1
Exhibit 10.12
AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of September 18, 1997
by and among
SERVICE EXPERTS, INC.
AND
SUNTRUST BANK, NASHVILLE, N.A.
AGENT AND AS A LENDER
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TABLE OF CONTENTS
Article I. Definitions................................................... -1-
Article II. The Credit.................................................... -13-
Section 2.01 The Revolving Credit Loan............................. -13-
Section 2.02 Letters of Credit..................................... -13-
Section 2.03 Interest Rate......................................... -15-
Section 2.04 Procedure for Revolving Credit Borrowing.............. -15-
Section 2.05 Use of Proceeds....................................... -16-
Section 2.06 Participation......................................... -16-
Section 2.07 Term of This Agreement................................ -17-
Section 2.08 Payments to Principal Office; Debit Authority......... -17-
Section 2.09....................................................... -17-
(a) Required Prepayment................................... -17-
(b) Principal Payments and Optional Prepayments........... -17-
(c) Permanent Reductions.................................. -18-
(d) Interest Payments..................................... -18-
Section 2.10 Funding Losses........................................ -18-
Section 2.11 Apportionment of Payments............................. -19-
Section 2.12 Sharing of Payments, Etc.............................. -19-
Section 2.13 Right of Offset, Etc.................................. -19-
Section 2.14 Commitment Fee........................................ -19-
Section 2.15 Usury................................................. -20-
Section 2.16 Interest Rate Not Ascertainable, Etc.................. -20-
Section 2.17 Illegality............................................ -21-
Section 2.18 Increased Costs....................................... -21-
Section 2.19 Swing Line Commitment; Use of Proceeds................ -22-
(a) Availability.......................................... -22-
(b) Borrowing Procedure Under Swing Line Commitment....... -22-
(c) Use of Proceeds....................................... -23-
(d) Refunding Swing Line Loans With Proceeds of Mandatory
Revolving Loans..................................... -23-
Article III. Guarantors.................................................. -24-
Section 3.01 Guarantors............................................ -24-
Article IV. Representations and Warranties............................... -24-
Section 4.01 Corporate Existence................................... -24-
Section 4.02 Power and Authorization............................... -24-
Section 4.03 Binding Obligations................................... -24-
Section 4.04 No Legal Bar or Resultant Lien........................ -24-
Section 4.05 No Consent............................................ -25-
Section 4.06 Financial Condition................................... -25-
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Section 4.07 Investments, Advances, and Guaranties................. -25-
Section 4.08 Liabilities and Litigation............................ -25-
Section 4.09 Taxes; Governmental Charges........................... -25-
Section 4.10 No Default............................................ -25-
Section 4.11 Compliance with Laws, Etc............................. -26-
Section 4.12 ERISA................................................. -26-
Section 4.13 Consolidated Entities................................. -26-
Section 4.14 No Material Misstatements............................. -26-
Section 4.15 Solvency.............................................. -26-
Section 4.16 Regulation U.......................................... -26-
Section 4.17 Filings............................................... -27-
Section 4.18 Title, Etc............................................ -27-
Section 4.19 Investment Company Act................................ -27-
Section 4.20 Personal Holding Company.............................. -27-
Section 4.21 Burdensome Agreements................................. -27-
Section 4.22 Insurance............................................. -27-
Section 4.23 Subsidiaries.......................................... -28-
Article V. Conditions Precedent......................................... -28-
Section 5.01 Initial Conditions.................................... -28-
(a) Notes and Loan Documents.............................. -28-
(b) Resolutions........................................... -28-
(c) Certificate of Existence.............................. -28-
(d) Consents, Etc......................................... -28-
(e) Incumbency Certificate................................ -28-
(f) Charter and By-Laws and Organizational Documents...... -28-
(g) Attorneys Opinion Letter.............................. -29-
(h) Payment of Fees, Etc.................................. -29-
(i) No Default Certificate................................ -29-
(j) Other................................................. -29-
Section 5.02 All Borrowings........................................ -29-
Article VI. Affirmative Covenants........................................ -29-
Section 6.01 Financial Statements and Reports...................... -30-
(a) Annual Reports........................................ -30-
(b) Quarterly and Year-to-Date Reports.................... -30-
(c) Compliance Reports.................................... -30-
(d) SEC Filings and Public Information.................... -30-
(e) Other Information..................................... -31-
Section 6.02 Annual Certificates of Compliance..................... -31-
Section 6.03 Taxes and Other Liens................................. -31-
Section 6.04 Maintenance........................................... -31-
Section 6.05 Further Assurances.................................... -32-
Section 6.06 Performance of Obligations............................ -32-
Section 6.07 Insurance............................................. -32-
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Section 6.08 Accounts and Records.................................. -32-
Section 6.09 Right of Inspection................................... -33-
Section 6.10 Notice of Certain Events.............................. -33-
Section 6.11 ERISA Information and Compliance...................... -33-
Section 6.12 Management............................................ -33-
Section 6.13 Additional Guaranties................................. -34-
Section 6.14 Equity Proceeds....................................... -34-
Article VII. Negative Covenants......................................... -34-
Section 7.01 Debts, Guarantees, and Other Obligations.............. -34-
Section 7.02 Liens................................................. -35-
Section 7.03 Investments, Loans, and Advances...................... -35-
Section 7.04 Distributions, and Redemptions; Issuance of Stock..... -36-
Section 7.05 Sales and Leasebacks.................................. -36-
Section 7.06 Nature of Business.................................... -37-
Section 7.07 Mergers, Consolidations, Etc.......................... -37-
Section 7.08 Proceeds of Loan...................................... -37-
Section 7.09 Disposition of Assets................................. -37-
Section 7.10 Limitation on Business................................ -37-
Section 7.11 Inconsistent Agreements............................... -37-
Section 7.12 Acquisitions.......................................... -37-
Article VII.A. Financial Covenants........................................ -38-
Section 7A.01 Financial Covenants.................................. -38-
(a) Minimum Net Worth..................................... -38-
(b) Senior Funded Debt to EBIA............................ -38-
(c) Total Funded Debt to EBIA............................. -38-
(d) Adjusted Total Funded Debt to Capitalization.......... -38-
(e) Fixed Charge Coverage Ratio........................... -38-
Article VIII. Events of Default.......................................... -38-
Section 8.01 Events of Default..................................... -38-
(a) Principal and Interest Payments....................... -38-
(b) Representations and Warranties........................ -39-
(c) Obligations........................................... -39-
(d) Involuntary Bankruptcy or Receivership Proceedings.... -39-
(e) Voluntary Petitions................................... -39-
(f) Assignments for Benefit of Creditors, Etc............. -39-
(g) Undischarged Judgments................................ -39-
(h) Violation of Laws, Etc................................ -40-
(i) Execution of Guaranty by a Consolidated Entity........ -40-
(j) ERISA Liability....................................... -40-
(k) Change of Ownership................................... -40-
(l) Executive Committee................................... -40-
(m) Default to Other Persons.............................. -40-
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Section 8.02 Remedies............................................. -40-
Section 8.03 Default Conditions................................... -41-
Article IX. General Provisions........................................... -42-
Section 9.01 Notices.............................................. -42-
Section 9.02 Invalidity........................................... -42-
Section 9.03 Survival of Agreements............................... -42-
Section 9.04 Successors and Assigns............................... -43-
Section 9.05 Waivers.............................................. -43-
Section 9.06 Cumulative Rights.................................... -43-
Section 9.07 Governing Law........................................ -43-
Section 9.08 Time of Essence...................................... -43-
Section 9.09 Costs, Expenses, and Taxes........................... -43-
Section 9.10 Entire Agreement; No Oral Representations Limiting
Enforcement.......................................... -43-
Section 9.11 Amendments........................................... -43-
Section 9.12 Distribution of Information.......................... -44-
Article X. Jury Waiver.................................................. -44-
Section 10.01 Jury Waiver.......................................... -44-
Article XI. Hazardous Substances......................................... -44-
Section 11.01 Representation and Indemnity Regarding Hazardous
Substances........................................... -44-
Article XII. The Agent.................................................... -45-
Section 12.01 Appointment of Agent................................. -45-
Section 12.02 Authorization of Agent with Respect to the Loan
Documents............................................ -46-
Section 12.03 Agent's Duties Limited; No Fiduciary Duty............ -48-
Section 12.04 NO RELIANCE ON THE AGENT............................. -48-
Section 12.05 Certain Rights of Agent.............................. -49-
Section 12.06 Reliance by Agent.................................... -49-
Section 12.07 Indemnification of Agent............................. -49-
Section 12.08 The Agent in its Individual Capacity................. -50-
Section 12.09 Holders of Notes..................................... -50-
Section 12.10 Successor Agent...................................... -50-
Section 12.11 Notice of Default or Event of Default................ -51-
Section 12.12 Benefit of Agreement................................. -51-
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EXHIBITS
Exhibit A: form of Borrowing Request
Exhibit B: form of Continuation/Conversion Notice
Exhibit C: List of Guarantors
Exhibit D: form of Application and Agreement for Standby Letter of Credit
Exhibit E: form of Revolving Credit Note
Exhibit F: List of Consolidated Entities
Exhibit G: form of Compliance Certificate
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AMENDED AND RESTATED CREDIT AGREEMENT
THIS AMENDED AND RESTATED CREDIT AGREEMENT is made and entered into as
of this 18th day of September, 1997 by and between SERVICE EXPERTS, INC., a
Delaware corporation (the "Borrower"), SUNTRUST BANK, NASHVILLE, N.A. ("STB"),
and the other banks and lending institutions who become Lenders pursuant to
Section 12.12 herein (STB and such other banks and lending institutions are
referred to collectively as the "Lenders"), and SUNTRUST BANK, NASHVILLE, N.A.,
in its capacity as agent for the Lenders and each successive agent for such
Lenders as may be appointed from time to time pursuant to Article XII herein
(the "Agent").
RECITALS
1. The Borrower, Agent, and the Lender entered into a Credit Agreement
dated September 3, 1997.
2. Subsequent to the execution of the Credit Agreement, the Borrower,
the Lenders, and Agent determined to include a Swing Line Commitment.
3. The parties to the Credit Agreement desire to amend and restate the
Credit Agreement as provided herein.
4. This Amended and Restated Credit Agreement shall govern the terms
and conditions under which the Lenders have agreed to extend credit to the
Borrower.
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the parties hereto agree as follows:
Article I. Definitions.
As used in this Agreement, the following terms shall have the following
meanings, unless the context expressly otherwise requires:
The terms defined in this article have the meanings attributed to them
in this article. Singular terms shall include the plural as well as the
singular, and vice versa. Words of masculine, feminine or neuter gender shall
mean and include the correlative words of other genders.
All references herein to a separate instrument are to such separate
instrument as the same may be amended or supplemented from time to time pursuant
to the applicable provisions thereof.
All accounting terms not otherwise defined herein have the meanings
assigned to them, and all computations herein provided for shall be made, in
accordance with generally accepted
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accounting principles applied on a consistent basis. All references herein to
"generally accepted accounting principles" refer to such principles as they
exist at the date of application thereof.
All references herein to designated "Articles", "Sections" and other
subdivisions or to lettered Exhibits are to the designated Articles, Sections
and other subdivisions hereof and the Exhibits annexed hereto unless the context
otherwise clearly indicates. All Article, Section, other subdivision and Exhibit
captions herein are used for reference only and in no way limit or describe the
scope or intent of, or in any way affect, this Agreement.
"Acquisition" means the acquisition by any Consolidated Entity of
any of the following: (a) the controlling interest in any Person, (b) a
Consolidated Entity, or (c) all or substantially all of the Property of
any Person.
"Adjusted Total Funded Debt" means the sum of: (a) Total Funded
Debt for the Consolidated Entities, plus (b) consolidated rent expense
for the Consolidated Entities calculated in accordance with Standard &
Poor's Corporation methodology, as such may change from time to time.
"Advance" or "Advances" means any and all amounts advanced by
Lenders to or for the account of the Borrower hereunder or under the
Revolving Credit Loan and all amounts advanced by the Swing Line Lender
under the Swing Line Loan, including, without limitation, advances of
loan proceeds, payments in overdraft, and amounts evidenced by Letters
of Credit. The terms "Advance" and "Loan" are used interchangeably in
this Agreement.
"Affiliate" of any specified Person means any other Person which
directly or indirectly through one or more intermediaries controls, or
is controlled by, or is under common control with such specified
Person. For purposes of this definition, "control" when used with
respect to any specified Person means the power to direct or cause the
direction of the management and policies of such Person, directly or
indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controls" and "controlled" have
meanings correlative to the foregoing.
"Agent" means SunTrust Bank, Nashville, N.A. or its successor as
appointed pursuant to the provisions of Article XII herein.
"Agreement" means this Amended and Restated Credit Agreement
(including all exhibits hereto) as the same may be modified, amended,
or supplemented from time to time.
"Applicable Margin" means the number of basis points per annum
determined on the Determination Date in accordance with the following
table for the purpose of calculating the Commitment Fee, the LIBOR
Option, and the Letter of Credit Fee:
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RATIO OF TOTAL FUNDED DEBT TO EBIA
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Purpose less than 1.0x greater than or equal to 1.0x but greater than or equal to 1.5x but greater than or equal to 2.0x
less than 1.5x less than 2.0x
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Commitment 20 basis points 25 basis points 30 basis points 37.5 basis
Fee per annum per annum per annum points per
Calculation annum
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Calculation 75 basis points 100 basis points 125 basis points 150 basis
of LIBOR per annum per annum per annum points per
Option and annum
Letter of
Credit Fee
====================================================================================================================================
"Applicable Rate" means either the Base Rate Option or the LIBOR
Option, except in the case of an Advance under the Swing Line Loan, the
Applicable Rate shall mean the Swing Line Rate.
"Assignment and Acceptance" means an Assignment and Acceptance
form executed by a Lender assigning its interest in the Revolving
Credit Loan, or any portion therein (other than as a participation), to
an Eligible Assignee in a form reasonably satisfactory to Agent.
"Bankruptcy Code" means the Bankruptcy Code, as set forth in 11
U.S.C. Section 101 et seq., as such may be amended from time to time.
"Base Rate" means the rate of interest equal to the higher of (i)
the rate of interest most recently announced by Agent as its "base" or
"prime" lending rate, as the case may be, for dollar loans in the
United States; and (ii) the Federal Funds Rate (as in effect from time
to time) plus one-half of one percent (1/2%) per annum. The Base Rate
is determined daily. The "base" or "prime" lending rate is a reference
rate and does not necessarily represent the lowest or best interest
rate actually charged to any customer. Each change in the "base" or
"prime" lending rate announced by Agent shall take effect at the
opening of business on the day such announcement is made. The Agent may
make commercial loans or other loans at rates of interest at, above, or
below such "base" or "prime" lending rate.
"Base Rate Option" shall mean that rate of interest equal to the
Base Rate.
"Borrower" shall have the same meaning attributed to that term in
the preamble to this Agreement.
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"Borrowing Date" means that date on which the Advances are to be
funded and which must be a day other than a Saturday, Sunday, or day on
which commercial banks are authorized to close for business in New York
City or the State of Tennessee.
"Borrowing Request" means a request in the form of Exhibit A
hereto submitted by the Borrower to Agent for an Advance as described
in Section 2.04 of this Agreement.
"Business Day" means any day other than a Saturday, Sunday or day
on which commercial banks are authorized to close for business in New
York City or the State of Tennessee; provided, however, when used with
reference to LIBOR Advances (including the making, continuing,
prepaying, or repaying of any LIBOR Advances), the term "Business Day"
shall also exclude any day on which banks are not open for dealings in
deposits of U.S. dollars in the London interbank market.
"Business Sweep System" means the procedure and policies
established from time to time by the Swing Line Lender and which may
change without notice to Borrower by which: (i) the Swing Line Lender
causes funds to be deposited into and removed from the Funding Account
to meet certain operational requirements of Borrower, and (ii)
automatic payments, to the extent funds are available, are applied to
the Swing Line Loan.
"Capitalization" means an amount equal to Total Funded Debt of the
Consolidated Entities plus Consolidated Net Worth.
"Closing Date" means the 3rd day of September, 1997.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute.
"Commitment Fee" has the same meaning as set forth in Section 2.14
herein.
"Conditions Precedent" means those matters or events that must be
completed or must occur or exist prior to the Lenders' being obligated
to fund any Advance, including, but not limited to, those matters
described in Article V hereof.
"Consolidated Amortization" means the amount attributed to
amortization on the Financial Statements of the Consolidated Entities,
as calculated in accordance with GAAP.
"Consolidated Entity" or "Consolidated Entities" means: (a) the
Borrower, (b) all present and future Subsidiaries, Controlled
Partnerships, and Controlled LLC's of the Borrower, and (c) any Person
the financial statements of which are consolidated with any other
Consolidated Entity identified in subparts (a) and (b) hereof. (The
current Consolidated Entities are depicted on Exhibit F hereto.)
