EXHIBIT 10.36
AMENDED AND RESTATED CREDIT AGREEMENT
$125,000,000 REVOLVING CREDIT LOAN
AMONG
GROUP MAINTENANCE AMERICA CORP.,
AS THE COMPANY,
THE SUBSIDIARIES OF THE COMPANY
LISTED AS GUARANTORS HEREIN
AND
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
AS THE AGENT
PARIBAS AND ABN AMRO BANK, N.V.
AS THE CO-AGENTS
AND
THE BANKS NAMED HEREIN
DATED AS OF JUNE 12, 1998
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION 1
SECTION 1.01 Definitions 1
SECTION 1.02 Types of Advances 15
SECTION 1.03 Accounting Terms 15
SECTION 1.04 Schedules 15
ARTICLE II
THE LOANS 15
SECTION 2.01 The Loans 15
SECTION 2.02 The Notes 16
SECTION 2.03 Notice of Advance 16
SECTION 2.04 Disbursement of Funds for Loans 16
SECTION 2.05 Conversions and Continuances 17
SECTION 2.06 Voluntary Prepayments 17
SECTION 2.07 Mandatory Repayments 17
SECTION 2.08 Method and Place of Payment 17
SECTION 2.09 Pro Rata Advances 18
SECTION 2.10 Interest 18
SECTION 2.11 Interest Periods 19
SECTION 2.12 Interest Rate Not Ascertainable 20
SECTION 2.13 Legality 20
SECTION 2.14 Increased Costs, Taxes or Capital Adequacy Requirements 21
SECTION 2.15 Eurodollar Advance Prepayment and Default Penalties 22
SECTION 2.16 Additional Costs, Taxes or Similar Requirements 23
SECTION 2.17 Tax Forms 23
SECTION 2.18 Voluntary Reduction of Commitment 24
SECTION 2.19 Fees 24
SECTION 2.20 Extension of Maturity Date 24
SECTION 2.21 Replacement of Banks 25
ARTICLE III
LETTERS OF CREDIT 25
SECTION 3.01 Letters of Credit 25
SECTION 3.02 Letters of Credit Requests 26
SECTION 3.03 Letter of Credit Participations 27
SECTION 3.04 Increased Costs 28
SECTION 3.05 Conflict between Applications and Agreement 29
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ARTICLE IV
CONDITIONS PRECEDENT 29
SECTION 4.01 Conditions Precedent to the Initial Advance 29
SECTION 4.02 Conditions Precedent to All Credit Events 31
SECTION 4.03 Delivery of Documents 32
ARTICLE V
REPRESENTATIONS AND WARRANTIES 32
SECTION 5.01 Organization and Qualification 32
SECTION 5.02 Authorization and Validity 32
SECTION 5.03 Governmental Consents 33
SECTION 5.04 Conflicting or Adverse Agreements or Restrictions 33
SECTION 5.05 Title to Assets 33
SECTION 5.06 Litigation 33
SECTION 5.07 Financial Statements 33
SECTION 5.08 Default 34
SECTION 5.09 Investment Company Act 34
SECTION 5.10 Public Utility Holding Company Act 34
SECTION 5.11 ERISA 34
SECTION 5.12 Tax Returns and Payments 34
SECTION 5.13 Environmental Matters 34
SECTION 5.14 Purpose of Loans 35
SECTION 5.15 Franchises and Other Rights 36
SECTION 5.16 Subsidiaries and Assets 36
SECTION 5.17 Solvency 36
ARTICLE VI
AFFIRMATIVE COVENANTS 36
SECTION 6.01 Information Covenants 36
SECTION 6.02 Books, Records and Inspections 38
SECTION 6.03 Insurance and Maintenance of Properties 39
SECTION 6.04 Payment of Taxes 39
SECTION 6.05 Corporate Existence 39
SECTION 6.06 Compliance with Statutes 39
SECTION 6.07 Material Privileges, Permits, Licenses and Other Rights 40
SECTION 6.08 ERISA 40
SECTION 6.09 Additional Subsidiaries 40
SECTION 6.10 Acquisition Agreements 41
SECTION 6.11 Material Contracts 41
SECTION 6.12 Employee Agreements 41
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ARTICLE VII
NEGATIVE COVENANTS 41
SECTION 7.01 Change in Business 41
SECTION 7.02 Consolidation, Merger or Sale of Assets 42
SECTION 7.03 Indebtedness 42
SECTION 7.04 Liens 43
SECTION 7.05 Investments 44
SECTION 7.06 Restricted Payments 45
SECTION 7.07 Change in Accounting 45
SECTION 7.08 Certain Indebtedness 45
SECTION 7.09 Transactions with Affiliates 45
SECTION 7.10 Changes to Acquisition Agreements 45
SECTION 7.11 Consolidated Net Worth 46
SECTION 7.12 Funded Debt to EBITDA Ratio 46
SECTION 7.13 Funded Debt to Capitalization Ratio 46
SECTION 7.14 Capital Expenditures 46
SECTION 7.15 Fixed Charge Coverage Ratio 46
SECTION 7.16 New Installations Revenues 46
SECTION 7.17 Limitations on Acquisitions 46
ARTICLE VIII
GUARANTY 47
SECTION 8.01 Guaranty 47
SECTION 8.02 Continuing Guaranty 48
SECTION 8.03 Effect of Debtor Relief Laws 49
SECTION 8.04 Waiver of Subrogation 49
SECTION 8.05 Subordination 50
SECTION 8.06 Waiver 50
SECTION 8.07 Full Force and Effect 51
SECTION 8.08 Negative Pledge 51
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES 51
SECTION 9.01 Events of Default 51
SECTION 9.02 Primary Remedies 52
SECTION 9.03 Other Remedies 53
ARTICLE X
THE AGENT 53
SECTION 10.01 Authorization and Action 53
SECTION 10.02 Agent's Reliance 54
SECTION 10.03 Agent and Affiliates; Chase and Affiliates 54
SECTION 10.04 Banks' Credit Decision 55
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SECTION 10.05 Agent's Indemnity 55
SECTION 10.06 Successor Agent 56
SECTION 10.07 Notice of Default 56
ARTICLE XI
MISCELLANEOUS 57
SECTION 11.01 Amendments 57
SECTION 11.02 Notices 57
SECTION 11.03 No Waiver; Remedies 58
SECTION 11.04 Costs and Expenses 59
SECTION 11.05 Release and Indemnity 59
SECTION 11.06 Right of Setoff 60
SECTION 11.07 Governing Law 60
SECTION 11.08 Interest 60
SECTION 11.09 Survival of Representations and Warranties 61
SECTION 11.10 Successors and Assigns; Participations 61
SECTION 11.11 Confidentiality 63
SECTION 11.12 Pro Rata Treatment 63
SECTION 11.13 Separability 64
SECTION 11.14 Execution in Counterparts 64
SECTION 11.15 Interpretation 64
SECTION 11.16 SUBMISSION TO JURISDICTION 65
SECTION 11.17 WAIVER OF JURY TRIAL 66
SECTION 11.18 FINAL AGREEMENT OF THE PARTIES 66
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Exhibits and Schedules:
----------------------
Exhibit 1.01A Administrative Questionnaire
Exhibit 2.02 Form of Note
Exhibit 2.03 Form of Notice of Advance
Exhibit 2.05 Form of Notice of Conversion
Exhibit 2.20 Form of Extension Request
Exhibit 3.02 Form of Letter of Credit Request
Exhibit 4.01(d)(i) Form of Security Agreement
Exhibit 4.01(d)(ii) Form of Pledge Agreement
Exhibit 4.01(h)(i) Form of Opinion of Borrower's Counsel - ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇
Exhibit 4.01(h)(ii) Form of Opinion of Borrower's Counsel - ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
Exhibit 11.10(c) Form of Assignment and Acceptance
Schedule 5.04 Agreements
Schedule 5.06 Litigation
Schedule 5.13 Exceptions to Environmental Matters
Schedule 5.16 Subsidiaries
Schedule 6.03 Existing Insurance Policies
Schedule 6.11 Material Contracts
Schedule 7.03(b) Existing Indebtedness
Schedule 7.04(a) Existing Liens
Schedule 7.05(b) Investments
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 12, 1998
(this "Agreement") is among GROUP MAINTENANCE AMERICA CORP., a Texas corporation
(the "Company"), the Subsidiaries of the Company listed on the signature pages
hereto as Guarantors (together with each other Person who subsequently becomes a
Guarantor, collectively the "Guarantors"), the banks and other financial
institutions listed on the signature pages hereto under the caption "Banks"
(together with each other person who becomes a Bank, collectively the "Banks"),
ABN AMRO BANK, N.V. and PARIBAS, individually, as Banks and as co-agents ("Co-
Agents"), and CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, individually as a Bank
("Chase") and as agent for the other Banks (in such capacity together with any
other Person who becomes the agent, the "Agent").
The Company, the Agent (then known as Texas Commerce Bank National
Association) and certain of the Banks have entered into that one certain Credit
Agreement dated December 11, 1997 (as amended the "Prior Credit Agreement"),
relating to the extension of a series of loans with a commitment totaling
$75,000,000.00 by said Banks to the Company. The Company has now requested the
Agent and the Banks to amend and restate the prior Credit Agreement to increase
the amount of credit that may be extended to Borrower to $125,000,000.00. The
Agent and the Banks have agreed to do so, subject to the terms and conditions
hereof and wish to execute this document for the purpose of setting forth their
amended and restated agreement in regard thereto.
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants set forth herein, the Company, the Agent, the Guarantors, and the
Banks agree to amend and restate the Prior Credit Agreement as follows:
ARTICLE I
DEFINITIONS; ACCOUNTING TERMS; INTERPRETATION
----------------------------------------------
SECTION 1.01 Definitions. As used in this Agreement, the following terms
have the following meanings:
"Accounts" means all accounts, accounts receivable or other indebtedness
owing to the Company or to a Subsidiary of the Company which is a Guarantor
as consideration for goods sold, services rendered and accrued receivables,
if billed during the immediately succeeding billing cycle and, in any
event, not later than the end of the month following the month in which
same were incurred all accounts, accounts receivable or other indebtedness
owing to the Company or any Guarantor as consideration for goods sold or
services rendered and billed within thirty (30) days of the providing of
such goods or services.
"Acquisition Agreements" has the meaning set forth in Section 6.10.
"Add Back Expenses" means expense items of IPO Subsidiaries and
Qualified Companies which will be eliminated after acquisition of said IPO
Subsidiary or Qualified
Company, as the case may be, by the Company, identified by the Company and
approved by the Majority Banks at the time of such acquisition.
"Administrative Questionnaire" means the questionnaire attached hereto
as Exhibit 1.01A to be completed by each Bank and returned to the Agent.
"Advance" means an advance, pursuant to a Notice of Advance, comprised
of a single Type of Loan from all the Banks (or resulting from a conversion
or conversions on the same date having, in the case of Eurodollar Rate
Advances, the same Interest Period (except as otherwise provided in this
Agreement)), made by all of the Banks concurrently to the Company.
"Advance Date" means, with respect to each Advance, the Business Day
upon which the proceeds of such Advance are to be made available to the
Company.
"Affiliate" means any other Person directly or indirectly controlling
(including all directors and officers of such Person), controlled by, or
under direct or indirect common control with such Person, and any other
Person in which such Person's direct or indirect equity interest is 20% or
more of the total outstanding equity interests of such Person and any
immediate family member (parent, spouse or child) and all spouses of said
Persons.
"Agent" has the meaning specified in the introduction to this Agreement.
"Agreement" has the meaning specified in the introduction to this
Agreement.
"Alternate Base Rate" means, for any day, a rate per annum (adjusted, to
the nearest 1/16 of 1%) equal to the greater of (a) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1% and (b) the Prime Rate
in effect on such day. For purposes hereof, the term "Prime Rate" means, as
of a particular date, the prime rate of Chase most recently announced by
Chase and in effect on such date, automatically fluctuating upward or
downward, as the case may be, with and at the time of each change therein
without notice to the Company or any other Person, which prime rate may not
necessarily represent the lowest or best rate actually charged to a
customer. "Federal Funds Effective Rate" means, for any day, the weighted
average of the rates on overnight federal funds transactions with members
of the Federal Reserve System arranged by federal funds brokers, as
published for such day (or, if such day is not a Business Day, for the
next preceding Business Day) by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Agent from three federal funds brokers of recognized standing selected by
it. If, for any reason, the Agent shall have determined (which
determination shall be conclusive absent manifest error) that it is unable
to ascertain the Federal Funds Effective Rate, including the inability or
failure of the Agent to obtain sufficient quotations in accordance with the
terms hereof, the Alternate Base Rate shall be determined without regard
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to clause (a) of the first sentence of this definition until the
circumstances giving rise to such inability no longer exist. Any change in
the Alternate Base Rate due to a change in the Prime Rate or the Federal
Funds Effective Rate shall be effective on the effective date of such
change in the Prime Rate or the Federal Funds Effective Rate, respectively.
"Alternate Base Rate Advance" means any Advance bearing interest at a
rate determined by reference to the Alternate Base Rate in accordance with
the provisions of Article II.
"Alternative Facility" means, as of any day, the short term, uncommitted
working capital loan facility of the Company with any Bank or Affiliate
thereof other than those, if any, provided for in the Loan Documents.
"Alternative Facilities Advances" means, on any day, the aggregate
advances made by any of the Banks under an Alternative Facility which are
outstanding as of such day.
"Applicable Lending Office" means, with respect to each Bank, such
Bank's Domestic Lending Office in the case of an Alternate Base Rate
Advance and such Bank's Eurodollar Lending Office in the case of a
Eurodollar Rate Advance.
"Assignment and Acceptance" has the meaning specified in Section 11.10
(c).
"Bank" has the meaning provided in the introduction to this Agreement.
"Bankruptcy Code" has the meaning specified in Section 9.01(e).
"Board" means the Board of Governors of the Federal Reserve System of
the United States (or any successor).
"Business Day" means any day (other than a day which is a Saturday,
Sunday or legal holiday in the State of Texas) on which most banks are open
for business in Houston, Texas.
"Capital Expenditures" means, with respect to any Person for any period,
the sum of all expenditures (whether paid in cash, capitalized as an asset
or accrued as a liability) by such Person and its consolidated Subsidiaries
during such period which, in accordance with GAAP, are or should be
included in capital expenditures or similar items reflected in the
consolidated statement of cash flows of such Person; provided, however,
that Capital Expenditures shall not include any such amounts incurred in
connection with the Investment in a Qualified Company permitted by Section
7.05.
"Capitalization Ratio" means, as to the Company and its Subsidiaries for
any period, the ratio of (i) Funded Debt of the Company and its
Subsidiaries determined on a
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consolidated basis, to (ii) the sum of Funded Debt of the Company and its
Subsidiaries determined on a consolidated basis plus Consolidated Net
Worth.
"Capitalized Lease Obligations" means all lease or rental obligations
which, pursuant to GAAP, are capitalized for balance sheet purposes.
"Change of Control" means either (i) any Unrelated Person, or two or
more Unrelated Persons acting in concert, acquire after the date hereof
beneficial ownership of 50% or more of the shares of voting stock of the
Company outstanding at the time of such acquisition, or (ii) all or
substantially all of the assets of the Company are sold after the date
hereof in a single transaction or series of related transactions to any
Persons, if the effect of such transaction or transactions is to change the
Persons controlling the Company. The term "Unrelated Person" shall mean any
Person other than a Related Person. A "Related Person" means (i) any Plan
or trust for any Plan, and (ii) any wholly-owned Subsidiary of the Company.
Any Person who is a party to any stockholders' agreement shall not be
considered to be acting in concert with any other party thereto merely
because such Person is a party thereto.
"Chase" means Chase Bank of Texas, National Association, a national
banking association.
"Code" means the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
"Collateral" means all, or substantially all, of the accounts and
inventory of the Company and its Material Subsidiaries, all as more fully
described in the Security Documents.
"Commitment" and "Commitments" means the obligation of each of the Banks
to enter into and perform this Agreement, to make available the Loans to
the Company in the amounts shown on the signature page of each Bank hereto
and all other duties and obligations of the Banks hereunder.
"Commitment Fee" has the meaning specified in Section 2.19.
"Company" has the meaning specified in the introduction to this
Agreement.
"Consolidated Net Worth" means, as at any date of determination, all
items which in conformity with GAAP would be included in the calculation of
shareholders' equity on a consolidated balance sheet of the Company as at
such date, plus any amounts included on such consolidated balance sheet in
respect of the Company's preferred stock, provided the terms of such
preferred stock have been approved by the Majority Banks in their sole
discretion.
4
"Conversion" or "Convert" (in each case whether or not capitalized)
means the changing of a Eurodollar Rate Advance to an Alternate Base Rate
Advance or vice versa in accordance with the provisions hereof.
"Credit Event" means the making of any Advance or the conversion of any
Advance into a Eurodollar Rate Advance.
"Default" means the occurrence of any event which with or without the
giving of notice or the passage of time or both would become an Event of
Default.
"Default Rate" means the lesser of (i) the Highest Lawful Rate and (ii)
the Alternate Base Rate plus two percent (2%).
"Designated Payment Date" means February 28, May 31, August 31 and
November 30 of each year; provided, however, if a Designated Payment Date
shall be a day which is not a Business Day, such Designated Payment Date
shall be the next succeeding Business Day, and such extension of time shall
be included in determining the amount to be paid on such date.
"Domestic Lending Office" means, with respect to any Bank, the office of
such Bank designated from time to time as its "Domestic Lending Office"
hereunder.
"EBITDA" means, for any period, and determined in accordance with GAAP,
the sum of:
(a) the consolidated pre tax income of the Company, plus the aggregate
amount which was deducted for such period in determining such
consolidated pre tax income for (i) interest expense, (ii)
depreciation expense, (iii) amortization expense, and (iv)
compensation expense relating to the issuance of stock and stock
options to employees (to the extent same do not constitute a use of
cash); (b) for each IPO Subsidiary acquired by the Company during the
twelve months preceding the date of the calculation of EBITDA and with
respect to the period beginning 12 months prior the calculation of
EBITDA through the date of said IPO Subsidiary's acquisition by the
Company, the sum of the consolidated pre tax income of the IPO
Subsidiary, plus (A) the aggregate amount which was deducted for such
period in determining such consolidated pre tax income for (i)
interest expense, (ii) depreciation expense and (iii) amortization
expense, and (B) Add-back Expenses; and (c) for each acquisition of a
Qualified Company with total consideration of $10,000,000 or greater
acquired by the Company during the twelve (12) months preceding the
date of the calculation of EBITDA and with respect to the period
beginning twelve (12) months prior to the calculation of EBITDA
through the date of said acquisition by the
5
Company, the sum of the consolidated pre-tax income of such Qualified
Company, plus: (A) the aggregate amount which was deducted for such
period in determining such consolidated pre-tax income for (i)
interest expense, (ii) depreciation expense, and (iii) amortization
expense, and (B) Add-Back Expenses of such Qualified Company.
"Effective Date" means the date on which all conditions to make an
Advance set forth in Section 4.01 are first met or waived in accordance
with Section 11.01 hereof.
"Eligible Assignee" means (a) any Bank; (b) a commercial bank organized
under the laws of the United States, or any state thereof, and having total
assets in excess of $1,000,000,000.00; (c) a commercial bank organized
under the laws of any other country which is a member of the Organization
for Economic Cooperation and Development or any successor organization, or
a political subdivision of any such country, and having total assets in
excess of $1,000,000,000.00; provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the Organization for Economic Cooperation
and Development or any successor organization; (d) the central bank of any
country which is a member of the Organization for Economic Cooperation and
Development or any successor organization; and (e) any other bank or
similar financial institution approved by the Agent and the Majority Banks.
"Employee Agreements" has the meaning set forth in Section 6.12.
"Environmental Laws" means federal, state or local laws, rules or
regulations, and any judicial, arbitral or administrative interpretations
thereof, including any judicial, arbitral or administrative order,
judgment, permit, approval, decision or determination pertaining to
conservation or protection of the environment as in effect and enforceable
against the Company or any of its Subsidiaries at the time in question,
including the Clean Air Act, the Comprehensive Environmental Response,
Compensation and Liability Act ("CERCLA"), the Federal Water Pollution
Control Act, the Occupational Safety and Health Act, the Resource
Conservation and Recovery Act, the Safe Drinking Water Act, the Toxic
Substances Control Act, the Superfund Amendment and Reauthorization Act of
1986, the Hazardous Materials Transportation Act, and comparable state and
local laws, and other environmental conservation and protection laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated thereunder.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) which is either a member of the same "controlled group" or
under "common control," within the meaning of Section 414 of the Code and
the regulations thereunder, with the Company.
