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Exhibit 4.5
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AMENDED AND RESTATED CREDIT AGREEMENT
dated as of March 16, 1998
by and among
RURAL/METRO CORPORATION,
a Delaware corporation,
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK,
as Agent
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...................................................... 1
SECTION 1.1 Definitions.................................................. 1
SECTION 1.2 General...................................................... 14
SECTION 1.3 Accounting Matters........................................... 14
SECTION 1.4 Other Definitions and Provisions............................. 15
ARTICLE II REVOLVING CREDIT FACILITY....................................... 15
SECTION 2.1 Loans........................................................ 15
SECTION 2.2 Procedure for Advance of Loans............................... 15
SECTION 2.3 Repayment of Loans........................................... 16
SECTION 2.4 Notes........................................................ 17
SECTION 2.5 Permanent Reduction of Aggregate Commitment.................. 17
SECTION 2.6 Termination of Credit Facility............................... 17
SECTION 2.7 Use of Proceeds.............................................. 17
ARTICLE III LETTER OF CREDIT FACILITY...................................... 17
SECTION 3.1 L/C Commitment............................................... 18
SECTION 3.2 Procedure for Issuance of Letters of Credit.................. 18
SECTION 3.3 L/C Participations........................................... 18
SECTION 3.4 Reimbursement Obligation of the Borrower..................... 19
SECTION 3.5 Obligations Absolute......................................... 20
SECTION 3.6 Fees and Other Charges....................................... 20
ARTICLE IV GENERAL LOAN PROVISIONS......................................... 21
SECTION 4.1 Interest..................................................... 21
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans..... 23
SECTION 4.3 Commitment and Agency Fees................................... 24
SECTION 4.4 Manner of Payment............................................ 25
SECTION 4.5 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by Agent.................................. 25
SECTION 4.6 Changed Circumstances........................................ 26
SECTION 4.7 Indemnity.................................................... 28
SECTION 4.8 Capital Requirements......................................... 28
SECTION 4.9 Taxes........................................................ 28
SECTION 4.10 Change in Lending Office..................................... 29
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ARTICLE V CLOSING; CONDITIONS OF CLOSING, BORROWING AND ACQUISITIONS....... 30
SECTION 5.1 Closing...................................................... 30
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit....... 31
SECTION 5.3 Conditions to All Permitted Acquisitions..................... 34
SECTION 5.4 Conditions to Major Permitted Acquisitions................... 34
SECTION 5.5 Conditions to All Extensions of Credit....................... 34
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF THE BORROWER.................. 35
SECTION 6.1 Representations and Warranties............................... 35
SECTION 6.2 Survival of Representations and Warranties, Etc.............. 40
ARTICLE VII FINANCIAL INFORMATION AND NOTICES.............................. 41
SECTION 7.1 Financial Statements......................................... 41
SECTION 7.2 Officer's Compliance Certificate............................. 42
SECTION 7.3 Accountants' Certificate..................................... 42
SECTION 7.4 Other Reports................................................ 43
SECTION 7.5 Notice of Litigation and Other Matters....................... 43
SECTION 7.6 Accuracy of Information...................................... 44
ARTICLE VIII AFFIRMATIVE COVENANTS......................................... 44
SECTION 8.1 Preservation of Corporate Existence and Related Matters...... 45
SECTION 8.2 Maintenance of Property...................................... 45
SECTION 8.3 Insurance.................................................... 45
SECTION 8.4 Accounting Methods and Financial Records..................... 45
SECTION 8.5 Payment and Performance of Obligations....................... 45
SECTION 8.6 Compliance with Laws, Approvals and Material Contracts....... 46
SECTION 8.7 Environmental Management..................................... 46
SECTION 8.8 Compliance with ERISA........................................ 46
SECTION 8.9 Conduct of Business.......................................... 46
SECTION 8.10 Visits and Inspections....................................... 46
SECTION 8.11 Additional Subsidiary Guarantors............................. 46
SECTION 8.12 Year 2000 Compatibility...................................... 47
SECTION 8.13 Further Assurances........................................... 47
ARTICLE IX FINANCIAL COVENANTS............................................. 47
SECTION 9.1 Total Debt Leverage Ratio.................................... 47
SECTION 9.2 Total Debt to Total Capitalization........................... 47
SECTION 9.3 Fixed Charge Coverage Ratio.................................. 47
SECTION 9.4 Limitation on Capital Expenditures........................... 48
SECTION 9.5 Limitation on Operating Leases............................... 48
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ARTICLE X NEGATIVE COVENANTS............................................... 48
SECTION 10.1 Limitations on Debt.......................................... 48
SECTION 10.2 Limitations on Guarantees.................................... 49
SECTION 10.3 Limitations on Liens......................................... 49
SECTION 10.4 Limitations on Loans, Advances, Investments and Acquisitions. 51
SECTION 10.5 Limitations on Mergers and Liquidation....................... 53
SECTION 10.6 Limitations on Sale of Assets................................ 53
SECTION 10.7 Limitations on Dividends and Distributions................... 54
SECTION 10.8 Transactions with Affiliates................................. 55
SECTION 10.9 Certain Accounting Changes................................... 55
SECTION 10.10 Payments and Prepayments of Non-Seller Financing Subordinated
Debt; Amendments to Certain Agreements....................... 55
SECTION 10.11 Restrictive Agreements....................................... 55
SECTION 10.12 Amendments to Senior Note Indenture or Senior Notes. Amend or
modify (or permit the amendment or modification of) any of the
terms or provisions of the Senior Note Indenture or the Senior
Notes without the prior written consent of the Required
Lenders...................................................... 56
ARTICLE XI DEFAULT AND REMEDIES............................................ 56
SECTION 11.1. Events of Default............................................ 56
SECTION 11.2. Remedies..................................................... 58
SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; etc.............. 59
SECTION 11.4. Crediting of Payments and Proceeds........................... 59
SECTION 11.5. Set-off...................................................... 59
ARTICLE XII THE AGENT...................................................... 60
SECTION 12.1. Appointment.................................................. 60
SECTION 12.2. Delegation of Duties......................................... 60
SECTION 12.3. Exculpatory Provisions....................................... 60
SECTION 12.4. Reliance by Agent............................................ 61
SECTION 12.5. Notice of Default............................................ 61
SECTION 12.6. Non-Reliance on the Agent and Other Lenders.................. 61
SECTION 12.7. Indemnification.............................................. 62
SECTION 12.8. The Agent in Its Individual Capacity......................... 62
SECTION 12.9. Resignation of Agent; Successor Agents....................... 62
ARTICLE XIII MISCELLANEOUS................................................. 63
SECTION 13.1. Notices...................................................... 63
SECTION 13.2. Expenses..................................................... 64
SECTION 13.3. Governing Law................................................ 64
SECTION 13.4. Consent to Jurisdiction...................................... 65
SECTION 13.5. Arbitration.................................................. 65
SECTION 13.6. Waiver of Jury Trial......................................... 66
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SECTION 13.7. Reversal of Payments......................................... 66
SECTION 13.8. Injunctive Relief............................................ 66
SECTION 13.9. Successors and Assigns; Participations....................... 66
SECTION 13.10. Amendments, Waivers and Consents............................. 69
SECTION 13.11. Performance of the Borrower's Duties......................... 69
SECTION 13.12. Indemnification.............................................. 69
SECTION 13.13. All Powers Coupled with Interest............................. 70
SECTION 13.14. Survival of Indemnities...................................... 70
SECTION 13.15. Titles and Captions.......................................... 70
SECTION 13.16. Severability of Provisions................................... 70
SECTION 13.17. Counterparts................................................. 70
SECTION 13.18. Term of Agreement............................................ 70
SECTION 13.19. Adjustments.................................................. 70
SECTION 13.20. Independent Effect of Covenants.............................. 71
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EXHIBITS
Exhibit A - Form of Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Prepayment
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Officer's Compliance Certificate
Exhibit F - Form of Assignment and Acceptance
Exhibit G - Form of Subsidiary Guaranty Agreement
Exhibit H - Form of Opinions of Counsel
Exhibit I - Form of Intercompany Subordination Agreement
Exhibit J - Form of Projected Financial Statements
Exhibit K - Terms of Subordinated Debt and Earn-Out Agreements
Exhibit L - Form of Notice of Account Designation
SCHEDULES
Schedule 1.1 - Commitments
Schedule 6.1(a) - Organization; Power; Qualifications
Schedule 6.1(b) - Subsidiaries of Borrower and Capitalization of Borrower
and Subsidiaries
Schedule 6.1(g) - Environmental Matters
Schedule 6.1(h) - ERISA Plans
Schedule 6.1(k) - Intellectual Property Matters
Schedule 6.1(l) - Material Contracts
Schedule 6.1(o) - Financial Statements
Schedule 6.1(p) - No Material Adverse Change
Schedule 6.1(s) - Liens
Schedule 6.1(t) - Debt and Guarantees
Schedule 6.1(u) - Litigation
Schedule 10.1 - Limitation on Debt
Schedule 10.2 - Limitation on Guarantees
Schedule 10.4 - Limitations on Loans, Advances, Investments and
Acquisitions
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AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of the 16th day of March,
1998, by and among RURAL/METRO CORPORATION, a corporation organized under the
laws of Delaware as Borrower (the "Borrower"), the Lenders who are or may become
a party to this Agreement (collectively, the "Lenders"), and FIRST UNION
NATIONAL BANK (f/k/a First Union National Bank of North Carolina), a national
banking association, as Agent for the Lenders (the "Agent").
STATEMENT OF PURPOSE
This Agreement amends and restates the Credit Agreement dated as of
September 29, 1995 by and among the Borrower, as guarantor, certain Subsidiaries
of the Borrower, as borrowers, the lenders party thereto and the Agent, as
amended by the First Amendment to the Credit Agreement dated as of December 20,
1996, the Second Amendment to Credit Agreement dated as of May 28, 1997 and the
Third Amendment to the Credit Agreement dated as of December 23, 1997 by and
among the credit parties thereto, the lenders party thereto and the Agent (as so
amended, the "Existing Credit Agreement").
The Borrower has requested and the Lenders have agreed to amend and
restate the Existing Credit Agreement and to extend a revolving credit facility
to the Borrower (as defined below) on the terms and conditions of this
Agreement. The Borrower and the Subsidiary Guarantors (as defined below) are and
will be members of the same affiliated group and conduct their operations for
their mutual benefit as one integrated financial enterprise, with each of the
Subsidiary Guarantors benefiting from the business operations of the other
members of the affiliated group. All Extensions of Credit to the Borrower will
inure to the benefit of the Subsidiary Guarantors, directly or indirectly.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions.
The following terms when used in this Agreement shall have the meanings
assigned to them below:
"Adjustment Date" shall have the meaning assigned thereto in Section
4.1(c).
"Affiliate" means, with respect to a Person, any other Person (other than
a Subsidiary) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with such Person. The
term "control" means (a) the power to vote ten percent (10%) or more of the
securities or other equity interests of a Person having ordinary voting
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power, or (b) the possession, directly or indirectly, of any other power to
direct or cause the direction of the management and policies of a Person,
whether through ownership of voting securities, by contract or otherwise.
"Agent" means First Union in its capacity as agent hereunder, and any
successor thereto appointed pursuant to Section 12.9.
"Agent's Office" means the office of the Agent specified in or determined
in accordance with the provisions of Section 13.1(c).
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced at any time or from time to
time pursuant to Section 2.5. The Aggregate Commitment as of the Closing Date
shall be Two Hundred Million Dollars ($200,000,000).
"Agreement" means this Amended and Restated Credit Agreement, as further
amended, modified or supplemented from time to time.
"Applicable Law" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all Governmental Authorities and all
orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
4.1(c).
"Application" means an application in the form specified from time to time
by the Issuing Lender, requesting the Issuing Lender to issue a Letter of
Credit.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 13.9(b)(iii).
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b)
the Federal Funds Rate plus 1/2 of 1% per annum. Each change in the Base Rate
shall take effect simultaneously with the corresponding change or changes in the
Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate determined with
reference to the Base Rate as provided in Section 4.1(a) hereof.
"Borrower" means Rural/Metro Corporation, a corporation organized under
the laws of Delaware, and its successors.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina are open for the conduct of their
commercial banking business, and (b) with respect to all notices and
determinations in connection with, and payments of principal and interest on,
any LIBOR Rate Loan, any day that is a Business Day described in clause (a) and
that is also a day for trading by and between banks in U.S. Dollar deposits in
the London interbank market.
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"Capital Asset" means, with respect to the Borrower and its Subsidiaries,
any asset which has been or will be classified and accounted for as a capital
asset on a Consolidated balance sheet of the Borrower and its Subsidiaries.
"Capital Expenditures" means, with respect to the Borrower and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Borrower and its Subsidiaries during such period (excluding assets
acquired in connection with a Permitted Acquisition), as determined in
accordance with GAAP.
"Capital Lease" means, with respect to the Borrower and its Subsidiaries,
any lease of any property which has been or will be classified and accounted for
as a capital lease on a Consolidated balance sheet of the Borrower and its
Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
11.1(f).
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended or supplemented.
"Commitment" means, as to any Lender, the commitment of such Lender to
make Loans and issue or participate in Letters of Credit as set forth on
Schedule 1 of this Agreement or in the most recent Assignment and Acceptance, if
any, executed by such Lender.
"Commitment Fee Rate" shall have the meaning assigned thereto in Section
4.3(b).
"Commitment Percentage" means, with respect to a particular Lender, the
percentage obtained by dividing (a) the Commitment of such Lender by (b) the
Aggregate Commitment.
"Consolidated" means, with reference to financial statements or financial
statement items of the Borrower and its Subsidiaries, such statements or items
on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Credit Facility" means the Revolving Credit Facility established pursuant
to Article II hereof and the L/C Facility established pursuant to Article III
hereof.
"Credit Parties" means the collective reference to the Borrower and the
Subsidiary Guarantors.
"Debt" means, with respect to any Person at any date, the sum, without
duplication, of the following calculated in accordance with GAAP: (a) all
liabilities, obligations and indebtedness for borrowed money including but not
limited to obligations evidenced by bonds, debentures, notes or other similar
instruments, (b) all obligations to pay the deferred purchase price of property
or services, including, without limitation, all conditional sale obligations and
seller notes and earn-out obligations (but only to the extent such earn-out
obligations are matured and then due and payable
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either in lump sum or in installments) issued or incurred in connection with the
acquisition of any other Person, (c) all obligations as lessee under Capital
Leases, (d) all Debt of any other Person secured by a Lien on any asset of such
Person, (e) all obligations, contingent or otherwise, relative to the face
amount of letters of credit, whether or not drawn (including without limitation
any Reimbursement Obligation), and banker's acceptances in each case issued for
the account of any such Person, (f) all Guarantees by such Person of Debt of any
other Person, (g) all obligations to redeem, repurchase, exchange, defease or
otherwise make payments in respect of capital stock or other securities of such
Person and (h) all termination payments which would be due and payable by any
such Person pursuant to Hedging Agreements.
"Default" means any of the events specified in Section 11.1 which with the
passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"Domestic Subsidiary" means any direct or indirect Subsidiary of the
Borrower organized under the laws of the United States or any state thereof or
Canada or any province thereof.
"Earn-Out Obligations" means any contingent payment obligation (other than
management incentive programs or employment agreements) incurred by any Credit
Party pursuant to any promissory note or any other agreement or agreements
between such Credit Party and any other Person in connection with a Permitted
Acquisition, and which is subject to terms and conditions set forth in Exhibit K
hereto.
"EBIRTA" means, for any period, (a) Net Income for such period, plus (b)
the sum of the following to the extent deducted in the determination of Net
Income: (i) income and franchise taxes, (ii) Interest Expense, (iii)
amortization and other non-cash charges (including amortization of goodwill,
covenants not to compete and other intangible assets), (iv) Net Rental and
Operating Lease Expense and (v) non-cash expenses incurred in connection with
the Borrower's Employee Stock Ownership Plan; provided, that EBIRTA attributable
to any Foreign Subsidiary shall not be included in the above calculation unless
(A) with respect to the acquisition of any such Foreign Subsidiary with
consideration in an amount (1) in excess of $5,000,000, the Required Lenders, in
their sole discretion, shall have approved the inclusion of such EBIRTA or (2)
less than $5,000,000, the Agent, in its sole discretion, shall have approved the
inclusion of such EBIRTA, and (B) there shall exist no restriction on the
ability of such Foreign Subsidiary to make dividends, distributions or any other
payment to the Borrower or any of its Domestic Subsidiaries; and, provided
further that the aggregate EBIRTA attributable to such Foreign Subsidiaries
included in the above calculation for any period shall at no time exceed 25% of
the aggregate Consolidated EBIRTA of the Borrower and its Subsidiaries for such
period. Pursuant to Section (A)(1) above, the Agent and the Lenders hereby agree
that the EBIRTA attributable to ECCO shall be included in the above calculation.
"EBITDA" means, for any period, (a) Net Income for such period, plus (b)
the sum of the following to the extent deducted in the determination of Net
Income: (i) income and franchise taxes, (ii) Interest Expense, (iii)
amortization, depreciation and other non-cash charges (including
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amortization of goodwill, covenants not to compete and other intangible assets)
and (iv) non-cash expenses incurred in connection with the Borrower's Employee
Stock Ownership Plan; provided, that EBITDA attributable to any Foreign
Subsidiary shall not be included in the above calculation unless (A) with
respect to the acquisition of any such Foreign Subsidiary with consideration in
an amount (1) in excess of $5,000,000, the Required Lenders, in their sole
discretion, shall have approved the inclusion of such EBITDA or (2) less than
$5,000,000, the Agent, in its sole discretion, shall have approved the inclusion
of such EBITDA, and (B) there shall exist no restriction on the ability of such
Foreign Subsidiary to make dividends, distributions or any other payment to the
Borrower or any of its Domestic Subsidiaries; and, provided further that the
aggregate EBITDA attributable to such Foreign Subsidiaries included in the above
calculation for any period shall at no time exceed 25% of the aggregate
Consolidated EBITDA of the Borrower and its Subsidiaries for such period.
Pursuant to Section (A)(1) above, the Agent and the Lenders hereby agree that
the EBIDTA attributable to ECCO shall be included in the above calculation.
"ECCO" means, collectively, Peimu S.A., Recor S.A., ▇▇▇▇▇▇ S.A. and
Semercor S.A. and all Affiliates of the foregoing.
"ECCO Acquisition" means the acquisition of one hundred percent (100%) of
the stock and votes of Peimu S.A., Recor S.A., ▇▇▇▇▇▇ S.A. and Semercor S.A.,
which acquisition is evidenced by the Purchase Agreement, dated January 16,
1998, by and between ▇▇▇▇ ▇▇▇▇▇▇▇, on behalf of the Borrower, in his capacity as
attorney and buyer, and (i) ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇; Uruguayan, identification
document number 1.296.245-2 issued by Republica Oriental del Uruguay, domiciled
in ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Oriental del Uruguay; (ii) ▇▇▇▇
▇▇▇▇▇ Campomar, Uruguayan, identification document number 1.325.707-0 issued by
Republica Oriental del Uruguay, domiciled in General Santander ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ Oriental del Uruguay; (iii) ▇▇▇▇▇▇▇ Fluerguin, identification document
number 1.440.520-4 issued by Republica Oriental del Uruguay, domiciled in
▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Oriental del Uruguay; (iv) ▇▇▇▇▇▇
▇▇▇▇▇▇▇, Uruguayan, identification document number 1.324.207-7 issued by
Republica Oriental del Uruguay, domiciled in Santa ▇▇▇▇▇▇ 1975, Montevideo,
Republica Oriental del Uruguay; (v) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Uruguayan, identification
document number 982.647 issued by Republica Oriental del Uruguay, identification
national document number 92.658.172 issued by Republica Argentina, domiciled in
Sucre ▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ Argentina; (vi) ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Uruguayan,
identification document number 1.377.853-1 issued by Republica Oriental del
Uruguay, domiciled in ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇;
and (vii) ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Uruguayan, identification document
number 1.273.985-5 issued by Republica Oriental del Uruguay, domiciled in
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, ▇ (▇)▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, each as sellers, as
amended or modified.
"Eligible Assignee" means, with respect to any assignment of the rights,
interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof or any country which is a member of the Organization
of Economic Cooperation and Development, having total capital and surplus in
excess of $100,000,000, (b) a finance company, insurance company or other
financial institution which in the ordinary course of business extends credit of
the type extended hereunder and that has total capital and surplus in excess of
$100,000,000, (c) already a Lender hereunder (whether as an original party to
this Agreement or as the assignee of another Lender), (d) the
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successor (whether by transfer of assets, merger or otherwise) to all or
substantially all of the commercial lending business of the assigning Lender, or
(e) any other Person that has been approved in writing as an Eligible Assignee
by the Borrower and the Agent.
"Employee Benefit Plan" means any employee benefit plan within the meaning
of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials. Environmental
Laws include, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 et. seq.), the Hazardous
Material Transportation Act (49 U.S.C. Section 331 et. seq.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 et. seq.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 et. seq.), the Clean Air Act
(42 U.S.C. Section 7401 et. seq.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 et. seq.), the Safe Drinking Water Act (42 U.S.C. Section 300, et.
seq.), the Environmental Protection Agency's regulations relating to underground
storage tanks (40 C.F.R. Parts 280 and 281), and the rules and regulations
promulgated under each of these statutes, each as amended or supplemented.
"ERISA" means the Employee Retirement Income Security Act of 1974, and the
rules and regulations thereunder, each as amended or supplemented.
"ERISA Affiliate" means any Person who together with the Borrower is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Event of Default" means any of the events specified in Section 11.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"Existing Credit Agreement" shall have the meaning assigned thereto in the
Statement of Purpose.
"Extensions of Credit" means, with respect to all Lenders, the aggregate
amount of all outstanding Loans and L/C Obligations, and with respect to each
Lender, such Lender's Commitment Percentage of such aggregate amount.
"Federal Funds Rate" means, for any day, a fluctuating interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers, as published at 11:00 a.m. (Charlotte time) for
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such day (or, if such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day which is a Business Day, the average of the quotations for
such day on such transactions received by the Agent from three Federal funds
brokers of recognized standing selected by it.
"Fixed Charges" means, with respect to the Borrower and its Subsidiaries
for any period, the sum of (a) Interest Expense plus (b) Net Rental and
Operating Lease Expense, all determined for such period on a Consolidated basis
in accordance with GAAP.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
ending on June 30.
"Foreign Subsidiary" means any direct or indirect Subsidiary of the
Borrower organized under the laws of a jurisdiction outside of the United States
or Canada.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained on a consistent
basis for the Borrower and its Subsidiaries throughout the period indicated and
consistent with the prior financial practice of the Borrower.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guarantee" means, with respect to any Person, any direct or indirect
liability, contingent or otherwise, of such Person with respect to any
indebtedness or other obligation of another Person if the primary purpose or
intent in incurring such liability, or the primary effect thereof, is to provide
assurance to the obligee of such indebtedness or other obligation that such
indebtedness or other obligation will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
indebtedness or other obligation will be protected (in whole or in part) against
loss with respect thereto.
"HCFA" means the Health Care Finance Administration or any successor
agency.
"Hazardous Materials" means any substances or materials (a) which are or
become defined as hazardous wastes, hazardous substances, pollutants,
contaminants or toxic substances under any Environmental Law, (b) which are
toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise harmful to human health or the environment and are or
become regulated by any Governmental Authority, (c) the presence of which
require investigation or remediation under any Environmental Law or common law,
(d) the discharge or emission or
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release of which requires a permit or license under any Environmental Law or
other Governmental Approval, (e) which are materials consisting of underground
or aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (f) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest rate
swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower, and any confirming letter
executed pursuant to such agreement, all as amended, modified or supplemented
from time to time with the prior approval of the Agent.
"Intellectual Property" shall have the meaning assigned thereto in
Section 6.1(k).
"Intercompany Subordination Agreement" means the Intercompany
Subordination Agreement of even date among the Credit Parties and the Agent, for
the benefit of itself and the Lenders, substantially in the form of Exhibit I
attached hereto, as amended, modified or supplemented from time to time.
"Interest Expense" means, with respect to the Borrower and its
Subsidiaries for any period, the gross interest expense (including without
limitation, interest expense attributable to Capital Leases and all net
obligations pursuant to Hedging Agreements) of the Borrower and its
Subsidiaries, less interest income of the Borrower and its Subsidiaries, all
determined for such period on a Consolidated basis in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
4.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any
Letter of Credit.
"L/C Facility" means the letter of credit facility established pursuant to
Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
face amount of all outstanding Letters of Credit and (b) the aggregate amount of
drawings under the Letters of Credit which have not then been reimbursed
pursuant to Section 3.4.
"L/C Participants" means the collective reference to all the Lenders other
than the Issuing Lender.
"Latin American Investments' means investments in Persons organized or
operating in any Latin American country; provided, that Latin America for
purposes of this definition shall include Mexico, Central America, South America
and the Caribbean.
"Lender" means each Person executing this Agreement as a Lender set forth
on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 13.9.
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"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Extensions of Credit.
"Letters of Credit" shall have the meaning assigned thereto in Section
3.1.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 at approximately 11:00 a.m. (London time) two (2) Business Days prior
to the first day of the applicable Interest Period (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%)). If, for any
reason, such rate does not appear on Telerate Page 3750, then "LIBOR" shall be
determined by the Agent to be the arithmetic average (rounded upward, if
necessary, to the nearest one-sixteenth of one percent (1/16%)) of the rate per
annum at which deposits in Dollars are being offered by leading reference banks
in the London interbank market to the Agent at approximately 11:00 a.m. (London
time) two (2) Business Days prior to the first day of the applicable Interest
Period for a period equal to such Interest Period and in an amount substantially
equal to the amount of the applicable Loan.
"LIBOR Rate Loan" means any Loan bearing interest at a rate determined
with reference to LIBOR as provided in Section 4.1(a) hereof.
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any Loan made to the Borrower pursuant to Article II and all
such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Subsidiary Guaranty, Intercompany Subordination Agreement, any Hedging Agreement
with a Lender, each Application and each other document, instrument and
agreement executed and delivered by any Credit Party in connection with this
Agreement, all as amended, modified or supplemented from time to time.
"Material Adverse Effect" means a material adverse effect on (a) the
properties, business, operations or financial condition of the Borrower and its
Subsidiaries taken as a whole or (b) the ability of the Borrower and its
Subsidiaries, taken as a whole, to pay all Obligations due under the Loan
Documents.
"Material Contract" means any written contract, agreement or other
instrument of the Borrower or any of its Subsidiaries, the termination or
revocation of which or the failure to comply with which could reasonably be
expected to have a Material Adverse Effect.
"Maximum Rate" shall have the meaning assigned thereto in Section
4.1(g).