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"Consolidated Interest Expense" means the aggregate interest
expense and amortization of deferred loan costs of the Consolidated
Entities, on a consolidated basis for such period (calculated without
regard to any limitations on the payment thereof), imputed interest on
capitalized lease obligations of the Consolidated Entities, and net
costs under interest rate protection agreements for the Consolidated
Entities, all as determined in conformity with GAAP.
"Consolidated Net Income" shall mean for any fiscal period the
consolidated net income of the Consolidated Entities, as calculated in
accordance with GAAP.
"Consolidated Net Worth" means on a consolidated basis the excess
of (A) total assets over (B) total liabilities, for the Consolidated
Entities, as determined in accordance with GAAP.
"Continuation/Conversion Notice" means the notice delivered on
behalf of the Borrower to Agent in the form of Exhibit B hereto.
"Control Group" means any Person and all Affiliates of such
Person.
"Controlled LLC" means a limited liability company, the ownership
and management of which is held by and/or controlled by any
Consolidated Entity.
"Controlled Partnership" means a general partnership or joint
venture of which any Consolidated Entity is a general partner or joint
venturer, or a limited partnership which has any Consolidated Entity as
a general partner and with respect to which general partnership, joint
venture, or limited partnership, any Consolidated Entity serving as
general partner or joint venturer is entitled to receive not less than
51% of any distributions of cash or other Property made to the partners
or joint venturers thereof.
"Conversion Date" means that date on which Advances on which
interest accrues at the Base Rate Option are converted to LIBOR
Advances and that date on which LIBOR Advances are converted to
Advances on which interest accrues at the Base Rate Option.
"Debt" means, with respect to any Consolidated Entity, without
duplication, on a consolidated basis, (i) Total Funded Debt, and (ii)
all other liabilities contingent or otherwise, which in accordance with
GAAP would be classified on a balance sheet of such Consolidated Entity
as a liability, but in any event including (a) liabilities secured by
any mortgage, pledge or lien existing on Property owned by such
Consolidated Entity and subject to such mortgage, pledge or lien,
whether or not the liability secured thereby shall have been assumed by
any Consolidated Entity, (b) endorsements (other than endorsements of
negotiable instruments for purposes of collection in the ordinary
course of business) and obligations to supply funds for the purchase or
payment of Debt of others, and (c) all outstanding indemnities.
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"Default" or "Event of Default" means the occurrence of any of the
events specified in Section 8.01 hereof, whether or not any requirement
for notice or lapse of time or other condition precedent has been
satisfied.
"Default Conditions" or "Default Condition" means the occurrence
of any of the events specified in Section 8.03 hereof.
"Default Rate" means interest rate equal to two percent (2%) per
annum above the Base Rate.
"Determination Date" means that date which is ten (10) Business
Days subsequent to Agent's receipt of the Borrower's most recent
consolidated Financial Statements and most recent quarterly
calculations of Borrower's ratio of Total Funded Debt to EBIA.
"EBIA" means Consolidated Net Income, plus Consolidated Interest
Expense, plus Consolidated Amortization, as determined in accordance
with GAAP.
"Eligible Assignee" means: (i) a financial institution organized
under the laws of the United States or any state thereof having total
assets in excess of $1,000,000,000, which has been approved by Borrower
and Agent as an Eligible Assignee, provided that Borrower and Agent
shall not unreasonably withhold its approval of any financial
institution seeking to become an Eligible Assignee, and provided that,
the approval of the Borrower and the Agent shall not be required if an
Event of Default exists hereunder or (ii) any Lender.
"Environmental Law" means any federal, state, or local law,
statute, ordinance, or regulation applicable or pertaining to health,
industrial hygiene, waste materials, removal of waste materials, oil,
gas, underground storage tanks, Hazardous Substances, other
environmental conditions on, under, or affecting any of the Property of
any Consolidated Entity.
"Equity Proceeds" means the net proceeds obtained by any
Consolidated Entity through the public or private placement of shares
of stock of any Consolidated Entity or the issuance of subordinated
debt of any Consolidated Entity (the form, substance, and terms of
which subordinated debt shall first be determined to be acceptable to
Lenders).
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, including (unless the context otherwise
requires) any rules or regulations promulgated thereunder.
"Facing Fee" means the fee as stipulated in a letter agreement
between Borrower and Agent dated September 2, 1997, referred to therein
as the "Fee Letter."
"Federal Funds Rate" means for any period, a fluctuating interest
rate per annum
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equal for each day during such period to the weighted average of the
rates on overnight Federal funds transactions with member banks of the
Federal Reserve System arranged by Federal funds brokers for such day,
as published on the next succeeding Business Day by the Federal Reserve
Bank of Atlanta, or, if such rate is not so published for any day that
is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three (3) Federal funds brokers
of recognized standing selected by the Agent.
"Financial Statements" means (i) the consolidated financial
statement or statements of the Consolidated Entities, described or
referenced in Section 4.06 hereof and delivered with this Agreement to
Agent for distribution to Lenders, and (ii) subsequent financial
statements as described or referenced in Section 6.01 and required to
be provided pursuant to this Agreement.
"Fiscal Quarter" means each of the quarters of the Fiscal Year
ending on the last day of each March, June, September, and December.
"Fiscal Year" or "Annually" means the twelve-month accounting
period ending December 31st of each year and presently used by the
Borrower as its fiscal year for accounting purposes, or such other
twelve (12) month accounting period adopted by Borrower as its fiscal
year and ending on the last day of March, June, or September.
"Fixed Charges" means the sum of Consolidated Interest Expense,
plus long-term Debt paid by the Consolidated Entities on a consolidated
basis (excluding any amounts paid under this Agreement), and plus cash
dividends paid, as determined on a consolidated basis for the
Consolidated Entities in accordance with GAAP.
"Funding Account" shall mean that certain account maintained by
the Borrower with Agent, bearing account no. 7020176082.
"GAAP" means generally accepted accounting principles in the
United States.
"Guarantor" and "Guarantors" mean each and all of the Persons
described on Exhibit C herein, as well as all future Persons executing
or required to execute a Guaranty pursuant to Section 6.13 herein.
"Guaranty" and "Guaranties" mean the guaranty agreements executed
by each of the Guarantors in form and substance approved by Agent.
"Hazardous Substances" means those substances included within the
definition of hazardous substances, hazardous materials, toxic
substances, or solid waste under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.
Section 9601, et seq.; the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Section 6901, et seq.; the Hazardous Materials
Transportation Act, 49 U.S.C.
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Section 1801, et seq.; any applicable state law and in the regulations
promulgated pursuant to such acts and laws, and such other substances,
materials, and waste which are or become regulated under any
Environmental Law.
"Interest Rate Period" means with respect to any LIBOR Advances:
(i) initially, the period commencing on any Borrowing Date or on
any Conversion Date, as the case may be, and ending one, two, three, or
six months thereafter, as designated by Borrower on its Borrowing
Request or on its Continuation/Conversion Notice, as the case may be,
given with respect thereto, or as otherwise provided herein; and
(ii) thereafter each period commencing on the last day of the
next preceding Interest Rate Period and ending one, two, three, or six
months thereafter as selected by Borrower on the applicable
Continuation/Conversion Notice given with respect thereto, or as
otherwise provided herein;
provided that all foregoing provisions relating to Interest Rate
Periods are subject to the following:
(1) if any Interest Rate Period would otherwise end on a day
that is not a Business Day, such Interest Rate Period shall be extended
to the next succeeding Business Day unless the result of such extension
would be to carry such Interest Rate Period into another calendar
month, in which event such Interest Rate Period shall end on the
immediately preceding Business Day;
(2) any Interest Rate Period that would otherwise extend beyond
the Maturity Date shall end on the Maturity Date; and
(3) any Interest Rate Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Rate Period) shall end on the last Business Day of a calendar month.
"Lender" or "Lenders" means STB, the other financial institutions
listed on the signature pages hereof and each permitted assignee
thereof, if any, pursuant to Section 12.12, but shall not include any
participant.
"Letter of Credit Application Agreement" means that certain
Application and Agreement for Issuance of a Letter of Credit in the
form of Exhibit D hereto or any other similar form required by the
Agent appropriately completed by the Borrower pursuant to Section
2.02(a) herein.
"Letter of Credit Fee", as set forth in Section 2.02(b) herein,
means an amount
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equal to the product of: (a) the Applicable Margin relating to the
Letter of Credit Fee calculation in effect for each period of
calculation multiplied by (b) the face amount of the Letter of Credit.
"Letters of Credit" has the same meaning as set forth in Section
2.02 herein.
"LIBOR" shall mean, for any Interest Rate Period, the offered
rates for deposits in U.S. Dollars for a period comparable to the
selected Interest Rate Period appearing on the Telerate Screen Page
3750 as of 11:00 A.M. London time, on the day that is two (2) Business
Days prior to the first day of the applicable Interest Rate Period. If
any of the Interest Rate Periods is unavailable on Telerate Screen Page
3750, then such rate shall be determined by and based on any other
interest rate reporting service of generally recognized standing
designated by the Agent to the Borrower.
"LIBOR Advances" means Advances made hereunder calculated at the
LIBOR Option.
"LIBOR Loans" shall have the same meaning as set forth in Section
2.18(a)(ii)(A) herein.
"LIBOR Option" means that rate of interest equal to LIBOR, plus
the Applicable Margin, as such may be adjusted for applicable reserve
requirements, if any.
"Lien" means any interest in Property securing an obligation owed
to, or a claim by, a Person, other than the owner of the Property,
whether such interest is based on the common law, statute, or contract,
and including, but not limited to, the lien or security interest
arising from a mortgage, encumbrance, pledge, security agreement,
conditional sale, or trust receipt or a lease, consignment, or bailment
for security purposes. The term "Lien" shall include reservations,
exceptions, encroachments, easements, rights-of-way, covenants,
conditions, restrictions, leases, and other title exceptions and
encumbrances affecting the Property. For the purposes of this
Agreement, a Consolidated Entity shall be deemed to be the owner of any
Property that such Consolidated Entity has acquired or holds subject to
a conditional sale agreement, financing lease, or other arrangement
pursuant to which title to the Property has been retained by or vested
in some other Person for security purposes.
"Loan" or "Loans" means any borrowing by the Borrower under this
Agreement, and/or any extension of credit by Lenders or Swing Line
Lender to or for the Borrower pursuant to this Agreement, the Revolving
Credit Loan, the Swing Line Loan, or any other Loan Document, including
any renewal, amendment, extension, or modification thereof.
"Loan Documents" means, collectively, each document, paper or
certificate executed, furnished or delivered in connection with this
Agreement (whether before, at,
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or after the Closing Date), including, without limitation, this
Agreement, the Revolving Credit Notes, the Swing Line Note, the
Guaranties, and all other documents, certificates, reports, and
instruments that this Agreement requires or that were executed or
delivered (or both) at Agent's request.
"Majority Lenders" means those Lenders with an aggregate Pro Rata
Share equal to or greater than 66 2/3%.
"Maturity Date" for the Revolving Credit Loan and the Swing Line
Loan shall mean the earlier of (i) September 3, 1999 and (ii) the date
the repayment of the Revolving Credit Loan or the Swing Line Loan is
accelerated pursuant to Article VIII herein.
"Maximum Total Amount" means the principal amount of $50,000,000,
or such lesser amount which may result from the Borrower permanently
reducing the maximum principal amount that may be borrowed under the
Revolving Credit Loan pursuant to Section 2.09(c).
"PBGC" means the Pension Benefit Guaranty Corporation and any
entity succeeding to any or all of its functions under ERISA.
"Permitted Encumbrances" means: (i) taxes, assessments, and other
governmental charges that are not delinquent or that are being
contested in good faith by appropriate proceedings duly pursued and
subject to maintenance of adequate reserves as required by GAAP; (ii)
mechanic's, materialmen's, contractors', landlords', warehousemen, or
other similar Liens imposed by law and arising in the ordinary course
of business, securing obligations that are not delinquent or that are
being contested in good faith by appropriate proceedings duly pursued
and subject to maintenance of adequate reserves as required by GAAP;
(iii) zoning restrictions, easements, and restrictions on the use of
any of the Consolidated Entities' real property which do not materially
impair the use of such real property; (iv) Liens disclosed on the
consolidated Financial Statement of Borrower dated March 31, 1997; (v)
Liens securing purchase money Debt of the Consolidated Entities which
in the aggregate does not exceed $5,000,000 at any one time; (vi)
customary Liens incurred or deposits made in the ordinary course of
business in connection with workers' compensation, unemployment
insurance, ERISA, or social security; (vii) customary Liens to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, and similar obligations, and (viii) rights reserved or vested in
governmental agencies and affecting the Property of any of the
Consolidated Entities, but which does not materially impair the use of
such Property.
"Person" means any individual, corporation, partnership, joint
venture, association, joint stock company, trust, unincorporated
organization, government, or any agency or political subdivision
thereof, or any other form of entity.
"Plan" means any employee benefit or other plan established or
maintained, or to
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which contributions have been made, by any Consolidated Entity and
covered by Title IV of ERISA or to which Section 412 of the Code
applies.
"Principal Office" means the principal office of the Agent located
at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Pro Rata Share" means the percentage of Maximum Total Amount
committed to by each of the Lenders as set forth opposite their
respective signature hereto, as such percentage may be adjusted from
time to time as a result of assignments or amendments made pursuant to
this Agreement.
"Property" or "Properties" means any interest in any kind of
property or asset, whether real, personal, or mixed, or tangible or
intangible.
"Revolving Credit Loan" means the aggregate principal amount
evidenced by the Revolving Credit Notes.
"Revolving Credit Loan Commitment" means, relative to any Lender,
such Lender's obligation to make Advances pursuant to Section 2.01(a)
of this Agreement.
"Revolving Credit Note" and "Revolving Credit Notes" means, as the
context may require: (a) any of the revolving credit notes executed by
the Borrower, payable to the order of any Lender, substantially in the
form of Exhibit E hereto, originally in the principal amounts each such
Lender's Pro Rata Share bears to the Maximum Total Amount, evidencing
the aggregate indebtedness of the Borrower to such Lender resulting
from the outstanding Revolving Credit Loan, as each such Revolving
Credit Note may from time to time be amended, increased, decreased,
extended, renewed, restated, and/or changed in any way, and all other
promissory notes accepted from time to time in amendment, renewal,
payment and/or substitution thereof and/or therefor, and/or (b)
collectively, all of the foregoing.
"Seller Notes" means any promissory note issued by any
Consolidated Entity in connection with an Acquisition by such
Consolidated Entity, which promissory notes and the payment thereunder
has been subordinated to the obligations of the Borrower and the
Guarantors arising under this Agreement and all other Loan Documents
pursuant to such subordination agreement satisfactory to Agent.
"Senior Funded Debt" means, with respect to any Consolidated
Entity, without duplication, on a consolidated basis, the sum of (i)
all indebtedness for money borrowed; (ii) purchase money Debt; (iii)
the amount of principal payments required to be made under Sellers
Notes during the term of this Agreement; (iv) capitalized leases; (v)
amounts evidenced by the aggregate face amount of all outstanding
letters of credit; (vi) outstanding amounts under asset securitization
vehicles, conditional sales contracts and similar title retention debt
instruments; and (vii) all indebtedness guaranteed by any
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Consolidated Entity. Additionally, the calculation of Funded Debt shall
include the redemption amount with respect to any redeemable preferred
stock of any Consolidated Entity required to be redeemed within the
next twelve (12) months.
"Subsidiary" means, with respect to any Person, any corporation of
which more than fifty percent (50%) of the issued and outstanding
Voting Stock is owned or controlled by such Person at the time as of
which any determination is being made either directly or indirectly
through one or more other Subsidiaries.
"Swing Line Commitment" means, at any time for the Swing Line
Lender, the principal amount of up to $2,000,000.00, as evidenced by
the Swing Line Note. The Swing Line Commitment shall be part of,
subsumed within, and not in addition to, the Revolving Credit Loan
Commitment of the Swing Line Lender.
"Swing Line Lender" means the Agent and any successor thereto or
assign thereof.
"Swing Line Loan" means all Advances made under the Swing Line
Note up to the Swing Line Commitment.
"Swing Line Note" means the Swing Line Note of the Borrower
payable to the order of the Swing Line Lender in a form approved by the
Swing Line Lender in the principal amount of up to $2,000,000.00, as
such may be from time to time supplemented, modified, amended, renewed,
or extended.
"Swing Line Rate" means a rate of interest equal to one-half of
one percent (.50%) per annum below the Base Rate, calculated on a
360-day year for actual number of days elapsed.
"Telerate Screen Page 3750" means the "British Bankers Association
LIBOR Rates" shown on Page 3750 of the Telerate System Incorporated
Service.