6
"Eurocurrency Liabilities" has the meaning specified in Regulation D as
in effect from time to time.
"Eurodollar Lending Office" means, with respect to each Bank, the
branches or affiliates of such Bank designated as its "Eurodollar Lending
Office" from time to time hereunder.
"Eurodollar Rate" means, with respect to any Eurodollar Rate Advance,
the rate (rounded to the nearest whole multiple of 1/16 of 1%) at which
dollar deposits approximately equal in principal amount to the entire
portion of such Advance and for a maturity equal to the applicable Interest
Period are offered in immediately available funds to the Agent by prime
banks in whatever Eurodollar interbank market may be selected by the Agent
in its sole and absolute discretion at the time of determination and in
accordance with the then usual practice in such market at approximately
10:00 a.m. (Houston, Texas time) two Business Days prior to the
commencement of such Interest Period.
"Eurodollar Rate Advance" means any Advance bearing interest at a rate
determined by reference to the Eurodollar Rate in accordance with the
provisions of Article II.
"Events of Default" has the meaning specified in Section 9.01.
"Execution Date" means June 12, 1998.
"Existing Letters of Credit" means all letters of credit issued by
Chase, outstanding on the Effective Date and described in Section 3.01(c).
"Extension Request" means each request by the Company made pursuant to
Section 2.20 for the Banks to extend the Maturity Date.
"Federal Funds Effective Rate" has the meaning specified in the
definition of the term "Alternate Base Rate."
"Fees" has the meaning specified in Section 2.19.
"Financials" has the meaning specified in Section 5.07.
"Funded Debt" means all indebtedness for borrowed money evidenced by a
written document and subject to periodic, required payments of interest
and/or principal.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States as set forth in the opinions, statements
and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants, the Financial Accounting
Standards Board and such other Persons who shall be approved by a
7
significant segment of the accounting profession and concurred in by the
independent certified public accountants certifying any audited financial
statements of the Company.
"Guaranteed Obligations" has the meaning specified in Section 8.01.
"Guarantors" has the meaning provided in the introduction to this
Agreement and, except as otherwise agreed by the Majority Banks and the
Company, shall include all of the Material Subsidiaries of the Company.
"Guaranty" means the obligations contained in Article VIII hereof.
"Hazardous Materials" means (a) hazardous waste as defined in the
Resource Conservation and Recovery Act of 1976, or in any applicable
federal, state or local law or regulation, (b) hazardous substances, as
defined in CERCLA, or in any applicable state or local law or regulation,
(c) gasoline, or any other petroleum product or by-product, (d) toxic
substances, as defined in the Toxic Substances Control Act of 1976, or in
any applicable federal, state or local law or regulation or (e)
insecticides, fungicides, or rodenticides, as defined in the Federal
Insecticide, Fungicide, and Rodenticide Act of 1975, or in any applicable
federal, state or local law or regulation, as each such Act, statute or
regulation may be amended from time to time.
"Highest Lawful Rate" means, as to any Bank, the maximum nonusurious
rate of interest that, under applicable law, may be contracted for, taken,
reserved, charged or received by such Bank on the Loans or under the Loan
Documents at any time or from time to time. If the maximum rate of interest
which, under applicable law, any of the Banks are permitted to charge the
Company on the Loans shall change after the date hereof, to the extent
permitted by applicable law, the Highest Lawful Rate shall be automatically
increased or decreased, as the case may be, as of the effective time of
such change without notice to the Company or any other Person.
"IPO Subsidiaries" means the Offering Acquisition Companies and Pre-
Offering Companies identified in registration statement no. 333-34067 filed
with the Securities and Exchange Commission by the Company on August 21,
1997, as such terms are defined therein.
"Indebtedness" means, without duplication, (a) all indebtedness for
borrowed money (whether by loan or the issuance and sale of debt
securities) or for the deferred purchase price of property or services, (b)
all indebtedness evidenced by bonds, debentures, notes or other similar
instruments, (c) all Capitalized Lease Obligations, (d) all obligations to
reimburse the issuer of any Letter of Credit for amounts drawn or drawable,
and (e) all other items that would be classified as a liability on the
Company's balance sheet pursuant to GAAP.
"Interest Period" has the meaning specified in Section 2.11.
8
"Issuing Bank" means Chase, in its capacity as a Bank, or such other
Bank to which the Company and the Majority Banks subsequently agree.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by such Person of the assets, stock or other
securities of any other Person, or any direct or indirect loan, advance or
capital contribution by such Person to any other Person, and any other item
which would be classified as an "investment" on a balance sheet of such
Person, including any direct or indirect contribution by such Person of
property or assets to a joint venture, partnership or other business entity
in which such Person retains an interest but shall not include demand
deposits.
"IPO" means the initial public offering of the Company.
"Letter of Credit Fee" has the meaning specified in Section 2.19(c).
"Letter of Credit Request" has the meaning specified in Section 3.02(a).
"Letters of Credit" has the meaning specified in Section 3.01(a).
"Lien" means, when used with respect to any Person, any mortgage, lien,
charge, pledge, security interest or encumbrance of any kind (whether
voluntary or involuntary and whether imposed or created by operation of law
or otherwise) upon, or pledge of, any of its property or assets, whether
now owned or hereafter acquired, any capital lease in the nature of the
foregoing, any conditional sale agreement or other title retention
agreement, in each case, for the purpose, or having the effect, of
protecting a creditor against loss or securing the payment or performance
of an obligation.
"Loan" and "Loans" has the meaning set forth in Section 2.01.
"Loan Documents" means this Agreement, the Notes, the Security
Documents, the Notice of Advance, and the corporate resolutions authorizing
the Loan Documents.
"Majority Banks" means Banks holding at least 66 2/3% of the Advances
outstanding under the Loans, or, if no Advances are outstanding, Banks
holding such percentage of the Total Commitment.
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"Margin" means, with respect to Alternate Base Rate Advances, Eurodollar
Rate Advances, or Commitment Fees, as applicable, the percentage determined
in accordance with the following table:
2.25
Funded Debt/ to 1.00 2.00 - 2.24 1.50 - 1.99 1.00 - 1.49 Less than
EBITDA Ratio or higher to 1.00 to 1.00 to 1.00 1.00 to 1.00
----------------------------------------------------------------------------------------------------------
Alternate Base Rate Margin .50% .25% 0% 0% 0%
----------------------------------------------------------------------------------------------------------
Eurodollar Margin 2.00% 1.75% 1.50% 1.25% 1.00%
----------------------------------------------------------------------------------------------------------
Commitment Fee .375% .375% .375% .25% .25%
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If sufficient information does not exist to calculate the Margin,
Eurodollar Rate Advances shall not be available to the Company and the
Margin for Alternate Base Rate Advances shall be deemed to be 0%.
"Margin Period" means a period commencing three (3) days after the
date on which the quarterly or annual financial statements of the Company
are required to be delivered pursuant to Section 6.01(a) or Section
6.01(b), as the case may be, and ending three (3) days after the next
date a financial statement is required to be so delivered.
"Material Adverse Effect" means, relative to any occurrence of
whatever nature (including any adverse determination in any litigation,
arbitration or governmental investigation or proceeding), (a) a material
adverse effect on the financial condition, business or operations of the
Company and its Subsidiaries taken as a whole or (b) a material
impairment of the collective ability of the Company and its Subsidiaries
taken as a whole to make payment hereunder or under any Note or the right
of any Bank to enforce any of its remedies to collect any amounts owing
under the Loan Documents.
"Material Contract" means the Contracts listed on Schedule 6.11, as
amended from time to time.
"Material Subsidiary" means a direct or indirect Subsidiary of the
Company which has one percent (1%) or more of either total consolidated
assets or total consolidated revenues of the Company.
"Maturity Date" means December 11, 2000, unless accelerated pursuant to
Article IX hereof.
"Maximum Guaranteed Amount" means for each Guarantor the maximum amount
which any Guarantor could pay under the Guaranty without having such
payment set
10
aside as a fraudulent transfer or conveyance or similar action under the
Bankruptcy Code or any applicable state or foreign law.
"Multiemployer Plan" means any plan that is a "multiemployer plan"
(as such term is defined in Section 4001(a)(3) of ERISA).
"New Installation" means the business of providing the installation of
new heating, ventilation and air conditioning, indoor air quality,
plumbing, appliance, electric, septic and sewer systems to residential or
commercial structures, as such structure is being newly constructed,
provided that New Installations does not include installations of systems
in buildings that have previously been occupied.
"Note" and "Notes" have the meanings specified in Section 2.02.
"Notice of Advance" has the meaning provided in Section 2.03(a).
"Notice of Conversion" has the meaning provided in Section 2.05.
"Notice of Default" has the meaning specified in Section 9.02.
"Obligations" means all the obligations of the Company now or hereafter
existing under the Loan Documents, whether for principal, interest, Fees,
expenses, indemnification or otherwise.
"Other Activities" has the meaning specified in Section 10.03.
"Other Financings" has the meaning specified in Section 10.03.
"Payment Office" means the office of the Agent located at ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇, or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to all or a substantial portion of its functions under ERISA.
"Permitted Investments" means, as to any Person:
(a) securities issued or directly and fully guaranteed or insured by
the United States or any agency or instrumentality thereof (provided
that the full faith and credit of the United States is pledged in
support thereof) having maturities of not more than twelve months from
the date of acquisition thereof,
11
(b) time deposits and certificates of deposit with maturities
of not more than twelve months from the date of acquisition by such
Person which deposits or certificates are either: (a) fully insured
by the Federal Deposit Insurance Corporation or (b) in any Bank or
other commercial bank incorporated in the United States or any U.S.
branch of any other commercial bank, in each case having capital,
surplus and undivided profits aggregating $100,000,000.00 or more
with a long-term unsecured debt rating of at least A- from Standard
& Poor's Ratings Group or A3 from ▇▇▇▇▇'▇ Investors Service,
(c) commercial paper issued by any Person incorporated in the
United States rated at least A2 or the equivalent thereof by
Standard & Poor's Ratings Group or at least P2 or the equivalent
thereof by ▇▇▇▇▇'▇ Investors Service and, in each case, maturing not
more than 270 days after the date of issuance,
(d) investments in money market mutual funds having assets in
excess of $2,000,000,000.00 substantially all of whose assets are
comprised of securities of the types described in clauses (a)
through (c) above, and
(e) repurchase or reverse purchase agreements respecting
obligations with a term of not more than seven days for underlying
securities of the types described in clause (a) above entered into
with any bank listed in or meeting the qualifications specified in
clause (b) above.
"Permitted Liens" means: (a) Liens for taxes, assessments, levies
or other governmental charges not yet due or which are being contested in
good faith by appropriate proceedings and for which adequate reserves are
maintained in accordance with GAAP; (b) Liens in connection with worker's
compensation, unemployment insurance or other social security, old age
pension or public liability obligations not yet due or which are being
contested in good faith by appropriate proceedings and for which adequate
reserves are maintained in accordance with GAAP; (c) operator's,
vendors', carriers', warehousemen's, repairmen's, mechanics', workers',
materialmen's or other like Liens arising by operation of law in the
ordinary course of business (or deposits to obtain the release of any
such Lien) and securing amounts of $50,000.00 or less or amounts not yet
due or which are being contested in good faith by appropriate proceedings
and for which adequate reserves are maintained in accordance with GAAP;
(d) deposits to secure insurance or adequate self insurance arrangements
in the ordinary course of business; (e) deposits and other Liens to
secure the performance of bids, tenders, contracts (other than contracts
for the payment of indebtedness for borrowed money or the deferred
purchase price of goods or services), leases, licenses, franchises, trade
contracts, statutory obligations, surety and appeal bonds and performance
bonds and other obligations of a like nature incurred in the ordinary
course of business; (f) easements, rights of way, covenants,
restrictions, reservations, exceptions, encroachments, zoning and similar
restrictions and other similar encumbrances (other than to secure the
payment of
12
indebtedness for borrowed money or the deferred purchase price of goods
or services) or title defects, in each case incurred in the ordinary
course of business which, in the aggregate, are not substantial in
amount, and which do not in any case singly or in the aggregate
materially detract from the value or usefulness of the Property subject
thereto for the business conducted by the Company and its Subsidiaries or
materially interfere with the ordinary conduct of the business of the
Company and its Subsidiaries; (g) bankers' liens arising by operation of
law; (h) inchoate Liens arising under ERISA to secure contingent
liabilities of the Company and its Subsidiaries; (i) landlord's liens
that are subordinated to the liens in favor of the Agent, unless waived
by the Agent; (j) Liens on assets of Subsidiaries to secure indebtedness
to the Company provided same are collaterally assigned to the Agent,
provided, such Liens may be incurred only to the extent the underlying
Indebtedness is otherwise permitted under the terms of this Agreement;
and (k) liens on the right to rebates of prepaid insurance premiums
financed by third parties on behalf of the Company or any of its
Subsidiaries to secure up to $500,000.00 outstanding at any time.
"Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a foreign
or domestic state or political subdivision thereof or any agency of such
state or subdivision.
"Plan" means any employee pension benefit plan (as defined in
Section 3(2) of ERISA), subject to Title IV of ERISA or Section 412 of
the Code, other than a Multiemployer Plan, with respect to which the
Company or an ERISA Affiliate contributes or has an obligation or
liability to contribute, including any such plan that may have been
terminated.
"Prescribed Forms" shall mean such duly executed form(s) or
statement(s), and in such number of copies, which may, from time to time,
be prescribed by law and which, pursuant to applicable provisions of the
Code or an income tax treaty between the United States and the country of
residence of the party providing the form(s) or statement(s), permit each
of the Company and the Agent to make payments hereunder for the account
of such party free of deduction or withholding of income and other taxes.
"Prior Credit Agreement" has the meaning specified in the
Introduction hereto on page one.
"Property" or "assets" (whether or not capitalized) means any
interest in any kind of property or asset, whether real, personal or
mixed, or tangible or intangible.
"Qualified Company" means any Person in the residential or
commercial/industrial service industry whose primary business is to
provide residential or commercial/industrial services, consisting of
heating, ventilation and air conditioning,
13
indoor air quality, plumbing, process piping, appliance, electrical,
installation, reinstallation and maintenance services.
"Regulations A, D, T, U and X" means Regulations A, D, T, U and X of
the Board as the same are from time to time in effect, and all official
rulings and interpretations thereunder or thereof.
"Release" means any spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping or
disposing into the environment (including the abandonment or discarding
of barrels, containers and other closed receptacles).
"Reportable Event" means an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30-day notice requirement
has not been waived by the PBGC.
"Requirements of Environmental Laws" means, as to any Person, the
requirements of any applicable Environmental Law relating to or affecting
such Person or the condition or operation of such Person's business or
its properties, both real and personal.
"Reserve Percentage" means, for any Interest Period and for any
Bank, the reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board (or if more than one
such percentage is so applicable, the daily average for such percentages
for those days in such Interest Period during which any such percentage
shall be so applicable) for determining the maximum reserve requirement
(including any marginal, supplemental or emergency reserves) for such
Bank in respect of liabilities or assets consisting of or including
Eurocurrency Liabilities.
"Responsible Officer" means, with respect to the Company, the
president, chief executive officer, chief operating officer, treasurer or
chief financial officer of the Company.
"Security Documents" means the documents described in Section 4.01
(f), of the Prior Credit Agreement and those in Section 4.01(d) of this
Agreement executed by the Company and its Subsidiaries in favor of Chase,
as Agent, for the benefit of the Banks, pursuant to the terms hereof.
"Subsidiary" means, with respect to any Person, (a) any corporation
more than 50% of whose stock of any class or classes having by the terms
thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might have voting
power by reason of the happening of any contingency) is at the time owned
by such Person, directly or indirectly, and (b) any partnership,
association, joint venture or other
14
entity in which such Person, directly or indirectly, has greater than 50%
of the equity interest. Unless otherwise provided or the context
otherwise requires, the term "Subsidiary" or "Subsidiaries" shall mean a
Subsidiary or Subsidiaries of the Company.
"Total Commitment" means the aggregate Commitments of all Banks
totaling a maximum of $125,000,000.00 for all Banks.
"Unrelated Person" means any Person who is not a Related Person.
"Unutilized Commitment" means the Total Commitment less the sum of
outstanding Advances and all issued and outstanding Letters of Credit.
SECTION 1.02 Types of Advances. Advances and Loans hereunder are
distinguished by "Type". The Type of an Advance refers to the determination
whether such Advance is a Eurodollar Rate Advance or an Alternate Base Rate
Advance.
SECTION 1.03 Accounting Terms. All accounting terms not defined
herein shall be construed in accordance with GAAP, as applicable, and all
calculations required to be made hereunder and all financial information
required to be provided hereunder shall be done or prepared in accordance with
GAAP.
SECTION 1.04 Schedules. Schedules hereto may be updated by the
Company from time to time to reflect transactions and other matters not
prohibited by the Loan Documents.
ARTICLE II
THE LOANS
---------
SECTION 2.01 The Loans. Subject to the terms and conditions hereof,
each Bank severally agrees at any time and from time to time on and after the
Execution Date and prior to the Maturity Date, to make and maintain a revolving
credit loan or loans (each a "Loan" and collectively, the "Loans") to the
Company not to exceed at any time outstanding the maximum amount of its
Commitment, which Loans (i) shall, at the option of the Company, be made and
maintained pursuant to one or more Advances comprised of Alternate Base Rate
Advances or Eurodollar Rate Advances, provided that, except as otherwise
specifically provided herein, all Advances made pursuant to a single notice of
advance shall be of the same Type, (ii) in the case of Eurodollar Rate Advances,
shall be made in the minimum amount of $1,000,000.00 and integral multiples of
$100,000.00 and, in the case of Alternate Base Rate Advances, in the minimum
amount of $300,000.00 and integral multiples thereof, or, in either case, the
amount of the Unutilized Commitment, (iii) may be repaid and, so long as no
Default or Event of Default exists hereunder, reborrowed, at the option of the
Company in accordance with the provisions hereof, and (iv) shall, in the
aggregate at any time outstanding, not exceed the maximum total amount of the
Commitment. There shall be no further Advances after the Maturity Date.
15
SECTION 2.02 The Notes. The Loans shall be evidenced by Notes in favor
of each Bank (individually a "Note" and collectively, the "Notes"),
substantially in the form of: Exhibit 2.02 hereto.
SECTION 2.03 Notice of Advance. Whenever the Company desires an Advance,
it shall give written notice thereof (a "Notice of Advance") (or telephonic
notice promptly confirmed in writing) to the Agent in the case of an Alternate
Base Rate Advance, not later than 10:00 a.m. (Houston, Texas time) on the date
of such Advance and in the case of a Eurodollar Rate Advance, not later than
11:00 a.m. (Houston, Texas time) three Business Days prior to the date of such
Advance. Each Notice of Advance shall be irrevocable and shall be in the form of
Exhibit 2.03 hereto, specifying (i) the aggregate principal amount of the
Advance to be made, (ii) the date of such Advance (which shall be a Business
Day), (iii) the Type of Advance, and (iv) if the proposed Advance is to be a
Eurodollar Rate Advance, the initial Interest Period to be applicable thereto.
The Agent shall promptly give the Banks written notice or telephonic notice
(promptly confirmed in writing) of each proposed Advance, of each Bank's
proportionate share thereof and of the other matters covered by each Notice of
Advance.
SECTION 2.04 Disbursement of Funds for Loans. No later than 1:00 p.m.
(Houston, Texas time) on any Advance Date for Loans, each Bank shall make
available its pro rata portion of the amount of such Advance in U.S. dollars and
in immediately available funds at the Payment Office. At such time, the Agent
shall credit the amounts so received to the general deposit account of the
Company maintained with the Agent in immediately available funds.
Unless the Agent shall have been notified by any Bank prior to disbursement of
the Advance by the Agent that such Bank does not intend to make available to the
Agent such Bank's portion of the Advance to be made on such date, the Agent may
assume that such Bank has made such amount available to the Agent on such
Advance Date and the Agent may, in reliance upon such assumption, make available
to the Company a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank and the Agent has made available
same to the Company, the Agent shall be entitled to recover such corresponding
amount on demand from such Bank. If such Bank does not pay such corresponding
amount forthwith upon the Agent's demand therefor, the Agent shall promptly
notify the Company, and the Company shall pay such corresponding amount to the
Agent within two (2) Business Days after demand therefor. The Agent shall also
be entitled to recover from such Bank or the Company, as the case may be,
interest on such corresponding amount from the date such corresponding amount
was made available by the Agent to the Company to the date such corresponding
amount is recovered by the Agent, at a rate per annum equal to the Alternate
Base Rate or the Eurodollar Rate plus the applicable Margin, as appropriate.
