EXHIBIT 10.37
CREDIT AGREEMENT
$3,000,000.00 REVOLVING CREDIT LOAN
$12,000,000.00 ADVANCING ACQUISITION LINE OF CREDIT LOAN
$20,000,000.00 TERM LOAN
AMONG
GROUP MAINTENANCE AMERICA CORP.,
AS THE COMPANY,
THE SUBSIDIARIES OF THE COMPANY
LISTED AS GUARANTORS HEREIN
AND
TEXAS COMMERCE BANK NATIONAL ASSOCIATION,
AS THE AGENT
AND
THE BANKS NAMED HEREIN
DATED AS OF MAY 2, 1997
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION................ 1
SECTION 1.01. Definitions................................... 1
SECTION 1.02. Types of Advances............................. 15
SECTION 1.03. Accounting Terms.............................. 15
SECTION 1.04. Schedules..................................... 15
ARTICLE II THE LOANS..................................................... 16
SECTION 2.01. The Loans..................................... 16
SECTION 2.02. The Notes..................................... 17
SECTION 2.03. Notice of Advance............................. 17
SECTION 2.04. Disbursement of Funds for Loans............... 17
SECTION 2.05. Conversions and Continuances.................. 18
SECTION 2.06. Voluntary Prepayments......................... 18
SECTION 2.07. Mandatory Repayments.......................... 18
SECTION 2.08. Method and Place of Payment................... 19
SECTION 2.09. Pro Rata Advances............................. 19
SECTION 2.10. Interest...................................... 19
SECTION 2.11. Interest Periods.............................. 21
SECTION 2.12. Interest Rate Not Ascertainable............... 22
SECTION 2.13. Change in Legality............................ 22
SECTION 2.14. Increased Costs, Taxes or Capital
Adequacy Requirements........................ 23
SECTION 2.15. Eurodollar Advance Prepayment and Default
Penalties................................... 24
SECTION 2.16. Voluntary Reduction of Commitment............. 25
SECTION 2.17. Tax Forms..................................... 25
ARTICLE III FEES.......................................................... 25
SECTION 3.01. Fees........................................ 25
ARTICLE IV CONDITIONS PRECEDENT.......................................... 26
SECTION 4.01. Conditions Pracedent to the Initial Advance... 26
SECTION 4.02. Conditions Precedent to All Credit Events..... 28
SECTION 4.03. Advances Under the Acquisition Loan
Commitment................................... 29
SECTION 4.04. Delivery of Documents......................... 30
ARTICLE V REPRESENTATIONS AND WARRANTIES................................ 30
SECTION 5.01. Organization and Qualification................ 30
SECTION 5.02. Authorization and Validity.................... 30
SECTION 5.03. Governmental Consents......................... 31
SECTION 5.04. Conflicting or Adverse Agreements or
Restrictions................................. 31
SECTION 5.05. Title to Assets............................... 31
SECTION 5.06. Litigation.................................... 31
SECTION 5.07. Financial Statements.......................... 31
SECTION 5.08. Default....................................... 32
SECTION 5.09. Investment Company Act........................ 32
SECTION 5.10. Public Utility Holding Company Act............ 32
SECTION 5.11. ERISA......................................... 32
SECTION 5.12. Tax Returns and Payments...................... 32
SECTION 5.13. Environmental Matters......................... 32
SECTION 5.14. Purpose of Loans.............................. 33
SECTION 5.15. Franchises and Other Rights................... 34
SECTION 5.16. Subsidiaries and Assets....................... 34
SECTION 5.17. Solvency...................................... 34
ARTICLE VI AFFIRMATIVE COVENANTS......................................... 34
SECTION 6.01. Information Covenants......................... 34
SECTION 6.02. Books, Records and Inspections................ 36
SECTION 6.03. Insurance and Maintenance of Properties....... 36
SECTION 6.04. Payment of Taxes.............................. 37
SECTION 6.05. Corporate Existence........................... 37
SECTION 6.06. Compliance with Statutes...................... 37
SECTION 6.07. ERISA......................................... 37
SECTION 6.08. Additional Subsidiaries....................... 38
ARTICLE VII NEGATIVE COVENANTS............................................ 38
SECTION 7.01. Change in Business............................ 38
SECTION 7.02. Consolidation, Merger or Sale of Assets....... 38
SECTION 7.03. Indebtedness.................................. 38
SECTION 7.04. Liens......................................... 40
SECTION 7.05. Investments................................... 40
SECTION 7.06. Restricted Payments........................... 41
SECTION 7.07. Change in Accounting.......................... 41
SECTION 7.08. Certain Indebtedness.......................... 42
SECTION 7.09. Transactions with Affiliates.................. 42
SECTION 7.10. Consolidated Net Worth........................ 42
SECTION 7.11. Funded Debt to Adjusted EBITDA Ratio.......... 42
SECTION 7.12. Total Funded Debt to Consolidated Net
Worth Ratio................................. 42
SECTION 7.13. Capital Expenditures.......................... 42
SECTION 7.14. Fixed Charge Coverage Ratio................... 42
SECTION 7.15. Subscription Agreement........................ 42
ARTICLE VIII GUARANTY...................................................... 43
SECTION 8.01. Guaranty...................................... 43
SECTION 8.02. Continuing Guaranty........................... 43
SECTION 8.03. Effect of Debtor Relief Laws.................. 44
SECTION 8.04. Waiver of Subrogation......................... 45
SECTION 8.05. Subordination................................. 45
SECTION 8.06. Waiver........................................ 46
SECTION 8.07. Full Force and Effect......................... 46
ARTICLE IX EVENTS OF DEFAULT AND REMEDIES................................ 47
SECTION 9.01. Events of Default............................. 47
SECTION 9.02. Primary Remedies.............................. 48
SECTION 9.03. Other Remedies................................ 48
ARTICLE X THE AGENT.................................................... 49
SECTION 10.01. Authorization and Action...................... 49
SECTION 10.02. Agent's Reliance.............................. 49
SECTION 10.03. Agent and Affiliates; TCB and Affiliates...... 50
SECTION 10.04. Bank Credit Decision.......................... 51
SECTION 10.05. Agent's Indemnity............................. 51
SECTION 10.06. Successor Agent............................... 51
SECTION 10.07. Notice of Default............................. 52
ARTICLE XI MISCELLANEOUS................................................. 52
SECTION 11.01. Amendments.................................... 52
SECTION 11.02. Notices....................................... 53
SECTION 11.03. No Waiver; Remedies........................... 54
SECTION 11.04. Costs, Expenses and Taxes..................... 54
SECTION 11.05. Release and Indemnity......................... 54
SECTION 11.06. Right of Setoff............................... 55
SECTION 11.07. Governing Law................................. 55
SECTION 11.08. Interest...................................... 56
SECTION 11.09. Survival of Representations and Warranties.... 57
SECTION 11.10. Successors and Assigns; Participations........ 57
SECTION 11.11. Confidentiality............................... 58
SECTION 11.12. Pro Rata Treatment............................ 58
SECTION 11.13. Separability.................................. 59
SECTION 11.14. Execution in Counterparts..................... 59
SECTION 11.15. Interpretation................................ 59
SECTION 11.16. Submission to Jurisdiction.................... 60
SECTION 11.17. Waiver of Jury Trial.......................... 61
SECTION 11.18. Final Agreement of the Parties................ 61
Exhibits and Schedules:
Exhibit 1.01 Form of Borrowing Base Certificate
Exhibit 1.01A Administrative Questionnaire
Exhibit 1.01B Amendment to Subscription Agreement
Exhibit 1.01C Florida Real Estate
Exhibit 1.01D Subscription Agreement
Exhibit 2.02(a) Form of Revolving Credit Note
Exhibit 2.02(b) Form of Term Note
Exhibit 2.02(c) Form of Acquisition Note
Exhibit 2.03 Form of Notice of Advance
Exhibit 2.05 Form of Notice of Conversion
Exhibit 4.01(h)(i) Form of Security Agreement
Exhibit 4.01(h)(ii) Form of Pledge Agreement
Exhibit 4.01(k) Form of Opinion of Borrower's Counsel
Exhibit 7.03(p) Preferred Stock Indebtedness
Exhibit 11.10(c) Form of Assignment and Acceptance
Schedule 5.04 Agreements
Schedule 5.06 Litigation
Schedule 5.13 Exceptions to Environmental Matters
Schedule 5.16 Subsidiaries
Schedule 6.03 Existing Insurance Policies
Schedule 7.03(b) Existing Indebtedness
Schedule 7.04(a) Existing Liens
Schedule 7.05(b) Investments
CREDIT AGREEMENT
This CREDIT AGREEMENT dated as of May 2, 1997 (this "Agreement") is
among GROUP MAINTENANCE AMERICA CORP., a Texas corporation (the "Company"), the
Subsidiaries of the Company listed on the signature pages hereto as Guarantors
(together with each other person who subsequently becomes a Guarantor,
collectively the "Guarantors"), the banks and other financial institutions
listed on the signature pages hereto under the caption "Banks" (together with
each other person who becomes a Bank, collectively the "Banks") and TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, individually as a Bank ("TCB") and as agent
for the other Banks (in such capacity together with any other Person who becomes
the agent, the "Agent").
The Company has requested that the Banks provide the Company with a
credit facility, pursuant to which the Banks will commit to make a revolving
credit loan of up to $3,000,000.00 to the Company for use as working capital and
in connection with the acquisition of Airtron, Inc., a $20,000,000.00 term loan
to finance the acquisition of Airtron, Inc., and a $12,000,000.00 acquisition
line of credit to finance the acquisition of stock of Qualified Companies as
defined in Section 1.01.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the Company, the Agent, the Guarantors, and the
Banks agree as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
Section 1.0. Definitions. As used in this Agreement, the following
terms shall have the following meanings:
"Accounts" means all accounts, accounts receivable or other
indebtedness owing to the Company or any Guarantor as consideration for goods
sold or services rendered billed within thirty (30) days of the providing of
such goods or services.
"Acquisition Loan" has the meaning specified in Section 2.01(c).
"Acquisition Loan Advance Termination Date" means October 31, 1998.
"Acquisition Loan Commitment" means that portion of the Commitment
that relates to the Acquisition Loan.
"Acquisition Loan Maturity Date" means April 30, 2003.
"Acquisition Note" has the meaning specified in Section 2.02.
"Adjusted EBITDA" means EBITDA plus historical expenses of acquisition
targets which (i) in the reasonable determination of each of the Banks for all
acquisitions made prior to July 31, 1997 and (ii) thereafter, in the sole
discretion of the Agent, will terminate as a result of the acquisition of said
target or otherwise.
"Administrative Questionnaire" means the questionnaire attached hereto
as Exhibit 1.01A to be completed by each Bank and returned to the Agent.
"Advance" means an advance, pursuant to a Notice of Advance, comprised
of a single Type of Loan from all the Banks (or resulting from a conversion or
conversions on the same date having, in the case of Eurodollar Rate Advances,
the same Interest Period (except as otherwise provided in this Agreement)), made
by all of the Banks concurrently to the Company.
"Advance Date" means, with respect to each Advance, the Business Day
upon which the proceeds of such Advance are to be made available to the Company.
"Affiliate" means any other Person directly or indirectly controlling
(including all directors and officers of such Person), controlled by, or under
direct or indirect common control with such Person, and any other Person in
which such Person's direct or indirect equity interest is 10% or more of the
total outstanding equity interests of such Person and any immediate family
member (parent, spouse or child) and all spouses of said Persons.
"Agent" has the meaning specified in the introduction to this
Agreement.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Airtron" means Airtron, Inc., a Delaware corporation the stock of
which is being acquired by the Company simultaneously herewith.
"Alternate Base Rate" means, for any date, a rate per annum (rounded
upwards, if necessary, to the next 1/16 of 1%) equal to the greater of (a) the
Federal Funds Effective Rate in effect on such day plus 1/2 of 1% and (b) the
Prime Rate in effect on such day. For purposes hereof, the term "Prime Rate"
means, as of a particular date, the prime rate of TCB most recently announced by
TCB and in effect on such date, automatically fluctuating upward or downward, as
the case may be, with and at the time of each change therein without notice to
the Company or any other Person, which prime rate may not necessarily represent
the lowest or best rate actually charged to a customer. "Federal Funds Effective
Rate" means, for any day, the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) by the Federal Reserve Bank
of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by the Agent from three federal funds
brokers of recognized standing selected by it. If, for any reason, the Agent
shall have determined (which determination shall be conclusive absent manifest
error) that it is unable to ascertain the Federal Funds Effective Rate,
including the inability or failure of the Agent to obtain sufficient quotations
in accordance with the terms hereof, the Alternate Base Rate shall be determined
without regard to clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Advance" means any Advance bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"Amendment to Subscription Agreement" means that certain Amendment to
Subscription Agreement and Consent to Assignment, substantially in the form of
Exhibit 1.01B, executed by the Company and Xxxxxx Xxxx, an individual residing
in Houston, Xxxxxx County, Texas.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of an Alternate Base Rate Advance and
such Bank's Eurodollar Lending Office in the case of a Eurodollar Rate Advance.
"Assignment and Acceptance" has the meaning specified in Section
11.10(c).
"Bank" has the meaning provided in the introduction to this Agreement.
"Bankruptcy Code" has the meaning specified in Section 9.01(e).
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Borrowing Base" means an amount equal to 70% of the Eligible
Accounts.
"Borrowing Base Certificate" means a certificate calculating the
Borrowing Base, substantially in the form of Exhibit 1.01.
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas) on which most banks are open for
business in Houston, Texas.
"Capitalized Lease Obligations" means all lease or rental obligations
which, pursuant to GAAP, are capitalized for balance sheet purposes.
"Change of Control" means either (i) any Unrelated Person, or two or
more Unrelated Persons acting in concert, acquire after the date hereof
beneficial ownership of 50% or more of the shares of voting stock of the Company
outstanding at the time of such acquisition, or (ii) all or substantially all of
the assets of the Company are sold after the date hereof in a single transaction
or series of related transactions to any Persons, if the effect of such
transaction or transactions is to change the Persons controlling the Company.
The term "Unrelated Person" shall mean any Person other than a Related Person. A
"Related Person" shall mean (i) Xxxxxx Xxxx, (ii) any Person that acquires at
any time any stock of the Company in connection with or pursuant to the
Company's acquisition of Airtron, (iii) any estate, executor, administrator,
immediate family member, or trust or trustee if such trust is, or such trustee
acts, for the benefit of such Person or his or her immediate family member or
members, if such estate, executor, immediate family member, trust or trustee
acquires stock of the Company from any Related Person, (iv) any Plan or trust
for any Plan, and (v) any wholly-owned Subsidiary of the Company. Any Person who
is a party to any stockholders' agreement shall not be considered to be acting
in concert with any other party thereto merely because such Person is a party
thereto.
"Code" means the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"Collateral" means all, or substantially all, of the assets of the
Company and its material Subsidiaries, real and personal, tangible and
intangible, all as more fully described in the Security Documents, but excluding
the Florida Real Estate until October 31, 1997 and excluding leasehold
interests.
"Commitment" and "Commitments"means the obligation of each of the
Banks to enter into and perform this Agreement, to make available the Loans to
the Company in the amounts shown on the signature page of each Bank hereto for
each Type of Loan and all other duties and obligations of the Banks hereunder.
"Commitment Fee" has the meaning specified in Section 3.01(b).
"Company" has the meaning specified in the introduction to this
Agreement.
"Consolidated Net Worth" means total assets (exclusive of any unfunded
portion of the Subscription Agreement) minus total liabilities.
"Conversion" or "Convert" (in each case whether or not capitalized)
means the changing of a Eurodollar Rate Advance to an Alternate Base Rate
Advance or vice versa in accordance with the provisions hereof.
""Credit Event" means the making of any Advance or the conversion of
any Advance into a Eurodollar Rate Advance.
"Default" means the occurrence of any event which with or without the
giving of notice or the passage of time or both would become an Event of
Default.
"Default Rate" means the lesser of (i) the Highest Lawful Rate and
(ii) the Alternate Base Rate plus two percent (2%).
"Designated Payment Date" means February 28, May 31, August 31 and
November 30 of each year; provided, however, if a Designated Payment Date shall
be a day which is not a Business Day, such Designated Payment Date shall be the
next succeeding Business Day, and such extension of time shall be included in
determining the amount to be paid on such date.
"Domestic Lending Office" means, with respect to any Bank, the office
of such Bank designated from time to time as its "Domestic Lending Office"
hereunder.
"EBITDA" means, for any period, the consolidated pre-tax income for
such period, plus the aggregate amount which was deducted for such period in
determining such consolidated, pre-tax income in respect of interest expense
(including amortization of debt discount, imputed interest and capitalized
interest), plus depreciation and amortization, plus income attributable to any
minority interest in any Person, for so long as said Person remains a Guarantor,
provided, the calculations of EBITDA for the period up to and including October
31, 1997, but not thereafter, shall not include any general and administrative
expenses of the Company, up to a maximum of $1,000,000.00, to the extent of
amounts paid by Xxxxxx Xxxx to the Company under the Subscription Agreement
after the Execution Date, provided further, however, such payments shall not
constitute an asset of, or equity in, the Company until October 31, 1997 for
purposes of the calculations in Sections 7.10 and 7.12.
"Effective Date" means the date on which all conditions to make an
Advance set forth in Section 4.01 are first met or waived in accordance with
Section 11.01 hereof.
"Eligible Accounts" means any Account which meets all of the following
criteria on the date of determination:
(i) is owned by the Company or a Subsidiary of the Company
which is a Guarantor, arising in the ordinary course of business;
(ii) is not more than ninety (90) days old from the original
invoice date;
(iii) has not been challenged by the obligor thereon beyond the
extent herein provided;
(iv) in respect of which no notice of the bankruptcy, insolvency
or dissolution of the obligor thereon is known to the Company;
(v) is not owed by (i) a foreign Person unless supported by a
letter of credit or other insurance satisfactory to the Agent, (ii)
the United States government or (iii) any Affiliate of the Company or
of any Subsidiary of the Company;
(vi) is not owed by an obligor that has 20% or more of its
aggregate accounts payable to the Company more than 90 days old (but
amounts that are more than 90 days old solely as a result of contract
retention requirements shall be considered to be not more than 90 days
old); and
(vii) is not subject to set-off, counterclaim, or deduction of
any kind beyond the extent herein; provided that if any Account is
subject to a claim of any third party or is subject to set-off,
counterclaim or deduction by the account debtor, the amount of such
Account included within the term "Eligible Accounts" shall be net of
the amount of such claim, set-off, counterclaim or deduction;
provided, further, if more than twenty-five percent (25%) of the
Accounts owed by any particular obligor are being challenged by such
obligor, then no such Accounts owed by such obligor shall be
considered Eligible Accounts.
"Eligible Assignee" means (a) any Bank; (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $1,000,000,000.00; (c) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development or any successor organization, or a
political subdivision of any such country, and having total assets in excess of
$1,000,000,000.00; provided that such bank is acting through a branch or agency
located in the country in which it is organized or another country which is also
a member of the Organization for Economic Cooperation and Development or any
successor organization; (d) the central bank of any country which is a member of
the Organization for Economic Cooperation and Development or any successor
organization; and (e) any other bank or similar financial institution approved
by the Agent and the Majority Banks.
