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Exhibit 10.3
SECOND AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of April 28, 1998
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........................................................ 7
ARTICLE II. THE CREDIT........................................................ 21
Section 2.01 The Revolving Credit Loan.................................... 21
Section 2.02 Letters of Credit Subcommitment.............................. 22
Section 2.03 Swing Line Commitment.
(a) Availability................................................. 23
(b) Borrowing Procedure Under Swing Line Commitment.............. 23
(c) Use of Proceeds.............................................. 24
(d) Refunding Swing Line Loans With Proceeds of Mandatory
Revolving Loans.............................................. 24
Section 2.05 Interest Rate................................................ 27
Section 2.06 Borrowing Procedure.......................................... 27
Section 2.07 Use of Proceeds.............................................. 29
Section 2.08 Participation................................................ 29
Section 2.09 Term of This Agreement....................................... 29
Section 2.10 Payments to Principal Office; Debit Authority................ 29
Section 2.11 ............................................................. 32
(a) Required Prepayment........................................... 32
(c) Permanent Reductions.......................................... 33
(d) Interest Payments............................................. 34
Section 2.12 Funding Losses.............................................. 34
Section 2.13 Apportionment of Payments................................... 35
Section 2.14 Sharing of Payments, Etc.................................... 35
Section 2.15 Right of Offset, Etc........................................ 35
Section 2.16 Commitment Fee.............................................. 35
Section 2.17 Usury....................................................... 36
Section 2.18 Interest Rate Not Ascertainable, Etc........................ 36
Section 2.19 Illegality.................................................. 37
Section 2.20 Increased Costs............................................. 37
ARTICLE III. GUARANTORS....................................................... 39
Section 3.01 Guarantors.................................................. 39
ARTICLE IV. REPRESENTATIONS AND WARRANTIES................................... 39
Section 4.01 Corporate Existence......................................... 39
Section 4.02 Power and Authorization..................................... 39
Section 4.03 Binding Obligations......................................... 40
Section 4.04 No Legal Bar or Resultant Lien.............................. 40
Section 4.05 No Consent.................................................. 40
Section 4.06 Financial Condition......................................... 40
Section 4.07 Investments, Advances, and Guaranties....................... 40
Section 4.08 Liabilities and Litigation.................................. 40
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Section 4.09 Taxes; Governmental Charges................................. 40
Section 4.10 No Default.................................................. 41
Section 4.11 Compliance with Laws, Etc................................... 41
Section 4.12 ERISA....................................................... 41
Section 4.13 Consolidated Entities....................................... 41
Section 4.14 No Material Misstatements................................... 41
Section 4.15 Solvency.................................................... 42
Section 4.16 Regulation U................................................ 42
Section 4.17 Filings..................................................... 42
Section 4.18 Title, Etc.................................................. 42
Section 4.19 Investment Company Act...................................... 42
Section 4.20 Personal Holding Company.................................... 43
Section 4.21 Burdensome Agreements....................................... 43
Section 4.22 Insurance................................................... 43
Section 4.23 Subsidiaries................................................ 43
ARTICLE V. CONDITIONS PRECEDENT............................................... 43
Section 5.01 Initial Conditions.......................................... 43
(a) Notes and Loan Documents..................................... 43
(b) Resolutions.................................................. 43
(c) Certificate of Existence..................................... 43
(d) Consents, Etc................................................ 44
(e) Incumbency Certificate....................................... 44
(f) Charter and By-Laws and Organizational Documents............. 44
(g) Attorneys Opinion Letter..................................... 44
(h) Payment of Fees, Etc......................................... 44
(i) No Default Certificate....................................... 44
(j) Other........................................................ 44
Section 5.02 All Borrowings.............................................. 44
ARTICLE VI. AFFIRMATIVE COVENANTS............................................. 45
Section 6.01 Financial Statements and Reports............................ 45
(a) Annual Reports............................................... 45
(b) Quarterly and Year-to-Date Reports........................... 45
(c) Compliance Reports........................................... 46
(d) SEC Filings and Public Information........................... 46
(g) Other Information............................................ 46
Section 6.02 Annual Certificates of Compliance........................... 46
Section 6.03 Taxes and Other Liens....................................... 47
Section 6.04 Maintenance................................................. 47
Section 6.05 Further Assurances.......................................... 47
Section 6.06 Performance of Obligations.................................. 48
Section 6.07 Insurance................................................... 48
Section 6.08 Accounts and Records........................................ 48
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Section 6.09 Right of Inspection......................................... 48
Section 6.10 Notice of Certain Events.................................... 48
Section 6.11 ERISA Information and Compliance............................ 49
Section 6.12 Management.................................................. 49
Section 6.13 Additional Guaranties....................................... 49
Section 6.14 Equity Proceeds............................................. 50
ARTICLE VII. NEGATIVE COVENANTS............................................... 50
Section 7.01 Debts, Guarantees, and Other Obligations.................... 50
Section 7.02 Liens....................................................... 51
Section 7.03 Investments, Loans, and Advances............................ 51
Section 7.04 Distributions, and Redemptions; Issuance of Stock........... 52
Section 7.05 Sales and Leasebacks........................................ 52
Section 7.06 Nature of Business.......................................... 52
Section 7.07 Mergers, Consolidations, Etc................................ 52
Section 7.08 Proceeds of Loan............................................ 53
Section 7.09 Disposition of Assets....................................... 53
Section 7.10 Limitation on Business...................................... 53
Section 7.11 Inconsistent Agreements..................................... 53
Section 7.12 Acquisitions................................................ 53
ARTICLE VII.A. FINANCIAL COVENANTS............................................ 54
Section 7A.01 Financial Covenants........................................ 54
(a) Minimum Net Worth............................................ 54
(b) Total Funded Debt to EBITDA.................................. 54
(c) Total Funded Debt to Capitalization.......................... 54
(d) Fixed Charge Coverage Ratio.................................. 54
ARTICLE VIII. EVENTS OF DEFAULT............................................... 54
Section 8.01 Events of Default........................................... 54
(a) Principal and Interest Payments.............................. 54
(b) Representations and Warranties............................... 54
(c) Obligations.................................................. 55
(d) Involuntary Bankruptcy or Receivership Proceedings........... 55
(e) Voluntary Petitions.......................................... 55
(f) Assignments for Benefit of Creditors, Etc.................... 55
(g) Undischarged Judgments....................................... 55
(h) Violation of Laws, Etc....................................... 56
(i) Execution of Guaranty by a Consolidated Entity............... 56
(j) ERISA Liability.............................................. 56
(k) Change of Ownership.......................................... 56
(l) Executive Committee.......................................... 56
(m) Default to Other Persons..................................... 56
Section 8.02 Remedies.................................................... 56
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Section 8.03 Default Conditions.......................................... 57
ARTICLE IX. GENERAL PROVISIONS................................................ 57
