______________, 19__
- ------------------------------------------------------------------------------
A. Adjusted Tangible Net Worth (Section 7.6)
[Calculations to follow.]
B. Leverage Ratio (Section 7.7)
[Calculations to follow.]
C. Interest Coverage Ratio (Section 7.8)
[Calculations to follow.]
D. Current Ratio (Section 7.9)
[Calculations to follow.]
D. Capital and Other Restricted Expenditures (Section 7.13)
[Calculations to follow.]
E. Applicable Margin (Senior Debt to EBITDA)
[Calculations to follow.]
<PAGE>
EXHIBIT E
ASSIGNMENT AND ACCEPTANCE
Dated _____________, 19_____
Reference is made to the Credit Agreement dated as of _______________,
1996 (the "Credit Agreement") among EMCOR Group, Inc., the other Borrowers, the
Lenders (as defined in the Credit Agreement) and Harris Trust and Savings Bank,
as Agent for the Lenders (the "Agent"). Terms defined in the Credit Agreement
are used herein with the same meaning.
_____________________________________________________ (the "Assignor") and
_________________________ (the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a _______% interest in and to
all of the Assignor's rights and obligations under the Credit Agreement as of
the Effective Date (as defined below), including, without limitation, such
percentage interest in the Assignor's Commitment as in effect on the Effective
Date and the Revolving Loans, if any, owing to the Assignor on the Effective
Date and the Assignor's Percentage of any outstanding L/C Obligations, if any.
2. The Assignor (i) represents and warrants that as of the date hereof (A)
its Commitment is $____________, (B) the aggregate outstanding principal amount
of Revolving Loans made by it under the Credit Agreement that have not been
repaid is $____________ and a description of the interest rates and currencies
for such Revolving Loans is attached as Schedule 1 hereto, and (C) the aggregate
principal amount of Assignor's outstanding L/C Obligations is $___________ and a
description of the expiry date, amount and account party for such L/C
Obligations is also attached as Schedule 1 hereto; (ii) represents and warrants
that it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim, lien,
or encumbrance of any kind; (iii) makes no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Loan Documents or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Loan Documents or any other instrument or document furnished pursuant
thereto; and (iv) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Borrower or any
Guarantor or the performance or observance by any Borrower or any Guarantor of
any of their respective obligations under the Credit Agreement or any other
instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received copies of the Credit
Agreement and the Intercreditor Agreement, together with copies of the most
recent financial statements delivered to the Lenders pursuant to in Sections
7.5(a), (b) and (c) thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon the Agent, the Assignor or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Credit Agreement; (iii) appoints and authorizes the Agent to take such
action as Agent on its behalf and to exercise such powers under the Loan
Documents as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (iv) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Lender; and (v)
specifies as its lending offices (and address for notices) the offices set forth
beneath its name on the signature pages hereof.
4. As consideration for the assignment and sale contemplated in Section 1
hereof, the Assignee shall pay to the Assignor on the Effective Date (as
hereinafter defined) in federal funds an amount equal to the percentage
specified in Section One of the balance of Revolving Loans outstanding on such
date. It is understood that commitment and/or Letter of Credit fees accrued to
the date hereof with respect to the interest assigned hereby are for the account
of the Assignor and such fees accruing from and including the date hereof are
for the account of the Assignee. Each of the Assignor and the Assignee hereby
agrees that if it receives any amount under the Credit Agreement which is for
the account of the other party hereto, it shall receive the same for the account
of such other party to the extent of such other party's interest therein and
shall promptly pay the same to such other party.
5. The effective date for this Assignment and Acceptance shall be
_____________, 19___(the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Company for its
acceptance and to the Agent for acceptance and recording by the Agent.
6. Upon such acceptance and recording, as of the Effective Date, (i) the
Assignee shall be a party to the Credit Agreement and, to the extent provided in
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement.
7. Upon such acceptance and recording, from and after the Effective Date,
the Agent shall make all payments under the Credit Agreement in respect of the
interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment and letter of credit fees with respect
thereto) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments under the Credit Agreement for periods prior to the
Effective Date directly between themselves.
8. In accordance with Section 11.18 of the Credit Agreement, the Assignee
requests and directs that the Agent prepare and cause the Borrowers to execute
and deliver to the Assignee Revolving Credit Notes payable to the Assignee.
9. This Assignment and Acceptance shall be governed by, and
construed in accordance with, the laws of the State of Illinois.
[ASSIGNOR LENDER]
By:_____________________________________
Title:____________________________________
[ASSIGNEE LENDER]
By:_____________________________________
Title:____________________________________
Lending Office (and address for
notices):
Accepted and consented this
____ day of ___________, 19__
EMCOR GROUP, INC.
By:____________________________
Title:_________________________
DYN SPECIALTY CONTRACTING INC.
By:____________________________
Title:_________________________
Accepted and consented to by the Agent this
_______ day of ___________, 19__
HARRIS TRUST AND SAVINGS BANK
By:____________________________
Title:_________________________
<PAGE>
--
SCHEDULE I
REVOLVING LOANS
Borrower to Whom Type of Interest Currency if other
Principal Amount Loan Disbursed Revolving Loan Rate than U.S. Dollars
- ---------------- -------------- -------------- ---- -----------------
LETTER OF CREDIT
Currency if
other than
Account Party Face Amount Expiry Date U.S. Dollars
------------- ----------- ----------- ----------
<PAGE>
SCHEDULE 4.2
THE GUARANTORS
INITIAL GUARANTORS
<TABLE>
<CAPTION>
JURISDICTION OF PERCENTAGE OWNER
NAME INCORPORATION OWNERSHIP
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
EMCOR Group, Inc.
DYN Specialty Contracting Inc. Virginia 100% EMCOR
Mechanical/Electrical
Services, Inc.
Dynalectric Company Florida 100% DYN Specialty
Contracting, Inc.
Dynalectric Company of Nevada Nevada 100% DYN Specialty
Contracting, Inc.
Contra Costa Electric, Inc. California 100% DYN Specialty
Contracting, Inc.
B&B Contracting and Supply Company Texas 100% DYN Specialty
Contracting, Inc.
KDC, Inc. California 100% DYN Specialty
Contracting, Inc.
EMCOR Mechanical/Electrical Delaware 100% MES Holdings Corp.
Services, Inc.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (East), Inc. Mechanical/Electrical
Services, Inc.
Heritage Air Systems, Inc. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Forest Electric Corp. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Welsbach Electric Corp. of L.I. New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
Penguin Maintenance and Services Delaware 100% EMCOR
Inc. Mechanical/Electrical
Services (East), Inc.
