General Statement of Beneficial Ownership — Schedule 13D Filing Table of Contents
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1: SC 13D General Statement of Beneficial Ownership HTML 93K
2: EX-1.A Joint Filing Agreement - Quinn HTML 8K
3: EX-1.B Joint Filing Agreement - Fuller HTML 7K
4: EX-2 Mountain Lake Acquisition Proposal Letter HTML 14K
5: EX-3 Press Release HTML 16K
6: EX-4 Debt Financing Letter HTML 132K
$432,000,000
Revolving Credit, Synthetic Letter of Credit, Delayed Draw Synthetic
Letter of Credit, Term Loan B and Second Lien Loan Facilities for
Mountain
Lake Acquisition Company
Ladies
and Gentlemen:
You
have
advised us that Mountain Lake Acquisition Company, a newly formed entity (the
“Company”) and wholly owned subsidiary of Mountain Lake Holding Company,
also a newly formed entity (the “Parent”) controlled by Patrick E. Quinn
and Max L. Fuller (the “Principal Owners”), intends on acquiring at least
90% of the outstanding shares of capital stock of Bluegrass (as such term has
been mutually agreed by SunTrust Bank and the Company, the “Target”),
through a tender offer for the shares of capital stock of the Target other
than
those contributed to the Company as part of the Rollover (as defined below)
(the
“Tender Offer”) and the Rollover, followed by a merger of the Company
with and into the Target, with the Target being the surviving corporation,
or
through a negotiated merger with the Target, with the Target being the surviving
corporation (collectively, the “Transaction”). In connection
with the Transaction, the Principal Owners, together with certain trusts and
other legal entities that hold shares of the Target for the benefit of the
foregoing persons and any other persons that may be mutually agreed
(collectively, the “Rollover Participants”) intend to make an equity
contribution of all of their shares of capital stock of the Target
(substantially as reported in Schedule 14(A) filed with the SEC on April 11,2007) to Holdings, and to cause Holdings to further contribute such shares
of
capital stock to the Company (the “Rollover”). You have
requested that we consider providing financing to fund the Transaction, to
refinance existing indebtedness of the Target and its subsidiaries in connection
therewith, and after consummation of the Transaction to fund working capital
to,
provide letters of credit for, and for other general corporate purposes of,
the
Target and its subsidiaries.
SunTrust
Bank is pleased to commit to provide a $50,000,000 revolving credit facility,
a
$92,000,000 synthetic letter of credit facility, a $40,000,000 delayed draw
synthetic letter of credit facility, and a $190,000,000 tranche B term loan
(the
“Term Loan B” and together with the foregoing revolving credit and
synthetic letter of credit facilities, the “First Lien Facilities”)
described in the summary of terms and conditions attached as Annex I (the
“First Lien Term Sheet”) and up to a $60,000,000 second
lien term loan (the “Second Lien Loan”, and together with the First Lien
Facilities, the “Senior Credit Facilities”) described in the summary of
terms and conditions attached as Annex II (the
“SecondLien Term Sheet”, and
together with the First Lien Term Sheet, the “Term Sheet”),
to the Company subject to the terms and conditions set forth in this
letter and in the Term Sheet (collectively, this “Commitment
Letter”). The proceeds of the Term Loan B and the Second
Lien Loan shall be used to finance the Transaction, to fund transaction costs
incurred in connection therewith and to refinance existing indebtedness of
the
Target and its subsidiaries. The First Lien Facilities other than the Term
Loan
B shall be used after the merger of the Company with and into the Target, with
the Target being the surviving corporation (the “Merger”), to fund
working capital, to provide letters of credit and for other general corporate
purposes of the Target and its subsidiaries.
You
hereby appoint SunTrust Bank to act, and SunTrust Bank agrees to act, as sole
agent for the Senior Credit Facilities, subject to the terms and conditions
of
this Commitment Letter. You also appoint SunTrust Robinson Humphrey,
a division of SunTrust Capital Markets, Inc. (the “Arranger” and,
together with SunTrust Bank, “SunTrust”) to act, and the Arranger agrees
to act, as sole lead arranger and sole book manager for the Senior Credit
Facilities, subject to the terms and conditions of this Commitment
Letter. In consideration for the undertakings and obligations of
SunTrust under this Commitment Letter, the Company agrees that SunTrust Bank
will act as the sole and exclusive agent for the Senior Credit Facilities,
that
the Arranger will act as the sole and exclusive arranger and book manager for
the Senior Credit Facilities and that no other agents, co-agents or arrangers
will be appointed, or other titles conferred, without the prior written consent
of the Arranger.