Section 9.01 Notices..................................................... 57
Section 9.02 Invalidity.................................................. 58
Section 9.03 Survival of Agreements...................................... 59
Section 9.04 Successors and Assigns...................................... 59
Section 9.05 Waivers..................................................... 59
Section 9.06 Cumulative Rights........................................... 59
Section 9.07 Governing Law............................................... 59
Section 9.08 Time of Essence............................................. 59
Section 9.09 Costs, Expenses, and Taxes.................................. 59
Section 9.10 Entire Agreement; No Oral Representations Limiting
Enforcement................................................. 59
Section 9.11 Amendments.................................................. 60
Section 9.12 Distribution of Information................................. 60
ARTICLE X. JURY WAIVER........................................................ 60
Section 10.01 Jury Waiver................................................ 60
ARTICLE XI. HAZARDOUS SUBSTANCES.............................................. 60
Section 11.01 Representation and Indemnity Regarding Hazardous
Substances................................................. 60
ARTICLE XII. THE AGENT........................................................ 61
Section 12.01 Appointment of Agent....................................... 61
Section 12.02 Authorization of Agent with Respect to the Loan Documents.. 62
Section 12.03 Agent's Duties Limited; No Fiduciary Duty.................. 64
Section 12.04 NO RELIANCE ON THE AGENT................................... 64
Section 12.05 Certain Rights of Agent.................................... 65
Section 12.06 Reliance by Agent.......................................... 65
Section 12.07 Indemnification of Agent................................... 66
Section 12.08 The Agent in its Individual Capacity....................... 66
Section 12.09 Holders of Notes........................................... 66
Section 12.10 Successor Agent............................................ 66
Section 12.11 Notice of Default or Event of Default...................... 67
Section 12.12 Benefit of Agreement....................................... 67
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EXHIBITS
EXHIBIT A: form of Revolving Credit Note
EXHIBIT B: form of Application and Agreement for Issuance of a Letter of Credit
EXHIBIT C: form of Foreign Currency Note
EXHIBIT D: form of Competitive Bid Note
EXHIBIT E: form of Competitive Bid Request
EXHIBIT F: form of Competitive Bid
EXHIBIT G: form of Borrowing Request
EXHIBIT H: form of Continuation/Conversion Notice
EXHIBIT I: list of current Guarantors
EXHIBIT J: list of current Consolidated Entities
EXHIBIT K: format for calculations (Section 6.01(c))
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SECOND AMENDED AND RESTATED CREDIT AGREEMENT
THIS SECOND AMENDED AND RESTATED CREDIT AGREEMENT is made and entered
into as of this 28th day of April, 1998 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 Lenders entered into an Amended and
Restated Credit Agreement dated as of September 18, 1997 (the "Credit
Agreement").
2. The parties to the Credit Agreement desire to amend and restate the
Credit Agreement as provided herein.
3. This Second 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 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.
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If, after the date hereof, there shall be any modification in GAAP used
in the preparation of the Financial Statements delivered pursuant to Section
4.06 (whether such modification is adopted or imposed by FASB, the American
Institute of Certified Public Accountants or other professional body) which
changes result in a change in the method of calculation of financial covenants,
standards or terms found in this Agreement, the parties hereto agree promptly to
enter into negotiations in order to amend such financial covenants, standards,
or terms so as to reflect equitably such changes, with the desired result that
the evaluations of Borrower's financial condition shall be the same after such
changes as if such changes had not been made; provided, however, that until the
parties hereto have reached a definitive agreement on such amendments, the
Borrower's financial condition shall continue to be evaluated on the same
principles as those used in the preparation of the Financial Statements
delivered pursuant to Section 4.06.
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.
"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, the Letter of Credit Subcommitment, and the
Competitive Bid 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.
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"Agreement" means this Second 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 EBITDA
-----------------------------------------------------------------------
Purpose <=1.0x >1.0x but >1.5x but >2.0 x but >2.5x
<=1.5x <=2.0x <=2.5x
--------------------------------------------------------------------------------------
Commitment 17.5 basis 20 basis 25 basis 37.5 basis 45 basis
Fee points per points per points per points per points per
Calculation annum annum annum annum annum
--------------------------------------------------------------------------------------
Calculation 62.5 basis 87.5 basis 100 basis 125 basis 150 basis
of LIBOR points per points per points per points per points per
Option, and annum annum annum annum annum
Letter of
Credit Fee
======================================================================================
"Applicable Rate" means (i) with respect to the Revolving
Credit Loan either the Base Rate Option or the LIBOR Option, as elected
by Borrower; (ii) with respect to the Competitive Bid Loan, the
Competitive Bid Rate; and (iii) with respect to the Swing Line Loan,
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. ss. 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
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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.
"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 G
hereto submitted by the Borrower to Agent for an Advance as described
in Section 2.06(b) 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 as measured on a consolidated
basis equal to the sum of Total Funded Debt of the Consolidated
Entities plus Consolidated Net Worth.
"Closing Date" means the 28th day of April, 1998.
"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
2.16 herein.
"Competitive Bid" shall mean an offer to make a Competitive
Bid Loan to Borrower substantially in the form of Exhibit F.
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"Competitive Bid Facility" shall mean the facility established
pursuant to Section 2.05.
"Competitive Bid Loan" shall mean a Loan made up of Advances
by all of those Lenders whose Competitive Bids have been accepted by
the Borrower pursuant to the same Competitive Bid Request under the
bidding procedure described in Section 2.04 for the same Interest Rate
Period and interest rate (with the understanding that two Competitive
Bid Loans may be made pursuant to a single Competitive Bid Request).
"Competitive Bid Note" shall mean a promissory note of the
Borrower payable to the order of any Lender, in substantially the form
of Exhibit D hereto, evidencing the indebtedness of the Borrower to
such Lender with respect to outstanding Competitive Bid Rate Advances
made by such Lender pursuant to this Agreement either as originally
executed or as it may be from time to time supplemented, modified,
amended, renewed or extended.
"Competitive Bid Rate Advance" shall mean an Advance made by a
Lender to the Borrower pursuant to the bidding procedure described in
Section 2.04.
"Competitive Bid Rate" shall mean, as to any Competitive Bid
made by a Lender pursuant to Section 2.04, the fixed rate of interest
per annum offered by the Lender making the Competitive Bid for the
relevant Interest Rate Period.
"Competitive Bid Request" shall mean a request made by the
Borrower pursuant to Section 2.04 substantially in the form of Exhibit
E.
"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 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 J hereto.)
"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.
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"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 H 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, the sum of (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.
"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.
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"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 EBITDA.
"Dollar" and the sign "$" means the lawful money of the United
States of America.
"Dollar Amount" means, at any date:
(a) with respect to an amount denominated in Dollars, such
amount as at such date; and
(b) with respect to an amount denominated in a Foreign
Currency, the amount of Dollars into which such Foreign Currency is
convertible into Dollars, as at such date and on the terms herein
provided.
"EBITAR" means, as measured on a consolidated basis in
accordance with GAAP, over a trailing four Fiscal Quarter period, the
sum of (i) Consolidated Net Income (excluding any gains related to
asset sales), plus (ii) Consolidated Interest Expense, plus (iii)
Income Tax Expense, plus (iv) amortization expense, plus (v) Rental and
Lease Expense.