Nothing herein shall be deemed to relieve any Bank from its obligation to
fulfill its Commitments hereunder or to prejudice any rights which the Company
may have against any Bank as a result of any default by such Bank hereunder. No
failure of any Bank hereunder shall relieve any other Bank of its obligations.
16
SECTION 2.05 Conversions and Continuances. The Company shall have the
option to convert or continue on any Business Day all or a portion of the
outstanding principal amount of one Type of Advance into another Type of
Advance, provided, no Advances may be converted into or continued as Eurodollar
Rate Advances if a Default or Event of Default is in existence on the date of
the conversion. Any continuation of an Advance as the same Type of Advance in
the same amount shall be effected by the Company giving notice to the Agent, in
writing, or by telephone promptly confirmed in writing, of its intention to
continue such Advance as an Advance of the same Type. Each such conversion shall
be effected by the Company giving the Agent written notice (each a "Notice of
Conversion"), substantially in the form of Exhibit 2.05 hereto, prior to 11:00
a.m. (Houston, Texas time) at least (a) three (3) Business Days prior to the
date of such conversion in the case of conversion into or continuance as
Eurodollar Rate Advances and (b) prior to 10:00 a.m. (Houston, Texas time) one
Business Day prior to the date of conversion in the case of a conversion into
Alternate Base Rate Advances, specifying each Advance (or portions thereof) to
be so converted and, if to be converted into or continued as Eurodollar Rate
Advances, the Interest Period to be initially applicable thereto. The Agent
shall thereafter promptly notify each Bank of such Notice of Conversion.
SECTION 2.06 Voluntary Prepayments. The Company shall have the right to
voluntarily prepay the Loans in whole or in part at any time on the following
terms and conditions: no Eurodollar Rate Advance may be prepaid prior to the
last day of its Interest Period unless, simultaneously therewith, the Company
pays to the Agent for the benefit of the Banks all sums necessary to compensate
the Banks for all reasonable costs and expenses actually incurred by the Banks
as a result of such prepayment (excluding loss of anticipated profits), as
reasonably determined by the Banks, including but not limited to those costs
described in Section 2.15 hereof; and each prepayment pursuant to this section
shall be applied first, to the payment of accrued and unpaid interest, and then,
to the outstanding principal, pro-rata, on all such scheduled principal payments
thereafter coming due on said Loans.
SECTION 2.07 Mandatory Repayments. The Company shall repay Loans on any
day on which the aggregate outstanding principal amount of the Loans plus the
amount of all outstanding Alternative Advances exceeds the Total Commitment in
the amount of such excess. The aggregate amount under the Notes (and all
accrued, unpaid interest) shall be due and payable, and the Total Commitment
shall terminate, on the Maturity Date.
SECTION 2.08 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement due from the
Company shall be made to the Agent for the benefit of the Banks not later than
1:00 p.m. (Houston, Texas time) on the date when due and shall be made in lawful
money of the United States in immediately available funds at the Payment Office.
17
SECTION 2.09 Pro Rata Advances. All Advances under this Agreement shall
be incurred from the Banks pro rata, on the basis of their respective
Commitments. It is understood that no Bank shall be responsible for any default
by any other Bank in its obligation to make Loans hereunder and that each Bank
shall be obligated to make the Loans provided to be made by it hereunder,
regardless of the failure of any other Bank to fulfill its commitments
hereunder.
SECTION 2.10 Interest. (a) Subject to Section 11.08, the Company shall
pay interest on the total outstanding principal balance of all Alternate Base
Rate Advances from the date of each respective Advance to maturity of said Loan
(whether by acceleration or otherwise) at a rate per annum which shall at all
times be equal to the lesser of (i) the Highest Lawful Rate and (ii) the
Alternate Base Rate in effect from time to time plus the Margin for Alternate
Base Rate Advances, which Margin shall be adjusted on the first day of each
Margin Period. If the Alternate Base Rate is based on the Prime Rate, interest
shall be computed on the basis of the actual number of days elapsed over a year
of 365 or 366 days, as the case may be. If the Alternate Base Rate is based on
the Federal Funds Effective Rate, interest shall be computed on the basis of the
actual number of days elapsed over a year of 360 days.
(b) Subject to Section 11.08, the Company shall pay interest on the
total outstanding principal balance of all Eurodollar Rate Advances under
all of the Loans from the date of each respective Advance to maturity of
said Loan (whether by acceleration or otherwise) at a rate per annum
(computed on the basis of the actual number of days elapsed over a year of
360 days) which shall, during each Interest Period applicable thereto, be
equal to the lesser of (i) the Highest Lawful Rate and (ii) the applicable
Eurodollar Rate for such Interest Period plus the Margin for Eurodollar
Rate Advances. The applicable Eurodollar Rate shall be fixed for each
Interest Period and shall not change during said Interest Period nor shall
the applicable Margin, which is added to said Eurodollar Rate to determine
the total interest payable to the Banks, be adjusted until the first day of
each Interest Period that begins after the effective date of the new Margin
Period.
(c) Subject to Section 11.08, overdue principal and, to the extent
permitted by law, overdue interest in respect of any Advance and all other
overdue amounts owing hereunder shall bear interest for each day that such
amounts are overdue at a rate per annum equal to the Default Rate.
(d) Interest on each Advance shall accrue from and including the date of
such Advance to but excluding the date of any repayment thereof and shall
be payable in arrears (i) in respect of Eurodollar Rate Advances (A) on the
last day of the Interest Period (as defined below) applicable thereto and
on each Designated Payment Date during any Interest Period in excess of
three (3) months and (B) on the date of any voluntary or mandatory
repayment or any conversion or continuance, (ii) in respect of Alternate
Base Rate Advances (A) on each Designated Payment Date commencing November
30, 1997, and (B) on the date of any voluntary or mandatory repayment of
such Advances on the principal amount repaid and (iii) in respect of each
Advance, at maturity (whether by acceleration or otherwise) and, after
maturity, on demand.
18
(e) The Agent, upon determining the Eurodollar Rate for any Interest
Period, shall notify the Company thereof. Each such determination shall,
absent manifest error, be final and conclusive and binding on all parties
hereto. In addition, prior to the due date for the payment of interest on
any Advances set forth in the immediately preceding paragraph, the Agent
shall notify the Company of the amount of interest due by the Company on
all outstanding Advances on the applicable due date, but any failure of the
Agent to so notify the Company shall not reduce the Company's liability for
the amount owed.
(f) So long as any Bank shall be required under regulations of the Board
to maintain reserves with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities and, as a result, the cost to such Bank
is increased above the level it would be but for such requirement, then
such Bank may require the Company to pay to the Agent, for the account of
such Bank, additional interest on the unpaid principal amount of each such
Eurodollar Rate Advance, from the date of such Advance until such principal
amount is paid in full, at an interest rate per annum equal at all times
during the Interest Period for such Advance to the lesser of (i) the
Highest Lawful Rate and (ii) the remainder obtained by subtracting (A) the
Eurodollar Rate for such Interest Period from (B) the rate obtained by
dividing such Eurodollar Rate referred to in clause (A) above by that
percentage equal to 100% minus the Reserve Percentage of such Bank for such
Interest Period. Such additional interest shall be determined by such Bank
as incurred and shall be payable upon demand therefor by the Bank to the
Company. Each determination by such Bank of additional interest due under
this Section shall be conclusive and binding for all purposes in the
absence of manifest error if such determination is made on a reasonable
basis.
SECTION 2.11 Interest Periods. (a) At the time the Company gives any
Notice of Advance or Notice of Conversion or provides notice of its intent to
continue a loan as the same Type in respect of the making of, or conversion
into, a Eurodollar Rate Advance, the Company shall have the right to elect, by
giving the Agent on the dates and at the times specified in Section 2.03 or
Section 2.05, as the case may be, notice of the interest period (each an
"Interest Period") applicable to such Eurodollar Rate Advance, which Interest
Period shall be either a one, two, three or six month period; provided, that:
(i) the initial Interest Period for any Eurodollar Rate Advance shall
commence on the date of such Eurodollar Rate Advance (including the date of
any conversion thereto or continuance thereof pursuant to Section 2.05);
each Interest Period occurring thereafter in respect of such Eurodollar
Rate Advance shall commence on the expiration date of the immediately
preceding Interest Period;
(ii) if any Interest Period relating to a Eurodollar Rate Advance begins
on a day for which there is no numerically corresponding day in the
calendar month at the end of such Interest Period, such Interest Period
shall end on the last Business Day of such calendar month;
19
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided, that if there are no more Business Days
in that month, the Interest Period shall expire on the preceding Business
Day;
(iv) no Interest Period for Advances shall extend beyond the applicable
Maturity Date; and
(v) the Company shall be entitled to have a maximum of nine (9) separate
Eurodollar Rate Advances hereunder for all Loans outstanding at any one
time.
(b) If, upon the expiration of any Interest Period applicable to a
Eurodollar Rate Advance, the Company has failed to elect a new Interest Period
to be applicable to such Advance as provided above, the Company shall be deemed
to have elected to convert such Advance into an Alternate Base Rate Advance
effective as of the expiration date of such current Interest Period.
SECTION 2.12 Interest Rate Not Ascertainable. In the event that the
Agent shall determine (which determination shall, absent manifest error, be
final, conclusive and binding upon all parties) that on any date for determining
the Eurodollar Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the Eurodollar interbank market
adequate and fair means do not exist for ascertaining the applicable interest
rate on the basis provided for in the definition of Eurodollar Rate, then, and
in any such event, the Agent shall forthwith give notice to the Company and to
the Banks of such determination. Until the Agent notifies the Company that the
circumstances giving rise to the suspension described herein no longer exist,
the obligations of the Banks to make Eurodollar Rate Advances shall be
suspended.
SECTION 2.13 Legality. (a) Notwithstanding anything to the contrary
herein contained, if any law or regulation or the interpretation thereof by any
governmental authority charged with the administration or interpretation thereof
makes it unlawful for any Bank or its Eurodollar Lending Office to make or
maintain any Eurodollar Rate Advance or to give effect to its obligations as
contemplated hereby, then, by prompt written notice to the Company, such Bank
may:
(i) declare that Eurodollar Rate Advances will not thereafter be made by
such Bank hereunder, whereupon the right of the Company to receive
Eurodollar Rate Advances from such Bank hereunder shall be suspended until
such declaration is subsequently withdrawn, provided, such request for a
Eurodollar Rate Advance shall be automatically converted (as to such Bank)
into a request for an Alternate Base Rate Advance and the affected Bank or
Banks shall respond thereto as provided herein; and
(ii) require that all outstanding Eurodollar Rate Advances made by such
Bank be converted to Alternate Base Rate Advances, in which event (A) all
such Eurodollar Rate Advances shall be automatically converted to Alternate
Base Rate Advances as of
20
the effective date of such notice as provided in paragraph (b) below if
required by applicable law or regulation, or if not so required, at the end
of the current Interest Period and (B) all payments and prepayments of
principal which would otherwise have been applied to repay the converted
Eurodollar Rate Advances shall instead be applied to repay the Alternate
Base Rate Advances resulting from the conversion of such Eurodollar Rate
Advances.
(b) For purposes of this Section, a notice to the Company by the Agent
pursuant to paragraph (a) above shall be effective on the date of receipt
thereof by the Company.
SECTION 2.14 Increased Costs, Taxes or Capital Adequacy Requirements.
(a) If any applicable law or regulation or compliance by any Bank with any
applicable guideline or request by any central bank or governmental authority
having jurisdiction over such Bank (whether or not having the force of law)
(i) shall change the basis of taxation of payments to such Bank of the
principal of or interest on any Eurodollar Rate Advance made by such Bank
or any other fees or amounts payable hereunder with respect to Eurodollar
Rate Advances (other than taxes imposed on the overall net income of such
Bank or its Applicable Lending Office or franchise taxes imposed upon it by
the jurisdiction in which such Bank or its Applicable Lending Office has an
office),
(ii) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement with respect to Eurodollar Rate Advances
against assets of, deposits with or for the account of, or credit extended
by, such Bank (without duplication of any amounts paid pursuant to Section
2.10(f)) or
(iii) shall impose on such Bank any other condition affecting this
Agreement with respect to Eurodollar Rate Advances or any Eurodollar Rate
Advance made by such Bank, and the result of any of the foregoing shall be
to increase the cost to such Bank of maintaining its Commitment or of
making or maintaining any Eurodollar Rate Advance or to reduce the amount
of any sum received or receivable by such Bank hereunder (whether of
principal, interest or otherwise) in respect thereof by an amount deemed in
good faith by such Bank to be material,
then the Company shall pay to such Bank such additional amount as will
compensate it for such increase or reduction within ten (10) days after notice
thereof pursuant to Section 2.14(c).
(b) If any Bank shall have determined in good faith that any law, rule,
regulation or guideline regarding capital adequacy, or any interpretation or
administration thereof of any such authority, central bank or comparable agency
has or would have the effect of reducing the rate of return on the capital of
such Bank as a consequence of, or with reference to, such Bank's obligations to
lend hereunder to a level below that which it could have achieved but for such
21
adoption, change or compliance by an amount deemed by such Bank to be material,
then, from time to time, the Company shall pay to the Agent for the benefit of
such Bank such additional amount as will reasonably compensate it for such
reduction within ten (10) days after notice thereof pursuant to Section 2.14(c).
(c) Each Bank will notify the Company through the Agent of any event
occurring after the date of this Agreement which will entitle it to compensation
pursuant to this Section, as promptly as practicable after it becomes aware
thereof and determines to request compensation and in any case, within 180 days
after becoming aware thereof. A certificate setting forth in reasonable detail
the amount necessary to compensate the Bank in question as specified in
paragraph (a) or (b) above, as the case may be, and the calculation of such
amount shall be delivered to the Company and shall be conclusive absent manifest
error if such determination is made on a reasonable basis. The Company shall pay
to the Agent for the account of such Bank the amount shown as due on any such
certificate within ten (10) days after its receipt of the same. The failure on
the part of any Bank to demand increased compensation with respect to any
Interest Period shall not constitute a waiver of the right to demand
compensation thereafter within the 180 day time limit set forth above. Each Bank
agrees, to the extent it may lawfully do so without incurring additional costs,
to use its best efforts to minimize costs arising under this section by
designating another lending office for the Loans affected, provided no Bank
shall be required to do so.
(d) Any notice given pursuant to this Section 2.14 shall be deemed to
contain a representation by the Bank issuing such notice that the increased
costs and charges are common to substantially all of the loan customers of such
Bank and are not unique to the Company.
SECTION 2.15 Eurodollar Advance Prepayment and Default Penalties.
Subject to Section 11.08, the Company shall indemnify each Bank against any loss
or expense (excluding loss of anticipated profits) which it may sustain or incur
as a consequence of (a) an Advance of, or a conversion from or into, Eurodollar
Rate Advances that does not occur on the date specified therefor in a Notice of
Advance or Notice of Conversion, (b) any payment, prepayment or conversion of a
Eurodollar Rate Advance required by any other provision of this Agreement or
otherwise made on a date other than the last day of the applicable Interest
Period or (c) any default in the payment or prepayment of the principal amount
of any Eurodollar Rate Advance or any part thereof or interest accrued thereon,
as and when due and payable (at the due date thereof, by notice of prepayment or
otherwise). Such loss or expense shall include an amount equal to the excess
determined by each Bank of (i) its cost of obtaining the funds for the Advance
being paid, prepaid or converted or not borrowed (based on the Eurodollar Rate)
for the period from the date of such payment, prepayment or conversion or
failure to borrow to the last day of the Interest Period for such Advance (or,
in the case of a failure to borrow, the Interest Period for the Advance which
would have commenced on the date of such failure to borrow) over (ii) the amount
of interest (as determined by each Bank) that would be realized in reemploying
the funds so paid, prepaid or converted or not borrowed for such period or
Interest Period, as the case may be. The Agent, on behalf of the Banks, will
notify the Company of any loss or expense which will entitle the Banks to
compensation pursuant to this Section, as promptly as possible after it becomes
aware thereof, but failure to so
22
notify shall not affect the Company's liability therefor. A certificate of any
Bank setting forth any amount which it is entitled to receive pursuant to this
Section shall be delivered to the Company and shall be conclusive absent
manifest error if such determination is made on a reasonable basis. The Company
shall pay to the Agent for the account of the Banks the amount shown as due on
any certificate within ten (10) days after its receipt of the same. Without
prejudice to the survival of any other obligations of the Company hereunder, the
obligations of the Company under this Section shall survive the termination of
this Agreement and the assignment of any of the Notes.
SECTION 2.16 Additional Costs, Taxes or Similar Requirements. Subject to
the terms of Section 11.08, all payments by the Company to any Bank shall be
payable in full by the Company without any reduction or set off of any kind for
any purpose and all costs and expenses incurred by any Bank in connection
herewith, direct or indirect, shall be reimbursed by the Company. To the extent
that any additional payments of any kind are required, any reductions to
payments made to any Bank occur or may reasonably be expected to occur, any
costs are incurred, any taxes (or the withholding thereof) are due to, or
required by, any governmental or regulatory agency, foreign or domestic, state,
federal, local, regional or national, based on any law, rule, regulation,
guideline or similar provision, (other than taxes payable on the taxable income
of any Bank to the United States of America or any state or local entity), or
any similar items, all such payments and costs or reduced income shall be the
responsibility of the Company. This provision shall be interpreted in the
broadest possible terms to include any increased costs, payments or reduced
income for any reason, including, but specifically not by way of limitation, due
to taxes, capital adequacy provisions, reserve requirements, withholding
obligations, costs due to the payment of any sums on a date other than the
regularly scheduled date or for any other reason and the Company does hereby
indemnify and hold harmless each Bank, for all such costs and does agree to pay
same or cover any Bank's expenses or losses in regard to same. The Company shall
immediately pay such sums to any Bank as are necessary to mitigate all such
items. This obligation is in addition to all other obligations of the Company
contained herein.
SECTION 2.17 Tax Forms. If any Bank or any entity that is or hereafter
becomes a borrower is organized under the laws of a jurisdiction outside the
United States, such Person shall provide the Agent and the other parties hereto
with the Prescribed Forms on the date of the initial Advance hereunder or on the
date it becomes a party hereto, as the case may be, and from time to time
thereafter if requested by the affected party hereto or the Agent. Unless the
party requesting them and the Agent have received such Prescribed Forms, the
Agent, if required by applicable law or regulation, may withhold taxes from
payments under the Loan Documents at the applicable rate in the case of payments
to or for any Bank organized under the laws of a jurisdiction outside the United
States, provided the Company shall, unless otherwise directed in writing by the
Agent, make all payments in full to the Agent without deducting any withholding
or similar taxes.
23
SECTION 2.18 Voluntary Reduction of Commitment. Upon at least five (5)
Business Days' prior written notice, the Company shall have the right, without
premium or penalty, to reduce ratably in part or terminate in whole the unused
portions of the respective Commitments of the Banks provided that each partial
reduction shall be in the aggregate amount of $5,000,000 or any integral
multiple of $1,000,000 in excess thereof.
SECTION 2.19 Fees. Subject to Section 11.08 hereof, the Company agrees
to pay the following fees (the "Fees"):
(a) The Company shall pay to the Agent for the ratable account of the
Banks a commitment fee (the "Commitment Fee") for the period from and
including the Execution Date to the Maturity Date calculated on the basis
of a 360-day year and computed on the daily average of the Unutilized
Commitment of each Bank at the rate for Commitment Fees set forth in the
definition of Margin. Commitment Fees shall be due and payable in arrears
on each Designated Payment Date commencing on the first such date following
the Execution Date and on the Maturity Date.
(b) The Company shall pay to the Agent for the benefit of the Banks an
annual fee (the "Letter of Credit Fee") in respect of each Letter of Credit
issued hereunder equal to (y) the greater of the then effective Eurodollar
Margin multiplied by the face amount of such Letter of Credit or $500.00,
plus (z) 0.125% multiplied by the face amount of such Letter of Credit, to
be paid to the Issuing Bank. Such fees shall be payable quarterly in
arrears.