EMCOR/Penguin Air Conditioning New York 100% EMCOR
Corp. Mechanical/Electrical
Services (East), Inc.
J.C. Higgins Corp. Delaware 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (Midwest), Inc. Mechanical/Electrical
Services, Inc.
JWP/Hyre Electric Co. of Indiana, Delaware 100% EMCOR
Inc. Mechanical/Electrical
Services, Inc.
EMCOR Midwest, Inc. Delaware 100% EMCOR
Mechanical/Electrical
Services (Midwest),
Inc.
Gibson Electric Co., Inc. New Jersey 100% EMCOR Midwest, Inc.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Service (West), Inc. Mechanical/Electrical
Services, Inc.
University Mechanical & California 100% EMCOR
Engineering Contractors, Inc. Mechanical/Electrical
Services (West), Inc.
T.L. Cholette, Inc. Michigan 100% University Mechanical
& Engineering
Contractors, Inc.
University Mechanical & Arizona 100% University Mechanical
Engineering Contractors, Inc. & Engineering
Contractors, Inc., a
California corporation
Hansen Mechanical Contractors, Nevada 100% University Mechanical
Inc. & Engineering
Contractors, Inc., a
California corporation
Trautman & Shreve, Inc. Colorado 100% University Mechanical
& Engineering
Contractors, Inc., a
California corporation
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (South), Inc. Mechanical/Electrical
Services, Inc.
EMCOR Gowan, Inc. Texas 100% EMCOR
Mechanical/Electrical
Services (South) Inc.
EMCOR International, Inc. Delaware 100% MES Holdings
Corporation
Inte-Fac Corp New York 100% EMCOR
Mechanical/Electrical
Services (East), Inc.
EMCOR Facilities Services, Inc. Delaware 100% MES Holdings
Corporation
MES Holdings Corporation Delaware 100% EMCOR Group, Inc.
</TABLE>
TO BE PROVIDED BY TRANCHE B ACTIVATION DATE
<TABLE>
<CAPTION>
JURISDICTION OF PERCENTAGE OWNER
NAME INCORPORATION OWNERSHIP
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EMCOR (UK) Limited UK 100% EMCOR International
Inc.
Drake & Scull Engineering Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull Airport Services UK 100% Drake & Scull
Ltd. Engineering Ltd.
Drake & Scull Technical Services UK 100% Drake & Scull
Ltd. Engineering Ltd.
Drake & Scull Engineering (UK) UK 100% Drake & Scull
Limited Engineering Ltd.
Drake & Scull International, Ltd. UK 100% Drake & Scull
Engineering Ltd.
Drake & Scull (Scotland) Ltd. UK 100% EMCOR (UK) Limited
HKW Consultancy Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull Holdings Ltd. UK 100% EMCOR (UK) Limited
DSC Building Ltd. UK 100% Drake & Scull
Holdings Ltd.
Del Commerce (Contract Services) UK 100% Drake & Scull
Ltd. Holdings Ltd.
JWP Leasing (UK) Ltd. UK 100% EMCOR (UK) Limited
Heritage Air Systems Ltd. UK 100% EMCOR (UK) Limited
</TABLE>
TO BE PROVIDED BY TRANCHE C ACTIVATION DATE
<TABLE>
<CAPTION>
JURISDICTION OF PERCENTAGE OWNER
NAME INCORPORATION OWNERSHIP
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
JWP NRO Holdings, Inc. Canada 100% EMCOR International
Inc.
EMCOR Canada Ltd. Canada 100% EMCOR International
Inc.
Comstock Canada, Ltd. Canada 100% EMCOR International
Inc.
</TABLE>
<PAGE>
SCHEDULE 5.2
THE SUBSIDIARIES
RESTRICTED SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF PERCENTAGE OWNER
NAME INCORPORATION OWNERSHIP
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
DYN Specialty Contracting Inc. Virginia 100% EMCOR
Mechanical/Electrical
Services, Inc.
Dynalectric Company Florida 100% DYN Specialty
Contracting, Inc.
Dynalectric Company of Nevada Nevada 100% DYN Specialty
Contracting, Inc.
Contra Costa Electric, Inc. California 100% DYN Specialty
Contracting, Inc.
B & B Contracting and Supply Texas 100% DYN Specialty
Company Contracting, Inc.
KDC, Inc. California 100% DYN Specialty
Contracting, Inc.
EMCOR Mechanical/Electrical Delaware 100% MES Holdings Corp.
Services, Inc.
Defender Indemnity, Ltd. Vermont 100% EMCOR Risk Holdings,
Inc.
EMCOR Risk Holdings, Inc. Delaware 100% MES Holdings Corp.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (East), Inc. Mechanical/Electrical
Services
Heritage Air Systems, Inc. New York 100% EMCOR Mechanical
Electrical Services
(East), Inc.
Welsbach Electric Corp. New York 100% EMCOR Mechanical
Electrical Services
(East), Inc.
Forest Electric Corp. New York 100% EMCOR Mechanical
Electrical Services
(East), Inc.
Welsbach Electric Corp. of L.I. New York 100% EMCOR Mechanical
Electrical Services
(East), Inc.
Penguin Maintenance and Services Delaware 100% EMCOR Mechanical
Inc. Electrical Services
(East), Inc.
Inte-Fac Corp. New York 100% EMCOR Mechanical
Electrical Services
(East), Inc.
EMCOR/Penguin Air Conditioning New York 100% EMCOR Mechanical
Corp. Electrical Services
(East), Inc.
J.C. Higgins Corp. Delaware 100% EMCOR Mechanical
Electrical Services
(East), Inc.
EMCOR Facilities Services, Inc. Delaware 100% MES Holdings Corp.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (Midwest), Inc. Mechanical/Electrical
Services, Inc.
JWP/Hyre Electric Co. of Indiana, Delaware 100% EMCOR
Inc. Mechanical/Electrical
Services (Midwest),
Inc.
JWP Technical Services of Ohio, Ohio 100% EMCOR
Inc. Mechanical/Electrical
Services (Midwest),
Inc.
EMCOR Midwest, Inc. Delaware 100% EMCOR
Mechanical/Electrical
Services (Midwest),
Inc.
Gibson Electric Co., Inc. New Jersey 100% EMCOR Midwest, Inc.
Zack Power & Industrial Company Delaware 100% EMCOR
Mechanical/Electrical
Services (Midwest),
Inc.
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (West), Inc. Mechanical/Electrical
Services, Inc.