"EBITDA" means, as measured on a consolidated basis in
accordance with GAAP, over a trailing four Fiscal Quarter period, the
sum of (i) Consolidated Net Income (excluding any gains related to
asset sales), plus (ii) Consolidated Interest Expense, plus (iii)
Income Tax Expense, plus (iv) depreciation and amortization expense, as
calculated on either an historical or Pro Forma basis, at the
Borrower's option, for the most recent four Fiscal Quarters.
"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
neither Borrower nor Agent shall 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; (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,
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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 April 13, 1998, referred to therein as
the "Fee Letter."
"Federal Funds Rate" means for any period, a fluctuating
interest rate per annum 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 Rental and Lease Expense paid by the Consolidated
Entities, as determined on a consolidated basis for the Consolidated
Entities in accordance with GAAP.
"Foreign Currencies" or "Foreign Currency" means individually
and collectively, as the context shall require, each of the following
currencies: (i) Canadian Dollars; and
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(ii) at the option of any Lender accepting a Foreign Currency Note, any
other currency mutually agreed upon between Borrower and such Lender,
which is freely transferrable and convertible into United States
Dollars.
"Foreign Currency Note" or "Foreign Currency Notes" means any
Foreign Currency Note executed by the Borrower payable to the order of
any Lender, substantially in the form of Exhibit C hereto, as each such
Foreign Currency Note may from time to time be amended, increased,
decreased, extended, renewed, restated and/or changed in any way.
"Funding Account" shall mean the account maintained by the
Borrower with Agent into which Advances are deposited.
"GAAP" means generally accepted accounting principles in the
United States.
"Guarantor" and "Guarantors" mean each and all of the Persons
described on Exhibit I 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.
ss. 9601, et seq.; the Resource Conservation and Recovery Act of 1976,
42 U.S.C. ss. 6901, et seq.; the Hazardous Materials Transportation
Act, 49 U.S.C. ss. 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.
"Income Tax Expense" means the amount shown as "provision for
income taxes" (or such other similar designation) on Borrower's
consolidated income statement.
"Interest Rate Period" means:
(a) 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
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(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.
(b) with respect to any Advance at a Competitive Bid Rate, the
interest period requested by the Borrower and agreed to by the
participating Lenders pursuant to Section 2.05 hereof.
"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 B 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 Subcommitment" means the commitment of Agent
on behalf of Lenders to issue Letters of Credit on Borrower's account
up to the aggregate face amount of $10,000,000 pursuant to and in
accordance with the provisions of Section 2.02 herein.
"Letter of Credit Fee", as set forth in Section 2.02(b)
herein, means an amount 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.
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"Letters of Credit" has the same meaning as set forth in
Section 2.02(a) 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 2.21 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 Letter of Credit Subcommitment, the Competitive Bid
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, or after the Closing Date), including,
without limitation, this Agreement, the Revolving Credit Notes, the
Foreign Currency Notes, the Competitive Bid Notes, the Swing Line Note,
the Guaranties, the Security Documents, and all other documents,
certificates, reports, and instruments that this Agreement requires or
that were executed or delivered (or both) at Agent's request.
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"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 (including the
Letter of Credit Subcommitment), the Competitive Bid Loan, and the
Swing Line Loan shall mean the earlier of (i) April 30, 2001, and (ii)
with regard to Competitive Bid Loans, any earlier date agreed upon by
Borrower and any Lender, and (iii) the date the repayment of any of the
Loans or the Swing Line Loan is accelerated pursuant to Article VIII
herein.
"Maximum Total Amount" means the principal amount of
$100,000,000, 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 2.12(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 December 31, 1997;
(v) Liens securing purchase money Debt of the Consolidated Entities
which in the aggregate does not exceed at any one time the lesser of
(A) an amount equal to five percent (5%) of Consolidated Net Worth, or
(B) $20,000,000; (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 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.
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"Principal Office" means the principal office of the Agent
located at 000 Xxxxxx Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxx 00000.
"Private Placement Debt" means such Debt designated as "Series
1998-A Senior Notes."
"Pro Forma" means, as it relates to the measurement of EBITDA
on a consolidated Pro Forma basis (if and when determined at the option
of the Borrower, without duplication, at the end of each Fiscal
Quarter, the sum of (i) the Borrower's EBITDA over a trailing four
Fiscal Quarter period (as stipulated in the definition of "EBITDA"),
plus (ii) the EBITDA over such trailing four Fiscal Quarter period of
any Consolidated Entity purchased during such trailing four Fiscal
Quarter period.
"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.
"Rental and Lease Expense" means all such amounts included in
the consolidated income statement of the Consolidated Entities as rent,
lease charges, or other payments under any lease, excluding imputed
interest on capital leases of the Consolidated Entities, to which any
Consolidated Entity is a party during any measuring period.
"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 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 A 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.
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"Security Documents" means any stock pledge agreement,
security agreement, Reg U, stock power, any other agreement required by
Agent in form and substance satisfactory to Agent that enables Agent to
obtain a perfected security interest for the benefit of Lender and
certain shares of stock of certain Guarantors, all as specified in
Section 6.13 hereof.
"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(s) satisfactory to Agent.
"Subsidiary" means, with respect to any Person, any
corporation or other entity 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 $5,000,000.00, 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 $5,000,000.00, 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.
"Total Funded Debt" means, with respect to any Consolidated
Entity on a consolidated basis, without duplication, the sum of (i) all
indebtedness for money borrowed; (ii) purchase money debt; (iii) the
aggregate principal amount of Seller Notes outstanding; (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; (vii) all indebtedness guaranteed by
any Consolidated Entity; and (viii) the redemption amount
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with respect to any redeemable preferred stock to be redeemed within
the next twelve (12) months.
"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) Availability. 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
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) Calculation of Maximum Total Amount. The Maximum Total
Amount available to be advanced under the Revolving Credit Loans shall
be reduced dollar-for-dollar by the sum of: (i) the face amount of any
outstanding Letters of Credit, (ii) the principal amount outstanding
from time to time under the Competitive Bid Loans, including any
Foreign Currency Notes issued thereunder, and (iii) the principal
amount outstanding from time to time under the Swing Line Loan. In no
event shall the Borrower permit the sum of (w) the face amount of
outstanding Letters of Credit, plus (x) the outstanding principal
amount of the Competitive Bid Loans, including any Foreign Currency
Notes issued thereunder, plus (y) the outstanding principal amount of
the Swing Line Loans, plus (z) the outstanding principal amount of the
Revolving Credit Loans to exceed the Maximum Total Amount. For purposes
of calculating the principal amount outstanding from time to time of
Foreign Currency Notes (issued under the Competitive Bid Loans), the
Dollar Amount of such Foreign Currency Notes shall be calculated based
upon the exchange rate on such date as reported in The Wall Street
Journal under the heading "Cross Currency Rates" (or, if such newspaper
is not published on such date, at such exchange rate as is reasonably
agreed to between the Borrower and the Agent).