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"Medicaid Regulations" means, collectively, (a) all federal statutes
(whether set forth in Title XIX of the Social Security Act or elsewhere)
affecting the medical assistance program established by Title XIX of the Social
Security Act (42 U.S.C. Sections 1396 et seq.) and any statutes succeeding
thereto, (b) all applicable provisions of all federal rules, regulations,
manuals and orders of all Governmental Authorities promulgated pursuant to or in
connection with the statutes described in clause (a) above and all federal
administrative, reimbursement and other guidelines of all Governmental
Authorities having the force of law promulgated pursuant to or in connection
with the statutes described in clause (a) above, (c) all state statutes and
plans for medical assistance enacted in connection with the statutes and
provisions described in clauses (a) and (b) above, and (d) all applicable
provisions of all rules, regulations, manuals and orders of all Governmental
Authorities promulgated pursuant to or in connection with the statutes described
in clause (c) above and all state administrative, reimbursement and other
guidelines of all Governmental Authorities having the force of law promulgated
pursuant to or in connection with the statutes described in clause (c) above, in
each case as may be amended or supplemented.
"Medicare Regulations" means, collectively, all federal statutes (whether
set forth in Title XVIII of the Social Security Act or elsewhere) affecting the
health insurance program for the aged and disabled established by Title XVIII of
the Social Security Act (42 U.S.C. Sections 1395 et seq.) and any statutes
succeeding thereto; together with all applicable provisions of all rules,
regulations, manuals and orders and administrative, reimbursement and other
guidelines having the force of law of all Governmental Authorities (including
without limitation, Health and Human Services ("HHS"), HCFA, the Office of the
Inspector General for HHS, or any Person succeeding to the functions of any of
the foregoing) promulgated pursuant to or in connection with any of the
foregoing having the force of law, as each may be amended or supplemented.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate has made, or
has accrued an obligation to make, contributions within the preceding six years.
"Net Income" means, with respect to the Borrower and its Subsidiaries for
any period, the Consolidated net income (or loss) of the Borrower and its
Subsidiaries for such period determined in accordance with GAAP; provided, that
there shall be excluded from Consolidated net income (or loss): (a) the income
(or loss) of any Person (other than a Subsidiary of the Borrower or such
Subsidiary) in which the Borrower or such Subsidiary has an ownership interest
unless received by the Borrower or such Subsidiary in a cash distribution, (b)
the income (or loss) of any Person accrued prior to the date it became a
Subsidiary of the Borrower or such Subsidiary or is merged into or consolidated
with such first Person, and (c) to the extent not included in clauses (a) and
(b) above, any after-tax extraordinary gains and non-cash losses.
"Net Rental and Operating Lease Expense" means, with respect to the
Borrower and its Subsidiaries for any period, the gross rental and operating
lease expense of the Borrower and its Subsidiaries, less certain rental income
of the Borrower and its Subsidiaries described on Schedule 1.1 hereto, all
determined for such period on a Consolidated basis in accordance with GAAP.
"Net Revenues" means, with respect to the Borrower and its Subsidiaries
for any period, net revenues of the Borrower and its Subsidiaries, determined
for such period on a Consolidated basis
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in accordance with GAAP and in accordance with past reporting practices of the
Borrower and its Subsidiaries.
"Net Worth" means, with respect to the Borrower and its Subsidiaries at
any date, the stockholders' equity of the Borrower and its Subsidiaries on such
date determined on a Consolidated basis in accordance with GAAP.
"Non-Seller Financing Subordinated Debt" means any Debt of any Credit
Party (other than the Seller Financing) which is subject to terms and conditions
(including subordination provisions) satisfactory to the Required Lenders.
"Notes" means the separate revolving credit notes made by the Borrower
payable to the order of each of the Lenders, substantially in the form of
Exhibit A hereto, evidencing the Revolving Credit Facility, and any amendments,
modifications and supplements thereto, any substitutes therefor, and any
replacements, restatements, renewals or extension thereof, in whole or in part.
"Notice of Account Designation" shall have the meaning assigned thereto in
Section 5.2(g).
"Notice of Borrowing" shall have the meaning assigned thereto in Section
2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 4.2.
"Obligations" means, in each case, whether now in existence or hereafter
arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) all Extensions of Credit, (b)
all payment and other obligations owing by a Borrower to any Lender under any
Hedging Agreement, and (c) all other reasonable fees (including reasonable
attorney's fees), commissions, charges, indebtedness, loans, liabilities,
financial accommodations, obligations, covenants and duties which are owing by
the Credit Parties to the Lenders or to the Agent pursuant to this Agreement or
any other Loan Document, of every kind, nature and description, direct or
indirect, absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
in Section 7.2.
"Other Taxes" shall have the meaning assigned thereto in Section 4.9(b).
"Parent Seller Financing" means any unsecured (other than by Letters of
Credit) Debt incurred by the Borrower in connection with any Permitted
Acquisition.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is
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maintained for employees of the Borrower or any ERISA Affiliates or (b) has at
any time within the preceding six years been maintained for the employees of the
Borrower or any of their current or former ERISA Affiliates.
"Permitted Acquisitions" means each acquisition permitted by Section
10.4(f) hereof or otherwise approved by the Required Lenders.
"Person" means an individual, corporation, partnership, association,
trust, business trust, joint venture, limited liability company, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof specifically
listed herein.
"Prime Rate" means, at any time, the rate of interest per annum publicly
announced from time to time by First Union as its prime rate. Each change in the
Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its Prime Rate is an index or base rate and
shall not necessarily be its lowest rate charged to its customers or other
banks.
"Register" shall have the meaning assigned thereto in Section 13.9(c).
"Reimbursement Obligation" means the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.4 for amounts drawn under the
Letters of Credit.
"Required Lenders" means, at any date, any combination of Lenders holding
at least fifty-one percent (51%) of all Extensions of Credit or, if no
Extensions of Credit are at the time outstanding, Lenders whose Commitment
Percentages aggregate at least fifty-one percent (51%).
"Reserve Requirement" means, for any Lender, the actual daily arithmetic
reserve requirement imposed on such Lender by the Board of Governors of the
Federal Reserve System (or any successor) under Regulation D on Eurocurrency
liabilities (as defined in Regulation D) of such Lender for the applicable
Interest Period as of the first day of such Interest Period, but subject to any
changes in such reserve requirement becoming effective during the Interest
Period.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
"SEC" shall have the meaning assigned thereto in Section 7.4(d).
"Seller Financing" means the collective reference to the Earn-Out
Obligations, the Subordinated Seller Financing and the Parent Seller
Financing.
"Senior Note Indenture" means the Note Indenture of even date among the
Borrower, the Subsidiary Guarantors and The First National Bank of Chicago, as
Trustee, pursuant to which the Senior Notes have been issued.
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"Senior Notes" means the senior unsecured notes issued by the Borrower
pursuant to the terms of the Senior Note Indenture containing terms and
conditions satisfactory to the Agent and the Required Lenders.
"Solvent" means, as to the Borrower and its Subsidiaries on a Consolidated
basis, on a particular date, that the Borrower and its Subsidiaries taken as a
whole (a) have capital sufficient to carry on their businesses and transactions
in which they engage and are able to pay their debts as they mature, (b) own
property having a present fair saleable value on a going concern basis greater
than the amount required to pay their probable liabilities (including
contingencies), and (c) do not believe that they will incur debts or liabilities
beyond their ability to pay such debts or liabilities as they mature. In
determining the amount of contingent or unliquidated liabilities at any time,
such liabilities will be computed at the amount which, in light of all the facts
and circumstances existing at such time, represents the amount that can
reasonably be expected to become an actual or matured liability.
"Subordinated Debt" means the collective reference to the Subordinated
Seller Financing, the Earn-Out Obligations and the Non-Seller Financing
Subordinated Debt.
"Subordinated Seller Financing" means any Debt (other than Earn-Out
Obligations) incurred by the Borrower or any Subsidiary in connection with any
Permitted Acquisition, which is subject to the terms and conditions set forth in
Exhibit K hereto.
"Subsidiary" means, as to any Person, any other Person of which more than
fifty percent (50%) of the outstanding capital stock or other ownership
interests having ordinary voting power to elect a majority of the board of
directors or other managers of such Person is at the time, directly or
indirectly, owned by or the management is otherwise controlled by such Person
(irrespective of whether, at the time, capital stock or other ownership
interests shall have or might have voting power by reason of the happening of
any contingency). Unless otherwise qualified, references to "Subsidiary" or
"Subsidiaries" herein shall refer to those of the Borrower.
"Subsidiary Guarantors" mean all direct and indirect Wholly-Owned Domestic
Subsidiaries of the Borrower incorporated or organized in the United States
existing on the Closing Date (excluding Coronado Health Services, Inc.) and each
additional Wholly-Owned Domestic Subsidiary of the Borrower incorporated or
organized in the United States required to become a Subsidiary Guarantor
pursuant to Section 8.11 hereof.
"Subsidiary Guaranty" means the Subsidiary Guaranty Agreement of even date
by the Subsidiary Guarantors in favor of the Agent, for the ratable benefit of
itself and the Lenders, substantially in the form of Exhibit G hereto, as
amended, modified or supplemented from time to time.
"Taxes" shall have the meaning assigned thereto in Section 4.9(a).
"Termination Date" means the earliest of the dates referred to in
Section 2.6.
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"Termination Event" means: (a) a "Reportable Event" described in Section
4043 of ERISA (other than a reportable event not subject to the provision for
30-day notice to the PBGC under regulations promulgated under such section), (b)
the withdrawal of the Borrower or any ERISA Affiliate from a Pension Plan during
a plan year in which it was a "substantial employer" as defined in Section
4001(a)(2) of ERISA, (c) the termination of a Pension Plan, the filing of a
notice of intent to terminate a Pension Plan or the treatment of a Pension Plan
amendment as a termination under Section 4041 of ERISA, (d) the institution of
proceedings to terminate, or the appointment of a trustee with respect to, any
Pension Plan by the PBGC, (e) any other event or condition which would
constitute grounds under Section 4042(a) of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan, (f) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan, (g) the imposition of a Lien pursuant to Section 412 of the Code or
Section 302 of ERISA, (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by PBGC of
proceedings to terminate a Multiemployer Plan under Section 4042 of ERISA.
"Total Debt Leverage Ratio" means the ratio determined in accordance with
Section 9.1 hereof.
"Uniform Customs" means the Uniform Customs and Practice for
Documentary Credits (1994 Revision), International Chamber of Commerce
Publication No. 500.
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of
the shares of capital stock or other ownership interests of which are, directly
or indirectly, owned or controlled by the Borrower or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General. All terms of an accounting nature not specifically
defined herein shall have the meaning assigned thereto by GAAP. Unless otherwise
specified, a reference in this Agreement to a particular section, subsection,
Schedule or Exhibit is a reference to that section, subsection, Schedule or
Exhibit of this Agreement. Wherever from the context it appears appropriate,
each term stated in either the singular or plural shall include the singular and
plural, and pronouns stated in the masculine, feminine or neuter gender shall
include the masculine, the feminine and the neuter. Any reference herein to
"Charlotte time" shall refer to the applicable time of day in Charlotte, North
Carolina.
SECTION 1.3 Accounting Matters. All financial and accounting calculations,
measurements and computations made for any purpose relating to this Agreement,
including, without limitation, all computations utilized by the Borrower or any
Subsidiary thereof to determine compliance with any covenant contained herein,
shall, except as otherwise expressly contemplated hereby or unless there is an
express written direction by the Agent to the contrary agreed to by the
Borrower, be performed in accordance with GAAP. In the event that changes in
GAAP (as in effect on the Closing Date) shall be mandated by the Financial
Accounting Standards Board, or any similar accounting body of comparable
standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such
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accounting terms only from and after the date the Borrower and the Lenders shall
have entered into an amendment of this Agreement to the extent necessary to
reflect any such changes in the financial covenants and other terms and
conditions of this Agreement, which amendment shall not be unreasonably
withheld.
SECTION 1.4 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Loans. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Loans to the Borrower from time to time
from the Closing Date through but not including the Termination Date as
requested by the Borrower in accordance with Section 2.2; provided, that (a) the
aggregate principal amount of all outstanding Loans (after giving effect to any
amount requested) shall not exceed the Aggregate Commitment less the L/C
Obligations and (b) the principal amount of Extensions of Credit from any Lender
to the Borrower shall not at any time exceed such Lender's Commitment. Each Loan
by a Lender shall be in a principal amount equal to such Lender's Commitment
Percentage of the aggregate principal amount of Loans requested on such
occasion. Subject to the terms and conditions hereof, the Borrower may borrow,
repay and reborrow Loans hereunder until the Termination Date.
SECTION 2.2 Procedure for Advance of Loans.
(a) Requests for Borrowing. The Borrower shall give the Agent irrevocable
prior written notice (or telephonic notice confirmed by written notice) in the
form attached hereto as Exhibit B (a "Notice of Borrowing") not later than 11:00
a.m. (Charlotte time) (i) on the same Business Day as each Base Rate Loan and
(ii) at least three Business Days before each LIBOR Rate Loan, of a proposed
borrowing specifying (A) the date of such borrowing, which shall be a Business
Day, (B) the amount of such borrowing, which shall be with respect to LIBOR Rate
Loans in an aggregate principal amount of $3,000,000 or a whole multiple of
$500,000 in excess thereof and with respect to Base Rate Loans in an aggregate
principal amount of $1,000,000 or a whole multiple of $500,000 in excess
thereof, (C) whether the Loans are to be LIBOR Rate Loans or Base Rate Loans,
and (D) in the case of a LIBOR Rate Loan, the duration of the Interest Period
applicable thereto. Notices received after 11:00 a.m. (Charlotte time) shall be
deemed received on the next Business Day. The Agent shall promptly notify the
Lenders of each Notice of Borrowing.
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(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time) on
the proposed borrowing date, each Lender will make available to the Agent, for
the account of the Borrower, at the office of the Agent in funds immediately
available to the Agent, such Lender's Commitment Percentage of the Loans to be
made on such borrowing date. Promptly after the Agent's receipt of such funds
and upon fulfillment of the applicable conditions set forth in Article V, the
Agent will (and each Lender hereby irrevocably authorizes the Agent to) make
such funds available to the Borrower by crediting such proceeds to a deposit
account of the Borrower maintained with the Agent or by wire transfer to such
account as may be agreed upon by the Borrower and the Agent from time to time.
Subject to Section 4.5 hereof, the Agent shall not be obligated to disburse the
proceeds of any Loan requested pursuant to this Section 2.2 until each Lender
shall have made available to the Agent its Commitment Percentage of such Loan.
SECTION 2.3 Repayment of Loans.
(a) Repayment on Termination Date. The Borrower shall repay the
outstanding principal amount of all Loans in full, together with all accrued but
unpaid interest thereon, on the Termination Date.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
principal amount of all Extensions of Credit exceeds the Aggregate Commitment,
the Borrower shall repay the Extensions of Credit immediately by making first, a
payment of principal of the Loans to the Agent for the account of the Lenders
and second, with respect to any Letters of Credit then outstanding, the payment
of cash collateral into a cash collateral account opened by the Borrower with
the Agent for the benefit of the Lenders), in an aggregate amount equal to such
excess. Each such repayment shall be accompanied by accrued interest on the
amount repaid and any amount required to be paid pursuant to Section 4.7 hereof.
(c) Optional Repayments. The Borrower may at any time and from time to
time repay the Loans, in whole or in part, upon irrevocable notice to the Agent
no later than 11:00 a.m., at least three (3) Business Days' prior to such
repayment with respect to LIBOR Rate Loans and on the same day of such repayment
with respect to Base Rate Loans, in the form attached hereto as Exhibit C (a
"Notice of Prepayment") specifying the date and amount of repayment and whether
the repayment is of LIBOR Rate Loans, Base Rate Loans, or a combination thereof,
and, if of a combination thereof, the amount allocable to each. Upon receipt of
such notice, the Agent shall promptly notify each Lender. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
set forth in such notice. Partial repayments shall be in an aggregate amount of
$1,000,000 or a whole multiple of $500,000 in excess thereof with respect to
Base Rate Loans and $3,000,000 or a whole multiple of $500,000 in excess thereof
with respect to LIBOR Rate Loans. Each such repayment shall be accompanied by
any amount required to be paid pursuant to Section 4.7 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 4.7 hereof.
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SECTION 2.4 Notes. Each Lender's Loans and the obligation of the Borrower
to repay such Loans shall be evidenced by a Note executed by the Borrower
payable to the order of such Lender representing the Borrower's obligation to
pay such Lender's Commitment or, if less, the aggregate unpaid principal amount
of all Loans made by such Lender to the Borrower hereunder, plus interest on
such principal amounts and all other fees, charges and other amounts due
thereon. Each Note shall be dated the date hereof and shall bear interest on the
unpaid principal amount thereof at the applicable interest rate per annum
specified in Section 4.1.
SECTION 2.5 Permanent Reduction of Aggregate Commitment.
(a) Voluntary Reduction. The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Agent, to permanently reduce, in whole at any time or in part from time to
time, without premium or penalty, the Aggregate Commitment in an aggregate
principal amount not less than $5,000,000 or any integral multiple of $1,000,000
in excess thereof.
(b) Payments. Each permanent reduction permitted pursuant to this Section
2.5 shall be accompanied by a payment of principal of the Loans (or with respect
to any Letters of Credit then outstanding, the payment of cash collateral into a
cash collateral account opened by the Borrower with the Agent for the benefit of
the Lenders) sufficient to reduce the Extensions of Credit to the Aggregate
Commitment, as so reduced, and by payment of accrued interest on the amount of
such repaid principal. Any reduction of the Aggregate Commitment to zero shall
be accompanied by payment of all outstanding Obligations (and funding of a cash
collateral account opened by the Borrower with the Agent for the benefit of the
Lenders in an amount equal to all Letters of Credit then outstanding) and
termination of the Aggregate Commitment and Credit Facility. Amounts on deposit
in the cash collateral account shall be applied in accordance with Section
11.2(b). If the reduction of the Aggregate Commitment requires the repayment of
any LIBOR Rate Loan, such reduction may be made only on the last day of the then
current Interest Period applicable thereto unless such repayment is accompanied
by any amount required to be paid pursuant to Section 4.7 hereof.
SECTION 2.6 Termination of Credit Facility. The Credit Facility shall
terminate on the earliest of (a) ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇) the date of permanent
reduction of the Aggregate Commitment in whole pursuant to Section 2.5, or (c)
the date of termination by the Agent on behalf of the Lenders pursuant to
Section 11.2(a).
SECTION 2.7 Use of Proceeds. The Borrower shall use the proceeds of the
Loans (a) to refinance certain existing Debt, (b) to pay certain fees and
expenses related to the transactions contemplated hereby, (c) to finance
Permitted Acquisitions and (d) to provide for the ongoing working capital
requirements of the Credit Parties.
ARTICLE III
LETTER OF CREDIT FACILITY
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SECTION 3.1 L/C Commitment.
(a) Subject to the terms and conditions hereof, the Issuing Lender, in
reliance on the agreements of the other Lenders set forth in Section 3.3(a),
agrees to issue letters of credit (the "Letters of Credit") for the account of
the Borrower on a Business Day during the period from the Closing Date through
but not including the Termination Date in such form as may be reasonably
approved from time to time by the Issuing Lender; provided, that the Issuing
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed Ten Million
Dollars ($10,000,000) or (ii) the total Extensions of Credit then outstanding
would exceed the Aggregate Commitment.
(b) Each Letter of Credit shall (i) be denominated in Dollars in a minimum
amount of $50,000, (ii) be a standby Letter of Credit issued to support the
obligations of any Borrower incurred in the ordinary course of its business,
(iii) expire on a date no later than the earlier of (A) one year from the
issuance thereof or (B) March 16, 2003 and (iv) be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
North Carolina. The Issuing Lender shall not at any time be obligated to issue
any Letters of Credit hereunder if such issuance would conflict with, or cause
the Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law. References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower may
request that the Issuing Lender issue a Letter of Credit on behalf of the
Borrower or on behalf of any of its Subsidiaries; provided that for any Letter
of Credit issued on behalf of any of its Subsidiaries, the Borrower shall be the
applicant with the Subsidiary as the co-applicant by delivering to the Issuing
Lender at its address for notices specified herein an Application therefor,
completed to the satisfaction of the Issuing Lender, and such other
certificates, documents and other papers and information as the Issuing Lender
may request. Upon receipt of any Application, the Issuing Lender shall process
such Application and the certificates, documents and other papers and
information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article V hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue the Letter of Credit earlier than three
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrower. The Issuing
Lender shall furnish to the Borrower a copy of such Letter of Credit and furnish
to each Lender a copy of such Letter of Credit and the amount of each Lender's
L/C Participation therein, all promptly following the issuance of such Letter of
Credit. To the extent that any provision of any Application related to any
Letter of Credit is inconsistent with the provisions of this Article III, the
provisions of this Article III shall apply.
SECTION 3.3 L/C Participations.
(a) The Issuing Lender hereby grants to each L/C Participant, and, to
induce the Issuing Lender to issue the Letters of Credit hereunder, each L/C
Participant hereby accepts and purchases
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from the Issuing Lender, on the terms and conditions hereinafter stated, for
such L/C Participant's own account and risk an undivided interest equal to such
L/C Participant's Commitment Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Commitment
Percentage of the amount of such draft, or any part thereof, which is not so
reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.3(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Agent during the period from and including the
date such payment is due to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. With respect to payment to the Issuing Lender of the unreimbursed
amounts described in this Section 3.3(b), if the L/C Participants receive notice
that any such payment is due (A) prior to 2:00 p.m. (Charlotte time) on any
Business Day, such payment shall be due that Business Day, and (B) after 2:00
p.m. (Charlotte time) on any Business Day, such payment shall be due on the
following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its Commitment
Percentage of such payment in accordance with this Section 3.3, the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise), or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro rata share
thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.4 Reimbursement Obligation of the Borrower. The Borrower agrees
to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of such draft so paid and any taxes, reasonable
out-of-pocket fees, charges or other costs or expenses incurred by the Issuing
Lender in connection with such payment. Each such payment shall be made to the
Issuing Lender at its address for notices specified herein in Dollars and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article III from the date such
amounts are paid by the Issuing Lender until payment in full at the rate per
annum equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans. The Issuing Lender shall notify the Borrower by facsimile promptly
of the presentment for payment of
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any Letter of Credit by any beneficiary, together with notice of the date such
payment shall be made; provided, that the failure of the Issuing Lender to
provide such notice shall not limit or affect in any manner any of the
Borrower's obligations set forth herein.
SECTION 3.5 Obligations Absolute. Except as described below, the
Borrower's obligations under this Article III (including without limitation the
Reimbursement Obligation) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against any Lender or any
beneficiary of a Letter of Credit. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligation under Section 3.4 shall not be affected by, among other
things, the validity or genuineness of documents or of any endorsements thereon,
even though such documents shall in fact prove to be invalid, fraudulent or
forged (absent the gross negligence or willful misconduct of the Issuing
Lender), or any dispute between or among the Borrower and any beneficiary of a
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of a Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of the message or advice, however transmitted, in connection with a
Letter of Credit, except for errors or omissions caused by the Issuing Lender's
gross negligence or willful misconduct. The Borrower agrees that any action
taken or omitted by the Issuing Lender under or in connection with any Letter of
Credit or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards of care
specified in the Uniform Customs and, to the extent not inconsistent therewith,
the Uniform Commercial Code as in effect in North Carolina, shall be binding on
the Borrower and shall not result in any liability of the Issuing Lender to the
Borrower. The responsibility of the Issuing Lender to the Borrower in connection
with any draft presented for payment under any Letter of Credit shall, in
addition to any payment obligation expressly provided for in such Letter of
Credit, be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment are in
conformity with such Letter of Credit.
SECTION 3.6 Fees and Other Charges.
(a) The Borrower shall pay to the Agent, for the account of the Issuing
Lender and the L/C Participants, a letter of credit fee with respect to each
Letter of Credit in an amount equal to the product of (i) the fraction that is
determined by dividing (A) the number of days that the Letter of Credit is to be
outstanding by (B) 360, (ii) the Applicable Margin with respect to LIBOR Rate
Loans and (iii) the face amount of such Letter of Credit. Such fee shall be
payable quarterly in arrears on the last Business Day of each calendar quarter
and on the Termination Date. The Agent shall, promptly following its receipt
thereof, distribute to the Issuing Lender and the L/C Participants all fees
received by the Agent pursuant to this paragraph (a) in accordance with their
respective Commitment Percentages.
(b) The Borrower shall pay to the Issuing Lender for its own account a
letter of credit fee with respect to each Letter of Credit in an amount equal to
the product of (i) the fraction that is determined by dividing (A) the number of
days that the Letter of Credit is to be outstanding by (B)
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360, (ii) 0.125% and (iii) the face amount of such Letter of Credit. Such fee
shall be payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Termination Date.
ARTICLE IV
GENERAL LOAN PROVISIONS
SECTION 4.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section 4.1,
at the election of the Borrower, the principal balance of any Loan shall bear
interest at the Base Rate or LIBOR plus, in each case, the Applicable Margin as
set forth below. The Borrower shall select the rate of interest and Interest
Period, if any, applicable to any Loan at the time a Notice of Borrowing is
given pursuant to Sections 2.2, or at the time a Notice of Conversion/
Continuation is given pursuant to Section 4.2. Each Loan bearing interest based
on the Base Rate shall be a "Base Rate Loan", and each Loan bearing interest
based on LIBOR shall be a "LIBOR Rate Loan". Any Loan as to which the Borrower
has not duly specified an interest rate as provided herein shall be deemed a
Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each, an "Interest Period") to be applicable to such Loan,
which Interest Period shall be a period of one, two or three months; provided
that:
(i) each Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period would otherwise expire on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) any Interest 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 Period) shall end on the last
Business Day of the calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Termination Date and
no Interest Period shall be selected which would result in the repayment of any
LIBOR Rate Loan prior to the end of an Interest Period; and
(v) there shall be no more than five (5) Interest Periods in effect
at any time.
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(c) Applicable Margin. The Applicable Margin provided for in Section
4.1(a) with respect to the Loans (the "Applicable Margin") shall be determined
by reference to the Total Debt Leverage Ratio as of the end of the fiscal
quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate in accordance with the following chart:
Total Debt Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ----------- ------------
Less than 2.00 to 1.00 0.00% 0.875%
Greater than or equal to
2.00 to 1.00
and less than 2.50 to 1.00 0.00% 1.125%
Greater than or equal to
2.50 to 1.00
and less than 3.00 to 1.00 0.00% 1.375%
Greater than or equal to
3.00 to 1.00
and less than 3.50 to 1.00 0.125% 1.625%
Greater than or equal to
3.50 to 1.00 0.250% 1.750%
Adjustments, if any, in the Applicable Margin shall be made by the Agent on the
fifth (5th) day (or, if not a Business Day, on the next succeeding Business Day)
following receipt by the Agent of financial statements for the Borrower and its
Subsidiaries pursuant to Sections 7.1(a) and 7.1(b) and the accompanying
Officer's Compliance Certificate (such date, the "Adjustment Date"), setting
forth the Total Debt Leverage Ratio as of the most recent fiscal quarter end;
provided that no adjustment shall be made to decrease the Applicable Margin at
any time that a Default or Event of Default has occurred and is continuing. In
the event the Borrower fails to deliver such financial statements and the
accompanying Officer's Compliance Certificate within the time required by
Sections 7.1 and 7.2 hereof, the Applicable Margin shall be the highest
Applicable Margin set forth above until the Adjustment Date following delivery
of such financial statements and the accompanying Officer's Compliance
Certificate.