"Total Funded Debt" means, without duplication, the sum of (i)
Senior Funded Debt, plus (ii) the aggregate outstanding principal
amount of Seller Notes.
"Voting Stock" means securities of any class of a corporation, the
holders of which are ordinarily, in the absence of contingencies,
entitled to elect a majority of the corporate directors (or persons
performing similar functions).
Article II. The Credit.
Section 2.01 The Revolving Credit Loan. (a) Subject to the conditions
and pursuant to the terms of the Loan Documents and in reliance upon the
representations, warranties, and covenants set forth in the Loan Documents, each
Lender severally agrees to make Advances (relative to
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such Lender) to the Borrower under the Revolving Credit Loan equal to such
Lender's Pro Rata Share of the aggregate amount of the borrowing of total
Advances (excluding Advances requested under the Swing Line Loan) requested by
the Borrower to be made on such day.
(b) The Maximum Total Amount available to be advanced under the
Revolving Credit Loan shall be reduced dollar-for-dollar by the sum of:
(i) the face amount of any outstanding Letter of Credit, and (ii) the
principal amount outstanding from time to time under the Swing Line
Note. In no event shall the Borrower permit the sum of (x) the face
amount of outstanding Letters of Credit, plus (y) the outstanding
principal amount of the Swing Line Note, plus (z) the outstanding
principal amount of the Revolving Credit Loan to exceed the Maximum
Total Amount.
(c) On the terms and subject to the conditions hereof and the
Revolving Credit Notes, and provided no Event of Default or Default
Condition shall have occurred, the Borrower, may borrow, repay, and
reborrow under the Revolving Credit Loan.
(d) The failure of any Lender to make an Advance under its
Revolving Credit Loan Commitment shall not relieve any other Lender of
its obligations, if any, hereunder to make Advances under such Lender's
Revolving Credit Loan Commitment, but no Lender shall be responsible
for the failure of any other Lender to make an Advance to be made by
such other Lender on the date of any requested borrowing.
Section 2.02 Letters of Credit. (a) Provided no Event of Default or
Default Condition exists, and subject to the terms and conditions of the Loan
Documents, the Lenders have agreed that the Agent on behalf of the Lenders will
issue to third party beneficiaries on the Borrower's account, standby letters of
credit ("Letters of Credit") in the face amount of up to $5,000,000 in the
aggregate. In connection with the issuance of each Letter of Credit, the
Borrower shall complete and execute a Letter of Credit Application Agreement in
form and substance satisfactory to Agent.
(b) In connection with the issuance of any Letter of Credit, and
on the first Business Day following the conclusion of each Fiscal
Quarter, the Borrower shall pay to Agent a Letter of Credit Fee
quarterly in arrears calculated as of the last day of each Fiscal
Quarter, or on the expiration date of the Letter of Credit, whichever
is sooner, calculated on the basis of a year of 360 days for the actual
number of days elapsed and to be apportioned and paid by Agent to each
of the Lenders pursuant to the Pro Rata Share of each Lender. If the
term of any Letter of Credit is less than thirty (30) days, the Letter
of Credit Fee shall be calculated as if the term of the Letter of
Credit was equal to thirty (30) days.
(c) In connection with the issuance of any Letter of Credit, and
on the first Business Day of each Fiscal Quarter, the Borrower shall
pay to Agent a Facing Fee quarterly in arrears calculated as of the
last day of each Fiscal Quarter, or on the expiration date of the
Letter of Credit, whichever is sooner, calculated on the basis of a
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year of 360 days for the actual number of days elapsed and to be
retained by Agent. None of the Lenders, except for the Agent, shall
share in the Facing Fee.
(d) The Agent agrees to use its best efforts to issue and deliver
to the Borrower each requested Letter of Credit within three (3)
Business Days following submission by the Borrower of a properly
completed Letter of Credit Application Agreement.
(e) No Letter of Credit shall be issued for a term in excess of
twelve (12) months, and no Letter of Credit shall be issued for a term
that extends beyond the Maturity Date. The language of each Letter of
Credit, including the requirements for a draw thereunder, shall be
subject to the reasonable approval of the Agent.
(f) The issuance of any Letter of Credit shall reduce the
Borrower's ability to receive Advances under the Revolving Credit Loan
by an amount equal to the face amount of the Letter of Credit and for
so long as the Letter of Credit is outstanding. Additionally, any
payment by the Agent under a Letter of Credit shall be treated as an
Advance (with interest calculated at the Base Rate Option) under the
Revolving Credit Loan, and the terms and provisions of repayment shall
be treated as an Advance under the Revolving Credit Loan.
(g) The Lenders shall participate in all Letters of Credit
requested by the Borrower. Each Lender, upon issuance of a Letter of
Credit by the Agent, shall be promptly notified by Agent and shall be
deemed to have purchased without recourse a risk participation from the
Agent in such Letter of Credit and the obligations arising thereunder,
in each case in an amount equal to its Pro Rata Share of all
obligations under such Letter of Credit and shall absolutely,
unconditionally, and irrevocably assume, as primary obligor and not as
surety, and be obligated to pay to the Agent therefor and discharge
when due, its Pro Rata Share of all obligations arising under such
Letter of Credit. Without limiting the scope and nature of each
Lender's participation in any Letter of Credit, to the extent that the
Agent has not been reimbursed as required hereunder or under any such
Letter of Credit, each such Lender shall pay to the Agent its Pro Rata
Share of such unreimbursed drawing in same day funds on the day of
notification by the Agent if so notified by Noon (Nashville, Tennessee
time) on such day, otherwise by the next succeeding Business Day, of an
unreimbursed drawing. The obligation of each Lender to so reimburse the
Agent shall be absolute and unconditional and shall not be affected by
the occurrence of a Default Condition or an Event of Default or any
other occurrence or event.
Section 2.03 Interest Rate.
(a) The Applicable Rate for Advances under the Revolving Credit
Loan shall either be the Base Rate Option or the LIBOR Option, as
selected by the Borrower pursuant to the procedure specified in parts
(b) and (c) below. The Applicable Rate for
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the Swing Line Loan shall be the Swing Line Rate.
(b) So long as the Borrower complies with Section 2.04 herein, the
Borrower may elect that any Advance under the Revolving Credit Loan
shall bear interest at either the Base Rate Option or the LIBOR Option.
In the event that the Borrower fails to designate an Applicable Rate,
or in the event the Borrower fails to make an interest rate election in
strict compliance herewith, then it shall be conclusively presumed that
the Borrower has selected the Base Rate Option.
(c) In no event shall there be more than ten (10) different
Interest Rate Periods applicable to LIBOR Advances.
(d) Upon the occurrence of an Event of Default, the indebtedness
described herein and all obligations hereunder immediately shall bear
interest at the Default Rate.
(e) All interest and fees shall be calculated on the basis of a
360-day year for the actual number of days elapsed.
Section 2.04 Procedure for Revolving Credit Borrowing. The Borrower may
borrow under the Revolving Credit Loan Commitments from the date hereof until
the Maturity Date pursuant to the following procedure:
(a) the Borrower, acting through either its: (i) Chief Executive
Officer, (ii) Chief Financial Officer, or (iii) any Person designated
in writing by the Chief Executive Officer to request Advances (which
designation shall be delivered by the Borrower to the Agent), requests
an Advance by delivering a Borrowing Request to Agent;
(b) in the case of Advances which the Borrower elects to bear
interest at the Base Rate Option the Borrowing Request must be
delivered to the Agent no later than on or before 11:00 A.M.
(Nashville, Tennessee time) on the Borrowing Date, and in the case of
Advances which the Borrower elects to bear interest at the LIBOR Option
the Borrowing Request must be delivered to the Agent no later than on
or before 11:00 A.M. (Nashville, Tennessee time) three (3) Business
Days prior to the Borrowing Date, and any Borrowing Request received by
Agent after 11:00 A.M. (Nashville, Tennessee time) will be deemed given
on the next succeeding Business Day and all telephonic notices shall be
promptly confirmed in writing delivered to Agent;
(c) all Borrowing Requests shall specify (i) the amount of the
requested Advance, which amount must be in a minimum amount of $200,000
and in increments of $50,000 for Advances at the Base Rate Option, and
in a minimum amount of $2,500,000 and in increments of $500,000 for
Advances at the LIBOR Option, (ii) whether the borrowing is to be (A) a
new Advance at the LIBOR Option or Base Rate Option or a combination
thereof or (B) a conversion from a LIBOR Option to a Base Rate Option
or a Base Rate Option to a LIBOR Option or (C) a rollover of an
existing Advance at the
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LIBOR Option, and (iv) if the Advance is to be entirely or partly made
as a LIBOR Loan, the chosen Interest Rate Period;
(d) at least three (3) Business Days prior to the expiration of
any applicable Interest Rate Period for an Advance at the LIBOR Option,
the Borrower shall designate a new Applicable Rate, and in the event
that the Borrower fails to make such designation, then it shall be
conclusively presumed that the Borrower has selected the Base Rate
Option until designated otherwise;
(e) the Borrower authorizes the Agent to cause all Advances to be
deposited into the Funding Account;
(f) the Agent and the Lenders shall have no liability to the
Borrower arising out of their compliance with the borrowing procedure
specified in this Section 2.04, except for acts of gross negligence or
willful misconduct; and
(g) the giving of notice by the Borrower that it is requesting an
Advance shall constitute a warranty by the Borrower that as of the date
of the request and as of the date the Advance is made: (i) no Event of
Default or Default Condition has occurred; and (ii) the representations
and warranties contained in Article IV of this Agreement remain true,
correct, and accurate, except that the representation contained in the
first sentence of Section 4.13 herein shall not be deemed to be a
continuing representation.
Section 2.05 Use of Proceeds. Proceeds of the Revolving Credit Loan
shall be used to fund Borrower's working capital, for Acquisitions and capital
expenditures needs, for Borrower's general corporate purposes, and to repay and
to cancel all outstanding amounts owed to STB under the existing credit
facility.
Section 2.06 Participation. Any Lender shall have the right to enter
into one or more participation agreements with one or more Affiliates, banks, or
financial institutions on such terms and conditions as such Lender shall deem
advisable. The Borrower shall furnish a sufficient number of copies of reports
and certificates to Lenders so that Lenders and each participating lender shall
receive a copy of each such document.
Section 2.07 Term of This Agreement. This Agreement shall be binding on
the Borrower so long as there is any Revolving Credit Loan or Swing Line Loan
outstanding, provided and except, the Borrower's representations, warranties,
and indemnity agreements shall survive the payment in full of such indebtedness.
Section 2.08 Payments to Principal Office; Debit Authority. Each
payment under the Revolving Credit Loan and the Swing Line Loan shall be made
without defense, setoff, or counterclaim to Agent at its Principal Office in
U.S. dollars for the account of Lenders and in immediately available funds no
later than on or before 1:00 P.M. (Nashville, Tennessee time) on the date such
payment is due. The Agent may, but shall not be obligated to, debit the amount
of
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any such payment which is not made by such time to any deposit account of the
Borrower with the Agent. Additionally, payments under the Swing Line Loan shall
be made pursuant to the procedure specified in the Business Sweep Agreement.
Section 2.09
(a) Required Prepayment. Whenever the aggregate amount outstanding
under the Revolving Credit Loan exceeds the Maximum Total Amount, the
Borrower shall immediately pay to Agent for the account of Lenders such
amounts as may be necessary to cause the aggregate principal amount
outstanding under the Revolving Credit Loan to be equal to or less than
the Maximum Total Amount. Whenever the amount outstanding under any
individual Revolving Credit Note exceeds the maximum amount permitted
to be outstanding under such Revolving Credit Note, the Borrower shall
immediately pay to Agent for the account of the respective Lender such
amounts as may be necessary to cause the principal amount outstanding
under such Revolving Credit Note to be equal to or less than such
Revolving Credit Note's maximum permitted amount. Whenever the amount
outstanding under the Swing Line Note exceeds the maximum amount
permitted to be outstanding under the Swing Line Loan, the Borrower
shall immediately pay to the Agent such amounts as may be necessary to
cause the principal amount outstanding under the Swing Line Note to be
equal to or less than the maximum amount permitted to be outstanding
under the Swing Line Loan.
(b) Principal Payments and Optional Prepayments. The Borrower may
make principal reductions and prepayments under the Revolving Credit
Notes provided that (i) in the case of amounts outstanding under the
Revolving Credit Notes calculated at the LIBOR Option, (A) principal
reductions and prepayments may only be made at the end of the
applicable Interest Rate Period, (B) the Borrower delivers written
notice to Agent no later than on or before 1:00 P.M. (Nashville,
Tennessee time) three (3) Business Days prior to such payment, and (C)
each such payment shall be received on or before 1:00 P.M. (Nashville,
Tennessee time) on the date of such payment and shall be in a principal
amount of not less than $1,000,000 and in integral multiples of
$100,000, and (ii) in the case of amounts outstanding under the
Revolving Credit Notes calculated at the Base Rate Option, the Borrower
shall give notice and make such payment no later than on or before 1:00
P.M. (Nashville, Tennessee time) on any Business Day and provided each
such payment shall be in a principal amount of not less than $200,000
and in integral multiples of $50,000. Any such payments and prepayments
shall be subject to payment of the amounts described in Section 2.10,
in the manner set forth therein, but not to any other prepayment
charge, fee or premium. All such payments and prepayments will be
applied first to unpaid expenses (if any), then to breakage costs (if
any), then to accrued interest, then to principal in the inverse order
of maturity, allocated, in the case of the Revolving Credit Notes,
pro-rata among the Lenders.
(c) Permanent Reductions. Upon three (3) Business Days prior
written notice delivered from the Borrower to Agent, the Borrower may
permanently reduce the
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maximum principal amount that may be borrowed under the Revolving
Credit Loan; provided that such permanent principal reduction shall be
in a principal amount of at least $5,000,000 and in integrals of
$1,000,000, and provided that such reductions may not be made on
Advances calculated at the LIBOR Option except at the end of the
applicable Interest Rate Period and provided that such reduction shall
also be subject to the amounts described in Section 2.10 herein. In the
event that a permanent principal reduction is made under the Revolving
Credit Loan, the Maximum Total Amount and the Revolving Credit Loan
Commitment of each Lender shall permanently be reduced on a pro rata
basis.
(d) Interest Payments. Interest shall be paid on the Revolving
Credit Loan no later than on or before 1:00 P.M. (Nashville, Tennessee
time) as follows: (i) on Advances calculated at the Base Rate Option,
all accrued interest shall be paid on a quarterly basis and in arrears
by Borrower to Agent, with such payment to be made on the first
Business Day following the end of each Fiscal Quarter, or if such day
is not a Business Day, then on the next succeeding Business Day; (ii)
on Advances calculated at the LIBOR Option, all accrued interest shall
be paid in arrears by Borrower to Agent on the last day of each
Interest Rate Period, provided that for all Advances at the LIBOR
Option that have an Interest Rate Period in excess of three (3) months,
accrued interest on such Advances shall also be paid on the last day of
each three (3) month period calculated from the initiation of such
Interest Rate Period; and (iii) on the Maturity Date, the Borrower
shall pay to the Agent an amount equal to all accrued interest.
Section 2.10 Funding Losses. The Borrower shall compensate each Lender,
upon any Lender's written request to the Borrower, copied to Agent (which
request shall set forth the basis for requesting such amounts in reasonable
detail and which request shall be made by Lender in good faith) for all losses,
additional cost, expenses, and liabilities (including, without limitation, any
interest paid by such Lender to lenders of funds borrowed by it to make or carry
loans on which interest is calculated at LIBOR to the extent not recovered by
such Lender in connection with the reemployment of such funds), which such
Lender may sustain because a repayment (including mandatory prepayments) of any
amounts to which LIBOR applies occurs on a date that is not the last Business
Day of an applicable Interest Rate Period.
Section 2.11 Apportionment of Payments. Aggregate principal and
interest payments in respect of Advances under the Revolving Credit Loan shall
be apportioned among all outstanding Revolving Credit Loan Commitments to which
such payments relate proportionately to the Lenders' respective Pro Rata Share
of such Revolving Credit Loan Commitments. In the event the Agent receives
payment under the Revolving Credit Loan on or before 1:00 P.M. (Nashville,
Tennessee time), then the Agent shall promptly thereafter distribute to each
Lender its share of all such payments received by the Agent on such Business
Day. Payments received by Agent subsequent to 1:00 P.M. (Nashville, Tennessee
time) shall be treated as received on the next succeeding Business Day. Payments
received by Agent for the Swing Line Loan shall not be apportioned but shall be
delivered to the Swing Line Lender.