SECTION 2.20 Extension of Maturity Date. Not less than 60 days and no
more than 90 days prior to the Maturity Date then in effect, provided that no
Event of Default shall have occurred and be continuing, the Company may request
an extension of such Maturity Date by submitting to the Agent an Extension
Request containing the information in respect of such extension specified in
Exhibit 2.20, which the Agent shall promptly furnish to each Bank. Each Bank
shall, not less than 30 days and not more than 60 days prior to the Maturity
Date then in effect, notify the Company and the Agent of its election (in its
sole and absolute discretion) to extend or not extend the Maturity Date as
requested in such Extension Request. Notwithstanding any provision of this
Agreement to the contrary, any notice by any Bank of its willingness to extend
the Maturity Date shall be revocable by such Bank in its sole and absolute
discretion at any time prior to the date that is 30 days prior to the Maturity
Date then in effect. If all Banks shall approve in writing the extension of the
Maturity Date requested in such Extension Request, the Maturity Date shall
automatically and without any further action by any Person be extended for the
period specified in such Extension Request; provided that (i) each extension
pursuant to this Section 2.20 shall be for a maximum of 364 days and (ii) the
Maturity Date shall not be extended beyond the second anniversary of the
original Maturity Date. If, not less than 30 days and not more than 60 days
prior to the Maturity Date then in effect, all Banks shall not approve in
writing the extension of the Maturity Date requested in an Extension Request,
the Maturity Date shall not be extended pursuant to such Extension Request. The
Agent shall promptly notify the Banks and the Company of any extension of the
Maturity Date pursuant to this Section 2.20.
24
SECTION 2.21 Replacement of Banks. If any Bank requests compensation
under Section 2.10(f), 2.14 or 2.16 or if any Bank notifies the Company that it
cannot fund certain Loans or is unable to deliver the Prescribed Forms, or if
any Bank defaults in its obligation to fund Advances hereunder, then the Company
may, at its sole expense and effort, upon notice to such Bank and the Agent,
require such Bank to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 11.10), all its interests,
rights and obligations under this Agreement to an assignee that shall assume
such obligations (which assignee may be another Bank, if a Bank accepts such
assignment); provided that (i) the Company shall have received the prior written
consent of the Agent, which consent shall not unreasonably be withheld, (ii)
such Bank shall have received payment of an amount equal to the outstanding
principal of its Advances, accrued interest thereon, accrued fees and all other
amounts payable to it hereunder, from the assignee (to the extent of such
outstanding principal and accrued interest and fees) or the Company (in the case
of all other amounts) and (iii) in the case of any such assignment resulting
from a claim for compensation under Section 2.10(f), 2.14 or 2.16, such
assignment will result in a reduction in such compensation. A Bank shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Bank or otherwise, the circumstances entitling the
Company to require such assignment and delegation cease to apply.
ARTICLE III
LETTERS OF CREDIT
-----------------
SECTION 3.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Issuing Bank agrees that it will, at any time
and from time to time on or after the Execution Date and prior to the Maturity
Date, promptly following its receipt of a Letter of Credit Request and
application for Letter of Credit, issue for the account of the Company or any of
the Guarantors and in support of the obligations of the Company or any of its
Subsidiaries, one or more irrevocable letters of credit (all such letters of
credit together with the Existing Letters of Credit collectively, the "Letters
of Credit"), up to a maximum amount outstanding at any one time for all Letters
of Credit and Existing Letters of Credit equal to $10,000,000.00, provided that
the Issuing Bank shall not issue any Letter of Credit if at the time of such
issuance: (i) the stated amount of such Letter of Credit is greater than an
amount which, when added to all other Letters of Credit outstanding and all
other Advances under the Notes then outstanding, would exceed the Total
Commitment; or (ii) the expiry date or, in the case of any Letter of Credit
containing an expiry date that is extendible at the option of the Issuing Bank,
the initial expiry date of such Letter of Credit is a date that is later than
the Maturity Date, unless such Letter of Credit is secured by cash.
(b) The Issuing Bank shall neither renew nor permit the renewal of any
Letter of Credit if any of the conditions precedent to such renewal set forth in
Section 4.02 are not satisfied or, after giving effect to such renewal, the
expiry date of such Letter of Credit would be a date that is later than twelve
months after the Maturity Date.
25
(c) The Company, the Agent and the Banks acknowledge that Chase has
issued, for the account of the Company, the Existing Letters of Credit. Upon the
Execution Date, the Letters of Credit outstanding shall be that amount equal to
the aggregate stated amount of the Existing Letters of Credit, and the amount
available for Loans and Letters of Credit under the Commitments shall be reduced
by such amount so long as said Letters of Credit are outstanding and the amount
available under each Bank's Commitment shall be reduced by such Bank's
percentage participation of such amount. If the Company or any of the Guarantors
desires to extend the existing expiry date of any Existing Letter of Credit, or
request a substitute letter of credit be issued for any reason in respect of any
Existing Letter of Credit, the Company or any of the Guarantors shall submit to
the Issuing Bank a Letter of Credit Request as provided in Section 3.02(a).
SECTION 3.02 Letters of Credit Requests. (a) Whenever the Company
desires that a Letter of Credit be issued for its account or that the existing
expiry date shall be extended, it shall deliver to the Issuing Bank (with copies
to be sent to the Agent) in the case of a Letter of Credit to be issued, at
least three (3) Business Days' prior written request therefor and in the case of
the extension of the existing expiry date of any Letter of Credit, at least five
days prior to the date on which the Issuing Bank must notify the beneficiary
thereof that the Issuing Bank does not intend to extend such existing expiry
date. Each such request shall be executed by the Company and shall be in the
form of Exhibit 3.02 attached hereto (each a "Letter of Credit Request") and
shall be accompanied by an application for Letter of Credit therefor, completed
to the reasonable satisfaction of the Issuing Bank, and such other certificates,
documents and other papers and information as the Issuing Bank or any Bank
(through the Agent) may reasonably request. Each Letter of Credit shall be
denominated in U.S. dollars, shall expire no later than the date specified in
Section 3.01, shall not be in an amount greater than is permitted under clauses
(i) or (ii) of Section 3.01(a) and shall be in such form as may be reasonably
approved from time to time by the Issuing Bank and the Company.
(b) The delivery of each Letter of Credit Request shall be deemed to be
a representation and warranty by the Company that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, this
Agreement. Unless the Issuing Bank has received notice from any Bank before it
issues the respective Letter of Credit or extends the existing expiry date of a
Letter of Credit that one or more of the conditions specified in Article IV are
not then satisfied, or that the issuance of such Letter of Credit would violate
this Agreement, then the Issuing Bank may issue the requested Letter of Credit
in accordance with the Issuing Bank's usual and customary practices. Upon its
issuance of any Letter of Credit or the extension of the existing expiry date of
any Letter of Credit, as the case may be, the Issuing Bank shall promptly notify
the Company, the Agent and each Bank of such issuance or extension, which notice
shall be accompanied by a copy of the Letter of Credit actually issued or a copy
of any amendment extending the existing expiry date of any Letter of Credit, as
the case may be.
26
SECTION 3.03 Letter of Credit Participations. (a) All Obligations of the
Company and the Guarantors with respect to all Existing Letters of Credit and
all Letters of Credit issued subsequent hereto shall be deemed to have been sold
and transferred by the Issuing Bank to each Bank, and each Bank shall be deemed
irrevocably and unconditionally to have purchased and received from the Issuing
Bank, without recourse or warranty, an undivided interest and participation, (to
the extent of such Bank's percentage participation in the Commitments) in each
such Obligation, each substitute letter of credit, each drawing made thereunder
and the obligations of the Company under this Agreement and the other Loan
Documents with respect thereto, and any security therefor or guaranty pertaining
thereto including the Guaranty.
(b) The Issuing Bank shall have no obligation relative to the Banks
other than to confirm that any documents required to be delivered under such
Letter of Credit appear to have been delivered and that they appear to comply on
their face with the requirements of such Letter of Credit.
(c) In the event that the Issuing Bank makes any payment under any
Letter of Credit, the same shall be considered an Alternate Base Rate Advance
without further action by any Person. The Issuing Bank shall promptly notify the
Agent, which shall promptly notify each Bank thereof. Each Bank shall
immediately pay to the Agent for the account of the Issuing Bank the amount of
such Bank's percentage participation of such Advance. If any Bank shall not have
so made its percentage participation available to the Agent, such Bank agrees to
pay interest thereon, for each day from such date until the date such amount is
paid at the lesser of the Federal Funds Effective Rate and the Highest Lawful
Rate.
(d) The Issuing Bank shall not be liable for, and the obligations of the
Company and the Banks to make payments to the Agent for the account of the
Issuing Bank with respect to Letters of Credit shall not be subject to, any
qualification or exception whatsoever, including any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Company may have at any time against a beneficiary named in a Letter of
Credit, any transferee of any Letter of Credit, the Agent, the Issuing
Bank, any Bank, or any other Person, whether in connection with this
Agreement, any Letter of Credit, the transactions contemplated herein or
any unrelated transactions (including any underlying transaction between
the Company and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under the
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
27
(iv) the surrender or impairment of any security for the performance or
observance of any of the terms of any of the Loan Documents; or
(v) the occurrence of any Default or Event of Default.
(e) THE ISSUING BANK SHALL NOT BE LIABLE FOR ANY ERROR, OMISSION,
INTERRUPTION OR DELAY IN TRANSMISSION, DISPATCH OR DELIVERY OF ANY MESSAGE
OR ADVICE, HOWEVER TRANSMITTED, IN CONNECTION WITH ANY LETTER OF CREDIT,
EXCEPT FOR ERRORS OR OMISSIONS CAUSED BY THE ISSUING BANK'S GROSS
NEGLIGENCE OR WILLFUL MISCONDUCT. IT IS THE EXPRESS INTENTION OF THE
PARTIES HERETO THAT THE ISSUING BANK, ITS OFFICERS, DIRECTORS, EMPLOYEES
AND AGENTS SHALL BE INDEMNIFIED AND HELD HARMLESS FROM ANY ACTION TAKEN OR
OMITTED BY SUCH PERSON UNDER OR IN CONNECTION WITH ANY LETTER OF CREDIT OR
ANY RELATED DRAFT OR DOCUMENT ARISING OUT OF OR RESULTING FROM SUCH
PERSON'S SOLE OR CONTRIBUTORY NEGLIGENCE. The Company agrees that any
action taken or omitted by the Issuing Bank under or in connection with any
Letter of Credit or the related drafts or documents, if done in accordance
with the standards of care specified in the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500 (and any subsequent revisions thereof approved by a
Congress of the International Chamber of Commerce and adhered to by the
Issuing Bank) and, to the extent not inconsistent therewith, the Uniform
Commercial Code of the State of Texas, shall not result in any liability of
the Issuing Bank to the Company.
SECTION 3.04 Increased Costs. (a) Notwithstanding any other provision
herein, but subject to Section 11.08, if any Bank shall have determined in good
faith that any law, rule, regulation or guideline or the application or
effectiveness of any applicable law or regulation or any change in applicable
law or regulation or any change after the Execution Date in the interpretation
or administration thereof, or compliance by any Bank (or any lending office of
such Bank) with any applicable guideline or request from any central bank or
governmental authority (whether or not having the force of law) either shall
impose, modify or make applicable any reserve, deposit, capital adequacy or
similar requirement against letters of credit issued, or participated in, by any
Bank or shall impose on any Bank any other conditions affecting this Agreement
or any Letter of Credit, and the result of any of the foregoing is to increase
the cost to any Bank of issuing, maintaining or participating in any Letter of
Credit, or reduce the amount received or receivable by any Bank hereunder with
respect to Letters of Credit, by an amount deemed by such Bank to be material,
then, from time to time, the Company shall pay to the Agent for the account of
such Bank such additional amount or amounts as will reasonably compensate such
Bank for such increased cost or reduction by such Bank.
(b) Each Bank will notify the Company through the Agent of any event
occurring after the date of this Agreement which will entitle such Bank to
compensation pursuant to subsection (a) above, as promptly as practicable. A
certificate of a Bank setting forth in reasonable detail such amount or amounts
as shall be necessary to compensate such Bank as specified in subsection (a)
above may be delivered to the Company (with a copy to the Agent) and shall be
conclusive absent manifest error. The Company shall pay to the Agent for the
account of
28
such Bank the amount shown as due on any such certificate within 30 days after
its receipt of the same. No Bank shall be entitled to recover any costs pursuant
to this Section 3.04(b) incurred more than 180 days prior to such Bank's giving
notice to the Company for reimbursement thereof.
SECTION 3.05 Conflict between Application and Agreement. To the extent
that any provision of any application for Letter of Credit is inconsistent with
the provisions of this Agreement, the provisions of this Agreement shall
control.
ARTICLE IV
CONDITIONS PRECEDENT
--------------------
SECTION 4.01 Conditions Precedent to the Initial Advance. The obligation
of each Bank to make its initial Advance hereunder to the Company is subject to
the occurrence of or receipt by the Agent of the following, all in form and
substance satisfactory to the Agent, and, where relevant, executed by all
appropriate parties:
(a) this Agreement (which includes the Guaranty);
(b) one Note for each Bank;
(c) Landlord's lien waivers as required by the Agent in respect of all
leased property;
(d) each of the following security documents (the "Security Documents")
granting a first and prior (except for Liens permitted under Section 7.04) Lien
or security interest on the Collateral to the Agent for the benefit of itself
and the Banks as security for the Obligations, substantially in the form of
Exhibits 4.01(d)(i) and (ii) hereto, or in the case of real estate collateral,
in a form reasonably requested by the Agent;
(i) Security Agreements covering substantially all of the accounts and
inventory of the Company and each of its Material Subsidiaries existent as
of the date hereof (except as set forth in such Security Agreement or other
Security Documents which exclusions have been agreed to by the Majority
Banks), accompanied by all documents, instruments and other items necessary
to obtain and perfect a Lien thereon;
(ii) Pledge Agreements pledging to the Agent all stock owned by the
Company or any Subsidiary in all domestic Material Subsidiaries and 65% of
all foreign Material Subsidiaries accompanied by original stock
certificates evidencing such shares and executed stock powers for such
certificates;
29
Failure of the Agent to request the information contained in this
paragraph prior to the Execution Date shall not preclude it from
requesting such information at any time thereafter, in its sole
discretion, during the time the Loan is outstanding; and
(iii) UCC-1 and UCC-3 Financing Statements and other documents or
instruments necessary to perfect the Liens granted in the Security
Documents.
(e) A Notice of Advance with respect to the initial Advance meeting the
requirements of Section 2.03(a);
(f) a certificate of the secretary or an assistant secretary of the
Company and each Guarantor certifying, inter alia, (i) true and complete copies
of each of the articles or certificate of incorporation, as amended and in
effect of the Company and each of the Guarantors, the bylaws, as amended and in
effect, of the Company and each of the Guarantors and the resolutions adopted by
the Board of Directors of the Company and each of the Guarantors (A) authorizing
the execution, delivery and performance by the Company and each of its
Subsidiaries of this Agreement and the other Loan Documents to which it is or
will be a party and, in the case of the Company, the Advances to be made
hereunder, (B) approving the forms of the Loan Documents to which it is or will
be a party and which will be delivered at or prior to the date of the initial
Advance hereunder and (C) authorizing officers of the Company and each of its
Subsidiaries to execute and deliver the Loan Documents to which it is or will be
a party and any related documents, including, any agreement contemplated by this
Agreement, and (ii) the incumbency and specimen signatures of the officers of
the Company and each of its Subsidiaries executing any documents on its behalf;
(g) a certificate of the President, Chief Financial Officer or Treasurer
of the Company certifying that there has been no change in the businesses or
financial condition of the Company which could reasonably be expected to have a
Material Adverse Effect since December 11, 1997;
(h) opinions addressed to the Agent and the Banks from (i) ▇▇▇▇▇▇▇▇▇ &
▇▇▇▇▇▇▇▇▇, L.L.P., counsel to the Company and the Guarantors, substantially in
the form set forth as Exhibit 4.01(h)(i), and (ii) from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇,
General Counsel to the Company, substantially in the form of
Exhibit 4.01(h)(ii);
(i) the payment to the Agent and the Banks of all reasonable fees and
expenses agreed upon by such parties to be paid on the Execution Date including,
without limitation, any accrued unpaid portions of Commitment Fees due under the
Prior Credit Agreement;
(j) certificates of appropriate public officials as to the existence,
good standing and qualification to do business as a foreign corporation, as
applicable, of the Company and its Material Subsidiaries in each jurisdiction in
which the ownership of its properties or the conduct of its business requires
such qualifications and where the failure to so qualify would have a Material
Adverse Effect;
30
(k) certificates of insurance as contemplated by Section 6.03(a); and
(l) UCC searches and other title information reasonably requested by the
Agent on the Company and each of its Material Subsidiaries.
The acceptance of the benefits of the initial Credit Event hereunder
shall constitute a representation and warranty by the Company to the Agent and
each of the Banks that, to the best of its knowledge, all of the conditions
specified in this Section above shall have been satisfied or waived as of that
time.
SECTION 4.02 Conditions Precedent to All Credit Events. The obligation
of the Banks to make any Advance, including, without limitation, the initial
Advance hereunder, is subject to the further conditions precedent that on the
date of such Credit Event:
(a) The representations and warranties set forth in Article V shall be
true and correct in all material respects as of, and as if such representations
and warranties were made on, the date of the proposed Advance (unless such
representation and warranty expressly relates to an earlier date or is no longer
true and correct solely as a result of transactions permitted by the Loan
Documents), and the Company shall be deemed to have certified to the Agent and
the Banks that such representations and warranties are true and correct in all
material respects by submitting a Notice of Advance.
(b) The Company shall have complied with the provisions of Section 2.03
hereof.
(c) No Default or Event of Default shall have occurred and be continuing
or would result from such Credit Event.
(d) No Material Adverse Effect shall have occurred in the consolidated
financial condition of the Company and its consolidated Subsidiaries since the
delivery of the most recent financial statements delivered pursuant to Section
6.01(b).
(e) the Agent shall have received the most recent unqualified report and
opinion on the Company's financial statements issued by KPMG Peat Marwick LLP,
or other independent certified public accountant of recognized national
standing.
(f) Except for any foreign Subsidiaries, all Persons that have become
Material Subsidiaries subsequent to the Execution Date shall have executed this
Agreement.
(g) The Agent shall have received such other approvals, opinions and
documents as the Agent or the Banks may reasonably request.
31
The acceptance of the benefits of each such Credit Event shall
constitute a representation and warranty by the Company to the Agent and each of
the Banks that all of the conditions specified in this Section above exist as of
that time.
SECTION 4.03 Delivery of Documents. All of the Notes, certificates,
legal opinions and other documents and papers referred to in this Article IV,
unless otherwise specified, shall be delivered to the Agent for the account of
each of the Banks and, except for the Notes, in sufficient counterparts for each
of the Banks and shall be reasonably satisfactory in form and substance to the
Banks.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce the Banks to enter into this Agreement and to make
the Advances provided for herein, the Company, as to itself and each of its
Subsidiaries, makes, on or as of the occurrence of each Credit Event (except to
the extent such representations or warranties relate to an earlier date or are
no longer true and correct in all material respects solely as a result of
transactions not prohibited by the Loan Documents), the following
representations and warranties to the Agent and the Banks:
SECTION 5.01 Organization and Qualification. Each of the Company and its
Material Subsidiaries is duly formed or organized, validly existing and in good
standing under the laws of the state of its organization, has the power to own
its property and to carry on its business as now conducted, except where the
failure to do so would not have a Material Adverse Effect and (c) is duly
qualified to do business and is in good standing in every jurisdiction in which
the failure to be so qualified would have a Material Adverse Effect.
SECTION 5.02 Authorization and Validity. Each of the Company and its
Subsidiaries has the corporate power and authority to execute, deliver and
perform its obligations hereunder and under the other Loan Documents to which it
is a party and all such action has been duly authorized by all necessary
corporate proceedings on its part. Each Loan Document to which the Company or
any of its Subsidiaries is a party have been duly and validly executed and
delivered by such Person and constitute a valid and legally binding agreement of
such Person enforceable in accordance with the respective terms thereof, except,
in each case, as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or other similar laws relating
to or affecting the enforcement of creditors' rights generally, and by general
principles of equity regardless of whether such enforceability is sought in a
proceeding in equity or at law.
32
SECTION 5.03 Governmental Consents. No authorization, consent, approval,
license or exemption of or filing or registration with any court or governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, is necessary for the valid execution or delivery by the Company or any
Subsidiary of any Loan Document.