(d) Default Rate. Upon the occurrence and during the continuance of an
Event of Default, (i) at the option of the Required Lenders, the Borrower shall
no longer have the option to request LIBOR Rate Loans, (ii) all amounts due and
payable with respect to LIBOR Rate Loans shall bear interest at a rate per annum
two percent (2%) in excess of the rate then applicable to LIBOR Rate Loans until
the end of the applicable Interest Period and thereafter at a rate equal to two
percent (2%) in excess of the rate then applicable to Base Rate Loans, and (iii)
all amounts due and payable with respect to Base Rate Loans shall bear interest
at a rate per annum equal to two percent (2%) in excess of the rate then
applicable to Base Rate Loans. Interest shall continue to accrue on the Notes
after the filing by or against a Borrower of any petition seeking any relief in
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bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1998, and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto. All accrued and
unpaid interest shall be paid in full on the Termination Date, together with any
amounts payable pursuant to Section 4.7. Interest rates based on the Base Rate
shall be computed on the basis of a 365-day year and assessed for the actual
number of days elapsed and all other interest rates, fees and commissions
provided hereunder shall be computed on the basis of a 360-day year and assessed
for the actual number of days elapsed.
(f) Agreed Interest Rate. The Borrower agrees to pay an effective
contracted for rate of interest equal to the rate of interest resulting from all
interest payable as provided herein, plus any additional rate of interest
resulting from the Additional Sums. For the purposes of this provision, the
"Additional Sums" shall consist of all fees, charges, goods, things in action or
other sums or things of value (other than the interest resulting from the
interest provided herein) paid or payable by the Borrower, whether pursuant to
this Agreement, the Notes or any other Loan Document, that may be deemed to be
interest for the purpose of any Applicable Law that may limit the maximum amount
of interest to be charged with respect to the Extensions of Credit. The
Additional Sums shall be deemed to be additional interest only for the purposes
of any such Applicable Law.
(g) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
exceed the highest rate permissible under any Applicable Law which a court of
competent jurisdiction shall, in a final determination, deem applicable hereto.
In the event that such a court determines that the Lenders have contracted for,
charged or received interest hereunder in excess of the highest applicable rate,
the rate in effect hereunder shall automatically be reduced to the maximum rate
permitted by Applicable Law and the Lenders shall at the Agent's option promptly
refund to the Borrower any interest received by Lenders in excess of the maximum
lawful rate or shall apply such excess to the principal balance of the
Obligations. It is the intent hereof that the Borrower not pay or contract to
pay, and that neither the Agent nor any Lender charge, receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
the maximum non-usurious rate that may be paid by the Borrower under Applicable
Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to convert at any time all or any portion of
their outstanding Base Rate Loans in a principal amount equal to $3,000,000 or
any whole multiple of $500,000 in excess thereof into one or more LIBOR Rate
Loans. Upon the expiration of any Interest Period, the Borrower may convert all
or any portion of their outstanding LIBOR Rate Loans into Base Rate Loans in a
principal amount equal to $1,000,000 or a whole multiple of $500,000 in excess
thereof or to continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the
Borrower desires to convert or continue Loans as provided above, the Borrower
shall give the Agent irrevocable prior written notice in the form attached as
Exhibit D(a "Notice of Conversion/Continuation") not later than 11:00 a.m.
(Charlotte time) three (3) Business Days, in the event of a conversion to or
continuation as LIBOR Rate Loans,
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and one (1) Business Day, in the event of a conversion to Base Rate Loans,
before the day on which a proposed conversion or continuation of such Loan is to
be effective specifying (i) the Loans to be converted or continued, and, in the
case of a LIBOR Rate Loan to be converted or continued, the last day of the
Interest Period therefor, (ii) the effective date of such conversion or
continuation (which shall be a Business Day), (iii) the principal amount of such
Loans to be converted or continued, and (iv) the Interest Period to be
applicable to such converted or continued LIBOR Rate Loan. The Agent shall
promptly notify the Lenders of such Notice of Conversion/Continuation. If,
within the time period required under the terms of this Section 4.2, the Agent
does not receive a Notice of Conversion/Continuation from the Borrower
containing an election to continue LIBOR Rate Loans for an additional Interest
Period or to convert such LIBOR Rate Loans, then, upon the expiration of the
Interest Period therefor, such Loans will be automatically converted to Base
Rate Loans.
SECTION 4.3 Commitment and Agency Fees.
(a) Agent's Fee. In order to compensate the Agent for its obligations
hereunder, the Borrower agrees to pay to the Agent for its own account the fees
set forth in a separate letter agreement between the Agent and the Borrower
dated February 3, 1998.
(b) Commitment Fee. Commencing on the Closing Date, the Borrower shall pay
to the Agent, for the account of the Lenders, a non-refundable commitment fee on
the average daily unused portion of the Aggregate Commitment, at a rate per
annum determined by reference to the Total Debt Leverage Ratio as of the end of
the fiscal quarter immediately preceding the delivery of the applicable
Officer's Compliance Certificate in accordance with the following chart:
Total Debt Leverage Ratio Commitment Fee Percentage
------------------------- -------------------------
Greater than or equal to
3.50 to 1.0. 0.375%
Less than 3.50 to 1.0. 0.250%
The commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing March 31, 1998,
and on the Termination Date. Such commitment fee shall be distributed by the
Agent to the Lenders pro rata in accordance with the Lenders' respective
Commitment Percentages. Adjustments, if any, in the commitment fee shall be made
by the Agent on the fifth (5th) day (or, if not a Business Day, on the next
succeeding Business Day) following receipt by the Agent of financial statements
for the Borrower and its Subsidiaries pursuant to Sections 7.1(a) and 7.1(b) and
the accompanying Officer's Compliance Certificate (such date, the "Adjustment
Date"), setting forth the Total Debt Leverage Ratio as of the most recent fiscal
quarter end; provided that no adjustment shall be made to decrease the
commitment fee at any time that a Default or Event of Default has occurred and
is continuing. In the event the Borrower fails to deliver such financial
statements and the accompanying Officer's Compliance Certificate within the time
required by Sections 7.1 and 7.2 hereof, the commitment fee shall be the highest
commitment fee set forth above until the Adjustment Date following delivery of
such financial statements and the accompanying Officer's Compliance Certificate.
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(c) Upfront Fees. The Borrower shall pay to the Agent, for the account of
the Lenders, a non-refundable upfront fee as set forth in the separate fee
letter executed by the Agent and the Borrower dated February 3, 1998.
SECTION 4.4 Manner of Payment. Each payment by the Borrower on account of
the principal of or interest on the Loans or of any fee or other amounts
(including without limitation the Reimbursement Obligation) payable to the
Lenders under this Agreement or any Note shall be made not later than 2:00 p.m.
(Charlotte time) on the date specified for payment under this Agreement to the
Agent for the account of the Lenders pro rata in accordance with their
respective Commitment Percentages at the Agent's Office, in Dollars, in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever. Any payment received after such time but before 5:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 11.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 5:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Agent of each such payment,
the Agent shall promptly credit each Lender's account with its pro rata share of
such payment in accordance with such Lender's Commitment Percentage and shall
wire advice of the amount of such credit to each Lender. Each payment to the
Agent of Agent's fees or expenses or to the Issuing Lender of its fees and
expenses and each L/C Participant of any fees owing thereto shall be made in
like manner, but for the account of the Agent, Issuing Lender or L/C
Participant, as the case may be. If any payment under this Agreement or any Note
shall be specified to be made upon a day which is not a Business Day, it shall
be made on the next succeeding day which is a Business Day and such extension of
time shall in such case be included in computing any interest if payable along
with such payment; provided, that if such extension would cause payment of
interest on or principal of any LIBOR Rate Loan to be made in the next calendar
month, such payment shall be made on the next preceding Business Day.
SECTION 4.5 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by Agent. The obligations of the Lenders under this Agreement
to make the Loans and issue or participate in Letters of Credit are several and
are not joint or joint and several. Unless the Agent shall have received notice
from a Lender prior to a proposed borrowing date that such Lender will not make
available to the Agent such Lender's ratable portion of the amount to be
borrowed on such date (which notice shall not release such Lender of its
obligations hereunder), the Agent may assume that such Lender has made such
portion available to the Agent on the proposed borrowing date in accordance with
Section 2.2(b), and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount is
made available to the Agent on a date after such borrowing date, such Lender
shall pay to the Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Commitment Percentage of such borrowing, times
(b) the daily average Federal Funds Rate during such period as determined by the
Agent, times (c) a fraction the numerator of which is the number of days that
elapse from and including such borrowing date to the date on which such Lender's
Commitment Percentage of such borrowing shall have become immediately available
to the Agent and the denominator of which is 360. If such Lender's Commitment
Percentage of such borrowing is not made available to the Agent by such Lender
within three (3) Business Days of such borrowing date, the Agent shall be
entitled to recover such amount made available by the Agent
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with interest thereon at the rate per annum applicable to such Loan, on demand,
from the Borrower. The Agent shall use reasonable efforts to provide the
Borrower with notice of such Lender's failure to make its Commitment Percentage
available to the Agent prior to any such demand; provided, that the Agent shall
incur no liability whatsoever to the Borrower in the event it fails to do so.
The failure of any Lender to make its Commitment Percentage of any Loan
available shall not relieve it or any other Lender of its obligation, if any,
hereunder to make its Commitment Percentage of such Loan available on such
borrowing date, but no Lender shall be responsible for the failure of any other
Lender to make its Commitment Percentage of such Loan available on the borrowing
date.
SECTION 4.6 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If, with respect to
any Interest Period, the Agent or the Required Lenders (after consultation with
Agent) shall determine that, by reason of circumstances affecting the foreign
exchange and interbank markets generally, the deposits in eurodollars in the
applicable amounts are not being offered (through Telerate Page 3750 or
otherwise) to the Agent or the Required Lenders for such Interest Period, then
the Agent shall forthwith give notice thereof to the Borrower. Thereafter, until
the Agent notifies the Borrower that such circumstances no longer exist (which
notification shall be given promptly, but in any event within ten (10) days
after the Agent obtains actual knowledge that such circumstances no longer
exist), the obligation of the Lenders to make LIBOR Rate Loans, and the right of
the Borrower to convert any Loan to or continue any Loan as a LIBOR Rate Loan,
shall be suspended, and the Borrower shall repay in full (or cause to be repaid
in full) the then outstanding principal amount of each such LIBOR Rate Loan,
together with accrued interest thereon, on the last day of the then current
Interest Period applicable to such LIBOR Rate Loan or convert the then
outstanding principal amount of each such LIBOR Rate Loan to a Base Rate Loan as
of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any directive of any such Governmental Authority, central bank or
comparable agency, shall make it unlawful or impossible for any of the Lenders
(or any of their respective Lending Offices) to honor its obligations hereunder
to make or maintain any LIBOR Rate Loan, such Lender shall promptly give notice
thereof to the Agent and the Agent shall promptly give notice to the Borrower
and the other Lenders. Thereafter, until the Agent notifies the Borrower that
such circumstances no longer exist (which notification shall be given promptly,
but in any event within ten (10) days after the Agent obtains actual knowledge
that such circumstances no longer exist), (i) the obligations of the Lenders to
make LIBOR Rate Loans and the right of the Borrower to convert any Loan or
continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the
Borrower may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of
the then current Interest Period applicable thereto as a LIBOR Rate Loan, the
applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan
for the remainder of such Interest Period.
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(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any directive of such
Governmental Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect to any LIBOR Rate
Loan or Letter of Credit or shall change the basis of taxation of payments to
any of the Lenders (or any of their respective Lending Offices) of the principal
of or interest on any LIBOR Rate Loan or the amount of any Reimbursement
Obligation in respect of any Letter of Credit (except for changes in the rate of
tax on the overall net income of any of the Lenders or any of their respective
Lending Offices); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System other than any change in the Reserve Requirements)
special deposit, insurance or similar requirement against assets of, deposits
with or for the account of, or credit extended by any of the Lenders (or any of
their respective Lending Offices) with respect to LIBOR Rate Loans or Letters of
Credit or shall impose on any of the Lenders (or any of their respective Lending
Offices) or the foreign exchange and interbank markets any other condition
affecting any LIBOR Rate Loan or Letter of Credit;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in any
Letter of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement, an Application or Letter
of Credit or under the Notes in respect of a LIBOR Rate Loan, then such Lender
shall promptly notify the Agent, and the Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The Agent will promptly notify the Borrower of any
event of which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 4.6(c); provided, that the Agent shall incur no
liability whatsoever to the Lenders or the Borrower in the event it fails to do
so. The Agent shall supply the Borrower with a certificate setting forth the
basis for determining such additional amount or amounts necessary to compensate
such Lender or Lenders.
(d) In the event that any Lender shall determine at any time that by
reason of Regulation D of the Board of Governors of the Federal Reserve System
(or any successor regulation), such Lender is required to maintain Reserve
Requirements during any period that it has any LIBOR Rate Loans outstanding,
then such Lender shall promptly notify the Borrower by written notice (or
telephonic notice promptly confirmed in writing) specifying the additional
amounts reasonably determined by the Lender to be required to indemnify such
Lender against the cost of maintaining such Reserve Requirements (such written
notice to provide a computation of such additional amounts) and the Borrower
shall directly pay to such Lender such specified amounts as additional interest
hereunder.
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SECTION 4.7 Indemnity. The Borrower hereby indemnifies each of the Lenders
against any loss or expense actually incurred by such Lender in connection with
such Lender's obtaining, liquidating or employing deposits or other funds
acquired to effect, fund or maintain the Loans (a) as a consequence of any
failure by the Borrower to make any payment when due of any amount due hereunder
in connection with a LIBOR Rate Loan, (b) due to any failure of the Borrower to
borrow on a date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. Each Lender's calculations of any such loss or expense shall be
furnished to the Borrower.
SECTION 4.8 Capital Requirements. If, after the date of this Agreement,
either (a) the introduction of, or any change in, or in the interpretation of,
any Applicable Law or (b) compliance with any guideline or request from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has the effect of reducing the rate of return on
the capital of, or has affected the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to its Commitment and other commitments of this type, below
the rate which the Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within fifteen (15) days after
written demand by any such Lender, the Borrower shall pay to such Lender from
time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts shall be submitted to the Borrower and the Agent by such Lender.
SECTION 4.9 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrower
hereunder or under the Notes shall be made free and clear of and without
deduction for any and all present or future taxes, levies, imposts, deductions,
charges or withholding, and all liabilities with respect thereto excluding, in
the case of each Lender and the Agent, income and franchise taxes (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrower shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note to any Lender or the Agent, (A) the sum payable
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 4.9) such Lender or Agent (as the case may be) receives an amount
equal to the amount such party would have received had no such deductions been
made, (B) the Borrower shall make such deductions, (C) the Borrower shall pay
the full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrower shall deliver to the Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 4.9(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any present
or future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes (other than income,
franchise, excise and property taxes to which the Agent or any Lender would have
been subject in the absence of this Agreement and the provision for security in
connection with the execution of this Agreement), levies of the United States or
any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment
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made hereunder or from the execution, delivery or registration of, or otherwise
with respect to, this Agreement, the Loans, the other Loan Documents, or the
perfection of any rights or security interest in respect thereto (hereinafter
referred to as "Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the Agent for
the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.9) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto; provided, that this indemnification shall not apply to any
Taxes, Other Taxes or related liability arising as the result of the gross
negligence or willful misconduct of any Lender. Such indemnification shall be
made within thirty (30) days from the date such Lender or the Agent (as the case
may be) makes written demand therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrower shall furnish to the Agent, at its
address referred to in Section 13.1, the original or a certified copy of a
receipt evidencing payment thereof or other evidence of payment reasonably
satisfactory to the Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Agent, on the Closing Date or concurrently with
the delivery of the relevant Assignment and Acceptance, as applicable, (i) two
United States Internal Revenue Service Forms 4224 or Forms 1001, as applicable
(or successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for or
on account of any United States federal income taxes, (ii) an Internal Revenue
Service Form W-8 or W-9 or successor applicable form, as the case may be, to
establish an exemption from United States backup withholding taxes and (iii) any
similar form required by state law. Each such Lender further agrees to deliver
to the Borrower, with a copy to the Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrower, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Agent that it is not entitled to receive payments without
deduction or withholding of United States federal income taxes) and, in the case
of a Form W-8 or W-9, establishing an exemption from United States backup
withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement of
\the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 4.9 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 4.10 Change in Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Sections 4.6, 4.7, 4.8,
or 4.9 with respect to
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such Lender, it will use its best efforts to designate another lending office as
its Lending Office for any Loans affected by such event with the intent of
avoiding the consequence of the event giving rise to the operation of any such
Section; provided, that such designation is made on such terms that such Lender
and its Lending Office suffer no material economic, legal or regulatory
disadvantage as a consequence thereof.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING, BORROWING AND ACQUISITIONS
SECTION 5.1 Closing. The closing shall take place at the offices of
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇, L.L.P., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ at 10:00 a.m. on March 16, 1998 or on such other
date and at such other place as the parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
and issue or participate in the initial Letter of Credit is subject to the
satisfaction of each of the following conditions:
(a) Executed Loan Documents. The following Loan Documents, in form and
substance reasonably satisfactory to the Agent and each Lender:
(i) this Agreement;
(ii) the Notes;
(iii) the Subsidiary Guaranty Agreement; and
(iv) the Intercompany Subordination Agreement.
shall have been duly authorized, executed and delivered by the applicable Credit
Parties, shall be in full force and effect and no Default or Event of Default
shall exist thereunder, and such Credit Parties shall have delivered original
counterparts thereof to the Agent.
(b) Collateral; Cancellation of Notes. The Agent will execute and deliver
on or prior to the Closing Date the Release Agreement, of even date herewith, by
and between the Agent and the Borrower pursuant to which the Agent agrees, among
other things, to execute and deliver all original stock certificates and stock
powers, Uniform Commercial Code financing statement terminations, cancellations
and satisfactions and other documents necessary or appropriate to terminate all
Liens securing the Existing Credit Agreement and all Security Documents executed
pursuant thereto. The Lenders agree that, within ten (10) Business Days after
receipt by the Lenders of the Notes executed in connection with this Agreement,
the Lenders shall deliver to the Borrower all promissory notes executed in
connection with the Existing Credit Facility, each marked satisfied.
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(c) ECCO Acquisition. The Agent and the Required Lenders shall have
completed their due diligence review in connection with the ECCO Acquisition and
the ECCO Acquisition shall be approved by the Agent and the Required Lenders, in
their sole discretion.
(d) Closing Certificates and Opinions; etc.
(i) Certificate of the Borrower. The Agent shall have received a
certificate from the chief executive or chief financial officer (or other
officer acceptable to the Agent) of the Borrower, in form and substance
satisfactory to the Agent, certifying that all representations and warranties of
the Borrower contained in this Agreement and the other Loan Documents are true
and correct in all material respects; that no Credit Party is in violation of
any of the covenants contained in this Agreement and the other Loan Documents;
that, after giving effect to the transactions contemplated by this Agreement, no
Default or Event of Default has occurred and is continuing; and that the Credit
Parties have satisfied each of the closing conditions.
(ii) Closing Certificate of each Credit Party. The Agent shall
have received a certificate of the secretary or assistant secretary of each
Credit Party certifying, as applicable, that (A) (1) the articles of
incorporation and bylaws of such Credit Party (or applicable documentation in
the case of any Credit Party organized as a partnership or a limited liability
company) delivered to the Agent on September 29, 1995 (or, with respect to any
Credit Party who joined the Existing Credit Agreement after September 29, 1995,
the date of the applicable Joinder Agreement executed by such Credit Party) have
not been repealed, revoked, rescinded or amended in any respect or (2) that, if
such documents have not previously been provided to the Agent, such documents
are attached thereto and have not been repealed, revoked, rescinded or amended
in any respect; (B) that attached thereto is a true and complete copy of
resolutions duly adopted by the Board of Directors of such Credit Party or the
general partner or member of such Credit Party, as applicable, authorizing the
transactions contemplated herein, and the execution, delivery and performance of
this Agreement and the Loan Documents to which it is a party; and (C) as to the
incumbency and genuineness of the signature of each officer of such Credit Party
or the general partner or member of such Credit Party, as applicable executing
any Loan Documents to which such Credit Party is a party.
(iii) Certificates of Good Standing. The Agent shall have received
long-form certificates as of a recent date of the good standing of each Credit
Party under the laws of its respective jurisdictions of organization and foreign
qualification and, if available, a certificate of the relevant taxing
authorities of such jurisdictions certifying that each Credit Party has filed
required franchise tax returns and owes no delinquent franchise taxes.
(iv) Opinions of Counsel. The Agent shall have received favorable
opinions of counsel to the Borrower and certain Subsidiary Guarantors addressed
to the Agent and Lenders with respect to the Borrower, certain Subsidiary
Guarantors, the Loan Documents and such other matters as the Lenders shall
reasonably request, substantially in the form of Exhibit H hereto.
(v) Tax Forms. The Agent and the Borrower shall have received
originals of the forms required by Section 4.9(e) hereof.
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(e) Consents; No Adverse Change.
(i) Governmental and Third Party Approvals. All necessary
approvals, authorizations and consents of any Person and of all Governmental
Authorities and courts having jurisdiction with respect to the transactions
contemplated by this Agreement and the Loan Documents shall have been obtained
and remain in full force and effect.
(ii) Permits and Licenses. All permits and licenses, including
permits and licenses required under Applicable Laws, necessary to the conduct of
business by the Credit Parties shall have been obtained and remain in full force
and effect.
(iii) No Injunction, Etc. To the knowledge of the Borrower, no
action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any Governmental Authority to enjoin,
restrain, or prohibit, or to obtain substantial damages in respect of, or which
is related to or arises out of this Agreement or the other Loan Documents or the
consummation of the transactions contemplated hereby or thereby.
(iv) No Material Adverse Change. Since June 30, 1997, there shall
not have occurred any event, condition or state of facts that is reasonably
likely to have a Material Adverse Effect.
(v) No Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(f) Financial Matters.
(i) Financial Statements. The Agent and each Lender shall have
received recent annual and interim Consolidated financial statements and other
financial information with respect to the Borrower prepared in accordance with
GAAP. Without limitation of the foregoing, the Agent and each Lender shall have
received audited financial statements for the Fiscal Year ended June 30, 1997
and unaudited financial statements for the six month period ending December 31,
1997.
(ii) Financial Condition Certificate. The chief executive officer,
chief financial officer or vice president of financial services of the Borrower
shall have delivered to the Agent a certificate on behalf of the Borrower
stating that: (A) the payables of the Borrower and each of its Subsidiaries are
generally current and are being paid in accordance with customary trade
practices (subject to normal disputes) and the Borrower and its Subsidiaries,
taken as a whole, are Solvent and (B) attached thereto is a pro forma balance
sheet of the Borrower and its Subsidiaries as of a date that is not more than 45
days prior to the Closing Date setting forth on a pro forma basis the financial
condition of the Borrower and its Subsidiaries on a Consolidated basis as of
that date and reflecting on a pro forma basis the effect of the transactions
contemplated herein (as if the Closing Date were the date of the pro forma
calculation), including all material fees and expenses in connection herewith,
with a statement from such chief financial officer on behalf of the Borrower and
each of its Subsidiaries that the projections and assumptions expressed therein
were reasonably based on the information available to the Borrower and its
Subsidiaries at the time so furnished.
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(iii) Projections. The Agent shall have received projected
financial statements of the Borrower and its Subsidiaries for the Fiscal Years
1998 through 2003, substantially in the form of Exhibit J hereto, such
projections to be accompanied by a certificate of the chief financial officer,
senior vice president of finance or vice president of finance of the Borrower to
the effect that such projections, in the reasonable judgment of the Borrower,
are based on estimates and assumptions, all of which are reasonable in light of
the conditions which existed at the time such projections were made, have been
prepared on the basis of the assumptions stated therein, and reflect, as of the
time so furnished and the Closing Date, the reasonable estimate of the Borrower
of the results of the operations and other information projected therein.
(iv) Payment at Closing. There shall have been paid by the
Borrower to the Agent and the lenders the fees set forth or referenced in
Section 4.3 and any other accrued and unpaid fees or expenses due hereunder
(including, without limitation, reasonable legal fees and expenses), and to any
other Person such amount as may be due thereto in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents.
(v) Credit Rating. The Agent shall have received evidence that
the Borrower has a credit rating of BB - or higher from Standard & Poor's
Services, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, or Ba3 or higher from ▇▇▇▇▇'▇
Investors Service, Inc.
(vi) Payoff of Debt under Existing Credit Agreement. All Debt
outstanding under the Existing Credit Agreement shall have been repaid.
(g) Notice of Borrowing and Account Designation. The Agent shall have
received written instructions from the Borrower to the Agent directing the
payment of any proceeds of Loans made under this Agreement that are to be paid
on the Closing Date. The Borrower shall also have delivered to the Agent a
notice specifying the account or accounts in the form of Exhibit L hereto (a
"Notice of Account Designation") to which the proceeds of any Loans made on or
after the Closing Date are to be disbursed.
(h) Miscellaneous.
(i) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement shall be reasonably satisfactory in form and
substance to the Lenders. The Lenders shall have received copies of all other
instruments and other evidence as the Lenders may reasonably request, in form
and substance reasonably satisfactory to the Lenders, with respect to the
transactions contemplated by this Agreement and the taking of all actions in
connection therewith.
(ii) Due Diligence and Other Documents. The Borrower shall have
delivered to the Agent such other documents, certificates and opinions as the
Agent reasonably requests.
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SECTION 5.3 Conditions to All Permitted Acquisitions. Each Permitted
Acquisition shall be subject to the satisfaction on the applicable acquisition
date of the following conditions precedent:
(a) Compliance with Section 10.4(f). The Borrower shall have complied with
the provisions of Section 10.4(f) in form and substance reasonably satisfactory
to the Required Lenders.
(b) Subordinated Seller Financing and Earn-Out Obligations. All
Subordinated Seller Financing and Earn-Out Obligations in connection with such
Permitted Acquisition shall comply with the terms and conditions of Exhibit K.
(c) Representations and Warranties. Each of the representations and
warranties set forth in Article VI shall be true and correct with respect to the
acquired Person as if made on such date.
SECTION 5.4 Conditions to Major Permitted Acquisitions. Each Permitted
Acquisition (a) of a Domestic Subsidiary or assets located within the United
States or Canada with a fair market value of all consideration paid in
connection with such Permitted Acquisition exceeding $20,000,000 or (b) of a
Foreign Subsidiary or assets located outside of the United States or Canada with
a fair market value of all consideration paid in connection with such Permitted
Acquisition exceeding $5,000,000, shall be, in each case, subject to the
satisfaction, on or before ten (10) Business Days prior to the applicable
acquisition date, of the following conditions precedent:
(i) Description. The Agent shall have received a description of the Person
to be acquired and a description of the acquisition.