(c) Revolving Feature. 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) Funding by Lenders. The failure of any Lender to make an
Advance under its Revolving Credit Loan Commitment shall not relieve
any other Lender of its
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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.
(e) Foreign Currency Notes. In the event that the Borrower
issues Foreign Currency Notes as part of a Competitive Bid Loan, the
Borrower shall make all payments of principal and interest under any
such Foreign Currency Notes in the Foreign Currency reflected in the
applicable Foreign Currency Note.
SECTION 2.02 LETTERS OF CREDIT SUBCOMMITMENT.
(a) Availability. 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 $10,000,000 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) Letter of Credit Fee. 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) Facing Fee. 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 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) Delivery of Letter of Credit. 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) Term. 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
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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) Reduction of Advances. 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) Participation of Lenders. 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 Swing Line Commitment.
(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 or
its Chief Financial Officer to request Advances under the
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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 1:00 p.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 1:00 p.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.
(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
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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.
SECTION 2.04 COMPETITIVE BID LOANS.
(a) In addition to making Revolving Loans pursuant to the
Revolving Credit Commitments pursuant to Section 2.01 above, the
Borrower may on the terms and conditions set forth herein request the
Lenders to make offers to make Competitive Bid Loans. The Lenders may,
but shall have no obligation to, make such offers, and the Borrower
may, but shall have no obligations to, accept any such offers in the
manner set forth herein.
(b) In order to request Competitive Bids, the Borrower shall
telecopy to the Lenders a duly completed Competitive Bid Request in the
form of Exhibit E attached hereto to be received no later than 10:00
a.m. (Nashville, Tennessee time) on the day of the proposed Competitive
Bid Loan or Loans. The Borrower may request offers to make Competitive
Bid Loans for up to five different Interest Rate Periods in a single
notice; provided, however, that the request for each separate Interest
Rate Period shall be deemed to be a separate Competitive Bid Request.
The Competitive Bid Request shall in each case refer to this Agreement
and specify (i) the date of such Loan or Loans (which shall be a
Business Day) and (ii) the aggregate principal amount thereof and
whether the requested Loan is in Dollars or in a Foreign Currency (and
if in a Foreign Currency, the applicable Foreign Currency) and (iii)
subject to Section 2.05 herein, the Interest Rate Period requested with
respect thereto.
(c) Each Lender may, in its sole discretion, make one or more
Competitive Bids to the Borrower responsive to each Competitive Bid
Request. Each Competitive Bid by a Lender must be received by the
Borrower via telecopy, substantially in the form of Exhibit F attached
hereto, not later than 11:00 a.m. (Nashville, Tennessee time) on the
Business Day of the proposed Competitive Bid Loan. Competitive Bids
that do not
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conform substantially to the format of Exhibit E may be rejected by the
Borrower, and the Borrower shall notify the Lender making such
nonconforming bid of such rejection as soon as practicable. Each
Competitive Bid shall refer to this Agreement and specify (i) the
principal amount, designating whether the bid is in Dollars or in a
Foreign Currency, (ii) the Competitive Bid Rate or Rates at which the
Lender is prepared to make the Competitive Bid Rate Advance or
Advances, and (iii) the Interest Rate Period and the last day thereof.
If any Lender shall elect not to make a Competitive Bid, such Lender
shall so notify the Borrower via telecopy by the time specified above
for submitting a Competitive Bid; provided, however, that failure by
any Lender to give such notice shall not cause such Lender to be
obligated to make any Competitive Bid Rate Advance as part of such
Competitive Bid Loan. A Competitive Bid submitted by a Lender pursuant
to this paragraph (c) shall be irrevocable (absent manifest error). No
Competitive Bid submitted by a Lender may be conditioned upon
acceptance by the Borrower of all (or some specified minimum) of the
principal amount of the Competitive Bid Loan for which such Competitive
Bid Request is being made.
(d) The Borrower may, in its sole and absolute discretion,
subject only to the provisions of this paragraph (d), accept or reject
any Competitive Bid referred to in paragraph (c) above. The Borrower
shall notify each Lender by telephone, confirmed by telecopy, whether
and to what extent it has decided to accept or reject any of or all the
bids referred to in paragraph (c) above not later than 12:00 p.m.
(Nashville, Tennessee time) on the Business Day of the proposed
Competitive Bid Loan; provided, however, that (i) the failure by the
Borrower to give such notice shall be deemed to be a rejection of all
the bids referred to in paragraph (c) above, (ii) the aggregate amount
of the Competitive Bids accepted by the Borrower shall not exceed the
principal amount specified in the Competitive Bid Request. A notice
given by the Borrower pursuant to this paragraph (d) shall be
irrevocable.
(e) Any Lender whose offer to make a Competitive Bid has been
accepted shall, not later than 2:00 p.m. (Nashville, Tennessee time) on
the proposed date of the Competitive Bid Loan borrowing, make the
amount of such Competitive Bid Loan available to the Borrower in
immediately available funds on the terms and conditions agreed to
between the Borrower and the relevant Lender, provided, however, that
the obligations of the Borrower with respect to all Competitive Bid
Loans shall rank pari passu with the obligations of the Borrower to
Lenders under any of the Loans.
(f) Each Competitive Bid Loan shall be repaid on the earlier
of (i) a date agreed upon between Borrower and Lender, and (ii) the
Maturity Date.
(g) The proceeds of each of the Competitive Bid Loans shall be
used by the Borrower for acquisitions, capital expenditures and as
working capital, and for other general corporate purposes of the
Borrower and other Consolidated Companies.
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(h) Any Lender's Competitive Bid Rate Advance shall not reduce
such Lender's obligation to lend its Pro Rata Share of the remaining
unused Commitments.
(i) The Borrower's obligations to pay the principal of, and
interest on, the Competitive Bid Loans to each Lender shall be
evidenced by the records of each Lender and by the Competitive Bid Note
payable to such Lender (or the assignor of such Lender). On each
occasion that the Borrower shall submit a request for a Revolving
Credit Loan or a request for a Letter of Credit, the Borrower shall
certify to Agent the total outstanding principal amount of all
Competitive Bid Loans and the respective Lenders holding such
Competitive Bid Loans (designating the amount held by each such
Lender).
SECTION 2.05 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 the Swing Line Loan
shall be the Swing Line Rate. The Applicable Rate for Advances under
the Competitive Bid Loan shall be the Competitive Bid Rate.
(b) So long as the Borrower complies with Section 2.06(a) and
(b) 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 outstanding at any
one time.
(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 2.06 BORROWING PROCEDURE.
(a) In General. The Borrower authorizes the Agent to cause all
Advances to be deposited into the Funding Account. Any one of the
Persons who holds the following titles with Borrower is authorized to
request an Advance: (i) Chief Executive Officer, (ii) Chief Financial
Officer, or (iii) any Person designated in writing by the Chief
Executive Officer or Chief Financial Officer to request Advances (which
designation shall be delivered by the Borrower to the Agent). When a
request for an Advance is made by
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an authorized officer of the Borrower accompanied with written
instructions to fund the Advance by a method other than depositing such
Advance into the Funding Account, the Borrower also authorizes Agent to
follow such instructions.