A. Terms
and Conditions of the Senior Credit Facilities
The
principal terms and conditions of the First Lien Facilities shall include those
set forth in the First Lien Term Sheet. The principal terms and
conditions of the Second Lien Facilities shall include those set forth in the
Second Lien Term Sheet. The definitive agreements will contain
certain other customary terms and conditions found in credit facilities of
this
type, which may not be specifically listed in the Term Sheet; provided that
there shall be no conditions to closing other than those specified herein or
in
the Term Sheet.
B.Syndication
Although
SunTrust Bank has, subject to the terms and conditions hereof, provided a
commitment for the entire amount of the Senior Credit Facilities, it is the
intent of SunTrust Bank to syndicate the Senior Credit Facilities, and, as
a
material inducement to SunTrust Bank’s issuing its commitment hereunder, the
Company hereby agrees to cooperate, and to use its commercially reasonable
efforts to cause the Target to cooperate, in such syndication process and to
take all action as SunTrust may reasonably request to assist the Arranger in
forming a syndicate of Lenders. The Company’s assistance shall
include (but not be limited to) (i) making senior management and representatives
of the Company and its subsidiaries, and using its commercially reasonable
efforts to make senior management and representatives of the Target and its
subsidiaries, available to participate in meetings and to provide information
to
potential lenders under the Senior Credit Facilities (the “Lenders”) at
such times and places as the Arranger may reasonably request; (ii) using the
Company’s existing lending relationships, and using its commercially reasonable
efforts to use the Target’s existing lending relationships, to assist in the
syndication process; and (iii) providing to the Arranger all information
reasonably deemed necessary by the Arranger to complete the syndication,
including an information memorandum with respect to the Senior Credit
Facilities, the Company, the Target, their subsidiaries and the
Transaction, and pro forma and projected financial statements with respect
to
the Company, the Target and the transactions contemplated by this Commitment
Letter (the “Projections”).
The
Arranger will manage all aspects of the syndication of the Senior Credit
Facilities in consultation with SunTrust Bank and the Company, including the
timing of all offers to potential Lenders, the allocation of commitments, and
the determination of compensation and titles (such as co-agent, managing agent,
etc.) given, if any, to such Lenders. The Company agrees that no
Lender will receive any compensation for its commitment to, or participation
in,
the Senior Credit Facilities except asexpressly set forth in the Term Sheet
or
the Fee Letter (as defined below), or as otherwise agreed to and offered by
the
Arranger.
To
ensure
an orderly and effective syndication of the Senior Credit Facilities, the
Company further agrees that until the earlier of termination of this Commitment
Letter and completion of the syndication, as determined by the Arranger in
its
sole discretion, the Company will not, and will not cause or permit any of
its
affiliates or agents to, and shall use its commercially reasonable efforts
not
to permit the Target and its subsidiaries to, arrange, sell, syndicate or issue,
attempt to arrange, sell, syndicate or issue, announce or authorize the
announcement of the arrangement, sale, syndication or issuance of, or engage
in
discussions concerning the arrangement, sale, syndication or issuance of, any
debt facility or debt security (including any renewals thereof) except (1)
with
the prior written consent of the Arranger, (2) purchase money and lease
financing of tractors and trailers and refinancing of existing Equipment Notes
(as defined in the First Lien Term Sheet), (3) the renewal of the Target’s
receivables securitization facility upon expiration thereof and (4) real estate
financings of presently unencumbered real property in an aggregate amount not
to
exceed $25,000,000.
C. Fees
The
fees payable to SunTrust Bank and
the Arranger in connection with their obligations hereunder are set forth in
that certain letter agreement dated as of the date hereof, executed by SunTrust
Bank and the Arranger and acknowledged and agreed to by Patrick Quinn and Max
Fuller (the “Principal Owners”) and the Company (the “Fee
Letter”), relating to this Commitment Letter. The obligations of
SunTrust pursuant to this Commitment Letter are subject to the execution and
delivery of the Fee Letter by the Principal Owners and the Company, which Fee
Letter constitutes an integral part of this Commitment Letter.