(ii) Financial Statements. The Agent shall have received financial
statements and other financial information for each Person being acquired in
such Permitted Acquisition for the most recent two (2) year period (or such
shorter period for which such Person has been in existence).
(iii) Projected Income Statements. The Agent shall have received projected
statements of income for the acquired Person for the two (2) years immediately
following the acquisition.
(iv) Pro-Forma Compliance. The Borrower shall have demonstrated pro forma
compliance with each covenant contained in Article IX and Article X hereof for
the four (4) fiscal quarters ending immediately after the acquisition.
SECTION 5.5 Conditions to All Extensions of Credit. The obligations of the
Lenders to make any Loan and issue or participate in any Letter of Credit is
subject to the satisfaction of the following conditions precedent on the
relevant borrowing or issue date:
(a) Continuation of Representations and Warranties. The representations
and warranties made by the Borrower contained in Article VI shall be true and
correct in all material respects on and as of such borrowing or issue date with
the same effect as if made on and as of such date, except for any deviations
from such representations and warranties expressly permitted by this Agreement
and except for any waivers of such representations and warranties granted by the
Required Lenders in writing.
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(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder on the borrowing or issue date with respect
to such Loan or Letter of Credit or after giving effect to the Loans to be made
or Letters of Credit issued on such date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
SECTION 6.1 Representations and Warranties. To induce the Agent and each
Lender to enter into this Agreement and to make any Loan and issue or
participate in any Letter of Credit, the Borrower represents and warrants to the
Agent and the Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its respective properties and to carry on its respective
businesses as now being conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its respective
properties or the nature of its respective businesses requires such
qualification and authorization, except where the failure to be so qualified and
authorized could not reasonably be expected to have a Material Adverse Effect.
The jurisdictions in which the Borrower and its Subsidiaries are organized and
qualified to do business as of the Closing Date are described on Schedule
6.1(a).
(b) Subsidiaries and Ownership. Each Subsidiary of the Borrower as of the
Closing Date is listed on Schedule 6.1(b). All outstanding shares of such
Subsidiaries have been duly authorized and validly issued and are fully paid and
nonassessable. The shareholders of all Subsidiaries of the Borrower as of the
Closing Date and the number of shares owned by each are described on Schedule
6.1(b). There are no outstanding stock purchase warrants, subscriptions,
options, securities, instruments or other rights of any type or nature
whatsoever, which are convertible into, exchangeable for or otherwise provide
for or permit the issuance of capital stock of the Borrower or its Subsidiaries
as of the Closing Date, except as described on Schedule 6.1(b).
(c) Authorization of Agreement, Notes, Loan Documents and Borrowing. Each
of the Borrower and its Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement, the Notes and each of the other Loan
Documents to which it is a party in accordance with their respective terms. As
of the Closing Date and the dates described in Article V hereof, this Agreement,
the Notes and each of the other Loan Documents to which each of the Borrower and
its Subsidiaries is a party have been duly executed and delivered by the duly
authorized officers of the Borrower and each of its Subsidiaries party thereto
and, on and after such date, each such document constitutes the legal, valid and
binding obligation of the Borrower and each of its Subsidiaries party thereto,
enforceable in accordance with its terms except as such enforcement may be
limited by applicable bankruptcy, insolvency, reorganization or other similar
laws relating to or limiting creditors' rights generally or by general equity
principles.
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(d) Compliance of Agreement, Notes, Loan Documents and Borrowing with
Laws, Etc. The execution, delivery and performance by the Borrower and its
Subsidiaries of the Loan Documents to which each such Person is a party, the
borrowings hereunder and the transactions contemplated hereby and thereby do not
and will not, by the passage of time, the giving of notice or otherwise, (i)
require any Governmental Approval or violate any Applicable Law relating to the
Borrower or any of its Subsidiaries except those approvals which have been
obtained, (ii) conflict with, result in a breach of or constitute a default
under (A) the articles of incorporation, bylaws or other organizational
documents of the Borrower or any of its Subsidiaries or any Material Contract to
which the Borrower or any of its Subsidiaries is a party or by which any of
their respective properties may be bound or (B) any Governmental Approval
relating to the Borrower or any of its Subsidiaries or (iii) result in or
require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by the Borrower or any of its
Subsidiaries other than Liens arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower and
its Subsidiaries (i) have all material Governmental Approvals required by any
Applicable Law for them to conduct their respective businesses, each of which is
in full force and effect, is final and not subject to review on appeal and is
not the subject of any pending or, to the knowledge of the Borrower or any of
its Subsidiaries, threatened proceeding, (ii) are in compliance with each
Governmental Approval applicable to them and in compliance with all other
Applicable Laws relating to them or any of their respective properties, except
in each case where the failure to so comply could not reasonably be expected to
have a Material Adverse Effect and (iii) are eligible to participate as
suppliers under Medicare Regulations and Medicaid Regulations, except where the
failure to be eligible could not reasonably be expected to have a Material
Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its Subsidiaries
have duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and have paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon them and their respective
property, income, profits and assets which are due and payable, except (i) any
such taxes for the current year not yet due and payable, (ii) any such taxes,
assessments, governmental charges or levies which are being contested in good
faith by appropriate proceedings so long as adequate reserves are maintained
with respect thereto in accordance with GAAP and (iii) any such tax returns, the
failure to file, or any such taxes, assessments, governmental charges or levies,
the failure to pay, could not reasonably be expected to have a Material Adverse
Effect. No Governmental Authority has filed any Lien or asserted any claim
against any the Borrower or its Subsidiaries with respect to material unpaid
taxes which has not been discharged or resolved or is not being contested in
good faith. The charges, accruals and reserves on the books of the Borrower and
its Subsidiaries in respect of federal, state, local and other taxes for all
Fiscal Years and portions thereof since the organization of the Borrower and its
Subsidiaries are in the judgment of the Borrower adequate, and the Borrower does
not anticipate any additional material taxes or assessments for any of such
years.
(g) Environmental Matters. Except for the matters existing on the Closing
Date and set forth on Schedule 6.1(g), to the knowledge of the Borrower, (i) the
properties owned in fee or leased by the Borrower and its Subsidiaries are in
compliance with all applicable Environmental Laws, except where the failure to
so comply could not reasonably be expected to have a Material Adverse
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Effect, (ii) there is no contamination at, under or about such properties or
such operations which could reasonably be expected to have a Material Adverse
Effect and (iii) except for matters that have previously been remedied, neither
the Borrower nor any of its Subsidiaries has received any written notice of
material violation, alleged violation, non-compliance, liability or potential
liability regarding environmental matters or compliance with Environmental Laws
with regard to any of such properties or the operations conducted in connection
therewith, nor does the Borrower or its Subsidiaries have knowledge that any
such notice will be received or is being threatened.
(h) ERISA.
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 6.1(h).
(ii) The Borrower and each ERISA Affiliate is in compliance with
all applicable provisions of ERISA and the regulations and published
interpretations thereunder with respect to all Employee Benefit Plans except
where failure to so comply is not reasonably likely to have a Material Adverse
Effect and except for any required amendments for which the remedial amendment
period as defined in Section 401(b) of the Code has not yet expired. Each
Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified
or an application for determination has been filed within the applicable
remedial amendment period, and each trust related to such plan has been
determined to be exempt under Section 501(a) of the Code or an application for
determination has been filed within the applicable remedial amendment period. No
material liability has been incurred by the Borrower or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan.
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan.
(iv) Neither the Borrower nor any ERISA Affiliate has: (A) engaged
in a nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any liability to the PBGC which remains
outstanding other than the payment of premiums and there are no premium payments
which are due and unpaid or (C) failed to make a required contribution or
payment to a Multiemployer Plan.
(v) No Termination Event has occurred or is reasonably expected
to occur which in either case is reasonably likely to have a Material Adverse
Effect.
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(vi) No material proceeding, claim (excluding routine
participant claims for benefits), lawsuit and/or investigation is existing or,
to the knowledge of the Borrower, threatened concerning or involving any (A)
employee welfare benefit plan (as defined in Section 3(1) of ERISA) currently
maintained or contributed to by the Borrower or any ERISA Affiliate, (B) Pension
Plan or (C) Multiemployer Plan.
(i) Margin Stock. Neither the Borrower nor any of its Subsidiaries is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation G, T, U or X of such Board of Governors.
(j) Government Regulation. Neither the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company" (as each such term is defined or used in the Investment
Company Act of 1940, as amended) and neither the Borrower nor any of its
Subsidiaries is, or will be, subject to regulation under the Public Utility
Holding Company Act of 1935, each as amended, or any other Applicable Law which
materially limits its ability to incur or consummate the transactions
contemplated hereby.
(k) Intellectual Property. As of the Closing Date, Schedule 6.1(k)
hereto sets forth a complete and accurate list of all patents, patent rights or
licenses, patent applications, trademarks, trademark rights, trade names, trade
name rights and copyrights (collectively, "Intellectual Property") owned,
licensed or otherwise lawfully used by the Borrower or any of its Subsidiaries,
the loss of which or failure to maintain could reasonably be expected to have a
Material Adverse Effect. Except as set forth on Schedule 6.1(k) and other
matters that could not reasonably be expected to have a Material Adverse Effect,
the Borrower and its Subsidiaries own, license or otherwise possess the lawful
right to use the Intellectual Property and all other similar intangible assets
which are necessary or required to conduct their respective businesses as now
and presently planned to be conducted without conflict with the rights of
others. No event has occurred which permits, or after notice or lapse of time or
both would permit, the revocation or termination of any such rights to the
Intellectual Property or other material intangible assets, the result of which
could reasonably be expected to have a Material Adverse Effect.
(l) Material Contracts. Schedule 6.1(l) sets forth a complete and
accurate list of all Material Contracts of the Borrower and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto. Except as
set forth on Schedule 6.1(l), on the Closing Date each such Material Contract
is, and after giving effect to the consummation of the transactions contemplated
by the Loan Documents will be, in full force and effect in accordance with the
terms thereof and there are no material defaults by the Borrower or any of its
Subsidiaries or, to their knowledge, by any other party under any such Material
Contract.
(m) Employee Matters. Each of the Borrower and its Subsidiaries are in
compliance in all material respects with all Applicable Laws with respect to
their employees including, without limitation, fair labor standards laws, wage
and hour laws, workers compensation laws, federal and
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state withholding, social security and payroll laws and similar laws except for
any Applicable Laws the failure to comply with which could not reasonably be
expected to have a Material Adverse Effect. Each of the Borrower and its
Subsidiaries have paid all material federal, state and local withholding, social
security, payroll and other employment related taxes which are due and payable.
(n) Trade Relations. Other than matters that could not reasonably be
expected to have a Material Adverse Effect, to the knowledge of each of the
Borrower and its Subsidiaries, there exists no actual or threatened termination,
cancellation or limitation of, or any adverse modification or change in, the
business relationship of the Borrower and its Subsidiaries taken as a whole with
any customer or any group of customers whose purchases individually or in the
aggregate are material to the business of the Borrower and its Subsidiaries
taken as a whole.
(o) Financial Statements. All balance sheets, statements of income,
retained earnings, stockholders' equity and cash flows, and all other financial
information (which information is subject to GAAP) of the Borrower and its
Subsidiaries which have been furnished by the Borrower to the Agent and the
Lenders for the purposes of or in connection with this Agreement, including
without limitation the financial statements described in Section 5.2(f), have
been prepared in accordance with GAAP consistently applied (except to the extent
pro forma statements are based upon reasonable estimates in accordance with
Section 5.2(f)(ii) and except for projections which are prepared on the basis of
reasonable assumptions in accordance with Section 5.2(f)(iii)) throughout the
periods involved and present fairly in all material respects the matters
reflected therein subject, in the case of unaudited statements, to changes
resulting from normal year-end audit adjustments and items that would be
disclosed in footnotes to the audited statements. As of the Closing Date, except
as set forth on Schedule 6.1(o), neither the Borrower nor any of its
Subsidiaries have any contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitments which are not reflected in
the financial statements described above or in the notes thereto and could
reasonably be expected to have a Material Adverse Effect.
(p) No Material Adverse Change. Except for matters existing on the
Closing Date and set forth on Schedule 6.1(p), since June 30, 1997, no event
which has had or could reasonably be expected to have a Material Adverse Effect
has occurred.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder and to the Permitted Acquisitions, the
Borrower and its Subsidiaries, taken as a whole, will be Solvent.
(r) Titles to Properties. Except for matters that could not reasonably
be expected to have a Material Adverse Effect, each of the Borrower and its
Subsidiaries have good and marketable title to, or valid and subsisting
leasehold interests in, the real property owned or leased, as the case may be,
by them and valid and legal title to all of their personal property, including,
but not limited to, the real and personal property reflected on the financial
statements referred to in Section 6.1(o), except property which has been
disposed of by the Borrower or its Subsidiaries subsequent to such date which
dispositions have been in the ordinary course of business or as otherwise
expressly permitted hereunder.
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(s) Liens. Except for matters existing on the Closing Date and set
forth on Schedule 6.1(s), none of the properties and assets owned by the
Borrower or its Subsidiaries is subject to any Lien other than the Liens
described in Section 10.3 hereof. Except as set forth on Schedule 6.1(s), no
financing statement under the Uniform Commercial Code of any state which names
the Borrower or any of its Subsidiaries as debtor and which has not been
terminated, has been filed in any state or other jurisdiction and neither the
Borrower nor any of its Subsidiaries has signed any such financing statement or
any security agreement authorizing any secured party thereunder to file any such
financing statement, except to perfect the Liens permitted by Section 10.3.
(t) Debt and Guarantees. Schedule 6.1(t) sets forth a complete and
accurate listing as of the Closing Date of all Debt and Guarantees of the
Borrower and its Subsidiaries in excess of $500,000. The Borrower and its
Subsidiaries have performed and are in compliance in all material respects with
all of the material terms of such Debt and Guarantees, and no material default
or event of default (beyond the period of grace, if any, provided in the
instrument or agreement under which such Debt or Guarantee was created) on the
part of the Borrower or its Subsidiaries exists with respect to any such Debt or
Guarantee.
(u) Litigation. To the knowledge of the Borrower, except for the
matters existing on the Closing Date and set forth on Schedule 6.1(u), there are
no material actions, suits or proceedings pending or threatened against or in
any other way relating adversely to or affecting the Borrower or any of its
Subsidiaries or any of their respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default. Other than matters that could not
reasonably be expected to have a Material Adverse Effect, no event has occurred
which constitutes a default or event of default by the Borrowers or any
Subsidiary thereof under any judgment, decree or order to which the Borrower or
its Subsidiaries is a party or by which the Borrower or its Subsidiaries or any
of their respective properties may be bound or which would require the Borrower
or its Subsidiaries to make any payment thereunder prior to the scheduled
maturity date therefor.
(w) Accuracy and Completeness of Information. No document furnished or
written statement made to the Agent or the Lenders by the Borrower or any of its
Subsidiaries in connection with the negotiation, preparation or execution of
this Agreement or any of the Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Borrower or its
Subsidiaries or omits or will omit to state a material fact necessary in order
to make the statements contained therein not misleading. The Borrower is not
aware of any facts which it has not disclosed in writing to the Agents which
could reasonably be expected to have a Material Adverse Effect.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
representations and warranties made under this Agreement shall survive the
Closing Date and be made or deemed to be made at and as of each borrowing date
and shall not be waived by the execution and delivery of this Agreement, any
investigation made by or on behalf of the Lenders or any borrowing hereunder.
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ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been finally paid and satisfied in full,
unless consent has been obtained in the manner set forth in Section 13.10
hereof, the Borrower will furnish or cause to be furnished to the Agent and each
of the Lenders at their respective addresses set forth in Section 13.1:
SECTION 7.1 Financial Statements.
(a) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of each fiscal quarter of the
Borrower, other than the fourth fiscal quarter thereof, an unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such fiscal quarter and unaudited Consolidated statements of income, retained
earnings and cash flows and consolidating statements of income for the fiscal
quarter then ended and that portion of the Fiscal Year then ended, all in
reasonable detail setting forth in comparative form the corresponding budgeted
figures for the portion of the Fiscal Year then ended and the corresponding
figures for the preceding Fiscal Year for the portion of the Fiscal Year then
ended and prepared by the Borrower in accordance with GAAP, subject to year end
adjustments and, if applicable, containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by the
chief financial officer, senior vice president of finance or vice president of
finance of the Borrower to present fairly in all material respects the financial
condition of the Borrower and its Subsidiaries as of their respective dates and
the results of operations of the Borrower and its Subsidiaries for the
respective periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows and unaudited consolidating statements of income for the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
setting forth in comparative form corresponding budgeted figures for the portion
of the Fiscal Year then ended and the corresponding figures for the preceding
Fiscal Year and (i) in the case of the consolidating statements prepared by the
Borrower in accordance with GAAP, containing disclosure of the effect on the
financial position or results of operations of any change in the application of
accounting principles and practices during the period, and certified by the
chief financial officer of the Borrower to present fairly in all material
respects the financial condition of the Borrower and its Subsidiaries as of
their respective dates and the results of operations of the Borrower and its
Subsidiaries for the respective periods then ended and (ii) in the case of the
Consolidated statements, prepared by ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or such other Big Six
independent certified public accounting firm selected by the Borrower in
accordance with GAAP and, if applicable, containing disclosure of the effect on
the financial position or results of operation of any change in the application
of accounting principles and practices during the year, and accompanied by a
report thereon by such certified public accountants that is not qualified with
respect to scope limitations
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imposed by the Borrower or any of its Subsidiaries or with respect to accounting
principles followed by the Borrower or any of its Subsidiaries not in accordance
with GAAP.
(c) Annual Financial Projections. As soon as practicable and in any
event within ninety (90) days after the beginning of each Fiscal Year, a
business plan of the Borrower and its Subsidiaries for the ensuing Fiscal Year,
such plan to include, the following: a quarterly operating and capital budget, a
projected quarterly income statement, statement of cash flows and balance sheet
and a report containing management's discussion and analysis of such
projections, accompanied by a certificate from the chief executive officer or
chief financial officer of the Borrower to the effect that such projections are
based on reasonable estimates and assumptions, all of which are reasonable in
light of current conditions, have been prepared on the basis of the assumptions
stated therein, and reflect, as of the time so furnished, the reasonable
estimate of the Borrower and its Subsidiaries of the projected results of
operations and other information projected therein.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Section 7.1, a certificate of the chief
executive officer, chief financial officer, senior vice president of finance or
vice president of finance of the Borrower, in the form of Exhibit E attached
hereto (an "Officer's Compliance Certificate"):
(a) stating that such officer has reviewed the financial statements of
the Borrower and its Subsidiaries as of the end of such fiscal quarter and such
statements fairly present in all material respects the financial condition of
the Borrower and its Subsidiaries as of the dates indicated and the results of
their operations and cash flows for the periods indicated; and
(b) stating that to such officer's knowledge, no Default or Event of
Default exists, or, if such is not the case, specifying such Default or Event of
Default and its nature, when it occurred, whether it is continuing and the steps
being taken by the Credit Parties with respect to such Default or Event of
Default; and
(c) setting forth as at the end of such fiscal quarter the calculations
required to establish (i) whether or not the Borrower and its Subsidiaries were
in compliance with the financial covenants set forth in Article IX hereof (ii)
whether or not the Borrower and its Subsidiaries were in compliance with the
investment and acquisition covenant set forth in Section 10.4 hereof (calculated
pursuant to the calculation worksheet attached as Schedule 1 to Exhibit E) and
(iii) the calculation of the Applicable Margin pursuant to Section 4.1(c) as at
the end of such period.
(d) attaching a Consolidated aging of the accounts receivable of the
Borrower and its Subsidiaries as of the end of such fiscal quarter, including a
detailed report by payor for Medicare, private pay and Medicaid (for system
integrated accounts receivable only; provided, that payor detail shall cover not
less than 70% of total accounts receivable).
SECTION 7.3 Accountants' Certificate. At each time financial statements
are delivered pursuant to Section 7.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the Agent
for the benefit of the Lenders stating that in making the examination necessary
for the certification of such financial statements, they obtained no knowledge
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of any Default or Event of Default arising as the result of the Borrower's
failure to comply with the provisions of Article IX or X hereof or, if such is
not the case, specifying such Default or Event of Default and its nature and
period of existence.
SECTION 7.4 Other Reports.
(a) Promptly after filed, all reports and forms filed with respect to
all Plans under ERISA except (i) as filed in the ordinary course of business or
(ii) that would not result in any Material Adverse Effect or action under ERISA;
(b) Promptly upon receipt thereof, copies of all reports, if any,
submitted to each Credit Party or its Board of Directors by its independent
public accountants in connection with their auditing function, including,
without limitation, any management report and any management responses thereto;
(c) If reasonably requested by the Agent, statements in conformity with
the requirements of Federal Reserve Form G-1 or U-1 referred to in Regulations G
and U, respectively, of the Board of Governors of the Federal Reserve System;
(d) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by the Borrower
or any of its Subsidiaries with the Securities and Exchange Commission ("SEC")
and required by the SEC to be delivered to the shareholders of the Borrower or
any of its Subsidiaries, and (ii) each report made by the Borrower or any of its
Subsidiaries to the SEC on Form 8-K and each final registration statement of the
Borrower or any of its Subsidiaries filed with the SEC;
(e) Within forty-five (45) days after the end of each fiscal quarter of
the Borrower, the description required pursuant to Section 5.4(i) hereof for
each Permitted Acquisition for which such description was not required to be
delivered pursuant to Section 5.4(i) and in which the fair market value of all
consideration paid in connection with such acquisition is greater than
$2,000,000; and
(f) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the Agent
may reasonably request.
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of the Borrower obtains actual
knowledge thereof) telephonic and written notice of:
(a) to the extent it could reasonably be expected to have a Material
Adverse Effect, the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses including
any notice received from the Internal Revenue Service or other taxing authority
regarding employment related taxes;
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(b) to the extent it could reasonably be expected to have a Material
Adverse Effect, any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws;
(c) to the extent it could reasonably be expected to have a Material
Adverse Effect, any labor controversy that has resulted in, or threatens to
result in, a strike or other work action against the Borrower or any Subsidiary
thereof;
(d) any Default or Event of Default, or any event which could
reasonably be expected to have a Material Adverse Effect; and
(e) to the extent it could reasonably be expected to have a Material
Adverse Effect (i) the establishment of any new Employee Benefit Plan, the
commencement of contributions to any plan to which the Borrower or any ERISA
Affiliate was not previously contributing or any increase in the benefits of any
existing Employee Benefit Plan, (ii) each funding waiver request filed with
respect to any Employee Benefit Plan and all communications received or sent by
the Borrower or any ERISA Affiliate with respect to such request, (iii) the
failure of the Borrower or any ERISA Affiliate to make a required installment or
payment under Section 302 of ERISA or Section 412 of the Code by the due date,
(iv) any Termination Event or "prohibited transaction", as such term is defined
in Section 406 of ERISA or Section 4975 of the Code, in connection with any
Employee Benefit Plan or any trust created thereunder, along with a description
of the nature thereof, what action the Borrower has taken, is taking or proposes
to take with respect thereto and, when known, any action taken or threatened by
the Internal Revenue Service, the Department of Labor or the PBGC with respect
thereto, (v) any favorable or unfavorable determination letter from the Internal
Revenue Service regarding the qualification of an Employee Benefit Plan under
Section 401(a) of the Code (along with a copy thereof), (vi) all notices
received by the Borrower or any ERISA Affiliate of the PBGC's intent to
terminate any Pension Plan or to have a trustee appointed to administer any
Pension Plan, (vii) each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by the Borrower or any ERISA Affiliate with the
Internal Revenue Service with respect to each Pension Plan, (viii) all notices
received by the Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA and (ix) the Borrower obtaining knowledge that such
Borrower or any ERISA Affiliate has filed or intends to file a notice of intent
to terminate any Pension Plan under a distress termination within the meaning of
Section 4041(c) of ERISA;
SECTION 7.6 Accuracy of Information. All written information, reports
and statements furnished by or on behalf of the Borrower to the Agent or any
Lender (other than financial forecasts) whether pursuant to this Article VII or
any other provision of this Agreement, shall be, at the time the same is so
furnished, true and correct in all material respects.
ARTICLE VIII
AFFIRMATIVE COVENANTS
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Until all of the Obligations have been finally paid and satisfied in
full and the Aggregate Commitment terminated, unless consent has been obtained
in the manner provided for in Section 13.10, the Borrower will, and will cause
each of its Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 10.5 or any other provision of any Loan Document,
preserve and maintain its separate corporate existence and all rights,
franchises, licenses and privileges necessary to the conduct of its business;
and qualify and remain qualified as a foreign corporation and authorized to do
business in each jurisdiction in which the failure to so qualify could
reasonably be expected to have a Material Adverse Effect.
SECTION 8.2 Maintenance of Property. Protect and preserve all
properties material to its business, including the Intellectual Property;
maintain in good working order and condition all buildings, equipment and other
tangible real and personal property material to its business; and from time to
time make or cause to be made all renewals, replacements and additions to such
property material to its business, so that the business carried on in connection
therewith may be properly and advantageously conducted at all times.
SECTION 8.3 Insurance. Maintain insurance with responsible insurance
companies against such risks (including professional liability risks) and in
such amounts as are customarily maintained by similar businesses, as may be
required by Applicable Law and reasonably satisfactory to the Required Lenders,
and on the Closing Date and upon the reasonable request of the Agent thereafter,
deliver to the Agent (a) a detailed list of the insurance then in effect,
stating the names of the insurance companies, the amounts of the insurance, the
dates of the expiration thereof and the risks covered thereby and (b) a
certified copy of the policies of insurance.
SECTION 8.4 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall fairly
present the financial condition of the Borrower and its Subsidiaries, taken as a
whole) as may be required or as may be necessary to permit the preparation of
financial statements in accordance with GAAP and in compliance with the
regulations of any Governmental Authority having jurisdiction over it or any of
its properties.
SECTION 8.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents and pay or perform
(a) all material taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property (including, without
limitation, withholding, social security, payroll and similar employment related
taxes) prior to delinquency, and (b) all other material indebtedness,
obligations and liabilities in accordance with customary trade practices;
provided, that the Borrower may contest any item described in clauses (a) and
(b) hereof in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
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SECTION 8.6 Compliance with Laws, Approvals and Material Contracts.
Observe and remain in compliance with all Applicable Laws and Material Contracts
and maintain in full force and effect all Governmental Approvals, except to the
extent failure to do so could not reasonably be expected to have a Material
Adverse Effect,
SECTION 8.7 Environmental Management. In addition to and without
limiting the generality of Section 8.6, maintain its business premises (whether
leased or owned in fee) free of any Hazardous Materials, the removal of which is
required under Environmental Laws and the failure to so remove could reasonably
be expected to have a Material Adverse Effect; and adopt and maintain Hazardous
Materials management practices including generation, storage, disposal and
remediation as may be required by Environmental Laws for all other Hazardous
Materials located on its business premises.