(b) Requests for Advances Under the Revolving Credit Loan.
Borrower shall give the Agent at least three (3) Business Days' notice
of a proposed Advance at the LIBOR Option (including conversions to a
LIBOR Option and rollovers of existing Advances at the LIBOR Option)
and same Business Day prior notice by 11:00 a.m. (Nashville, Tennessee
time) of a proposed Advance at the Base Rate Option, under the
Revolving Credit Loan by presentation of the applicable Borrowing
Request. Any notice received by Agent after 11:00 a.m. (Nashville,
Tennessee time) shall be deemed given on the next Business Day. Any
telephonic notices shall be promptly confirmed in writing delivered to
Agent. All Borrowing Requests for Advances under the Revolving Credit
Loan shall specify (i) the amount of the requested Advance, (ii) the
requested date of borrowing, so long as it conforms to the required
notification period, (iii) 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 conversion from a Base Rate Option to a LIBOR Option, or (C) a
rollover of an existing Advance at the LIBOR Option, and (iv) if the
Advance is to be entirely or partly made as a LIBOR Advance, the chosen
Interest Rate Period. 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. 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. With regard to requests for
Advances under the Revolving Credit Loan, the following shall apply:
(i) in the event that the Borrower designates the Base Rate Option as
the Applicable Rate, the requested Advance must be in a minimum amount
of $200,000 and in integral multiples of $50,000; and (ii) in the event
the Borrower designates the LIBOR Option as the Applicable Rate, the
requested Advance must be in a minimum amount of $2,500,000 and in
integral multiples of $500,000. Agent shall give prompt notice to
Lenders of a request for an Advance on the date of such request, and
each Lender shall wire immediately available funds to Agent by 1:00
p.m. (Nashville, Tennessee time) the date of the requested Advance.
(c) Requests for Competitive Bid Loans. Whenever the Borrower
desires to receive Competitive Bids it shall follow the procedure set
forth in Section 2.04 herein.
(d) Requests for Swing Line Loans. Whenever the Borrower
desires to receive a Swing Line Loan, it shall follow the procedure set
forth in Section 2.03(b) herein.
(e) No Liability. The Agent and the Lenders (including the
Swing Line Lender) shall have no liability to Borrower arising out of
their compliance with the
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borrowing procedure specified in this Agreement, except for acts of
gross negligence or willful misconduct.
(f) Warranty. The request by the Borrower for 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 2.07 USE OF PROCEEDS. Proceeds of the Advances shall be used to
fund Borrower's working capital, for Acquisitions and capital expenditures
needs, and for Borrower's general corporate purposes.
SECTION 2.08 PARTICIPATION. Subject to Section 12.11(d), 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.
SECTION 2.09 TERM OF THIS AGREEMENT. This Agreement shall be binding on
the Borrower so long as any portion of the indebtedness described herein remains
outstanding, provided and except, the Borrower's representations, warranties,
and indemnity agreements shall survive the payment in full of such indebtedness.
SECTION 2.10 PAYMENTS TO PRINCIPAL OFFICE; DEBIT AUTHORITY.
(a) Each payment under the Revolving Credit Loan, the
Competitive Bid 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 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.
(b)(i) All such payments shall be made free and clear of and
without deduction or withholding for any taxes in respect of this
Agreement or any other Credit Documents, or any payments of principal,
interest, fees or other amounts payable hereunder or thereunder (but
excluding, except as provided in paragraph (iii) hereof, in the case of
each Lender, taxes imposed on or measured by its net income, and
franchise taxes and branch profit taxes imposed on it (A) by the
jurisdiction under the laws of which such Lender is organized or any
political subdivision thereof, and in the case of each Lender, taxes
imposed on or measured by its net income, and franchise taxes and
branch profit taxes imposed on it, by the jurisdiction of such Lender's
appropriate
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Lending Office or any political subdivision thereof, and (B) by a
jurisdiction in which any payments are to be made by any Borrower
hereunder, other than the United States of America, or any political
subdivision thereof, and that would not have been imposed but for the
existence of a connection between such Lender and the jurisdiction
imposing such taxes (other than a connection arising as a result of
this Agreement or the transactions contemplated by this Agreement),
except in the case of taxes described in this clause (B), to the extent
such taxes are imposed as a result of a change in the law or
regulations of any jurisdiction or any applicable treaty or regulations
or in the official interpretation of any such law, treaty or
regulations by any government authority charged with the interpretation
or administration thereof after the date of this Agreement). If any
such taxes are so levied or imposed, Borrower agrees (A) to pay the
full amount of such taxes, and such additional amounts as may be
necessary so that every net payment of all amounts due hereunder and
under the other Credit Documents, after withholding or deduction for or
on account of any such taxes (including additional sums payable under
this Section 2.10), will not be less than the full amount provided for
herein had no such deduction or withholding been required, (B) to make
such withholding or deduction and (C) to pay the full amount deducted
to the relevant authority in accordance with applicable law. Borrower
will furnish to the Agent and each Lender, within 30 days after the
date the payment of any taxes is due pursuant to applicable law,
certified copies of tax receipts evidencing such payment by Borrower.
Borrower will indemnify and hold harmless the Agent and each Lender and
reimburse the Agent and each Lender upon written request for the amount
of any such taxes so levied or imposed and paid by the Agent or Lender
and any liability (including penalties, interest and expenses) arising
therefrom or with respect thereto, whether or not such taxes were
correctly or illegally asserted. A certificate as to the amount of such
payment by such Lender or the Agent, absent manifest error, shall be
final, conclusive and binding for all purposes.
(ii) Each Lender that is organized under the laws of
any jurisdiction other than the United States of America or
any State thereof (including the District of Columbia) agrees
to furnish to Borrower and the Agent, prior to the time it
becomes a Lender hereunder, two copies of either U.S. Internal
Revenue Service Form 4224 or U.S. Internal Revenue Service
Form 1001 or any successor forms thereto (wherein such Lender
claims entitlement to complete exemption from U.S. Federal
withholding tax on interest paid by Borrower hereunder) and to
provide to Borrower and the Agent a new Form 4224 or Form 1001
or any successor forms thereto if any previously delivered
form is found to be incomplete or incorrect in any material
respect or upon the obsolescence of any previously delivered
form; provided, however, that no Lender shall be required to
furnish a form under this paragraph (ii) after the date that
it becomes a Lender hereunder if it is not entitled to claim
an exemption from withholding under applicable law.
(iii) Borrower shall also reimburse the Agent and
each Lender, upon written request, for any taxes imposed
(including, without limitation, taxes
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imposed on the overall net income of the Agent or Lender
pursuant to the laws of the jurisdiction in which the
principal executive office of the Agent or Lender is located)
as the Agent or Lender shall determine are payable by the
Agent or Lender in respect of amounts paid by or on behalf of
Borrower to or on behalf of the Agent or Lender pursuant to
paragraph (i) hereof.