University Mechanical & California 100% EMCOR
Engineering Contractors, Inc. Mechanical/Electrical
Services (West), Inc.
T.L. Cholette, Inc. Michigan 100% University Mechanical
& Engineering
Contractors, Inc., a
California corporation
University Mechanical & Arizona 100% University Mechanical
Engineering Contractors, Inc. & Engineering
Contractors, Inc., a
California corporation
Hansen Mechanical Contractors, Nevada 100% University Mechanical
Inc. & Engineering
Contractors, Inc., a
California corporation
Trautman & Shreve, Inc. Colorado 100% University Mechanical
& Engineering
Contractors, Inc., a
California corporation
RCV Cogeneration, Inc. California 100% University Mechanical
& Engineering
Contractors, Inc., a
California corporation
EMCOR Mechanical/Electrical Delaware 100% EMCOR
Services (South), Inc. Mechanical/Electrical
Services, Inc.
EMCOR Gowan, Inc. Texas 100% EMCOR
Mechanical/Electrical
Services (South) Inc.
EMCOR International, Inc. Delaware 100% MES Holdings
JWP NRO Holdings, Inc. Canada 100% EMCOR International
EMCOR Canada Ltd. Canada 100% EMCOR International
Comstock Canada Ltd. Canada 100% EMCOR International
EMCOR (UK) Limited UK 100% EMCOR International,
Inc.
Drake & Scull Engineering Ltd. UK 100% EMCOR UK Limited
Drake & Scull Airport Services UK 100% Drake & Scull
Ltd. Engineering, Ltd.
Drake & Scull Technical Services UK 100% Drake & Scull
Ltd. Engineering, Ltd.
Drake & Scull Engineering (UK) UK 100% Drake & Scull
Limited Engineering, Ltd.
Drake & Scull International, Ltd. UK 100% Drake & Scull
Engineering, Ltd.
Drake & Scull (Scotland) Ltd. UK 100% EMCOR (UK) Limited
HKW Consultancy Ltd. UK 100% EMCOR (UK) Limited
Drake & Scull Holdings Ltd. UK 100% EMCOR (UK) Limited
DSC Building Ltd. UK 100% Drake & Scull
Holdings Ltd.
Del Commerce (Contract Services) UK 100% EMCOR UK Limited
Ltd.
H & F Kornfeld Ltd. (UK) UK 100% EMCOR UK Limited
JWP Leasing (UK) Ltd. UK 100% EMCOR (UK) Limited
BL Distribution Ltd. UK 100% EMCOR (UK) Limited
Businessland Holdings Ltd. UK 100% EMCOR (UK) Limited
Heritage Air Systems Ltd. UK 100% EMCOR (UK) Limited
Forest Drake & Scull Electric Ltd. UK 100% EMCOR (UK) Limited
MES Holdings Corporation Delaware 100% EMCOR Group, Inc.
JWP Technical Services Malaysia 100% EMCOR International,
(Malaysia)2 Inc.
JWP (Cayman Islands) Ltd.* Caymen Islands 100% EMCOR International,
Inc.
NESMA EMCOR Company Ltd. (50%)* Saudia Arabia 50% JWP (Cayman Islands)
Ltd.
Drake & Scull (Cayman Islands) Caymen Islands 100% EMCOR International,
Ltd.* Inc.
Drake & Scull Assarain (Oman) Oman 49% Drake & Scull (Cayman
(49%)* Islands) Ltd.
Lunar Drake & Scull Llc. (UAE) __________ 49% Drake & Scull (Cayman
(49%)* Islands) Ltd.
</TABLE>
<PAGE>
UNRESTRICTED SUBSIDIARIES
<TABLE>
<CAPTION>
JURISDICTION OF PERCENTAGE
NAME INCORPORATION OWNERSHIP OWNER
- -------------------------------------------------------------------------------------------
<S> <C> <C> <C>
A to Z Equipment Corp. New York 100% Sellco Corporation
Afgo Engineering Corporation New York 100% Sellco Corporation
Afgo Engineering Corp. of Delaware 100% Sellco Corporation
Washington
Antwerp Education Center N.V. Belgium 100% Sellco Corporation
AZCO Inc. Delaware 100% Sellco Corporation
Businessland Canada Ltd. Canada 100% JWP Information
Services Inc.
Businessland (Hong Kong) Limited Hong Kong 100% JWP Information
Services Inc.
Case/Acme Systems, Inc. New York 100% Sellco Corporation
Computer Maintenance Corporation New Jersey 100% Sellco Corporation
Drake & Scull France SARL France 100% Sellco Corporation
E.M.A. International, Inc. District of 100% Sellco Corporation
Columbia
Gone Inc. California 100% Sellco Corporation
G/M Tech New York 100% Sellco Corporation
Guzovsky/JWP Electrical Inc. Rhode Island 100% Sellco Corporation
Intec Business Phones Inc. Delaware 100% Sellco Corporation
ISYS Security Systems, Inc. Delaware 100% Sellco Corporation
Jamaica Water Securities Corp. New York 100% Sellco Corporation
Jamaica Water Supply Company New York 96% Jamaica Water
Securities Corp.
JWP Voc I Delaware 100% Sellco Corporation
JWP Voc II Delaware 100% Sellco Corporation
JWP Asset Management Inc. Delaware 100% Sellco Corporation
JWP Communications Inc. Delaware 100% Sellco Corporation
JWP Controls Inc. California 100% Sellco Corporation
JWP Controls Holding, Inc. Delaware 100% Sellco Corporation
JWP Credit Corp. Delaware 100% Sellco Corporation
JWP E.C. Corp. New York 100% Sellco Corporation
JWP Environmental Composting Minnesota 100% Sellco Corporation
Technologies, Inc.
JWP Equipment Services Inc. Delaware 100% Sellco Corporation
JWP Espana SA Spain 100% Sellco Corporation
JWP France SARL France 100% Sellco Corporation
JWP/Guzovsky Electrical Corp. Massachusetts 100% Sellco Corporation
JWP/HCII Corp. Delaware 100% Sellco Corporation
JWP of Hartford, Inc. Connecticut 100% Sellco Corporation
JWP Information Services, Inc. California 100% Sellco Corporation
JWP Information Services SARL France 100% Sellco Corporation
JWP/IS Network Integration Pennsylvania 100% Sellco Corporation
Services, Inc.