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Section 2.12 Sharing of Payments, Etc. If any Lender shall obtain any
payment or reduction (including, without limitation, any amounts received as
adequate protection of a deposit treated as cash collateral under the Bankruptcy
Code) of the indebtedness relating to Advances under the Revolving Credit Loan
(whether voluntary, involuntary, through the exercise of any right of set-off or
otherwise) in excess of its Pro Rata Share of payments or reductions of the
Revolving Credit Loan, such Lender shall forthwith (a) notify the Agent, upon
which the Agent shall promptly thereafter notify each of the other Lenders of
such receipt, and (b) purchase from the other Lenders such participations in the
Revolving Credit Loan as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, ratably with each of them, provided that if all or any portion will
be rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest unless the Lender obligated to
return such funds is required to pay interest on such funds. The Borrower agrees
that any Lender so purchasing a participation from another Lender pursuant to
this Section 2.12 may, to the fullest extent permitted by law, exercise all its
rights to receive payment (including the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation.
Section 2.13 Right of Offset, Etc. The Borrower hereby agrees that, in
addition to (and without limitation of) any right of set-off, banker's lien or
counterclaim the Lenders may otherwise have, the Lenders shall be entitled, at
their option, to offset balances held by any of them at any of their offices
against any principal of or interest on the indebtedness described herein which
is not paid when due by reason of a failure by the Borrower to make any payment
when due to such Lender (regardless whether such balances are then due to the
Borrower), in which case such offsetting Lender shall promptly notify the
Borrower, provided that its failure to give such notice shall not affect the
validity thereof.
Section 2.14 Commitment Fee. Commencing on the first Business Day
following September 30, 1997 and on the first Business Day following the end of
each Fiscal Quarter thereafter (or if such day is not a Business Day, then on
the next succeeding Business Day) and on the Maturity Date, the Borrower shall
pay to the Agent on or before 1:00 P.M. (Nashville, Tennessee time) for
distribution upon receipt promptly thereafter to the Lenders based on their Pro
Rata Share a Commitment Fee equal to the average unused portion of the Revolving
Credit Loan (less the face amount of Letters of Credit outstanding during such
time period issued by Agent pursuant to Section 2.02 herein) for the Fiscal
Quarter (or portion thereof) then ended, multiplied by the Applicable Margin
then in effect relating to the Commitment Fee calculation; provided that the
payment made on the first Business Day following September 30, 1997 shall be for
a time period from the Closing Date to and including September 30, 1997. The
Commitment Fee shall be calculated based on a year of 360 days for the actual
number of days elapsed.
Section 2.15 Usury. The parties to this Agreement intend to conform
strictly to applicable usury laws as presently in effect. Accordingly, if the
transactions contemplated hereby would be usurious under applicable law
(including the laws of the United States of America and the State of Tennessee),
then, in that event, notwithstanding anything to the contrary in any Loan
Document or agreement executed in connection with the indebtedness described
herein, Borrower, Agent,
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and Lenders agree as follows: (i) the aggregate of all consideration that
constitutes interest under applicable law which is contracted for, charged, or
received under any of the Loan Documents or agreements, or otherwise in
connection with the indebtedness described herein, shall under no circumstance
exceed the maximum lawful rate of interest permitted by applicable law, and any
excess shall be credited on the indebtedness by the holder thereof (or, if the
indebtedness described herein shall have been paid in full, refunded to the
Borrower); and (ii) in the event that the maturity of the indebtedness described
herein is accelerated as a result of any Event of Default or otherwise, or in
the event of any required or permitted prepayment, then such consideration that
constitutes interest may never include more than the maximum amount of interest
permitted by applicable law, and excess interest, if any, for which this
Agreement provides, or otherwise, shall be cancelled automatically as of the
date of such acceleration or prepayment and, if previously paid, shall be
credited on the indebtedness described herein (or, if the indebtedness shall
have been paid in full, refunded to the Borrower).
Section 2.16 Interest Rate Not Ascertainable, Etc. In the event that
the Agent shall in good faith have determined that on any date for determining
LIBOR, by reason of any changes arising after the date of this Agreement
affecting the London interbank market or the Agent's position in such market,
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of LIBOR, then, and in any such
event, the Agent shall forthwith give notice (by telephone confirmed in writing)
to the Borrower of such determination and a summary of the basis for such
determination. At the expiration of any Interest Rate Period then in effect and
until the Agent notifies the Borrower that the circumstances giving rise to the
suspension described herein no longer exist (which notice shall be given
forthwith after such determination is made by the Agent), all Loans shall bear
interest at the Base Rate Option.
Section 2.17 Illegality. (a) In the event that the Agent shall have
determined at any time that the making or continuance of any Advance bearing
interest at the LIBOR Option has become unlawful by compliance by any of the
Lenders in good faith with any applicable law, governmental rule, regulation,
guideline or order (whether or not having the force of law and whether or not
failure to comply therewith would be unlawful), then, in any such event, the
Agent shall give prompt notice (by telephone confirmed in writing) to the
Borrower of such determination and a summary of the basis for such
determination.
(b) Upon the giving of the notice to the Borrower referred to in
Section 2.17(a), the Borrower's right to elect a LIBOR Option shall be
immediately suspended, and all Advances shall bear interest at the Base
Rate Option.
Section 2.18 Increased Costs. (a) If by reason of (i) after the date
hereof, the introduction of or any change (including, without limitation, any
change by way of imposition or increase of reserve requirements) in or in the
interpretation of any law or regulation, or (ii) the compliance with any
guideline or request from any central bank or other governmental authority or
quasi-governmental authority exercising control over banks or financial
institutions generally (whether or not having the force of law):
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(A) the Agent or any Lender shall be subject to any tax, duty or
other charge with respect to any Advances bearing interest at the LIBOR
Option (all such Advances being collectively referred to as the "LIBOR
Loans") or its obligation to make LIBOR Loans, or the basis of taxation
of payments to the Agent or any Lender of the principal of or interest
on its LIBOR Loans or its obligation to make LIBOR Loans shall have
changed (except for changes in the tax on the overall net income of the
Agent or such Lender, or similar taxes, pursuant to the laws of
jurisdictions with taxing authority over the Agent or such Lender); or
(B) any reserve (including, without limitation, any reserve
imposed by the Board of Governors of the Federal Reserve System),
special deposit or similar requirement against assets of, deposits with
or for the account of, or credit extended by, the Agent or any Lender
shall be imposed or deemed applicable or any other condition affecting
its LIBOR Loans or its obligation to make LIBOR Loans shall be imposed
on the Agent or any Lender or the London interbank market;
and as a result thereof there shall be any increase in the cost to the Agent or
any Lender of agreeing to make, fund or maintain LIBOR Loans (except to the
extent already included in the determination of the interest rate for LIBOR
Loans), or there shall be a reduction in the amount received or receivable by
the Agent or any Lender, then the Borrower shall from time to time, upon written
notice from and demand in good faith by the Agent on the Borrower, pay to the
Agent for the account of the Lenders (or any Lender) within five (5) Business
Days after the date of such notice and demand, additional amounts sufficient to
indemnify the Agent or such Lender against such increased cost; provided,
however, that nothing in this section shall require the Borrower to indemnify
the Agent or any Lender for withholding taxes.
(b) If the Agent shall in good faith determine that at any time,
because of the circumstances described in Section 2.18(a)(i) or (ii)
arising after the date of this Agreement affecting the Agent or any
Lender or the London interbank market or the Agent or any Lender's
position in such market, the calculations for the interest rates for
LIBOR Loans as determined by the Agent or any Lender will not
adequately and fairly reflect the cost to the Agent or any Lender of
funding such LIBOR Loans, the Agent shall forthwith give notice (by
telephone confirmed in writing) to the Borrower of such advice, and a
summary of the basis for such determination, and then, and in any such
event and until Agent notifies the Borrower that such circumstances no
longer exist (which notice shall be given forthwith after such
determination is made by the Agent):
(i) The Borrower's right to request, and the Agent's and
any Lender's obligation to make or permit portions of the
indebtedness described herein to remain outstanding past the last
day of the then current Interest Rate Period as LIBOR Loans shall
be immediately suspended; and
(ii) After the last day of the then-current Interest Rate
Period, all
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indebtedness described herein shall bear interest at the Base Rate
Option.
Section 2.19 Swing Line Commitment; Use of Proceeds.
(a) Availability. Subject to and upon the terms and conditions
herein set forth, the Swing Line Lender, from and after the Closing
Date through Business Day next preceding the Maturity Date, hereby
agrees to make available to the Borrower from time to time, Swing Line
Loans which shall not exceed in aggregate the principal amount at any
time outstanding under the Swing Line Commitment.
(b) Borrowing Procedure Under Swing Line Commitment. The Borrower
may borrow under the Swing Line Commitment from the date hereof until
the Maturity Date pursuant to the following procedure:
(i) the Borrower, acting through either its (A) Chief
Executive Officer, (B) Chief Financial Officer, or (C) any Person
designated in writing by its Chief Executive Officer to request
Advances under the Swing Line Loan (which designation shall be
delivered by the Borrower to the Agent), may request an Advance
under the Swing Line Loan no later than on or before 11:00 A.M.
(Nashville, Tennessee time) on the date an Advance under the Swing
Line Loan is desired; provided that any request for an Advance
under the Swing Line Loan received by Agent after 11:00 A.M.
(Nashville, Tennessee time) will be deemed given on the next
succeeding Business Day;
(ii) in addition to the procedure specified in subpart (i)
above, Advances under the Swing Line Loan may be automatically
funded by the Swing Line Lender pursuant to the procedure
specified in the Business Sweep System;
(iii) the Borrower authorizes the Agent to cause all Advances
to be deposited into the Funding Account; and
(iv) the giving of notice by the Borrower that it is
requesting an Advance under the Swing Line Loan and the acceptance
by the Borrower of Advances pursuant to such request or pursuant
to the procedure comprising the Business Sweep System shall
constitute a warranty by the Borrower that as of the date of the
request and as of the date the Advance: (A) no Event of Default or
Default Condition has occurred; and (B) the representations and
warranties contained in Article IV of this Agreement remain true,
correct, and accurate, except that the representation contained in
the first sentence of Section 4.13 herein shall not be deemed to
be a continuing representation.
(c) Use of Proceeds. The proceeds of Swing Line Loans shall be
used by the Borrower for acquisitions, capital expenditures, working
capital, and other general corporate purposes.
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(d) Refunding Swing Line Loans With Proceeds of Mandatory
Revolving Loans. If (i) any Swing Line Loan shall be outstanding upon
the occurrence of an Event of Default, or (ii) after giving effect to
any request for a Swing Line Loan or a Revolving Credit Loan, the
aggregate principal amount of the Revolving Credit Loans and Swing Line
Loans outstanding to the Swing Line Lender would exceed the Swing Line
Lender's Revolving Credit Loan Commitment, then each Lender hereby
agrees, upon request from the Swing Line Lender, to make a Revolving
Credit Loan (which shall be initially funded as a Base Rate Option) in
an amount equal to such Lender's Pro Rata Share of the outstanding
principal amount of the Swing Line Loans (the "Refunded Swing Line
Loans") outstanding on the date such notice is given. On or before
11:00 a.m. (Nashville, Tennessee time) on the first Business Day
following receipt by each Lender of a request to make Revolving Credit
Loans as provided in the preceding sentence, each such Lender (other
than the Swing Line Lender) shall deposit in an account specified by
the Agent to the Lenders from time to time the amount so requested in
same day funds, whereupon such funds shall be immediately delivered to
the Swing Line Lender (and not the Borrower) and applied to repay the
Refunded Swing Line Loans. On the day such Revolving Credit Loans are
made, the Swing Line Lender's pro rata share of the Refunded Swing Line
Loans shall be deemed to be paid with the proceeds of the Revolving
Credit Loans made by the Swing Line Lender. Upon the making of any
Revolving Credit Loan pursuant to this clause, the amount so funded
shall become due under such Lender's Revolving Credit Note and shall no
longer be owed under the Swing Line Note. Each Lender's obligation to
make the Revolving Credit Loans referred to in this clause shall be
absolute and unconditional and shall not be affected by any
circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Lender may
have against the Swing Line Lender, the Borrower or any other Person
for any reason whatsoever; (ii) the occurrence or continuance of any
Default Condition or Event of Default; (iii) any adverse change in the
condition (financial or otherwise) of the Borrower or any other
Consolidated Entity; (iv) the acceleration or maturity of any Loans or
the termination of the Revolving Credit Loan Commitments after the
making of any Swing Line Loan; (v) any breach of this Agreement by the
Borrower or any other Lender; or (vi) any other circumstance, happening
or event whatsoever, whether or not similar to any of the foregoing.
Article III. Guarantors.
Section 3.01 Guarantors. The obligations of the Borrower under the Loan
Documents shall be guaranteed jointly and severally by each of the Guarantors
pursuant to the Guaranties.
Article IV. Representations and Warranties.
To induce Lenders to enter this Agreement and extend credit under this
Agreement, the Borrower covenants, represents and warrants to Agent and to
Lenders as follows:
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Section 4.01 Corporate Existence. The Borrower is a corporation duly
organized, legally existing, and in good standing under the laws of the State of
Tennessee, and it is duly qualified as a foreign corporation in all
jurisdictions in which the Property owned or the business transacted by it makes
such qualification necessary, except where failure to so qualify does not have a
material adverse effect on the Borrower, its respective business, or its
respective Properties. The Borrower will not commence doing business in any
state unless and until the Borrower shall have qualified to do business in such
state.
Section 4.02 Power and Authorization. The Borrower is duly authorized
and empowered to execute, deliver, and perform under all Loan Documents; the
board of directors of the Borrower has authorized the Borrower to execute and
perform under the Loan Documents; and all other corporate and shareholder action
on Borrower's part required for the due execution, delivery, and performance of
the Loan Documents has been duly and effectively taken.
Section 4.03 Binding Obligations. This Agreement is, and the Loan
Documents when executed and delivered in accordance with this Agreement will be,
legal, valid and binding upon and against the Borrower and its respective
Properties, and this Agreement and the Loan Documents are enforceable in
accordance with their respective terms, subject to no defense, counterclaim,
set-off, or objection of any kind.
Section 4.04 No Legal Bar or Resultant Lien. The Borrower's execution,
delivery and performance of the Loan Documents does not constitute a default
under, and will not violate any provisions of the articles of incorporation (or
charter), bylaws, articles of organization, and/or operating agreement of the
Borrower, any contract, agreement, law, regulation, order, injunction, judgment,
decree, or writ to which the Borrower is subject, or result in the creation or
imposition of any Lien upon any Properties of the Borrower.
Section 4.05 No Consent. The Borrower's execution, delivery, and
performance of the Loan Documents do not require the consent or approval of any
other Person.
Section 4.06 Financial Condition. The consolidated Financial Statements
which have been delivered to Agent and to Lenders for the Consolidated Entities
dated March 31, 1997 have been prepared in accordance with GAAP consistently
applied, and such consolidated Financial Statements present fairly the financial
condition of the Consolidated Entities as of the date or dates and for the
period or periods stated therein. No material adverse change in the financial
condition of the Consolidated Entities taken as a whole has occurred since the
date of such Financial Statements.
Section 4.07 Investments, Advances, and Guaranties. None of the
Consolidated Entities has made investments in, advances to, or guaranties of the
obligations of any Person, or committed or agreed to undertake any of these
actions or obligations, except as referred to or reflected in the Financial
Statements.
Section 4.08 Liabilities and Litigation. None of the Consolidated
Entities has any material
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liabilities (individually or in the aggregate) direct or contingent, except as
referred to or reflected in the Financial Statements. Except as disclosed in
writing to Agent by Borrower from time to time, there is no litigation, legal or
administrative proceeding, investigation, or other action of any nature pending
or, to the knowledge of the Borrower, threatened against or affecting any of the
Consolidated Entities that involves the possibility of any judgment or liability
not fully covered by insurance and that may materially and adversely affect the
business or the Properties of any of the Consolidated Entities or their
respective ability to carry on their business as now conducted.
Section 4.09 Taxes; Governmental Charges. Each of the Consolidated
Entities has filed or caused to be filed all tax returns and reports required to
be filed and has paid all taxes, assessments, fees, and other governmental
charges levied upon each of them or upon any of their respective Properties or
income, which are due and payable, including interest and penalties, except
where being contested in good faith by appropriate proceedings and subject to
maintenance of adequate reserves as required by GAAP by the Borrower or the
affected Consolidated Entity. Each of the Consolidated Entities has made all
required withholding deposits.
Section 4.10 No Default. None of the Consolidated Entities is in
default in any respect that materially and adversely affects its business,
Properties, operations, or condition, financial or otherwise, under any
indenture, mortgage, deed of trust, credit agreement, note, agreement, or other
instrument to which any of the Consolidated Entities is a party or by which any
of them or their Properties are bound. None of the Consolidated Entities is in
violation of its respective Articles of Incorporation (or Charter), Bylaws,
Articles of Organization, or operating agreements. No Default Conditions
hereunder have occurred or are continuing as of the date hereof.