SECTION 5.04 Conflicting or Adverse Agreements or Restrictions. Neither
the Company nor any Subsidiary is a party to any contract or agreement or
subject to any restriction which would reasonably be expected to have a Material
Adverse Effect. As of the Execution Date, all agreements of the Company relating
to the lending of money or the issuance of letters of credit by any party are
described hereto on Schedule 5.04. Neither the execution nor delivery of the
Loan Documents nor compliance with the terms and provisions hereof or thereof
will be contrary to the provisions of, or constitute a default under, (a) the
charter or bylaws of the Company or any Material Subsidiary (b) or any law,
regulation, order, writ, injunction or decree of any court or governmental
instrumentality that is applicable to the Company or any Material Subsidiary or
(c) any material agreement to which the Company or any of its Subsidiaries is a
party or by which it is bound or to which any of them is subject.
SECTION 5.05 Title to Assets. Each of the Company and its Material
Subsidiaries has good title to all material personal property and good and
indefeasible title to all material real property as reflected on the books and
records of the Company or any of its Material Subsidiaries as being owned by
them, except for properties disposed of in the ordinary course of business,
subject to no Liens, except those permitted hereunder, except where the failure
to do so could not reasonably be expected to have a Material Adverse Effect. All
of such assets have been and are being maintained by the appropriate Person in
good working condition in accordance with industry standards, except where the
failure to do so could not reasonably be expected to have a Material Adverse
Effect.
SECTION 5.06 Litigation. No proceedings against the Company or any
Subsidiary are pending or, to the knowledge of the Company, threatened before
any court or governmental agency or department which involve a reasonable
material risk of having a Material Adverse Effect except those listed on
Schedule 5.06 hereof.
SECTION 5.07 Financial Statements. Prior to the Execution Date, the
Company has furnished to the Banks its audited consolidated balance sheet as of
December 31, 1997 and audited consolidated income statement and statement of
cash flows for the period ended December 31, 1997, and the unaudited balance
sheet and consolidated income statement and statements of cash flow for the
period from January 1, 1998 through March 31, 1998 (such financials, the
"Financials"). The Financials have been prepared in conformity with GAAP
consistently applied (except as otherwise disclosed in such financial
statements) throughout the periods involved and present fairly, in all material
respects, the consolidated financial condition of the Company and its
consolidated Subsidiaries as of the dates thereof and the consolidated results
of their operations for the periods then ended. As of the Execution Date, no
Material Adverse Effect
33
has occurred in the consolidated financial condition of the Company and its
consolidated Subsidiaries since the date of said Financials.
SECTION 5.08 Default. Neither the Company nor any Subsidiary is in
default under any material provisions of any instrument evidencing any
Indebtedness or of any agreement relating thereto, or in default in any respect
under any order, writ, injunction or decree of any court, or in default in any
respect under or in violation of any order, injunction or decree of any
governmental instrumentality, in each case in such manner as to cause a Material
Adverse Effect.
SECTION 5.09 Investment Company Act. Neither the Company nor any
Subsidiary is, or is directly or indirectly controlled by or acting on behalf of
any Person which is, an "investment company," as such term is defined in the
Investment Company Act of 1940, as amended.
SECTION 5.10 Public Utility Holding Company Act. Neither the Company nor
any Subsidiary is a non-exempt "holding company," or subject to regulation as
such, or, to the knowledge of the Company's or such Subsidiary's officers, an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
SECTION 5.11 ERISA. No accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, exists
or is expected to be incurred with respect to any Plan. No liability to the PBGC
(other than required premium payments) has been or is expected by the Company to
be incurred with respect to any Plan by the Company or any ERISA Affiliate.
Neither the Company nor any ERISA Affiliate has incurred any withdrawal
liability under Title IV of ERISA with respect to any Multi-Employer Plans.
SECTION 5.12 Tax Returns and Payments. Each of the Company and its
Subsidiaries has filed all federal income tax returns and other tax returns,
statements and reports (or obtained extensions with respect thereto) which are
required to be filed and has paid or deposited or made adequate provision, in
accordance with GAAP for the payment of all taxes (including estimated taxes
shown on such returns, statements and reports) which are shown to be due
pursuant to such returns, except for such taxes as are being contested in good
faith and by appropriate proceedings, except, in each such case, where such
failure could not reasonably be expected to have a Material Adverse Effect.
SECTION 5.13 Environmental Matters. Each of the Company and its
Subsidiaries (a) possesses all environmental, health and safety licenses,
permits, authorizations, registrations, approvals and similar rights necessary
under law or otherwise for the Company or such Subsidiary to conduct its
operations as now being conducted (other than those with respect to which the
failure to possess or maintain would not, individually or in the aggregate for
the Company and such Subsidiaries, reasonably be expected to have a Material
Adverse Effect) and (b) each of such licenses, permits, authorizations,
registrations, approvals and similar rights is valid and subsisting,
34
in full force and effect and enforceable by the Company or such Subsidiary, and
each of the Company and its Subsidiaries is in compliance with all effective
terms, conditions or other provisions of such permits, authorizations,
registrations, approvals and similar rights except for such failure or
noncompliance that, individually or in the aggregate for the Company and such
Subsidiaries, would not reasonably be expected to have a Material Adverse
Effect. Except as disclosed on Schedule 5.13, neither the Company nor any of its
Subsidiaries has received any notices of any violation of, noncompliance with,
or remedial obligation under, Requirements of Environmental Laws (which
violation or non-compliance has not been cured), and there are no writs,
injunctions, decrees, orders or judgments outstanding, or lawsuits, claims,
proceedings, investigations or inquiries pending or, to the knowledge of the
Company or any Subsidiary, threatened, relating to the ownership, use,
condition, maintenance or operation of, or conduct of business related to, any
property owned, leased or operated by the Company or such Subsidiary or other
assets of the Company or such Subsidiary, other than those violations, instances
of noncompliance, obligations, writs, injunctions, decrees, orders, judgments,
lawsuits, claims, proceedings, investigations or inquiries that, individually or
in the aggregate for the Company and such Subsidiaries, would not have a
Material Adverse Effect. Except as disclosed on Schedule 5.13, there are no
material obligations, undertakings or liabilities arising out of or relating to
Environmental Laws to which the Company or any of its Subsidiaries has agreed,
assumed or retained, or, to the knowledge of the Company, by which the Company
or any of its Subsidiaries is adversely affected, by contract or otherwise and,
further, except as disclosed on Schedule 5.13, neither the Company nor any of
its Subsidiaries has received a written notice or claim to the effect that the
Company or any of its Subsidiaries is or may be liable to any other Person as
the result of a Release or threatened Release of a Hazardous Material which, in
either case, could reasonably be expected to have a Material Adverse Effect.
SECTION 5.14 Purpose of Loans. (a) The proceeds of the Loan will be used
for general corporate purposes.
(b) None of the proceeds of any Advance will be used directly or
indirectly for the purpose of purchasing or carrying any "margin stock" within
the meaning of Regulation U or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
stock.
(c) Use of Proceeds. Neither the Company nor any affiliate of the
Borrower shall use any portion of the proceeds of the Loans nor have any Letter
of Credit issued, either directly or indirectly, for the purposes of (i)
purchasing any securities underwritten by ABN AMRO Chicago Corporation ("AACC"),
an affiliate of one of the Banks, (ii) purchasing from AACC any securities in
which AACC makes a market, or (iii) refinancing or making payments of principal,
interest or dividends on any securities issued by the Company or any affiliate
of the Company, and underwritten or dealt in by AACC.
35
SECTION 5.15 Franchises and Other Rights. The Company and each of its
Subsidiaries has all franchises, permits, licenses, patents, trademarks and
other intangible assets or authority as are necessary to enable them to carry on
their respective businesses as now being conducted and is not in default in
respect thereof where the absence of such or any such default could reasonably
be expected to have a Material Adverse Effect.
SECTION 5.16 Subsidiaries and Assets. The Subsidiaries listed on
Schedule 5.16 are all of the Subsidiaries of the Company as of the Execution
Date and the address given for such Subsidiaries is the correct mailing address
as of the Execution Date. The Subsidiaries executing this Agreement are all of
the Material Subsidiaries as of the Execution Date.
SECTION 5.17 Solvency. After giving effect to the initial Advance
hereunder and all other Indebtedness of the Company existing at the time of such
Advance, the Company and its Subsidiaries, viewed as a consolidated entity, will
have at such time (a) capital sufficient to carry on their businesses and
transactions and (b) assets, the fair market value of which exceeds their
consolidated liabilities (as reflected on the Financials or on the financial
statements most recently delivered to the Banks).
ARTICLE VI
AFFIRMATIVE COVENANTS
---------------------
The Company, as to itself and each of its Subsidiaries, covenants and
agrees that on and after the date hereof until the Notes have been paid in full
and the Commitments have terminated:
SECTION 6.01 Information Covenants. The Company will furnish to each
Bank:
(a) As soon as available, and in any event within fifty (50) days of the
end of each fiscal quarter, the consolidated and, if requested by the Agent, the
consolidating balance sheet of the Company and its Subsidiaries as of the end of
such period and the related consolidated and, if requested by the Agent,
consolidating statements of income for such period and, in each case, also for
the portion of the fiscal year ended at the end of such period, setting forth,
in each case after the first anniversary of the Effective Date, comparative
consolidated figures for the related periods in the prior fiscal year, all of
which shall be certified by the chief financial officer or chief executive
officer of the Company as fairly presenting in all material respects, the
financial position of the Company and its Subsidiaries as of the end of such
period and the results of their operations for the period then ended in
accordance with GAAP, subject to changes resulting from normal year-end audit
adjustments.
(b) As soon as available, and in any event within ninety-five (95) days
after the close of each fiscal year of the Company, the audited consolidated
and, if requested by the Agent,
36
the unaudited consolidating balance sheets of the Company and its Subsidiaries
as at the end of such fiscal year and the related consolidated and, if requested
by the Agent, consolidating statements of income, stockholders' equity and cash
flows for such fiscal year, setting forth, in each case after the first
anniversary of the Effective Date, comparative figures for the preceding fiscal
year and certified by KPMG Peat Marwick LLP or other independent certified
public accountants of recognized national standing, whose report shall be
without limitation as to the scope of the audit and reasonably satisfactory in
substance to the Banks.
(c) Immediately after any Responsible Officer of the Company obtains
verified knowledge thereof, notice of:
(i) any material violation of, noncompliance with, or remedial
obligations under, Requirements of Environmental Laws;
(ii) any material Release or threatened material Release of Hazardous
Materials affecting any property owned, leased or operated by the Company
or any of its Subsidiaries;
(iii) any event or condition which constitutes a Default or an Event of
Default;
(iv) any condition or event which, in the opinion of management of the
Company, would reasonably be expected to have a Material Adverse Effect;
(v) any Person having given any written notice to the Company or taken
any other action with respect to a claimed material default or event under
any material instrument or material agreement;
(vi) the institution of any litigation which could reasonably be
expected in the good faith judgment of the Company either to have a
Material Adverse Effect or result in a final, non-appealable judgment or
award in excess of $1,000,000.00 with respect to any single cause of
action;
(vii) all ERISA notices required by Section 6.08; and
(viii) any sale of Assets other than as permitted hereby;
Such notice shall specify the nature and period of existence thereof and the
action taken by such Person and the nature of any such claimed default, event or
condition and, in the case of an Event of Default or Default, what action has
been taken, is being taken or is proposed to be taken with respect thereto.
(d) At the time of the delivery of the quarterly and annual financial
statements provided for in Sections 6.01(a) and 6.01(b), a certificate of a
Responsible Officer to the effect that,
37
to his knowledge, no Default or Event of Default exists or, if any Default or
Event of Default does exist, specifying the nature and extent thereof and the
action that is being taken or that is proposed to be taken with respect thereto,
which certificate shall set forth the calculations required to establish whether
the Company was in compliance with the provisions of Sections 7.11 through 7.17
as at the end of such fiscal period or year, as the case may be.
(e) Upon request by the Agent, a summary report (by Subsidiary) of all
Accounts of the Company and its Subsidiaries.
(f) Promptly following request by the Agent such environmental reports,
studies and audits of the Company's procedures and policies, assets and
operations in respect of Environmental Laws as the Agent may reasonably request.
(g) Promptly upon receipt thereof, a copy of any report or letter
submitted to the Company by its independent accountants in connection with any
regular or special audit of the Company's records and simultaneously with the
sending or filing thereof, copies of all proxy statements, financial statements
and reports which the Company sends to its stockholders, and copies of all
regular, periodic or special reports, and all registration statements, in each
case, which the Company or any of its Subsidiaries files with the Securities and
Exchange Commission or any other securities exchange or securities market.
(h) Promptly following request by the Agent such financial projections,
budgets and unaudited consolidating financial statements of the Company and its
Subsidiaries as the Agent may reasonably request.
(i) From time to time and with reasonable promptness, such other
information or documents as the Agent or any Bank through the Agent may
reasonably request.
SECTION 6.02 Books, Records and Inspections. The Company will maintain,
and will cause its Subsidiaries to maintain, the corporate books and financial
records of the Company and its Subsidiaries and will permit, or cause to be
permitted, any Person designated by any Bank or the Banks to visit and inspect
any of the properties of the Company and its Subsidiaries, to examine such books
and records and make copies thereof or extracts therefrom, audit its accounts,
inventory and finances of any such corporations with the officers, employees and
agents of the Company and its Subsidiaries and with their independent public
accountants, all at such reasonable times and as often as the Agent or such Bank
may request. Such inspections shall be at the expense of the Company if made
annually and shall be at the expense of the Bank or Banks requiring same if made
more often than annually.
38
SECTION 6.03 Insurance and Maintenance of Properties. (a) Each of the
Company and its Subsidiaries will keep reasonably adequately insured by
financially sound and reputable insurers all of its material property, and
against the interruption of its business, which is of a character, and in
amounts and against such risks, usually and reasonably insured by similar
Persons engaged in the same or similar businesses, including, without
limitation, insurance against fire, casualty and any other hazards normally
insured against, which policies shall name the Agent for the benefit of the
Banks, as a loss payee. Each of the Company and its Subsidiaries will at all
times maintain insurance against its liability for injury to Persons or
property, which insurance shall be by financially sound and reputable insurers
and in such amounts and form as are customary for corporations of established
reputation engaged in the same or a similar business and owning and operating
similar properties and which shall name the Agent, for the benefit of the Banks,
as an additional insured. The Company shall provide the Agent a listing of all
such insurance and such other certificates and other evidence thereof, on or
prior to the Execution Date hereof and annually thereafter. A listing of all
policies of the Company and its Subsidiaries as of the Execution Date is
attached hereto as Schedule 6.03.
(b) Each of the Company and its Subsidiaries will cause all of its
material properties used or useful in the conduct of its business to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all reasonably necessary
repairs, renewals and replacements thereof, all as in the reasonable judgment of
such Person may be reasonably necessary so that the business carried on in
connection therewith may be properly conducted at all times, except where such
failure could not reasonably be expected to have a Material Adverse Effect.
SECTION 6.04 Payment of Taxes. Each of the Company and its Subsidiaries
will pay and discharge all taxes, assessments and governmental charges or levies
imposed upon it or upon its income or profits, or upon any properties belonging
to it, prior to the date on which penalties attach thereto, except for such
amounts that are being contested in good faith and by appropriate proceedings,
except where such failure could not reasonably be expected to have a Material
Adverse Effect.
SECTION 6.05 Corporate Existence. Each of the Company and its
Subsidiaries will do all things necessary to preserve and keep in full force and
effect (a) the existence of the Company, and (b) unless the failure to do so
would not reasonably be expected to have a Material Adverse Effect, the rights
and franchises of each of the Company and its Subsidiaries.
SECTION 6.06 Compliance with Statutes. Each of the Company and its
Subsidiaries will comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except to the extent the failure to do so would not reasonably
be expected to have a Material Adverse Effect.
39
SECTION 6.07 Material Privileges, Permits, Licenses and Other Rights.
Each of the Company and its Subsidiaries will do all things necessary to
preserve and keep in full force and effect all material privileges, permits,
licenses and other rights necessary to conduct business as such business is
currently conducted as of the Effective Date, except to the extent the failure
to do so would not reasonably be expected to have a Material Adverse Effect.
SECTION 6.08. ERISA. Immediately after any Responsible Officer of the
Company or any of its Subsidiaries knows or has reason to know any of the
following items are true the Company will deliver or cause to be delivered to
the Banks a certificate of the chief financial officer of the Company setting
forth details as to such occurrence and such action, if any, the Company or its
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by the Company or its ERISA
Affiliate with respect thereto: (i) that a Reportable Event has occurred or that
an application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard; (ii) that a
Multiemployer Plan has been or may be terminated, reorganized, partitioned or
declared insolvent under Title IV of ERISA; (iii) that any required contribution
to a Plan or Multiemployer Plan has not been or may not be timely made; (iv)
that proceedings may be or have been instituted under Section 4069(a) of ERISA
to impose liability on the Company or an ERISA Affiliate or under Section 4042
of ERISA to terminate a Plan or appoint a trustee to administer a Plan; (v) that
the Company or any ERISA Affiliate has incurred or may incur any liability
(including any contingent or secondary liability) on account of the termination
of or withdrawal from a Plan or a Multiemployer Plan; and (vi) that the Company
or an ERISA Affiliate may be required to provide security to a Plan under
Section 401(a)(29) of the Code.
SECTION 6.09 Additional Subsidiaries. (a) The Company will cause any
Person that becomes a Material Subsidiary subsequent to the Execution Date to
(i) within thirty (30) Business Days after becoming a Subsidiary, to execute a
Guaranty or a counterpart of this Agreement and deliver same to the Agent and
(ii) within thirty (30) days after becoming a Subsidiary, to deliver to the
Agent evidence, satisfactory to the Agent, that all Indebtedness owing by such
Subsidiary to any other Person has been paid in full and said Indebtedness has
been canceled and all Liens securing such Indebtedness have been released,
(except for Indebtedness and Liens permitted hereby) provided, if said
Subsidiary is not incorporated under the laws of the United States or one of its
states or territories, no such guaranty will be required if the Company makes
arrangements, satisfactory to the Agent, in its sole discretion, regarding
restrictions on transfer of funds or other assets by the Company or any
Subsidiary to said new foreign Subsidiary. Further, the Company, or its
Affiliate that owns the stock of said Material Subsidiary, will deliver to the
Agent a Pledge Agreement as described in Section 4.01(d)(ii) in respect of such
Material Subsidiary.
(b) Subsequent to the Execution Date, if the Company and all of the
Material Subsidiaries that are Guarantors do not have both total revenue and
total assets equal to eighty-five percent (85%) of the total consolidated
revenue and the total consolidated assets, respectively, of the Company and all
of its Subsidiaries on a consolidated basis, as shown by the reports required
under Section 6.01, the Company will immediately pledge, or cause to be pledged,
the stock of
40
Subsidiaries sufficient to attain each of said eighty-five percent (85%) levels
and will cause such Subsidiaries to become Guarantors, all with appropriate
supporting documentation as referenced above.
SECTION 6.10 Acquisition Agreements. Upon request of the Agent, the
Company shall provide the Agent with: (a) copies of all acquisition agreements
relating to the acquisitions of Qualified Companies, (b) a specimen form of such
acquisition agreement (the "Acquisition Agreements") and (c) listing of each
then existing Acquisition Agreement.
SECTION 6.11 Material Contracts. (a) The Company and its Subsidiaries
shall provide the Agent with copies of all material contracts (the "Material
Contracts") as of the Effective Date. A listing of each such Material Contract
is attached hereto as Schedule 6.11.
(b) The Company and its Subsidiaries shall provide the Agent with an
executed copy of each additional Material Contract entered into after the
Effective Date, within ten (10) Business Days after request therefor by the
Agent.
SECTION 6.12 Employee Agreements. The Company and its Subsidiaries shall
provide the Agent with copies of all agreements relating to the employees of the
Company and its Subsidiaries, upon request by the Agent, including, but not
limited to, all collective bargaining agreements, employment contracts, non-
compete agreements, employee savings, employee retirement and employee benefit
plans. Upon request by the Agent, the Company will provide the Agent with a list
of (i) each employment agreement between the Company and each of its officers,
(ii) each employment agreement between a Subsidiary and the key employees of
such Subsidiary (or its predecessor), (iii) each union with which a Subsidiary
of the Company has entered into a collective bargaining agreement, and (iv) each
employee pension benefit plan (as defined in ERISA) sponsored by the Company or
any of its subsidiaries.
ARTICLE VII
NEGATIVE COVENANTS
------------------
The Company covenants and agrees, as to itself and, except as
otherwise provided herein, each of its Subsidiaries, that on and after the date
hereof until the Notes have been paid in full and the Commitments have
terminated:
SECTION 7.01 Change in Business. The Company will not, and will not
permit any of its Subsidiaries to, engage in any businesses not of the same
general type as those conducted by the Company on the Execution Date, those
conducted by a Qualified Company when acquired and businesses reasonably related
thereto.