"Environmental Laws" means federal, state or local laws, rules or
regulations, and any judicial, arbitral or administrative interpretations
thereof, including any judicial, arbitral or administrative order, judgment,
permit, approval, decision or determination pertaining to conservation or
protection of the environment as in effect and enforceable against the Company
or any of its Subsidiaries at the time in question, including the Clean Air Act,
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA"), the Federal Water Pollution Control Act, the Occupational Safety and
Health Act, the Resource Conservation and Recovery Act, the Safe Drinking Water
Act, the Toxic Substances Control Act, the Superfund Amendment and
Reauthorization Act of 1986, the Hazardous Materials Transportation Act, and
comparable state and local laws, and other environmental conservation and
protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is either a member of the same "controlled group" or under
"common control," within the meaning of Section 414 of the Code and the
regulations thereunder, with the Company.
"Eurocurrency Liabilities" has the meaning specified in Regulation D
as in effect from time to time.
"Eurodollar Lending Office" means, with respect to each Bank, the
branches or affiliates of such Bank designated as its "Eurodollar Lending
Office" from time to time hereunder.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Advance,
the rate (rounded to 1\16 of 1%) at which dollar deposits approximately equal in
principal amount to the entire portion of such Advance and for a maturity equal
to the applicable Interest Period are offered in immediately available funds to
the Agent by prime banks in whatever Eurodollar interbank market may be selected
by the Agent in its sole and absolute discretion at the time of determination
and in accordance with the then usual practice in such market at approximately
10:00 a.m. (Houston, Texas time) two Business Days prior to the commencement of
such Interest Period.
"Eurodollar Rate Advance" means any Advance bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the provisions
of Article II.
"Events of Default" has the meaning specified in Section 9.01.
"Excess Cash Flow" means, for any period, EBITDA of Airtron less (a)
the following items in respect of Airtron (but not the Company on a consolidated
basis): cash taxes actually paid, cash interest expense, and capital
expenditures permitted by Section 7.13 hereof and (b) mandatory and optional
principal payments on the Term Loan permitted hereby.
"Execution Date" means May 2, 1997.
"Federal Funds Effective Rate" has the meaning specified in the
definition of the term "Alternate Base Rate."
"Fees" has the meaning specified in Section 3.01.
"Financials" has the meaning specified in Section 5.07.
"Florida Real Estate" means the property described on Exhibit 1.01C
hereto.
"Funded Debt" means all indebtedness for borrowed money evidenced by a
written document and subject to periodic, required payments of interest and/or
principal.
"GAAP" means generally accepted accounting principles as in effect
from time to time as set forth in the opinions, statements and pronouncements of
the Accounting Principles Board of the American Institute of Certified Public
Accountants, the Financial Accounting Standards Board and such other Persons who
shall be approved by a significant segment of the accounting profession and
concurred in by the independent certified public accountants certifying any
audited financial statements of the Company.
"Guaranteed Obligations" has the meaning specified in Section 8.01.
"Guarantors" has the meaning provided in the introduction to this
Agreement and, except as otherwise agreed by the Majority Banks and the Company,
shall include all of the domestic Subsidiaries of the Company.
"Guaranty" means the obligations contained in Article VIII hereof.
"Hazardous Materials" means (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable federal,
state or local law or regulation, (b) hazardous substances, as defined in
CERCLA, or in any applicable state or local law or regulation, (c) gasoline, or
any other petroleum product or by-product, (d) toxic substances, as defined in
the Toxic Substances Control Act of 1976, or in any applicable federal, state or
local law or regulation or (e) insecticides, fungicides, or rodenticides, as
defined in the Federal Insecticide, Fungicide, and Rodenticide Act of 1975, or
in any applicable federal, state or local law or regulation, as each such Act,
statute or regulation may be amended from time to time.
"Highest Lawful Rate" means, as to any Bank, the maximum nonusurious
rate of interest that, under applicable law, may be contracted for, taken,
reserved, charged or received by such Bank on the Loans or under the Loan
Documents at any time or from time to time. If the maximum rate of interest
which, under applicable law, any of the Banks are permitted to charge the
Company on the Loans shall change after the date hereof, to the extent permitted
by applicable law, the Highest Lawful Rate shall be automatically increased or
decreased, as the case may be, as of the effective time of such change without
notice to the Company or any other Person.
"Indebtedness" means, without duplication, (a) all indebtedness for
borrowed money (whether by loan or the issuance and sale of debt securities) or
for the deferred purchase price of property or services, (b) all indebtedness
created or arising under any conditional sale or other title retention agreement
with respect to property, (c) all Capitalized Lease Obligations, (d) all
guaranties, hedge or swap agreements or other contingent liabilities of any kind
(including letter of credit reimbursement obligations) and (e) all other
indebtedness, to the extent it would constitute a liability on a balance sheet
prepared in accordance with GAAP
or would be disclosed as a contingent liability in a footnote to financial
statements of such Person prepared in accordance with GAAP.
"Interest Period" has the meaning specified in Section 2.11.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of the assets, stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such Person to any other Person, and any other item
which would be classified as an "investment" on a balance sheet of such Person,
including any direct or indirect contribution by such Person of property or
assets to a joint venture, partnership or other business entity in which such
Person retains an interest but shall not include demand deposits.
"Lien" means, when used with respect to any Person, any mortgage,
lien, charge, pledge, security interest or encumbrance of any kind (whether
voluntary or involuntary and whether imposed or created by operation of law or
otherwise) upon, or pledge of, any of its property or assets, whether now owned
or hereafter acquired, any capital lease in the nature of the foregoing, any
conditional sale agreement or other title retention agreement, in each case, for
the purpose, or having the effect, of protecting a creditor against loss or
securing the payment or performance of an obligation.
"Loan" and "Loans" means the Term Loan, the Acquisition Loan and the
Revolving Credit Loan.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Notice of Advance, the corporate resolutions authorizing the Loan
Documents and the Borrowing Base Certificate.
"Majority Banks" means Banks holding at least 66% of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks holding
such percentage of the Total Commitment.
"Margin" means the positive or negative percentage determined in
accordance with the following table:
Funded Debt/ Adjusted
EBITDA Ratio 2.25 or Higher 1.75 - 2.25 1.75 or Lower
------------ -------------- ----------- -------------
Alternate Base Rate
Margin 0% -.25% -.5%
Eurodollar Margin Not Available 2% 1.75%
If sufficient information does not exist to calculate the Margin,
Eurodollar Rate Advances shall not be available to the Company and the Margin
for Alternate Base Rate Advances shall be deemed to be 0%.
"Margin Period" means a period commencing on the date on which the
quarterly or annual financial statements of the Company are required to be
delivered pursuant to Section 6.01(a) or Section 6.01(b), as the case may be,
and ending on the next date a financial statement is required to be so
delivered.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), (a) a material adverse
effect on the financial condition, business or operations of the Company and its
Subsidiaries taken as a whole or (b) a material impairment of the collective
ability of the Company and its Subsidiaries taken as a whole to make payment
hereunder or under any Note or the right of any Bank to enforce any of its
remedies to collect any amounts owing under the Loan Documents.
"Maximum Guaranteed Amount" means for each Guarantor the maximum
amount which any Guarantor could pay under the Guaranty without having such
payment set aside as a fraudulent transfer or conveyance or similar action under
the Bankruptcy Code or any applicable state or foreign law.
"Multiemployer Plan" means any plan which is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"Note" and "Notes" have the meaning specified in Section 2.02 and
include the Revolving Credit Notes, the Acquisition Notes and the Term Notes.
"Notice of Advance" has the meaning provided in Section 2.03(a).
"Notice of Conversion" has the meaning provided in Section 2.05.
"Notice of Default" has the meaning specified in Section 9.02.
"Obligations" means all the obligations of the Company now or
hereafter existing under the Loan Documents, whether for principal, interest,
Fees, expenses, indemnification or otherwise.
"Other Activities" has the meaning specified in Section 10.03.
"Other Financings" has the meaning specified in Section 10.03.
"Payment Office" means the office of the Agent located at 0000 Xxxxxx
Xxxxxx, Xxxxxxx, Xxxxx 00000, or such other office as the Agent may hereafter
designate in writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or any of its functions under ERISA.
"Permitted Investments" means, as to any Person:
(a) securities issued or directly and fully guaranteed or insured
by the United States or any agency or instrumentality thereof
(provided that the full faith and credit of the United States is
pledged in support thereof) having maturities of not more than twelve
months from the date of acquisition thereof,
(b) time deposits and certificates of deposit with maturities of
not more than twelve months from the date of acquisition by such
Person which deposits or certificates are either: (a) fully insured by
the Federal Deposit Insurance Corporation or (b) in any Bank or other
commercial bank incorporated in the United States or any U.S. branch
of any other commercial bank, in each case having capital, surplus and
undivided profits aggregating $100,000,000.00 or more with a long-term
unsecured debt rating of at least A- from Standard & Poor's Ratings
Group or A3 from Xxxxx'x Investors Service,
(c) commercial paper issued by any Person incorporated in the
United States rated at least A2 or the equivalent thereof by Standard
& Poor's Ratings Group or at least P2 or the equivalent thereof by
Xxxxx'x Investors Service and, in each case, maturing not more than
270 days after the date of issuance,
(d) investments in money market mutual funds having assets in
excess of $2,000,000,000.00 substantially all of whose assets are
comprised of securities of the types described in clauses (a) through
(c) above, and
(e) repurchase or reverse purchase agreements respecting
obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into
with any bank listed in or meeting the qualifications specified in
clause (b) above.
"Permitted Liens" shall mean: (a) Liens for taxes, assessments, levies
or other governmental charges not yet due or which are being contested in good
faith by appropriate proceedings and for which adequate reserves are maintained
in accordance with GAAP; (b) Liens in connection with worker's compensation,
unemployment insurance or other social security, old age pension or public
liability obligations not yet due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves are maintained in
accordance with GAAP; (c) operator's, vendors', carriers', warehousemen's,
repairmen's, mechanics', workers', materialmen's or other like Liens arising by
operation of law in the ordinary course of business (or deposits to obtain the
release of any such Lien) and securing amounts of $50,000.00 or less or amounts
not yet due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves are maintained in accordance with
GAAP; (d) deposits to secure insurance in the ordinary course of business; (e)
deposits and other Liens to secure the performance of bids, tenders, contracts
(other than contracts for the payment of indebtedness for borrowed money or the
deferred purchase price of goods or services), leases, licenses, franchises,
trade contracts, statutory obligations, surety and appeal bonds and performance
bonds and other obligations of a like nature incurred in the ordinary course of
business; (f) easements, rights of way, covenants, restrictions, reservations,
exceptions, encroachments, zoning and similar restrictions and other similar
encumbrances (other than to secure the payment of indebtedness for borrowed
money or the deferred purchase price of goods or services) or title defects, in
each case incurred in the ordinary course of business which, in the aggregate,
are not substantial in amount, and which do not in any case singly or in the
aggregate materially detract from the value or usefulness of the Property
subject thereto for the business conducted by the Company and its Subsidiaries
or materially interfere with the ordinary conduct of the business of the Company
and its Subsidiaries; (g) bankers' liens arising by operation of law; (h)
inchoate Liens arising under ERISA to secure contingent liabilities of the
Company and its Subsidiaries; (i) landlord's liens that are subordinated to the
liens in favor of the Agent, unless waived by the Agent; (j) Liens on assets of
Subsidiaries to secure indebtedness to the Company provided same are
collaterally assigned to the Agent, provided further, such Liens may be incurred
only to the extent the underlying Indebtedness is otherwise permitted under the
terms of this Agreement; and (k) liens on the right to rebates of prepaid
insurance premiums financed by third parties on behalf of the Company or any of
its Subsidiaries to secure up to $500,000.00 outstanding at any time of
Indebtedness incurred pursuant to Section 7.03(n) with respect to the repayment
of amounts so paid on behalf of the Company or any of its Subsidiaries.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign or
domestic state or political subdivision thereof or any agency of such state or
subdivision.
"Plan" means any employee pension benefit plan (as defined in Section
3(2) of ERISA), subject to Title IV of ERISA or Section 412 of the Code, other
than a Multiemployer Plan, with respect to which the Company or an ERISA
Affiliate contributes or has an obligation or liability to contribute, including
any such plan that may have been terminated.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time, be
prescribed by law and which, pursuant to applicable provisions of the Code or an
income tax treaty between the United States and the country of residence of the
Bank providing the form(s) or statement(s), permit
each of the Company and the Agent to make payments hereunder for the account of
such Bank free of deduction or withholding of income and other taxes.
"Property" or "assets" (whether or not capitalized) means any interest
in any kind of property or asset, whether real, personal or mixed, or tangible
or intangible.
"Qualified Company" means any Person in the residential or commercial
service industry whose primary business is to provide residential or commercial
services, consisting of heating, ventilation and air conditioning, indoor air
quality, plumbing, appliance, electrical, septic, or sewer repair,
reinstallation and maintenance services.
"Regulations A, D, G, T, U and X" means Regulations A, D, G, T, U and
X of the Board as the same are from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or disposing into
the environment (including the abandonment or discarding of barrels, containers
and other closed receptacles).
"Reportable Event" means an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement has not
been waived by the PBGC.
"Requirements of Environmental Laws" means, as to any Person, the
requirements of any applicable Environmental Law relating to or affecting such
Person or the condition or operation of such Person's business or its
properties, both real and personal.
"Reserve Percentage" means, for any Interest Period and for any Bank,
the reserve percentage applicable during such Interest Period under regulations
issued from time to time by the Board (or if more than one such percentage is so
applicable, the daily average for such percentages for those days in such
Interest Period during which any such percentage shall be so applicable) for
determining the maximum reserve requirement (including any marginal,
supplemental or emergency reserves) for such Bank in respect of liabilities or
assets consisting of or including Eurocurrency Liabilities.
"Responsible Officer" means, with respect to the Company, the chairman
of the board of directors, president, any vice president, chief executive
officer, chief operating officer, treasurer or chief financial officer of the
Company.
"Revolving Credit Loan" has the meaning specified in Section 2.01(a).
"Revolving Credit Loan Commitment" means that portion of the
Commitment that relates to the Revolving Credit Loan.
"Revolving Credit Maturity Date" means October 31, 1998.
"Revolving Credit Note" has the meaning specified in Section 2.02.
"Security Documents" means the documents described in Section 4.01
(h), executed by the Company and its Subsidiaries in favor of TCB, as Agent, for
the benefit of the Banks, pursuant to the terms hereof.
"Subscription Agreement" means the Subscription Agreement between the
Company, a successor in interest to Maintenance Specialists of America, Inc) and
Xxxxxx Xxxx, an individual residing in Houston, Xxxxxx County, Texas, as
Subscriber dated October 24, 1996, substantially in the form of Exhibit 1.01D,
as amended from time to time.
"Subsidiary" means and includes, with respect to any Person, (a) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation (irrespective of whether or not at the time stock of any class or
classes of such corporation shall have or might have voting power by reason of
the happening of any contingency) is at the time owned by such Person, directly
or indirectly and (b) any partnership, association, joint venture or other
entity in which such Person, directly or indirectly, has greater than 50% of the
equity interest. Unless otherwise provided or the context otherwise requires,
the term "Subsidiary" or "Subsidiaries" shall mean a Subsidiary or Subsidiaries
of the Company.
"TCB" means Texas Commerce Bank National Association, 000 Xxxx Xxxxxx,
Xxxxxxx, Xxxxx 00000.
"Term Loan" has the meaning specified in Section 2.01(b).
"Term Loan Commitment" means that portion of the Commitment that
relates to the Term Loan.
"Term Loan Maturity Date" means April 30, 2003.
"Term Note" has the meaning specified in Section 2.02.
"Total Acquisition Loan Commitment" means the aggregate Acquisition
Loan Commitments for all Banks totaling a maximum of $12,000,000.00 for all
Banks.
"Total Commitment" means the sum of the Total Acquisition Loan
Commitment, the Total Revolving Credit Loan Commitment and the Total Term Loan
Commitment, totaling a maximum of $35,000,000.00 for all Banks.
"Total Revolving Credit Loan Commitment" means the aggregate Revolving
Credit Loan Commitments for all Banks totaling a maximum of $3,000,000.00.
"Total Term Loan Commitment" means the aggregate Term Loan Commitments
for all Banks, totaling a maximum of $20,000,000.00.
"Unutilized Revolving Loan Commitment" means the Total Revolving
Credit Loan Commitment less the outstanding Advances under the Revolving Credit
Loan.
"Unutilized Acquisition Loan Commitment" means the Total Acquisition
Loan Commitment less the Advances made under the Acquisition Loan at any time
(whether or not outstanding).
SECTION 1.02. Types of Advances. Advances and Loans hereunder are
distinguished by "Type". The Type of an Advance refers to the determination
whether such Advance is a Eurodollar Rate Advance or an Alternate Base Rate
Advance. The Type of a Loan refers to whether such Loan is a Term Loan, an
Acquisition Loan or a Revolving Credit Loan.
SECTION 1.03. Accounting Terms. All accounting terms not defined
herein shall be construed in accordance with GAAP, as applicable, and all
calculations required to be made hereunder and all financial information
required to be provided hereunder shall be done or prepared in accordance with
GAAP.
SECTION 1.04. Schedules. Schedules hereto may be updated by the
Company from time to time to reflect transactions and other matters not
prohibited by the Loan Documents.
ARTICLE II
THE LOANS
SECTION 2.01. The Loans. (a) The Revolving Credit Loans. Subject
to the terms and conditions hereof, each Bank severally agrees at any time and
from time to time on and after the Execution Date and prior to the Revolving
Credit Maturity Date, to make and maintain a revolving credit loan or loans
(each a "Revolving Credit Loan" and collectively, the "Revolving Credit Loans")
to the Company not to exceed at any time outstanding the maximum amount of its
Revolving Credit Loan Commitment, which Revolving Credit Loans (i) shall, at the
option of the Company, be made and maintained pursuant to one or more Advances
comprised of Alternate Base Rate Advances or Eurodollar Rate Advances; provided
that, except as otherwise specifically provided herein, all Advances made
simultaneously under the Revolving Credit Loan shall be of the same Type, (ii)
in the case of Eurodollar Rate Advances, shall be made in the minimum amount of
$300,000.00 and integral multiples of $100,000.00 and, in the case of Alternate
Base Rate Advances, in the minimum amount of $100,000.00 and integral multiples
thereof, or, in either case, in the remaining balance of the Revolving Credit
Loan Commitment, (iii) may be repaid and, so long as no Default or Event of
Default exists hereunder, reborrowed, at the option of the Company in accordance
with the provisions hereof, and (iv) shall, in the aggregate at any time
outstanding, not exceed the lesser of the Borrowing Base or the maximum total
amount of the Total Revolving Credit Loan Commitment. There shall be no further
Revolving Credit Advances after the Revolving Credit Maturity Date.