(iv) In addition to the documents to be furnished
pursuant to Section 2.10(b)(ii) each Lender shall, promptly
upon the reasonable written request of the Borrower to that
effect, deliver to the Borrower such other accurate and
complete forms or similar documentation as such Lender is
legally able to provide and as may be required from time to
time by any applicable law, treaty, rule or regulation or any
jurisdiction in order to establish such Lender's tax status
for withholding purposes or as may otherwise be appropriate to
eliminate or minimize any taxes on payments under this
Agreement or any under Credit Documents.
(v) The Borrower shall not be required to pay any
amounts pursuant to Section 2.10(b)(i), or (iii) to any Lender
in respect of any United States withholding taxes payable
hereunder (and the Borrower, if required by law to do so,
shall be entitled to withhold such amounts and pays such
amounts to the United States Government) if the obligation to
pay such additional amounts would not have arisen but for a
failure by such Lender to comply with its obligations under
Section 2.10(b)(ii), and such Lender shall not be entitled to
an exemption from deduction or withholding of United Stated
Federal income tax in respect of the payment of such sum by
the Borrower hereunder for, in each case, any reason other
than a change in United States law or regulations by any
governmental authority charged with the interpretation or
administration thereof (whether or not having the force of
law) after the date such Lender became a Lender hereunder.
(vi) Within sixty (60) days of the written request of
the Borrower, each Lender shall execute and deliver such
certificates, forms or other documents, which can be
reasonably furnished consistent with the facts and which are
reasonably necessary to assist in applying for refunds of
taxes remitted hereunder.
(vii) To the extent that the payment of any Lender's
taxes by the Borrower gives rise from time to time to a Tax
Benefit (as hereinafter defined) to such Lender in any
jurisdiction other than the jurisdiction which imposed such
taxes, such Lender shall pay to the Borrower the amount of
each such Tax Benefit so recognized or received. The amount of
each Tax Benefit and, therefore, payment to the Borrower will
be determined from time to time by the relevant Lender in its
sole discretion, which determination shall be binding and
conclusive on all parties hereto. Each such payment will be
due and payable by such Lender to the Borrower within a
reasonable time after the filing of the income tax return in
which such Tax Benefit is recognized or, in the case of any
tax refund, after the refund is received; provided, however if
at any time thereafter such Lender
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is required to rescind such Tax Benefit or such Tax Benefit is
otherwise disallowed or nullified, the Borrower shall
promptly, after notice thereof from such Lender, repay to
Lender the amount of such Tax Benefit previously paid to the
Borrower and rescinded, disallowed or nullified. For purposed
of this section, "Tax Benefit" shall mean the amount by which
any Lender's income tax liability for the taxable period in
question is reduced below what would have been payable had the
Borrower not been required to pay the Lender's taxes. In case
of any dispute with respect to the amount of any payment the
Borrower shall have no right to any offset or withholding of
payments with respect to future payments due to any Lender
under this Agreement or the other Credit Documents.
(c) Payment by the Borrower to the Agent in accordance with
the terms of this Agreement shall, as to the Borrower, constitute
payment to the Lenders under this Agreement.
SECTION 2.11 PAYMENTS.
(a) Required Prepayment. Whenever the aggregate amount of
outstanding Advances exceeds the Maximum Total Amount, the Borrower
shall immediately pay such amounts as may be necessary to cause the
aggregate principal amount of outstanding Advances to be equal to or
less than the Maximum Total Amount in accordance with Section 2.01(b).
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 the 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. Whenever the issuance of any
Letter of Credit exceeds the Letter of Credit Subcommitment, the
Borrower shall immediately take such action as required by Agent to
reduce the face amount of outstanding Letters of Credit to an amount
equal to or less than the Letter of Credit Subcommitment.
(b) Optional Prepayment. The Borrower may prepay the Revolving
Credit Loan, the Swing Line Loan, and the Competitive Bid Loan only as
follows:
(i) The Borrower may prepay the Swing Line Loan by
written or oral notice to Agent no later than 1:00 p.m.
(Nashville, Tennessee time) on the date of such prepayment,
(if notice is oral, to be promptly thereafter confirmed in
writing);
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(ii) Borrower may prepay Advances under the Revolving
Credit Loan which bear interest at the Base Rate Option
(provided that such reduction shall be in a principal amount
of at least $200,000 and integral multiples of $50,000 in
excess thereof) by written notice delivered to Agent no later
than 11:00 a.m. (Nashville, Tennessee time) on the date of
such prepayment and Agent shall promptly give notice to
Lenders on the date of such prepayment;
(iii) Borrower shall have the right and option
(without penalty or premium) to prepay Advances under the
Revolving Credit Loan bearing interest at the LIBOR Option at
the expiration of the applicable Interest Rate Period for such
Advance. Any such reduction shall be in a principal amount of
at least $1,000,000 and integral multiples of $100,000 in
excess thereof. Borrower shall have the right and option to
prepay Advances under the Revolving Credit Loan bearing
interest at the LIBOR Option on a Business Day other than at
the end of an Interest Rate Period provided that: (A) the
Borrower must give Agent at least three (3) Business Days'
prior written notice of the amount and time of such
prepayment; (B) Borrower agrees to immediately pay breakage
costs determined by Agent and/or the Lenders to apply to such
prepayment; and (C) any such reduction shall be in a principal
amount of at least $1,000,000 and integral multiples of
$100,000 in excess thereof.
(iv) Borrower shall have the right and option to
prepay Advances under a Competitive Bid Loan prior to the
expiration of the applicable Interest Rate Period for such
Advance, subject to Borrower's paying to such Lender or
Lenders an amount equal to all losses, additional costs,
expenses, and liabilities (including, without limitation, any
interest paid by such Lender or Lenders to lenders of funds
borrowed by it to make or carry loans on which interest is
calculated at LIBOR or the Competitive Bid Rate 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
amounts to which LIBOR or the Competitive Bid Rate applies
occurs on a date that is not the last Business Day of an
applicable Interest Rate Period.
All prepayments will be applied first to unpaid expenses (if any), then to
accrued interest, then to principal.
(c) Permanent Reductions. Upon three (3) Business Days prior
written notice delivered from the Borrower to Agent, the Borrower may
permanently reduce the Maximum Total Amount; provided that such
permanent principal reduction shall be in a principal amount of at
least $5,000,000 and in integral amounts of $1,000,000, and provided
that such permanent principal reduction shall not reduce the Maximum
Total Amount below an amount equal to the sum of all outstanding
Advances. In the event that a permanent reduction is made hereunder,
then the Maximum Total Amount shall
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permanently be reduced on a pro rata basis. Any amounts so reduced may
not be reinstated.
(d) Interest Payments. Interest on the Revolving Credit Loan,
Competitive Bid Loan, and Swing Line Loan shall be paid as follows:
(i) Interest shall be paid on the Revolving Credit
Loan no later than on or before 1:00 p.m. (Nashville,
Tennessee time) as follows: (A) on Advances calculated at the
Base Rate Option, all accrued interest shall be paid on a
quarterly basis 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; (B) 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 (C) on the Maturity Date, the Borrower shall pay to the
Agent an amount equal to all accrued interest.