41
SECTION 7.02 Consolidateion, Merger or Sale of Assets. Except as
previously disclosed to the Agent, the Company will not, and will not permit any
of its Subsidiaries to, wind up, liquidate or dissolve their affairs, or agree
to be acquired by any third party in any transaction of merger or consolidation
in which the Company or such Subsidiary is not the sole surviving entity, or
sell or otherwise dispose of all or any substantial part of their property or
assets (including the capital stock of any Subsidiary) other than: (a) sales of
inventory and surplus or obsolete assets in the ordinary course of business that
do not prejudice the Banks in any material way, (b) dispositions of the stock of
Subsidiaries to other wholly-owned Subsidiaries of the Company that have
complied with Section 6.09, and (c) sales of assets with a value equal to or
less than five percent (5%) of the Company's Consolidated Net Worth, provided
the proceeds of such sale are used to acquire assets for use in the Company's
business, or, at the option of the Company, to reduce the Obligations.
SECTION 7.03 Indebtedness. Neither the Company nor any Subsidiary of the
Company will create, incur, assume or permit to exist any Indebtedness of the
Company or any Subsidiary except:
(a) Indebtedness existing hereunder;
(b) Indebtedness existing on the Execution Date and described in the
Financials or, if not shown, listed on Schedule 7.03(b);
(c) Indebtedness arising as a result of the endorsement in the ordinary
course of business of negotiable instruments in the course of collection;
(d) accounts payable and unsecured, current and long-term, liabilities
(including accrued insurance related liabilities), not the result of
indebtedness for borrowed money, to vendors, suppliers and other Persons for
goods and services in the ordinary course of business;
(e) agreements (including agreements of intent) to acquire any Person or
assets issued by the Company or any of its Subsidiaries in anticipation of
acquiring such Person or assets if such acquisition is not prohibited by this
Agreement, including any ongoing, contingent payment obligations contained in
such agreements;
(f) Intercompany Indebtedness of any Subsidiary of the Company to the
Company or any other Subsidiary and Indebtedness of the Company to any
Subsidiary of the Company assuming same is subordinate to the Obligations in the
manner provided in Section 8.05 hereof;
(g) guarantees by the Company or any of its Subsidiaries of Indebtedness
of any Subsidiary of the Company permitted to be incurred, created or existing
pursuant to this Agreement, provided, that such guarantees are not directly
secured by any Liens;
(h) current and deferred taxes;
42
(i) contingent liabilities under surety bonds or otherwise incurred in
the ordinary course of business;
(j) earn-out agreements that are a part of Investments allowed under
Section 7.05(d);
(k) Other Indebtedness not in excess of five percent (5%) of
Consolidated Net Worth in the aggregate at any time outstanding;
(l) Indebtedness not to exceed two percent (2%) of Consolidated Net
Worth at any time outstanding secured in accordance with clause (j) of the
definition herein of Permitted Liens;
(m) Indebtedness not to exceed $10,000,000.00, subordinated to the
satisfaction of the Agent, owing to Sellers of Qualified Companies, in
connection with the acquisition of said Qualified Company;
(n) liabilities incurred in connection with interest rate hedging and
swap agreements, provided, same are entered into in connection with the day to
day business operations of the Company and not for speculative purposes;
(o) Alternative Facilities Advances, provided, the Alternative
Facilities Advances do not exceed at any time the lesser of the Aggregate Unused
Commitment as of such time or $15,000,000; and
(p) renewals and extensions with the same lenders (in the same or
lesser principal amount on similar terms and conditions) of any Indebtedness
listed in subparagraphs (a) through (o) above.
SECTION 7.04 Liens. Neither the Company nor any Subsidiary of the
Company will create, incur, assume or suffer to exist any Lien upon or with
respect to any of its property or assets of any kind whether now owned or
hereafter acquired (nor will they covenant with any other Person not to grant
such a Lien to the Agent on Collateral, except property secured or to be secured
by a Lien permitted by this Agreement), except:
(a) Liens existing on the Execution Date and listed on Schedule 7.04(a);
(b) Liens securing currently secured Indebtedness permitted under
Section 7.03(b) or (m) above;
(c) Permitted Liens;
43
(d) Liens created by the Loan Documents;
(e) Other Liens securing obligations allowed pursuant to Section 7.03(k)
or (l) not exceeding $1,500,000.00 in the aggregate at any one time;
(f) deposits under real property leases and deposits with utilities,
provided that such deposits do not exceed amounts customarily deposited by other
Persons similarly situated; and
(g) any renewal, extension or replacement of any Lien referred to above
with the same lenders; provided, that no Lien arising or existing as a result of
such extension, renewal or replacement shall be extended to cover any property
not theretofore subject to the Lien being extended, renewed or replaced and
provided further that the principal amount of the Indebtedness secured thereby
shall not exceed the principal amount of the Indebtedness so secured at the time
of such extension, renewal or replacement.
SECTION 7.05 Investments. Neither the Company nor any Subsidiary will,
directly or indirectly, make or own any Investment in any Person, except:
(a) Permitted Investments;
(b) Investments owned on the Effective Date as set forth on Schedule
7.05(b), including Investments in the Subsidiaries, direct and indirect;
(c) Investments arising out of loans and advances for expenses, travel
per diem and similar items in the ordinary course of business to officers,
directors and employees and intercompany Indebtedness permitted by Section
7.03(f);
(d) Subject to the limitations contained in Section 7.17, investments in
the stock, warrants, stock appreciation rights, other securities and/or other
assets of Qualified Companies;
(e) other Investments not exceeding two and one-half percent (2.5%) of
Consolidated Net Worth in the aggregate at any one time outstanding;
(f) Investments in the form of stock buy backs allowed under Section
7.06; and
(g) Investments in wholly-owned Subsidiaries of the Company.
44
SECTION 7.06 Restricted Payments. The Company will not pay any dividends
or redeem, retire, purchase or guaranty the value of or make any other
acquisition, direct or indirect, of any shares of any class of stock of the
Company, or of any warrants, rights or options to acquire any such shares, now
or hereafter outstanding, except to the extent that the consideration therefor
consists solely of shares of stock (including warrants, rights or options
relating thereto) of the Company or is approved by the Majority Banks; provided,
the Company may (i) purchase its stock in a maximum, aggregate amount not to
exceed $1,000,000.00 in the aggregate; and (ii) purchase its stock in an
additional aggregate amount not to exceed $5,000,000.00 provided the stock is
unrestricted stock and is purchased only from former owners of acquired
businesses and provided further, that the purchased stock is reissued or the
same number of shares of the same class of stock is issued, for value, within
one hundred fifty (150) days of purchase and the Company receives the full net
proceeds therefor.
SECTION 7.07 Change in Accounting. The Company will not and will not
permit any Subsidiary to, change its method of accounting except for (a) changes
permitted by GAAP in which the Company's auditors concur, (b) changes with
respect to any Person or assets acquired by the Company to conform with the
Company's policies and procedures and which are permitted by GAAP or (c) changes
required by GAAP. The Company shall advise the Agent in writing promptly upon
making any material change to the extent same is not disclosed in the financial
statements required under Section 6.01 hereof. In the event of any such change,
the Company, the Banks and the Agent agree to negotiate amendments to Sections
7.11 through 7.18 hereof (and related definitions, if relevant) so as to
equitably reflect such changes thereon with the intended result that the
criteria for evaluating the financial condition of the Company and its
Subsidiaries shall be substantially the same after such changes as before.
SECTION 7.08 Certain Indebtedness. The Company will not make, and will
not permit any of its Subsidiaries to make, after the occurrence and during the
continuance of any Event of Default, any prepayments of principal or interest on
any other of the Company's Indebtedness, except as may be required thereby.
SECTION 7.09 Transactions with Affiliates. The Company will not,
directly or indirectly, engage in any transaction with any Affiliate, including
the purchase, sale or exchange of assets or the rendering of any service, except
in the ordinary course of business or pursuant to the reasonable requirements of
its business and, in each case, upon terms that are no less favorable than those
which might be obtained in an arm's-length transaction at the time from non-
Affiliates.
SECTION 7.10 Changes to Acquisition Agreements. The Company will not,
and will not permit any of its Subsidiaries to amend, modify, alter or change in
any way, to the material detriment of the Banks, those Acquisition Agreements
listed on Schedule 6.10 attached hereto.
45
SECTION 7.11 Consolidated Net Worth. The Company will not permit its
Consolidated Net Worth to be less than the actual net worth as of the Execution
Date minus $750,000.00, plus, in all cases: (a) 100% of the increase in
Consolidated Net Worth resulting from the issuance of any capital stock by the
Company or any Subsidiary subsequent to the Execution Date at any time during
the term hereof and (b) 75% of the consolidated after tax income (if positive)
of the Company and its Subsidiaries since September 30, 1997 (to be adjusted
semi-annually at mid-year and fiscal year-end) for each fiscal year during the
term hereof (including any Subsidiaries acquired subsequent hereto).
SECTION 7.12 Funded Debt to EBITDA Ratio. (a) The Company will not
permit the ratio of its Funded Debt to EBITDA calculated for the preceding four
(4) quarters on a rolling four (4) quarter basis to be greater than 2.75 to 1.0
at any time during the term hereof.
(b) The definition of EBITDA contained in Section 1.01 of this
Agreement shall be effective retroactively to December 11, 1997 for purposes of
calculating the ratio of the Company's Funded Debt to EBITDA under the Prior
Credit Agreement and under this Agreement.
SECTION 7.13 Funded Debt to Capitalization Ratio. The Company will not
permit its Capitalization Ratio to be greater than fifty-five percent (55%) at
any time during the term hereof.
SECTION 7.14 Capital Expenditures. The Company will not permit non-
acquisition related consolidated Capital Expenditures (including Capitalized
Lease Obligations) to be greater than eight percent (8%) of Consolidated Net
Worth for any fiscal year during the term hereof.
SECTION 7.15 Fixed Charge Coverage Ratio. The Company will not permit
the ratio of (a) EBITDA calculated for the preceding four (4) quarters on a
rolling four (4) quarter basis less cash taxes less Capital Expenditures
actually paid during such four (4) quarters to (b) the sum of: interest expense,
plus scheduled amortization of principal plus Capital Lease Obligation payments
calculated for the preceding four (4) quarters on a rolling four quarter basis,
plus twenty percent (20%) of Advances outstanding under this Agreement to be
less than 1.20 to 1.0, as of the end of any fiscal quarter.
SECTION 7.16 New Installations Revenues. The Company will not permit its
percentage of its total revenues derived from New Installations on a
consolidated basis to be greater than or equal to fifty percent (50%) at any
time after June 30, 1999.
SECTION 7.17 Limitations on Acquisitions. The Company will not and will
not permit any Subsidiary to acquire any Qualified Company by funding such
acquisition with consideration other than common stock, without first obtaining
prior approval of such acquisition from the Majority Banks as follows:
46
---------------------------------------------------------------------
Acquisition of a Qualified Acquisition of a Qualified
Company having total revenues Company having total revenues
derived from New Installations derived from New Installations
(greater or equal to) 50% (less than) 50%
------------------------------------------------------------------------------------------------------
From the Effective Date to the Approval from Majority Banks Approval from Majority Banks
Maturity Date required when non-equity required when non-equity
consideration consideration
(greater than) $5,000,000 (greater than) $10,000,000
------------------------------------------------------------------------------------------------------
ARTICLE VIII
GUARANTY
--------
SECTION 8.01 Guaranty. In consideration of, and in order to induce the
Banks to make the Loans hereunder, the Guarantors hereby absolutely,
unconditionally and irrevocably, jointly and severally guarantee the punctual
payment and performance when due, whether at stated maturity, by acceleration or
otherwise, of the Obligations, and all other obligations and covenants of the
Company now or hereafter existing under this Agreement, the Notes and the other
Loan Documents whether for principal, interest (including interest accruing or
becoming owing both prior to and subsequent to the commencement of any
proceeding against or with respect to the Company under any chapter of the
Bankruptcy Code), Fees, commissions, expenses (including reasonable attorneys'
fees and expenses) or otherwise, and all reasonable costs and expenses, if any,
incurred by the Agent or any Bank in connection with enforcing any rights under
this Guaranty (all such obligations being the "Guaranteed Obligations"), and
agree to pay any and all reasonable expenses incurred by each Bank and the Agent
in enforcing this Guaranty; provided that notwithstanding anything contained
herein or in any of the Loan Documents to the contrary, the maximum liability of
each Guarantor hereunder and under the other Loan Documents shall in no event
exceed such Guarantor's Maximum Guaranteed Amount, and provided further, each
Guarantor shall be unconditionally required to pay all amounts demanded of it
hereunder prior to any determination of such Maximum Guaranteed Amount and the
recipient of such payment, if so required by a final non-appealable order of a
court of competent jurisdiction, shall then be liable for the refund of any
excess amounts. If any such rebate or refund is ever required, all other
Guarantors (and the Company) shall be fully liable for the repayment thereof to
the maximum extent allowed by applicable law. This Guaranty is an absolute,
unconditional, present and continuing guaranty of payment and not of
collectibility and is in no way conditioned upon any attempt to collect from the
Company or any other action, occurrence or circumstance whatsoever. Each
Guarantor agrees that the Guaranteed Obligations may at any time and from time
to time exceed the Maximum Guaranteed Amount of such Guarantor without impairing
this Guaranty or affecting the rights and remedies of the Banks hereunder.
47
SECTION 8.02 Continuing Guaranty. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
this Agreement, the Notes and the other Loan Documents. Each Guarantor agrees
that the Guaranteed Obligations and Loan Documents may be extended or renewed,
and Loans repaid and reborrowed in whole or in part, without notice to or assent
by such Guarantor, and that it will remain bound upon this Guaranty
notwithstanding any extension, renewal or other alteration of any Guaranteed
Obligations or Loan Documents, or any repayment and reborrowing of Loans. To the
maximum extent permitted by applicable law, the obligations of each Guarantor
under this Guaranty shall be absolute, unconditional and irrevocable, and shall
be performed strictly in accordance with the terms hereof under any
circumstances whatsoever, including:
(a) any extension, renewal, modification, settlement, compromise, waiver
or release in respect of any Guaranteed Obligations;
(b) any extension, renewal, amendment, modification, rescission, waiver
or release in respect of any Loan Documents;
(c) any release, exchange, substitution, non-perfection or invalidity
of, or failure to exercise rights or remedies with respect to, any direct or
indirect security for any Guaranteed Obligations, including the release of any
Guarantor or other Person liable on any Guaranteed Obligations;
(d) any change in the corporate existence, structure or ownership of the
Company, any Guarantor, or any insolvency, bankruptcy, reorganization or other
similar proceeding affecting the Company, such Guarantor, any other Guarantor or
any of their respective assets;
(e) the existence of any claim, defense, set-off or other rights or
remedies which such Guarantor at any time may have against the Company, or the
Company or such Guarantor may have at any time against the Agent, any Bank, any
other Guarantor or any other Person, whether in connection with this Guaranty,
the Loan Documents, the transactions contemplated thereby or any other
transaction other than by the payment in full by the Company of the Guaranteed
Obligations after the termination of the Commitments of the Banks;
(f) any invalidity or unenforceability for any reason of this Agreement
or other Loan Documents, or any provision of law purporting to prohibit the
payment or performance by the Company, such Guarantor or any other Guarantor of
the Guaranteed Obligations or Loan Documents, or of any other obligation to the
Agent or any Bank; or
(g) any other circumstances or happening whatsoever, whether or not
similar to any of the foregoing.
48
SECTION 8.03 Effect of Debtor Relief Laws. If after receipt of any
payment of, or proceeds of any security applied (or intended to be applied) to
the payment of all or any part of the Guaranteed Obligations, the Agent or any
Bank is for any reason compelled to surrender or voluntarily surrenders (under
circumstances in which it believes it could reasonably be expected to be so
compelled if it did not voluntarily surrender), such payment or proceeds to any
Person (a) because such payment or application of proceeds is or may be avoided,
invalidated, declared fraudulent, set aside, determined to be void or voidable
as a preference, fraudulent conveyance, fraudulent transfer, impermissible set-
off or a diversion of trust funds or (b) for any other similar reason, including
(i) any judgment, decree or order of any court or administrative body having
jurisdiction over the Agent, any Bank or any of their respective properties or
(ii) any settlement or compromise of any such claim effected by the Agent or any
Bank with any such claimant (including the Company), then the Guaranteed
Obligations or part thereof intended to be satisfied shall be reinstated and
continue, and this Guaranty shall continue in full force as if such payment or
proceeds have not been received, notwithstanding any revocation thereof or the
cancellation of any Note or any other instrument evidencing any Guaranteed
Obligations or otherwise; and the Guarantors, jointly and severally, shall be
liable to pay the Agent and the Banks, and hereby do indemnify the Agent and the
Banks and hold them harmless for the amount of such payment or proceeds so
surrendered and all expenses (including reasonable attorneys' fees, court costs
and expenses attributable thereto) incurred by the Agent or any Bank in the
defense of any claim made against it that any payment or proceeds received by
the Agent or any Bank in respect of all or part of the Guaranteed Obligations
must be surrendered. The provisions of this paragraph shall survive the
termination of this Guaranty, and any satisfaction and discharge of the Company
by virtue of any payment, court order or any federal or state law.
SECTION 8.04 Waiver of Subrogation. Notwithstanding any payment or
payments made by any Guarantor hereunder, or any set-off or application by the
Agent or any Bank of any security or of any credits or claims, no Guarantor will
assert or exercise any rights of the Agent or any Bank or of such Guarantor
against the Company to recover the amount of any payment made by such Guarantor
to the Agent or any Bank hereunder by way of any claim, remedy or subrogation,
reimbursement, exoneration, contribution, indemnity, participation or otherwise
arising by contract, by statute, under common law or otherwise, and such
Guarantor shall not have any right of recourse to or any claim against assets or
property of the Company, in each case unless and until the Obligations of the
Company guaranteed hereby have been fully and finally satisfied. Until such
time, each Guarantor hereby expressly waives any right to exercise any claim,
right or remedy which such Guarantor may now have or hereafter acquire against
the Company that arises under this Agreement or any other Loan Document or from
the performance by any Guarantor of the Guaranty hereunder including any claim,
remedy or right of subrogation, reimbursement, exoneration, contribution,
indemnification or participation in any claim, right or remedy of the Agent or
any Bank against the Company or any Guarantor, or any security that the Agent or
any Bank now has or hereafter acquires, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under common law or
otherwise. If any amount shall be paid to a Guarantor by the Company or another
Guarantor after payment in full of the Obligations, and the Obligations shall
thereafter be reinstated in whole or in part and the Agent or any Bank forced to
repay any sums
49
received by any of them in payment of the Obligations, this Guaranty shall be
automatically reinstated and such amount shall be held in trust for the benefit
of the Agent and the Banks and shall forthwith be paid to the Agent to be
credited and applied to the Guaranteed Obligations, whether matured or
unmatured. The provisions of this paragraph shall survive the termination of
this Guaranty, and any satisfaction and discharge of the Company by virtue of
any payment, court order or any federal or state law.
SECTION 8.05 Subordination. If any Guarantor becomes the holder of any
indebtedness payable by the Company or another Guarantor, each Guarantor hereby
subordinates all indebtedness owing to it from the Company to all indebtedness
of the Company to the Agent and the Banks, and agrees that during the
continuance of any Event of Default it shall not accept any payment on the same
until payment in full of the Obligations of the Company under this Agreement and
the other Loan Documents after the termination of the Commitments of the Banks
and shall in no circumstance whatsoever attempt to set-off or reduce any
obligations hereunder because of such indebtedness. If any amount shall
nevertheless be paid in violation of the foregoing to a Guarantor by the Company
or another Guarantor prior to payment in full of the Guaranteed Obligations,
such amount shall be held in trust for the benefit of the Agent and the Banks
and shall forthwith be paid to the Agent to be credited and applied to the
Guaranteed Obligations, whether matured or unmatured.