JWP Merger Sub Inc. Delaware 100% Sellco Corporation
JWP New England Inc. Delaware 100% Sellco Corporation
JWP/SHI Corp. Delaware 100% Sellco Corporation
JWP TS Corp. New Jersey 100% Sellco Corporation
Kerby Saunders, Inc. New York 100% Sellco Corporation
Kerby Saunders-Warkol, Inc. Delaware 100% Sellco Corporation
Marlon of Texas, Inc. Texas 100% Sellco Corporation
Metalair Industries, Inc. Texas 100% Sellco Corporation
Micro Avenue Belgium 100% Sellco Corporation
MicroCom Belgium 100% Sellco Corporation
North Am. Heating & Air Delaware 100% Sellco Corporation
Conditioning Company
Sivea Benelux Belgium 100% Sellco Corporation
SLR Constructors Inc. New York 100% Sellco Corporation
Superior Engineering Corporation Utah 100% Sellco Corporation
Sutter Hill Industries, Inc. Illinois 100% Sellco Corporation
Teletime Limited Ontario 100% Sellco Corporation
University Cogeneration, Inc. California 100% Sellco Corporation
University Nuclear Systems, Inc. Washington 100% Sellco Corporation
Wachtel, Duklauer & Fein New York 100% Sellco Corporation
Incorporated
JWP Unrestricted Sub 9 Inc. New York 100% Sellco Corporation
Sellco Corporation Delaware 100% EMCOR Group, Inc.
JWP Energy Products Inc. Idaho 100% EMCOR Group, Inc.
JWP/MEC Corp. Pennsylvania 100% EMCOR Group, Inc.
University Energy Services of California 100% EMCOR Group, Inc.
California, Inc.
University Technical Services Inc. California 100% University Energy
Services of California
JWP Telecom, Inc. Delaware 100% EMCOR Group, Inc.
JWP Telecommunication Services Delaware 100% JWP Telecom, Inc.
Inc.
Standard Telecommunications, Inc. New York 100% JWP Telecom, Inc.
Standard Telecommunications New Jersey 100% JWP Telecom, Inc.
Equipment Inc.
MEC Constructors, Inc. (formerly Delaware 100% EMCOR Group, Inc.
JWP Pacific International, Inc.)
Jamaica Technical Trading Company Delaware 100% MEC Constructors, Inc.
JWP Technical Services (C.N.M.I.) Northern 100% MEC Constructors, Inc.
Inc. Marianas
JWP Technical Services (Hong Kong Hong Kong 100% MEC Constructors, Inc.
Limited)
JWP Technical Services Singapore 100% MEC Constructors, Inc.
(Singapore) PTE Ltd.
JWP Thailand Ltd. Thailand 100% MEC Constructors, Inc.
JWP Technical Services of Guam, Delaware 50% MEC Constructors, Inc.
Inc.
50% University Mechanical
& Engineering
Contractors, Inc.
</TABLE>
<PAGE>
SCHEDULE 7.10
INDEBTEDNESS
(a) EMCOR Group, Inc. ("EMCOR")
1. Indebtedness evidenced by the Series C Notes and the obligations
existing under the indenture pursuant to which such notes are issued
and the documents executed in connection therewith.
2. Note payable to SellCo Corporation in the principal amount of
$5,464,133.78.
3. Note payable to Connecticut Development Authority in the principal
amount of $180,000.
(b) EMCOR Penguin Air Conditioning Corp.
1. $203,000 owed in connection with Industrial Revenue Bond financing.
(c) Gibson Electric Co., Inc.
1. $74,000 note payable to Pitney Bowes Credit Corp.
(d) EMCOR Gowan, Inc.
1. $808,000 payable under finance lease and purchase money mortgage.
(e) Heritage Air Systems Limited. (U.K.)
1. (pound)237,500 - note bearing interest at 8% payable to Barclays Bank.
(f) Dynalectric Company
1. $32,000 payable under finance leases and purchase money mortgages.
(g) Comstock Canada, Ltd.
1. Canadian $2,000,000 credit facility from Canadian Imperial Bank.
<PAGE>
(h) U.K. Borrowing Group
1. EMCOR (U.K.) Limited, Drake & Scull Holdings, Limited, Drake & Scull
Engineering Limited, Drake & Scull Airport Services Limited, Drake &
Scull Technical Services Ltd., DelCommerce (Contract Services)
Limited, Heritage Air Systems Limited, Forest Drake & Scull Electric
Limited, and JWP Leasing Limited (the "UK Borrowing Group") have
overall credit limit of (pound)17,100,000. Each member of the UK
Borrowing Group has secured the indebtedness to Barclays Bank by liens
upon its assets and each member is also jointly and severally liable
under these credit facilities. In addition, each member has guaranteed
the obligations of each other member.
2. The UK borrowing Group has guaranteed the obligations of its members
in respect of bonds issued by Seaboard Surety Company for its members.
This guarantee is secured by a lien upon the assets of each member.
(i) University Mechanical & Engineering Contractors, Inc., an Arizona
Corporation
1. $696,000 Mortgage Note.
(j) Various EMCOR Subsidiaries
1. $1,000,000 payable under finance leases and purchase money
mortgages.
(k) University Mechanical & Engineering Contractors Inc., a California
Corporation
1. Note payable to former shareholders in the principal amount of
$608,000.
(l) Lunar Drake & Scull
1. Lunar Drake & Scull is liable in respect of its Performance Guarantees
of approximately $3,500,000 from the British Bank of the Middle East.
<PAGE>
(m) Dynalectric Company of Nevada
1. $20,000 Mortgage Note.
(n) Drake & Scull Engineering Ltd. ("D&S")
(pound)129,000 payable in respect of finance leases.
(o) Other
1. The information contained in Schedule 7.11 and 7.12 is hereby
incorporated herein by reference thereto.
2. Excluded is indebtedness owing by EMCOR to its subsidiaries, by its
subsidiaries to EMCOR, and by its subsidiaries to its other
subsidiaries
<PAGE>
SCHEDULE 7.11
LIENS
(a) EMCOR Group, Inc. ("EMCOR")
1. Lien in favor of Connecticut Development Authority on certain equipment
and furniture located at EMCOR's offices in Norwalk, CT.
(Amount Secured - $180,000)
2. Finance leases secured by property leased (Amount Secured - $100,000)
(b) EMCOR Penguin Air Conditioning Corp.
1. Lien on building and related property pursuant to Industrial Revenue
Bond financing (Amount Secured - $203,000)
(c) Gibson Electric Co., Inc.
1. Finance leases secured by property leased and purchase money mortgage
on property purchased (Amount Secured - $74,000).
(d) EMCOR Gowan, Inc.