(b) The Term Loans. Subject to the terms and conditions hereof, each
Bank severally agrees to make a term loan (each a "Term Loan" and collectively
the "Term Loans") to the Company on the Effective Date, in the amount of its
Term Loan Commitment. There shall be no further Advances under the Term Loan
subsequent to the Effective Date. All conversions of the Term Loan shall be in
the minimum amount of $300,000.00.
(c) The Acquisition Loans. Subject to the terms and conditions
hereof, each Bank severally agrees to make an advancing acquisition loan (each
an "Acquisition Loan" and collectively, the "Acquisition Loans") to the Company,
up to the maximum amount of its Acquisition Loan Commitment, which Acquisition
Loans (i) shall, at the option of the Company, be made and maintained pursuant
to one or more Advances comprised of Alternate Base Rate Advances or Eurodollar
Rate Advances, provided that, except as otherwise specifically provided herein,
all Advances made simultaneously under the Acquisition Loan shall be of the same
Type, (ii) in the case of Eurodollar Rate Advances, shall be made in the minimum
amount of $300,000.00 and integral multiples of $100,000.00 or in the remaining
balance of the Acquisition Loan Commitment, (iii) so long as no Default or Event
of Default exists hereunder, may be advanced, but not reborrowed, in accordance
with the provisions hereof and for the purposes set forth herein, and (iv)
shall, in the aggregate, not exceed the maximum total amount of the Total
Acquisition Loan Commitment. There shall be no further Advances under the
Acquisition Loan after the Acquisition Loan Advance Termination Date.
SECTION 2.02. The Notes. Each of the Loans shall be evidenced by
Notes in favor of each Bank (individually a "Note" and collectively, the
"Notes"), substantially in the form of: (a) Exhibit 2.02(a) hereto for Revolving
Credit Notes (a "Revolving Credit Note"; (b) Exhibit 2.02(b) hereto for Term
Notes (a "Term Note"); and (c) Exhibit 2.02(c) hereto for Acquisition Notes (an
"Acquisition Note").
SECTION 2.03. Notice of Advance. (a) Whenever the Company desires
an Advance, it shall give written notice thereof (a "Notice of Advance") (or
telephonic notice promptly confirmed in writing) to the Agent (i) in the case of
an Alternate Base Rate Advance, not later than 10:00 a.m. (Houston, Texas time)
on the date of such Advance and (ii) in the case of a Eurodollar Rate Advance,
not later than 11:00 a.m. (Houston, Texas time) three Business Days prior to the
date of such Advance. Each Notice of Advance shall be irrevocable and shall be
in the form of Exhibit 2.03 hereto, specifying (i) the aggregate principal
amount of the Advance to be made, (ii) the date of such Advance (which shall be
a Business Day), (iii) whether it is to be an Alternate Base Rate Advance or a
Eurodollar Rate Advance and (iv) if the proposed Advance is to be a Eurodollar
Rate Advance, the initial Interest Period to be applicable thereto.
(b) The Agent shall promptly give the Banks written notice or
telephonic notice (promptly confirmed in writing) of each proposed Advance, of
each Bank's proportionate share thereof and of the other matters covered by each
Notice of Advance.
SECTION 2.04. Disbursement of Funds for Loans. (a) No later than
1:00 p.m. (Houston, Texas time) on any Advance Date for Loans, each Bank shall
make available its pro rata
portion of the amount of such Advance in U.S. dollars and in immediately
available funds at the Payment Office. At such time, the Agent shall credit the
amounts so received to the general deposit account of the Company maintained
with the Agent in immediately available funds.
(b) Unless the Agent shall have been notified by any Bank prior to
disbursement of the Advance by the Agent that such Bank does not intend to make
available to the Agent such Bank's portion of the Advance to be made on such
date, the Agent may assume that such Bank has made such amount available to the
Agent on such Advance Date and the Agent may, in reliance upon such assumption,
make available to the Company a corresponding amount. If such corresponding
amount is not in fact made available to the Agent by such Bank and the Agent has
made available same to the Company, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Company, and the Company shall pay such corresponding amount
to the Agent within two (2) Business Days after demand therefor. The Agent
shall also be entitled to recover from such Bank or the Company, as the case may
be, interest on such corresponding amount from the date such corresponding
amount was made available by the Agent to the Company to the date such
corresponding amount is recovered by the Agent, at a rate per annum equal to the
Alternate Base Rate or the Eurodollar Rate plus the applicable Margin, as
appropriate. Nothing herein shall be deemed to relieve any Bank from its
obligation to fulfill its Commitments hereunder or to prejudice any rights which
the Company may have against any Bank as a result of any default by such Bank
hereunder. No failure of any Bank hereunder shall relieve any other Bank of its
obligations.
SECTION 2.05. Conversions and Continuances. The Company shall
have the option to convert or continue on any Business Day all or a portion of
the outstanding principal amount of one Type of Advance for any Loan into
another Type of Advance, provided, no Advances may be converted into or
continued as Eurodollar Rate Advances if a Default or Event of Default is in
existence on the date of the conversion. Any continuation of an Advance as the
same Type of Advance in the same amount shall be effected by the Company giving
notice to the Agent, in writing, or by telephone promptly confirmed in writing,
of its intention to continue such Advance as an Advance of the same Type. Each
such conversion shall be effected by the Company giving the Agent written notice
(each a "Notice of Conversion"), substantially in the form of Exhibit 2.05
hereto, prior to 11:00 a.m. (Houston, Texas time) at least (a) three (3)
Business Days prior to the date of such conversion in the case of conversion
into or continuance as Eurodollar Rate Advances and (b) prior to 10:00 a.m.
(Houston, Texas time) one Business Day prior to the date of conversion in the
case of a conversion into Alternate Base Rate Advances, specifying each Advance
(or portions thereof) to be so converted and, if to be converted into or
continued as Eurodollar Rate Advances, the Interest Period to be initially
applicable thereto. The Agent shall thereafter promptly notify each Bank of
such Notice of Conversion.
SECTION 2.06. Voluntary Prepayments. The Company shall have the
right to voluntarily prepay any Loan in whole or in part at any time on the
following terms and conditions: (a) no Eurodollar Rate Advance may be prepaid
prior to the last day of its Interest Period unless, simultaneously therewith,
the Company pays to the Agent for the benefit of the Banks, all sums
necessary to compensate the Banks for all reasonable costs and expenses actually
incurred by the Banks as a result of such prepayment (excluding loss of
anticipated profits), as reasonably determined by the Banks, including but not
limited to those costs described in Section 2.15 hereof; and (b) each prepayment
pursuant to this section shall be applied first, to the payment of accrued and
unpaid interest, and then, to the outstanding principal, pro-rata, on all such
scheduled principal payments thereafter coming due on said Loans.
SECTION 2.07. Mandatory Repayments.
(a) Revolving Credit Loan. The Company shall repay Revolving Credit
Loans on any day on which the aggregate outstanding principal amount of the
Revolving Credit Loans exceeds the lesser of (i) the Revolving Credit Loan
Commitment or, (ii) as shown by the most recent Borrowing Base Certificate or
interim update thereof, the then current Borrowing Base, in the amount of such
excess. The aggregate amount under the Revolving Credit Notes (and all accrued,
unpaid interest) shall be due and payable, and the Revolving Credit Loan
Commitment shall terminate, on the Revolving Credit Maturity Date.
(b) Term Loan. (i) The Company shall repay the Term Loan in equal
quarterly installments of principal of $833,333.00 the first of which shall be
due and payable on August 31, 1997, with a like payment due on each Designated
Payment Date thereafter. The aggregate outstanding amount of the Term Loan (and
all accrued, unpaid interest) shall be due and payable on the Term Loan Maturity
Date. (ii) The Company shall reduce the amount outstanding under the Term Loan
on or before each anniversary date hereof by a percentage of Excess Cash Flow
(for the prior year or, in the case of the reduction to be made on the first
anniversary date hereof, for the period from the date the Term Loan is made
through December 31, 1997) based on the following table:
RATIO OF OUTSTANDING
BALANCE OF TERM REQUIRED EXCESS CASH
LOAN TO ADJUSTED EBITDA FLOW PAYMENT
OF AIRTRON
greater than or equal to 1.5 to 1.0 50%
less than 1.5 to 1.0 but greater than 1.0 to 1.0 25%
less than or equal to 1.0 to 1.0 0%
(c) Acquisition Loan. The Company shall repay the Acquisition Loan in
equal quarterly installments, each equal to one-eighteenth (1\18th) of the
amount outstanding thereunder on the Acquisition Loan Advance Termination Date,
the first of which shall be due and payable on the first Designated Payment Date
after said date, with a like payment due on each Designated Payment Date
thereafter. The aggregate outstanding amount of the Acquisition Loan (and all
accrued, unpaid interest) shall be due and payable on the Acquisition Loan
Maturity Date.
SECTION 2.08. Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement due from the
Company shall be made to the Agent for the benefit of the Banks not later than
1:00 p.m. (Houston, Texas time) on the date when due and shall be made in lawful
money of the United States in immediately available funds at the Payment Office.
SECTION 2.09. Pro Rata Advances. All Advances under this Agreement
shall be incurred from the Banks pro rata, on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
SECTION 2.10. Interest. (a) Subject to Section 11.08, the Company
agrees to pay interest for the period from the Execution Date to and including
the Revolving Credit Maturity Date, on the outstanding principal balance of all
Loans, at the lesser of the Alternate Base Rate or the Highest Lawful Rate.
(b) Subsequent to the Revolving Credit Maturity Date, and subject to
Section 11.08, the Company agrees to pay interest on the total outstanding
principal balance of all Alternate Base Rate Advances under all of the Loans
from the date of each respective Advance to maturity of said Loan (whether by
acceleration or otherwise) at a rate per annum which shall at all times be equal
to the lesser of (i) the Highest Lawful Rate and (ii) the Alternate Base Rate in
effect from time to time plus the Margin for Alternate Base Rate Advances, which
Margin shall be adjusted on the first day of each Margin Period. If the
Alternate Base Rate is based on the Prime Rate, interest shall be computed on
the basis of the actual number of days elapsed over a year of 365 or 366 days,
as the case may be. If the Alternate Base Rate is based on the Federal Funds
Effective Rate, interest shall be computed on the basis of the actual number
of days elapsed over a year of 360 days.
(c) Subsequent to the Revolving Credit Maturity Date, and subject to
Section 11.08, the Company agrees to pay interest on the total outstanding
principal balance of all Eurodollar Rate Advances under all of the Loans from
the date of each respective Advance to maturity of said Loan (whether by
acceleration or otherwise) at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days) which shall, during each
Interest Period applicable thereto, be equal to the lesser of (i) the Highest
Lawful Rate and (ii) the applicable Eurodollar Rate for such Interest Period
plus the Margin for Eurodollar Rate Advances. The applicable Eurodollar Rate
shall be fixed for each Interest Period and shall not change during said
Interest Period but the applicable Margin, which is added to said Eurodollar
Rate to determine the total interest payable to the Banks, may be adjusted, if
applicable, effective on the first day of each Margin Period, whether or not
said adjustment occurs at a time other than the beginning of an Interest Period.
(d) Subject to Section 11.08, overdue principal and, to the extent
permitted by law, overdue interest in respect of any Advance and all other
overdue amounts owing hereunder shall bear interest for each day that such
amounts are overdue at a rate per annum equal to the Default Rate.
(e) Interest on each Advance shall accrue from and including the date
of such Advance to but excluding the date of any repayment thereof and shall be
payable (i) in respect of Eurodollar Rate Advances (A) on the last day of the
Interest Period (as defined below) applicable thereto and on each Designated
Payment Date during any Interest Period in excess of three (3) months and (B) on
the date of any voluntary or mandatory repayment or any conversion or
continuance, (ii) in respect of Alternate Base Rate Advances (A) on each
Designated Payment Date commencing August 31, 1997, and (B) on the date of any
voluntary or mandatory repayment of such Advances on the principal amount repaid
and (iii) in respect of each Advance, at maturity (whether by acceleration or
otherwise) and, after maturity, on demand.
(f) The Agent, upon determining the Eurodollar Rate for any Interest
Period, shall notify the Company thereof. Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto. In
addition, prior to the due date for the payment of interest on any Advances set
forth in the immediately preceding paragraph, the Agent shall notify the Company
of the amount of interest due by the Company on all outstanding Advances on the
applicable due date, but any failure of the Agent to so notify the Company shall
not reduce the Company's liability for the amount owed.
(g) The Company shall pay to the Agent for the Account of each Bank,
so long as the Banks shall be required under regulations of the Board to
maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities, additional interest on the unpaid principal
amount of each such Eurodollar Rate Advance, from the date of such Advance until
such principal amount is paid in full, at an interest rate per annum equal at
all times during the Interest Period for such Advance to the lesser of (i) the
Highest Lawful Rate and (ii) the remainder obtained by subtracting (A) the
Eurodollar Rate for such Interest Period from (B) the rate obtained by dividing
such Eurodollar Rate referred to in clause (A) above by that percentage equal to
100% minus the Reserve Percentage of such Bank for such Interest Period. Such
additional interest shall be determined by such Bank as incurred and shall be
payable upon demand therefor by the Bank to the Company. Each determination by
such Bank of additional interest due under this Section shall be conclusive and
binding for all purposes in the absence of manifest error if such determination
is made on a reasonable basis.
SECTION 2.11. Interest Periods. (a) At the time the Company gives
any Notice of Advance or Notice of Conversion or provides notice of its intent
to continue a loan as the same Type in respect of the making of, or conversion
into, a Eurodollar Rate Advance, the Company shall have the right to elect, by
giving the Agent on the dates and at the times specified in Section 2.03 or
Section 2.05, as the case may be, notice of the interest period (each an
"Interest Period") applicable to such Eurodollar Rate Advance, which Interest
Period shall be either a one, two, three or six month period; provided, that:
(i) the initial Interest Period for any Eurodollar Rate Advance
shall commence on the date of such Eurodollar Rate Advance (including the
date of any conversion thereto or continuance thereof pursuant to Section
2.05); each Interest Period occurring thereafter in respect of such
Eurodollar Rate Advance shall commence on the expiration date of the
immediately preceding Interest Period;
(ii) if any Interest Period relating to a Eurodollar Rate
Advance begins on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period, such Interest
Period shall end on the last Business Day of such calendar month;
(iii) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if there are no more Business Days
in that month, the Interest Period shall expire on the preceding Business
Day;
(iv) no Interest Period for Advances shall extend beyond the
applicable Maturity Date; and
(v) the Company shall be entitled to have a maximum of nine (9)
separate Eurodollar Rate Advances hereunder for all Loans outstanding at
any one time.
(b) If, upon the expiration of any Interest Period applicable to a
Eurodollar Rate Advance, the Company has failed to elect a new Interest Period
to be applicable to such Advance as provided above, the Company shall be deemed
to have elected to convert such Advance into an Alternate Base Rate Advance
effective as of the expiration date of such current Interest Period.
SECTION 2.12. Interest Rate Not Ascertainable. In the event that
the Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) that on any date for determining
the Eurodollar Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the Eurodollar interbank market
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate, then, and
in any such event, the Agent shall forthwith give notice to the Company and to
the Banks of such determination. Until the Agent notifies the Company that the
circumstances giving rise to the suspension described herein no longer exist,
the obligations of the Banks to make Eurodollar Rate Advances shall be
suspended.
SECTION 2.13. Change in Legality. (a) Notwithstanding anything to
the contrary herein contained, if any change in any law or regulation or in the
interpretation thereof by any governmental authority charged with the
administration or interpretation thereof shall make it unlawful for any Bank or
its Eurodollar Lending Office to make or maintain any Eurodollar Rate Advance or
to give effect to its obligations as contemplated hereby, then, by prompt
written notice to the Company, such Bank may:
(i) declare that Eurodollar Rate Advances will not thereafter
be made by such Bank hereunder, whereupon the Company shall be prohibited
from requesting Eurodollar Rate Advances from such Bank hereunder unless
such declaration is subsequently withdrawn, provided, such request for a
Eurodollar Rate Advance shall, if the Company so indicates, be
automatically converted (as to such Bank) into a request for an Alternate
Base Rate Advance and the affected Bank or Banks shall respond thereto as
provided herein; and
(ii) require that all outstanding Eurodollar Rate Advances made
by such Bank be converted to Alternate Base Rate Advances, in which event
(A) all such Eurodollar Rate Advances shall be automatically converted to
Alternate Base Rate Advances as of the effective date of such notice as
provided in paragraph (b) below if required by applicable law or
regulation, or if not so required, at the end of the current Interest
Period and (B) all payments and prepayments of principal which would
otherwise have been applied to repay the converted Eurodollar Rate Advances
shall instead be applied to repay the Alternate Base Rate Advances
resulting from the conversion of such Eurodollar Rate Advances.
(b) For purposes of this Section, a notice to the Company by the Agent
pursuant to paragraph (a) above shall be effective on the date of receipt
thereof by the Company.
SECTION 2.14. Increased Costs, Taxes or Capital Adequacy
Requirements. (a) If any change in the application or effectiveness of any
applicable law or regulation or compliance by any Bank with any applicable
guideline or request issued after the date hereof by any central bank or
governmental authority having jurisdiction over such Bank (whether or not having
the force of law) (i) shall change the basis of taxation of payments to such
Bank of the principal of or interest on any Eurodollar Rate Advance made by such
Bank or any other fees or amounts payable hereunder with respect to Eurodollar
Rate Advances (other than taxes imposed on the overall net income of such Bank
or its Applicable Lending Office or franchise taxes imposed upon it by the
jurisdiction in which such Bank or its Applicable Lending Office has an office),
(ii) shall impose, modify or deem applicable any reserve, special deposit or
similar requirement with respect to Eurodollar Rate Advances against assets of,
deposits with or for the account of, or credit extended by, such Bank (without
duplication of any amounts paid pursuant to Section 2.10(g)) or (iii) shall
impose on such Bank any other condition affecting this Agreement with respect to
Eurodollar Rate Advances or any Eurodollar Rate Advance made by such Bank, and
the result of any of the foregoing shall be to increase the cost to such Bank of
maintaining its Commitment or of making or maintaining any Eurodollar Rate
Advance or to reduce the amount of any sum received or receivable by such Bank
hereunder (whether of principal, interest or otherwise) in respect thereof by an
amount deemed in good faith by such Bank to be material, then the Company shall
pay to such Bank such additional amount as will compensate it for such increase
or reduction within ten (10) days after notice thereof pursuant to Section
2.14(c).
(b) If any Bank shall have determined in good faith that any change in
any law, rule, regulation or guideline regarding capital adequacy, or any change
in the interpretation or administration thereof of any such authority, central
bank or comparable agency has or would have the effect of reducing the rate of
return on the capital of such Bank as a consequence of, or with
reference to, such Bank's obligations to lend hereunder to a level below that
which it could have achieved but for such adoption, change or compliance by an
amount deemed by such Bank to be material, then, from time to time, the Company
shall pay to the Agent for the benefit of such Bank such additional amount as
will reasonably compensate it for such reduction within ten (10) days after
notice thereof pursuant to Section 2.14(c).