SECTION 8.06 Waiver. Each Guarantor hereby waives promptness, diligence,
notice of acceptance and any other notice with respect to any of the Guaranteed
Obligations and this Guaranty and waives presentment, demand of payment, notice
of intent to accelerate, notice of dishonor or nonpayment and any requirement
that the Agent or any Bank institute suit, collection proceedings or take any
other action to collect the Guaranteed Obligations, including any requirement
that the Agent or any Bank protect, secure, perfect or insure any Lien against
any property subject thereto or exhaust any right or take any action against the
Company or any other Person or any collateral (it being the intention of the
Agent, the Banks and each Guarantor that this Guaranty is to be a guaranty of
payment and not of collection). It shall not be necessary for the Agent or any
Bank, in order to enforce any payment by any Guarantor hereunder, to institute
suit or exhaust its rights and remedies against the Company, any other Guarantor
or any other Person, including others liable to pay any Guaranteed Obligations,
or to enforce its rights against any security ever given to secure payment
thereof. Each Guarantor hereby expressly waives to the maximum extent permitted
by applicable law each and every right to which it may be entitled by virtue of
the suretyship laws of the State of Texas, including any and all rights it may
have pursuant to Rule 31, Texas Rules of Civil Procedure, Section 17.001 of the
Texas Civil Practice and Remedies Code and Chapter 34 of the Texas Business and
Commerce Code. Each Guarantor hereby waives marshaling of assets and
liabilities, notice by the Agent or any Bank of any indebtedness or liability to
which such Bank applies or may apply any amounts received by such Bank, and of
the creation, advancement, increase, existence, extension, renewal,
rearrangement or modification of the Guaranteed Obligations. Each Guarantor
expressly waives, to the extent permitted by applicable law, the benefit of any
and all laws providing for exemption of property from execution or for valuation
and appraisal upon foreclosure.
50
SECTION 8.07 Full Force and Effect. This Guaranty is a continuing
guaranty and shall remain in full force and effect until all of the Obligations
of the Company under this Agreement and the other Loan Documents and all other
amounts payable under this Guaranty have been paid in full (after the
termination of the Commitments of the Banks). All rights, remedies and powers
provided in this Guaranty may be exercised, and all waivers contained in this
Guaranty may be enforced, only to the extent that the exercise or enforcement
thereof does not violate any provisions of applicable law which may not be
waived.
SECTION 8.08 Negative Pledge. No Guarantor will create any lien on its
assets to any other Person during the pendency of this Agreement except for
liens that would be permitted by Section 7.04 nor will any of them enter any
agreement with any Person not to grant liens on or pledge assets to the Agent.
ARTICLE IX
EVENTS OF DEFAULT AND REMEDIES
------------------------------
SECTION 9.01 Events of Default. The following events shall constitute
Events of Default ("Events of Default") hereunder:
(a) any installment of principal is not paid when due or any payment of
interest or Fees is not paid on the date on which such payment is due and
such failure continues for a period of five (5) days; or
(b) any representation or warranty made or deemed made by the Company or
any Subsidiary herein or in any of the Loan Documents or other document,
certificate or financial statement delivered in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect when made or deemed made or reaffirmed, as the case may be; or
(c) the Company shall fail to perform or observe or cause any Subsidiary
to fail to perform or observe any duty or covenant contained in Article VI of
this Agreement or in any of the Security Documents and such failure continues
for a period of fifteen (15) days or shall fail to perform or observe any other
covenant or duty contained in this Agreement or in any of the Loan Documents; or
(d) the Company or any Subsidiary shall (i) fail to make (whether as
primary obligor or as guarantor or other surety) any principal payment of or
interest or premium, if any, on any instrument of Indebtedness in excess of
1,000,000.00 allowed hereunder outstanding beyond any period of grace provided
with respect thereto or (ii) shall fail to duly observe, perform or comply with
any agreement with any Person or any term or condition of any instrument of
Indebtedness in excess of $1,000,000.00, if the effect of such failure is to
cause, or to permit the holder or holders to cause, such obligations to become
due prior to any stated maturity; or
51
(e) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed in a court of competent jurisdiction seeking (i) relief
in respect of the Company or any Material Subsidiary, or of a substantial part
of the property or assets of the Company or any Material Subsidiary, under Title
11 of the United States Code, as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"), or any other federal or state bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver,
trustee, custodian, sequestrator, conservator or similar official for the
Company or any Material Subsidiary or for a substantial part of the property or
assets of the Company or any Material Subsidiary or (iii) the winding-up or
liquidation of the Company or any Subsidiary; and such proceeding or petition
shall continue undismissed for 60 days or an order or decree approving or
ordering any of the foregoing shall be entered; or
(f) the Company or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under the Bankruptcy
Code or any other federal or state bankruptcy, insolvency, receivership or
similar law, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or the filing of any petition described
in clause (e) above, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar official for
the Company or any Subsidiary or for a substantial part of the property or
assets of the Company or any Subsidiary, (iv) file an answer admitting the
material allegations of a petition filed against it in any such proceeding, (v)
make a general assignment for the benefit of creditors, (vi) become unable, or
admit in writing its inability or fail generally, to pay its debts as they
become due or (vii) take any action for the purpose of effecting any of the
foregoing; or
(g) any Loan Document shall become or be deemed to be unenforceable in
any material respect in the sole judgment of the Majority Banks; or
(h) a judgment or order, which with other outstanding judgments and
orders against the Company and its Subsidiaries equal or exceed $1,000,000.00 in
the aggregate (to the extent not covered by insurance as to which the respective
insurer has acknowledged coverage), shall be entered against the Company or any
Subsidiary and (i) within 30 days after entry thereof such judgment shall not
have been paid or discharged or execution thereof stayed pending appeal or,
within 30 days after the expiration of any such stay, such judgment shall not
have been paid or discharged or any enforcement proceeding shall have been
commenced (and not stayed) by any creditor or upon such judgment; or
(i) a Change of Control shall occur.
SECTION 9.02 Primary Remedies. In any such event, and at any time after
the occurrence of any of the above described events, the Agent, if directed by
the Majority Banks, shall by written notice to the Company (a "Notice of
Default") take any or all of the following actions (without prejudice to the
rights of any Bank to enforce any other rights it may have against the Company,
provided that, if an Event of Default specified in Section 9.01(e) or Section
9.01(f) shall
52
occur, the following shall occur automatically without the giving of any Notice
of Default): (a) declare the Commitments terminated, whereupon the Commitments
shall forthwith terminate immediately and any Commitment Fee and any other owing
and unpaid Fee shall forthwith become due and payable without any other notice
of any kind; (b) declare the principal of and any accrued and unpaid interest in
respect of all Advances, and all obligations owing hereunder, to be, whereupon
the same shall become, forthwith due and payable without presentment, demand,
notice of demand or of dishonor and non-payment, protest, notice of protest,
notice of intent to accelerate, declaration or notice of acceleration or any
other notice of any kind (except as herein provided), all of which are hereby
waived by the Company; (c) set off any assets or money of the Company or any
Guarantor in its or any Bank's possession against the Obligations (and
thereafter in accordance with Section 11.06); and (d) exercise any rights or
remedies under any of the Loan Documents or under any applicable state or
federal law.
SECTION 9.03 Other Remedies. Upon the occurrence and during the
continuance of any Event of Default, the Agent may proceed to protect and
enforce its and the Banks' rights, either by suit in equity or by action at law
or both, whether for the specific performance of any covenant or agreement
contained in this Agreement or in any other Loan Document or in aid of the
exercise of any power granted in this Agreement or in any other Loan Document;
or may proceed to enforce the payment of all amounts owing to the Banks under
the Loan Documents and any accrued and unpaid interest thereon in the manner set
forth herein or therein; it being intended that no remedy conferred herein or in
any of the other Loan Documents is to be exclusive of any other remedy, and each
and every remedy contained herein or in any other Loan Document shall be
cumulative and shall be in addition to every other remedy given hereunder and
under the other Loan Documents or now or hereafter existing at law or in equity
or by statute or otherwise.
ARTICLE X
THE AGENT
---------
SECTION 10.01 Authorization and Action. Each Bank hereby irrevocably
appoints and authorizes the Agent to act on its behalf and to exercise such
powers under this Agreement and the other Loan Documents as are specifically
delegated to or required of the Agent by the terms hereof, together with such
powers as are reasonably incidental thereto. The Agent may perform any of its
duties hereunder by or through its agents and employees. The duties of the Agent
shall be mechanical and administrative in nature; the Agent shall not have by
reason of this Agreement or any other Loan Documents a fiduciary relationship in
respect of any Bank; and nothing in this Agreement or any other Loan Document,
expressed or implied, is intended to, or shall be so construed as to, impose
upon the Agent any obligations in respect of this Agreement or any other Loan
Document except as expressly set forth herein or therein. As to any matters not
expressly provided for by this Agreement, the Notes or the other Loan Documents
(including enforcement or collection of the Notes), the Agent shall not be
required to exercise any discretion or take any action, but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
53
refraining from acting) upon the instructions of the Majority Banks, and such
instructions shall be binding upon the Banks and all holders of Notes and the
Obligations; provided, that the Agent shall not be required to take any action
which exposes the Agent to personal liability and shall not be required or
entitled to take any action which is contrary to any of the Loan Documents or
applicable law.
SECTION 10.02 Agent's Reliance. (a) Neither the Agent nor any of its
directors, officers, agents or employees shall be liable to the Banks for any
action taken or omitted to be taken by it or them under or in connection with
this Agreement, the Notes or any of the other Loan Documents (i) with the
consent or at the request of the Majority Banks or (ii) in the absence of its or
their own gross negligence or willful misconduct, it being the express intention
of the parties hereto that the Agent and its directors, officers, agents and
employees shall have no liability to the Banks for actions and omissions under
this Section resulting from their sole ordinary or contributory negligence.
(b) Without limitation of the generality of the foregoing, the Agent:
(i) may treat the payee of each Note and the Obligations as the holder thereof
until the Agent receives written notice of the assignment or transfer thereof
signed by such payee and in form satisfactory to the Agent; (ii) may consult
with legal counsel (including counsel for the Company), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (iii) makes no warranty or
representation to any Bank and shall not be responsible to any Bank for any
statements, warranties or representations made in or in connection with this
Agreement, any Note or any other Loan Document; (iv) except as otherwise
expressly provided herein, shall not have any duty to ascertain or to inquire as
to the performance or observance of any of the terms, covenants or conditions of
this Agreement, any Note or any other Loan Document or to inspect the property
(including the books and records) of the Company; (v) shall not be responsible
to any Bank for the due execution, legality, validity, enforceability,
collectibility, genuineness, sufficiency or value of this Agreement, any Note,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (vi) shall not be responsible to any Bank for the perfection
or priority of any Lien securing the Obligations; and (vii) shall incur no
liability to the Banks under or in respect of this Agreement, any Note or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telegram, telecopier or cable) reasonably
believed by it to be genuine and signed or sent by the proper party or parties.
SECTION 10.03 Agent and Affiliates; Chase and Affiliates. Without
limiting the right of any other Bank to engage in any business transactions with
the Company or any of its Affiliates, with respect to their Commitments, the
Loans made by them and the Notes issued to them, Chase and each other Bank who
may become the Agent shall have the same rights and powers under this Agreement
and its Notes as any other Bank and may exercise the same as though it was not
the Agent; and the term "Bank" or "Banks" shall, unless otherwise expressly
indicated, include Chase and any such other Bank, in their individual
capacities. Chase, each other Person who becomes the Agent and their respective
Affiliates may be engaged in, or may hereafter engage in, one or more
54
loan, letter of credit, leasing or other financing activity not the subject of
this Agreement (collectively, the "Other Financings") with the Company, any
Subsidiary or any of its Affiliates, or may act as trustee on behalf of, or
depositary for, or otherwise engage in other business transactions with the
Company, any Subsidiary or any of its Affiliates (all Other Financings and other
such business transactions being collectively, the "Other Activities") with no
responsibility to account therefor to the Banks. Without limiting the rights and
remedies of the Banks specifically set forth herein, no other Bank by virtue of
being a Bank hereunder shall have any interest in (a) any Other Activities, (b)
any present or future guaranty by or for the account of the Company not
contemplated or included herein, (c) any present or future offset exercised by
the Agent in respect of any such Other Activities, (d) any present or future
property taken as security for any such Other Activities or (e) any property now
or hereafter in the possession or control of the Agent which may be or become
security for the Obligations of the Company hereunder and under the Notes by
reason of the general description of indebtedness secured, or of property
contained in any other agreements, documents or instruments related to such
Other Activities; provided, however, that if any payment in respect of such
guaranties or such property or the proceeds thereof shall be applied to
reduction of the Obligations evidenced hereunder and by the Notes, then each
Bank shall be entitled to share in such application according to its pro rata
portion of such Obligations.
SECTION 10.04 Banks' Credit Decision. Each Bank acknowledges and agrees
that it has, independently and without reliance upon the Agent or any other Bank
and based on the financial statements referred to in Section 6.01 and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
and agrees that it will, independently and without reliance upon the Agent or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents.
SECTION 10.05 Agent's Indemnity. (a) The Agent shall not be required to
take any action hereunder or to prosecute or defend any suit in respect of this
Agreement, the Notes or any other Loan Document unless indemnified to the
Agent's satisfaction by the Banks against loss, cost, liability and expense. If
any indemnity furnished to the Agent shall become impaired, it may call for
additional indemnity and cease to do the acts indemnified against until such
additional indemnity is given. In addition, the Banks agree to indemnify the
Agent (to the extent not reimbursed by the Company), ratably according to the
respective aggregate principal amounts of the Notes then held by each of them
(or if no Notes are at the time outstanding, ratably according to the respective
amounts of the Commitments), from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against the Agent in any way relating to or arising
out of this Agreement or any action taken or omitted by the Agent under this
Agreement, the Notes and the other Loan Documents. Without limitation of the
foregoing, each Bank agrees to reimburse the Agent promptly upon demand for its
ratable share of any out-of-pocket expenses (including reasonable counsel fees)
incurred by the Agent in connection with the preparation, execution,
administration, or enforcement of, or legal advice in respect of rights or
55
responsibilities under, this Agreement, the Notes and the other Loan Documents
to the extent that the Agent is not reimbursed for such expenses by the Company.
The provisions of this Section shall survive the termination of this Agreement,
the payment of the Obligations and/or the assignment of any of the Notes.
(b) Notwithstanding the foregoing, no Bank shall be liable under this
Section to the Agent for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
due to the Agent resulting from the Agent's gross negligence or willful
misconduct. Each Bank agrees, however, that it expressly intends, under this
Section, to indemnify the Agent ratably as aforesaid for all such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses and disbursements arising out of or resulting from the Agent's sole
ordinary or contributory negligence.
SECTION 10.06 Successor Agent. The Agent may resign at any time by
giving written notice thereof to the Banks and the Company and may be removed as
Agent under this Agreement, the Notes and the other Loan Documents at any time
with or without cause by the Majority Banks. Upon any such resignation or
removal, the Majority Banks shall have the right to appoint a successor Agent
with the approval of the Company, which shall not be unreasonably withheld. If
no successor Agent shall have been so appointed by the Majority Banks, and shall
have accepted such appointment, within 30 calendar days after the retiring
Agent's giving of notice of resignation or the Majority Banks' removal of the
retiring Agent, then the retiring Agent may, on behalf of the Banks, appoint a
successor Agent with the approval of the Company, which shall not be
unreasonably withheld, which shall be a commercial bank organized under the laws
of the United States of America or of any state thereof and having a combined
capital and surplus of at least $50,000,000. Upon the acceptance of any
appointment as Agent hereunder and under the Notes and the other Loan Documents
by a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations under
this Agreement, the Notes and the other Loan Documents. After any retiring
Agent's resignation or removal as Agent hereunder and under the Notes and the
other Loan Documents, the provisions of this Article X shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement, the Notes and the other Loan Documents.
SECTION 10.07 Notice of Default. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent shall have received notice from a Bank or the Company
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." If the Agent receives such
notice, the Agent shall give notice thereof to the Banks; provided, however, if
such notice is received from a Bank, the Agent also shall give notice thereof to
the Company. The Agent shall be entitled to take action or refrain from taking
action with respect to such Default or Event of Default as provided in Section
10.01 and Section 10.02.
56
ARTICLE XI
MISCELLANEOUS
-------------
SECTION 11.01 Amendments. No amendment or waiver of any provision of
this Agreement, any Note or any other Loan Document, nor consent to any
departure by the Company herefrom or therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Company, as to amendments,
and by the Majority Banks in all cases, and then, in any case, such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, no such amendment, waiver or consent shall be
effective unless signed by all of the Banks if it attempts to: (a) change the
definition of "Commitment", "Designated Payment Date", "Majority Banks",
"Margin" or "Maturity Date"; (b) modify this Section or Sections 2.19 or 11.05
or any definition related to said sections; (c) release any Guarantor or
Collateral; (d) waive any Default under Section 9.01(a), (e) release any Liens
on any of the Collateral, or in any other manner change the repayment terms of
the Loans, including required principal payments or the rate, amount or time of
interest payments. Further, no provisions of Article III or Article X or other
terms affecting the Agent or the Issuing Bank may be changed without the consent
of said Agent or the Issuing Bank as appropriate.
SECTION 11.02 Notices. Except with respect to telephone notifications
specifically permitted pursuant to Article II, all notices, consents, requests,
approvals, demands and other communications provided for herein shall be in
writing (including telecopy communications) and mailed, telecopied, sent by
overnight courier or delivered:
(a) If to the Company and the Guarantors:
Group Maintenance America Corp.
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Chief Financial Officer
(b) If to the Agent:
Chase Bank of Texas
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇
Senior Vice President
57
with copies to:
Loan Syndication Services
▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ - M.S. 46
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇
and to:
▇▇▇▇▇▇▇ & ▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
or, in the case of any party hereto, such other address or telecopy number as
such party may hereafter specify for such purpose by notice to the other
parties.
(c) If to any Bank, to the address shown on the signature page hereof or
specified by such Bank (or the Agent on behalf of any Bank) to the Company.
All communications shall, when mailed, telecopied or delivered, be
effective when mailed by certified mail, return receipt requested to any party
at its address specified above, or telecopied to any party to the telecopy
number set forth above, or delivered personally to any party at its address
specified above; provided, that communications to the Agent pursuant to Article
II shall not be effective until actually received by the Agent, and provided
further that communications sent by telecopy after 5:00 p.m., Houston, Texas
time, shall be effective on the next succeeding business day.
SECTION 11.03 No Waiver; Remedies. No failure on the part of any Bank or
the Agent to exercise, and no delay in exercising, any right hereunder, under
any Note or under any other Loan Document shall operate as a waiver thereof; nor
shall any single or partial exercise of any such right, or any abandonment or
discontinuance of any steps to enforce such right, preclude any other or further
exercise thereof or the exercise of any other right. No notice to or demand on
the Company in any case shall entitle the Company to any other or further notice
or demand in similar or other circumstances. The remedies herein are cumulative
and not exclusive of any other remedies provided by law, at equity or in any
other agreement.
58
SECTION 11.04 Costs and Expenses. The Company agrees to pay on demand:
(a) all reasonable out-of-pocket costs and expenses of the Agent in connection
with the preparation, delivery, sale and syndication of this Agreement, the
Notes, the other Loan Documents and the other documents to be delivered
hereunder, including the reasonable fees and out-of-pocket expenses of counsel
for the Agent with respect thereto and with respect to advising the Agent as to
its rights and responsibilities under this Agreement, the Notes and the other
Loan Documents, and any modification, supplement or waiver of any of the terms
of this Agreement or any other Loan Document, (b) all reasonable out-of-pocket
costs and expenses of any Bank including reasonable legal fees and expenses, in
connection with the enforcement of this Agreement, the Notes and the other Loan
Documents and (c) reasonable costs and expenses incurred in connection with
third party professional services reasonably required by the Agent such as
appraisers, environmental consultants, accountants or similar Persons, provided
that, prior to any Event of Default hereunder, the Agent will first obtain the
consent of the Company to such expense, which consent shall not be unreasonably
withheld. Without prejudice to the survival of any other obligations of the
Company hereunder and under the Notes, the obligations of the Company under this
Section shall survive the termination of this Agreement or the replacement of
the Agent and each assignment of the Notes.
SECTION 11.05 Release and Indemnity. (a) The Company shall and hereby
does indemnify the Agent and each Bank and each Affiliate thereof and their
respective directors, officers, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims or damages (including
reasonable legal fees and expenses) to which any of them may become subject,
insofar as such losses, liabilities, claims or damages arise out of or result
from any actual or proposed use by the Company of the proceeds of any extension
of credit hereunder or any investigation, litigation or other proceeding
(including any threatened investigation or proceeding) relating to the foregoing
or any of the other Loan Documents, and the Company shall reimburse each Bank
and each Affiliate thereof and their respective directors, officers, employees
and agents, upon demand for any expenses (including legal fees) reasonably
incurred in connection with any such investigation or proceeding; but excluding
any such losses, liabilities, claims, damages or expenses incurred by reason of
the gross negligence or willful misconduct of the Person to be indemnified (the
"Indemnified Obligations").