1. Finance leases secured by property leased and purchase money mortgage
on property purchased (Amount Secured - $808,000).
(e) Heritage Air Systems Limited (UK) ("Heritage Limited")
1. (pound)237,500 note secured by all assets.
(f) Dynalectric Company
1. Finance leases secured by property leased and purchase money mortgage
on property purchased (Amount Secured - $32,000).
<PAGE>
(g) Dynalectric Company of Nevada
1. $20,000 Mortgage Note on a condominium.
(h) Comstock Canada Ltd. ("Comstock") and EMCOR Canada Ltd. ("EMCOR
Canada")
1. Canadian Imperial Bank has made available to Comstock a CDN
$2,000,000 credit facility. The indebtedness is secured by accounts
receivable of Comstock and a deposit instrument of U.S. $1,400,000
of EMCOR Canada.
(i) U.K. Borrowing Group
1. EMCOR (U.K.) Limited, Drake & Scull Holdings, Limited, Drake & Scull
Engineering Limited, Drake & Scull Airport Services Limited, Drake &
Scull Technical Services Ltd., DelCommerce (Contract Services) Limited,
Heritage Air Systems Limited, Forest Drake & Scull Electric Limited,
and JWP Leasing Limited (the "UK Borrowing Group") have overall credit
limit of (pound)17,100,000. Each member of the UK Borrowing Group has
secured the indebtedness to Barclays Bank by liens upon its assets and
each member is also jointly and severally liable under these credit
facilities. In addition, each member has guaranteed the obligations of
each other member.
2. The UK borrowing Group has guaranteed the obligations of its members in
respect of bonds issued by Seaboard Surety Company for its members.
This guarantee is secured by a lien upon the assets of each member.
(j) University Mechanical & Engineering Contractors, Inc., an Arizona
Corporation
1. $696,000 Mortgage Note on real estate payable to Bank of America.
(k) Drake & Scull Engineering Ltd.
Finance leases secured by property leased (amount secured -
(pound)129,000).
(l) Various EMCOR Subsidiaries
1. EMCOR subsidiaries have obtained bonds from Seaboard Surety Company,
Reliance Surety Company and its affiliates ("Reliance"), and London
Guarantee. The agreements pursuant to which the bonds were issued and
will be issued in the future provide that the subsidiary for which
bonds are written grants liens upon its assets in favor of the bonding
companies.
In connection with the above, Reliance has liens upon the assets of Dyn
Specialty Contracting, Inc., B&B Contracting and Supply Company,
Dynalectric Company, Dynalectric Company of Nevada, Inc., Contra Costa
Electric, Inc. and KDC Inc. and on their outstanding shares of capital
stock.
2. Miscellaneous finance leases of approximately $1,000,000.
<PAGE>
SCHEDULE 7.12
INVESTMENTS, LOANS, ADVANCES AND GUARANTEES
1. EMCOR Group, Inc. ("EMCOR" or "Parent") guarantees performance and
payment bonds of its subsidiaries - existing and future.
2. Parent guarantees finance leases of its subsidiaries - existing
and future.
3. University Mechanical Engineering & Contractors Inc., a California
corporation ("University"), guarantees performance bonds of
University Mechanical & Engineering Contractors, Inc., an Arizona
corporation - existing and future.
4. EMCOR International, Inc., Comstock Canada Ltd., JWP-NRO Holdings
Inc. and Parent guarantee various performance and payment bonds of
Comstock Canada, Ltd. ("Comstock") - existing and future.
5. UK Borrowing Group has certain guarantees with respect to its
members: See Schedules 7.10 and 7.11 - existing and future.
6. Barclays Bank guaranteed a bond issued for the benefit of Drake &
Scull Engineering ("D&S") by Saudi Investment Bank in the amount of
approximately (pound)152,000. The bond beneficiary is Philip Holtzman
& Co. Barclays Bank indemnifies Saudi Investment Bank in respect of
this bond and D&S guarantees the Barclays obligation.
7. D&S guarantees indebtedness under a credit facility between Drake &
Scull Assarain LLC. and Bank Muscat Al Ahli Al Omani in an amount not
to exceed 392,000 Rials Omani ($105,000).
8. D&S guarantees indebtedness under a credit facility between Drake &
Scull LLC and ABN AMRO Bank in an amount not to exceed 14,000,000 UAE
Dirhams ($3,820,000).
9. EMCOR (UK) Limited guarantees indebtedness under a credit facility
between NESMA EMCOR Saudi Arabia Ltd. and the Saudi Investment
Bank in an amount not to exceed 16,500,000 Rials ($4,400,000).
10. Drake & Scull Engineering Ltd. guarantees indebtedness under a
credit facility between Drake & Scull International and ANZ
Grindlays Bank in an amount not to exceed 13,300,000 UAE Dirhams
($3,625,000).
11. Parent guarantees performance and payment bonds of Unique
Construction Company - existing and future.
12. Guarantee by Parent of mortgage indebtedness of Erlanger Land Co.
Inc. to The Prudential Insurance Company of America. Current
amount outstanding - $5,552,000.
13. Guarantees by Parent of any contract by U.S.A. General Services
Administration pursuant to Solicitation No. GSC-RESF-B-C-0048-N
14. Guarantee by Parent of agreement among Zack Power & Industrial
Company, Parent and Foster Wheeler Energy Corp.
15. Guarantee by Parent of agreement between Parent and George Hyman
with respect to Jensen Water Treatment Facility for Los Angeles
16. Guarantee/Keepwell by Parent with respect to Dynatran Division of
Dynalectric Company for Virginia Department of Transportation
17. Guarantees dated October 24, 1991 and November 15, 1994 by Parent of
(i) subcontract agreement between PCL Construction Group Inc. and
Comstock Canada with respect to Royal Hospital Project, Edmonton,
Canada and (ii) subcontract between Comstock and PCL Construction
Group with respect to National Archives of Canada, Gatineau Building,
Gatineau, Quebec.