SECTION 8.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 8.6, make timely payment of contributions required to
meet the minimum funding standards set forth in ERISA with respect to any
Employee Benefit Plan; not take any action or fail to take action the result of
which could be a liability to the PBGC or to a Multiemployer Plan; not
participate in any prohibited transaction that could result in any material
civil penalty under ERISA or material tax under the Code; operate each Employee
Benefit Plan in such a manner that will not incur any tax liability under
Section 4980B of the Code or any material liability to any qualified beneficiary
as defined in Section 4980B of the Code other than liabilities which could not
reasonably be expected to have a Material Adverse Effect; and furnish to the
Agent upon the Agent's request such additional information about any Employee
Benefit Plan as may be reasonably requested by the Agent.
SECTION 8.9 Conduct of Business. Engage in the business conducted by
the Borrower and its Subsidiaries as of the Closing Date or any other business
reasonably related to the foregoing.
SECTION 8.10 Visits and Inspections. Permit representatives of the
Agent or any of the Lenders, from time to time, as often as may be reasonably
requested, to visit and inspect its properties; inspect, audit and make extracts
from its books, records and files, including, but not limited to, management
letters prepared by independent accountants; and discuss with its principal
officers, and its independent accountants, its business, assets, liabilities,
financial condition, results of operations and business prospects; provided,
that so long as no Event of Default has occurred and is continuing, such visits
and inspections shall be made only upon reasonable prior notice, during normal
business hours and at the expense of the Agent or such Lender.
SECTION 8.11 Additional Subsidiary Guarantors. Upon the creation of any
Wholly-Owned Domestic Subsidiary incorporated or organized in the United States
permitted by this Agreement, cause to be executed and delivered to the Agent
within ten (10) Business Days after the creation of such Wholly-Owned Domestic
Subsidiary incorporated or organized in the United States, (a) the supplement to
the Subsidiary Guaranty attached as Exhibit G hereto executed by such new
Wholly-Owned Domestic Subsidiary incorporated or organized in the United States,
(b) the supplement to the Intercompany Subordination Agreement attached hereto
as Exhibit I hereto executed by such Wholly-Owned Domestic Subsidiary
incorporated or organized in the United States, (c) the closing documents and
certificates required of each of the Credit Parties pursuant to
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Section 5.2(d) hereof with respect to such new Subsidiary; provided, that upon
the written request of the Borrower, the Required Lenders, in their sole
discretion, may waive the requirement that an opinion of counsel be delivered
with respect to such new Subsidiary and (d) such other documents reasonably
requested by the Agent in order that such Subsidiary shall become bound by all
of the terms, covenants and agreements contained in the Subsidiary Guaranty.
Upon satisfaction of the conditions set forth in this Section 8.11, each such
Wholly-Owned Domestic Subsidiary incorporated or organized in the United States
shall become a Subsidiary Guarantor under the Subsidiary Guaranty and a Credit
Party hereunder, as of such date, as if an original signatory thereto.
SECTION 8.12 Year 2000 Compatibility. Take all actions reasonably
necessary to assure that the Borrower's computer based systems are able to
operate and effectively process data which includes dates on and after January
1, 2000. At the request of the Agent, the Borrower shall provide reasonable
assurances satisfactory to the Agent of the Borrower's Year 2000 compatibility.
SECTION 8.13 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Agent or the
Required Lenders may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the Agent
and the Lenders their respective rights under this Agreement, the Notes, and the
other Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
Until all of the Obligations have been finally paid and satisfied in
full and the Aggregate Commitment terminated, unless consent has been obtained
in the manner set forth in Section 13.10 hereof, the Borrower and its
Subsidiaries will not:
SECTION 9.1 Total Debt Leverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) the Consolidated Debt of the Borrower and its
Subsidiaries as of such fiscal quarter end to (b) the product of (i)
Consolidated EBITDA for the period of two (2) consecutive fiscal quarters ending
on such fiscal quarter end multiplied by (ii) two (2), to exceed 4.00 to 1.00.
SECTION 9.2 Total Debt to Total Capitalization. As of the end of any
fiscal quarter, permit the ratio of (a) the Consolidated Debt of the Borrower
and its Subsidiaries as of such fiscal quarter end to (b) the sum of (i)
Consolidated Net Worth plus (ii) the Consolidated Debt of the Borrower and its
Subsidiaries, each as of such fiscal quarter end, to exceed .60 to 1.00.
SECTION 9.3 Fixed Charge Coverage Ratio. As of the end of any fiscal
quarter, permit the ratio of (a) the product of (i) Consolidated EBIRTA for the
period of two (2) consecutive fiscal quarters ending on such fiscal quarter end
multiplied by (ii) two (2) to (b) the product of (i) Consolidated Fixed Charges
for such period of two (2) consecutive fiscal quarters multiplied by (ii) two
(2), to be less than 2.00 to 1.00.
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SECTION 9.4 Limitation on Capital Expenditures. Make or incur Capital
Expenditures during the following periods in an aggregate amount in excess of
the following amounts: (a) for the Fiscal Year ending June 30, 1998,
$28,000,000; (b) for the Fiscal Year ending June 30, 1999, $31,000,000; (c) for
the Fiscal Year ending June 30, 2000, $34,000,000; (d) for the Fiscal Year
ending June 30, 2001, $35,000,000; and (e) $40,000,000 thereafter.
Notwithstanding and in addition to the foregoing, (i) the Borrower and its
Subsidiaries shall be permitted to incur Capital Expenditures in an amount not
to exceed $10,000,000 for each Fiscal Year to purchase Capital Assets
specifically required to perform new servicing contracts and (ii) in the event
that, at the time of any Permitted Acquisition, the Borrower and its
Subsidiaries provide the Agent with a budget for additional Capital Expenditures
to be made in connection with such Permitted Acquisition and such Capital
Expenditures (as set forth on the budget) are made within the twelve (12) month
period following such Permitted Acquisition, such expenditures shall be deemed
to be acquisition expenditures (and not Capital Expenditures limited hereby).
SECTION 9.5 Limitation on Operating Leases. Incur Net Rental and
Operating Lease Expense for any period of four (4) consecutive fiscal quarters
in an amount greater than 3.00% of Consolidated Net Revenues for such four (4)
fiscal quarter period.
ARTICLE X
NEGATIVE COVENANTS
Until all of the Obligations have been finally paid and satisfied in
full and the Aggregate Commitment terminated, unless consent has been obtained
in the manner set forth in Section 13.10 hereof, the Borrower will not and will
not permit any of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur or suffer to exist any
Debt, other than:
(a) the Obligations;
(b) Debt existing on the Closing Date and set forth on Schedule 10.1
hereto, including the extension of maturity, modification or refinancing (but
not in any such case an increase in the principal amount or decrease of the
average weighted maturity thereof);
(c) obligations under Hedging Agreements approved by the Agent;
(d) Non-Seller Financing Subordinated Debt in an aggregate amount at
any time outstanding not to exceed an amount satisfactory to the Required
Lenders;
(e) Parent Seller Financing, Subordinated Seller Financing and Earn-Out
Obligations in an aggregate principal amount at any time outstanding not to
exceed $30,000,000 (less any and all current outstanding principal amounts of
all items identified on Schedule 10.1 as "seller financing");
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(f) (i) Debt for borrowed money owing to any Credit Party by any other
Credit Party; provided, that such Debt is subordinated to the Obligations
pursuant to the terms and conditions of the Intercompany Subordination Agreement
and (ii) Debt owing from any and all Foreign Subsidiaries to any Credit Party;
provided that such Debt shall not exceed $20,000,000 in the aggregate;
(g) business expenses and trade accounts payable arising in the
ordinary course of business that are being paid in accordance with customary
trade practices (subject to normal disputes);
(h) Guarantees permitted by Section 10.2 hereof;
(i) Capital Leases and purchase money Debt described in Section 10.3(c)
and Debt of any Person assumed by a Credit Party in connection with a Permitted
Acquisition, in an aggregate principal amount at any time outstanding not to
exceed $25,000,000 (less any and all current outstanding principal amounts of
all items identified on Schedule 10.1 as Capital Leases and purchase money
Debt);
(j) Debt pursuant to the Senior Notes, in an aggregate principal amount
not to exceed $150,000,000; and
(k) additional Debt of the Credit Parties and their Subsidiaries not
otherwise specifically provided for herein, in an aggregate principal amount at
any time outstanding not to exceed $15,000,000 at any time.
SECTION 10.2 Limitations on Guarantees. Create, incur, assume, or
suffer to exist any Guarantees except (a) Guarantees in favor of the Agent for
the benefit of the Lenders, (b) Guarantees existing on the Closing Date and set
forth on Schedule 10.2 hereto, and any renewal or modification (but not any
increase in the principal amount) thereof, (c) Guarantees representing the
endorsement of negotiable instruments for deposit or collection in the ordinary
course of business, (d) Guarantees by any Credit Party of the payments under any
operating lease entered into by any other Credit Party and permitted pursuant to
Section 9.8 hereof, (e) Guarantees by any Credit Party of any Debt permitted by
Section 10.1, and (f) Guarantees by the Credit Parties and their Subsidiaries
not otherwise permitted herein of Debt of their Affiliates in an aggregate
amount at any time not to exceed $500,000.
SECTION 10.3 Limitations on Liens. Create, incur, assume or suffer to
exist any Lien on or with respect to any of its assets or properties (including
shares of capital stock), real or personal, whether now owned or hereafter
acquired, except:
(a) Liens of the Agent for the benefit of the Lenders;
(b) Liens existing on the Closing Date and set forth on Schedule 6.1(s)
hereto;
(c) Liens securing Debt permitted pursuant to Section 10.1(i);
provided, that (i) the aggregate amount of Debt secured by such Liens does not
exceed the amount permitted under
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Section 10.1(i), (ii) the Lien attaches solely to the assets being leased or
acquired (including, in the case of Liens related to Debt of any Person assumed
by a Credit Party in connection with a Permitted Acquisition, any assets
acquired in connection with a Permitted Acquisition) and (iii) in the case of
Liens arising under Capital Leases and purchase money Liens, the Debt secured by
any such Liens does not exceed 100% of the capitalized amount or purchase price
of the asset being leased or acquired;
(d) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace, if any,
related thereto has not expired or which are being contested in good faith and
by appropriate proceedings if adequate reserves are maintained to the extent
required by GAAP;
(e) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than sixty (60) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(f) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers compensation, unemployment insurance or similar legislation and utility
deposits;
(g) Liens securing the performance of bids, tenders, statutory
obligations, surety and appeal bonds and other obligations of like nature,
incurred as an incident to and in the ordinary course of business;
(h) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate do not, in any case, materially detract from
the value of such property or impair the use thereof in the ordinary conduct of
business;
(i) Leases and subleases not materially interfering with the ordinary
course of conduct of the businesses of the Credit Parties and their
Subsidiaries, taken as a whole;
(j) in addition to the Liens permitted under subsection (c) above,
Liens incurred under Capital Leases and purchase money Liens with respect to
motor vehicles acquired or held in the ordinary course of business of the Credit
Parties and their Subsidiaries; provided, that (i) the aggregate amount of Debt
secured by such Liens does not exceed the amount permitted under Section
10.1(k), (ii) the Lien attaches solely to the assets being leased or acquired
and (iii) the Debt secured by any such Liens does not exceed 100% of the
capitalized amount or purchase price of the asset being leased or acquired;
(k) Judgement liens which do not create a Default or Event of Default
under Section 11.1(k); and
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(l) Liens in favor of Governmental Authorities in the form of
contingent lease agreements, in form and substance satisfactory to the Agent in
its reasonable discretion, which agreements permit such Governmental Authorities
to lease or purchase existing inventory and equipment used in connection with
emergency service contracts between the Credit Parties or their Subsidiaries and
such Governmental Authorities upon the early termination of such contracts for a
period not to exceed twelve (12) months after such termination; provided that
any such contingent lease agreement shall have (i) a lease price equal to the
fair market value of the assets so leased and (ii) fair and reasonable terms no
less favorable than any Credit Party would obtain in a comparable arm's length
transaction.
SECTION 10.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture,
evidence of Debt or other obligation or security, substantially all or a
material portion of the business or assets of any other Person or any other
investment or interest whatsoever in any other Person; or make or permit to
exist, directly or indirectly, any loans, advances or extensions of credit to,
or any investment in cash or by delivery of property in, any Person; or enter
into, directly or indirectly, any commitment or option in respect of the
foregoing except:
(a) investments existing on the Closing Date and the other existing
loans, advances and investments set forth on Schedule 10.4 hereto;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States or issued by any agency thereof
and backed by the full faith and credit of the United States, in each case
maturing within one year from the date of acquisition thereof, (ii) commercial
paper maturing no more than one year from the date issued and, at the time of
acquisition, having a rating of at least A-1 from Standard & Poor's Corporation
or at least P-1 from ▇▇▇▇▇'▇ Investors Service, Inc., (iii) certificates of
deposit or bankers' acceptances maturing within one year from the date of
issuance thereof issued by, or overnight reverse repurchase agreements from, any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia having combined capital and surplus of
not less than $500,000,000, and (iv) time deposits maturing no more than thirty
(30) days from the date of creation thereof with commercial banks having
membership in the Federal Deposit Insurance Corporation in amounts not exceeding
the lesser of $100,000 or the maximum amount of insurance applicable to the
aggregate amount of such Person's deposits at such institution;
(c) capital contributions and investments in Wholly-Owned Domestic
Subsidiaries created or acquired after the Closing Date; provided, that such
Wholly-Owned Subsidiaries become Subsidiary Guarantors hereunder pursuant to the
requirements of Section 8.11 hereof; intercompany loans and advances permitted
under Section 10.1(f); and loans and advances to employees for reasonable travel
and business expenses in the ordinary course of business;
(d) deposits for utilities, security deposits, leases and similar
prepaid expenses incurred in the ordinary course of business;
(e) trade accounts created, or prepaid expenses accrued, in the
ordinary course of business;
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(f) investments by any Credit Party in the form of acquisitions of all
or substantially all of the business or a line of business (whether by the
acquisition of capital stock, assets, any combination thereof or any "pooling of
interests") of any other Person if each such acquisition meets all of the
following requirements: (i) the Person to be acquired shall engage in the
business conducted by the Borrower and its Subsidiaries as of the Closing Date
or any other business reasonably related to the foregoing, (ii) a Wholly-Owned
Subsidiary of the Borrower shall be the surviving Person and no Default or Event
of Default shall have occurred and be continuing both before and after giving
effect to the acquisition, (iii) the Borrower shall have certified to the Agent
that it is in pro forma compliance with each covenant contained in Article IX
and Article X hereof prior to consummating the acquisition and, if any Lender
requests in its sole discretion, the Borrower shall have provided evidence to
the Agent of such pro forma compliance, (iv) the Fair Market Value of all
Consideration (as defined below) paid in connection with such acquisition (or
series of related acquisitions in the same Fiscal Year) shall not exceed
$25,000,000; provided, that the Fair Market Value of all Consideration paid in
connection with such acquisition of a Foreign Subsidiary or of assets located
outside of the United States and Canada shall not exceed $5,000,000, and (v) the
Fair Market Value of all Consideration paid in connection with all such
acquisitions shall not exceed $100,000,000 in the aggregate for each Fiscal
Year; provided that the Fair Market Value of all Consideration paid in
connection with any such acquisitions of Foreign Subsidiaries and assets located
outside of the United States and Canada shall not exceed $20,000,000 in the
aggregate for each Fiscal Year.
(g) loans, investments, advances and acquisitions otherwise approved in
writing by the Required Lenders;
(h) the ECCO Acquisition;
(i) other loans, advances and investments by any Credit Party or any
Subsidiary thereof in an aggregate amount at any time outstanding not to exceed
$10,000,000; and
(j) investments (including working capital investments) by any Credit
Party or any Subsidiary thereof in Persons that are not Wholly-Owned
Subsidiaries of such Credit Party or any Subsidiary thereof if each such
investment meets all of the following requirements: (i) no Default or Event of
Default shall have occurred and be continuing both before and after giving
effect to such investment and (ii) the Fair Market Value of all Consideration
paid in connection with such investments shall not exceed $15,0000,000 in the
aggregate (net of any proceeds received from the sale or other disposition of
any investment or return on any investment made pursuant to this Section
10.4(j); provided that the Borrower shall have delivered to the Agent, evidence
in form and substance satisfactory to the Agent of the amount of such proceeds).
For the purposes of calculating compliance with clauses (f) and (j) of
this Section 10.4, the "Fair Market Value of all Consideration" paid in
connection with any acquisition or investment shall include (1) any cash
consideration paid in connection with such acquisition or investment, (2) the
face amount of any Seller Financing issued in connection with such acquisition
or investment (excluding Earn-Out Obligations on terms and conditions
satisfactory to the Agent to be paid to a seller in connection with additional
business or contracts not in existence at the time of such
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acquisition or investment), (3) the face amount of any Debt assumed in
connection with such acquisition or investment, (4) the amount of any
commissions paid in connection with such acquisition or investment, (5) 100% of
the fair market value (calculated in the same manner as in the applicable
acquisition or investment contract, such calculation to be reasonably
satisfactory to the Agent) of any unrestricted stock issued or transferred in a
pooling of interest or otherwise and (6) 65% of the fair market value
(calculated in the same manner as in the applicable acquisition or investment
contract, such calculation to be reasonably satisfactory to the Agent) of any
restricted stock (stock which cannot by agreement be sold or transferred for a
period of at least 2 years or is otherwise deemed to be restricted by the Agent,
in its reasonable discretion) issued or transferred in a pooling of interest or
otherwise and minus (7) any cash balances, including accounts receivable (to the
extent indemnified by the seller) assumed in such acquisition or investment; and
(k) loans, advances and investments by any Credit Party or Subsidiary
thereof to a Foreign Subsidiary in an aggregate amount at any time outstanding
not to exceed $15,000,000 (net of any proceeds received from the sale or other
disposition of any investment or return on any investment made pursuant to this
Section 10.4(k); provided that the Borrower shall have delivered to the Agent,
evidence in form and substance satisfactory to the Agent of the amount of such
proceeds).
SECTION 10.5 Limitations on Mergers and Liquidation. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except (a)
any Wholly-Owned Subsidiary of the Borrower may merge with the Borrower or any
other Wholly-Owned Subsidiary; provided, that (i) if the Borrower is party to
such transaction, the Borrower shall be the surviving person and (ii) except as
set forth in (i) above if any other Credit Party is party to such transaction,
such Credit Party shall be the surviving Person, (b) the Borrower or any other
Credit Party may merge with or into any other Person for the purpose of
consummating any acquisition permitted under Section 10.4(f); provided, that if
the Borrower is a party to such merger, the Borrower shall be the surviving
Person and (c) the Borrower or any other Credit Party may merge with any Person
as long as such Credit Party is the surviving Person and no Default or Event of
Default shall have occurred before and after giving effect to such merger.
SECTION 10.6 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the conveyance, sale, lease, assignment, exchange, transfer or
other disposition of obsolete assets or assets no longer used in the business of
the Borrower or such Subsidiary;
(b) the conveyance, sale, lease, assignment, transfer or other
disposition without recourse of accounts receivable arising in the ordinary
course of business in connection with the compromise or collection thereof;
(c) the conveyance, sale, lease, assignment, transfer or other
disposition of inventory in the ordinary course of business;
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(d) the conveyance, sale, lease, assignment, transfer or other
disposition by any Credit Party or any of its Subsidiaries of its business or
assets to another Credit Party; provided, that no Default or Event of Default
shall have occurred before and after giving effect to such sale;
(e) any other conveyance, sale, lease, assignment, transfer or other
disposition of assets in any Fiscal Year having a fair market value not to
exceed $2,500,000;
(f) any conveyance, sale, lease, assignment, transfer or other
disposition of assets to Governmental Authorities in connection with contingent
lease agreements executed or assumed by a Credit Party or any Subsidiary
thereof, in form and substance satisfactory to the Agent in its reasonable
discretion, which agreements permit such Governmental Authorities to lease or
purchase existing inventory and equipment used in connection with emergency
service contracts between Credit Parties or any Subsidiaries thereof and such
Governmental Authorities upon the early termination of such contracts for a
period not to exceed twelve (12) months after such termination; provided, that
any such conveyance shall have (i) a purchase price equal to the fair market
value of the assets so conveyed and (ii) fair and reasonable terms no less
favorable than any Credit Party would obtain in a comparable arm's length
transaction;
(g) Capital Leases and operating leases for fair market value to any
Person in which a Credit Party or any Subsidiary thereof made an investment
pursuant to Section 10.4(j) or Section 10.4(k) above; provided, that the
aggregate fair saleable value of all assets so leased shall not exceed
$5,000,000; and
(h) any other sale, conveyance, lease, assignment, transfer or other
disposition; provided, that (i) the Borrower or such Subsidiary receives
consideration at the time of such sale, conveyance, lease, assignment or other
disposition at least equal to the fair market value thereof as reasonably
determined for such sales or dispositions in excess of $1,000,000 in good faith
by the board of directors as evidenced by a resolution provided to the Agent,
(ii) no less than 75% of the consideration received by the Borrower or such
Subsidiary is in the form of cash or cash equivalents described in Section
10.4(b) and (iii) the proceeds from such sale or disposition are invested in a
Credit Party within 270 days following the receipt of such proceeds..
SECTION 10.7 Limitations on Dividends and Distributions. Declare or pay
any dividends upon any of its capital stock or purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock; provided that (a) any Credit Party may pay dividends solely
in shares of its own capital stock, (b) any Subsidiary may pay cash dividends to
a Credit Party, (c) Rural/Metro may make a dividend distribution to its
shareholders of "Rights" to purchase "Series A Junior Participating Preferred
Stock" of Rural/Metro, pursuant to the terms and conditions of a Rights
Agreement dated as of August 23, 1995 between Rural/Metro and American
Securities Transfer, Inc., as Rights Agent, (d) the Borrower may pay cash
dividends in any fiscal quarter in an aggregate amount not to exceed 25% of Net
Income for the most recently ended
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fiscal quarter, (e) the Borrower may redeem shares of its capital stock;
provided, that (i) the fair market value of any such shares of capital stock
redeemed in any fiscal quarter, together with any and all cash dividends made
pursuant to clause (d) above, shall not exceed 25% of Net Income for the most
recently ended fiscal quarter and (ii) the fair market value of all such shares
of capital stock redeemed shall not exceed $5,000,000 in the aggregate and (f)
the Borrower may make contributions of (i) any amount of capital stock and (ii)
cash in an aggregate amount not to exceed $1,000,000, in any Fiscal Year to its
Employee Stock Ownership Plan; provided that, in connection with any
distribution or payment pursuant to clauses (c) and (d) above, no Default or
Event of Default shall have occurred before and after giving effect to any such
dividend or payment.
SECTION 10.8 Transactions with Affiliates. Except as otherwise
permitted hereunder, directly or indirectly: (a) make any loan or advance to, or
purchase or assume any note or other obligation to or from, any of its officers,
directors, shareholders or other Affiliates, or to or from any member of the
immediate family of any of its officers, directors, shareholders or other
Affiliates, or subcontract any operations to any of its Affiliates in an
aggregate principal amount in excess of $125,000 at any time outstanding, or (b)
enter into, or be a party to, any transaction with any of its Affiliates, except
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms no less favorable to it than it would obtain in a comparable
arm's length transaction with a Person not its Affiliate. In any transaction
permitted pursuant to clause (b) above involving an amount or having a value in
excess of $1,000,000 in any Fiscal Year, the Borrower or such Subsidiary must
obtain a resolution of its board of directors certifying that such transaction
complies with the terms and conditions of clause (b) above. In any transaction
permitted pursuant to clause (b) above involving an amount or having a value in
excess of $10,000,000 in any Fiscal Year, the Borrower or such Subsidiary must
obtain a written opinion as to the fairness of such transaction, from a
financial point of view, from an independent financial advisor.
SECTION 10.9 Certain Accounting Changes. Change its Fiscal Year end, or
make any material change in its accounting treatment and reporting practices
except as required by GAAP or the SEC.
SECTION 10.10 Payments and Prepayments of Non-Seller Financing
Subordinated Debt; Amendments to Certain Agreements. Directly or indirectly (a)
make any payment or prepayment on any Non-Seller Financing Subordinated Debt
other than payments as are expressly required thereunder or redeem or otherwise
acquire for value any Non-Seller Financing Subordinated Debt or (b) amend or
supplement any of the terms or provisions of any Non-Seller Financing
Subordinated Debt.
SECTION 10.11 Restrictive Agreements. Enter into any agreement (other
than the Senior Note Indenture) after the Closing Date which restricts, limits
or otherwise encumbers its ability to (a) with respect to any Subsidiary, (i)
pay dividends or make any other distributions in cash or otherwise to the
Borrower or any Subsidiary, (ii) pay any Debt owed to the Borrower or any
Subsidiary, (iii) make loans or advances to the Borrower or any Subsidiary
thereof , (iv) transfer any of its assets or property to the Borrower or any
Subsidiary (except the restrictions set forth in any agreement governing a
Permitted Lien) or (v) guaranty the Debt under this Agreement and (b) with
respect to the Borrower or any Subsidiary, incur Liens on or with respect to any
of its assets or properties; provided, that any contingent lease agreement
permitted pursuant to Sections 10.3(l) and 10.6(f) may restrict or limit the
ability of the Credit Party to such contingent lease agreement to incur Liens on
or otherwise encumber the assets subject to such contingent lease agreement.
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SECTION 10.12 Amendments to Senior Note Indenture or Senior Notes.
Amend or modify (or permit the amendment or modification of) any of the terms or
provisions of the Senior Note Indenture or the Senior Notes without the prior
written consent of the Required Lenders.
ARTICLE XI
DEFAULT AND REMEDIES
SECTION 11.1. Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment. (i) The Borrower shall default in any payment
of principal of any Loan, Note or Reimbursement Obligation, when and as due
(whether at maturity, by reason of acceleration or otherwise), (ii) the Borrower
shall fail to make any payment of interest on any Loan, Note or Reimbursement
Obligation or any fee due hereunder within three (3) Business Days after the
same becomes due and payable or (iii) the Borrower shall fail to make any
payment of any other amount due hereunder or under any other Loan Document
within five (5) Business Days after written notice that such amount has become
due and payable has been given to the Borrower by the Agent.
(b) Misrepresentation. Any representation or warranty made by the
Borrower or any of its Subsidiaries under this Agreement, any Loan Document or
any amendment hereto or thereto, shall prove to be incorrect or misleading in
any material respect as of the date made.
(c) Default in Performance of Certain Covenants. The Borrower shall
default in the performance or observance of any covenant or agreement contained
in Section 7.2, 7.5(d), Section 8.11 and Articles IX and X of this Agreement.
(d) Default in Performance of Other Covenants and Conditions. The
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Agent.
(e) Cross-Default. The Borrower or any of its Subsidiaries shall (i)
default in the payment of any Debt (other than the Notes or any Reimbursement
Obligation) or Guarantee in principal amount in excess of $2,000,000 beyond the
period of grace if any, provided in the instrument or agreement under which such
Debt or Guarantee was created or (ii) default in the observance or performance
of any other provision or condition contained in any instrument or agreement
evidencing, securing or relating to such Debt or Guarantee described in clause
(i) above beyond the period of grace if any, provided in such instrument or
agreement; provided, that no Event of Default shall occur hereunder by reason of
the Borrower or any of its Subsidiaries' good faith exercise of its rights of
offset contained in any Seller Financing (or similar financing described on
Schedule 6.1(t)) for breaches, violations or inaccuracies in any
representations, warranties or
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undertakings of a seller in connection with a Permitted Acquisition (or any
acquisition which occurred prior to the Closing Date).