(c) Each Bank will notify the Company through the Agent of any event
occurring after the date of this Agreement which will entitle it to compensation
pursuant to this Section, as promptly as practicable after it becomes aware
thereof and determines to request compensation and in any case, within 180 days
after becoming aware thereof. A certificate setting forth in reasonable detail
the amount necessary to compensate the Bank in question as specified in
paragraph (a) or (b) above, as the case may be, and the calculation of such
amount shall be delivered to the Company and shall be conclusive absent manifest
error if such determination is made on a reasonable basis. The Company shall
pay to the Agent for the account of such Bank the amount shown as due on any
such certificate within ten (10) days after its receipt of the same. The
failure on the part of any Bank to demand increased compensation with respect to
any Interest Period shall not constitute a waiver of the right to demand
compensation thereafter within the 180 day time limit set forth above. Each
Bank agrees, to the extent it may lawfully do so without incurring additional
costs, to use its best efforts to minimize costs arising under this section by
designating another lending office for the Loans affected, provided no Bank
shall be required to do so.
(d) In the event any Bank gives a notice to the Company pursuant to
Section 2.13 or 2.14 that it cannot fund certain Loans or that such funding will
be at an increased cost, or is unable to deliver the Prescribed Forms as
required by Section 2.17 below, the Company may give notice in response, with
copies to the Agent, that it wishes to seek one or more banks to replace such
Bank in accordance with the provisions set forth in Section 11.10. Each Bank
giving such a notice agrees that, at the request of the Company, it will assign
all of its interests hereunder and under the Notes and the Commitment to a
designated, Eligible Assignee for the full amount then owing to it, all in
accordance with Section 11.10. Thereafter, said assignee shall have all of the
rights hereunder and obligations of the Assigning Bank (except as otherwise
expressly set forth herein) and such Bank shall have no further obligations to
the Company hereunder.
(e) Any notice given pursuant to this Section 2.14 shall be deemed to
contain a representation by the Bank issuing such notice that the increased
costs and charges are common to substantially all of the loan customers of such
Bank and are not unique to the Company.
SECTION 2.15. Eurodollar Advance Prepayment and Default Penalties.
Subject to Section 11.08, the Company shall indemnify each Bank against any loss
or expense (excluding loss of anticipated profits) which it may sustain or incur
as a consequence of (a) an Advance of, or a conversion from or into, Eurodollar
Rate Advances that does not occur on the date specified therefor in a Notice of
Advance or Notice of Conversion, (b) any payment, prepayment or conversion of a
Eurodollar Rate Advance required by any other provision of this Agreement or
otherwise made on a date other than the last day of the applicable Interest
Period or (c) any default in the payment or prepayment of the principal amount
of any Eurodollar Advance or any part thereof or interest
accrued thereon, as and when due and payable (at the due date thereof, by notice
of prepayment or otherwise). Such loss or expense shall include an amount equal
to the excess determined by each Bank of (i) its cost of obtaining the funds for
the Advance being paid, prepaid or converted or not borrowed (based on the
Eurodollar Rate) for the period from the date of such payment, prepayment or
conversion or failure to borrow to the last day of the Interest Period for such
Advance (or, in the case of a failure to borrow, the Interest Period for the
Advance which would have commenced on the date of such failure to borrow) over
(ii) the amount of interest (as determined by each Bank) that would be realized
in reemploying the funds so paid, prepaid or converted or not borrowed for such
period or Interest Period, as the case may be. The Agent, on behalf of the
Banks, will notify the Company of any loss or expense which will entitle the
Banks to compensation pursuant to this Section, as promptly as possible after it
becomes aware thereof, but failure to so notify shall not affect the Company's
liability therefor. A certificate of any Bank setting forth any amount which it
is entitled to receive pursuant to this Section shall be delivered to the
Company and shall be conclusive absent manifest error if such determination is
made on a reasonable basis. The Company shall pay to the Agent for the account
of the Banks the amount shown as due on any certificate within ten (10) days
after its receipt of the same. Without prejudice to the survival of any other
obligations of the Company hereunder, the obligations of the Company under this
Section shall survive the termination of this Agreement and the assignment of
any of the Notes.
SECTION 2.16. Voluntary Reduction of Commitment. Upon at least
three (3) Business Days' prior written notice, the Company shall have the right,
without premium or penalty, to reduce or terminate: (i) the Revolving Loan
Credit Commitments, in whole or in part, in the amount of $1,500,000.00 or
integral multiples thereof, and (ii) the Acquisition Loan Commitment, in whole
or in part, in the amount of $3,000,00.00.
SECTION 2.17. Tax Forms. With respect to any Bank which is
organized under the laws of a jurisdiction outside the United States, on the
date of the initial Advance hereunder or on the date it becomes a party hereto,
and from time to time thereafter if requested by the Company or the Agent, each
such Bank shall provide the Agent and the Company with the Prescribed Forms.
Unless the Company and the Agent have received such Prescribed Forms, the Agent
and the Company if required by applicable law or regulation, may withhold taxes
from payments under the Loan Documents at the applicable rate in the case of
payments to or for any Bank organized under the laws of a jurisdiction outside
the United States, provided the Company shall, unless otherwise directed in
writing by the Agent or unless otherwise required by law, make all payments in
full to the Agent without deducting any withholding or similar taxes.
ARTICLE III
FEES
SECTION 3.01. Fees. Subject to Section 11.08 hereof, the Company
agrees to pay the following fees (the "Fees"):
(a) The Company agrees to pay to the Agent for the ratable account of
the Banks a Commitment fee (the "Commitment Fee") for the period from and
including the Execution Date to the Revolving Credit Maturity Date and the
Acquisition Loan Advance Termination Date, respectively, computed at a rate
equal to .25% per annum and calculated on the basis of a 360 day-year on the
daily average of the Unutilized Revolving Loan Commitment and the Unutilized
Acquisition Loan Commitment of each Bank. Commitment Fees shall be due and
payable in arrears on each Designated Payment Date commencing on the first such
date following the Execution Date and on the Revolving Credit Maturity Date in
respect of the Revolving Credit Loan and the Acquisition Loan Advance
Termination Date in respect of the Acquisition Loan.
(b) The fees described in that one certain Fee Letter among the
Company, the Agent and Chase Securities, Inc. dated March 7, 1997.
ARTICLE IV
CONDITIONS PRECEDENT
SECTION 4.01. Conditions Precedent to the Initial Advance. The
obligation of each Bank to make its initial Advance to the Company is subject to
the occurrence of or receipt by the Agent of the following, all in form and
substance satisfactory to the Agent, and, where relevant, executed by all
appropriate parties:
(a) this Agreement (which includes the Guaranty);
(b) one Revolving Credit Note for each Bank;
(c) one Term Note for each Bank;
(d) one Acquisition Note for each Bank;
(e) Landlord's lien waivers as required by the Agent in respect of all
leased property;
(f) the Amendment to the Subscription Agreement;
(g) evidence satisfactory to the Agent that (i) the Company has merged
with GroupMAC Management Co., f/k/a Group Maintenance America Corp., f/k/a
Maintenance Specialists of America, Inc., and (ii) that the Company has
succeeded to all of the rights and obligations of said merged entity;
(h) each of the following security documents (the "Security
Documents") granting a first and prior (except for Liens permitted under Section
7.04) Lien or security interest on the Collateral to the Agent for the benefit
of itself and the Banks as security for the Obligations,
substantially in the form of Exhibits 4.01(h)(i) and (ii) hereto, or in the case
of real estate collateral, in a form reasonably requested by the Agent.
(i) Security Agreements covering substantially all personal
property assets of the Company and each of its Subsidiaries (except as set
forth in such Security Agreement or other Security Documents which
exclusions have been agreed to by the Majority Banks), accompanied by all
documents, instruments and other items necessary to obtain and perfect a
Lien thereon, including all promissory notes, certificates of title (if
requested by the Agent) to vehicles and equipment, chattel paper and
similar items;
(ii) Pledge Agreements pledging to the Agent all stock of the
Company in any Subsidiaries or Affiliates accompanied by original stock
certificates evidencing such shares and executed stock powers for such
certificates;
(iii) Mortgages or deeds of trust on all owned real property,
including owned real estate, mineral interests or similar items owned by
the Company or any of its Subsidiaries, except as otherwise agreed to by
the Banks, accompanied by, if requested by the Agent, the following, all in
form, substance and amount reasonably satisfactory to the Agent:
(x) a mortgagee's title insurance policy issued by a
company satisfactory to the Agent insuring the Liens granted as first
and prior Liens;
(y) MAI appraisals for all real estate on which a Lien in
favor of the Agent is being granted, such appraisals to set forth the
market value of each parcel and to be in compliance with Title XI of
the Financial Institutions Reform, Recovery and Enforce Act of 1989,
as amended 12 U.S.C. 3331, et seq., and The Regulations and Statements
of General Policy on Appraisals promulgated by the Federal Deposit
Insurance Corporation, 12 C.F.R. Part 32, as amended; and
(z) an environmental assessment of any parcel of the real
property owned by the Company valued in excess of $250,000.00 on which
a Lien in favor of the Agent is being granted, conducted by an
environmental engineering firm reasonably accepted to the Agent and a
Phase II environmental audit or other supplemental data on such
parcels of land as the Agent may reasonably request based on the
information received in such environmental assessment on such site,
conducted by an environmental engineering firm reasonably acceptable
to the Agent and containing recommended remediation measures and cost
estimates associated with such measures satisfactory to the Agent in
its sole discretion; provided, in regard to the Florida Real Estate,
so long as same is being offered for sale, such items described in
this subparagraph (iii) shall not be required until October 31, 1997,
after which time such items may be required, in the sole discretion of
the Agent.
Failure of the Agent to request the information contained in this
paragraph prior to the Execution Date shall not preclude it from requesting
such information at any time thereafter, in its sole discretion, during the
time the Loan is outstanding; and
(iv) UCC-1 and UCC-3 Financing Statements and other documents or
instruments necessary to perfect the Liens granted in the Security
Documents.
(i) Notices of Advance with respect to the initial Advances meeting
the requirements of Section 2.03(a);
(j) a certificate of an officer and of the secretary or an assistant
secretary of the Company certifying, inter alia, (i) true and complete copies of
each of the articles or certificate of incorporation, as amended and in effect
of the Company and each of the Guarantors, the bylaws, as amended and in effect,
of the Company and each of the Guarantors and the resolutions adopted by the
Board of Directors of the Company and each of the Guarantors (A) authorizing the
execution, delivery and performance by the Company and each of its Subsidiaries
of this Agreement and the other Loan Documents to which it is or will be a party
and, in the case of the Company, the Advances to be made hereunder, (B)
approving the forms of the Loan Documents to which it is or will be a party and
which will be delivered at or prior to the date of the initial Advance and (C)
authorizing officers of the Company and each of its Subsidiaries to execute and
deliver the Loan Documents to which it is or will be a party and any related
documents, including, any agreement contemplated by this Agreement, (ii) the
incumbency and specimen signatures of the officers of the Company and each of
its Subsidiaries executing any documents on its behalf and (iii) that there has
been no change in the businesses or financial condition of the Company which
could reasonably be expected to have a Material Adverse Effect since
February 28, 1997.
(k) a favorable, signed opinion addressed to the Agent and the Banks
from Xxxxxxxxx & Xxxxxxxxx, L.L.P., counsel to the Company and the Guarantors,
substantially in the form set forth as Exhibit 4.01(k);
(l) the payment to the Agent and the Banks of all reasonable fees and
expenses (including the reasonable fees and disbursements of Xxxxxxx & Xxxxx
L.L.P.) agreed upon by such parties to be paid on the Execution Date;
(m) certificates of appropriate public officials as to the existence,
good standing and qualification to do business as a foreign corporation, as
applicable, of the Company and its Subsidiaries in each jurisdiction in which
the ownership of its properties or the conduct of its business requires such
qualifications and where the failure to so qualify would have a Material Adverse
Effect;
(n) certificates of insurance as contemplated by Section 6.03(a); and
(o) UCC searches and other title information reasonably requested by
the Agent on the Company and each of its Material Subsidiaries; and
(p) a Borrowing Base Certificate, if available.
The acceptance of the benefits of the initial Credit Event shall
constitute a representation and warranty by the Company to the Agent and each of
the Banks that, to the best of its knowledge, all of the conditions specified in
this Section above shall have been satisfied or waived as of that time.
SECTION 4.02. Conditions Precedent to All Credit Events. The
obligation of the Banks to make any Advance is, including, without limitation,
the initial Advance, subject to the further conditions precedent that on the
date of such Credit Event:
(a) In the case of any Advance pursuant to Section 2.01(a), Agent
shall have received or waived all required Borrowing Base Certificates and the
most recently received certificate shall indicate that such Advance will not
cause the total of outstanding Revolving Credit Loans to exceed the Borrowing
Base.
(b) The representations and warranties set forth in Article V shall be
true and correct in all material respects as of, and as if such representations
and warranties were made on, the date of the proposed Advance (unless such
representation and warranty expressly relates to an earlier date or is no longer
true and correct solely as a result of transactions permitted by the Loan
Documents), and the Company shall be deemed to have certified to the Agent and
the Banks that such representations and warranties are true and correct in all
material respects by submitting a Notice of Advance.
(c) The Company shall have complied with the provisions of Section
2.03 hereof.
(d) No Default or Event of Default shall have occurred and be
continuing or would result from such Credit Event.
(e) No Material Adverse Effect shall have occurred in the consolidated
financial condition of the Company and its consolidated Subsidiaries since the
delivery of the most recent financial statements delivered pursuant to Section
6.01(b).
(f) Except for any foreign Subsidiaries, all Persons that have become
Subsidiaries subsequent to the Execution Date shall have executed this
Agreement.
(g) The Agent shall have received such other approvals, opinions or
documents as the Agent or the Banks may reasonably request.
The acceptance of the benefits of each such Credit Event shall
constitute a representation and warranty by the Company to the Agent and each of
the Banks that all of the conditions specified in this Section above exist as of
that time.
SECTION 4.03. Advances Under the Acquisition Loan Commitment. The
obligation of the Banks to make any Advance under the Acquisition Loan is
subject to the further conditions that, as of the date of such Advance:
(a) (i) the ratio of Funded Debt to Adjusted EBITDA of the Company
(including all prior acquisitions by the Company, whether or not then owned by
the Company) for the most recent twelve (12) month period available, the last
month of which is not more than three (3) months old shall not exceed 2.35 to
1.0; and (ii) the ratio of Funded Debt to Consolidated Net Worth shall not
exceed 0.8 to 1.0;
(b) the ratio of the amount of such Advance to Adjusted EBITDA of the
target being acquired for the most recent twelve (12) month period available,
the last month of which is not more than three (3) months prior to the closing
of said acquisition shall not exceed 2.75 to 1.0; and
(c) Agent shall have received a counterpart of this Agreement or a
Guaranty executed by the entity being acquired if, after giving effect to such
acquisition, such entity would be a Subsidiary of the Company along with all
Security Documents covering substantially all of the assets (other than real
property leases in which the Company or a Subsidiary is lessee) of said entity
being acquired.
SECTION 4.04. Delivery of Documents. All of the Notes,
certificates, legal opinions and other documents and papers referred to in this
Article IV, unless otherwise specified, shall be delivered to the Agent for the
account of each of the Banks and, except for the Notes, in sufficient
counterparts for each of the Banks and shall be reasonably satisfactory in form
and substance to the Banks.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Agreement and to make
the Advances provided for herein, the Company, as to itself and each of its
Subsidiaries, makes, on or as of the occurrence of each Credit Event (except to
the extent such representations or warranties relate to an earlier date or are
no longer true and correct in all material respects solely as a result of
transactions not prohibited by the Loan Documents), the following
representations and warranties to the Agent and the Banks:
SECTION 5.01. Organization and Qualification. Each of the Company
and its Subsidiaries (a) is duly formed or organized, validly existing and is in
good standing under the laws of the state of its organization, (b) has the power
to own its property and to carry on its business as now conducted, except where
the failure to do so would not have a Material Adverse Effect and (c) is duly
qualified to do business and is in good standing in every jurisdiction in which
the failure to be so qualified would have a Material Adverse Effect.
SECTION 5.02. Authorization and Validity. Each of the Company and
its Subsidiaries has the corporate power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and all such action has been duly authorized by all necessary
corporate proceedings on its part. The Loan Documents to which each of the
Company and its Subsidiaries is a party have been duly and validly executed and
delivered by such Person and constitute a valid and legally binding agreement of
such Person enforceable in accordance with the respective terms thereof, except,
in each case, as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to or affecting the enforcement of creditors' rights generally, and by general
principles of equity regardless of whether such enforceability is a proceeding
in equity or at law.
SECTION 5.03. Governmental Consents. No authorization, consent,
approval, license or exemption of or filing or registration with any court or
governmental department, commission, board, bureau, agency or instrumentality,
domestic or foreign, is necessary for the valid execution or delivery by the
Company or any Subsidiary of any Loan Document.
SECTION 5.04. Conflicting or Adverse Agreements or Restrictions.
Neither the Company nor any Subsidiary is a party to any contract or agreement
or subject to any restriction which would reasonably be expected to have a
Material Adverse Effect. As of the Execution Date, all agreements of the
Company relating to the lending of money or the issuance of letters of credit by
any party are described hereto on Schedule 5.04. Neither the execution nor
delivery of the Loan Documents nor compliance with the terms and provisions
hereof or thereof will be contrary to the provisions of, or constitute a default
under (a) the charter or bylaws of the Company or any of its Subsidiaries or (b)
any law, regulation, order, writ, injunction or decree of any court or
governmental instrumentality that is applicable to the Company or any of its
Subsidiaries or (c) any material agreement to which the Company or any of its
Subsidiaries is a party or by which it is bound or to which it is subject.
SECTION 5.05. Title to Assets. Each of the Company and its
Subsidiaries has good title to all material personalty and good and indefeasible
title to all material realty as reflected on the Company's and the Subsidiaries'
books and records as being owned by them, except for properties disposed of in
the ordinary course of business, subject to no Liens, except those permitted
hereunder, except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. All of such assets have been and are being
maintained by the appropriate Person in good working condition in accordance
with industry standards, except where the failure to do so could not reasonably
be expected to have a Material Adverse Effect..
SECTION 5.06. Litigation. No proceedings against the Company or
any Subsidiary are pending or, to the knowledge of the Company, threatened
before any court or governmental agency or department which involve a reasonable
material risk of having a Material Adverse Effect except those listed on
Schedule 5.06 hereof.
SECTION 5.07. Financial Statements. Prior to the Execution Date,
the Company has furnished to the Banks the audited consolidated balance sheet
for Airtron as of February 28, 1997 and the audited consolidated income
statement and statement of cash flows for the twelve (12) months ended
February 28, 1997 (such financials, the "Financials"). The Financials have been
prepared in conformity with GAAP consistently applied (except as otherwise
disclosed in such financial statements) throughout the periods involved and
present fairly, in all material respects, the consolidated financial condition
of the Company and its consolidated Subsidiaries as of the dates thereof and the
consolidated results of their operations for the periods then ended. As of the
Execution Date, no Material Adverse Effect has occurred in the consolidated
financial condition of the Company and its consolidated Subsidiaries since
February 28, 1997.