18. Guarantee/Keepwell by Parent with respect to agreement between
Wachtel, Duklauer & Fein Inc. ("WDF") and New York City Health and
Hospitals Corp. ("NYC") relating to Kings County Hospital Power
Plant modernization
19. Guarantee/Keepwell by Parent with respect to agreement between WDF
and NYC relating to Bellevue Hospital Center Emergency Room
Renovation
20. Guarantee/Keepwell by Parent with respect to agreement between
Dynalectric Company and State of Utah
21. Guarantee by Parent of agreement between EMCOR Mechanical of Guam
Inc. and PACCO Ltd. of Guam
22. Parent letter agreement dated August 24, 1992 to Lehrer, McGowan,
Bovis agreeing to insure that Kerby Saunders-Warkol, Inc., d/b/a
EMCOR Mechanical Services will have sufficient financial resources to
perform agreements as trade manager for mechanical and plumbing work
at New York Hospital
23. Parent nominal party under agreement dated December 9, 1991 with
Mannesmann Demag Corporation with respect to LTV project. EMCOR
assigned obligation to EMCOR Technical Services of Ohio Inc. but
Parent remains prime obligor
24. Parent guarantee dated May 10, 1991 of agreement ("Costain
Agreement") between Costain Construction Limited ("Costain") and
Drake & Scull Engineering Ltd. ("D&S") with respect to development
at 54 Lombard Street, London
25. Parent guarantee dated December 6, 1991 (in favor of Fleetway
House Construction Management Limited with whom Costain
contracted) of Costain Agreement
26. EMCOR guarantee of warranty between Limeback and D&S with respect
to 54 Lombard Street, London
27. EMCOR guarantee dated April 27, 1990 in favor of Costain with
respect to ERSB Sellafield
28. EMCOR guarantee dated May 7, 1991 of agreement between John Mowlen
& Co. PLC and D&S with respect to Works Package 330 Mechanical
Services at CIS Refurbishment, Manchester
29. EMCOR guarantee dated January 20, 1991 of agreement between Olympia &
York Limited Contractors and Olympia & York Canary Wharf Ltd. and D&S
with respect to Building B1/B2, Mechanical and Plumbing Works
30. EMCOR guarantee dated May 1991 of agreement between British Rail
and D&S with respect to North Pole International
<PAGE>
31. EMCOR guarantee dated June 6, 1991 of agreement between Olympia &
York Canary Wharf Ltd. and Forest Drake Scull Electric Ltd. with
respect to Building DS-7 Fit Out-Electrical Works for Daily
Telegraph Offices
32. EMCOR guarantee dated June 6, 1991 of agreement between Olympia &
York Canary Wharf Ltd. and Olympia & York Contractors Ltd. and D&S
with respect to Canary Wharf Building B1, Texaco Fit Out
33. EMCOR guarantee dated June, 1991 of agreement between Olympia &
York Canary Wharf and D&S, trading as Forest Drake & Scull
Communications Systems with respect to communication cabling in
Building DS-7, Job No. 900009 10 99063
34. EMCOR guarantee dated May 27, 1991 of agreement between Try
Construction Ltd. and D&S with respect to BP Research Center,
Sunbury, Middlesex Building 200
35. EMCOR guarantee of agreement between Olympia & York Contractors
Limited and Olympia & York Canary Wharf Limited and D&S with
respect to Canary Wharf Building B1/B2, Drake & Scull Engineering
- Electric Works
36. EMCOR guarantee of agreement between Olympia & York Canary Wharf
Limited and JWP Information Services, Ltd. with respect to
communications cabling works in Building FC-2, Job Number 900296
37. EMCOR guarantee of agreement between Olympia & York Canary Wharf
Limited and Olympia & York Contractors Ltd. and D&S with respect
to Building B/1, Small Power & Lighting
38. EMCOR guarantee dated October, 1992 of agreement between Amec
Design & Management Ltd. and D&S with respect to Work Package 360
for mechanical, electrical and plumbing services at Northwest
Water Ltd. Central Site, Warrington
39. EMCOR guarantee dated February 27, 1992 of agreement between
Thames Water Utilities Ltd. and D&S with respect to Advance ME&I
Installment Works, Contract Number 1732/D42
40. EMCOR guarantee dated January 14, 1992 of agreement between John
Lang Construction Ltd. and D&S with respect to Health Care
International, Glasgow in respect of contract among Amec, D&S and
Wessex
41. Deed of Warranty dated January 31, 1992 between EMCOR and British
Airways with respect to agreement between Drake & Scull Airport
Services Ltd. and British Airways
42. Comfort Letter/Guarantee dated January 16, 1990 in favor of Property
Services Agency in respect of D&S and Drake & Scull Scotland Ltd.
43. EMCOR indemnity dated February 22, 1990 in favor of Wessex
Regional Health Authority in respect of contract between D&S and
Amec PLC
44. EMCOR guarantee of agreement between Forest Drake Scull Electric
Ltd. and Herbert Construction (U.K.) Ltd. ("Herbert") in respect
of Forest Drake Scull Ltd. work at Canary Wharf, American Express
floors
45. EMCOR guarantee of lease agreement between IBM RITC 6000 computer
from Lombard Water North Central PLC.
46. Indemnification of trade payables in Nevada for JWP Controls
47. Indemnification of trade payables in Nevada for Dynalectric
Company
48. EMCOR has agreed to indemnify Barnett Bank of Central Florida,
N.A. and Barnett Bank Trust Company, N.A. in respect of certain
environmental liabilities relating to Sebastian, Florida property.
49. Guarantees by EMCOR of obligations of Drake & Scull Engineering
Co. Limited with respect to London Underground contracts
50. The Parent is liable by reason of indemnification agreements or
reimbursement agreements in respect of the following Letter of
Credit:
Bank Party for
Issuing Letter L/C In Whose Account
of Credit ("L/C") Amount Favor Of L/C Issued
----------------- ------ -------- ----------
Howard Bank 250,000 State of Vermont Defender
<PAGE>
51. Indemnification obligations to Days Cove Reclamation Company
("Days Cove") pursuant to a stock agreement and termination
agreement to be entered into among JWP Equipment Services Inc.,
Days Cove and EMCOR with respect to the sale of the stock of JWP
Environmental Services Inc. to Days Cove
52. Indemnification obligations to Barnett Bank of Central Florida,
N.A. and Barnett Bank Trust Company, N.A. in connection with sale
of business of JWP/HCCII Corp. (formerly HETRA Computer and
Communications Industries, Inc.)
53. In connection with sales of other subsidiaries' assets or stock, the
selling subsidiaries and its direct and/or indirect parent
corporations also have similar indemnification obligations to the
buyer.
54. Indemnification obligations of Parent with respect to surety bonds
issued by Seaboard, Reliance and London Guarantee.
55. Guarantee by Parent of employment arrangement between Drake &
Scull Engineering Limited and Andrew Gay.
56. EMCOR (UK) Guarantee dated September 28, 1993 of agreement between
D&S and John Mowlem Construction Ltd. in respect of package 1705 M&E
Engineering Services at the MOD (PE) Collocation Bristol.