(f) Change in Control. (i) Any person or group of persons (within the
meaning of Section 13(d) of the Exchange Act) shall obtain ownership or control
in one or more series of transactions of more than forty percent (40%) of the
common stock or forty percent (40%) of the voting power of the Borrower entitled
to vote in the election of members of the board of directors of the Borrower,
(ii) less than a majority of the members of the board of directors of the
Borrower are Persons who (A) were members of the board of directors of the
Borrower on the Closing Date or (B) were nominated for election or elected to
such board of directors with the approval of a majority of the Persons who meet
the qualifications of clause (A) or this clause(B) who were members of the board
of directors at the time of such nomination or election or (iii) except as
permitted in Section 10.5, any Guarantor shall cease to be a Wholly-Owned
Subsidiary of the Borrower (any such event, a "Change in Control").
(g) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect); (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts; (iii) apply
for or consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (iv) admit in writing its inability to pay its debts as they become
due; (v) make a general assignment for the benefit of creditors; or (vi) take
any corporate action for the purpose of authorizing any of the foregoing.
(h) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Borrower or any of its Subsidiaries in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts; or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any of its Subsidiaries or for all or any
substantial part of its assets, domestic or foreign, and (A) such Person shall
consent to or fail to contest in a timely and appropriate manner any such case
or proceeding or (B) such case or proceeding shall continue undismissed or
unstayed for a period of sixty (60) consecutive calendar days, or an order
granting the relief requested in such case or proceeding (including, but not
limited to, an order for relief under such federal bankruptcy laws) shall be
entered.
(i) Failure of Agreements. Any material provision of the Subsidiary
Guaranty shall for any reason cease to be valid and binding on the Subsidiary
Guarantors or the Subsidiary Guarantors shall so state in writing, in each case
other than in accordance with the express terms thereof and except where such
circumstance arises as a result of the action or inaction of the Agent or any
Lender.
(j) Termination Event. The occurrence of any of the following events:
(i) the Borrower or any ERISA Affiliate fails to make full payment when due (or
promptly after the Borrower obtains knowledge of any such amounts which are
due), which under the provisions of any Pension
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Plan or Section 412 of the Code, the Borrower or any ERISA Affiliate is required
to pay as contributions thereto; (ii) an accumulated funding deficiency in
excess of $1,000,000 occurs or exists, whether or not waived, with respect to
any Pension Plan; (iii) a Termination Event resulting in liability the Borrower
or any ERISA Affiliate in excess of $1,000,000; or (iv) the Borrower or any
ERISA Affiliate as employers under one or more Multiemployer Plan makes a
complete or partial withdrawal from any such Multiemployer Plan and the plan
sponsor of such Multiemployer Plans notifies such withdrawing employer that such
employer has incurred a withdrawal liability requiring payments in an amount
exceeding $1,000,000.
(k) Judgment. A judgment or order for the payment of money which
exceeds $1,000,000 in amount shall be entered against the Borrower or any of its
Subsidiaries by any court and such judgment or order shall continue
undischarged, unstayed or unbonded for a period of thirty (30) days.
(l) Attachment. A warrant or writ of attachment or execution or similar
process shall be issued against any property of the Borrower or any Subsidiary
thereof which exceeds $1,000,000 in value and such warrant or process shall
continue undischarged or unstayed for a period of thirty (30) days.
(m) Termination of Material Contracts. Any Material Contract shall be
terminated or cancelled (other than upon the expiration thereof in accordance
with its terms), if the result of such termination or cancellation, together
with the termination of any other Material Contracts in the aggregate, shall or
could reasonably be expected to have a Material Adverse Effect.
(n) Medicare/Medicaid Participation. The Borrower or any Subsidiary
thereof shall lose its eligibility to participate as a supplier under Medicare
Regulations or Medicaid Regulations, the result of which could reasonably be
expected to have a Material Adverse Effect.
SECTION 11.2. Remedies. Upon the occurrence and during the continuance
of an Event of Default, with the consent of the Required Lenders, the Agent may,
or upon the request of the Required Lenders, the Agent shall, by written notice
to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligation at the
time outstanding, and all other amounts owed to the Lenders and to the Agent
under this Agreement or any of the other Loan Documents (including without
limitation all L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) and all other Obligations, to be forthwith due and payable,
whereupon the same shall immediately become due and payable without presentment,
demand, protest or any additional notice of any kind, all of which are expressly
waived, anything in this Agreement or the other Loan Documents to the contrary
notwithstanding, and terminate the Aggregate Commitment; provided, that upon the
occurrence of an Event of Default specified in Section 11.1(g) or (h), the
Aggregate Commitment shall be automatically terminated and all Obligations shall
automatically become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the
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preceding paragraph, require the Borrower at such time to deposit in a cash
collateral account opened by the Agent an amount equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit. Amounts held in such
cash collateral account shall be applied by the Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay the other Obligations. After all such Letters of
Credit shall have expired or been fully drawn upon, the Reimbursement Obligation
shall have been satisfied and all other Obligations shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Credit Parties' Obligations.
SECTION 11.3. Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Agent and the Lenders set forth in
this Agreement is not intended to be exhaustive and the exercise by the Agent
and the Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the Borrower, the Agent and the
Lenders or their respective agents or employees shall be effective to change,
modify or discharge any provision of this Agreement or any of the other Loan
Documents or to constitute a waiver of any Event of Default.
SECTION 11.4. Crediting of Payments and Proceeds. In the event that the
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Agent's and Issuing
Lender's fees then due and payable, then to all commitment and other fees and
commissions then due and payable, then to accrued and unpaid interest on the
Notes, the Reimbursement Obligation and any termination payments due in respect
of a Hedging Agreement with any Lender (pro rata in accordance with all such
amounts due) and then to the principal amount of the Notes and Reimbursement
Obligation, and then to the cash collateral account described in Section 11.2(b)
hereof to the effect of any L/C Obligations then outstanding, in that order.
SECTION 11.5. Set-off. Except to the extent prohibited by law, in
addition to any rights now or hereafter granted under Applicable Law and not by
way of limitation of any such rights, upon and after the occurrence of any Event
of Default and during the continuance thereof, the Lenders and any assignee of a
Lender in accordance with Section 13.9 are hereby authorized by the Borrower at
any time or from time to time, without notice to the Borrower or to any other
Person, any such notice being hereby expressly waived, to set off and to
appropriate and to apply
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any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured, excluding government securities required by Applicable Law to be
held as security for worker's compensation and similar claims) and any other
indebtedness at any time held or owing by the Lenders, or any such assignee or
participant to or for the credit or the account of the Credit Parties against
and on account of the Obligations irrespective of whether or not (a) the Lenders
shall have made any demand under this Agreement or any of the other Loan
Documents or (b) the Agent shall have declared any or all of the Obligations to
be due and payable as permitted by Section 11.2.
ARTICLE XII
THE AGENT
SECTION 12.1. Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as the Agent of such Lender under this
Agreement and the other Loan Documents and each such Lender irrevocably
authorizes First Union as Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Agent by the terms of this Agreement and such other Loan Documents, together
with such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement or such other Loan
Documents, the Agent shall not have any duties or responsibilities, except those
expressly set forth herein and therein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or the other Loan
Documents or otherwise exist against the Agent. To the extent any provision of
this Agreement permits action by the Agent, the Agent shall, subject to the
provisions of Section 13.10 hereof and of this Article XII, take such action if
directed in writing to do so by the Required Lenders.
SECTION 12.2. Delegation of Duties. The Agent may execute any of its
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Agent with reasonable care.
SECTION 12.3. Exculpatory Provisions. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for its or such Person's own gross negligence or
willful misconduct), or (b) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrower or
any of its Subsidiaries or any officer thereof contained in this Agreement or
the other Loan Documents or in any certificate, report, statement or other
document referred to or provided for in, or received by such Agent under or in
connection with, this Agreement or the other Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents or for any failure of the Borrower or any
of its Subsidiaries to perform its obligations hereunder or thereunder. The
Agent shall be under no obligation to any Lender to ascertain or to
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inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement, or to inspect the properties, books or
records of the Borrower or any of its Subsidiaries.
SECTION 12.4. Reliance by Agent. The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Credit Parties), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 13.9 hereof. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders (or, when expressly required
hereby or by the relevant other Loan Document, all the Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 12.5. Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, it shall promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 12.6. Non-Reliance on the Agent and Other Lenders. Each Lender
expressly acknowledges that neither the Agent nor any of its respective
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates has made any representations or warranties to it and that no act by
the Agent hereinafter taken, including any review of the affairs of the Borrower
or any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agent to any Lender. Each Lender represents to the Agent that it
has, independently and without reliance upon the Agent or any other Lender, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries and made its own decision to make its Loans and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time,
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continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigation as it deems necessary to inform itself as to the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries. Except for notices, reports and other documents
expressly required to be furnished to the Lenders by the Agent hereunder or by
the other Loan Documents, the Agent shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower and its Subsidiaries which may come into the possession of the Agent or
any of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 12.7. Indemnification. The Lenders agree to indemnify the Agent
in its capacity as such and (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
the respective amounts of their Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's bad faith,
gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of the Notes, any Reimbursement Obligation and all
other amounts payable hereunder and the termination of this Agreement.
SECTION 12.8. The Agent in Its Individual Capacity. The Agent and its
Subsidiaries and Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrower as though the Agent
were not an Agent hereunder. With respect to any Extensions of Credit made or
renewed by it and any Note issued to it, the Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include the Agent in its individual capacity.
SECTION 12.9. Resignation of Agent; Successor Agents. Subject to the
appointment and acceptance of a successor as provided below, the Agent may
resign at any time by giving thirty (30) days prior notice thereof to the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right to appoint a successor Agent, as the case may be, which successor
shall have minimum capital and surplus of at least $500,000,000 with the consent
of the Borrower, which shall not be unreasonably withheld. If no successor Agent
shall have been so appointed by the Required Lenders and shall have accepted
such appointment within fifteen (15) days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may with the consent of the
Borrower, which shall not be unreasonably withheld, on behalf of the Lenders,
appoint a successor Agent, which successor shall have minimum capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor
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Agent, as the case may be, such successor Agent shall thereupon succeed to and
become vested with all rights, powers, privileges and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 12.9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as the Agent.
ARTICLE XIIIII
MISCELLANEOUS
SECTION 13.1. Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing if otherwise permitted by this
Agreement. Any notice shall be effective if delivered by hand delivery or sent
via telecopy, recognized overnight courier service or certified mail, return
receipt requested, and shall be presumed to be received by a party hereto (i) on
the date of delivery if delivered by hand or sent by telecopy, (ii) on the next
Business Day if sent by recognized overnight courier service and (iii) on the
fifth Business Day following the date sent by certified mail, return receipt
requested. A telephonic notice to the Agent as understood by the Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to any Credit Party: Rural/Metro Corporation
▇▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: O'Connor, Cavanagh, Anderson,
Westover, ▇▇▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
and
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Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
If to First Union,
as Agent or Lender: First Union National Bank
One First Union Center
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇
Attention: Syndication Agency
Services
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
If to any Lender: At the address for notices set
forth opposite such Lender's name
on Schedule 1 hereto
(c) Agent's Office. The Agent hereby designates its office located at
the address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrower and Lenders, as the
Agent's Office referred to herein, to which payments due are to be made and at
which Extensions of Credit will be disbursed.
SECTION 13.2. Expenses. The Borrower will pay all reasonable
out-of-pocket expenses of the Agent in connection with: (a) the preparation,
execution and delivery of this Agreement and each of the other Loan Documents,
whenever the same shall be executed and delivered, including all reasonable
syndication and due diligence expenses, (including such reasonable fees and
expenses incurred in connection with the due diligence pertaining to the ECCO
Acquisition) reasonable appraiser's fees, reasonable search fees, recording
fees, taxes and reasonable fees and disbursements of counsel for the Agent; (b)
the preparation, execution and delivery of any waiver, amendment or consent by
the Agent or the Lenders relating to this Agreement or any of the other Loan
Documents including reasonable fees and disbursements of counsel for the Agent,
reasonable search fees, reasonable appraiser's fees, recording fees and taxes
imposed in connection therewith; and (c) consulting with one or more Persons,
including appraisers, accountants, engineers and attorneys, concerning or
related to the nature, scope or value of any right or remedy of the Agent or any
of the Lenders hereunder or under any of the other Loan Documents, including any
review of factual matters in connection therewith, which expenses shall include
the reasonable fees and disbursements of such Persons. In addition, the Borrower
will pay all reasonable out-of-pocket expenses of the Agent and each Lender in
connection with prosecuting or defending any claim in any way arising out of,
related to, connected with, or enforcing any provision of, this Agreement or any
of the other Loan Documents, which expenses shall include the reasonable fees
and disbursements of counsel (including the allocated cost of in-house counsel)
and of experts and other consultants retained by the Agent or any of the
Lenders.
SECTION 13.3. Governing Law. THIS AGREEMENT, THE NOTES AND THE OTHER
LOAN DOCUMENTS, UNLESS OTHERWISE EXPRESSLY SET FORTH THEREIN, SHALL BE GOVERNED
BY, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH
CAROLINA,
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WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.
SECTION 13.4. Consent to Jurisdiction. The Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrower hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Agent or any Lender in connection
with this Agreement, the Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, by the mailing of copies
thereof by registered or certified mail, postage prepaid, to the Borrower at its
address for notices contained in Section 13.1. Nothing in this Section 13.4
shall affect the right of the Agent or any Lender to serve legal process in any
other manner permitted by Applicable Law or affect the right of the Agent or any
Lender to bring any action or proceeding against the Borrower or its properties
in the courts of any other jurisdictions.
SECTION 13.5. Arbitration.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("Disputes"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association (the "AAA") and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina. The
expedited procedures set forth in Rule 51, et seq. of the Arbitration Rules
shall be applicable to claims of less than $1,000,000. All applicable statutes
of limitation shall apply to any Dispute. A judgment upon the award may be
entered in any court having jurisdiction. The panel from which all arbitrators
are selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted. The arbitrators shall be appointed as provided in the Arbitration
Rules.
(b) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the Agent and the Lenders preserve, without
diminution, certain remedies that the Agent and the Lenders may employ or
exercise freely, either alone, in conjunction with or during a Dispute. The
Agent and the Lenders shall have and hereby reserve the right to proceed in any
court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii)
65
72
all rights of self help including peaceful occupation of property and collection
of rents, set off, and peaceful possession of property and (iii) obtaining
provisional or ancillary remedies including injunctive relief, sequestration,
garnishment, attachment, appointment of receiver and in filing an involuntary
bankruptcy proceeding. Preservation of these remedies does not limit the power
of an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.
SECTION 13.6. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE AGENT, EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR
OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT,
THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR
THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
SECTION 13.7. Reversal of Payments. To the extent the Borrower makes a
payment or payments to the Agent for the ratable benefit of the Lenders which
payments or proceeds or any part thereof are subsequently invalidated, declared
to be fraudulent or preferential, set aside and/or required to be repaid to a
trustee, receiver or any other party under any bankruptcy law, state or federal
law, common law or equitable cause, then, to the extent of such payment or
proceeds repaid, the Obligations or part thereof intended to be satisfied shall
be revived and continued in full force and effect as if such payment or proceeds
had not been received by the Agent.
SECTION 13.8. Injunctive Relief. The Borrower recognizes that, in the
event the Borrower fails to perform, observe or discharge any of its obligations
or liabilities under this Agreement, any remedy of law may prove to be
inadequate relief to the Lenders. Therefore, the Borrower agrees that the
Lenders, at the Lenders' option, shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving actual
damages.
SECTION 13.9. Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrower , the Agent and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrower may not assign or transfer any of their respective rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Agent and the Borrower (provided, that no consent of the Borrower shall be
required (A) in connection with an assignment from any Lender to one of such
Lender's Affiliates or to another Lender or (B) at any time that a Default or
Event of Default shall have occurred and be continuing), which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Obligations at the time
owing to it and the Notes held by it); provided, that:
(i) each such assignment shall be of a constant, and not a
varying, percentage of all the assigning Lender's rights and
obligations under this Agreement;
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73
(ii) the Commitment of the assigning Lender after any such
assignment (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Agent) shall in no
event be less than $5,000,000 and the Commitment so assigned shall not
be less than $5,000,000 (other than assignments of the entire
Commitment of a Lender).
(iii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance in the form of Exhibit F attached hereto
(an "Assignment and Acceptance"), together with any Note or Notes
subject to such assignment;
(iv) such assignment shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with
the Securities and Exchange Commission or apply to or qualify the Loans
or the Notes under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Agent an assignment
fee of $3,000 upon the execution by such Lender of the Assignment and
Acceptance.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Register. The Agent shall maintain a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders and the amount of the Obligations with respect to each
Lender from time to time (the "Register"). The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the Agent and
the Lenders may treat each person whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection by the Borrower or Lender at any reasonable time and
from time to time upon reasonable prior notice.
(d) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit F:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the
Borrower; and
67
74
(iv) promptly deliver a copy of such Assignment and Acceptance
to the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Agent, in exchange for the surrendered Note or Notes,
a new Note or Notes to the order of such Eligible Assignee in amounts equal to
the Commitment assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender. Each surrendered Note
or Notes shall be canceled and returned to the Borrower.
(e) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Commitment and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less
than $3,000,000;
(ii) such Lender's obligations under this Agreement
(including, without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by
it for all purposes of this Agreement;
(v) the Borrower, the Agent and the other Lenders shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right
to approve any waivers, amendments or other modifications to this
Agreement or any other Loan Document other than waivers, amendments or
modifications which would reduce the principal of or the interest rate
on any Loan or Reimbursement Obligation, extend the term or increase
the amount of the Commitment of such participant, reduce the amount of
any fees to which such participant is entitled, or, extend any
scheduled payment date for principal; and
(vii) any such disposition shall not, without the consent of
the Borrower, require the Borrower to file a registration statement
with the Securities and Exchange Commission to apply to qualify the
Loans or the Notes under the blue sky law of any state.
Any information disclosed by or on behalf of the Borrower or any of its
Subsidiaries or acquired Person to the Agent or any of the Lenders and any
information obtained by the Agent or
68
75
any of the Lenders pursuant to the provisions of, or in connection with, this
Agreement shall be used solely for purposes of this Agreement and not in any
other manner, and, if such information is not otherwise in the public domain,
shall not be disclosed by the Agent or such Lender to any other Person except
(A) to its independent accountants and legal counsel (it being understood that
the Persons to whom such disclosure is made will be informed of the confidential
nature of such information and instructed to keep such information
confidential), (B) pursuant to statutory and regulatory requirements, (C)
pursuant to any mandatory court order, subpoena or other legal process or (D)
subject to an agreement containing provisions substantially the same as those of
this Section, to any participant in or assignee of, or prospective participant
in or assignee of, any Loan (it being understood that prior to any such
disclosures contemplated by clauses (B) and (C) above, the Agent or such Lender
shall, if practicable, give the Borrower prior written notice of such
disclosure).
(g) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.10. Amendments, Waivers and Consents. Except as set forth
below or as otherwise provided herein or in any of the other Loan Documents, any
term, covenant, agreement or condition of this Agreement or any of the other
Loan Documents may be amended or waived by the Lenders, and any consent given by
the Lenders, if, but only if, such amendment, waiver or consent is in writing
signed by the Required Lenders (or by the Agent with the consent of the Required
Lenders) and delivered to the Agent and, in the case of an amendment, signed by
the Borrower; provided, that no amendment, waiver or consent shall (i) increase
the amount or extend the time of the obligation of the Lenders to make Loans or
issue or participate in Letters of Credit, (ii) extend the originally scheduled
time or times of payment of the principal of any Loan or Reimbursement
Obligation, the time or times of payment of interest on any Loan or
Reimbursement Obligation, (iii) reduce the rate of interest or fees payable on
any Loan, (iv) permit any subordination of the principal or interest on any Loan
or Reimbursement Obligation, (v) reduce the "Guaranteed Obligations" as defined
in Subsidiary Guaranty or release the Subsidiary Guarantors from their
obligations under the Subsidiary Guaranty or (vi) amend the provisions of this
Section 13.10, the number of Lenders required to approve any amendment or waiver
otherwise set forth herein, or the definition of Required Lenders or Required
Lenders, without the prior written consent of each Lender. In addition, no
amendment, waiver or consent to the provisions of Article XII shall be made
without the written consent of the Agent.
SECTION 13.11. Performance of the Borrower's Duties. The Borrower's
obligations under this Agreement and each of the Loan Documents shall be
performed by the Borrower at its sole cost and expense.
SECTION 13.12. Indemnification. The Borrower agrees to reimburse the
Agent and the Lenders for all reasonable out-of-pocket costs and expenses,
including all reasonable counsel (including the allocated cost of in-house
counsel), appraisal, or other expert or consultant fees and disbursements
incurred, and to indemnify and hold the Agent and the Lenders harmless from and
against all losses suffered by the Agent and the Lenders in connection with (a)
the exercise by the Agent or the Lenders of any right or remedy granted to them
under this Agreement or any of the other Loan Documents, (b) any claim, and the
prosecution or defense thereof, arising out of or in any way connected with this
Agreement or any of the other Loan Documents, and (c) the collection
69
76
or enforcement of the Obligations or any of them; provided, that the Borrower
shall not be obligated to reimburse the Agent or any Lender for costs and
expenses, or indemnify the Agent or any Lender for any loss, resulting from the
gross negligence or willful misconduct of the Agent or any Lender.
SECTION 13.13. All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Agent and any Persons
designated by the Agent or Lenders pursuant to any provisions of this Agreement
or any of the other Loan Documents shall be deemed coupled with an interest and
shall be irrevocable so long as any of the Obligations remain unpaid or
unsatisfied or the Commitments have not been terminated.
SECTION 13.14. Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Agent and the Lenders are
entitled under the provisions of this Article XIII and any other provision of
this Agreement and the Loan Documents shall continue in full force and effect
and shall protect the Agents and the Lenders against events arising after such
termination as well as before.
SECTION 13.15. Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 13.16. Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.17. Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 13.18. Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been paid and satisfied in full. No termination of this Agreement
shall affect the rights and obligations of the parties hereto arising prior to
such termination.
SECTION 13.19. Adjustments. If any Lender (a "Benefitted Lender") shall
at any time receive any payment of all or part of the Obligations (whether
voluntarily or involuntarily, by set-off or otherwise) in a greater proportion
than any such payment to any other Lender, such Benefitted Lender shall purchase
for cash from the other Lenders such portion of each such other Lender's
Extensions of Credit, as shall be necessary to cause such Benefitted Lender to
share the excess payment ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrower agrees that each Lender so purchasing a portion of another Lender's
70
77
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
SECTION 13.20. Independent Effect of Covenants. The Borrower expressly
acknowledges and agrees that each covenant contained in Articles VIII, IX and X
hereof shall be given independent effect. Accordingly, the Borrower shall not
engage in any transaction or other act otherwise permitted under any covenant
contained in Articles VIII, IX or X if, before or after giving effect to such
transaction or act, the Borrower shall or would be in breach of any other
covenant contained in Articles VIII, IX or X.
[SIGNATURE PAGES TO FOLLOW]
71
78
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
BORROWER:
RURAL/METRO CORPORATION, A
DELAWARE CORPORATION
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
Title: Chief Financial Officer
_____________________________
79
AGENT:
FIRST UNION NATIONAL BANK, as Agent
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
Title: Senior Vice President
_____________________________
80
LENDERS:
FIRST UNION NATIONAL
BANK, as Lender
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
______________________________
Title: Senior Vice President
_____________________________
81
ABN AMRO BANK N.V.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Title: Vice President/Director
---------------------------
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------
Title: Vice President
---------------------------
82
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
______________________________
Title: First Vice President
_____________________________
83
BANQUE PARIBAS
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇
_______________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇
______________________________
Title: Assistant Vice President
_____________________________
By: /s/ Clare-Ballhe
_______________________________
Name: Clare-Ballhe
______________________________
Title: Director
_____________________________
84
FLEET BANK, N.A.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
________________________________
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
______________________________
Title: Vice President
_____________________________
85
THE LONG-TERM CREDIT BANK OF
JAPAN, LIMITED
By: /s/ Koh ▇▇▇▇▇▇▇▇
________________________________
Name: Koh ▇▇▇▇▇▇▇▇
______________________________
Title: General Manager
_____________________________
86
▇▇▇▇▇ FARGO BANK
By: /s/ ▇▇▇▇ ▇▇▇▇▇
_______________________________
Name: ▇▇▇▇ ▇▇▇▇▇
______________________________
Title: Vice President
_____________________________
87
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
_______________________________
Name: ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
______________________________
Title: Vice President
_____________________________
88
Schedule 1.1
LENDERS
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE ADDRESS
First Union
National Bank $32,000,000 One First Union Center
(16%) ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: Syndication Agency Services
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Fleet Bank, N.A. $28,000,000 1185 Ave. of The Americas
(14%) ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The First National $24,000,000 ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇.
Bank of Chicago (12%) ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Banque Paribas $25,000,000 ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
(▇▇.▇%) ▇▇▇▇▇ ▇▇▇▇
▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇
Asst. Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
89
LENDER PERCENTAGE ADDRESS
ABN Amro
Bank N.V. $21,000,000 LA International Branch
(10.5%) ▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
VP and Director
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
The Long-Term Credit
Bank of Japan,
Limited $14,000,000 Los Angeles Agency
(7%) ▇▇▇ ▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇▇▇
▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
▇▇▇▇▇ Fargo Bank $28,000,000 ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
(14%) ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇ ▇▇▇▇▇,
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
Bank of America National
Trust and Savings
Association $28,000,000 Commercial Banking
(14%) Department
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇,
Vice President
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇]
2
90
EXHIBIT A
to
Amended and Restated Credit Agreement
dated as of March 16, 1998
by and among
Rural/Metro Corporation,
as Borrower,
the Lenders referred to therein,
and
First Union National Bank
(f/k/a First Union National Bank of North Carolina),
as Agent
AMENDED AND RESTATED REVOLVING CREDIT NOTE
91
AMENDED AND RESTATED REVOLVING CREDIT NOTE
$________________ March ___, 1998
FOR VALUE RECEIVED, Rural/Metro Corporation, a corporation organized
under the laws of Delaware (the "Borrower"), promises to pay to the order of
____________________, (the "Lender"), at the place and times provided in the
Credit Agreement hereinafter referred to the principal sum of _________________
($__________) or, if less, the principal amount of all Loans made by the Lender
from time to time pursuant to the Amended and Restated Credit Agreement dated as
of March 16, 1998 (as amended, restated, modified or otherwise supplemented from
time to time, the "Credit Agreement") by and among the Borrower, the financial
institutions which are or may become a party thereto (collectively, the
"Lenders"), and First Union National Bank (f/k/a First Union National Bank of
North Carolina), as Agent for the Lenders. Capitalized terms used herein and not
defined herein shall have the meanings assigned thereto in the Credit Agreement.