SECTION 5.08. Default. Neither the Company nor any Subsidiary is
in default under any material provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto, or in default in any respect
under any order, writ, injunction or decree of any court, or in default in any
respect under or in violation of any order, injunction or decree of any
governmental instrumentality, in each case in such manner as to cause a Material
Adverse Effect.
SECTION 5.09. Investment Company Act. Neither the Company nor any
Subsidiary is, or is directly or indirectly controlled by or acting on behalf of
any Person which is, an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
SECTION 5.10. Public Utility Holding Company Act. Neither the
Company nor any Subsidiary is a non-exempt "holding company," or subject to
regulation as such, or, to the knowledge of the Company's or such Subsidiary's
officers, an "affiliate" of a "holding company" or a "subsidiary company" of a
"holding company," within the meaning of the Public Utility Holding Company Act
of 1935, as amended.
SECTION 5.11. ERISA. No accumulated funding deficiency (as defined
in Section 412 of the Code or Section 302 of ERISA), whether or not waived,
exists or is expected to be incurred with respect to any Plan. No liability to
the PBGC (other than required premium payments) has been or is expected by the
Company to be incurred with respect to any Plan by the Company or any ERISA
Affiliate. Neither the Company nor any ERISA Affiliate has incurred any
withdrawal liability under Title IV of ERISA with respect to any Multi-Employer
Plans.
SECTION 5.12. Tax Returns and Payments. Each of the Company and
its Subsidiaries has filed all federal income tax returns and other tax returns,
statements and reports (or obtained extensions with respect thereto) which are
required to be filed and has paid or deposited or made adequate provision, in
accordance with GAAP for the payment of all taxes (including estimated taxes
shown on such returns, statements and reports) which are shown to be due
pursuant to such returns, except for such taxes as are being contested in good
faith and by appropriate proceedings, except, in each such case, where such
failure could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.13. Environmental Matters. Each of the Company and its
Subsidiaries (a) possesses all environmental, health and safety licenses,
permits, authorizations, registrations, approvals and similar rights necessary
under law or otherwise for the Company or such Subsidiary to conduct its
operations as now being conducted (other than those with respect to which the
failure to possess or maintain would not, individually or in the aggregate for
the Company and such Subsidiaries, reasonably be expected to have a Material
Adverse Effect) and (b) each of such licenses, permits, authorizations,
registrations, approvals and similar rights is valid and subsisting, in full
force and effect and enforceable by the Company or such Subsidiary, and each of
the Company and its Subsidiaries is in compliance with all effective terms,
conditions or other provisions of such permits, authorizations, registrations,
approvals and similar rights except for such failure or noncompliance that,
individually or in the aggregate for the Company and such Subsidiaries, would
not reasonably be expected to have a Material Adverse Effect. Except as
disclosed on Schedule 5.13, neither the Company nor any of its Subsidiaries has
received any notices of any violation of, noncompliance with, or remedial
obligation under, Requirements of Environmental Laws (which violation or non-
compliance has not been cured), and there are no writs, injunctions, decrees,
orders or judgments outstanding, or lawsuits, claims, proceedings,
investigations or inquiries pending or, to the knowledge of the Company or any
Subsidiary, threatened, relating to the ownership, use, condition, maintenance
or operation of, or conduct of business related to, any property owned, leased
or operated by the Company or such Subsidiary or other assets of the Company or
such Subsidiary, other than those violations, instances of noncompliance,
obligations, writs, injunctions, decrees, orders, judgments, lawsuits, claims,
proceedings, investigations or inquiries that, individually or in the aggregate
for the Company and such Subsidiaries, would not have a Material Adverse Effect.
Except as disclosed on Schedule 5.13, there are no material obligations,
undertakings or liabilities arising out of or relating to Environmental Laws to
which the Company or any of its Subsidiaries has agreed, assumed or retained,
or, to the knowledge of the Company, by which the Company or any of its
Subsidiaries is adversely affected, by contract or otherwise and, further,
except as disclosed on Schedule 5.13, neither the Company nor any of its
Subsidiaries has received a written notice or claim to the effect that the
Company or any of its Subsidiaries is or may be liable to any other Person as
the result of a Release or threatened Release of a Hazardous Material which, in
either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.14. Purpose of Loans. (a) The proceeds of the Term Loan
will be used solely to finance the acquisition of Airtron and to repay certain
Indebtedness currently owing by Airtron.
(b) The proceeds of the Acquisition Loan will be used to finance the
purchase of stock, warrants, stock appreciation rights, other securities and/or
other assets of Qualified Companies.
(c) The proceeds of the Revolving Credit Loan will be used to finance
seasonal increases in Accounts and inventory, for working capital and in
connection with the acquisition of Airtron.
(d) None of the proceeds of any Advance will be used directly or
indirectly for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
stock.
SECTION 5.15. Franchises and Other Rights. The Company and each of
its Subsidiaries has all franchises, permits, licenses and other authority as
are necessary to enable them to carry on their respective businesses as now
being conducted and is not in default in respect thereof where the absence of
such or any such default could reasonably be expected to have a Material Adverse
Effect.
SECTION 5.16. Subsidiaries and Assets. The Subsidiaries listed on
Schedule 5.16 are all of the Subsidiaries of the Company as of the Execution
Date and the address given for such Guarantors is the correct mailing address as
of the Execution Date.
SECTION 5.17. Solvency. After giving effect to the initial Advance
hereunder and all other Indebtedness of the Company existing at the time of such
Advance, the Company and its Subsidiaries, viewed as a consolidated entity have
at such time (a) capital sufficient to carry on their businesses and
transactions and (b) assets, the fair market value of which exceeds their
consolidated liabilities (as reflected on the Financials or on the financial
statements most recently delivered to the Banks).
ARTICLE VI
AFFIRMATIVE COVENANTS
The Company, as to itself and each of its Subsidiaries, covenants and
agrees that on and after the date hereof until the Notes have been paid in full
and the Commitments have terminated:
SECTION 6.01. Information Covenants. The Company will furnish to
each Bank:
(a) As soon as available, and in any event within 30 days after the
close of each month, up to and including the month ending September 30, 1997,
and within 50 days of each quarter thereafter, the consolidated and
consolidating balance sheet of the Company and its Subsidiaries as of the end of
such period and the related consolidated and consolidating statements of income
for such period and, in each case, also for the portion of the fiscal year ended
at the end of such period, setting forth, in each case after the first
anniversary of the Effective Date, comparative consolidated figures for the
related periods in the prior fiscal year, all of which shall be certified by the
chief financial officer or chief executive officer of the Company as fairly
presenting in all material respects, the financial position of the Company and
its Subsidiaries as of the end of such period and the results of their
operations for the period then ended in accordance with GAAP, subject to changes
resulting from normal year-end audit adjustments.
(b) As soon as available, and in any event within ninety-five (95)
days after the close of each fiscal year of the Company, the audited
consolidated and the unaudited consolidating balance sheets of the Company and
its Subsidiaries as at the end of such fiscal year and the related consolidated
and consolidating statements of income, stockholders equity and cash flows for
such fiscal year, setting forth, in each case after the first anniversary of the
Effective Date, comparative figures for the preceding fiscal year and certified
by KPMG Peat Marwick LLP or other independent certified public accountants of
recognized national standing, whose report shall be without limitation as to the
scope of the audit and reasonably satisfactory in substance to the Banks.
(c) Immediately after any Responsible Officer of the Company obtains
verified knowledge thereof, notice of:
(i) any material violation of, noncompliance with, or remedial
obligations under, Requirements of Environmental Laws;
(ii) any material Release or threatened material Release of
Hazardous Materials affecting any property owned, leased or operated by the
Company or any of its Subsidiaries;
(iii) any event or condition which constitutes a Default or an
Event of Default;
(iv) any condition or event which, in the opinion of management
of the Company, would reasonably be expected to have a Material Adverse
Effect;
(v) any Person having given any written notice to the Company
or taken any other action with respect to a claimed material default or
event under any material instrument or material agreement;
(vi) the institution of any litigation which could reasonably be
expected in the good faith judgment of the Company either to have a
Material Adverse Effect or result in a final, non-appealable judgment or
award in excess of $500,000.00 with respect to any single cause of action;
and
(vii) all ERISA notices required by Section 6.07;
then, a notice of such event or condition will be delivered to each Bank
specifying the nature and period of existence thereof and specifying the notice
given or action taken by such Person and the nature of any such claimed default,
event or condition and, in the case of an Event of Default or Default, what
action has been taken, is being taken or is proposed to be taken with respect
thereto.
(d) At the time of the delivery of the quarterly and annual financial
statements provided for in Sections 6.01(a) and 6.01(b), a certificate of a
Responsible Officer to the effect that, to his knowledge, no Default or Event of
Default exists or, if any Default or Event of Default does
exist, specifying the nature and extent thereof and the action that is being
taken or that is proposed to be taken with respect thereto, which certificate
shall set forth the calculations required to establish whether the Company was
in compliance with the provisions of Sections 7.10 through 7.14 as at the end of
such fiscal period or year, as the case may be.
(e) Quarterly, as soon as available, and in any event within thirty
(30) days after the end of each quarter, (i) a Borrowing Base Certificate
showing at least Eligible Accounts of the Company and its Subsidiaries in an
aggregate amount equal to or greater than 150% of the Total Revolving Credit
Loan Commitment or of all Accounts; and (ii) a summary report (by Subsidiary) of
all Accounts of the Company and its Subsidiaries.
(f) Promptly following request by the Agent such environmental
reports, studies and audits of the Company's procedures and policies, assets and
operations in respect of Environmental Laws as the Agent may reasonably request.
(g) Promptly upon receipt thereof, a copy of any report or letter
submitted to the Company by its independent accountants in connection with any
regular or special audit of the Company's records.
(h) From time to time and with reasonable promptness, such other
information or documents as the Agent or any Bank through the Agent may
reasonably request.
SECTION 6.02. Books, Records and Inspections. The Company and its
Subsidiaries will maintain, and will permit, or cause to be permitted, any
Person designated by any Bank or the Banks to visit and inspect any of the
properties of the Company and its Subsidiaries, to examine the corporate books
and financial records of the Company and its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of any such corporations with the officers, employees and agents of the Company
and its Subsidiaries and with their independent public accountants, all at such
reasonable times and as often as the Agent or such Bank may request. Such
inspections shall be at the expense of the Company if made annually and shall be
at the expense of the Bank or Banks requiring same if made more often than
annually.
SECTION 6.03. Insurance and Maintenance of Properties. (a) Each of
the Company and its Subsidiaries will keep reasonably adequately insured by
financially sound and reputable insurers all of its material property, which is
of a character, and in amounts and against such risks, usually and reasonably
insured by similar Persons engaged in the same or similar businesses, including,
without limitation, insurance against fire, casualty and any other hazards
normally insured against, which policies shall name the Agent for the benefit of
the Banks, as a loss payee. Each of the Company and its Subsidiaries will at
all times maintain insurance against its liability for injury to Persons or
property, which insurance shall be by financially sound and reputable insurers
and in such amounts and form as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties and which shall name the Agent, for the benefit of the Banks,
as an additional insured. The Company shall provide the Agent a listing of all
such insurance and such other certificates and other evidence thereof, on or
prior
to the Execution Date hereof and annually thereafter. A listing of all presently
existing policies of the Company and its Subsidiaries is attached hereto as
Schedule 6.03.
(b) Each of the Company and its Subsidiaries will cause all of its
material properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all reasonably necessary
repairs, renewals and replacements thereof, all as in the reasonable judgment of
such Person may be reasonably necessary so that the business carried on in
connection therewith may be properly conducted at all times, except where such
failure could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.04. Payment of Taxes. Each of the Company and its
Subsidiaries will pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which penalties attach thereto,
except for such amounts that are being contested in good faith and by
appropriate proceedings, except where such failure could not reasonably be
expected to have a Material Adverse Effect.
SECTION 6.05. Corporate Existence. Each of the Company and its
Subsidiaries will do all things necessary to preserve and keep in full force and
effect (a) the existence of the Company, and (b) unless the failure to do so
would not reasonably be expected to have a Material Adverse Effect, the rights
and franchises of each of the Company and its Subsidiaries.
SECTION 6.06. Compliance with Statutes. Each of the Company and
its Subsidiaries will comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except to the extent the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
SECTION 6.07. ERISA. Immediately after any Responsible Officer of
the Company or any of its Subsidiaries knows or has reason to know any of the
following items are true the Company will deliver or cause to be delivered to
the Banks a certificate of the chief financial officer of the Company setting
forth details as to such occurrence and such action, if any, the Company or its
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Company or its ERISA
Affiliate with respect thereto: that a Reportable Event has occurred or that an
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard; that a Multiemployer
Plan has been or may be terminated, reorganized, partitioned or declared
insolvent under Title IV of ERISA; that any required contribution to a Plan or
Multiemployer Plan has not been or may not be timely made; that proceedings may
be or have been instituted under Section 4069(a) of ERISA to impose liability on
the Company or an ERISA Affiliate or under Section 4042 of ERISA to terminate a
Plan or appoint a trustee to administer a Plan; that the Company or any ERISA
Affiliate has incurred or may incur any liability (including any contingent or
secondary liability) on account of the termination of or withdrawal from a Plan
or a
Multiemployer Plan; and that the Company or an ERISA Affiliate may be required
to provide security to a Plan under Section 401(a)(29) of the Code.
SECTION 6.08. Additional Subsidiaries. The Company will cause any
Person that becomes a Subsidiary subsequent to the Execution Date, within ten
(10) Business Days after becoming a Subsidiary, to execute a Guaranty or a
counterpart of this Agreement and deliver same to the Agent and to deliver the
other Security Documents referenced in Section 4.03(c), provided if said
Subsidiary is not incorporated under the laws of the United States or one of its
states or territories, no such guaranty or Security Documents will be required
if the Company makes arrangements, satisfactory to the Agent, in its sole
discretion, regarding restrictions on transfer of funds or other assets by the
Company or any Subsidiary to said new foreign Subsidiary.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees, as to itself and, except as
otherwise provided herein, each of its Subsidiaries, that on and after the date
hereof until the Notes have been paid in full and the Commitments have
terminated:
SECTION 7.01. Change in Business. The Company will not, and will
not permit any of its Subsidiaries to, engage in any businesses not of the same
general type as those conducted by the Company on the Execution Date after
giving effect to the acquisition of Airtron, those conducted by a Qualified
Company when acquired and businesses reasonably related thereto.
SECTION 7.02. Consolidation, Merger or Sale of Assets. Except as
previously disclosed to the Agent, the Company will not, and will not permit any
of its Subsidiaries to, wind up, liquidate or dissolve their affairs, or enter
into any transaction of merger or consolidation in which the Company is not the
surviving entity, or sell or otherwise dispose of all or any substantial part of
their property or assets (other than sales of inventory and surplus or obsolete
assets in the ordinary course of business provided that any disposal does not
prejudice the Banks in any way), including the capital stock of any Subsidiary,
except for dispositions of the stock of Subsidiaries to other wholly-owned
Subsidiaries of the Company which have complied with Section 6.08.
SECTION 7.03. Indebtedness. Neither the Company nor any Subsidiary
of the Company will create, incur, assume or permit to exist any Indebtedness of
the Company or any Subsidiary except:
(a) Indebtedness existing hereunder;
(b) Indebtedness existing on the Execution Date and described in the
Financials or, if not shown, listed on Schedule 7.03(b);
(c) letters of credit incurred in the ordinary course of business in
an amount not to exceed $750,000.00 outstanding at any one time, provided such
letters of credit are issued by one of the Banks, which letters of credit, and
the Company's liabilities thereunder, shall be secured, pro-rata and pari-passu
with all of the Obligations;
(d) Indebtedness arising as a result of the endorsement in the
ordinary course of business of negotiable instruments in the course of
collection;
(e) accounts payable and unsecured, current and long-term, liabilities
(including accrued insurance related liabilities), not the result of
indebtedness for borrowed money, to vendors, suppliers and other Persons for
goods and services in the ordinary course of business;
(f) agreements (including agreements of intent) to acquire any Person
or assets issued by the Company or any of its Subsidiaries in anticipation of
acquiring such Person or assets if such acquisition is not prohibited by this
Agreement, including any ongoing, contingent payment obligations contained in
such agreements (including obligations to make payments resulting from the
deferred tax assets arising from stock appreciation rights, warrants and its
deferred compensation plan previously in existence, all in accordance with the
acquisition agreement in respect of Airtron);
(g) Intercompany Indebtedness of any Subsidiary of the Company to the
Company or any other Subsidiary and Indebtedness of the Company to any
Subsidiary of the Company assuming same is subordinate to the Obligations in the
manner provided in Section 8.05 hereof;
(h) guarantees by the Company or any of its Subsidiaries of
Indebtedness of any Subsidiary of the Company permitted to be incurred, created
or existing pursuant to this Agreement, provided, that such guarantees are not
directly secured by any Liens;
(i) current and deferred taxes;
(j) contingent liabilities under surety bonds or otherwise incurred in
the ordinary course of business with a maximum exposure at any one time not to
exceed $1,000,000;
(k) Indebtedness of the type described in clause (d) of the definition
herein of Indebtedness if incurred in the ordinary course of business;
(l) earn-out agreements that are a part of Investments allowed under
Section 7.05(e);
(m) Other Indebtedness not in excess of $1,000,000.00 in the aggregate
at any time outstanding;
(n) Indebtedness not to exceed $500,000.00 at any time outstanding
secured in accordance with clause (k) of the definition herein of Permitted
Liens;
(o) Indebtedness not to exceed $2,000,000.00, unsecured or
subordinated to the satisfaction of the Agent, owing to Sellers of Qualified
Companies, in connection with the acquisition of said Qualified Company;
(p) preferred stock issued on terms substantially similar to, or no
less favorable to the Company than, those contained on Exhibit 7.03(p); and
(q) renewals and extensions with the same lenders (in the same or
lesser principal amount on similar terms and conditions) of any Indebtedness
listed in subparagraphs (a) through (p) above.
SECTION 7.04. Liens. Neither the Company nor any Subsidiary of the
Company will create, incur, assume or suffer to exist any Lien upon or with
respect to any of its property or assets of any kind whether now owned or
hereafter acquired (nor will they covenant with any other Person not to grant
such a Lien to the Agent on Collateral, except property secured or to be secured
by a Lien permitted by this Agreement), except:
(a) Liens existing on the Execution Date and listed on Schedule
7.04(a);
(b) Liens securing currently secured Indebtedness permitted under
Section 7.03(b) or (m) above;
(c) Permitted Liens;
(d) Liens created by the Loan Documents;
(e) Other Liens securing obligations allowed pursuant to Section
7.03(l) or (m) not exceeding $500,000.00 in the aggregate at any one time; and
(f) any renewal, extension or replacement of any Lien referred to
above with the same lenders; provided, that no Lien arising or existing as a
result of such extension, renewal or replacement shall be extended to cover any
property not theretofore subject to the Lien being extended, renewed or replaced
and provided further that the principal amount of the Indebtedness secured
thereby shall not exceed the principal amount of the Indebtedness so secured at
the time of such extension, renewal or replacement.