57. EMCOR (UK) Guarantee dated December 14, 1993 of agreement between
D&S and Fleetway House Construction Management Ltd. in respect of
54 Lombard Street fit out.
58. EMCOR (UK) Guarantee dated January 5, 1994 of agreement between
D&S and British Aerospace Defence Ltd. in respect of Estates
Services Maintenance of the BAE Defence Ltd., Samlesbury Site.
59. EMCOR (UK) Guarantee dated May 29, 1994 of agreement between D&S
and Fleetway House Construction Management Ltd. in respect of
facilities management contract at 54 Lombard Street.
60. EMCOR (UK) Guarantee dated August 11, 1994 of agreement between
D&S Higgs & Hill Western Ltd. in respect of Mountstuart Primary
School.
61. EMCOR (UK) Guarantee dated January 13, 1995 of agreement between D&S
and The City of Dundee DC in respect of central heating works.
62. EMCOR (UK) Guarantee dated January 24, 1995 of agreement between
D&S and Heathrow Airport Ltd. in respect of mechanical and public
health services on the Europier Project.
63. EMCOR (UK) Guarantee dated February 27, 1995 of agreement between D&S
and Dundee DC in respect of lighting installation at the Mill O'Mains
Security Lighting Contract.
64. EMCOR (UK) Guarantee dated March 17, 1995 of agreement between D&S
and North West Water Ltd. in respect of maintenance of electrical and
mechanical installation of Lingley Mere & Dawson House, Warrington.
65. EMCOR (UK) Guarantee dated March 20, 1995 of agreement between D&S
and EBC Construction Ltd. in respect of electrical installation at
Lyndhurst Magistrates Court.
66. EMCOR (UK) Guarantee dated April 3, 1995 of agreement between D&S and
City of Dundee DC in respect of contract heating replacement for
Whorterbank low rise development.
67. EMCOR (UK) Guarantee dated April 5, 1995 of agreement between D&S and
GEC Alsthom in respect of mechanical and electrical installation at
Connah's Quay Power Generation Station.
68. EMCOR (UK) Guarantee dated July 12, 1995 of agreement between D&S
Trafalgar House Construction (Regions) Ltd. in respect of design and
installation of mechanical and electrical works at Invicta Barracks,
Kent.
69. EMCOR (UK) Guarantee dated July 19, 1995 of agreement between D&S
and Trafalgar House (Regions) Ltd. in respect of mechanical and
electrical services at Farnborough Hospital.
70. EMCOR (UK) Guarantee dated August 11, 1995 of agreement between D&S
and Trustees of Victoria & Albert Museum in respect of electrical
works.
71. EMCOR (UK) Guarantee dated August 11, 1995 of agreement between
D&S and Vodafone Ltd. in respect of mobile maintenance service.
72. EMCOR (UK) Guarantee dated September 19, 1995 of agreement between
D&S and Bovis Construction Ltd. in respect of mechanical and
electrical works at 30 Berkeley Square.
73. EMCOR (UK) Guarantee dated October 4, 1995 in favor of Banco
Comercial de Macau in support of advance payment guarantee granted in
connection with Macau International Airport FM Contract.
74. EMCOR (UK) Guarantee dated October 12, 1995 of agreement between D&S
and Atomic Weapons Establishment in respect of maintenance work at
Aldermaston facility.
75. EMCOR (UK) Guarantee dated October 16, 1995 of agreement between
D&S and Bard Pharmaceuticals Ltd. in respect of mechanical and
electrical works at new production facility.
76. EMCOR (UK) Guarantee dated October 16, 1995 of agreement between D&S
and Amoco (UK) in respect of facilities management services at Amoco
head office building.
77. EMCOR (UK) Guarantee dated November 7, 1995 of agreement between
D&S and NG Bailey & Co. Ltd. in respect of mechanical and
electrical services at HMS Neptune, Faslane.
78. EMCOR (UK) Guarantee dated November 7, 1995 in favor of Banco
Comercial de Macau in respect of mechanical, electrical and building
works at Macau International Airport.
79. EMCOR (UK) Guarantee dated November 11, 1995 of agreement between D&S
and The BBC (Midlands Region) in respect of building engineering
services at Pebble Mill.
80. EMCOR (UK) Guarantee dated December 5, 1995 of agreement between
D&S and British Aerospace Defence Ltd. in respect of estate
service maintenance at Brough Aerodrome.
81. EMCOR (UK) Guarantee dated December 21, 1995 of agreement between
EMCOR-NESMA and United Arab Can Manufacturing Co. in respect of
electrical work at Damman Can/End Plant.
82. EMCOR (UK) Guarantee dated February 21, 1996 of agreement between D&S
and British Gas Plc in respect of mechanical installation
laboratories at Loughborough.
83. D&S Guarantee dated December 21, 1995 in favor of ANZ Grindlays Bank
in respect of banking arrangements for Drake & Scull International,
Abu Dhabi.
84. D&S Guarantee dated April 18, 1996 of agreement between YDS
Engineering Ltd. and Gammon-Paul Y Joint Venture in respect of
electrical works at HACTL Superterminal 1 at Chek Lap Kok Airport,
Hong Kong.
85. D&S Guarantee dated April 18, 1996 of agreement between YDS
Engineering Ltd. and Gammon-Paul Y Joint Venture in respect of HVAC
installation and associated works at HACTL Superterminal 1 at Chek
Lap Kok Airport, Hong Kong.
86. D&S Guarantee dated April 18, 1996 of Agreement between YDS
Engineering Ltd. and Hong Kong Air Cargo Terminals Ltd. in respect
of electrical installation works at HACTL Superterminal 1 at Chek
Lap Kok Airport, Hong Kong.
87. D&S Guarantee dated April 18, 1996 of agreement between YDS
Engineering Ltd. and Hong Kong Air Cargo Terminals Ltd. in respect
of HVAC installation works at HACTL Superterminal 1 at Chek Lap
Kok Airport, Hong Kong.
88. D&S Guarantee dated April 22, 1996 in favor of Barduct Ltd. in
support of special supply terms granted to YDS Engineering Ltd. in
connection with HACTL Superterminal 1 at Chek Lap Kok Airport,
Hong Kong.
89. D&S Guarantee dated October 23, 1990 of agreement between D&S and
Mowlem Regional Construction Ltd. in respect of electrical and
mechanical services to building 459 RAF St. Mawgan, Cornwall.
90. D&S Holdings Guarantee dated February 13, 1991 of agreement between
D&S and Olympia & York Canary Wharf Ltd. in respect of under floor
and high level electrical fitting out works in building DS-7 at phase
1 of Canary Wharf development.
