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Exhibit (B)
[SunTrust Letterhead]
May 12, 1997
SouthCap Corporation
000 Xxxxxxx Xxxxxx #000
Xxxxxxxxx, Xxxxxxxxx 00000
Attn: Xxxx X. Xxxxx, Executive Vice
President and Chief Financial Officer
Re: $6,000,000 Loan to SouthCap Corporation
Dear Xx. Xxxxx:
SunTrust Bank, Nashville, N.A. ("LENDER") is pleased to offer the following loan
commitment (the "COMMITMENT") to SouthCap Corporation, a Tennessee corporation,
subject to the terms and conditions set forth in this commitment letter
("COMMITMENT LETTER").
The major terms of the loan (the "LOAN") are described in general on the
attached term sheet and are incorporated herein by reference. The attached term
sheet summarizes our current understanding of the type of facility that we are
willing to offer to you, but the actual terms of the Loan will be evidenced by a
definitive and detailed loan agreement ("LOAN AGREEMENT") and related documents,
all in form and substance acceptable to Lender and containing such terms,
conditions, covenants, representations, defaults and remedies as Lender may
require (collectively, the "LOAN DOCUMENTS").
Borrower and Xxxxxx agree that this Commitment Letter does not contain all the
terms and conditions that will govern the Loan, or cover the wide variety of
issues that the Loan Documents will address. Borrower understands that the Loan
Documents will place significant restrictions on Borrower, and its subsidiaries.
Lender shall have no obligation to fund the Loan or enter into further written
agreements unless and until a satisfactory Loan Agreement and other Loan
Documents have been executed.
By your acceptance, you acknowledge that this Commitment Letter is issued in
reliance on the information that you have provided to us, and at a time before
we have completed a full business, credit, and legal analysis of Borrower and
the transactions contemplated by this Commitment. As a result of further
investigation and analysis by us and our counsel, impediments to closing may
come to our attention. While our mutual efforts will be directed toward the
closing of this transaction, we may require that the transaction be
restructured. If the conditions in this Commitment Letter have not been met to
Lender's satisfaction before closing, or if there is a material adverse change
in the business or affairs of Borrower and/or United Home Life Insurance Company
("HOME LIFE"), or if Xxxxxx discovers adverse circumstances of which it was
unaware, or if any representation of Borrower made in connection with or as an
inducement to the making of the Loan is untrue or misleading in any respect, the
commitment to lend evidenced by this Commitment Letter shall be null and void.
The parties acknowledge that this Commitment contemplates only a lending
relationship and that there is and shall be no agency, partnership, joint
venture or fiduciary relationship between Xxxxxx and Xxxxxxxx.
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SouthCap Corporation
May 12, 1997
Page 2
This Commitment Letter supersedes all previous oral and written negotiations,
proposals, commitments and understandings of any nature whatsoever, and may be
amended or modified only in writing signed by all parties.
The Commitment is not transferable and may not be assigned without the written
permission of Xxxxxx.
If Xxxxxxxx accepts the Commitment and the terms and conditions herein, please
have a copy of this Commitment Letter signed and delivered to Lender at the
address stated above (by facsimile transmission or otherwise), along with the
required commitment fee, on or before 5:00 p.m. (Central Time), on May 16, 1997.
This Commitment Letter shall not be effective or bind Lender unless Borrower has
accepted it and returned a signed copy to Lender by such time.
We appreciate the opportunity to respond to your financing needs and hope you
will find this commitment attractive.
Very truly yours,
SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ Xxxxxx Xxxxx
Title: Group Vice President
XXXXXXXX'S ACCEPTANCE:
The foregoing terms and conditions are hereby accepted and agreed to this 12th
day of May, 1997.
SOUTHCAP CORPORATION
By: /s/ Xxxx X. Xxxxx
Title: Executive Vice President
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SUNTRUST BANK, NASHVILLE, N.A.
TERM SHEET
(Attached to Commitment Letter Dated May 12, 1997)
LOAN:
- Loan of up to $6,000,000 for a term of three (3) years. Provided, however,
that the amount advanced under the Loan shall not exceed at any time an amount
equal to the current market value of Borrower's Eligible Liquid Assets which
shall be defined in the Loan Agreement.
PURPOSE:
- The proceeds of the Loan will be used solely by Borrower to acquire at least
50.1% of the outstanding voting stock of Home Life. No advance under the Loan
will be permitted until Borrower has acquired (or will acquire with the initial
advance) 50.1% of the outstanding voting stock of Home Life.
INTEREST RATE:
- The Loan shall bear interest at a varying rate per annum equal to the "base
rate of interest" from time to time charged by Xxxxxx. The "base rate of
interest" is defined as that rate of interest established from time to time and
announced by Xxxxxx as the "base rate," which is used as an index for
establishing interest rates on loans. The interest rate shall be adjusted daily
to reflect any changes in such "base rate of interest".
COLLATERAL:
- Pledge of all issued and outstanding stock of all presently existing and
hereafter acquired subsidiaries of Borrower.
- Security interest in all presently existing and hereafter acquired assets of
the Borrower, including, without limitation, all cash accounts, securities
equipment, and any interests in real property.
- Assignment of $2,000,000 in life insurance proceeds on the life of
X. X. Xxxxxxx.
- Negative pledge of all assets of Xxxxxxxx's subsidiaries, whether presently
existing or hereafter acquired.
FEES AND EXPENSES:
- Commitment fee of $12,000 fully earned and non-refundable on acceptance of
this Commitment Letter and payable upon execution of this Commitment Letter.
- Borrower shall pay all Lender's reasonable legal fees and other expenses
and all closing costs, expenses, filing fees, and similar charges paid or
incurred in connection with this Commitment Letter, the structuring of the Loan
or otherwise in connection with the Loan, regardless of whether the Loan is
closed or funded, and all costs and expenses incurred by Lender in the
enforcement or protection of its rights. All such amounts shall be due and
payable by Borrower upon Xxxxxx's demand.
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FINANCIAL REPORTING:
Quarterly unaudited consolidated and consolidating financial statements, annual
audited consolidated and consolidating financial statements, and other
information as requested by Xxxxxx.
CONDITIONS AND CONTINGENCIES:
Completion of Xxxxxx's due diligence and legal review. Negotiation and execution
of loan agreement, notes, security agreements, mortgages, pledge agreements,
negative pledge agreements, certificates, financing statements and other
documentation in form and substance satisfactory to Lender, containing such
terms, conditions, representations, warranties, covenants, defaults, remedies
and other matters as Lender may deem appropriate, which may be different from or
in addition to those described herein. Satisfactory legal opinions and evidence
of Xxxxxxxx's status and authorization of Loan. Other conditions include the
absence of material adverse change in Borrower's condition or business.
GOVERNING LAW:
This Commitment Letter and the Loan Documents shall be governed by Tennessee
law.
EXPIRATION AND ACCEPTANCE:
5:00 p.m. (Central Time) on May 16, 1997. Once accepted, should the Loan not
close for any reason, this Commitment Letter shall not be effective or bind
Lender, but Borrower shall reimburse Lender for all its costs and expenses
(including reasonable legal fees) incurred in connection with the preparation of
the Loan Documents and the transactions described herein. Any commitment made
pursuant to this Commitment Letter or in respect of the Loan shall expire if the
definitive Loan Agreement and other Loan Documents are not fully executed and
delivered within 60 days after the date that this Commitment Letter is signed by
Xxxxxxxx.