SECTION 7.05. Investments. Neither the Company nor any Subsidiary
will, directly or indirectly, make or own any Investment in any Person, except:
(a) Permitted Investments;
(b) Investments owned on the Effective Date as set forth on Schedule
7.05(b), including Investments in Airtron and the Subsidiaries, direct and
indirect;
(c) Investments arising out of loans and advances for expenses, travel
per diem and similar items in the ordinary course of business to officers,
directors and employees and intercompany Indebtedness permitted by Section
7.03(g);
(d) Investments in the stock, warrants, stock appreciation rights,
other securities and/or other assets of Qualified Companies with a cash
component of the purchase price of less than $500,000.00 for each such Qualified
Company;
(e) Investments in the stock, warrants, stock appreciation rights,
other securities and/or other assets of Qualified Companies funded, in part, by
the Acquisition Loans, with the approval of all of the Banks;
(f) other Investments not exceeding $250,000.00 in the aggregate at
any one time outstanding;
(g) Investments in the form of stock buy backs allowed under Section
7.06; and
(h) Investments in capital stock of wholly-owned Subsidiaries of the
Company.
SECTION 7.06. Restricted Payments. The Company will not pay any
dividends or redeem, retire, purchase or guaranty the value of or make any other
acquisition, direct or indirect, of any shares of any class of stock of the
Company, or of any warrants, rights or options to acquire any such shares, now
or hereafter outstanding, except to the extent that the consideration therefor
consists solely of shares of stock (including warrants, rights or options
relating thereto) of the Company or is approved by the Majority Banks; provided,
the Company may purchase the stock of departing officers and employees upon
their departure in a maximum, aggregate amount not to exceed $250,000.00 in the
aggregate.
SECTION 7.07. Change in Accounting. The Company will not and will
not permit any Subsidiary to, change its method of accounting except for (a)
changes permitted by GAAP in which the Company's auditors concur, (b) changes
with respect to any Person or assets acquired by the Company to conform with the
Company's policies and procedures and which are permitted by GAAP or (c) changes
required by GAAP. The Company shall advise the Agent in writing promptly upon
making any material change to the extent same is not disclosed in the financial
statements required under Section 6.01 hereof. In the event of any such change,
the Company, the Banks and the Agent agree to negotiate amendments to Sections
7.10 through 7.14 hereof (and related definitions, if relevant) so as to
equitably reflect such changes thereon with the intended result that the
criteria for evaluating the financial condition of the Company and its
Subsidiaries shall be substantially the same after such changes as before.
SECTION 7.08. Certain Indebtedness. The Company will not, and will
not permit any of its Subsidiaries after the occurrence and during the
continuance of any Event of Default to make any prepayments of principal or
interest on any other of the Company's Indebtedness, except as may be required
thereby.
SECTION 7.09. Transactions with Affiliates. The Company will not,
directly or indirectly, engage in any transaction with any Affiliate, including
the purchase, sale or exchange of assets or the rendering of any service, except
in the ordinary course of business or pursuant to the reasonable requirements of
its business and, in each case, upon terms that are no less favorable than those
which might be obtained in an arm's-length transaction at the time from non-
Affiliates.
SECTION 7.10. Consolidated Net Worth. The Company will not permit
its Consolidated Net Worth to be less than the actual net worth as of the
Execution Date minus $200,000.00, plus, in all cases: (a) 100% of the increase
in Consolidated Net Worth resulting from the issuance of any capital stock by
the Company or any Subsidiary subsequent to the Execution Date at any time
during the term hereof and (b) 75% of the consolidated after tax income of the
Company and its Subsidiaries (to be adjusted semi-annually at mid-year and
fiscal year-end) for each fiscal year during the term hereof (including any
Subsidiaries acquired subsequent hereto).
SECTION 7.11. Funded Debt to Adjusted EBITDA Ratio. The Company
will not permit the ratio of its total Funded Debt to Adjusted EBITDA calculated
for the preceding four (4) quarters on a rolling four (4) quarter basis to be
greater than 3.0 to 1.0 at any time during the term hereof.
SECTION 7.12. Total Funded Debt to Consolidated Net Worth Ratio.
The Company will not permit the ratio of (a) its total Funded Debt to (b)
Consolidated Net Worth to be greater than 1.25 to 1.0 at any time during the
term hereof.
SECTION 7.13. Capital Expenditures. The Company will not permit
total consolidated capital expenditures (including Capitalized Lease
Obligations) to be greater than $5,000,000.00 for any fiscal year during the
term hereof.
SECTION 7.14. Fixed Charge Coverage Ratio. The Company will not
permit the ratio of (a) Adjusted EBITDA calculated for the preceding four (4)
quarters on a rolling four (4) quarter basis less cash taxes actually paid
during such four (4) quarters to (b) the sum of: required principal repayments
on all Funded Debt for the upcoming four quarters, plus required cash interest
payments, plus cash capital expenditures, both calculated for the preceding four
(4) quarters on a rolling four quarter basis, to be less than 1.25 to 1.0, as of
the end of any fiscal quarter.
SECTION 7.15. Subscription Agreement. The Company will not amend,
modify or cancel that certain Subscription Agreement dated as of October 24,
1996 between the Company and Xxxxxx X. Xxxx, without the express approval of the
Majority Banks.
ARTICLE VIII
GUARANTY
SECTION 8.01. Guaranty. In consideration of, and in order to
induce the Banks to make the Loans hereunder, the Guarantors hereby absolutely,
unconditionally and irrevocably, jointly and severally guarantee the punctual
payment and performance when due, whether at stated maturity, by acceleration or
otherwise, of the Obligations, and all other obligations and covenants of the
Company now or hereafter existing under this Agreement, the Notes and the other
Loan Documents whether for principal, interest (including interest accruing or
becoming owing both prior to and subsequent to the commencement of any
proceeding against or with respect to the Company under any chapter of the
Bankruptcy Code), Fees, commissions, expenses (including reasonable attorneys'
fees and expenses) or otherwise, and all reasonable costs and expenses, if any,
incurred by the Agent or any Bank in connection with enforcing any rights under
this Guaranty (all such obligations being the "Guaranteed Obligations"), and
agree to pay any and all reasonable expenses incurred by each Bank and the Agent
in enforcing this Guaranty; provided that notwithstanding anything contained
herein or in any of the Loan Documents to the contrary, the maximum liability of
each Guarantor hereunder and under the other Loan Documents shall in no event
exceed such Guarantor's Maximum Guaranteed Amount, provided further, each
Guarantor shall be unconditionally required to pay all amounts demanded of it
hereunder prior to any determination of such Maximum Guaranteed Amount and the
recipient of such payment, if so required by a final non-appealable order of a
court of competent jurisdiction, shall then be liable for the refund of any
excess amounts. If any such rebate or refund is ever required, all other
Guarantors (and the Company) shall be fully liable for the repayment thereof to
the maximum extent allowed by applicable law. This Guaranty is an absolute,
unconditional, present and continuing guaranty of payment and not of
collectibility and is in no way conditioned upon any attempt to collect from the
Company or any other action, occurrence or circumstance whatsoever. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Guaranteed Amount of such Guarantor without impairing
this Guaranty or affecting the rights and remedies of the Banks hereunder.
SECTION 8.02. Continuing Guaranty. Each Guarantor guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. Each Guarantor agrees
that the Guaranteed Obligations and Loan Documents may be extended or renewed,
and Loans repaid and reborrowed in whole or in part, without notice to or assent
by such Guarantor, and that it will remain bound upon this Guaranty
notwithstanding any extension, renewal or other alteration of any Guaranteed
Obligations or Loan Documents, or any repayment and reborrowing of Loans. To
the maximum extent permitted by applicable law, the obligations of each
Guarantor under this Guaranty shall be absolute, unconditional and irrevocable,
and shall be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including:
(a) any extension, renewal, modification, settlement, compromise,
waiver or release in respect of any Guaranteed Obligations;
(b) any extension, renewal, amendment, modification, rescission,
waiver or release in respect of any Loan Documents;
(c) any release, exchange, substitution, non-perfection or invalidity
of, or failure to exercise rights or remedies with respect to, any direct or
indirect security for any Guaranteed Obligations, including the release of any
Guarantor or other Person liable on any Guaranteed Obligations;
(d) any change in the corporate existence, structure or ownership of
the Company, any Guarantor, or any insolvency, bankruptcy, reorganization or
other similar proceeding affecting the Company, such Guarantor, any other
Guarantor or any of their respective assets;
(e) the existence of any claim, defense, set-off or other rights or
remedies which such Guarantor at any time may have against the Company, or the
Company or such Guarantor may have at any time against the Agent, any Bank, any
other Guarantor or any other Person, whether in connection with this Guaranty,
the Loan Documents, the transactions contemplated thereby or any other
transaction other than by the payment in full by the Company of the Guaranteed
Obligations after the termination of the Commitments of the Banks;
(f) any invalidity or unenforceability for any reason of this
Agreement or other Loan Documents, or any provision of law purporting to
prohibit the payment or performance by the Company, such Guarantor or any other
Guarantor of the Guaranteed Obligations or Loan Documents, or of any other
obligation to the Agent or any Bank; or
(g) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
SECTION 8.03. Effect of Debtor Relief Laws. If after receipt of
any payment of, or proceeds of any security applied (or intended to be applied)
to the payment of all or any part of the Guaranteed Obligations, the Agent or
any Bank is for any reason compelled to surrender or voluntarily surrenders
(under circumstances in which it believes it could reasonably be expected to be
so compelled if it did not voluntarily surrender), such payment or proceeds to
any Person (a) because such payment or application of proceeds is or may be
avoided, invalidated, declared fraudulent, set aside, determined to be void or
voidable as a preference, fraudulent conveyance, fraudulent transfer,
impermissible set-off or a diversion of trust funds or (b) for any other similar
reason, including (i) any judgment, decree or order of any court or
administrative body having jurisdiction over the Agent, any Bank or any of their
respective properties or (ii) any settlement or compromise of any such claim
effected by the Agent or any Bank with any such claimant (including the
Company), then the Guaranteed Obligations or part thereof intended to be
satisfied shall be reinstated and continue, and this Guaranty shall continue in
full force as if such payment or proceeds have not been received,
notwithstanding any revocation thereof or the cancellation of any Note or any
other instrument evidencing any Guaranteed Obligations or otherwise; and the
Guarantors, jointly and severally, shall be liable to pay the Agent and the
Banks, and hereby do indemnify the Agent and the Banks and hold them harmless
for the amount of such payment or proceeds so
surrendered and all expenses (including reasonable attorneys' fees, court costs
and expenses attributable thereto) incurred by the Agent or any Bank in the
defense of any claim made against it that any payment or proceeds received by
the Agent or any Bank in respect of all or part of the Guaranteed Obligations
must be surrendered. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Company
by virtue of any payment, court order or any federal or state law.
SECTION 8.04. Waiver of Subrogation. Notwithstanding any payment
or payments made by any Guarantor hereunder, or any set-off or application by
the Agent or any Bank of any security or of any credits or claims, no Guarantor
will assert or exercise any rights of the Agent or any Bank or of such Guarantor
against the Company to recover the amount of any payment made by such Guarantor
to the Agent or any Bank hereunder by way of any claim, remedy or subrogation,
reimbursement, exoneration, contribution, indemnity, participation or otherwise
arising by contract, by statute, under common law or otherwise, and such
Guarantor shall not have any right of recourse to or any claim against assets or
property of the Company, in each case unless and until the Obligations of the
Company guaranteed hereby have been fully and finally satisfied. Until such
time, each Guarantor hereby expressly waives any right to exercise any claim,
right or remedy which such Guarantor may now have or hereafter acquire against
the Company that arises under this Agreement or any other Loan Document or from
the performance by any Guarantor of the Guaranty hereunder including any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification or participation in any claim, right or remedy of the Agent or
any Bank against the Company or any Guarantor, or any security that the Agent or
any Bank now has or hereafter acquires, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law or
otherwise. If any amount shall be paid to a Guarantor by the Company or another
Guarantor after payment in full of the Obligations, and the Obligations shall
thereafter be reinstated in whole or in part and the Agent or any Bank forced to
repay and sums received by any of them in payment of the Obligations, this
Guaranty shall be automatically reinstated and such amount shall be held in
trust for the benefit of the Agent and the Banks and shall forthwith be paid to
the Agent to be credited and applied to the Guaranteed Obligations, whether
matured or unmatured. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Company
by virtue of any payment, court order or any federal or state law.
SECTION 8.05. Subordination. If any Guarantor becomes the holder
of any indebtedness payable by the Company or another Guarantor, each Guarantor
hereby subordinates all indebtedness owing to it from the Company to all
indebtedness of the Company to the Agent and the Banks, and agrees that during
the continuance of any Event of Default it shall not accept any payment on the
same until payment in full of the Obligations of the Company under this
Agreement and the other Loan Documents after the termination of the Commitments
of the Banks and shall in no circumstance whatsoever attempt to set-off or
reduce any obligations hereunder because of such indebtedness. If any amount
shall nevertheless be paid in violation of the foregoing to a Guarantor by the
Company or another Guarantor prior to payment in full of the Guaranteed
Obligations, such amount shall be held in trust for the benefit of the Agent and
the Banks and shall forthwith be paid to the Agent to be credited and applied to
the Guaranteed Obligations, whether matured or unmatured.
SECTION 8.06. Waiver. Each Guarantor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Guaranty and waives presentment, demand of
payment, notice of intent to accelerate, notice of dishonor or nonpayment and
any requirement that the Agent or any Bank institute suit, collection
proceedings or take any other action to collect the Guaranteed Obligations,
including any requirement that the Agent or any Bank protect, secure, perfect or
insure any Lien against any property subject thereto or exhaust any right or
take any action against the Company or any other Person or any collateral (it
being the intention of the Agent, the Banks and each Guarantor that this
Guaranty is to be a guaranty of payment and not of collection). It shall not be
necessary for the Agent or any Bank, in order to enforce any payment by any
Guarantor hereunder, to institute suit or exhaust its rights and remedies
against the Company, any other Guarantor or any other Person, including others
liable to pay any Guaranteed Obligations, or to enforce its rights against any
security ever given to secure payment thereof. Each Guarantor hereby expressly
waives to the maximum extent permitted by applicable law each and every right to
which it may be entitled by virtue of the suretyship laws of the State of Texas,
including any and all rights it may have pursuant to Rule 31, Texas Rules of
Civil Procedure, Section 17.001 of the Texas Civil Practice and Remedies Code
and Chapter 34 of the Texas Business and Commerce Code. Each Guarantor hereby
waives marshaling of assets and liabilities, notice by the Agent or any Bank of
any indebtedness or liability to which such Bank applies or may apply any
amounts received by such Bank, and of the creation, advancement, increase,
existence, extension, renewal, rearrangement or modification of the Guaranteed
Obligations. Each Guarantor expressly waives, to the extent permitted by
applicable law, the benefit of any and all laws providing for exemption of
property from execution or for valuation and appraisal upon foreclosure.
SECTION 8.07. Full Force and Effect. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Obligations
of the Company under this Agreement and the other Loan Documents and all other
amounts payable under this Guaranty have been paid in full (after the
termination of the Commitments of the Banks). All rights, remedies and powers
provided in this Guaranty may be exercised, and all waivers contained in this
Guaranty may be enforced, only to the extent that the exercise or enforcement
thereof does not violate any provisions of applicable law which may not be
waived.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
SECTION 9.01. Events of Default. The following events shall
constitute Events of Default ("Events of Default") hereunder:
(a) any installment of principal is not paid when due or any payment
of interest or Fees is not paid on the date on which such payment is due and
such failure continues for a period of five (5) days; or
(b) any representation or warranty made or deemed made by the Company
or any Subsidiary herein or in any of the Loan Documents or other document,
certificate or financial statement delivered in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect when made or deemed made or reaffirmed, as the case may be; or
(c) the Company shall fail to perform or observe or cause any
Subsidiary to fail to perform or observe any duty or covenant contained in
Article VI of this Agreement or in any of the Security Documents and such
failure continues for a period of fifteen (15) days or shall fail to perform or
observe any other covenant or duty contained in this Agreement or in any of the
Loan Documents; or
(d) the Company or any Subsidiary shall (i) fail to make (whether as
primary obligor or as guarantor or other surety) any principal payment of or
interest or premium, if any, on any instrument of Indebtedness in excess of
$500,000.00 allowed hereunder outstanding beyond any period of grace provided
with respect thereto or (ii) shall fail to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument of
Indebtedness in excess of $500,000.00, if the effect of such failure is to
cause, or to permit the holder or holders to cause, such obligations to become
due prior to any stated maturity; or
(e) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any Subsidiary, or of a substantial part of the
property or assets of the Company or any Subsidiary, under Title 11 of the
United States Code, as now or hereafter in effect, or any successor thereto (the
"Bankruptcy Code"), or any other federal or state bankruptcy, insolvency,
receivership or similar law, (ii) the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of the property or assets of the Company or
any Subsidiary or (iii) the winding-up or liquidation of the Company or any
Subsidiary; and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be
entered; or
(f) the Company or any Subsidiary shall (i) voluntarily commence any
proceeding or file any petition seeking relief under the Bankruptcy Code or any
other federal or state bankruptcy, insolvency, receivership or similar law, (ii)
consent to the institution of, or fail to contest in a timely and appropriate
manner, any proceeding or the filing of any petition described in clause (e)
above, (iii) apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the Company or any
Subsidiary or for a substantial part of the property or assets of the Company or
any Subsidiary, (iv) file an answer admitting the material allegations of a
petition filed against it in any such proceeding, (v) make a general assignment
for the benefit of creditors, (vi) become unable, or admit in writing its
inability or fail generally to pay
its debts as they become due or (vii) take any action for the purpose of
effecting any of the foregoing; or
(g) either party to the Subscription Agreement shall be in default
thereunder of any kind and for any reason; or
(h) a judgment or order, which with other outstanding judgments and
orders against the Company and its Subsidiaries equal or exceed $500,000.00 in
the aggregate (to the extent not covered by insurance as to which the respective
insurer has acknowledged coverage), shall be entered against the Company or any
Subsidiary and (i) within 30 days after entry thereof such judgment shall not
have been paid or discharged or execution thereof stayed pending appeal or,
within 30 days after the expiration of any such stay, such judgment shall not
have been paid or discharged or (ii) any enforcement proceeding shall have been
commenced (and not stayed) by any creditor or upon such judgment; or
(i) a Change of Control shall occur.