The unpaid principal amount of this Note from time to time outstanding
is subject to mandatory repayment from time to time as provided in the Credit
Agreement and shall bear interest as provided in Section 4.1 of the Credit
Agreement. All payments of principal and interest on this Note shall be payable
in lawful currency of the United States of America in immediately available
funds to the account designated in the Credit Agreement.
This Note is entitled to the benefits of, and evidences Obligations
incurred under, the Credit Agreement, to which reference is made for a statement
of the terms and conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the Obligations evidenced by
this Note and on which such Obligations may be declared to be immediately due
and payable.
THIS NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH
THE LAWS OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW
PRINCIPLES THEREOF.
The Debt evidenced by this Note is senior in right of payment to all
Subordinated Debt and Earn-Out Obligations referred to in the Credit Agreement.
The Borrower hereby waives all requirements as to diligence,
presentment, demand of payment, protest and (except as required by the Credit
Agreement) notice of any kind with respect to this Note.
[SIGNATURE PAGE TO FOLLOW]
92
IN WITNESS WHEREOF, the undersigned Borrower has executed this Note
under seal as of the day and year first above written.
RURAL/METRO CORPORATION, a Delaware
corporation
By:_____________________________________
Name:____________________________________
Title:____________________________________
93
EXHIBIT G
to
Amended and Restated Credit Agreement
dated as of March 16, 1998
by and among
Rural/Metro Corporation,
as Borrower,
the Lenders referred to therein,
and
First Union National Bank
(f/k/a First Union National Bank of North Carolina),
as Agent
SUBSIDIARY GUARANTY AGREEMENT
94
SUBSIDIARY GUARANTY AGREEMENT
THIS SUBSIDIARY GUARANTY AGREEMENT (this "Guaranty"), dated as of March
16, 1998, made by each of the Subsidiaries of Rural/Metro Corporation, a
Delaware corporation (the "Borrower") listed on the signature pages hereto (the
"Guarantors"), in favor of FIRST UNION NATIONAL BANK (f/k/a FIRST UNION NATIONAL
BANK OF NORTH CAROLINA), a national banking association, as Agent (the "Agent")
for the ratable benefit of itself and the Lenders (the "Lenders") party to the
Amended and Restated Credit Agreement dated of even date (as amended, restated,
modified or supplemented from time to time, the "Credit Agreement") between the
Borrower, the financial institutions which are, or may from time to time become,
party thereto (collectively, the "Lenders") and the Agent.
STATEMENT OF PURPOSE
Pursuant to the terms of the Credit Agreement, the Lenders have agreed
to extend certain credit facilities to the Borrower in the aggregate principal
amount of up to $200,000,000. The Borrower and the Guarantors comprise one
integrated financial enterprise, and all Loans to the Borrower will inure,
directly or indirectly, to the benefit of each of the Guarantors.
In connection with the transactions contemplated by the Credit
Agreement, the Lenders have requested, and each of the Guarantors has agreed to
execute and deliver, this Guaranty.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, and to induce the Lenders to continue to make
available Loans pursuant to the Credit Agreement, it is agreed as follows:
SECTION 1. Definitions. Capitalized terms used herein (including the
preamble hereof) shall have the meanings assigned to them in the Credit
Agreement, unless the context otherwise requires or unless otherwise defined
herein. References in the Credit Agreement to a "Subsidiary Guaranty" or herein
to this "Guaranty" shall include and mean this Guaranty, including all
amendments, restatements, modifications and supplements hereto now or hereafter
in effect.
SECTION 2. Guaranty of Obligations of Borrower. Each Guarantor hereby,
jointly and severally with the other Guarantors, unconditionally guarantees to
the Agent for the ratable benefit of itself and the Lenders, and their
respective successors, endorsees, transferees and assigns, the prompt payment
and performance of all Obligations of the Borrower, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether or not recovery may
be or hereafter become barred by the statute of limitations, whether enforceable
or unenforceable as against the Borrower, whether or not discharged, stayed or
otherwise affected by any bankruptcy, insolvency or other similar law or
proceeding, whether created directly with the Agent or any Lender or acquired by
the Agent or any Lender through assignment, endorsement or otherwise, whether
matured or unmatured, whether joint or several, as and when the same become due
and payable (whether at maturity or earlier, by reason of acceleration,
mandatory repayment or otherwise), in accordance with the terms of any such
instruments evidencing any such obligations, including all renewals, extensions
or modifications thereof (all Obligations of the Borrower to the Agent or any
Lender, including all of the foregoing, being hereinafter collectively referred
to as the "Guaranteed Obligations"); provided, that notwithstanding anything to
the contrary contained herein, it is the intention of each Guarantor and the
Lenders that, in any proceeding involving the bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution or insolvency
or any similar proceeding with respect to any Guarantor or its assets, the
amount of such Guarantor's obligations with respect to the Guaranteed
Obligations shall be in, but not in excess of, the maximum amount thereof not
subject to avoidance or recovery by operation of applicable law governing
bankruptcy, reorganization, arrangement, adjustment of debts, relief of debtors,
dissolution, insolvency, fraudulent transfers or conveyances or other similar
laws (including, without limitation, 11 U.S.C. Section 547, Section 548,
Section 550 and other "avoidance" provisions of Title 11 of the United States
Code) applicable in any such proceeding to such Guarantor and this Guaranty
(collectively, "Applicable Insolvency Laws"). To that end, but only in the event
and to the extent that such Guarantor's obligations with respect to the
Guaranteed Obligations or any payment made pursuant to the Guaranteed
Obligations
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would, but for the operation of the foregoing proviso, be subject to avoidance
or recovery in any such proceeding under Applicable Insolvency Laws, the amount
of such Guarantor's obligations with respect to the Guaranteed Obligations shall
be limited to the largest amount which, after giving effect thereto, would not,
under Applicable Insolvency Laws, render such Guarantor's obligations with
respect to such Guaranteed Obligations unenforceable or avoidable or otherwise
subject to recovery under Applicable Insolvency Laws. To the extent any payment
actually made pursuant to the Guaranteed Obligations exceeds the limitation of
the foregoing proviso and is otherwise subject to avoidance and recovery in any
such proceeding under Applicable Insolvency Laws, the amount subject to
avoidance shall in all events be limited to the amount by which such actual
payment exceeds such limitation and the Guaranteed Obligations as limited by the
foregoing proviso shall in all events remain in full force and effect and be
fully enforceable against such Guarantor. The foregoing proviso is intended
solely to preserve the rights of the Agent hereunder against such Guarantor in
such proceeding to the maximum extent permitted by Applicable Insolvency Laws
and neither such Guarantor, the Borrower, any other Guarantor nor any other
Person shall have any right or claim under such proviso that would not otherwise
be available under Applicable Insolvency Laws in such proceeding.
SECTION 3. Nature of Guaranty. Each Guarantor agrees that this Guaranty
is a continuing, unconditional guaranty of payment and performance and not of
collection, and that its obligations under this Guaranty shall be primary,
absolute and unconditional, irrespective of, and unaffected by:
(a) the genuineness, validity, regularity, enforceability or
any future amendment of, or change in, the Credit Agreement or any
other Loan Document or any other agreement, document or instrument to
which the Borrower or any Subsidiary thereof is or may become a party;
(b) the absence of any action to enforce this Guaranty, the
Credit Agreement or any other Loan Document or the waiver or consent by
the Agent or any Lender with respect to any of the provisions of this
Guaranty, the Credit Agreement or any other Loan Document;
(c) the existence, value or condition of, or failure to
perfect its Lien, if any, against, any security for or other guaranty
of the Guaranteed Obligations or any action, or the absence of any
action, by the Agent or any Lender in respect of such security or
guaranty (including, without limitation, the release of any such
security or guaranty); or
(d) any other action or circumstances which might otherwise
constitute a legal or equitable discharge or defense of a surety or
guarantor;
it being agreed by each Guarantor that, subject to the proviso in Section 2
hereof, its obligations under this Guaranty shall not be discharged until the
final and indefeasible payment and performance, in full, of the Guaranteed
Obligations and the termination of the Commitments. To the extent permitted by
Applicable Law, each Guarantor expressly waives all rights it may now or in the
future have under any statute (including, without limitation, North Carolina
General Statutes Section 26-7, et seq. or similar law), or at law or in equity,
or otherwise, to compel the Agent or any Lender to proceed in respect of the
Guaranteed Obligations against the Borrower or any other party or against any
security for or other guaranty of the payment and performance of the Guaranteed
Obligations before proceeding against, or as a condition to proceeding against,
such Guarantor. To the extent permitted by Applicable Law, each Guarantor
further expressly waives and agrees not to assert or take advantage of any
defense based upon the failure of the Agent or any Lender to commence an action
in respect of the Guaranteed Obligations against the Borrower, such Guarantor,
any other guarantor or any other party or any security for the payment and
performance of the Guaranteed Obligations. Each Guarantor agrees that any notice
or directive given at any time to the Agent or any Lender which is inconsistent
with the waivers in the preceding two sentences shall be null and void and may
be ignored by the Agent or such Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty. The foregoing waivers are of the essence of the
transaction contemplated by the Loan Documents and, but for this Guaranty and
such waivers, the Agent and Lenders would decline to enter into the Credit
Agreement.
SECTION 4. Demand by the Agent. In addition to the terms set forth in
Section 3, and in no manner imposing any limitation on such terms, if all or any
portion of the then outstanding Guaranteed Obligations under the Credit
Agreement are declared to be immediately due and payable, then the Guarantors
shall, upon demand in
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writing therefor by the Agent to the Guarantors, pay all or such portion of the
outstanding Guaranteed Obligations then declared due and payable. Payment by the
Guarantors shall be made to the Agent, to be credited and applied upon the
Guaranteed Obligations, in immediately available Dollars to an account
designated by the Agent or at the address referenced herein for the giving of
notice to the Agent or at any other address that may be specified in writing
from time to time by the Agent.
SECTION 5. Waivers. In addition to the waivers contained in Section 3,
each Guarantor, to the extent permitted by law, waives and agrees that it shall
not at any time insist upon, plead or in any manner whatever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by such
Guarantor of its obligations under, or the enforcement by the Agent or the
Lenders of, this Guaranty. Each Guarantor further hereby waives diligence,
presentment, demand, protest and notice of whatever kind or nature with respect
to any of the Guaranteed Obligations and waives the benefit of all provisions of
law which are or might be in conflict with the terms of this Guaranty. Each
Guarantor represents, warrants and agrees that its obligations under this
Guaranty are not and shall not be subject to any counterclaims, offsets or
defenses of any kind against the Agent, the Lenders or the Borrower whether now
existing or which may arise in the future.
SECTION 6. Benefits of Guaranty. The provisions of this Guaranty are
for the benefit of the Agent and the Lenders and their respective successors,
transferees, endorsees and assigns, and nothing herein contained shall impair,
as between the Borrower, the Agent and the Lenders, the obligations of the
Borrower under the Loan Documents. In the event all or any part of the
Guaranteed Obligations are transferred, endorsed or assigned by the Agent or any
Lender to any Person or Persons, any reference to an "Agent", or "Lender" herein
shall be deemed to refer equally to such Person or Persons.
SECTION 7. Modification of Loan Documents etc. If the Agent or the
Lenders shall at any time or from time to time, with or without the consent of,
or notice to, the Guarantors:
(a) change or extend the manner, place or terms of payment of,
or renew or alter all or any portion of, the Guaranteed Obligations;
(b) take any action under or in respect of the Loan Documents
in the exercise of any remedy, power or privilege contained therein or
available to it at law, in equity or otherwise, or waive or refrain
from exercising any such remedies, powers or privileges;
(c) amend or modify, in any manner whatsoever, the Loan
Documents;
(d) extend or waive the time for performance by any Guarantor,
any other guarantor, the Borrower or any other Person of, or compliance
with, any term, covenant or agreement on its part to be performed or
observed under a Loan Document, or waive such performance or compliance
or consent to a failure of, or departure from, such performance or
compliance;
(e) take and hold security or collateral for the payment of
the Guaranteed Obligations or sell, exchange, release, dispose of, or
otherwise deal with, any property pledged, mortgaged or conveyed, or in
which the Agent or the Lenders have been granted a Lien, to secure any
Debt of any Guarantor, any other guarantor or the Borrower to the Agent
or the Lenders;
(f) release anyone who may be liable in any manner for the
payment of any amounts owed by any Guarantor, any other guarantor or
the Borrower to the Agent or any Lender;
(g) modify or terminate the terms of any intercreditor or
subordination agreement pursuant to which claims of other creditors of
any Guarantor, any other guarantor or the Borrower are subordinated to
the claims of the Agent or any Lender; or
(h) apply any sums by whomever paid or however realized to any
amounts owing by any Guarantor, any other guarantor or the Borrower to
the Agent or any Lender in such manner as the Agent or any Lender shall
determine in its reasonable discretion;
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then neither the Agent nor any Lender shall incur any liability to any Guarantor
as a result thereof, and no such action shall impair or release the obligations
of any Guarantor under this Guaranty.
SECTION 8. Reinstatement. Each Guarantor agrees that, if any payment
made by the Borrower or any other Person applied to the Obligations is at any
time annulled, set aside, rescinded, invalidated, declared to be fraudulent or
preferential or otherwise required to be refunded or repaid or the proceeds of
any collateral are required to be refunded by the Agent or any Lender to the
Borrower, its estate, trustee, receiver or any other party, including, without
limitation, any Guarantor, under any Applicable Law or equitable cause, then, to
the extent of such payment or repayment, each Guarantor's liability hereunder
(and any Lien securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
collateral securing such Guarantor's liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien, if any) shall be reinstated in full force and effect,
and such prior cancellation or surrender shall not diminish, release, discharge,
impair or otherwise affect the obligations of such Guarantor in respect of the
amount of such payment (or any Lien securing such obligation).
SECTION 9. Representations and Warranties. To induce the Lenders to
make any Loans, each Guarantor hereby represents and warrants that:
(a) such Guarantor has the corporate right, power and
authority to execute, deliver and perform this Guaranty and has taken
all necessary corporate action to authorize its execution, delivery and
performance of, this Guaranty;
(b) this Guaranty constitutes the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except as enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by the availability of equitable
remedies;
(c) the execution, delivery and performance of this Guaranty
will not violate any provision of any Applicable Law or Material
Contract obligation of such Guarantor and will not result in the
creation or imposition of any Lien upon or with respect to any property
or revenues of such Guarantor;
(d) no consent or authorization of, filing with, or other act
by or in respect of, any arbitrator or Governmental Authority and no
consent of any other Person (including, without limitation, any
stockholder or creditor of such Guarantor), is required in connection
with the execution, delivery, performance, validity or enforceability
of this Guaranty;
(e) no actions, suits or proceedings before any arbitrator or
Governmental Authority are pending or, to the knowledge of such
Guarantor, threatened by or against such Guarantor or against any of
its properties with respect to this Guaranty or any of the transactions
contemplated hereby;
(f) such Guarantor has such title to the real property owned
by it and a valid leasehold interest in the real property leased by it,
and has good and marketable title to all of its personal property
sufficient to carry on its business free of any and all Liens of any
type whatsoever, except those permitted by Section 10.3 of the Credit
Agreement; and
(g) as of the Closing Date, such Guarantor (i) has capital
sufficient to carry on its business and transactions and all business
and transactions in which it engages and is able to pay its debts as
they mature, (ii) owns property having a value, both at fair valuation
and at present fair saleable value, greater than the amount required to
pay its probable liabilities (including contingencies) and (iii) does
not believe that it will incur debts or liabilities beyond its ability
to pay such debts or liabilities as they mature.
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SECTION 10. Remedies.
(a) Upon the occurrence of any Event of Default, with the consent of
the Required Lenders, the Agent may, or upon the request of the Required
Lenders, the Agent shall, enforce against the Guarantors their respective
obligations and liabilities hereunder and exercise such other rights and
remedies as may be available to the Agent hereunder, under the Loan Documents or
otherwise.
(b) No right or remedy herein conferred upon the Agent is intended to
be exclusive of any other right or remedy contained herein or in any other Loan
Document or otherwise, and every such right or remedy contained herein and
therein or now or hereafter existing at law, or in equity, or by statute, or
otherwise shall be cumulative. The Required Lenders may instruct the Agent to
pursue, or refrain from pursuing, any remedy available to the Agent at such
times and in such order as the Required Lenders shall determine, and the
Required Lenders' election as to such remedies shall not impair any remedies
against any Guarantor not then exercised. In addition, any election of remedies
which results in the denial or impairment of the right of the Agent to seek a
deficiency judgment against the Borrower shall not impair any Guarantor's
obligation to pay the full amount of the Guaranteed Obligations.
SECTION 11. No Subrogation. Notwithstanding any payment or payments by
any of the Guarantors hereunder, or any set-off or application of funds of any
of the Guarantors by the Agent or any Lender, or the receipt of any amounts by
the Agent or any Lender with respect to any of the Guaranteed Obligations, none
of the Guarantors shall be entitled to be subrogated to any of the rights of the
Agent or any Lender against the Borrower or the other Guarantors or against any
collateral security held by the Agent or any Lender for the payment of the
Guaranteed Obligations nor shall any of the Guarantors seek any reimbursement
from the Borrower or any of the other Guarantors in respect of payments made by
such Guarantor in connection with the Guaranteed Obligations, until all amounts
owing to the Agent and the Lenders on account of the Guaranteed Obligations are
paid in full and the Commitments are terminated. If any amount shall be paid to
any Guarantor on account of such subrogation rights at any time when all of the
Guaranteed Obligations shall not have been paid in full, such amount shall be
held by such Guarantor in trust for the Agent, segregated from other funds of
such Guarantor, and shall, forthwith upon receipt by such Guarantor, be turned
over to the Agent in the exact form received by such Guarantor (duly endorsed by
such Guarantor to the Agent, if required) to be applied against the Guaranteed
Obligations, whether matured or unmatured, in such order as set forth in the
Credit Agreement.
SECTION 12. Miscellaneous.
(a) Entire Agreement; Amendments. This Guaranty, together with the
other Loan Documents, constitutes the entire agreement between the parties with
respect to the subject matter hereof and supersedes all prior agreements with
respect to the subject matter hereof and may not be amended or supplemented
except by a writing signed by each Guarantor and the Agent, consented to by such
Lenders as required by Section 13.10 of the Credit Agreement.
(b) Headings. Titles and captions of sections and subsections in this
Guaranty are for convenience of reference only, and neither limit or amplify the
provisions of this Guaranty.
(c) Notices. All notices and communications hereunder shall be given in
accordance with Section 13.1 of the Credit Agreement.
(d) Binding Effect. This Guaranty shall bind each Guarantor and shall
inure to the benefit of the Agent and Lenders and their respective successors
and assigns. No Guarantor may assign this Guaranty or delegate any of its duties
hereunder, other than in connection with the merger of such Guarantor into such
other Person as permitted by Section 10.5 of the Credit Agreement.
(e) Non-Waiver. The failure of the Agent or any Lender to enforce any
right or remedy hereunder, or promptly to enforce any such right or remedy,
shall not constitute a waiver thereof, nor give rise to any estoppel against the
Agent or any Lender, nor excuse any Guarantor from its obligations hereunder.
Any waiver of any such right or remedy by the Lenders must be in writing and
signed by the Required Lenders.
(f) Termination. This Guaranty shall terminate and be of no further
force or effect on the date when the Guaranteed Obligations have been
indefeasibly paid in full.
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(g) Governing Law. This Guaranty shall be governed by and construed and
enforced in accordance with the laws of the State of North Carolina, without
reference to the conflicts or choice of law principles thereof.
(h) Consent to Jurisdiction. Each Guarantor hereby irrevocably consents
to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Guaranty, any rights or
obligations hereunder, or the performance of such rights and obligations. Each
Guarantor hereby irrevocably consents to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the Agent or any
Lender in connection with this Guaranty, any rights or obligations hereunder, or
the performance of such rights and obligations, on behalf of itself or its
property, in the manner referenced in Section 12(c). Nothing in this Section
12(h) shall affect the right of the Agent or any Lender to serve legal process
in any other manner permitted by Applicable Law or affect the right of the Agent
or any Lender to bring any action or proceeding against any Guarantor or its
properties in the courts of any other jurisdictions.
(i) Binding Arbitration; Waiver of Jury Trial.
(i) Binding Arbitration. Upon demand of any party, whether
made before or after institution of any judicial proceeding, any
dispute, claim or controversy arising out of, connected with or
relating to this Guaranty or any other Loan Documents ("Disputes"),
between or among parties to this Guaranty or any other Loan Document
shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the
right of that party to demand arbitration hereunder. Disputes may
include, without limitation, tort claims, counterclaims, claims brought
as class actions, claims arising from Loan Documents executed in the
future, or claims concerning any aspect of the past, present or future
relationships arising out or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the
American Arbitration Association and Title 9 of the U.S. Code. All
arbitration hearings shall be conducted in Charlotte, North Carolina.
The expedited procedures set forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall
be comprised of licensed attorneys. The single arbitrator selected for
expedited procedure shall be a retired judge from the highest court of
general jurisdiction, state or federal, of the state where the hearing
will be conducted.
(ii) JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE AGENT, EACH LENDER AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVE
THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION,
CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS GUARANTY OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.
(iii) Preservation of Certain Remedies. Notwithstanding the
preceding binding arbitration provisions, the parties hereto and the
Loan Documents preserve, without diminution, certain remedies that such
Persons may employ or exercise freely, either alone, in conjunction
with or during a Dispute. Each such Person shall have and hereby
reserves the right to proceed in any court of proper jurisdiction or by
self help to exercise or prosecute the following remedies: (A) all
rights to foreclose against any real or personal property or other
security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (B) all
rights of self help including peaceful occupation of property and
collection of rents, set off, and peaceful possession of property, (C)
obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver
and in filing an involuntary bankruptcy proceeding, and (D) when
applicable, a judgment by confession of judgment. Preservation of these
remedies does not limit the power of an arbitrator to grant similar
remedies that may be requested by a party in a Dispute.
100
(j) Expenses. The Guarantors agree that they will reimburse the Agent
and each Lender for all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and expenses) incurred by such Agent or Lender in connection
with the enforcement of the obligations of the Guarantors under this Guaranty
and any other Loan Documents and all reasonable out-of-pocket expenses
(including reasonable attorneys' fees and expenses) incurred by the Agent in
connection with the amendment or modification of this Guaranty.
(k) Indemnities. Each Guarantor agrees to hold the Agent and the
Lenders harmless from and against all losses suffered by the Agent and the
Lenders in connection with (i) the exercise by the Agent or the Lenders of any
right or remedy granted to them under this Guaranty, (ii) any claim, and the
prosecution or defense thereof, arising out of or in any way connected with this
Guaranty, and (iii) the collection or enforcement of the Obligations or any of
them; provided, that such Guarantor shall not be obligated to reimburse the
Agent or the Lenders for costs and expenses, or indemnify the Agent or the
Lenders for any loss, resulting from the gross negligence or willful misconduct
of the Agent or the Lenders. Notwithstanding any termination of this Guaranty,
the indemnities to which the Agent and Lenders are entitled under this Guaranty
shall continue in full force and effect and shall protect the Agent and the
Lenders against events arising after such termination as well as before.
[SIGNATURE PAGES TO FOLLOW]
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IN WITNESS WHEREOF, each of the Guarantors has executed and delivered
this Guaranty as of the date hereinabove first written.
AID AMBULANCE AT VIGO COUNTY, INC.
an Indiana corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
AMBULANCE TRANSPORT SYSTEMS, INC.
a New Jersey corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
AMERICAN LIMOUSINE SERVICE, INC.
an Ohio corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
ARROW AMBULANCE, INC.
an Idaho corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
BEACON TRANSPORTATION, INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
CITY WIDE AMBULANCE SERVICE, INC.
an Ohio corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
CORNING AMBULANCE SERVICE INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
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DONLOCK, LTD
a Pennsylvania corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
E.M.S. VENTURES, INC.
a Georgia corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
EMS VENTURES OF SOUTH CAROLINA, INC.
a South Carolina corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
EASTERN AMBULANCE SERVICE, INC.
a Nebraska corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
EASTERN PARAMEDICS, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
GOLD CROSS AMBULANCE SERVICES, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
GOLD CROSS AMBULANCE SERVICE,
OF PA., INC.
an Ohio corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
103
▇▇▇▇▇ & ▇▇▇▇▇, INC
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇▇▇ & ▇▇▇▇▇ AMBULETTE, LTD.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
LASALLE AMBULANCE INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
104
MEDI-CAB OF GEORGIA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MEDICAL EMERGENCY DEVICES AND
SERVICES (MEDS), INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MEDICAL TRANSPORTATION SERVICES, INC.
a South Dakota corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MEDSTAR EMERGENCY MEDICAL
SERVICES, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MERCURY AMBULANCE SERVICE, INC.
a Kentucky corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
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METRO CARE CORP.
an Ohio corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MO-RO-KO, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MULTI CAB INC.
a New Jersey corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MULTI-CARE INTERNATIONAL, INC.
a New Jersey corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
MULTI-CARE MEDICAL CAR SERVICE, INC.
a New Jersey corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
106
MULTI-HEALTH CORP.
a Florida corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇▇▇ AMBULANCE SERVICE, INC.
an Indiana corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
NATIONAL AMBULANCE &
OXYGEN SERVICE, INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
NORTH MISS. AMBULANCE SERVICE, INC.
a Mississippi corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
PHYSICIANS AMBULANCE SERVICE, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
107
PROFESSIONAL MEDICAL SERVICES, INC.
an Arkansas corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RISC AMERICA ALABAMA
FIRE SAFETY SERVICES, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
R/M MANAGEMENT CO., INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
R/M OF MISSISSIPPI, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
R/M OF TENNESSEE G.P., INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇
▇/▇ ▇▇ ▇▇▇▇▇▇▇▇▇ L.P., INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
R/M OF TEXAS G.P., INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
R/M PARTNERS, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RMC CORPORATE CENTER, L.L.C.