91. D&S Holdings Guarantee dated April 19, 1991 of agreement between
D&S and Trafalgar House Construction Management Ltd. in respect of
DS-7 Canary Wharf, London.
92. D&S Holdings Guarantee dated April 19, 1991 of agreement between D&S
and Olympia & York Canary Wharf Ltd. in respect of electrical
contract at DS-7 Canary Wharf, London.
93. D&S Holdings Guarantee dated July 30, 1991 of agreement between
D&S and Wimpey Construction Ltd. in respect of building services
at British Telecom, Milton Keynes.
94. D&S Holdings Guarantee dated October 2, 1991 of agreement between
D&S, Olympia & York Canary Wharf Ltd. in respect of services
agreement, Phase I fit and for Daily Telegraph.
95. D&S Holdings Guarantee dated June 6, 1992 of agreement between D&S
and Lothian Health Board in respect of maintenance work to East and
Community units.
96. D&S Holdings Guarantee dated July 20, 1992 of agreement between D&S
and Lothian Health Board in respect of mechanical and electrical
maintenance at Royal Infirmary and Associated Hospitals.
97. D&S Holdings Guarantee dated December 22, 1992 of agreement between
D&S and Eastern Telegraph Company in respect of mechanical and
electrical services installation contract at New Telecommunications
College.
98. Guarantee by Dynalectric Company of debts and obligations of Allied
Electric in respect of contract among Dynalectric Company, Allied
Electric and Memphis IRS Computer Center.
99. Guarantee Agreement dated July 17, 1995 of Parent of payment by
University Mechanical Engineering & Contractors Inc., Superior
Engineering Corp. of their respective debts and obligations
arising out of their respective contracting activities in State of
Utah.
100. Guarantee Agreement by Parent of D&S Contractors with Hargmead
Ltd. and Kier Build Ltd. in the nature of a Performance Guarantee.
101. Guarantee by Parent to Young's Engineering Holding, Ltd. ("YEH") to
indemnify it in respect of 50% of its indemnification obligation
under a Performance Bond in favor of Gammon-Paul Joint Venture ("Main
Contractor") under contract in which joint venture of YEH and D&S are
performing work.
102. Guarantee by Parent of contract between Forest Electric Corp. and
Turner Construction Company for New York Mercantile Exchange.
103. University letter to Connecticut General Life Insurance Company
agreeing to take all steps reasonably within its power to assure that
University Cogeneration Inc. (i) continues to have a minimum net
worth of at least $5,000,000 and (ii) applies its resources to pay
its debt and other obligations as they become due.
104. The information contained in Schedules 7.10 and 7.11 is hereby
incorporated herein by reference.
<PAGE>
SCHEDULE
INVESTMENTS, LOANS AND ADVANCES
<TABLE>
<CAPTION>
AMOUNT OF PAYEE
INVESTMENTS INVESTMENT OR HOLDER
----------- ---------- ---------
<S><C> <C> <C>
1. Unique Construction 49% stock interest Gibson Electric
Company Cost $206,000 Co., Inc.
2 Bonds held for retention $1,000,000 aggregate Welsbach Electric
principal amount Corp.
3. State of Israel Bonds $60,000 aggregate Welsbach Electric
principal amount Corp.
4. State of Israel Bonds $200,000 aggregate Forest Electric
principal amount Corp.
5. Morton Hoffman Mortgage $116,000, unpaid Forest Electric
Note principal amount Corp.
6. New York City Bonds held $638,000 aggregate Forest Electric
for retention principal amount Corp.
7. Alan Fox Mortgage Note $466,000 Forest Electric
unpaid principal amount Corp.
8. Skyview Co-Op Mortgage $26,000 Forest Electric
Receivable Corp.
9. Joseph DiSanti $331,000, unpaid Forest Electric
Mortgage Note principal amount, $0 Corp.
current book balance
10.Meli Borelli Associates, $162,000, unpaid EMCOR Penguin Air
Inc. Note principal amount Conditioning
11.Note made by Nassau $61,000, unpaid Forest Electric
Street Partnership principal amount Corp.
12.Limited Partnership $113,217 current book Forest Electric
Interest in Nassau balance Corp.
Street Partners
13.Limited Partnership ($89,575) current book Forest Electric
Interest in Astoria balance Corp.
Studios
14.Note made by C. Thomas $50,000, unpaid EMCOR
Taylor principal amount, $0
current book balance
15.Note made by MI $76,000 current book EMCOR Midwest
Investments value
(Huen), Inc.
16.Riverdale Apartment Co-op 315 Shares Forest Electric
Stock Corp.
17.Note made by Hoffman $125,469 unpaid Gibson Electric
Homes principal amount, Co., Inc. and
$25,000 current book Sutter Hill
balance Industries, Inc.,
d/b/a
EMCOR Residential
Services
18.Contingent Note made by $923,000 unpaid University
Huntington Partners principal amount Industries
19.J. DiSanti Concrete Inc. 2,500 shares of EMCOR
preferred stock
</TABLE>
<PAGE>
NEWS RELEASE
EXHIBIT 99
FOR IMMEDIATE RELEASE
CONTACT: Joseph W. Barnett
Vice Pres./Communications
EMCOR Group, Inc.
(203) 849-7812
- ------------------------------------------------------------------------------
EMCOR GROUP, INC. INCREASES AND
REFINANCES ITS REVOLVING CREDIT FACILITY
- ------------------------------------------------------------------------------
NORWALK, CONNECTICUT, June 21, 1996 -- EMCOR Group, Inc. (NASDAQ: EMCG)
announced today that is has entered into a credit agreement with Harris Trust
and Savings Bank to provide EMCOR with up to a $100,000,000 credit facility for
a three year period. Under the terms of the credit facility, $50 million of
borrowing capacity is immediately available. The remaining borrowing capacity is
subject to the receipt of additional commitments from other banks, an earnings
test and consents of bonding companies providing surety bonds to EMCOR's
Canadian and United Kingdom subsidiaries.
All outstanding indebtedness under EMCOR's existing $45 million credit
facilities was repaid in full, and those agreements were terminated.
Frank T. MacInnis, Chairman of the Board and President of EMCOR, stated he was
pleased that the Company was successful in obtaining a long-term credit facility
that will assist the Company in realizing its growth opportunities in 1996 and
beyond.
EMCOR Group, Inc. is a worldwide leader in mechanical/electrical construction
and facilities management services.
- --------
1 Include only quarterly.
2 Designated Foreign Restricted Subsidiaries.