(ii) All accrued interest on Advances under the
Competitive Bid Loan shall be paid by Borrower to such
Competitive Bid Lender on the last day of each Interest Rate
Period, provided that for all Advances at the Competitive Bid
Rate 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.
(iii) All accrued interest on Advances under the
Swing Line Loan shall be paid on a quarterly basis in arrears
by Borrower to Agent for the benefit of the Swing Line Lender,
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.
SECTION 2.12 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 costs, 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 or the Competitive Bid Rate 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 or the Competitive Bid Rate
applies occurs on a date that is not the last Business Day of an applicable
Interest Rate Period.
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SECTION 2.13 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 any Competitive Bid Loan shall not be apportioned, but
shall be delivered to the respective Lender on whose account payment is made.
Payments received by Agent for the Swing Line Loan shall not be apportioned but
shall be delivered to the Swing Line Lender.
SECTION 2.14 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 (other than payments with respect to Competitive Bid Loans
which are payable solely to the Lenders participating therein and other than
payments with respect to the Swing Line 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 shall 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 2.14 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 2.15 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 2.16 COMMITMENT FEE. 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
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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 Loans (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. For the purpose of calculating the average unused portion of
the Loans, the principal amount outstanding under any Competitive Bid Notes
during any measuring period shall not be counted as usage. The Commitment Fee
shall be calculated based on a year of 360 days for the actual number of days
elapsed.
SECTION 2.17 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, 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 2.18 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.
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SECTION 2.19 ILLEGALITY.
(a) In the event that the Agent or any Lender shall have
determined any time that the making or continuance of any Advance
bearing interest at the LIBOR Option or the Competitive Bid Rate has
become unlawful by compliance by any Lender (an "Affected Lender") 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 or such Affected Lender 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 2.19(a), the Borrower's right to elect a LIBOR Option or a
Competitive Bid Rate shall be immediately suspended, and all
outstanding Advances made by the Affected Lender shall be under the
Revolving Credit Loan and shall bear interest at the Base Rate Option
after the current Interest Rate Period has expired.
SECTION 2.20 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):
(A) the Agent or any Lender shall be subject to any
tax (including a foreign withholding tax), duty or other
charge with respect to any Advances bearing interest at the
LIBOR Option or at the Competitive Bid Rate (all such Advances
being collectively referred to as the "LIBOR/Competitive Bid
Loans") or its obligation to make LIBOR/Competitive Bid Loans,
or the basis of taxation of payments to the Agent or any
Lender of the principal of or interest on its
LIBOR/Competitive Bid Loans or its obligation to make
LIBOR/Competitive Bid 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/Competitive Bid Loans or its obligation to make
LIBOR/Competitive Bid Loans shall be imposed on the Agent, any
Lender, the London interbank market;
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and as a result thereof there shall be any increase in the cost to the Agent or
such Lender (a "LIBOR/Competitive Bid Affected Lender") of agreeing to make or
making, funding or maintaining LIBOR/Competitive Bid Loans (except to the extent
already included in the determination of the interest rate for LIBOR/Competitive
Bid Loans), or there shall be a reduction in the amount received or receivable
by the Agent or any LIBOR/Competitive Bid Affected Lender, then the Borrower
shall from time to time, upon written notice from and demand in good faith by
the Agent, pay to the Agent for the account of the Lenders (or any
LIBOR/Competitive Bid Affected Lender) within five (5) Business Days after the
date of such notice and demand, additional amounts sufficient to indemnify the
Agent or such LIBOR/ Competitive Bid Affected Lender against such increased
cost; provided, however, that nothing in this section shall require Borrower to
indemnify the Agent or any Lender for withholding taxes imposed by the United
States.
(b) If the Agent or any LIBOR/Competitive Bid Rate Affected
Lender shall in good faith determine that at any time, because of the
circumstances described in Section 2.19(a)(i) or (ii) arising after the
date of this Agreement affecting the Agent or any Lender, the London
interbank market, or the Agent or any Lender's position in such market,
the calculations for the interest rates for LIBOR/Competitive Bid 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/Competitive Bid Loans, the Agent or any LIBOR/Competitive Bid
Rate Affected Lender 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 or any LIBOR/Competitive Bid Rate Affected Lender notifies
the Borrower that such circumstances no longer exist (which notice
shall be given forthwith after such determination is made by the Agent
or any LIBOR/Competitive Bid Rate Affected Lender):
(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/Competitive Bid Loans shall be immediately suspended;
and
(ii) After the last day of the then-current Interest
Rate Period, all such indebtedness described in this Section
shall be converted to a Revolving Credit Loan and bear
interest at the Base Rate Option.
SECTION 2.21 CAPITAL ADEQUACY.
Without limiting any other provision of this Agreement, in the event
that any Lender shall have determined that any law, treaty, governmental (or
quasi-governmental) rule, regulation, guideline or order regarding capital
adequacy not currently in effect or fully applicable as of the Closing Date, or
any change therein or in the interpretation or application thereof after the
Closing Date, or compliance by such Lender with any request or directive
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regarding capital adequacy not currently in effect or fully applicable as of the
Closing Date (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) from a central bank or governmental
authority or body having jurisdiction, does or shall have the effect of reducing
the rate of return on such Lender's capital as a consequence of its obligations
hereunder to a level below that which such Lender could have achieved but for
such law, treaty, rule, regulation, guideline or order, or such change or
compliance (taking into consideration such Lender's policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then within
ten (10) Business Days after written notice and demand by such Lender (with
copies thereof to the Agent), Borrower shall from time to time pay to such
Lender additional amounts sufficient to compensate such Lender for such
reduction (but, in the case of outstanding Advances calculated at the Base Rate
Option, without duplication of any amounts already recovered by such Lender by
reason of an adjustment in the applicable Base Rate). Each certificate as to the
amount payable under this Section 2.21. (which certificate shall set forth the
basis for requesting such amounts in reasonable detail), submitted to Borrower
by any Lender in good faith, shall, absent manifest error, be final, conclusive
and binding for all purposes.
ARTICLE III. GUARANTORS.
SECTION 3.01 GUARANTORS. Subject to the provisions of Section 6.13, 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:
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.
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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 December 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 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
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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 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
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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 and
marketable title to and ownership of 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 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.
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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
hereunder (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 Notes, the Competitive Bid Notes (including
Foreign Currency Notes issued under the Competitive Bid Loan), the
Guaranties of each of the Guarantors, delivery and execution of any
applicable Security Documents, any Letter of Credit Application
Agreements, and other documents executed in connection with this
Agreement (the "Loan Documents").
(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.
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(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 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
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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 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 firms of independent certified public
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 balance sheets and
consolidated 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;
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(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 K 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 ten (10) days
after such are filed with the Securities and Exchange Commission,
copies of all filings made (including Borrower's 8-K reports),
including the Borrower's 10-Q and 10-K reports; and
(e) Pro Forma Calculations. In the event that the Borrower
elects to calculate EBITDA on a Pro Forma basis, as permitted
hereunder, the Borrower shall provide to Agent and to each Lender at
the time it requests such calculation to be made on a Pro Forma basis,
the pro forma financial statements on which such calculations are
based.