An Arizona Limited Liability Company
By: RURAL/METRO CORPORATION,
an Arizona corporation,
Its Member
By: ___________________________________
Name:________________________________
Title:_______________________________
109
RURAL/METRO ARGENTINA, L.L.C.
an Arizona limited liability company
By: RURAL/METRO NETHERLANDS
HOLDINGS, B.V.
a Netherlands corporation,
Its Member
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO BRASIL, L.L.C.
an Arizona corporation
By: RURAL/METRO NETHERLANDS
HOLDINGS, B.V.
a Netherlands corporation,
Its Member
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CANADIAN HOLDINGS, INC.
a Delaware Corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO COMMUNICATIONS SERVICES, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
110
RURAL/METRO CORPORATION
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CORPORATION OF FLORIDA
a Florida corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CORPORATION OF
TENNESSEE
a Tennessee corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO FIRE DEPT., INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO INTERNATIONAL, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
111
RURAL/METRO MID-ATLANTIC, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ALABAMA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARGENTINA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARKANSAS, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARLINGTON, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF BRASIL, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF CALIFORNIA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇
▇▇▇▇▇/▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF CENTRAL OHIO, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF GEORGIA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF INDIANA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
113
RURAL/METRO OF INDIANA, L.P.
a Delaware limited partnership
By: THE AID AMBULANCE COMPANY, INC.
a Delaware corporation,
Its General Partner
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF INDIANA II, L.P.
a Delaware corporation
By: THE AID AMBULANCE COMPANY, INC.
a Delaware corporation,
Its General Partner
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF KENTUCKY, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF MISSISSIPPI, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF NEBRASKA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF NEW YORK, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇
▇▇▇▇▇/▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇, INC.
a Florida corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF OHIO, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF OREGON, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ROCHESTER, INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
115
RURAL/METRO OF SAN DIEGO, INC.
a California corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF SOUTH CAROLINA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF SOUTH DAKOTA, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF TENNESSEE, L.P.
a Delaware limited partnership
By: R/M OF TENNESSEE, G.P., INC.
a Delaware corporation,
Its General Partner
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF TEXAS, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇
▇▇▇▇▇/▇▇▇▇▇ ▇▇ ▇▇▇▇▇, L.P.,
a Delaware limited partnership
By: R/M OF TEXAS G.P., INC.,
a Delaware corporation,
Its General Partner
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO PROTECTION SERVICES, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO TEXAS HOLDINGS, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SW GENERAL, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SIOUX FALLS AMBULANCE, INC.
a South Dakota corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇ EMERGENCY MEDICAL SERVICES,
INC.
a Georgia corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF CASA GRANDE, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF SOUTHEASTERN
ARIZONA, INC. an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF TUCSON, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST GENERAL SERVICES, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
118
THE AID AMBULANCE COMPANY, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
THE AID COMPANY, INC.
an Indiana corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
THE WESTERN NEW YORK EMERGENCY
MEDICAL SERVICES TRAINING
INSTITUTE INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
TOWNS AMBULANCE SERVICE, INC.
a New York corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
UNITED MEDICAL SERVICES, INC.
a Washington corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
119
VALLEY FIRE SERVICE, INC.
a Delaware corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
W & W LEASING COMPANY, INC.
an Arizona corporation
By: ___________________________________
Name:________________________________
Title:_______________________________
120
SUBSIDIARY GUARANTY AGREEMENT SUPPLEMENT
UNCONDITIONAL GUARANTY AGREEMENT SUPPLEMENT, dated as of
_____________________, (the "Supplement"), made by [INSERT NAME OF NEW
SUBSIDIARY], a __________________ (the "New Guarantor"), in favor of First Union
National Bank (f/k/a First Union National Bank of North Carolina), as agent (in
such capacity, the "Agent") under the Credit Agreement (as defined in the
Guaranty Agreement referred to below) for the ratable benefit of itself and the
Lenders (as so defined).
1. Reference is hereby made to the Guaranty Agreement dated as of
March 16, 1998, made by the certain Subsidiaries of the Borrower party thereto
as guarantors, (the "Guarantors") in favor of the Agent (as amended,
supplemented or otherwise modified as of the date hereof, the "Guaranty
Agreement"). This Supplement supplements the Guaranty Agreement, forms a part
thereof and is subject to the terms thereof. Capitalized terms used and not
defined herein shall have the meanings given thereto or referenced in the
Guaranty Agreement.
2. The New Guarantor hereby agrees to unconditionally guarantee
to the Agent for the ratable benefit of itself and the Lenders, and their
respective successors, endorsees, transferees and assigns, the prompt payment
(whether at stated maturity, by acceleration or otherwise) and performance of
all Obligations of the Borrower to the same extent and upon the same terms and
conditions as are contained in the Guaranty Agreement.
3. The New Guarantor hereby agrees that it is a party to the
Guaranty Agreement as if a signatory thereto on the Closing Date of the Credit
Agreement, and the New Guarantor shall comply with all of the terms, covenants,
conditions and agreements and hereby makes each representation and warranty, in
each case set forth therein. The New Guarantor agrees that the "Subsidiary
Guaranty" or "Guaranty" as used therein or in any other Loan Documents shall
mean the Guaranty Agreement as supplemented hereby.
4. The New Guarantor hereby acknowledges it has received a copy
of the Guaranty Agreement and that it has read and understands the terms
thereof.
[SIGNATURE PAGE TO FOLLOW]
121
IN WITNESS WHEREOF, the undersigned hereby causes this Supplement to be
executed and delivered as of the ____day of _____________19__.
[INSERT NAME OF NEW SUBSIDIARY]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
122
EXHIBIT I
to
Amended and Restated Credit Agreement
dated as of March 16, 1998
by and among
Rural/Metro corporation,
as Borrower,
the Lenders referred to therein,
and
First Union National Bank
(f/k/a First Union National Bank of North Carolina),
as Agent
FORM OF INTERCOMPANY SUBORDINATION AGREEMENT
123
FORM OF INTERCOMPANY SUBORDINATION AGREEMENT
THIS INTERCOMPANY SUBORDINATION AGREEMENT, dated as of March __, 1998
among RURAL/METRO CORPORATION, a Delaware corporation (the "Borrower"), the
several subsidiaries of the Borrower identified on the signature pages hereto
(the "Guarantors" and together with the Borrower, the "Intercompany Loan
Parties") and FIRST UNION NATIONAL BANK(f/k/a FIRST UNION NATIONAL BANK OF NORTH
CAROLINA), as agent (the "Agent") for the Lenders party to the Credit Agreement
dated as of March 16, 1998 by and among the Borrower, the financial institutions
that are or may become party thereto (the "Lenders") and the Agent.
Statement of Purpose
The Credit Agreement requires that the Intercompany Loan Parties agree
to subordinate all intercompany obligations owing by any Intercompany Loan Party
to any other Intercompany Loan Party to all obligations owed to the Agent or any
Lender under the Credit Agreement or any other Loan Document (the "Senior
Indebtedness") by any of the Intercompany Loan Parties.
To induce the Lenders to enter into the Credit Agreement, the
Intercompany Loan Parties have agreed to enter into this Intercompany
Subordination Agreement with respect to all such intercompany obligations.
Capitalized terms used herein and not defined herein shall have the meanings
assigned thereto in the Credit Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. SUBORDINATION.
1.01. Subordination to Senior Indebtedness.
Each Intercompany Loan Party for itself and its successors agrees that,
to the extent it is from time to time entitled to receive payment in respect of
any intercompany loan, advance or other account from any other Intercompany Loan
Party (a "Subordinated Obligation"), the payment of the principal of, premium,
if any, interest on (including all interest accruing thereon subsequent to a
Bankruptcy Event ("post-petition interest")) or other fees, costs, expenses and
any other amounts accrued, incurred or otherwise due in connection with all such
Subordinated Obligations from time to time, is subordinated in right of payment,
to the extent and in the manner provided herein, to the payment in full of all
Senior Indebtedness.
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124
1.02. No Payment on the Subordinated Obligations in Certain
Circumstances.
(a) No payment shall be made, either directly or indirectly, by or
on behalf of any Intercompany Loan Party, in cash, property or securities on
account of the principal of, premium, if any, and interest (including
post-petition interest) on any Subordinated Obligation at the time outstanding,
or other fees, costs, expenses and any other amounts accrued, incurred or
otherwise due in respect of any such Subordinated Obligation, or to prepay,
purchase, redeem, retire, exchange, defease or otherwise acquire any
Subordinated Obligation or any instrument evidencing a Subordinated Obligation
for cash or property (collectively, "Subordinated Payments"), (i) upon the
maturity of any Senior Indebtedness by acceleration or otherwise, unless and
until all principal of, interest (including post-petition interest) and premium,
if any, on and all other fees, costs, expenses and other amounts accrued or
incurred pursuant to the terms of the Senior Indebtedness then due, shall have
first been paid in full or waived, or (ii) upon the occurrence of any Event of
Default with respect to any Senior Indebtedness (unless and until such Event of
Default shall have been cured or waived in accordance with the terms of the
Credit Agreement).
(b) In furtherance of the provisions of Section 1.01, in the event
that, notwithstanding the foregoing provisions of subsection 1.02, any
Subordinated Payment, either directly or indirectly, shall be made by or on
behalf of any Intercompany Loan Party, and received by another Intercompany Loan
Party at a time when such payment was prohibited by the provisions of this
subsection 1.02, then, unless and until such payment is no longer prohibited by
this subsection 1.02, such payment shall be segregated and held in trust for the
benefit of and shall be promptly paid over to, the Agent, for the benefit of the
Lenders.
(c) The Borrower shall give prompt written notice to each other
Intercompany Loan Party of any Event of Default with respect to such Senior
Indebtedness. Failure to give such notice shall not affect the subordination of
the Subordinated Obligations to the Senior Indebtedness provided in this
Intercompany Subordination Agreement.
1.03. Subordination of Intercompany Obligations on Dissolution,
Liquidation or Reorganization of an Intercompany Loan Party.
Upon any distribution by any Intercompany Loan Party of assets of any
kind or character, whether in cash, property or securities, to creditors upon
any dissolution, winding up, liquidation or reorganization (excluding, so long
as no Default or Event of Default shall have occurred and be continuing,
mergers, sales of assets and other combinations permitted pursuant to Sections
10.5, 10.6(d) and 10.6(e) of the Credit Agreement) of such Intercompany Loan
Party (the "Liquidating Loan Party") (whether in a voluntary or involuntary
bankruptcy, insolvency or receivership proceedings or upon any assignment for
the benefit of creditors or otherwise):
(a) the Lenders shall first receive payment in full in
cash, to the extent then presently available for payment, of the
principal, interest (including all interest accruing on the Senior
Indebtedness subsequent to a Bankruptcy Event ("post-petition interest
on Senior Indebtedness")) and premium, if any, due thereon and all
other fees, costs, expenses, or other amounts accrued or incurred
pursuant to the terms thereof (or have such payments duly provided for
in a manner reasonably satisfactory to holders of Senior Indebtedness
or their representative) before any other Intercompany Loan Party is
entitled to receive any Subordinated Payment on account of or accrued
or incurred in connection with any Subordinated Obligation;
(b) any payment or distribution of assets of the
Liquidating Loan Party of any kind or character, whether in cash,
property or securities to which such other Intercompany Loan Party
would be entitled except for the provisions of this Intercompany
Subordination Agreement shall be paid by the Liquidating Loan Party,
the liquidating trustee or agent or other person making such a payment
or distribution, directly to the Agent, for the benefit of the Lenders,
to the extent necessary to make payment in full of all Senior
Indebtedness remaining unpaid; and
(c) in the event that, notwithstanding the foregoing, any
payment or distribution of assets of the Liquidating Loan Party of any
kind or character, whether in cash, property or securities,
3
125
shall be received by any such other Intercompany Loan Party on account
of, or accrued or incurred in connection with, any Subordinated
Obligation before all Senior Indebtedness is paid in full in cash, or
effective provision (in a manner reasonably satisfactory to the
Lenders) made for its payment, then such payment or distribution shall
be segregated and received and held in trust for the benefit of and
shall be promptly paid over to the Agent, for the benefit of the
Lenders, for application to the payment of all Senior Indebtedness
until such Senior Indebtedness shall have been paid in full (including
post-petition interest on the Senior Indebtedness).
The Borrower shall give prompt written notice to the Agent and each
Intercompany Loan Party of any dissolution, winding up, liquidation or
reorganization of any Intercompany Loan Party, but failure to give such notice
shall not affect the subordination of the Subordinated Obligations to the Senior
Indebtedness provided in this Intercompany Subordination Agreement.
1.04. Subrogation.
Subject to the payment in full of all Senior Indebtedness, the holder
of, or obligee with respect to, any Subordinated Obligation shall be subrogated
to the rights of the Lenders to receive payments or distributions of assets of
an Intercompany Loan Party applicable to the Senior Indebtedness to the extent
that distributions were paid to the Lenders that otherwise would have been paid
to such obligee, until all amounts owing on such Subordinated Obligation shall
be paid in full, and for the purpose of such subrogation no such payments or
distributions to the Lenders by virtue of this Intercompany Subordination
Agreement, which otherwise would have been made to such obligee, shall, as
between the obligor on such Subordinated Obligation and such obligee, be deemed
to be payment on account of such Subordinated Obligation, it being understood
that the provisions of this Intercompany Subordination Agreement are and are
intended solely for the purpose of defining the relative rights of the
Intercompany Loan Parties, on the one hand, and the Lenders, on the other hand.
4
126
1.05. Subordination Rights Not Impaired.
(a) No right of the Agent or any Lender to enforce subordination
as provided herein shall at any time in any way be prejudiced or impaired by any
act or failure to act on the part of any Intercompany Loan Party or by any act
or failure to act, in good faith, by the Agent or any such Lender, or by any
noncompliance by any Intercompany Loan Party with the terms of any Subordinated
Obligation, regardless of any knowledge thereof which any such Lender may have
or be otherwise charged with. The Agent and the Lenders may extend, renew,
modify or amend the terms of Senior Indebtedness or any security therefor and
release, sell or exchange such security and otherwise deal freely with any
Intercompany Loan Party, all without affecting the liabilities and obligations
of any other Intercompany Loan Party or the rights of the Agent and the Lenders
hereunder.
(b) All rights and interests hereunder or under any Subordinated
Obligation of the Agent and the Lenders, and all agreements and obligations of
the Intercompany Loan Parties under this Intercompany Subordination Agreement,
shall remain in full force and effect irrespective of (i) any lack of validity
or enforceability of the Credit Agreement or any other Loan Document, or of any
provision of any thereof or (ii) any other circumstance that might otherwise
constitute a defense available to, or a discharge of, any Intercompany Loan
Party in respect of the Senior Indebtedness.
1.06. Authorization to Effect Subordination.
Each Intercompany Loan Party, by its acceptance hereof, solely in its
capacity as obligee with respect to Subordinated Obligations, upon the
occurrence and during the continuation of an Event of Default under the Credit
Agreement, (a) irrevocably authorizes and empowers (but without imposing any
obligation on) the Agent (through its authorized representatives), on behalf of
itself and the Lenders, to demand, ▇▇▇ for, collect and receive such obligee's
ratable share of payments or distributions with respect to Subordinated
Obligations which are required to be paid or delivered to the Lenders as
provided herein, and take all such other action, in the name of such obligee or
otherwise, as such authorized representatives may determine to be necessary or
appropriate for the enforcement of the provisions of this Intercompany
Subordination Agreement, including without limitation, that (i) such
representatives shall have the right to vote such obligee's interest in any
proceeding under the Bankruptcy Law as such vote relates to any Subordinated
Obligation or Subordinated Payment and (ii) in any such proceeding such
representatives may, as attorney-in-fact for such obligee, file any claim, proof
of claim or such other instrument of similar character, in each case, solely to
the extent such proof of claim or such other instrument relates to any
Subordinated Obligation or Subordinated Payment; and (b) agrees to execute and
deliver to such representatives, all such further instruments confirming the
authorization hereinabove set forth, and all such powers of attorney, proofs of
claim, assignments of claim and other instruments as may reasonably be requested
by the Agent.
5
127
1.07. Definitions.
"Bankruptcy Event" means (a) any Intercompany Loan Party, pursuant to
or within the meaning of any Bankruptcy Law (i) admits in writing its inability
to pay its debts generally as they become due, (ii) commences a voluntary case
or proceeding under any Bankruptcy Law with respect to itself, (iii) consents to
the entry of a judgment, decree or order for relief against it in an involuntary
case or proceeding in which it is the alleged debtor under any Bankruptcy Law,
(iv) consents to the appointment of a Custodian of it or for any substantial
part of its property, (v) consents to or acquiesces in the institution of
bankruptcy or insolvency proceedings against it, (vi) applies for, consents to
or acquiesces in the appointment of or taking possession by a Custodian of any
other Intercompany Loan Party for any substantial part of their properties,
(vii) makes a general assignment for the benefit of its creditors or (viii)
takes any corporate act to authorize any of the foregoing; or (b) a court of
competent jurisdiction enters a judgment, decree or order for relief in respect
of any Intercompany Loan Party in an involuntary case or proceeding under any
Bankruptcy Law which shall (i) approve as properly filed a petition seeking
reorganization, arrangement, adjustment or composition in respect of any
Intercompany Loan Party, (ii) appoint a Custodian of any Intercompany Loan Party
for any substantial part of their respective properties or (iii) order the
winding-up or liquidation of the affairs of any Intercompany Loan Party; and
such judgment, decree or order shall remain unstayed and in effect for a period
of 60 consecutive days; or any bankruptcy or insolvency petition or application
is filed, or any bankruptcy or insolvency proceeding is commenced against any
Intercompany Loan Party and such petition, application or proceeding is not
dismissed within 60 days.
"Bankruptcy Law" means Title 11, U.S. Code or any similar Federal or
state law for the relief of debtors.
"Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.
SECTION 2. COUNTERPARTS.
This Intercompany Subordination Agreement may be executed in any number
of counterparts, which may be originals or copies sent by facsimile
transmission, each of which shall be an original and all of which shall
constitute one and the same agreement.
SECTION 3. BINDING EFFECT.
This Intercompany Subordination Agreement shall be binding on the
parties hereto and their respective successors and assigns.
SECTION 4. EVIDENCE OF SUBORDINATION.
To the extent that any of the Subordinated Obligations is evidenced by
a promissory note or other instrument, the Intercompany Loan Party obligated
thereunder shall cause to be placed thereon a legend stating that the payment
thereof is subordinate to payment of all Senior Indebtedness pursuant to this
Agreement and such Intercompany Loan Party shall ▇▇▇▇ all books of account in
such manner to indicate that payment thereof is subordinated pursuant to this
Agreement.
SECTION 5. GOVERNING LAW.
This Intercompany Subordination Agreement shall be governed by, and
construed in accordance with, the laws of the State of North Carolina, without
regard to principles of conflicts of law.
SECTION 6. FURTHER ASSURANCES.
The parties hereto agree to execute such other documents and take such
other actions as may be reasonably necessary to implement the terms hereof.
6
128
[SIGNATURE PAGES TO FOLLOW]
7
129
IN WITNESS WHEREOF, the undersigned have executed and delivered this
Agreement as of the date hereinabove first written.
Agent:
FIRST UNION NATIONAL BANK,
as Agent for the Lenders
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Intercompany Loan Parties:
RURAL/METRO CORPORATION
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
AID AMBULANCE AT VIGO COUNTY, INC.
an Indiana corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
AMBULANCE TRANSPORT SYSTEMS, INC.
a New Jersey corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
AMERICAN LIMOUSINE SERVICE, INC.
an Ohio corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
8
130
ARROW AMBULANCE, INC.
an Idaho corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
BEACON TRANSPORTATION, INC.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CITY WIDE AMBULANCE SERVICE, INC.
an Ohio corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
CORNING AMBULANCE SERVICE INC.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
DONLOCK, LTD.
a Pennsylvania corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
E.M.S. VENTURES, INC.
a Georgia corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EMS VENTURES OF SOUTH CAROLINA, INC.
a South Carolina corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
131
EASTERN AMBULANCE SERVICE, INC.
a Nebraska corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
EASTERN PARAMEDICS, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
GOLD CROSS AMBULANCE SERVICES, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
GOLD CROSS AMBULANCE SERVICE,
OF PA., INC.
an Ohio corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇▇▇ & ▇▇▇▇▇, INC.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇▇▇ & ▇▇▇▇▇ AMBULETTE, LTD.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
LASALLE AMBULANCE INC.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
10
132
MEDI-CAB OF GEORGIA, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MEDICAL EMERGENCY DEVICES AND
SERVICES (MEDS), INC.
an Arizona corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MEDICAL TRANSPORTATION SERVICES, INC.
a South Dakota corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
11
133
MEDSTAR EMERGENCY MEDICAL
SERVICES, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MERCURY AMBULANCE SERVICE, INC.
a Kentucky corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
METRO CARE CORP.
an Ohio corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MO-RO-KO, INC.
an Arizona corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MULTI CAB INC.
a New Jersey corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
12
134
MULTI-CARE INTERNATIONAL, INC.
a New Jersey corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MULTI-CARE MEDICAL CAR SERVICE, INC.
a New Jersey corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
MULTI-HEALTH CORP.
a Florida corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
▇▇▇▇▇ AMBULANCE SERVICE, INC.
an Indiana corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
NATIONAL AMBULANCE &
OXYGEN SERVICE, INC.
a New York corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
13
135
NORTH MISS. AMBULANCE SERVICE, INC.
a Mississippi corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
PHYSICIANS AMBULANCE SERVICE, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
PROFESSIONAL MEDICAL SERVICES, INC.
an Arkansas corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
RISC AMERICA ALABAMA
FIRE SAFETY SERVICES, INC.
a Delaware corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
R/M MANAGEMENT CO., INC.
an Arizona corporation
By:
----------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
14
136
R/M OF MISSISSIPPI, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
R/M OF TENNESSEE G.P., INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
R/M OF TENNESSEE L.P., INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
R/M OF TEXAS G.P., INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
R/M PARTNERS, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
15
137
RMC CORPORATE CENTER, L.L.C.
An Arizona Limited Liability Company
By: RURAL/METRO CORPORATION,
an Arizona corporation,
Its Member
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO ARGENTINA, L.L.C.
an Arizona limited liability company
By: RURAL/METRO NETHERLANDS
HOLDINGS, B.V.
a Netherlands corporation,
Its Member
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO BRASIL, L.L.C.
an Arizona corporation
By: RURAL/METRO NETHERLANDS
HOLDINGS, B.V.
a Netherlands corporation,
Its Member
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CANADIAN HOLDINGS, INC.
a Delaware Corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO COMMUNICATIONS SERVICES, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
16
138
RURAL/METRO CORPORATION
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CORPORATION OF FLORIDA
a Florida corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO CORPORATION OF
TENNESSEE
a Tennessee corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO FIRE DEPT., INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
17
139
RURAL/METRO INTERNATIONAL, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO MID-ATLANTIC, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ALABAMA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARGENTINA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARKANSAS, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF ARLINGTON, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF BRASIL, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
18
140
RURAL/METRO OF CALIFORNIA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF CENTRAL ALABAMA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF CENTRAL OHIO, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF GEORGIA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
19
141
RURAL/METRO OF INDIANA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF INDIANA, L.P.
a Delaware limited partnership
By: THE AID AMBULANCE COMPANY, INC.
a Delaware corporation,
Its General Partner
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF INDIANA II, L.P.
a Delaware corporation
By: THE AID AMBULANCE COMPANY, INC.
a Delaware corporation,
Its General Partner
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF KENTUCKY, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF MISSISSIPPI, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF NEBRASKA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
20
142
RURAL/METRO OF NEW YORK, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF NORTH FLORIDA, INC.
a Florida corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF OHIO, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF OREGON, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
21
143
RURAL/METRO OF ROCHESTER, INC.
a New York corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF SAN DIEGO, INC.
a California corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF SOUTH CAROLINA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF SOUTH DAKOTA, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF TENNESSEE, L.P.
a Delaware limited partnership
By: R/M OF TENNESSEE, G.P., INC.
a Delaware corporation,
Its General Partner
By:_____________________________________
Name:________________________________
Title:_______________________________
22
144
RURAL/METRO OF TEXAS, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO OF TEXAS, L.P.,
a Delaware limited partnership
By: R/M OF TEXAS G.P., INC.,
a Delaware corporation,
Its General Partner
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO PROTECTION SERVICES, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
RURAL/METRO TEXAS HOLDINGS, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
SW GENERAL, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
23
145
SIOUX FALLS AMBULANCE, INC.
a South Dakota corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
SOUTH GEORGIA EMERGENCY MEDICAL SERVICES, INC.
a Georgia corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF CASA GRANDE, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF
SOUTHEASTERN ARIZONA, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
SOUTHWEST AMBULANCE OF TUCSON, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
24
146
SOUTHWEST GENERAL SERVICES, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
THE AID AMBULANCE COMPANY, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
THE AID COMPANY, INC.
an Indiana corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
THE WESTERN NEW YORK EMERGENCY
MEDICAL SERVICES TRAINING
INSTITUTE INC.
a New York corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
TOWNS AMBULANCE SERVICE, INC.
a New York corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
25
147
UNITED MEDICAL SERVICES, INC.
a Washington corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
VALLEY FIRE SERVICE, INC.
a Delaware corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
W & W LEASING COMPANY, INC.
an Arizona corporation
By:_____________________________________
Name:________________________________
Title:_______________________________
26
148
INTERCOMPANY SUBORDINATION AGREEMENT SUPPLEMENT
INTERCOMPANY SUBORDINATION AGREEMENT SUPPLEMENT, dated as of
_____________________, (the "Supplement"), made by [INSERT NAME OF NEW
SUBSIDIARY], a __________________ (the "New Intercompany Loan Party"), in favor
of First Union National Bank (f/k/a First Union National Bank of North
Carolina), as agent (in such capacity, the "Agent") under the Credit Agreement
(as defined in the Subordination Agreement referred to below) for the ratable
benefit of itself and the Lenders (as so defined).
1. Reference is hereby made to the Intercompany Subordination Agreement
dated as of March 16, 1998, made by the Borrower and certain Subsidiaries of the
Borrower party thereto, (collectively, the "Intercompany Loan Parties") in favor
of the Agent (as amended, supplemented or otherwise modified as of the date
hereof, the "Subordination Agreement"). This Supplement supplements the
Subordination Agreement, forms a part thereof and is subject to the terms
thereof. Capitalized terms used and not defined herein shall have the meanings
given thereto or referenced in the Subordination Agreement.
2. The New Intercompany Loan Party for itself and its successors hereby
agrees that, to the extent it is from time to time entitled to receive payment
in respect of any Subordinated Obligation, the payment of the principal of,
premium, if any, interest on (including all interest accruing thereon subsequent
to a Bankruptcy Event ("post-petition interest")) or other fees, costs, expenses
and any other amounts accrued, incurred or otherwise due in connection with all
such Subordinated Obligations from time to time, is subordinated in right of
payment, to the extent and in the manner provided in the Subordination
Agreement, to the payment in full of all Senior Indebtedness.
3. The New Intercompany Loan Party hereby agrees that it is a party to
the Subordination Agreement as if a signatory thereto on the Closing Date of the
Credit Agreement, and the New Intercompany Loan Party shall comply with all of
the terms, covenants, conditions and agreements and hereby makes each
representation and warranty, in each case set forth therein. The New
Intercompany Loan Party agrees that the "Intercompany Subordination Agreement"
as used therein or in any other Loan Documents shall mean the Subordination
Agreement as supplemented hereby.
4. The New Intercompany Loan Party hereby acknowledges it has received
a copy of the Subordination Agreement and that it has read and understands the
terms thereof.
[SIGNATURE PAGE TO FOLLOW]
27
149
IN WITNESS WHEREOF, the undersigned hereby causes this Supplement to be
executed and delivered as of the ____day of ______________19__.
[INSERT NAME OF NEW SUBSIDIARY]
By:_____________________________________
Name:________________________________
Title:_______________________________
28