Section 4.11 Compliance with Laws, Etc. None of the Consolidated
Entities is in violation of any law, judgment, decree, order, ordinance, or
governmental rule or regulation to which any of the Consolidated Entities, or
any of their respective Properties is subject in any respect that materially and
adversely affects their respective business, Properties, or financial condition.
None of the Consolidated Entities has failed to obtain any license, permit,
franchise, or other governmental authorization necessary to the ownership of any
of their respective Properties or to the conduct of their business, which if not
obtained would have or has a material adverse effect on any of the Consolidated
Entities. All improvements on the real estate owned by, leased to, or used by
the Consolidated Entities conform in all material respects to all applicable
state and local laws, zoning and building ordinances and health and safety
ordinances, and such real estate is zoned for the various purposes for which
such real estate and improvements thereon are presently being used.
Section 4.12 ERISA. Each of the Consolidated Entities is in compliance
in all material respects with the applicable provisions of ERISA. None of the
Consolidated Entities has incurred any "accumulated funding deficiency" within
the meaning of ERISA which is material to the financial condition of the
Consolidated Entities taken as a whole, and none of the Consolidated
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Entities has incurred any liability to PBGC in connection with any Plan which
liability is adverse and material to financial condition of the Consolidated
Entities taken as a whole.
Section 4.13 Consolidated Entities. Each of the Consolidated Entities
is duly organized, validly existing, and in good standing under the laws of the
jurisdiction of its incorporation or formation, has all requisite power and
authority, licenses, permits, and authorizations necessary to own Property and
to carry on its business as now being conducted, and is qualified to do business
in every jurisdiction required by law, except in those instances where the
failure to be so qualified or to obtain such licenses, permits, and
authorizations does not have a material adverse effect on such Consolidated
Entity.
Section 4.14 No Material Misstatements. No information, exhibit, or
report furnished or to be furnished by the Consolidated Entities to Agent or to
Lenders in connection with this Agreement, contain any material misstatement of
fact or fail to state any material fact, the omission of which would render the
statements therein materially false or misleading.
Section 4.15 Solvency. The Borrower is solvent. The Borrower is
generally paying its debts as they mature and the fair value of the Borrower's
assets substantially exceeds the sum total of its respective liabilities.
Section 4.16 Regulation U. None of the Consolidated Entities is engaged
principally, nor as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System. No part of the indebtedness described herein shall be used at any time
to purchase or to carry margin stock within the meaning of Regulation U or to
extend credit to others for the purpose of purchasing or carrying any margin
stock if to do so would cause the Lenders to violate the provisions of
Regulation U. Each Consolidated Entity is in full compliance with, and has not
violated or allowed to be violated any provision of, any of the regulations G,
T, U or X, any laws and regulations to employee benefit plans, and/or applicable
environmental laws, rules, or regulations.
Section 4.17 Filings. The Borrower has filed all reports and statements
required to be filed with the Securities and Exchange Commission. As of their
respective dates, the reports and statements referred to above complied in all
material respects with all rules and regulations promulgated by the Securities
and Exchange Commission and did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements therein, in light of the circumstances under which they
were made, not misleading.
Section 4.18 Title, Etc. Each of the Consolidated Entities has good
title to its respective Properties, free and clear of all Liens except those
permitted by Section 7.02 herein, and except for any defects in title which
would not have a material adverse effect on the business, Properties, financial
condition or operations of any of the Consolidated Entities or on the ability of
the Borrower to perform its respective obligations under this Agreement or any
of the other
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Loan Documents. The Consolidated Entities possess all trademarks, copyrights,
trade names, patents, licenses, and rights therein, free from burdensome
restrictions, which are adequate for the conduct of their respective business as
now conducted and presently proposed to be conducted, except for such that would
not have a material adverse effect on the business, Properties, financial
condition or operations of any of the Consolidated Entities or on the ability of
the Borrower to perform its respective obligations under this Agreement or any
of the other Loan Documents.
Section 4.19 Investment Company Act. None of the Consolidated Entities
is an "investment company" or a company "controlled" by an "investment company"
within the meaning of the Investment Company Act of 1940, as amended.
Section 4.20 Personal Holding Company. The Borrower is not a "personal
holding company" as defined in Section 542 of the Code.
Section 4.21 Burdensome Agreements. The Consolidated Entities are not
parties to any agreements that materially restrict their ability to conduct
their business as presently conducted or that may be expected to have a
material, adverse effect on the financial condition of any of the Consolidated
Entities.
Section 4.22 Insurance. Schedule 4.22 attached hereto depicts the type
and amount of insurance coverage maintained by each of the Consolidated Entities
with respect to their respective Properties and businesses. The Consolidated
Entities have paid all material amounts of insurance premiums now due and owing
with respect to such insurance policies and coverages, and such policies and
coverages are in full force and effect. The Consolidated Entities shall continue
to maintain substantially similar insurance coverage on their respective
Properties and businesses throughout the term of this Agreement.
Section 4.23 Subsidiaries. Schedule 4.23 sets forth all Subsidiaries
existing as of the Closing Date, the jurisdiction of their incorporation, and
the direct or indirect ownership interest of the Borrower therein.
Article V. Conditions Precedent.
Section 5.01 Initial Conditions. Lenders' obligation to extend credit
and to issue any Letter of Credit hereunder and the Swing Line Lender's
obligation to extend credit is subject to the Conditions Precedent that Agent
shall have received (or agreed in writing to waive or defer receipt of) all of
the following, each duly executed, dated and delivered as of the date hereof, in
form and substance satisfactory to Agent and its counsel:
(a) Notes and Loan Documents. This Agreement, the Revolving Credit
Notes, Swing Line Note, the Guaranties of each of the Guarantors, any
Letter of Credit Application Agreements, and other documents executed
in connection with this Agreement (the "Loan Documents").
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(b) Resolutions. Certified copies of resolutions of the Board of
Directors of the corporate Borrower and each of the Guarantors
authorizing or ratifying the execution, delivery, and performance,
respectively, of Loan Documents to which each is a party.
(c) Certificate of Existence. A certificate of existence of the
Borrower and each of the Guarantors from the state or commonwealth in
which the Borrower and the Guarantors are incorporated or organized,
which certificate shall contain no facts objectionable to Agent.
(d) Consents, Etc. Certified copies of all documents evidencing
any necessary corporate action, consents, and governmental approvals
(if any) with respect to this Agreement and the Loan Documents.
(e) Incumbency Certificate. A certificate of the secretary or any
assistant secretary of the Borrower and each of the Guarantors
certifying: (i) the names of the officer or officers of the Borrower
and each of the Guarantors authorized to sign the respective Loan
Documents, together with a sample of the true signature of such
officer(s), and (ii) as to representations and warranties of, and
litigation involving, the Borrower and each of the Guarantors.
(f) Charter and By-Laws and Organizational Documents. A copy of
the Borrower's and the Guarantors' respective by-laws and charter or
articles of incorporation and/or articles of organization and operating
agreement, if applicable, (including all amendments thereto) certified
by the secretary or any assistant secretary of the Borrower and
Guarantors, as applicable, and in the case of the charter or articles
of incorporation, by the Secretary of State of the state or
commonwealth in which the Borrower and the Guarantors are incorporated,
as being true and complete copies of the current charter or articles of
incorporation and by-laws of each.
(g) Attorneys Opinion Letter. An opinion letter from counsel to
the Borrower and the Guarantors favorably opining as to such matters as
required by Agent.
(h) Payment of Fees, Etc. Payment of all outstanding fees and
expenses to Agent, and to any Lender, including all of Agent's
reasonable legal fees.
(i) No Default Certificate. Delivery of a certificate dated as of
the Closing Date executed by the Chief Executive Officer or the Chief
Financial Officer of the Borrower certifying to Agent and to Lenders
that no Default Condition or Event of Default exists.
(j) Other. Such other documents as Agent may reasonably request.
Section 5.02 All Borrowings. The Lenders' obligation to extend credit
pursuant to this
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Agreement and to issue any Letter of Credit and the Swing Line Lender's
obligation to extend credit pursuant to this Agreement is subject to the
following additional Conditions Precedent which shall be met each time an
Advance under the Revolving Credit Loan (including the request for the issuance
of a Letter of Credit) and Advance under the Swing Line Loan is made:
(a) The representations of the Borrower contained in Article IV
are true and correct as of the date of the requested Advance, with the
same effect as though made on the date additional funds are advanced;
(b) There has been no material adverse change in the Borrower's
consolidated financial condition or other condition since the date of
the last borrowing hereunder; (c) No Default Conditions and no Event of
Default have occurred and continue to exist; (d) No material litigation
(including, without limitation, derivative actions), arbitration
proceedings or governmental proceedings not disclosed in writing by the
Borrower to the Agent prior to the date of the execution and delivery
of this Agreement is pending or known to be threatened against any of
the Consolidated Entities and no material development not so disclosed
has occurred in any litigation, arbitration proceedings or governmental
proceedings so disclosed, which could reasonably be expected to
adversely affect the financial position or business of the Consolidated
Entities taken as a whole or impair the ability of the Borrower to
perform its respective obligations under this Agreement or any other
Loan Documents.
Article VI. Affirmative Covenants.
The Borrower covenants that, during the term of this Agreement
(including any extensions hereof) and until all indebtedness described herein
shall have been finally paid in full, unless the Required Lenders shall
otherwise first consent in writing, the Borrower shall:
Section 6.01 Financial Statements and Reports. Promptly furnish to
Agent (with sufficient copies for distribution by Agent to each Lender):
(a) Annual Reports. As soon as available, and in any event within
one hundred (100) days after the close of each Fiscal Year of the
Borrower, the audited consolidated Financial Statements of the
Consolidated Entities setting forth the audited consolidated balance
sheets of the Consolidated Entities as at the end of such year, and the
audited consolidated statements of income, statements of cash flows,
and statements of retained earnings, along with supporting notes to
such consolidated Financial Statements, of the Consolidated Entities
for such year, setting forth in each case in comparative form
(beginning when comparative data are available) the corresponding
figures for the preceding Fiscal Year accompanied by the report of the
Borrower's certified public accountants, and by an unaudited
consolidating balance sheet and unaudited consolidating statements of
income, and statements of retained earnings of the Borrower duly
certified by the Borrower's chief financial officer as being correct
reflections of the information used for the audited consolidated
Financial Statements. The audit opinion in respect of the consolidated
Financial Statements of the Consolidated Entities shall be the
unqualified opinion of one of the nationally recognized "Big Six" firms
of independent certified public
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accountants acceptable to Agent and shall be accompanied by such
certificates as reasonably required by Agent;
(b) Quarterly and Year-to-Date Reports. As soon as available and
in any event within fifty (50) days after the end of each Fiscal
Quarter, the consolidated balance sheets of the Borrower as of the end
of such Fiscal Quarter, and the consolidated and consolidating balance
sheets and consolidating statements of income and statements of cash
flow of the Borrower for such quarter and for a period from the
beginning of the Fiscal Year to the close of such Fiscal Quarter, all
certified by the chief financial officer or chief accounting officer of
the Borrower as being true and correct to the best of his or her
knowledge;
(c) Compliance Reports. As soon as available and in any event
within one hundred days (100) after the end of a Fiscal Year or within
fifty (50) days after the end of each Fiscal Quarter that is not the
end of a Fiscal Year, the calculations with supporting details by the
Borrower of the financial covenants contained in Article VII A herein,
all in a format similar to that described on Exhibit G hereto, along
with a certificate of compliance certified by the chief executive
officer or chief financial officer of the Borrower stating that such
officer has no knowledge of any Event of Default or Default Condition,
or if such officer has obtained such knowledge, disclosing the nature,
details, and period of existence of such event;
(d) SEC Filings and Public Information. Within three (3) days
after such are filed with the Securities and Exchange Commission,
copies of all filings made (including Borrower's 8-K reports) except
for the Borrower's 10-Q and 10-K reports which shall be due within ten
(10) days after such are filed; and
(e) Other Information. Promptly upon its becoming available, such
other material information, including, but not limited to, material
violations of environmental laws or regulations and important matters
relating to funding of employee benefit plans, about the Consolidated
Entities as a whole or the indebtedness described herein, or such other
information that any Lender through the Agent may reasonably request
from time to time.
All such balance sheets and other Financial Statements referred to in Sections
6.01(a) and (b) hereof shall conform to GAAP.
Section 6.02 Annual Certificates of Compliance. Concurrently with the
furnishing of the annual audited consolidated Financial Statements pursuant to
Section 6.01(a) hereof, furnish or cause to be furnished to Agent (with
sufficient copies for distribution to each Lender) a certificate of compliance
in a form reasonably satisfactory to Agent prepared by one of the nationally
recognized "Big Six" accounting firms stating that in making the examination
necessary for their audit they have obtained no knowledge of any Default
Condition or Event of Default, or event which, after notice or lapse of time (or
both), would constitute a Default Condition or Event of
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Default or, if they have obtained such knowledge, disclosing the nature,
details, and period of existence of such event.
Section 6.03 Taxes and Other Liens. Pay and discharge promptly all
taxes, assessments, and governmental charges or levies imposed upon any of the
Consolidated Entities or upon any of their respective income or Property as well
as all claims of any kind (including claims for labor, materials, supplies, and
rent) which, if unpaid, might become a Lien upon any Consolidated Entity's
Property; provided, however, that none of the Consolidated Entities shall be
required to pay any such tax, assessment, charge, levy, or claim if the amount,
applicability, or validity thereof shall currently be contested in good faith by
appropriate proceedings diligently conducted and if such of the Consolidated
Entities, as applicable, shall establish reserves therefor adequate under GAAP.
Section 6.04 Maintenance.
(a) Except as otherwise provided herein, (i) continue to engage in
business of the same general type as conducted on the Closing Date by
the Consolidated Entities, taken as a whole, and (ii) maintain and
cause each Consolidated Entity to maintain its corporate, partnership,
joint venture, limited partnership, and/or limited liability company
existence, name, rights, and franchises;
(b) observe and comply and cause each Consolidated Entity to
observe and comply (to the extent necessary so that any failure will
not materially and adversely affect the business or Property of any of
the Consolidated Entities) with all applicable laws, environmental laws
and regulations, statutes, codes, acts, ordinances, orders, judgments,
decrees, injunctions, rules, regulations, certificates, franchises,
permits, licenses, authorizations, and requirements of all federal,
state, county, municipal, and other governments;
(c) maintain and cause each Consolidated Entity to maintain its
Property (and any Property leased by or consigned to it or held under
title retention or conditional sales contracts) in good and workable
condition at all times and make all repairs, replacements, additions,
and improvements to its Property reasonably necessary and proper to
ensure that the business carried on in connection with its Property may
be conducted properly and efficiently at all times; and
(d) maintain and cause each Consolidated Entity to maintain
ownership of, and all presently existing benefits and rights arising
from, their respective patents, trademarks, franchises, and other
intellectual property.
Section 6.05 Further Assurances. Promptly cure any defects in the
creation, issuance, and delivery of the Loan Documents. The Borrower at its
expense promptly will execute and deliver to Agent upon request all such other
and further documents, agreements, and instruments in compliance with or
accomplishment of the covenants and agreements of the Borrower in the Loan
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Documents, or to correct any omissions in the Loan Documents, all as may be
reasonably necessary or appropriate in connection therewith.
Section 6.06 Performance of Obligations.
(a) Pay the indebtedness described herein according to the terms
of the Loan Documents; and
(b) do and perform, and cause to be done and to be performed,
every act and discharge all of the obligations provided to be performed
and discharged by the Borrower under the Loan Documents, at the time or
times and in the manner specified.
Section 6.07 Insurance. Maintain and continue to maintain, and cause
each Consolidated Entity to maintain and continue to maintain, with financially
sound and reputable insurers, insurance satisfactory in type, coverage and
amount to Agent against such liabilities, casualties, risks, and contingencies
and in such types and amounts as is customary in the case of corporations
engaged in the same or similar businesses and similarly situated. Upon request
of any Lender, through the Agent, the Borrower will furnish or cause to be
furnished to Agent from time to time a summary of the insurance coverage of the
Consolidated Entities in form and substance satisfactory to Agent and if
requested will furnish each Lender copies of the applicable policies.
Section 6.08 Accounts and Records. Keep books of record and account, in
which full, true, and correct entries will be made of all dealings or
transactions in accordance with GAAP, except only for changes in accounting
principles or practices with which the Borrower's certified public accountants
concur and which changes have been reported to Agent in writing and with an
explanation thereof.
Section 6.09 Right of Inspection. Permit and cause each Consolidated
Entity to permit any officer, employee, or agent of Agent or any Lender as may
be designated by Agent to visit and inspect any of the Property of any of the
Consolidated Entities, to examine the books of record and accounts of any of the
Consolidated Entities, and to discuss the affairs, finances, and accounts of any
of the Consolidated Entities with the respective officers, accountants, and
auditors of any of the Consolidated Entities, all at such reasonable times and
as often as Agent may reasonably desire.