(b) WITHOUT LIMITING ANY PROVISION OF THIS AGREEMENT, IT IS THE EXPRESS
INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE INDEMNIFIED HEREUNDER
SHALL BE INDEMNIFIED AND HELD HARMLESS AGAINST ANY AND ALL INDEMNIFIED
OBLIGATIONS ARISING OUT OF OR RESULTING FROM THE ORDINARY SOLE OR CONTRIBUTORY
NEGLIGENCE OF SUCH PERSON OR IMPOSED UPON SAID PARTY UNDER ANY THEORY OF STRICT
LIABILITY. Without prejudice to the survival of any other obligations of the
Company hereunder and under the other Loan Documents, the obligations of the
Company under this Section shall survive the termination of this Agreement and
the other Loan Documents and the payment of the Obligations or the assignment of
the Notes.
59
SECTION 11.06 Right of Setoff. Without limiting the remedies provided
for in Article IX, each Bank is hereby authorized at any time and from time to
time, after acceleration of the Obligations after the occurrence of an Event of
Default to the fullest extent permitted by law, to set off and apply any and all
deposits held and other indebtedness owing by such Bank, or any branch,
subsidiary or Affiliate, to or for the credit or the account of the Company
against any and all the Obligations of the Company now or hereafter existing
under this Agreement and the other Loan Documents and other obligations of the
Company held by such Bank, irrespective of whether or not such Bank shall have
made any demand under this Agreement, its Note or the Obligations and although
the Obligations may be unmatured. Each Bank agrees promptly to notify the
Company after any such set-off and application made by such Bank, provided, that
failure to give such notice shall not affect the validity of such set-off and
application. The rights of each Bank under this Section are in addition to other
rights and remedies (including other rights of setoff) which such Bank may have.
SECTION 11.07 Governing Law. THIS AGREEMENT, ALL NOTES, THE OTHER LOAN
DOCUMENTS AND ALL OTHER DOCUMENTS EXECUTED IN CONNECTION HEREWITH SHALL BE
DEEMED TO BE CONTRACTS AND AGREEMENTS EXECUTED BY THE COMPANY AND EACH BANK
UNDER THE LAWS OF THE STATE OF TEXAS AND OF THE UNITED STATES OF AMERICA AND FOR
ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH, AND GOVERNED BY, THE LAWS OF
SAID STATE AND OF THE UNITED STATES OF AMERICA. Without limitation of the
foregoing, nothing in this Agreement, or in the Notes or in any other Loan
Document shall be deemed to constitute a waiver of any rights which any Bank may
have under applicable federal legislation relating to the amount of interest
which such Bank may contract for, take, receive or charge in respect of the Loan
and the Loan Documents, including any right to take, receive, reserve and charge
interest at the rate allowed by the law of the state where any Bank is located.
The Agent, each Bank and the Company further agree that insofar as the
provisions of Texas Finance Code, Chapter 303, as amended, are applicable to the
determination of the Highest Lawful Rate with respect to the Notes and the
Obligations hereunder and under the other Loan Documents, the weekly rate
ceiling of such Article, as described in Article 1D.003 of the Texas Credit
Title, shall be applicable; provided, however, that to the extent permitted by
such Article, the Agent may from time to time by notice to the Company revise
the election of such interest rate ceiling as such ceiling affects the then
current or future balances of the Loans. The provisions of the Texas Finance
Code, Chapter 346 do not apply to this Agreement, any Note issued hereunder or
the other Loan Documents.
SECTION 11.08 Interest. Each provision in this Agreement and each other
Loan Document is expressly limited so that in no event whatsoever shall the
amount paid, or otherwise agreed to be paid, to the Agent or any Bank, or
charged, contracted for, reserved, taken or received by the Agent or any Bank,
for the use, forbearance or detention of the money to be loaned under this
Agreement or any Loan Document or otherwise (including any sums paid as required
by any covenant or obligation contained herein or in any other Loan Document
which is for the use, forbearance or detention of such money), exceed that
amount of money which would cause the effective rate of interest to exceed the
Highest Lawful Rate, and all amounts owed under this Agreement and each other
Loan Document shall be held to be subject to reduction to the effect that
60
such amounts so paid or agreed to be paid, charged, contracted for, reserved,
taken or received which are for the use, forbearance or detention of money under
this Agreement or such Loan Document shall in no event exceed that amount of
money which would cause the effective rate of interest to exceed the Highest
Lawful Rate. Anything in any Note or any other Loan Document to the contrary
notwithstanding, the Company shall not be required to pay unearned interest on
any Note and the Company shall not be required to pay interest on the
Obligations at a rate in excess of the Highest Lawful Rate, and if the effective
rate of interest which would otherwise be payable under such Note and such Loan
Documents would exceed the Highest Lawful Rate, or if the holder of such Note
shall receive any unearned interest or shall receive monies that are deemed to
constitute interest which would increase the effective rate of interest payable
by the Company under such Note and the other Loan Documents to a rate in excess
of the Highest Lawful Rate, then (a) the amount of interest which would
otherwise be payable by the Company shall be reduced to the amount allowed under
applicable law and (b) any unearned interest paid by the Company or any interest
paid by the Company in excess of the Highest Lawful Rate shall in the first
instance be credited on the principal of the Obligations of the Company (or if
all such Obligations shall have been paid in full, refunded to the Company). It
is further agreed that, without limitation of the foregoing, all calculations of
the rate of interest contracted for, reserved, taken, charged or received by any
Bank under the Notes and the Obligations and under the other Loan Documents are
made for the purpose of determining whether such rate exceeds the Highest Lawful
Rate, and shall be made, to the extent permitted by usury laws applicable to
such Bank, by amortizing, prorating and spreading in equal parts during the
period of the full stated term of the Notes and this Agreement all interest at
any time contracted for, charged or received by such Bank in connection
therewith. Furthermore, in the event that the maturity of any Note or other
obligation is accelerated or in the event of any required or permitted
prepayment, then such consideration that constitutes interest under applicable
law may never include more than the maximum amount allowed by applicable law and
excess interest, if any, provided for in this Agreement, any Note or otherwise
shall be canceled automatically as of the date of such acceleration or
prepayment and, if theretofore paid, shall be refunded to the Company.
SECTION 11.09 Survival of Representations and Warranties. All
representations, warranties and covenants contained herein or made in writing by
the Company in connection herewith and the other Loan Documents shall survive
the execution and delivery of this Agreement, the Notes and the other Loan
Documents and the termination of the Commitments of the Banks and will bind and
inure to the benefit of the respective successors and assigns of the parties
hereto, whether so expressed or not, provided, that the Commitments of the Banks
shall not inure to the benefit of any successor or assign of the Company.
SECTION 11.10 Successors and Assigns; Participations. (a) All covenants,
promises and agreements by or on behalf of the Company or the Banks that are
contained in this Agreement shall bind and inure to the benefit of their
respective permitted successors and assigns. The Company may not assign or
transfer any of its rights or obligations hereunder.
(b) Any of the Banks may assign to or sell participations to one or more
banks of all or a portion of its rights and obligations under this Agreement and
the other Loan Documents
61
(including all or a portion of its Commitment, the Advances and the Obligations
of the Company owing to it and the Notes); provided, that the Company shall
continue to deal solely and directly with the Agent and such assigning or
selling Bank in connection with such Bank's rights and obligations under this
Agreement and the other Loan Documents. Except with respect to cost protections
provided to a participant pursuant to this paragraph and the items listed in
Section 11.01 hereof, no participant shall be a third party beneficiary of this
Agreement nor shall it be entitled to enforce any rights provided to the Banks
against the Company under this Agreement. In the case of participations (but not
assignments) (i) the original Bank's obligations under this Agreement (including
without limitation, its Commitment to the Company hereunder) shall remain
unchanged, (ii) such Bank shall remain solely responsible to the other parties
hereto for the performance of such obligations, (iii) such Bank shall remain the
holder of such Loan Documents for all purposes of this Agreement, (iv) the
Company, the Agent and the other Banks shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and obligations
under this Agreement, (v) such Bank shall continue to be able to agree to any
modification or amendment of this Agreement or any waiver hereunder without the
consent, approval or vote of any such participant or group of participants,
other than modifications, amendments and waivers described in Section 11.01, and
(vi) except as contemplated by the immediately preceding clause (v), no
participant shall be deemed to be or to have any of the rights of obligations of
a "Bank" hereunder.
(c) A Bank may assign to any other Bank or Banks or to any Affiliate of
a Bank and, with the prior written consent of the Company and the Agent (which
consent shall not be unreasonably withheld), a Bank may assign to one or more
other Eligible Assignees all or a portion of its interests, rights, and
obligations under this Agreement and the other Loan Documents (including all or
a portion of its Commitment and the same portion of the Loans and other
Obligations of the Company at the time owing to it and the Note held by it);
provided, however, that (i) each such assignment shall be in a minimum principal
amount of not less than $5,000,000.00 and shall be of a constant, and not a
varying, percentage of the assigning Bank's Commitment, its rights and
obligations under this Agreement, and its share of the outstanding balance of
each of the Notes, (ii) the parties to each such assignment shall execute and
deliver to the Agent, for its acceptance, an Assignment and Acceptance,
substantially in the form of Exhibit 11.10(c) hereto, in form and substance
satisfactory to the Agent (an "Assignment and Acceptance") and any Note subject
to such assignment, (iii) no assignment shall be effective until receipt by the
Agent of a reasonable service fee from the Assignee Bank in respect of said
assignment equal to $2,000.00, and (iv) the Assigning Bank shall retain a
minimum amount of $5,000,000.00 of the Commitment following the Assignment. Upon
such execution, delivery and acceptance, from and after the effective date
specified in each Assignment and Acceptance, which effective date (unless
otherwise agreed to by the assigning Bank, the Eligible Assignee thereunder and
the Agent) shall be at least five Business Days after the execution thereof, (x)
the Eligible Assignee thereunder shall be a party hereto as a "Bank" and to the
other Loan Documents and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Bank hereunder and under the
other Loan Documents and (y) the assignor Bank thereunder shall, to the extent
provided in such Assignment and Acceptance, be released from its obligations
under this Agreement and the other Loan Documents (and, in the case of an
Assignment and Acceptance covering all of the remaining portion
62
of an assigning Bank's rights and obligations under this Agreement and the other
Loan Documents, such Bank shall cease to be a party hereto).
(d) Notwithstanding any other provision herein, any Bank may, in
connection with any assignment or participation or proposed assignment or
participation pursuant to this section, disclose to the assignee or participant
or proposed assignee or participant, any information relating to the Company
furnished to such Bank by or on behalf of the Company; provided, however, that
prior to any such disclosure, the assignee or participant or proposed assignee
or participant shall agree in writing for the benefit of the Company to preserve
the confidentiality of any confidential information relating to the Company or
any of its Subsidiaries received by it from such Bank in a manner consistent
with Section 11.11.
SECTION 11.11 Confidentiality. Each Bank and the Agent agrees to keep
any information delivered or made available to it by the Company or any of its
Subsidiaries, confidential from anyone other than Persons employed or retained
by its who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans and who are bound hereby; provided that
nothing herein shall prevent any Bank or the Agent from disclosing such
information (a) to any other Bank, (b) pursuant to subpoena or upon the order of
any court or administrative agency, (c) upon the request or demand of any
regulatory agency or authority having jurisdiction over such Bank, (d) which has
been publicly disclosed, (e) to the extent reasonably required in connection
with any litigation to which the Agent, any Bank, the Company or its respective
Affiliates may be a party, (f) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (g) to such Bank's legal counsel and
independent auditors and who are bound hereby and (h) to any actual or proposed
participant or assignee of all or part of its rights hereunder which has agreed
in writing to be bound by the provisions of this Section. Each Bank or the Agent
will promptly notify the Company of any information that it is required or
requested to deliver pursuant to clause (b) or (c) of this Section and, if the
Company is a party to any such litigation, clause (e) of this Section.
SECTION 11.12 Pro Rata Treatment. (a) Except as otherwise specifically
permitted hereunder, each payment or prepayment of principal, if permitted under
this Agreement, and each payment of interest with respect to an Advance shall be
made pro rata among the Banks.
(b) Each Bank agrees that if, through the exercise of a right of
banker's Lien, setoff or claim of any kind against the Company as a result of
which the unpaid principal portion of the Notes and the Obligations held by it
shall be proportionately less than the unpaid principal portion of the Notes and
Obligations held by any other Bank, it shall be deemed to have simultaneously
purchased from such other Bank a participation in the Notes and Obligations held
by such other Bank, in the amount required to render such amounts proportional;
provided, however, that if any such purchase or purchases or adjustments shall
be made pursuant to this Section and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments shall be
rescinded to the extent of such recovery and the purchase price or prices or
adjustments restored without interest.
63
SECTION 11.13 Separability. Should any clause, sentence, paragraph or
Section of this Agreement be judicially declared to be invalid, unenforceable or
void, such decision will not have the effect of invalidating or voiding the
remainder of this Agreement, and the parties hereto agree that the part or parts
of this Agreement so held to be invalid, unenforceable or void will be deemed to
have been stricken herefrom and the remainder will have the same force and
effectiveness as if such part or parts had never been included herein.
SECTION 11.14 Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement. Any
Subsidiary of the Company that executes this Agreement after the date of this
Agreement shall, upon such execution, become a party hereto as a Guarantor.
SECTION 11.15 Interpretation. (a) In this Agreement, unless a clear
contrary intention appears:
(i) the singular number includes the plural number and vice versa;
(ii) reference to any gender includes each other gender;
(iii) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Agreement as a whole and not to any particular
Article, Section or other subdivision;
(iv) reference to any Person includes such Person's successors and
assigns but, if applicable, only if such successors and assigns are permitted by
this Agreement, and reference to a Person in a particular capacity excludes such
Person in any other capacity or individually, provided that nothing in this
clause is intended to authorize any assignment not otherwise permitted by this
Agreement;
(v) except as expressly provided to the contrary herein, reference to
any agreement, document or instrument (including this Agreement) means such
agreement, document or instrument as amended, supplemented or modified and in
effect from time to time in accordance with the terms thereof and, if
applicable, the terms hereof, and reference to any Note or other note includes
any Note issued pursuant hereto in extension or renewal thereof and in
substitution or replacement therefor;
(vi) unless the context indicates otherwise, reference to any Article,
Section, Schedule or Exhibit means such Article or Section hereof or such
Schedule or Exhibit hereto;
(vii) the words "including" (and with correlative meaning "include")
means including, without limiting the generality of any description preceding
such term;
64
(viii) with respect to the determination of any period of time, except
as expressly provided to the contrary, the word "from" means "from and
including" and the word "to" means "to but excluding"; and
(ix) reference to any law, rule or regulation means such as amended,
modified, codified or reenacted, in whole or in part, and in effect from time to
time.
(b) The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
(c) No provision of this Agreement shall be interpreted or construed
against any Person solely because that Person or its legal representative
drafted such provision.
(d) In the event of any conflict between the specific provisions of this
Agreement and the provisions of any application pertaining to any letter of
credit secured by a Loan Document, the terms of this Agreement shall control.
SECTION 11.16 SUBMISSION TO JURISDICTION. (a) ANY LEGAL ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF TEXAS, IN ▇▇▇▇▇▇ COUNTY OR OF THE UNITED
STATES FOR THE SOUTHERN DISTRICT OF TEXAS AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF THE COMPANY AND EACH GUARANTOR HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS WITH RESPECT TO ANY SUCH ACTION OR PROCEEDING. THE COMPANY AND
EACH GUARANTOR FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OUT OF ANY
OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO IT AT ITS
ADDRESS PROVIDED IN SECTION 11.02 AND WITH RESPECT TO ANY GUARANTOR, AT THE
ADDRESS PROVIDED ON SCHEDULE 5.16 HERETO, SUCH SERVICE TO BECOME EFFECTIVE
THIRTY (30) DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE RIGHT OF
THE AGENT OR ANY BANK TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR
TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST THE COMPANY IN ANY
OTHER JURISDICTION.
(b) EACH OF THE COMPANY AND THE GUARANTORS HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT
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ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
SECTION 11.17 WAIVER OF JURY TRIAL. EACH OF THE COMPANY AND EACH
GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO
A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS
UNDER THIS AGREEMENT OR UNDER ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT
DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR
ARISING FROM OR RELATING TO ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH
THIS AGREEMENT, AND AGREES, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THAT ANY
SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
SECTION 11.18 FINAL AGREEMENT OF THE PARTIES. THIS AGREEMENT (INCLUDING
THE SCHEDULES AND EXHIBITS HERETO), THE NOTES AND THE OTHER LOAN DOCUMENTS
CONSTITUTE A "LOAN AGREEMENT" AS DEFINED IN SECTION 26.02(a) OF THE TEXAS
BUSINESS AND COMMERCE CODE, AND REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES RELATING TO THE SUBJECT MATTER HEREOF AND THEREOF AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
date first above written.
COMPANY:
GROUP MAINTENANCE AMERICA CORP.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
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GUARANTORS/MATERIAL SUBSIDIARIES:
AA Advance Air, Inc., a Florida corporation
A-ABC Appliance, Inc., a Texas corporation
Air Conditioning Engineers, Inc., a Michigan corporation
Air Conditioning, Plumbing and Heating Service Co., Inc., a Colorado corporation
Aircon Energy Incorporated, a California corporation
Airtron, Inc., a Delaware corporation
Arkansas Mechanical Services, Inc., an Arkansas corporation
▇▇▇▇ Electric Corp., an Illinois corporation
Central Carolina Air Conditioning Company, a North Carolina corporation
▇▇▇▇▇▇▇ Mechanical Contractors, Inc., a Minnesota corporation
GroupMAC Holding Corp., a Delaware corporation
HPS Plumbing Services, Inc., a California corporation
Hallmark Air Conditioning, Inc., a Texas corporation
▇▇▇▇▇▇▇▇▇▇ Mechanical Corporation, a Virginia corporation
▇. ▇. ▇▇▇▇▇▇▇ Air Conditioning, Inc., a Colorado corporation
K & N Plumbing, Heating and Air Conditioning, Inc., a Texas corporation
Linford Service Co., a California corporation
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Co., Inc., a Washington corporation
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries, Inc., a Washington corporation
▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Service, Inc., a Washington corporation
Masters, Inc., a Maryland corporation
Mechanical Interiors, Inc., a Texas corporation
▇▇▇▇ ▇. ▇▇▇▇▇ Co., Inc., an Indiana Corporation
Ray and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Inc., a Florida corporation
▇▇▇▇▇▇ Services, Incorporated, a Tennessee corporation
Southeast Mechanical Service, Inc., a Florida corporation
Sterling Air Conditioning, Inc., a Texas corporation
Valley Wide Plumbing and Heating, Inc., a Colorado corporation
Vantage Mechanical Contractors, Inc., a Maryland corporation
▇▇▇▇'▇ Heating and Cooling, Inc., a Florida corporation
▇▇▇▇▇▇ Refrigeration, Air Conditioning & Heating, Inc., an Ohio corporation
Yale Incorporated, a Minnesota corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
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AGENT/SECURED PARTY:
Amount of Commitment: CHASE BANK OF TEXAS,
$22,000,000.00 NATIONAL ASSOCIATION,
as Agent and Individually, as a Bank
By: /s/ ▇. ▇. ▇▇▇▇▇▇▇
▇. ▇. ▇▇▇▇▇▇▇
Vice President
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CO-AGENT:
Amount of Commitment: ABN AMRO BANK, N.V., as Co-Agent and
$20,000,000.00 Individually, as a Bank
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇
Group Vice President
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇▇
Assistant Vice President
Address for Notice:
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ #▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇
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Amount of Commitment: PARIBAS, as Co-Agent and Individually, as
$20,000,000.00 a Bank
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
By: /s/ ▇▇▇▇▇ ▇▇▇
Name: ▇▇▇▇▇ ▇▇▇
Title: Assistant Vice President
Address for Notice:
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
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BANKS:
Amount of Commitment: BANK OF AMERICA TEXAS, N.A.
$17,500,000.00
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President
Address for Notice:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
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Amount of Commitment: NATIONAL CITY BANK, KENTUCKY
$17,500,000.00
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Vice President
Address for Notice:
▇▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇-▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telecopy No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Amount of Commitment: CREDIT LYONNAIS NEW YORK BRANCH
$14,000,000.00
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Senior Vice President
Address for Notice:
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇ ▇▇▇▇▇▇
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Amount of Commitment: UNION BANK OF CALIFORNIA
$14,000,000.00
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
Address for Notice:
▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
Attn: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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