SECTION 9.02. Primary Remedies. In any such event, and at any time
after the occurrence of any of the above described events, the Agent, if
directed by the Majority Banks, shall by written notice to the Company (a
"Notice of Default") take any or all of the following actions (without prejudice
to the rights of any Bank to enforce any other rights it may have against the
Company, provided that, if an Event of Default specified in Section 9.01(e) or
Section 9.01(f) shall occur, the following shall occur automatically without the
giving of any Notice of Default): (a) declare the Commitments terminated,
whereupon the Commitments shall forthwith terminate immediately and any
Commitment Fee and any other owing and unpaid Fee shall forthwith become due and
payable without any other notice of any kind; (b) declare the principal of and
any accrued and unpaid interest in respect of all Advances, and all obligations
owing hereunder, to be, whereupon the same shall become, forthwith due and
payable without presentment, demand, notice of demand or of dishonor and non-
payment, protest, notice of protest, notice of intent to accelerate, declaration
or notice of acceleration or any other notice of any kind (except as herein
provided), all of which are hereby waived by the Company; (c) set off any assets
or money of the Company or any Guarantor in its or any Bank's possession against
the Obligations; and (d) exercise any rights or remedies under any document
securing any of the Loan Documents or under any applicable state or federal law.
SECTION 9.03. Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Agent may proceed to protect and
enforce its and the Banks' rights, either by suit in equity or by action at law
or both, whether for the specific performance of any covenant or agreement
contained in this Agreement or in any other Loan Document or in aid of the
exercise of any power granted in this Agreement or in any other Loan Document;
or may proceed to enforce the payment of all amounts owing to the Banks under
the Loan Documents and any accrued and unpaid interest thereon in the manner set
forth herein or therein; it being intended that no remedy conferred herein or in
any of the other Loan Documents is to be exclusive of any other remedy, and each
and every remedy contained herein or in any other Loan Document shall be
cumulative and shall be in addition to every other remedy given hereunder and
under the other Loan Documents or now or hereafter existing at law or in equity
or by statute or otherwise.
ARTICLE X
THE AGENT
SECTION 10.01. Authorization and Action. Each Bank hereby
irrevocably appoints and authorizes the Agent to act on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
specifically delegated to or required of the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto. The Agent may perform
any of its duties hereunder by or through its agents and employees. The duties
of the Agent shall be mechanical and administrative in nature; the Agent shall
not have by reason of this Agreement or any other Loan Documents a fiduciary
relationship in respect of any Bank; and nothing in this Agreement or any other
Loan Document, expressed or implied, is intended to, or shall be so construed as
to, impose upon the Agent any obligations in respect of this Agreement or any
other Loan Document except as expressly set forth herein or therein. As to any
matters not expressly provided for by this Agreement, the Notes or the other
Loan Documents (including enforcement or collection of the Notes), the Agent
shall not be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Majority Banks,
and such instructions shall be binding upon the Banks and all holders of Notes
and the Obligations; provided, that the Agent shall not be required to take any
action which exposes the Agent to personal liability and shall not be required
or entitled to take any action which is contrary to any of the Loan Documents or
applicable law.
SECTION 10.02. Agent's Reliance. (a) Neither the Agent nor any of
its directors, officers, agents or employees shall be liable to the Banks for
any action taken or omitted to be taken by it or them under or in connection
with this Agreement, the Notes or any of the other Loan Documents (i) with the
consent or at the request of the Majority Banks or (ii) in the absence of its or
their own gross negligence or willful misconduct, IT BEING THE EXPRESS INTENTION
OF THE PARTIES HERETO THAT THE AGENT AND ITS DIRECTORS, OFFICERS, AGENTS AND
EMPLOYEES SHALL HAVE NO LIABILITY TO THE BANKS FOR ACTIONS AND OMISSIONS UNDER
THIS SECTION RESULTING FROM THEIR SOLE ORDINARY OR CONTRIBUTORY NEGLIGENCE.
(b) Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of each Note and the Obligations as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (ii) may consult
with legal counsel (including counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with this
Agreement, any Note or any other Loan Document; (iv) except as otherwise
expressly provided herein, shall not have
any duty to ascertain or to inquire as to the performance or observance of any
of the terms, covenants or conditions of this Agreement, any Note or any other
Loan Document or to inspect the property (including the books and records) of
the Company; (v) shall not be responsible to any Bank for the due execution,
legality, validity, enforceability, collectibility, genuineness, sufficiency or
value of this Agreement, any Note, any other Loan Document or any other
instrument or document furnished pursuant hereto or thereto; (vi) shall not be
responsible to any Bank for the perfection or priority of any Lien securing the
Obligations; and (vii) shall incur no liability to the Banks under or in respect
of this Agreement, any Note or any other Loan Document by acting upon any
notice, consent, certificate or other instrument or writing (which may be by
telegram, telecopier or cable) reasonably believed by it to be genuine and
signed or sent by the proper party or parties.
SECTION 10.03. Agent and Affiliates; TCB and Affiliates. Without
limiting the right of any other Bank to engage in any business transactions with
the Company or any of its Affiliates, with respect to their Commitments, the
Loans made by them and the Notes issued to them, TCB and each other Bank who may
become the Agent shall have the same rights and powers under this Agreement and
its Notes as any other Bank and may exercise the same as though it was not the
Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include TCB and any such other Bank, in their individual capacities.
TCB, each other Person who becomes the Agent and their respective Affiliates may
be engaged in, or may hereafter engage in, one or more loan, letter of credit,
leasing or other financing activity not the subject of this Agreement
(collectively, the "Other Financings") with the Company, any Subsidiary or any
of its Affiliates, or may act as trustee on behalf of, or depositary for, or
otherwise engage in other business transactions with the Company, any
Subsidiary or any of its Affiliates (all Other Financings and other such
business transactions being collectively, the "Other Activities") with no
responsibility to account therefor to the Banks. Without limiting the rights and
remedies of the Banks specifically set forth herein, no other Bank by virtue of
being a Bank hereunder shall have any interest in (a) any Other Activities, (b)
any present or future guaranty by or for the account of the Company not
contemplated or included herein, (c) any present or future offset exercised by
the Agent in respect of any such Other Activities, (d) any present or future
property taken as security for any such Other Activities or (e) any property now
or hereafter in the possession or control of the Agent which may be or become
security for the Obligations of the Company hereunder and under the Notes by
reason of the general description of indebtedness secured, or of property
contained in any other agreements, documents or instruments related to such
Other Activities; provided, however, that if any payment in respect of such
guaranties or such property or the proceeds thereof shall be applied to
reduction of the Obligations evidenced hereunder and by the Notes, then each
Bank shall be entitled to share in such application according to its pro rata
portion of such Obligations.
SECTION 10.04. Bank Credit Decision. Each Bank acknowledges and
agrees that it has, independently and without reliance upon the Agent or any
other Bank and based on the financial statements referred to in Section 6.01 and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement. Each Bank also
acknowledges and agrees that it will, independently and without reliance upon
the Agent or any other Bank 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 this Agreement and the other Loan Documents.
SECTION 10.05. Agent's Indemnity. (a) The Agent shall not be
required to take any action hereunder or to prosecute or defend any suit in
respect of this Agreement, the Notes or any other Loan Document unless
indemnified to the Agent's satisfaction by the Banks against loss, cost,
liability and expense. If any indemnity furnished to the Agent shall become
impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given. In addition, the
Banks agree to indemnify the Agent (to the extent not reimbursed by the
Company), ratably according to the respective aggregate principal amounts of the
Notes then held by each of them (or if no Notes are at the time outstanding,
ratably according to the respective amounts of the Commitments), from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by, or asserted against the
Agent in any way relating to or arising out of this Agreement or any action
taken or omitted by the Agent under this Agreement, the Notes and the other Loan
Documents. Without limitation of the foregoing, each Bank agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including reasonable counsel fees) incurred by the Agent in connection
with the preparation, execution, administration, or enforcement of, or legal
advice in respect of rights or responsibilities under, this Agreement, the Notes
and the other Loan Documents to the extent that the Agent is not reimbursed for
such expenses by the Company. The provisions of this Section shall survive the
termination of this Agreement, the payment of the Obligations and/or the
assignment of any of the Notes.
(b) Notwithstanding the foregoing, no Bank shall be liable under this
Section to the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
due to the Agent resulting from the Agent's gross negligence or willful
misconduct. EACH BANK AGREES, HOWEVER, THAT IT EXPRESSLY INTENDS, UNDER THIS
SECTION, TO INDEMNIFY THE AGENT RATABLY AS AFORESAID FOR ALL SUCH LIABILITIES,
OBLIGATIONS, LOSSES, DAMAGES, PENALTIES, ACTIONS, JUDGMENTS, SUITS, COSTS,
EXPENSES AND DISBURSEMENTS ARISING OUT OF OR RESULTING FROM THE AGENT'S SOLE
ORDINARY OR CONTRIBUTORY NEGLIGENCE.
SECTION 10.06. Successor Agent. The Agent may resign at any time
by giving written notice thereof to the Banks and the Company and may be removed
as Agent under this Agreement, the Notes and the other Loan Documents at any
time with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent
with the approval of the Company, which shall not be unreasonably withheld. If
no successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 calendar days after the retiring
Agent's giving of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent with the approval of the Company, which shall not be
unreasonably withheld, which shall be a commercial bank organized under the laws
of the United States of America or of any state thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder and under the Notes and
the other Loan Documents by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement, the Notes and the other
Loan Documents. After any retiring Agent's resignation or removal as Agent
hereunder and under the Notes and the other Loan Documents, the provisions of
this Article X shall inure to its benefit as to any actions taken or omitted to
be taken by it while it was Agent under this Agreement, the Notes and the other
Loan Documents.
SECTION 10.07. Notice of Default. The Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent shall have received notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." If the Agent receives such
notice, the Agent shall give notice thereof to the Banks; provided, however, if
such notice is received from a Bank, the Agent also shall give notice thereof to
the Company. The Agent shall be entitled to take action or refrain from taking
action with respect to such Default or Event of Default as provided in Section
10.01 and Section 10.02.
ARTICLE XI
MISCELLANEOUS
SECTION 11.01. Amendments. No amendment or waiver of any provision
of this Agreement, any Note or any other Loan Document, nor consent to any
departure by the Company herefrom or therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Company, as to amendments,
and by the Majority Banks in all cases, and then, in any case, such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given provided, no such amendment shall be effective unless
signed by all of the Banks if it attempts to: (a) change the definition of
"Accounts", "Adjusted EBITDA", "Borrowing Base", "Commitment", "Designated
Payment Date", "EBITDA", "Eligible Accounts", "Excess Cash Flow", "Majority
Banks", "Margin" or "Maturity Date"; (b) modify this Section or Sections 3.01 or
7.01 through 7.14 or any definition related to said sections; (c) release any
Guarantor; (d) waive any Default under Section 9.01(a), (e) release any Liens on
any of the Collateral, or (f) in any other manner change the repayment terms of
the Loans, including required principal payments or the rate, amount or time of
interest payments.
SECTION 11.02. Notices. Except with respect to telephone
notifications specifically permitted pursuant to Article II, all notices,
consents, requests, approvals, demands and other communications provided for
herein shall be in writing (including telecopy communications) and mailed,
telecopied, sent by overnight courier or delivered:
(a) If to the Company and the Guarantors:
Group Maintenance America Corp.
0000 Xxxx Xxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No: (000) 000-0000
Attention: Xxxxxx X. Xxxxxx
(b) If to the Agent:
Texas Commerce Bank National Association
000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No: (000) 000-0000
Attention: Xx. Xxxx Xxxxxxx
Senior Vice President
with copies to:
Loan Syndication Services
0000 Xxxxxx
0xx Xxxxx - M.S. 46
Xxxxxxx, Xxxxx 00000
Attention: Xxxx Xxxxxxx
and to:
Xxxxxxx & Xxxxx L.L.P.
0000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xx. Xxxxxx X. Xxxxxx
or, in the case of any party hereto, such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the other
parties.
(c) If to any Bank, to the address shown on the signature page hereof
or specified by such Bank (or the Agent on behalf of any Bank) to the Company.
All communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, or
telecopied to any party to the telecopy number set forth above, or delivered
personally to any party at its address specified above; provided, that
communications to the Agent pursuant to Article II shall not be effective until
actually received by the Agent, and provided further that communications sent by
telecopy after 5:00 p.m., Houston, Texas time, shall be effective on the next
succeeding business day.
SECTION 11.03. No Waiver; Remedies. No failure on the part of any
Bank or the Agent to exercise, and no delay in exercising, any right hereunder,
under any Note or under any other Loan Document shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, or any
abandonment or discontinuance of any steps to enforce such right, preclude any
other or further exercise thereof or the exercise of any other right. No notice
to or demand on the Company in any case shall entitle the Company to any other
or further notice or demand in similar or other circumstances. The remedies
herein are cumulative and not exclusive of any other remedies provided by law,
at equity or in any other agreement.
SECTION 11.04. Costs, Expenses and Taxes. The Company agrees to
pay on demand: (a) all reasonable out-of-pocket costs and expenses of the Agent
in connection with the preparation, execution and delivery of this Agreement,
the Notes, the other Loan Documents and the other documents to be delivered
hereunder, including the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement, the Notes and the other
Loan Documents, and any modification, supplement or waiver of any of the terms
of this Agreement or any other Loan Document, (b) all reasonable out-of-pocket
costs and expenses of any Bank including reasonable legal fees and expenses, in
connection with the enforcement of this Agreement, the Notes and the other Loan
Documents and (c) reasonable costs and expenses incurred in connection with
third party professional services required by the Agent such as appraisers,
environmental consultants, accountants or similar Persons, provided that, prior
to any Event of Default hereunder, the Agent will first obtain the consent of
the Company to such expense, which consent shall not be unreasonably withheld.
Without prejudice to the survival of any other obligations of the Company
hereunder and under the Notes, the obligations of the Company under this Section
shall survive the termination of this Agreement or the replacement of the Agent
and each assignment of the Notes.
SECTION 11.05. Release and Indemnity. (a) The Company shall and
hereby does indemnify the Agent and each Bank and each Affiliate thereof and
their respective directors, officers, employees and agents from, and hold each
of them harmless against, any and all losses, liabilities, claims or damages
(including reasonable legal fees and expenses) to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise out of or
result from any actual or proposed use by the Company of the proceeds of any
extension of credit hereunder or any investigation, litigation or other
proceeding (including any threatened investigation or proceeding) relating to
the foregoing or any of the other Loan Documents, and the Company shall
reimburse each Bank and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any expenses (including legal
fees) reasonably incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
expenses
incurred by reason of the gross negligence or willful misconduct of the Person
to be indemnified (the "Indemnified Obligations").
(B) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE
EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED
HEREUNDER SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL INDEMNIFIED
OBLIGATIONS: (I) ARISING OUT OF OR RESULTING FROM THE ORDINARY SOLE OR
CONTRIBUTORY NEGLIGENCE OF SUCH PERSON OR (II) IMPOSED UPON SAID PARTY UNDER ANY
THEORY OF STRICT LIABILITY. Without prejudice to the survival of any other
obligations of the Company hereunder and under the other Loan Documents, the
obligations of the Company under this Section shall survive the termination of
this Agreement and the other Loan Documents and the payment of the Obligations
or the assignment of the Notes.
SECTION 11.06. Right of Setoff. Without limiting the remedies
provided for in Article IX, each Bank is hereby authorized at any time and from
time to time, after acceleration of the Obligations after the occurrence of an
Event of Default to the fullest extent permitted by law, to set off and apply
any and all deposits held and other indebtedness owing by such Bank, or any
branch, subsidiary or Affiliate, to or for the credit or the account of the
Company against any and all the Obligations of the Company now or hereafter
existing under this Agreement and the other Loan Documents and other obligations
of the Company held by such Bank, irrespective of whether or not such Bank shall
have made any demand under this Agreement, its Note or the Obligations and
although the Obligations may be unmatured. The rights of each Bank under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Bank may have.
SECTION 11.07. Governing Law. This Agreement, all Notes, the other
Loan Documents and all other documents executed in connection herewith shall be
deemed to be contracts and agreements executed by the Company and each Bank
under the laws of the State of Texas and of the United States of America and for
all purposes shall be construed in accordance with, and governed by, the laws of
said state and of the United States of America. Without limitation of the
foregoing, nothing in this Agreement, or in the Notes or in any other Loan
Document shall be deemed to constitute a waiver of any rights which any Bank may
have under applicable federal legislation relating to the amount of interest
which such Bank may contract for, take, receive or charge in respect of the Loan
and the Loan Documents, including any right to take, receive, reserve and charge
interest at the rate allowed by the law of the state where any Bank is located.
The Agent, each Bank and the Company further agree that insofar as the
provisions of Article 5069-1.04, of the Revised Civil Statutes of Texas, as
amended, are applicable to the determination of the Highest Lawful Rate with
respect to the Notes and the Obligations hereunder and under the other Loan
Documents, the indicated rate ceiling of such Article shall be applicable;
provided, however, that to the extent permitted by such Article, the Agent may
from time to time by notice to the Company revise the election of such interest
rate ceiling as such ceiling affects the then current or future balances of the
Loans. The provisions of Article 5069-15.01 et seq. do not apply to this
Agreement, any Note issued hereunder or the other Loan Documents.
SECTION 11.08. Interest. Each provision in this Agreement and each
other Loan Document is expressly limited so that in no event whatsoever shall
the amount paid, or otherwise
agreed to be paid, to the Agent or any Bank, or charged, contracted for,
reserved, taken or received by the Agent or any Bank, for the use, forbearance
or detention of the money to be loaned under this Agreement or any Loan Document
or otherwise (including any sums paid as required by any covenant or obligation
contained herein or in any other Loan Document which is for the use, forbearance
or detention of such money), exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate, and all amounts
owed under this Agreement and each other Loan Document shall be held to be
subject to reduction to the effect that such amounts so paid or agreed to be
paid, charged, contracted for, reserved, taken or received which are for the
use, forbearance or detention of money under this Agreement or such Loan
Document shall in no event exceed that amount of money which would cause the
effective rate of interest to exceed the Highest Lawful Rate. Anything in any
Note or any other Loan Document to the contrary notwithstanding, the Company
shall not be required to pay unearned interest on any Note and the Company shall
not be required to pay interest on the Obligations at a rate in excess of the
Highest Lawful Rate, and if the effective rate of interest which would otherwise
be payable under such Note and such Loan Documents would exceed the Highest
Lawful Rate, or if the holder of such Note shall receive any unearned interest
or shall receive monies that are deemed to constitute interest which would
increase the effective rate of interest payable by the Company under such Note
and the other Loan Documents to a rate in excess of the Highest Lawful Rate,
then (a) the amount of interest which would otherwise be payable by the Company
shall be reduced to the amount allowed under applicable law and (b) any unearned
interest paid by the Company or any interest paid by the Company in excess of
the Highest Lawful Rate shall in the first instance be credited on the principal
of the Obligations of the Company (or if all such Obligations shall have been
paid in full, refunded to the Company). It is further agreed that, without
limitation of the foregoing, all calculations of the rate of interest contracted
for, reserved, taken, charged or received by any Bank under the Notes and the
Obligations and under the other Loan Documents are made for the purpose of
determining whether such rate exceeds the Highest Lawful Rate, and shall be
made, to the extent permitted by usury laws applicable to such Bank, by
amortizing, prorating and spreading in equal parts during the period of the full
stated term of the Notes and this Agreement all interest at any time contracted
for, charged or received by such Bank in connection therewith. Furthermore, in
the event that the maturity of any Note or other obligation is accelerated or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest under applicable law may never include more than the
maximum amount allowed by applicable law and excess interest, if any, provided
for in this Agreement, any Note or otherwise shall be canceled automatically as
of the date of such acceleration or prepayment and, if theretofore paid, shall
be refunded to the Company.