Section 6.10 Notice of Certain Events. Promptly notify Agent if the
Borrower learns of the occurrence of (i) any event that constitutes a Default
Condition or Event of Default together with a detailed statement by a
responsible officer of the steps being taken as a result thereof; or (ii) the
receipt of any notice from, or the taking of any other action by, the holder of
any promissory note, debenture, or other evidence of Debt of any of the
Consolidated Entities with respect to a claimed default, together with a
detailed statement by a responsible officer of the respective Consolidated
Entity specifying the notice given or other action taken by such holder and the
nature of the claimed default and what action the affected Consolidated Entity
is taking or
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proposes to take with respect thereto; or (iii) any legal, judicial, or
regulatory proceedings, including, but not limited to, environmental matters,
affecting any of the Consolidated Entities in which the amount involved is
material and is not adequately covered by insurance or which, if adversely
determined, would have a material and adverse effect on the business or the
financial condition of the Consolidated Entities taken as a whole; or (iv) any
dispute between any of the Consolidated Entities and any governmental or
regulatory authority or any other Person, entity, or agency which, if adversely
determined, might interfere with the normal business operations of the
Consolidated Entities taken as a whole; or (v) any material adverse changes,
either individually or in the aggregate, in the assets, liabilities, financial
condition, business, operations, affairs, or circumstances of any of the
Consolidated Entities from those reflected in the Financial Statements or from
the facts warranted or represented in any Loan Document.
Section 6.11 ERISA Information and Compliance. Comply and cause each of
the Consolidated Entities to comply with ERISA and all other applicable laws
governing any pension or profit sharing plan or arrangement to which any of the
Consolidated Entities is a party, provided that no Event of Default or Default
Condition shall be deemed to have occurred unless the failure to comply with
ERISA or such other laws governing any pension or profit sharing plan or
arrangement has a material, adverse impact on the financial condition of the
Consolidated Entities taken as a whole. The Borrower shall provide and shall
cause each of the Consolidated Entities to provide Agent with notice of any
"reportable event" or "prohibited transaction" or the imposition of a
"withdrawal liability" within the meaning of ERISA.
Section 6.12 Management. Give immediate notice to Agent of any material
change in the composition of Persons comprising the senior management or the
executive committee of the Borrower.
Section 6.13 Additional Guaranties. At the same time that any of the
Consolidated Entities acquires any Person that is or becomes a Consolidated
Entity, the Borrower shall cause such new Consolidated Entity to execute a
Guaranty in the form of the Guaranties executed by the Guarantors, and to
deliver to Agent such Guaranties and other documents, instruments and items with
respect thereto that are similar to those documents, instruments and items
delivered by the Guarantors with regard to their Guaranties. Additionally, in
such case upon Agent's request, the Borrower shall cause the Agent to receive a
counsel's opinion letter issued by counsel acceptable to Agent regarding such
matters involving such Consolidated Entity as may be required by Agent.
Immediately upon any Person becoming a Consolidated Entity, the Borrower shall
give notice thereof to Agent. The Borrower shall pay the costs and expenses,
including without limitation, the Agent's legal fees and expenses, in connection
with the preparation, negotiation, execution and review of the Guaranty of such
Consolidated Entity and the other items described in this Section.
The provisions of this Section 6.13 shall not apply to Future
University, Inc. in the event that it becomes a Consolidated Entity until and
unless: (i) the Borrower or any other Consolidated Entity acquires one hundred
percent (100%) ownership of the common stock of Future University, Inc., or (ii)
any Consolidated Entity makes loans or advances to Future University,
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Inc.
Section 6.14 Equity Proceeds. Give to Agent five (5) Business Days
prior notice of any proposed transaction intended to raise Equity Proceeds.
Article VII. Negative Covenants.
The Borrower covenants and agrees that, during the term of this
Agreement and any extensions hereof and until the indebtedness described herein
has been paid and satisfied in full, unless Required Lenders shall otherwise
first consent in writing, the Borrower will not, either directly or indirectly,
and will not allow any of the Consolidated Entities to:
Section 7.01 Debts, Guarantees, and Other Obligations. Except as
otherwise set forth in this Agreement, incur, create, assume, or in any manner
become or be liable with respect to any Debt; provided that subject to all other
provisions of this Article VII, the foregoing prohibitions shall not apply to:
(a) any indebtedness owed to Lenders and to the Swing Line Lender
as set forth in this Agreement;
(b) endorsements of negotiable or similar instruments for
collection or deposit in the ordinary course of business;
(c) trade payables, accruals, deferrals or similar obligations and
liabilities (other than for borrowed money or purchase money
obligations) from time to time incurred or accrued in the ordinary
course of business not to exceed amounts historically and customarily
incurred or accrued by any Consolidated Entity;
(d) taxes, assessments, or other governmental charges that are not
yet assessed or are being contested in good faith by appropriate action
promptly initiated and diligently conducted, if the appropriate
Consolidated Entity shall have made any reserve therefor required by
GAAP;
(e) indebtedness (direct or contingent) to others, excluding
Seller Notes, that does not exceed $5,000,000 in the aggregate for all
Consolidated Entities;
(f) indebtedness owed or guaranties provided by the Guarantors to
the Borrower, or indebtedness owed or guaranties provided by the
Guarantors to each other, or indebtedness owed or guaranties provided
by the Borrower to the Guarantors; and
(g) Seller Notes not to exceed $20,000,000 in the aggregate
outstanding principal balance at any one time.
Section 7.02 Liens. Create, incur, assume, or permit to exist any Lien
on any of their
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respective Property (real, personal, or mixed now owned or hereafter acquired)
except, subject to all other provisions of this Article, the foregoing
restrictions shall not apply to:
(a) Liens securing the payment of any of the indebtedness
described in this Agreement; and
(b) Permitted Encumbrances.
Section 7.03 Investments, Loans, and Advances. Make or permit to remain
outstanding any loans or advances to or investments in any Person, except that,
subject to all other provisions of this Article, the foregoing restriction shall
not apply to:
(a) investments in direct obligations of the United States of
America or any agency thereof having maturities of less than one year;
(b) investments in direct obligations of any political
subdivisions of the United States of America or any State of the United
States of America having a senior unsecured senior debt rating from
Standard and Poor's Corporation or Xxxxx'x Investors Services, Inc. of
AA or better and having maturities of less than one year;
(c) investments in commercial paper of the highest credit rating
of Standard and Poor's Corporation or Xxxxx'x Investors Services, Inc.,
or upon the discontinuance or either or both of such services, any
other nationally recognized rating service,
(d) investments in bankers' acceptances and certificates of
deposit having maturities of less than one year, or repurchase
agreements issued by commercial banks in the United States of America
having capital and surplus in excess of $50,000,000, or commercial
paper of the highest quality;
(e) investments in money market funds so long as the fund is rated
or so long the fund is a fund operated by a commercial bank of the type
specified in (d) above;
(f) tax exempt cash equivalents secured by a standby letter of
credit (issued by a bank with single "A" or better rating by Standard &
Poor's Corporation or A2 or better rating by Xxxxx'x Investors
Services, Inc.) or by credit insurance sufficient to obtain a "AAA"
rating by Standard & Poor's Corporation or Aaa by Xxxxx Investors
Services, Inc. or having an underlying credit rating of single "A" or
better rating by Standard & Poor's Corporation or A2 or better rating
by Xxxxx'x Investors Services, Inc.;
(g) advances to officers and employees of Borrower made in the
ordinary course of business and not in excess of amounts customarily
and historically loaned to such officers and employees not to exceed
$100,000 in the aggregate;
(h) the endorsement of negotiable or similar instruments in the
ordinary course
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of business;
(i) investments in stock of any existing Subsidiary; and
(j) investments in the form of stock purchases incurred in
Acquisitions permitted by Section 7.12 herein.
Section 7.04 Distributions, and Redemptions; Issuance of Stock. (a)
Purchase, redeem, or otherwise acquire for value any of its stock now or
hereafter outstanding, provided that the Borrower may be permitted to redeem up
to 2% of its outstanding Voting Stock in any Fiscal Year, (b) return any capital
to its stockholders, or (c) make any distribution of its assets to its
stockholders as such; provided that these restrictions shall not be deemed to
restrict the Borrower's ability to issue dividends in the ordinary course of
business so long as no Event of Default or Default Condition exists or would
exist immediately after such dividends have been made.
Section 7.05 Sales and Leasebacks. Enter into any arrangement, directly
or indirectly, with any Person by which any Consolidated Entity shall sell or
transfer any material portion of its Property, whether now owned or hereafter
acquired, and by which any Consolidated Entity shall then or thereafter rent or
lease as lessee such Property or any part thereof or other Property that such
Consolidated Entity intends to use for substantially the same purpose or
purposes as the Property sold or transferred.
Section 7.06 Nature of Business. Suffer or permit any material change
to be made in the character of the business of any of the Consolidated Entities,
as carried on as of the date hereof.
Section 7.07 Mergers, Consolidations, Etc. Merge, consolidate or
reorganize with or into, or sell, assign, lease, transfer, or otherwise dispose
of (whether in one transaction or in a series of transactions) all or
substantially all of its Property (whether now owned or hereafter acquired) to,
or become an Affiliate of, any Person; provided, however, so long as no Event of
Default and no Default Condition has occurred or will occur immediately
thereafter as a result of such: (a) any Consolidated Entity other than the
Borrower may transfer assets to the Borrower or to any other Consolidated
Entity; (b) the Borrower may merge, reorganize or consolidate with any Person as
long as, after giving effect to any such merger, reorganization or consolidation
the Borrower is the surviving corporation; and (c) excluding the Borrower, any
other Consolidated Entity may merge into another Consolidated Entity.
Section 7.08 Proceeds of Loan. Permit the proceeds of the Advances to
be used for any purpose other than those permitted under this Agreement.
Section 7.09 Disposition of Assets. Dispose of any of the assets of any
of the Consolidated Entities other than in the ordinary course of such of the
Consolidated Entities' (as applicable) present business upon terms standard in
such of the Consolidated Entities' (as applicable) industry; provided that this
restriction shall not prohibit any of the Consolidated
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Entities from disposing of any portion of its assets if such disposition does
not have a material, adverse effect on the financial or other condition of the
Consolidated Entities taken as a whole, and provided that this restriction shall
not prohibit any Consolidated Entity from transferring its assets to the
Borrower or to another Consolidated Entity (excluding Future University, Inc.
until such time as Future University, Inc. becomes a Guarantor).
Section 7.10 Limitation on Business. Engage in any business other than
the business in which the Consolidated Entities are currently primarily engaged
as a whole as of this Agreement, nor transact business between Borrower and/or
any other Consolidated Entity except on an arm's length basis for fair
consideration.
Section 7.11 Inconsistent Agreements. Enter into any agreement
containing any provision which would be violated or breached by the performance
by the Borrower of its obligations.
Section 7.12 Acquisitions. Make any Acquisition in which: (A) less than
fifty percent (50%) of the consideration paid or given in such Acquisition
consists of stock, and (B) the cash paid exceeds $5,000,000.
Section 7.13 Advances to Future University, Inc. Make any loans or
advances of monies funded under the Revolving Credit Loans to Future University,
Inc. until Future University, Inc. becomes a Guarantor.
Article VII.A. Financial Covenants.
The Borrower covenants and agrees that, during the term of this
Agreement and any extensions hereof and until the indebtedness described herein
has been paid and satisfied in full, unless Majority Lenders shall otherwise
first consent in writing, the Borrower will not:
Section 7A.01 Financial Covenants.
(a) Minimum Net Worth. Permit the Consolidated Net Worth to be
less than a minimum amount equal to: (i) $91,000,000, plus (ii) on a
quarterly basis for each Fiscal Quarter beginning with the Second
Fiscal Quarter for the 1997 Fiscal Year, a cumulative amount equal to
75% of quarterly Consolidated Net Income, plus (iii) 100% of the net
proceeds of any Equity Proceeds raised subsequent to Closing Date. For
the purpose of this calculation, Consolidated Net Income shall never be
less than 0.
(b) Senior Funded Debt to EBIA. Permit the ratio of Senior Funded
Debt of the Consolidated Entities divided by EBIA to exceed a ratio of
2.5 to 1.0 calculated as of the end of each Fiscal Quarter. For the
purpose of this calculation, the number attributed to EBIA shall be
determined by using the two most profitable quarterly EBIA calculations
for the preceding three Fiscal Quarters multiplied by two (2).
(c) Total Funded Debt to EBIA. Permit the ratio of Total Funded
Debt of the
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Consolidated Entities divided by EBIA to exceed a ratio of 3.0 to 1.0
calculated as of the end of each Fiscal Quarter. For the purpose of
this calculation, the number attributed to EBIA shall be determined by
using the two most profitable quarterly EBIA calculations for the
preceding three Fiscal Quarters multiplied by two (2).
(d) Adjusted Total Funded Debt to Capitalization. Permit the ratio
of Adjusted Total Funded Debt to Capitalization to exceed .40 to 1.0 at
any time, all as determined at the end of each Fiscal Quarter.
(e) Fixed Charge Coverage Ratio. Permit the ratio of EBIA to Fixed
Charges, as calculated at the end of each Fiscal Quarter on a trailing
four quarter basis, to be less than 2.5 to 1.0 at any time.
Article VIII. Events of Default.
Section 8.01 Events of Default. Any of the following events shall be
considered an Event of Default as those terms are used in this Agreement:
(a) Principal and Interest Payments. The Borrower fails to make
payment by of principal when due in accordance with the terms of the
Loan Documents or the Borrower fails to pay within five (5) days when
due any payment of interest or any other amount when due in accordance
with the terms of the Loan Documents; or
(b) Representations and Warranties. Any representation or warranty
made by the Borrower in any Loan Document is incorrect in any material
respect as of the date thereof; or any representation, statement
(including Financial Statements), certificate, or data furnished or
made by the Borrower in any Loan Document with respect to any
indebtedness is untrue in any material respect, as of the date as of
which the facts therein set forth were stated or certified; or
(c) Obligations. The Borrower fails to perform any of its
respective obligations as required by and contained in any Loan
Document or a breach or violation occurs under any of the promises,
agreements, or covenants contained herein and such breach or violation
is not cured within thirty (30) days after delivery of written notice
by Agent to Borrower, provided and except that such thirty (30) day
cure period shall not apply and an Event of Default shall be deemed to
exist without opportunity to cure upon the breach or violation of any
of the following articles and sections of this Agreement: Section
6.04(a)(i), 6.10, 6.11, 6.12, 6.13, 6.14, Article VII, and Article
VII.A; or
(d) Involuntary Bankruptcy or Receivership Proceedings . A
receiver, custodian, liquidator, or trustee of the Borrower or any of
the Guarantors, or of any of their respective Property, is appointed by
the order or decree of any court or agency or supervisory authority
having jurisdiction; or the Borrower or any of the Guarantors is
adjudicated bankrupt or insolvent; or any of the Property of the
Borrower or any of the
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Guarantors is sequestered by court order; or a petition is filed
against the Borrower or any of the Guarantors under any state or
federal bankruptcy, reorganization, debt arrangement, insolvency,
readjustment of debt, dissolution, liquidation, or receivership law of
any jurisdiction, whether now or hereafter in effect, which petition is
not dismissed within sixty (60) days after it has been filed; or
(e) Voluntary Petitions. The Borrower or any of the Guarantors
takes affirmative steps to prepare to file, or the Borrower or any of
the Guarantors files a petition in voluntary bankruptcy or to seek
relief under any provision of any bankruptcy, reorganization, debt
arrangement, insolvency, readjustment of debt, dissolution, or
liquidation law of any jurisdiction, whether now or hereafter in
effect, or consents to the filing of any petition against it under any
such law; or
(f) Assignments for Benefit of Creditors, Etc. The Borrower or any
of the Guarantors makes an assignment for the benefit of its creditors,
or admits in writing its inability to pay its debts generally as they
become due, or consents to the appointment of a receiver, trustee, or
liquidator of the Borrower or any of the Guarantors or of all or any
part of their respective Properties; or
(g) Undischarged Judgments. If a final, non-appealable judgment
for the payment of money in excess of $500,000 is rendered by any
court or other governmental authority against the Borrower or any of
the Guarantors which is not fully covered by valid collectible
insurance, or if any judgment by any court or governmental authority is
entered against the Borrower, any of the Guarantors, or any Property of
the Borrower or the Guarantors, which judgment has a material adverse
affect on the Borrower or any of the Guarantors and which judgment is
not discharged, stayed, or deferred for sixty (60) days after date of
entry; or
(h) Violation of Laws, Etc. The Borrower or any of the Guarantors
violates or otherwise fails to comply with any law, rule, regulation,
decree, order, or judgment under the laws of the United States of
America, or of any state or jurisdiction thereof the effect of which
has a material and adverse impact on the Borrower or any of the
Guarantors; or Borrower or any of the Guarantors fails or refuses at
any and all times to remain current in its or their financial reporting
requirements pursuant to such laws, rules, and regulations or pursuant
to the rules and regulations of any exchange upon which the shares of
the Borrower or any Guarantors are traded; or
(i) Execution of Guaranty by a Consolidated Entity. Should any
Consolidated Entity not execute and deliver to Agent the guaranty and
other items required by Section 6.13 herein; or
(j) ERISA Liability. The Borrower or any of the Guarantors incurs
any liability under ERISA that has a material adverse effect on the
financial condition or other condition of the Borrower or any of the
Guarantors; or
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(k) Change of Ownership. More than thirty percent (30%) of the
outstanding common stock of Borrower becomes owned by any Control Group
who does now own more than thirty percent (30%) of the outstanding
Voting Stock; or
(l) Executive Committee. A significant change occurs in the
membership of Borrower's executive committee; or
(m) Default to Other Persons. A default, breach, or event of
default occurs under any promissory note for an amount in excess of
$500,000 issued by Borrower or any Guarantor to any Person or a
default, breach, or event of default occurs under any agreement between
Borrower or any Guarantor and any Person involving Debt of $500,000 or
more, the effect of which is to permit or cause the Person to
accelerate such indebtedness and to demand payment thereof, provided,
that an Event of Default shall not be deemed to have occurred if the
Borrower or any Guarantor in good faith is contesting by appropriate
proceedings the demand and acceleration and if the Borrower or
Guarantor, as applicable, has established an appeal bond (if
appropriate), cash bonds, sureties, bonds, or cash reserves in such
amounts as reasonably required by Agent or in the case of an appeal
bond, as required by law.