(f) Consolidating Statements. As reasonably requested by Agent
or any Lender, the Borrower shall make available at its premises for
review to the Agent or any such Lender the Borrower's consolidating
balance sheets, statement of income, and statements of retained
earnings.
(g) 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 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 Default or, if they have obtained
such knowledge, disclosing the nature, details, and period of existence of such
event.
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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
Documents, or to correct any omissions in the Loan Documents, all as may be
reasonably necessary or appropriate in connection therewith.
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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 (including consolidating statements of the Borrower), 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 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
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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; provided that if
the Borrower or any Consolidated Entity acquires a foreign Consolidated Entity
that is prohibited by law from executing a Guaranty, then and in such event, the
Borrower shall cause 65% of the outstanding common, voting stock of such foreign
Consolidated Entity to be pledged and delivered to Agent for the benefit of
Lenders pursuant to the Security Documents. 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
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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, 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 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;
(f) Seller Notes not to exceed $20,000,000 in the aggregate
outstanding principal balance at any one time;
(g) Private Placement Debt up to $75,000,000 in the aggregate;
and
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(h) Total Funded Debt to others, excluding Seller Notes and
Private Placement Debt, that does not exceed the lesser of (i) five
percent (5%) of Consolidated Net Worth, or (ii) $20,000,000 in the
aggregate for all Consolidated Entities.
SECTION 7.02 LIENS. Create, incur, assume, or permit to exist any Lien
on any of their 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 in an
aggregate amount in excess of $2,000,000, 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 rated A-2 or higher by
Standard and Poor's Corporation or P-2 or higher by Xxxxx'x Investors
Services, Inc., or upon the discontinuance or either or both of such
services, the highest credit of 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
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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;
(h) the endorsement of negotiable or similar instruments in
the ordinary course of business;
(i) investments in stock of any existing Subsidiary;
(j) investments in the form of stock purchases incurred in
Acquisitions permitted by Section 7.12 herein;
(k) investments received in settlement of debt owed to any
Consolidated Entity and incurred in the ordinary course of business;
and
(l) investments in, and loans or advances to, all Consolidated
Entities.
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. If such transaction has a reasonable
likelihood of causing a material, adverse effect on the financial condition of
the Consolidated Entities, 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 in which the Consolidated Entities
are presently engaged in as a whole.
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
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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 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 consideration
paid or given exceeds $15,000,000, provided that the consideration paid or given
by one Consolidated Entity in the acquisition of another Consolidated Entity
shall not be included in the calculation of this covenant.
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.
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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) $142,000,000, plus (ii) on a
quarterly basis for each Fiscal Quarter beginning with the first Fiscal
Quarter for the 1998 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) Total Funded Debt to EBITDA. Permit the ratio of Total
Funded Debt of the Consolidated Entities divided by EBITDA to exceed a
ratio of 3.0 to 1.0 calculated as of the end of each Fiscal Quarter on
a trailing four quarter basis.
(c) Total Funded Debt to Capitalization. Permit the ratio of
Total Funded Debt of the Consolidated Entities to Capitalization to
exceed .45 to 1.0 at any time, all as determined at the end of each
Fiscal Quarter.
(d) Fixed Charge Coverage Ratio. Permit the ratio of EBITAR of
the Consolidated Entities 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
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(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 the earlier of (i) any
officer of the Borrower obtaining knowledge thereof, or (ii) the
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 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
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(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
(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. Xxxx Xxxxxxxx or Xxx Xxxxx no longer
serve on the 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
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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.
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
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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. Xxxxxxx X. Xxxxxxxxx
Chief Financial Officer
Service Experts, Inc.
000 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
or after May 15, 1998
Xx. Xxxxxxx X. Xxxxxxxxx
Chief Financial Officer
Service Experts, Inc.
0 Xxxxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
(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.
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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.
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.
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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.
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.
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(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 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, Foreign Currency Note, or Competitive Bid Note by the
acceptance of any such promissory 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
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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, 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
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(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).
(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.
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(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.
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
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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 Foreign Currency Notes, the Competitive Bid
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 Foreign Currency
Notes, the Competitive Bid 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. 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
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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.
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
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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 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.
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(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 $10,000,000 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 Foreign Currency Note 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 $10,000,000; 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 Foreign
Currency Note, a new Revolving Credit Note or Foreign Currency Note 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 Foreign Currency Note to the assigning Lender in the amount of its
retained Revolving Credit Loan Commitment. Such new Revolving Credit
Note and Foreign Currency Note 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
Foreign Currency Note, shall be dated the date of the surrendered
Revolving Credit Note or Foreign Currency Note that they replace, and
shall otherwise be in substantially the form attached hereto as Exhibit
A and Exhibit C, as applicable.
(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 2.09, sell
participations in its respective Revolving
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Credit Loan Commitment and Letter of Credit Subcommitment 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 Subcommitment
(after giving effect to any permitted assignment hereof) unless it
retains an aggregate exposure of at least $10,000,000 (except that no
such limitation shall be applicable to any such participation sold at
any time there exists an Event of Default hereunder), (ii) the
participation interest sold may not exceed 50% of such Lender's
Revolving Credit Loan Commitment (iii) such Lender's obligations under
this Agreement shall remain unchanged, (iv) such Lender shall remain
solely responsible to the other parties hereto for the performance of
such obligations, and (v) 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 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 promissory note issued to it to a
Federal Reserve Bank; provided that no such assignment shall release
the assigning Lender from any of its obligations hereunder.
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ENTERED INTO the date first above written.
BORROWER:
SERVICE EXPERTS, INC.
By: /s/ Xxxxxxx X. Xxxxxxxxx
--------------------------------------
Title: Chief Financial Officer
-----------------------------------
AGENT:
SUNTRUST BANK, NASHVILLE, N.A., Agent
By: /s/ XXXXX X. XXXXXXX
--------------------------------------
Title: AVP
-----------------------------------
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: AVP
----------------------------------
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/ Xxxxxx X. Xxxxxx
-----------------------------------------
Title: Vice President
--------------------------------------
Address: 0000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Pro Rata Share: 12 1/2%
[Signatures Continued on Next Page]
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SOUTHTRUST BANK, NATIONAL
ASSOCIATION
By: /s/ RETT DALLAS
-----------------------------------------
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, N.A.
By: /s/ Xxxxx Xxxxxxxxx
------------------------------------------
Title: Vice President
---------------------------------------
Address: 000 X. Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Pro Rata Share: 12 1/2%
[Signatures Continued on Next Page]
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FIRST AMERICAN NATIONAL BANK
By: /s/ XXXXXXX X. XXXXXX
--------------------------------------
Title: Senior Vice President
-----------------------------------
Address: 0xx & Xxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000-0000
Pro Rata Share: 20%
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