SECTION 11.09. Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing by
the Company in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents, the termination of the Commitments of the Banks and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not, provided, that the Commitments of the Banks
shall not inure to the benefit of any successor or assign of the Company.
SECTION 11.10. Successors and Assigns; Participations. (a) All
covenants, promises and agreements by or on behalf of the Company or the Banks
that are contained in this Agreement shall bind and inure to the benefit of
their respective permitted successors and assigns. The Company may not assign or
transfer any of its rights or obligations hereunder.
(b) Any of the Banks may assign to or sell participations to one or
more banks of all or a portion of its rights and obligations under this
Agreement and the other Loan Documents (including all or a portion of its
Commitment, the Advances and the Obligations of the Company owing to it and the
Notes); provided, that the Company shall continue to deal solely and directly
with the Agent and such assigning or selling Bank in connection with such Bank's
rights and obligations under this Agreement and the other Loan Documents.
Except with respect to cost protections provided to a participant pursuant to
this paragraph and the items listed in Section 11.01 hereof, no participant
shall be a third party beneficiary of this Agreement nor shall it be entitled to
enforce any rights provided to the Banks against the Company under this
Agreement.
(c) A Bank may assign to any other Bank or Banks or to any Affiliate
of a Bank and, with the prior written consent of the Company and the Agent
(which consent shall not be unreasonably withheld), a Bank may assign to one or
more other Eligible Assignees all or a portion of its interests, rights, and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitment and the same portion of the Loans and other
Obligations of the Company at the time owing to it and the Note held by it);
provided, however, that (i) each such assignment shall be in a minimum principal
amount of not less than $5,000,000.00 for all Types of Loans and shall be of a
constant, and not a varying, percentage of all the assigning Bank's Acquisition
Loan Commitment, Revolving Credit Loan Commitment and Term Loan Commitment, its
rights and obligations under this Agreement, and its share of the outstanding
balance of each of the Notes (ii) the parties to each such assignment shall
execute and deliver to the Agent, for its acceptance, an Assignment and
Acceptance, substantially in the form of Exhibit 11.10(c) hereto, in form and
substance satisfactory to the Agent (an "Assignment and Acceptance") and any
Note subject to such assignment and (iii) no assignment shall be effective until
receipt by the Agent of a reasonable service fee from the Assignee Bank in
respect of said assignment equal to $2,000.00. Upon such execution, delivery
and acceptance, from and after the effective date specified in each Assignment
and Acceptance, which effective date (unless otherwise agreed to by the
assigning Bank, the Eligible Assignee thereunder and the Agent) shall be at
least five Business Days after the execution thereof, (x) the Eligible Assignee
thereunder shall be a party hereto as a "Bank" and to the other Loan Documents
and, to the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Bank hereunder and under the other Loan Documents and (y)
the assignor Bank thereunder shall, to the extent provided in such Assignment
and Acceptance, be released from its obligations under this Agreement and the
other Loan Documents (and, in the case of an Assignment and Acceptance covering
all of the remaining portion of an assigning Bank's rights and obligations under
this Agreement and the other Loan Documents, such Bank shall cease to be a party
hereto).
(d) Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this section,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to the Company furnished to such Bank by or on behalf of
the Company.
SECTION 11.11. Confidentiality. Each Bank agrees to keep any
information delivered or made available to it by the Company or any of its
Subsidiaries, confidential from anyone other than Persons employed or retained
by such Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans and who are bound hereby; provided that
nothing herein shall prevent any Bank from disclosing such information (a) to
any other Bank, (b) pursuant to subpoena or upon the order of any court or
administrative agency, (c) upon the request or demand of any regulatory agency
or authority having jurisdiction over such Bank, (d) which has been publicly
disclosed, (e) to the extent reasonably required in connection with any
litigation to which the Agent, any Bank, the Company or its respective
Affiliates may be a party, (f) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (g) to such Bank's legal counsel and
independent auditors and who are bound hereby and (h) to any actual or proposed
participant or assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this Section. Each Bank will
promptly notify the Company of any information that it is required or requested
to deliver pursuant to clause (b) or (c) of this Section and, if the Company is
a party to any such litigation, clause (e) of this Section .
SECTION 11.12. Pro Rata Treatment. (a) Except as otherwise
specifically permitted hereunder, each payment or prepayment of principal, if
permitted under this Agreement, and each payment of interest with respect to an
Advance shall be made pro rata among the Banks.
(b) Each Bank agrees that if, through the exercise of a right of
banker's Lien, setoff or claim of any kind against the Company as a result of
which the unpaid principal portion of the Notes and the Obligations held by it
shall be proportionately less than the unpaid principal portion of the Notes and
Obligations held by any other Bank, it shall be deemed to have simultaneously
purchased from such other Bank a participation in the Notes and Obligations held
by such other Bank, in the amount required to render such amounts proportional;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustments restored without interest.
SECTION 11.13. Separability. Should any clause, sentence,
paragraph or Section of this Agreement be judicially declared to be invalid,
unenforceable or void, such decision will not have the effect of invalidating or
voiding the remainder of this Agreement, and the parties hereto agree that the
part or parts of this Agreement so held to be invalid, unenforceable or void
will be deemed to have been stricken herefrom and the remainder will have the
same force and effectiveness as if such part or parts had never been included
herein.
SECTION 11.14. Execution in Counterparts. This Agreement may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed shall be deemed to be an
original and all of which taken together shall constitute
one and the same agreement. Any Subsidiary of the Company that executes this
Agreement after the date of this Agreement shall, upon such execution, become a
party hereto as a Guarantor.
SECTION 11.15. Interpretation. (a) In this Agreement, unless a
clear contrary intention appears:
(i) the singular number includes the plural number and vice
versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to any
particular Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors
and assigns but, if applicable, only if such successors and assigns are
permitted by this Agreement, and reference to a Person in a particular
capacity excludes such Person in any other capacity or individually,
provided that nothing in this clause is intended to authorize any
assignment not otherwise permitted by this Agreement;
(v) except as expressly provided to the contrary herein,
reference to any agreement, document or instrument (including this
Agreement) means such agreement, document or instrument as amended,
supplemented or modified and in effect from time to time in accordance with
the terms thereof and, if applicable, the terms hereof, and reference to
any Note or other note includes any Note issued pursuant hereto in
extension or renewal thereof and in substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any
Article, Section, Schedule or Exhibit means such Article or Section hereof
or such Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative meaning
"include") means including, without limiting the generality of any
description preceding such term;
(viii) with respect to the determination of any period of time,
except as expressly provided to the contrary, the word "from" means "from
and including" and the word "to" means "to but excluding"; and
(ix) reference to any law, rule or regulation means such as
amended, modified, codified or reenacted, in whole or in part, and in
effect from time to time.
(b) The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
(d) In the event of any conflict between the specific provisions of
this Agreement and the provisions of any application pertaining to any letter of
credit secured by a Loan Document, the terms of this Agreement shall control.
SECTION 11.16. SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS, IN XXXXXX COUNTY OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE COMPANY AND
EACH GUARANTOR FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS
ADDRESS PROVIDED IN SECTION 11.02 AND WITH RESPECT TO ANY GUARANTOR, AT THE
ADDRESS PROVIDED ON SCHEDULE 5.16 HERETO, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
(b) EACH OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
SECTION 11.17. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH
GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM OR RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES, TO THE
EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 11.18. FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT
(INCLUDING THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN
DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF THE
TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
BORROWER:
GROUP MAINTENANCE AMERICA CORP.
By: __________________________________
Xxxxxxx X. Xxxxxxxxx
Executive Vice President -
Acquisitions and Finance
GUARANTORS/SUBSIDIARIES:
AIRTRON, INC.
By: ________________________________
Xxxxxxx Xxxxxxxx
Vice President
AIRTRON OF CENTRAL FLORIDA, INC.
By: ________________________________
Xxxxxxx Xxxxxxxx
President
JARL ACQUISITION CORP.
By: ________________________________
Xxxxxxx X. Xxxxxxxxx
Secretary
AMOUNT OF COMMITMENT: AGENT/SECURED PARTY:
Term Loan Commitment TEXAS COMMERCE BANK NATIONAL
$8,571,428.57 ASSOCIATION, as Agent and Individually,
as a Bank
Acquisition Loan Commitment:
$5,142,857.14
Revolving Credit Loan Commitment: By: ______________________________
$1,285,714.29 X. X. Xxxxxxx
Vice President
BANKS:
AMOUNT OF COMMITMENT:
Term Loan Commitment BANQUE PARIBAS
$5,714,285.71
Acquisition Loan Commitment:
$3,428,571.43
By: ______________________________
Revolving Credit Loan Commitment: Name:_____________________________
$857,142.86 Title:____________________________
By: ______________________________
Name:_____________________________
Title:____________________________
Address for Notice:
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx Xxxxx-Xxxxxx
AMOUNT OF COMMITMENT:
Term Loan Commitment: ABN AMRO BANK, N.V.
$5,714,285.71
Acquisition Loan Commitment:
$3,428,571.43
By: ______________________________
Revolving Credit Loan Commitment: Name:_____________________________
$857,142.86 Title:____________________________
By: ______________________________
Name:_____________________________
Title:____________________________
Address for Notice:
Xxxxx Xxxxxxxx, #0000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx Zozobrato
AMENDMENT AND WAIVER TO CREDIT AGREEMENT
This AMENDMENT AND WAIVER TO CREDIT AGREEMENT (this "Amendment and
Waiver"), effective as of July 14, 1997, is entered into by and among GROUP
MAINTENANCE AMERICA CORP., a Texas corporation (the "Company"), TEXAS COMMERCE
BANK NATIONAL ASSOCIATION, a national banking association, as Administrative
Agent (the "Agent") and the Banks signatory hereto (the "Banks"). Capitalized
terms used herein, unless otherwise defined, are as defined in the hereafter
referenced Credit Agreement.
WHEREAS, the Company, and the Agent, and the Banks, have executed that
certain Credit Agreement dated as of May 2, 1997 (as amended from time to time,
the "Credit Agreement"); and
WHEREAS, the Company has requested the Banks to modify certain terms
of the Credit Agreement; and
WHEREAS, the Banks have agreed to do so, provided the Company ratifies
and confirms all of its obligations under the Credit Agreement and the Loan
Documents.
NOW, THEREFORE, in consideration of the premises and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. Temporary Waiver of Sections 4.03(a)(ii) and (b). Sections
4.03(a)(ii) and (b) only of the Credit Agreement shall not be applicable to the
acquisition of the entities Xxxxxx Services, Inc., Xxxxxxxx/Xxxxx & Associates,
Xxxxxxxx Xxxxx Products & Publications, Inc., or United Service Alliance, L.C.,
but shall remain applicable for all other acquisitions otherwise permitted
hereunder. All other terms, conditions and requirements contained in the Credit
Agreement remain applicable to the acquisition of said entities and for all
other purposes.
2. Amendment to Section 7.03(m). Section 7.03 of the Credit
Agreement, regarding other permitted indebtedness is hereby amended by deleting
the figure $1,000,000.00 and substituting therefor the figure $1,500,000.00.
3. Amendment to Section 7.12. Section 7.12 of the Credit Agreement
is hereby deleted and the following substituted therefor:
"SECTION 7.12. Total Funded Debt to Consolidated Net Worth
Ratio. The Company will not permit the ratio of its Total Funded Debt to
Consolidated Net Worth to be greater than the following for the periods
indicated:
prior to 12/31/97 3.25 to 1.0
from 12/31/97 to 12/31/98 2.60 to 1.0
1/1/99 and thereafter 1.50 to 1.0
4. Ratification. The Company hereby ratifies all of its obligations
under the Credit Agreement and the Loan Documents, and agrees and acknowledges
that the Credit Agreement and each of the Loan Documents shall continue in full
force and effect as amended and modified by this Amendment and Waiver. Nothing
in this Amendment and Waiver extinguishes, novates or releases any right, claim,
lien, security interest or entitlement of any of the Banks created by or
contained in any of such documents nor is the Company released from any
covenant, warranty or obligation created by or contained herein.
5. Guarantor Ratification. The Guarantors execute this Amendment
and Waiver to guaranty the Loans and the Obligations, as amended hereby, to
ratify and confirm the Guaranty, the effectiveness thereof and the liability of
each of them thereunder and to state that the Guaranty is in full force and
effect notwithstanding the execution hereof and that the Guaranty extends to all
of the Obligations.
6. Representations and Warranties. The Company hereby represents
and warrants to the Banks that (a) this Amendment and Waiver has been duly
executed and delivered on behalf of the Company, (b) this Amendment and Waiver
constitutes a valid and legally binding agreement enforceable against the
Company in accordance with its terms, (c) the representations and warranties
contained in the Credit Agreement and the Loan Documents are true and correct on
and as of the date hereof in all material respects as though made as of the date
hereof except as heretofore otherwise disclosed in writing to the Agent (other
than those of such representations and warranties which by their express terms
speak to a date on or before the date hereof), (d) no Default exists under the
Credit Agreement or any of the Loan Documents and (e) the execution, delivery
and performance of this Amendment and Waiver has been duly authorized by the
Company. The Company will, upon request by the Agent, provide satisfactory
evidence of items (a) and (e) above.
7. Counterparts. This Amendment and Waiver may be signed in any
number of counterparts, by facsimile signature or in original document form,
each of which shall be construed as an original, but all of which together shall
constitute one and the same instrument.
8. Conditions to Effectiveness. This Amendment and Waiver shall
become effective immediately upon the execution hereof by all parties.
9. SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION OR PROCEEDING
WITH RESPECT TO THIS AMENDMENT AND WAIVER, THE CREDIT
-2-
AGREEMENT, AND THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE
STATE OF TEXAS, IN XXXXXX COUNTY OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF THE
COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS WITH
RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE COMPANY AND EACH GUARANTOR FURTHER
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS ADDRESS PROVIDED IN
SECTION 11.02 OF THE CREDIT AGREEMENT AND WITH RESPECT TO ANY GUARANTOR, AT THE
ADDRESS PROVIDED ON SCHEDULE 5.16 ATTACHED TO THE CREDIT AGREEMENT, SUCH SERVICE
TO BECOME EFFECTIVE THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL
AFFECT THE RIGHT OF THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER
PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST
THE COMPANY IN ANY OTHER JURISDICTION.
(b) EACH OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY WAIVES
ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY
OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH
THIS AMENDMENT AND WAIVER BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE
AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN
BROUGHT IN AN INCONVENIENT FORUM.
10. WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH GUARANTOR
HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO A TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AMENDMENT AND WAIVER OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM OR RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AMENDMENT AND WAIVER OR THE CREDIT AGREEMENT, AND AGREES, TO THE EXTENT
PERMITTED BY APPLICABLE LAW, THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
11. FINAL AGREEMENT OF THE PARTIES. THIS AMENDMENT AND WAIVER,
ALONG WITH THE CREDIT AGREEMENT (INCLUDING THE SCHEDULES, EXHIBITS, AND OTHER
AMENDMENTS THERETO), THE NOTES, AND THE OTHER
-3-
LOAN DOCUMENTS CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(A) OF
THE TEXAS BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN
THE PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
[The remainder of this page intentionally left blank.]
-4-
IN WITNESS WHEREOF, the parties hereto have caused this Amendment and
Waiver to be executed by their respective officers thereunto duly authorized as
of the date first above written.
BORROWER:
GROUP MAINTENANCE AMERICA CORP.
By:
-----------------------------------------
Xxxxxx X. Xxxxxx
Senior Vice President and
Chief Financial Officer
GUARANTORS/SUBSIDIARIES:
GROUP MAC HOLDING CORP.
GROUP MAC MANAGEMENT CO.
By:
-----------------------------------------
Xxxxxx X. Xxxxxx
Vice President
AIRTRON, INC.
AIRTRON OF CENTRAL FLORIDA, INC.
By:
-----------------------------------------
Xxxxxx X. Xxxxxx
Vice President
A-ABC APPLIANCE, INC.
A-1 APPLIANCE AND AIR CONDITIONING,
INC.
XX XXXX, INC
ALL SERVICE ACQUISITION CORP.
AMS ACQUISITION CORP.
CENTRAL CAROLINA ACQUISITION
CORP.
XXXXXXX XXXXXXXX, INC.
XXXXXXX BROTHERS, INC.
CRP ACQUISITION CORP.
XXXXX ACQUISITION CORP.
HALLMARK AIR CONDITIONING, INC.
K&N PLUMBING, HEATING AND AIR
CONDITIONING, INC.
LSC ACQUISITION CORP.
XXXXXXXXX XXXXXX ACQUISITION
CORP.
MASTERS ACQUISITION CORP.
SEMS ACQUISITION CORP.
XXXXXX SERVICES, INC.
SUBURBAN ACQUISITION CORP.
UNITED ACQUISITION CORP.
VAN'S ACQUISITION CORP.
XXXXXX ACQUISITION CORP.
YALE ACQUISITION CORP.
By:
--------------------------------
Xxxxxx X. Xxxxxx
Vice President
AMOUNT OF COMMITMENT: AGENT/SECURED PARTY:
Term Loan Commitment TEXAS COMMERCE BANK NATIONAL
$8,571,428.57 ASSOCIATION, as Agent and Individually,
as a Bank
Acquisition Loan Commitment:
$5,142,857.14
Revolving Credit Loan Commitment: By:
$1,285,714.29 ----------------------------------
X. X. Xxxxxxx
Vice President
BANKS:
AMOUNT OF COMMITMENT:
Term Loan Commitment BANQUE PARIBAS
$5,714,285.71
Acquisition Loan Commitment:
$3,428,571.43
By: ------------------------------
Revolving Credit Loan Commitment: Name: ------------------------------
$857,142.86 Title: ------------------------------
By: ------------------------------
Name: ------------------------------
Title: ------------------------------
Address for Notice:
------------------
0000 Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxx Xxxxx-Xxxxxx
AMOUNT OF COMMITMENT:
Term Loan Commitment: ABN AMRO BANK, N.V.
$5,714,285.71
Acquisition Loan Commitment:
$3,428,571.43
By: --------------------------------
Revolving Credit Loan Commitment: Name: --------------------------------
$857,142.86 Title: --------------------------------
By: --------------------------------
Name: --------------------------------
Title: --------------------------------
Address for Notice:
------------------
Xxxxx Xxxxxxxx, #0000
Xxxxxxx, Xxxxx 00000
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
Attention: Xxxxxxxxx Zozobrato