Section 8.02 Remedies. Upon the happening of any Event of Default set
forth above, with the exception of those events set forth in Section 8.01(d) and
8.01(e): (i) Agent, acting pursuant to Lenders' direction as set forth in
Article XII, may declare the entire principal amount of all indebtedness then
outstanding, including interest accrued thereon, to be immediately due and
payable without presentment, demand, protest, notice of protest, or dishonor or
other notice of default of any kind, all of which the Borrower hereby expressly
waives, (ii) Agent, acting pursuant to Lenders' direction as set forth in
Article XII may terminate and cancel all obligations of the Lenders (including
the Swing Line Lender) under this Agreement unless and until the Lenders
(including the Swing Line Lender) shall reinstate such obligations in writing;
or (iii) Agent, acting pursuant to Lenders' direction as set forth in Article
XII, may bring an action to protect or enforce the rights of the Agent and the
Lenders (including the Swing Line Lender) under the Loan Documents or seek to
collect the indebtedness described herein by any lawful means.
Upon the happening of any event specified in Section 8.01(d) and
Section 8.01(e) above: (i) all indebtedness described herein, including all
principal, accrued interest, and other charges or monies due in connection
therewith shall be immediately and automatically due and payable in full,
without presentment, demand, protest, or dishonor or other notice of any kind,
all of which the Borrower hereby expressly waives, (ii) all obligations of
Lenders (including the Swing Line Lender) under this Agreement shall immediately
cease and terminate unless and until each of the Lenders (including the Swing
Line Lender) shall reinstate such obligations in writing; or (iii) Agent, acting
pursuant to Lenders' direction as set forth in Article XII, may bring an action
to protect or enforce their rights under the Loan Documents or seek to collect
the indebtedness described herein and/or enforce the obligations evidenced
herein by any lawful means.
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Section 8.03 Default Conditions. Any of the following events shall be
considered a Default Condition:
(a) The Borrower suffers a material adverse change in its
financial condition; or
(b) Should any event occur that except for the giving of notice
and/or the passage of time would be an Event of Default.
Upon the occurrence of a Default Condition or at any time thereafter
until such Default Condition no longer exists, the Borrower agrees that subject
to Article XII, the Agent and the Lenders (including the Swing Line Lender), in
their sole discretion, and without notice to the Borrower, may immediately cease
making any Advances, all without liability whatsoever to the Borrower or any
other Person whomsoever, all of which is expressly waived hereby. The Borrower
releases the Lenders (including the Swing Line Lender) and the Agent from any
and all liability whatsoever, whether direct, indirect, or consequential, and
whether seen or unforeseen, resulting from or arising out of or in connection
with Lenders' determination to cease making Advances pursuant to this Section.
Article IX. General Provisions.
Section 9.01 Notices. All communications under or in connection with
this Agreement or any of the other Loan Documents shall be in writing and shall
be mailed by first class certified mail, postage prepaid, or otherwise sent by
telex, telegram, telecopy, or other similar form of rapid transmission confirmed
by mailing (in the manner stated above) a written confirmation at substantially
the same time as such rapid transmission, or personally delivered to an officer
of the receiving party. All such communications shall be mailed, sent, or
delivered as follows:
(a) if to the Borrower, to its address shown below, or to such
other address as Borrower may have furnished to Agent in writing:
Xx. Xxxx X. Xxxxxxxx
CEO and Chairman of the Board
Service Experts, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
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(b) if to Agent, to its address shown below, or to such other
address or to such individual's or department's attention as it may
have furnished the Borrower in writing:
SunTrust Bank, Nashville, N.A., Agent
000 Xxxxxx Xxxxxx, Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
(c) if to Lenders, to the address of each of the Lenders as shown
beside the respective signature of each of the Lenders.
Any communication so addressed and mailed by certified mail shall be deemed to
be given when so mailed.
Section 9.02 Invalidity. In the event that any one or more of the
provisions contained in any Loan Document for any reason shall be held invalid,
illegal, or unenforceable in any respect, such invalidity, illegality, or
unenforceability shall not affect any other provision of any Loan Document.
Section 9.03 Survival of Agreements. All representations and warranties
of the Borrower in this Agreement and all covenants and agreements in this
Agreement not fully performed before the Closing Date of this Agreement shall
survive the Closing Date.
Section 9.04 Successors and Assigns. The Borrower may not assign its
respective rights or delegate duties under this Agreement or any other Loan
Document. All covenants and agreements contained by or on behalf of the Borrower
in any Loan Document shall bind the Borrower's successors and assigns and shall
inure to the benefit of the Agent, each Lender, the Swing Line Lender, and their
respective successors and assigns.
Section 9.05 Waivers. Pursuant to T.C.A. Section 00-00-000, no action
or course of dealing on the part of Agent or any Lender or the Swing Line
Lender, their respective officers, employees, consultants, or agents, nor any
failure or delay by Agent or any Lender or the Swing Line Lender with respect to
exercising any right, power, or privilege of Agent or any Lender or the Swing
Line Lender under any of the Loan Documents shall operate as a waiver thereof,
except as otherwise provided in this Agreement. Acting pursuant to the
requirements of Article XII herein, Agent may from time to time waive any
requirement hereof, including any of the Conditions Precedent; however no waiver
shall be effective unless in writing and signed by the Agent. The execution by
Agent of any waiver shall not obligate Agent or any Lender or the Swing Line
Lender to grant any further, similar, or other waivers.
Section 9.06 Cumulative Rights. Rights and remedies of Agent or any
Lender or the Swing Line Lender under each Loan Document shall be cumulative,
and the exercise or partial exercise of any such right or remedy shall not
preclude the exercise of any other right or remedy.
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Section 9.07 Governing Law. This Agreement and the other Loan Documents
constitute a contract made under and shall be construed in accordance with and
governed by the laws of the State of Tennessee.
Section 9.08 Time of Essence. Time is of the essence with regard to
each and every provision of this Agreement.
Section 9.09 Costs, Expenses, and Taxes. The Borrower agrees to pay on
demand all reasonable out-of-pocket costs and expenses of Agent (including the
reasonable fees and out-of-pocket expenses of counsel for Agent) incurred by
Agent in connection with the preparation, execution, delivery, administration,
enforcement, or protection of Agent's or any Lender's or Swing Line Lender's
rights under the Loan Documents (including any suit for declaratory judgment or
interpretation of the provisions hereof).
Section 9.10 Entire Agreement; No Oral Representations Limiting
Enforcement. This Agreement represents the entire agreement between the parties
hereto except for such other agreements set forth in the Loan Documents, and any
and all oral statements heretofore made regarding the matters set forth herein
are merged herein.
Section 9.11 Amendments. The parties hereto agree that this Agreement
may not be modified or amended except in writing signed by the parties hereto.
Section 9.12 Distribution of Information. The Borrower hereby
authorizes the Agent and each Lender (including the Swing Line Lender), as the
Agent and each Lender (including the Swing Line Lender) may elect in its sole
discretion, to discuss with and furnish to any Affiliate, to any government or
self-regulatory agency with jurisdiction over the Agent and each Lender
(including the Swing Line Lender), or to any participant or prospective
participant, all financial statements, audit reports and other information
pertaining to the Borrower, the Guarantors, and/or the Consolidated Entities,
whether such information was provided by the Borrower or prepared or obtained by
the Agent or third parties. Neither the Agent nor any of its employees,
officers, directors or agents make any representation or warranty regarding any
audit reports or other analyses of the Borrower which the Agent may elect to
distribute, whether such information was provided by the Borrower or prepared or
obtained by the Agent or third parties, nor shall the Agent or any of its
employees, officers, directors or agents be liable to any Person receiving a
copy of such reports or analyses for any inaccuracy or omission contained in
such reports or analyses or relating thereto.
Article X. Jury Waiver.
Section 10.01 Jury Waiver. IF ANY ACTION OR PROCEEDING INVOLVING THIS
LOAN AGREEMENT OR ANY LOAN DOCUMENT IS COMMENCED IN ANY COURT OF COMPETENT
JURISDICTION, THE BORROWER, AGENT, AND EACH LENDER (INCLUDING THE SWING LINE
LENDER) HEREBY WAIVE THEIR RIGHTS TO DEMAND A JURY TRIAL.
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Article XI. Hazardous Substances.
Section 11.01 Representation and Indemnity Regarding Hazardous
Substances.
(a) The Borrower has no knowledge of any spills, releases,
discharges, or disposal of Hazardous Substances that have occurred or
are presently occurring on or onto any of its Property or on any of the
Property of any Consolidated Entity; or of any spills or disposal of
Hazardous Substances that have occurred or are occurring off any of its
Property (or the Property of any Consolidated Entity) as a result of
any construction on or operation and use of such Property; in each case
under this paragraph (a) so as to violate any Environmental Law in a
manner that would have a material adverse effect on the business,
Properties or financial condition of the Borrower or the Consolidated
Entities or on the ability of the Borrower or the Guarantors to perform
their respective obligations under this Agreement or any of the other
Loan Documents.
(b) The Borrower represents that its Property and any current
operation concerning its Property (and the Property of any of the
Consolidated Entities) and its business operations are not in violation
of any applicable Environmental Law, and the Borrower has no actual
knowledge or any notice from any governmental body claiming that such
Property or such business operations or operations or uses of the
Property have or may result in any violation of any Environmental Law
or requiring or calling attention to the need for any work, repairs,
corrective actions, construction alterations or installation on or in
connection with the Property or any of the Borrower's business in order
to comply with any Environmental Law with which Borrower has not
complied, in each case under this paragraph (b) wherein such violation
would have a material adverse effect on the business, Properties, or
financial condition of the Borrower and/or any of the Consolidated
Entities. If there are any such notices which would have such effect
with which the Borrower has not complied, the Borrower shall provide
Agent with copies thereof. If the Borrower receives any such notice
which would have such effect, the Borrower will immediately provide a
copy to Agent.
(c) The Borrower agrees to indemnify and hold Agent and each of
the Lenders (including the Swing Line Lender) harmless from and against
any and all claims, demands, damages, losses, liens, liabilities,
penalties, fines, lawsuits, and other proceedings, costs and expenses
(including, without limitation, reasonable attorneys' fees), arising
directly or indirectly from or out of, or in any way connected with (i)
the presence of any Hazardous Substances on any of the Property of any
Consolidated Entity in violation of any Environmental Law; (ii) any
violation or alleged violation of any Environmental Law relating to
Hazardous Substances on any of the Property of any Consolidated Entity,
whether attributable to events occurring before or after Borrower's
acquisition of any of its Property or the acquisition of such property
by any Consolidated Entity; (iii) any violation of any Environmental
Law by any of the Consolidated Entities resulting from the conduct of
its business, use of its Property, or otherwise; or (iv) any
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inaccuracy in the certifications contained in Section 11.01(a).
Article XII. The Agent.
Section 12.01 Appointment of Agent. Each Lender hereby designates STB
as Agent to administer all matters concerning the Loans and to act as herein
specified. Each Lender hereby irrevocably authorizes, and each holder of any
Revolving Credit Note by the acceptance of a Revolving Credit Note shall be
deemed irrevocably to authorize, the Agent to take such actions on its behalf
under the provisions of this Agreement, the other Loan Documents and all other
instruments and agreements referred to herein or therein, and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its agents or employees. The Lenders agree
that neither the Agent nor any of its directors, officers, employees, or agents
shall be liable for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Lenders agree that the Agent shall not
have any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any of the Lenders, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or otherwise be imposed upon or exist against the Agent.
Section 12.02 Authorization of Agent with Respect to the Loan
Documents. (a) Each Lender hereby authorizes the Agent to enter into each of the
Loan Documents and to take all action contemplated thereby, all in its capacity
as Agent for the ratable benefit of the Lenders. All rights and remedies under
the Loan Documents may be exercised by the Agent for the benefit of the Agent
and the Lenders upon the terms thereof. The Lenders further agree that the Agent
may assign its rights and obligations under any of the Loan Documents to any
Affiliate of the Agent, if necessary or appropriate under applicable law, which
assignee in each such case shall (subject to compliance with any requirements of
applicable law governing the assignment of such Loan Documents) be entitled to
all the rights of the Agent under and with respect to the applicable Loan
Document.
(b) The Agent shall administer the Loans described herein and the
Loan Documents on behalf of and for the benefit of the Lenders in all
respects as if the Agent were the sole Lender under the Loan Documents,
except that:
(i) The Agent shall administer the Loans and the Loan
Documents with a degree of care at least equal to that customarily
employed by the Agent in the administration of similar credit
facilities for its own account.
(ii) The Agent shall not, without the consent of the Majority
Lenders, take any of the following actions:
(A) agree to a waiver of any material requirements,
covenants,
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or obligations of the Borrower or any of the Guarantors
contained herein;
(B) agree to any amendment to or modification of any of
the terms of any of the Loan Documents, except Agent may
agree to amendments and modifications to the Swing Line Note
with only the consent of the Swing Line Lender;
(C) waive any Event of Default or Default Condition as
set forth in this Agreement;
(D) accelerate the indebtedness described in this
Agreement following an Event of Default; or
(E) initiate litigation or pursue other remedies to
enforce the obligations contained in any Loan Document or to
collect the indebtedness described herein.
(iii) The Agent shall not, without the consent of all of the
Lenders, take any of the following actions:
(A) increase or extend any Revolving Credit Loan
Commitment or the Maximum Total Amount;
(B) extend the maturity of any payment of principal of
or interest on the indebtedness described herein;
(C) reduce any fees paid to or for the benefit of
Lenders under this Agreement;
(D) reduce the rate of interest charged on the
indebtedness described herein;
(E) release any Guaranty;
(F) waive, amend, modify or change the Conditions
Precedent;
(G) postpone any date fixed for the payment in respect
of principal of, or interest on the indebtedness described
herein, or any fees hereunder;
(H) modify the definition of Majority Lenders; or
(I) modify this Section 12.02(b)(iii).
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(iv) The Agent shall use its best efforts to distribute to
Lenders copies of Financial Statements and other material writings
and documents delivered to Agent by Borrower within three (3)
Business Days after receipt thereof; provided, however, the Agent
shall have no liability for failure to comply with this provision.
(c) The Agent, upon its receipt of actual notice thereof, shall
notify the Lenders of: (i) each proposed action that would require the
consent of the Lenders as set forth herein, or (ii) any action proposed
to be taken by the Agent in the administration of the Loans and Loan
Documents not in the ordinary course of business; provided that any
failure of the Agent to give the Lenders any such notice shall not
alone be the basis for any liability of the Agent to the Lenders except
for the Agent's gross negligence or willful misconduct.
(d) The Lenders agree that the Agent shall incur no liability
under or in respect of this Agreement with respect to anything which it
may do or refrain from doing in the reasonable exercise of its judgment
or which may seem to it to be necessary or desirable in the
circumstances, except for its gross negligence or willful misconduct.
Agent shall incur no liability to any of the Lenders for giving consent
on behalf of the Lenders when under the terms of this Agreement consent
may not be unreasonably withheld.
(e) The Agent shall not be liable to the Lenders or to any Lender
in acting or refraining from acting under this Agreement or any other
Loan Document in accordance with the instructions of the Majority
Lenders or all of the Lenders, where expressly required by this
Agreement, and any action taken or failure to act pursuant to such
instructions shall be binding on all Lenders. In each circumstance
where any consent of or direction from the Majority Lenders or all of
the Lenders is required or requested by Agent, the Agent shall send to
the Lenders a notice setting forth a description in reasonable detail
of the matter as to which consent or direction is requested and the
Agent's proposed course of action with respect thereto. In the event
the Agent shall not have received a response from any Lender within
five (5) Business Days after Agent sends such notice, such Lender shall
be deemed to have agreed to the course of action proposed by the Agent.
Section 12.03 Agent's Duties Limited; No Fiduciary Duty. The Lenders
agree that the Agent shall have no duties or responsibilities except those
expressly set forth in this Agreement and the other Loan Documents. The Lenders
agree that none of the Agent nor any of its respective officers, directors,
employees or agents shall be liable for any action taken or omitted by it as
such hereunder or in connection herewith, unless caused by its or their gross
negligence or willful misconduct. The Agent shall not have by reason of this
Agreement a fiduciary relationship to or in respect of any Lender, and nothing
in this Agreement, express or implied, is intended to or shall be so construed
as to impose upon the Agent any obligations in respect of this Agreement or the
other Loan Documents except as expressly set forth herein.
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Section 12.04 NO RELIANCE ON THE AGENT. (A) EACH LENDER REPRESENTS AND
WARRANTS TO THE AGENT AND THE OTHER LENDERS THAT INDEPENDENTLY AND WITHOUT
RELIANCE UPON THE AGENT, EACH LENDER, TO THE EXTENT IT DEEMS APPROPRIATE, HAS
MADE AND SHALL CONTINUE TO MAKE (I) ITS OWN INDEPENDENT INVESTIGATION OF THE
FINANCIAL CONDITION AND AFFAIRS OF THE BORROWER, THE GUARANTORS, AND THE
CONSOLIDATED ENTITIES IN CONNECTION WITH THE TAKING OR NOT TAKING OF ANY ACTION
IN CONNECTION HEREWITH, AND (II) ITS OWN APPRAISAL OF THE CREDIT WORTHINESS OF
THE BORROWER, THE GUARANTORS, AND THE CONSOLIDATED ENTITIES, AND, EACH LENDER
FURTHER AGREES THAT, EXCEPT AS EXPRESSLY PROVIDED IN THIS AGREEMENT, THE AGENT
SHALL HAVE NO DUTY OR RESPONSIBILITY, EITHER INITIALLY OR ON A CONTINUING BASIS,
TO PROVIDE ANY LENDER WITH ANY CREDIT OR OTHER INFORMATION WITH RESPECT THERETO,
WHETHER COMING INTO ITS POSSESSION BEFORE THE MAKING OF THE LOANS OR AT ANY TIME
OR TIMES THEREAFTER. AS LONG AS ANY OF THE LOANS ARE OUTSTANDING AND/OR ANY
AMOUNT IS AVAILABLE TO BE REQUESTED OR BORROWED HEREUNDER, OR THIS AGREEMENT AND
THE LOAN DOCUMENTS HAVE NOT BEEN CANCELLED AND TERMINATED, EACH LENDER SHALL
CONTINUE TO MAKE ITS OWN INDEPENDENT EVALUATION OF THE FINANCIAL CONDITION AND
AFFAIRS OF THE BORROWER, THE GUARANTORS, AND THE CONSOLIDATED ENTITIES.
(b) The Agent shall not be responsible to any Lender (including
the Swing Line Lender) for any recitals, statements, information,
representations or warranties herein or in any document, certificate or
other writing delivered in connection herewith or for the execution,
effectiveness, genuineness, validity, enforceability, collectability,
priority or sufficiency of this Agreement, the Revolving Credit Notes,
the Swing Line Note, the Guaranties, the other Loan Documents, or any
other documents contemplated hereby or thereby, or the financial
condition of the Borrower, the Guarantors, or any of the Consolidated
Entities, or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions
of this Agreement, the Revolving Credit Notes, the Swing Line Note, the
Guaranties, the other Loan Documents or the other documents
contemplated hereby or thereby, or the financial condition of the
Borrower, the Guarantors, or any of the Consolidated Entities or the
existence or possible existence of any Default Condition or Event of
Default.
Section 12.05 Certain Rights of Agent. The Lenders agree that if the
Agent shall request instructions from the Majority Lenders (or all of the
Lenders where unanimity is expressly required under the terms of this Agreement)
with respect to any action or actions (including the failure to act) in
connection with this Agreement, the Agent shall be entitled to refrain from such
act or taking such act, unless and until the Agent shall have received
instructions from the Majority Lenders (or all of the Lenders where unanimity is
expressly required under the terms of this Agreement); and the Agent shall not
incur liability to any Person by reason of so refraining.
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Without limiting the foregoing, no Lender shall have any right of action
whatsoever against the Agent as a result of the Agent's acting or refraining
from acting hereunder in accordance with the instructions of the Majority
Lenders (or, with regard to acts for which the consent of all of the Lenders is
expressly required under the terms of this Agreement, in accordance with the
instructions of all of the Lenders).
Section 12.06 Reliance by Agent. The Lenders agree that the Agent shall
be entitled to rely, and shall be fully protected in relying, upon any note,
writing, resolution, notice, statement, certificate, telex, teletype or
telecopier message, cablegram, radiogram, order or other documentary,
teletransmission or telephone message reasonably believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person. The
Lenders agree that the Agent may consult with legal counsel (including counsel
for any Lender), independent public accountants and other experts selected by it
and shall not be liable for any action taken or omitted to be taken by it in
good faith in accordance with the advice of such counsel, accountants or
experts.
Section 12.07 Indemnification of Agent. To the extent the Agent is not
reimbursed and indemnified by the Borrower, each Lender will reimburse and
indemnify the Agent, ratably according to their respective Pro Rata Share, for,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses (including fees of
experts, consultants and counsel and disbursements) or disbursements of any kind
or nature whatsoever that may be imposed on, incurred by or asserted against the
Agent in performing its duties hereunder, in any way relating to or arising out
of this Agreement or the other Loan Documents; provided that no Lender shall be
liable to the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct. The
obligations and indemnifications arising under this Section 12.07 shall survive
termination of this Agreement, repayment of the Loans and indebtedness arising
in connection with the Letters of Credit and expiration of the Letters of
Credit.
Section 12.08 The Agent in its Individual Capacity. With respect to its
obligation to lend under this Agreement, the Loan made by it and the Revolving
Credit Note issued to it, the Agent shall have the same rights and powers
hereunder as any other Lender or holder of a Revolving Credit Note and may
exercise the same as though it were not performing the duties of Agent specified
herein; and the terms "Lenders," "Majority Lenders," "holders of Revolving
Credit Notes," or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity. The Agent may also
exercise rights and remedies of the Swing Line Lender. The Agent and its
Affiliates may accept deposits from, lend money to, and generally engage in any
kind of banking, trust, financial advisory or other business with the Borrower,
the Guarantors, the Consolidated Entities, or any Affiliate of the Borrower as
if it were not performing the duties specified herein as Agent, and may accept
fees and other consideration from the Borrower for services in connection with
this Agreement and otherwise without having to account for the same to the
Lenders.
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Section 12.09 Holders of Notes. The Agent and the Borrower may deem and
treat the payee of any Revolving Credit Note as the owner thereof for all
purposes hereof unless and until a written notice of the assignment or transfer
thereof shall have been filed with the Agent and the Borrower. Any request,
authority or consent of any Person who, at the time of making such request or
giving such authority or consent, is the holder of any Revolving Credit Note
shall be conclusive and binding on any subsequent holder, transferee or assignee
of such Revolving Credit Note.
Section 12.10 Successor Agent. (a) The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower and may be removed
at any time with cause by the Majority Lenders; provided, however, the Agent may
not resign or be removed until (i) a successor Agent has been appointed and
shall have accepted such appointment, and (ii) the successor Agent has assumed
all responsibility for issuance of the Letters of Credit and the successor Agent
has assumed in the place and stead of the Agent all existing liability under
outstanding Letters of Credit, and (iii) the successor agent has assumed all
responsibility for Advances under the Swing Line Loan (including outstanding
Advances thereunder) and the successor Agent has assumed in the place and stead
of the Agent all existing liability under the Swing Line Loan. The transactions
described in the immediately preceding sentence shall be accomplished pursuant
to written agreements reasonably satisfactory to the Agent and the successor
Agent. Upon any such resignation or removal, the Majority Lenders shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Majority Lenders, and shall have accepted such appointment,
within thirty (30) days after the retiring Agent's giving of notice of
resignation or the Majority Lenders' removal of the retiring Agent, then the
retiring Agent may, on behalf of the Lenders, appoint a successor Agent, which
shall be a bank that maintains an office in the United States, or a commercial
bank organized under the laws of the United States of America or any State
thereof, or any Affiliate of such bank, having a combined capital and surplus of
at least $100,000,000.
(b) Upon the acceptance of any appointment as the Agent hereunder
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. After any retiring Agent's
resignation or removal hereunder as Agent, the provisions of this
Article XII shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was an Agent under this Agreement.
Section 12.11 Notice of Default or Event of Default. In the event that
the Agent or any Lender shall acquire actual knowledge, or shall have been
notified, of any Default Condition or Event of Default (other than through a
notice by one party hereto to all other parties), the Agent or such Lender shall
promptly notify the Agent, and the Agent shall take such action and assert such
rights under this Agreement as the Majority Lenders shall request in writing,
and the Agent shall not be subject to any liability by reason of its acting
pursuant to any such request. If, following notification by Agent to Lenders,
the Majority Lenders (or all of the Lenders if required hereunder) shall fail to
request the Agent to take action or to assert rights under this
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Agreement in respect of any Default Condition or Event of Default within five
(5) Business Days after their receipt of the notice of any Default Condition or
Event of Default from the Agent or any Lender, or shall request inconsistent
action with respect to such Default Condition or Event of Default, the Agent
may, but shall not be required to, take such action and assert such rights
(other than rights under Article VIII hereof) as it deems in its discretion to
be advisable for the protection of the Lenders.
Section 12.12 Benefit of Agreement.
(a) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of
such Lender, provided that no such action shall increase the cost of
the Loans to the Borrower.
(b) Each Lender may assign a portion of its interests, rights and
obligations under this Agreement, including all or a portion of any of
its Revolving Credit Loan Commitment (including without limitation its
commitment to participate in Letters of Credit) to any Eligible
Assignee; provided, however, that (i) the amount of the Revolving
Credit Loan Commitment of the assigning Lender subject to each
assignment (determined as of the date the assignment and acceptance
with respect to such assignment is delivered to the Agent) shall not be
less than an amount equal to $5,000,000 or greater integral multiples
thereof, (ii) the assigning Lender may not assign to an Eligible
Assignee more than an amount equal to $10,000,000; (iii) the parties to
each such assignment shall execute and deliver to the Agent an
Assignment and Acceptance, (iv) the Borrower shall execute a Revolving
Credit Note or Revolving Credit Notes subject to such assignment, and
(v) the Eligible Assignee shall pay to the Agent a processing and
recordation fee of $3,000. From and after the effective date specified
in each Assignment and Acceptance, the assignee thereunder shall be a
party hereto and to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement. Notwithstanding the foregoing, the assigning
Lender must retain after the consummation of such Assignment and
Acceptance, a minimum aggregate amount of Revolving Credit Loan
Commitment of $5,000,000; provided, however, no such minimum amount
shall be required with respect to any such assignment made at any time
there exists an Event of Default hereunder. Within five (5) Business
Days after receipt of the notice and the Assignment and Acceptance, the
Borrower, at its own expense, shall execute and deliver to the Agent,
in exchange for the surrendered Revolving Credit Note or Revolving
Credit Notes, a new Revolving Credit Note or Revolving Credit Notes to
the order of the Eligible Assignee in a principal amount equal to the
applicable Revolving Credit Loan Commitment assumed by it pursuant to
such Assignment and Acceptance, as well as a new Revolving Credit Note
or Revolving Credit Notes to the assigning Lender in the amount of its
retained Revolving Credit Loan Commitment. Such new Revolving Credit
Notes to the Eligible Assignee and to the assigning Lender shall be in
an aggregate principal amount equal to the aggregate principal amount
of such surrendered Revolving Credit Note or Revolving Credit Notes,
shall be dated the date of the surrendered Revolving Credit Note or
Revolving Credit Notes that they replace, and shall otherwise
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be in substantially the form attached hereto as Exhibit E.
(c) No assignment of all or any portion of this Agreement by any
Lender shall be permitted without compliance with the provisions of
Section 12.12(b) hereof, or if such assignment would violate any
applicable securities law. In connection with its execution and
delivery hereof each Lender represents that it is acquiring its
interest herein for its own account for investment purposes and not
with a view to further distribution thereof, and shall require any
proposed assignee to furnish similar representations to the Agent and
the Borrower.
(d) Each Lender may, without the consent of the Borrower or the
Agent, but subject to the provisions of Section 2.06, sell
participations in its respective Revolving Credit Loan Commitment and
Letter of Credit commitments to such Lender's Affiliate(s), but sales
of participations to Persons other than such Lender's Affiliates shall
be made only with the prior consent of the Agent and in all events
subject to said section. Provided, however, that (i) no Lender may sell
a participation in its aggregate Revolving Credit Loan Commitment and
Letter of Credit commitments (after giving effect to any permitted
assignment hereof) unless it retains an aggregate exposure of at least
$5,000,000 (except that no such limitation shall be applicable to any
such participation sold at any time there exists an Event of Default
hereunder), (ii) such Lender's obligations under this Agreement shall
remain unchanged, (iii) such Lender shall remain solely responsible to
the other parties hereto for the performance of such obligations, and
(iv) the Borrower and the Agent and other Lenders shall continue to
deal solely and directly with each Lender in connection with such
Lender's rights and obligations as provided in this Agreement and the
other Loan Documents. Each Lender shall promptly notify in writing the
Agent of any sale of a participation hereunder.
(e) Any Lender or participant may, in connection with the
assignment or participation or proposed assignment or participation,
pursuant to this Section 12.12, disclose to the assignee or participant
or proposed assignee or participant any information relating to the
Borrower, any of the Guarantors, or the Consolidated Entities furnished
to such Lender by or on behalf of the Borrower, any of the Guarantors,
or any of the Consolidated Entities. With respect to any disclosure of
confidential, non-public, proprietary information, such proposed
assignee or participant shall agree to use the information only for the
purpose of making any necessary credit judgments with respect to this
credit facility and not to use the information in any manner prohibited
by any law, including without limitation, the securities laws of the
United States. The proposed participant or assignee shall agree in
writing not to disclose any of such information except (i) to
directors, employees, auditors or counsel to whom it is necessary to
show such information, each of whom shall be informed of the
confidential nature of the information and agree to maintain the
confidentiality thereof as described herein, (ii) in any statement or
testimony pursuant to a subpoena or order by any court, governmental
body or other agency asserting jurisdiction over such entity, or as
otherwise required by law (provided prior notice is given to the
Borrower and the Agent unless otherwise
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prohibited by the subpoena, order or law), and (iii) upon the request
or demand of any regulatory agency or authority with proper
jurisdiction. The proposed participant or assignee, and such
representatives, shall further agree to return to the Borrower all
documents or other written material and copies thereof received from
any Lender, the Agent, or the Borrower relating to such confidential
information.
(f) Any Lender may at any time assign all or any portion of its
rights in this Agreement and the Revolving Credit Notes issued to it to
a Federal Reserve Bank; provided that no such assignment shall release
the assigning Lender from any of its obligations hereunder.
ENTERED INTO the date first above written.
BORROWER:
SERVICE EXPERTS, INC.
By: /s/ Xxxx X. Xxxxxxxx
--------------------------------------
Title: President
-----------------------------------
AGENT:
SUNTRUST BANK, NASHVILLE, N.A., Agent
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Title: Commercial Officer
-----------------------------------
Address: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
[Signatures Continued on Next Page]
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LENDERS:
SUNTRUST BANK, NASHVILLE, N.A.
By: /s/ Xxxxx X. Xxxxxxx
--------------------------------------
Title: Commercial Officer
-----------------------------------
Address: 000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Pro Rata Share: 30%
[Signatures Continued on Next Page]
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BANK OF AMERICA, FSB
By: /s/ Xxxx Yankoslas
-----------------------------------------
Title: Vice President
--------------------------------------
Address: 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Pro Rata Share: 20%
[Signatures Continued on Next Page]
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SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By: /s/ Xxxxx X. Xxxx
-------------------------------------------
Title: Vice President
----------------------------------------
Address: 000 Xxxxxx Xxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Pro Rata Share: 25%
[Signatures Continued on Next Page]
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NATIONSBANK OF TENNESSEE, N.A.
By: /s/ Xxx X. Xxxxx
----------------------------------------
Title: Vice President
-------------------------------------
Address: Xxx XxxxxxxXxxx Xxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Pro Rata Share: 25%
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