D. Conditions
Precedent
The
undertakings and obligations of SunTrust under this Commitment Letter are
subject to: (i) the preparation, execution and delivery of mutually acceptable
loan documentation, including a credit agreement incorporating substantially
the
terms and conditions outlined in this Commitment Letter; (ii) the absence of
a
material adverse change in the business, condition (financial or otherwise),
operations, liabilities (contingent or otherwise), properties or prospects
of
the Company and its subsidiaries, taken as a whole, since the date of this
Commitment Letter, or a material adverse change in the business, condition
(financial or otherwise), operations, liabilities (contingent or otherwise),
properties or prospects of the Target and its subsidiaries, taken as a whole,
as
reflected in the consolidated financial statements of the Target as of December31, 2006; provided, however, that changes in the consolidated financial
position, results of operation and cash flows of the Target and its
subsidiaries, taken as a whole, between December 31, 2006 and March 31, 2007
reflected in the March 31, 2007 financial statements of the Target and its
subsidiaries filed with the SEC shall not be considered in determining any
such
material adverse change, (iii) the accuracy, in all material respects, of all
representations that the Company makes to SunTrust (including those in
Section E below) and all information that the Company furnishes to
SunTrust, and the absence of any information or other matter being disclosed
after the date hereof that is inconsistent in a material and adverse manner
with
any information or other material disclosed to SunTrust; (iv) the payment in
full of all fees, expenses and other amounts payable hereunder and under the
Fee
Letter; (v) the compliance with the provisions of this Commitment Letter; (vi)
a
closing of the Senior Credit Facilities on or prior to December 31, 2007;
and(vii) the satisfaction of the other conditions set
forth in the Term Sheet.
The
Company represents and warrants to SunTrust that (i) all information that has
been or will be made available to SunTrust by the Company, the Target or any
of
their representatives in connection with the transactions contemplated by this
Commitment Letter (other than the Projections) (the “Information”) is or
will be, when furnished, complete and correct in all material respects and
does
not or will not, when furnished, contain any untrue statement of a material
fact
or omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which
such
statements were or will be made; and (ii) the Projections have been or will
be
prepared in good faith based upon reasonable assumptions. The Company
agrees to supplement the Information and the Projections from time to time
so
that the representation and warranty contained in this Section E remains
correct. In issuing the commitments and undertakings hereunder and in
arranging and syndicating the Senior Credit Facilities, SunTrust Bank and the
Arranger are relying on the accuracy of the Information and the Projections
without independent verification thereof.
The
Company authorizes the Arranger and its affiliates, including SunTrust Bank,
to
share with each other, and to use, credit and other confidential or non-public
information regarding the Company to the extent permitted by applicable laws
and
regulations and for the purpose of performing their obligations under this
Commitment Letter and the Senior Credit Facilities.
F. Indemnities,
Expenses, Etc.
1. Indemnification. The
Company and the Principal Owners, jointly and severally, agree to indemnify
and
hold harmless the Arranger, SunTrust Bank, each other Lender, their respective
affiliates and their respective directors, officers, employees, agents,
representatives, legal counsel, and consultants (each, an “Indemnified
Person”) against, and to reimburse each Indemnified Person upon its demand
for, any losses, claims, damages, liabilities or other expenses
(“Losses”) incurred by such Indemnified Person or asserted against such
Indemnified Person by any third party or by the Company, the Target or any
of
their subsidiaries, insofar as such Losses arise out of or in any way relate
to
or result from this Commitment Letter, the Fee Letter, the Transaction, the
financings and other transactions contemplated by this Commitment Letter or
the
use of the proceeds of the Senior Credit Facilities, including, without
limitation, (i) all Losses arising out of any legal proceeding relating to
any
of the foregoing (whether or not such Indemnified Person is a party thereto)
and
(ii) Losses that arise out of untrue statements made or statements omitted
to be
made by the Company, or with the Company’s consent or in conformity with the
Company’s actions or omissions), in each case whether or not such Indemnified
Person is a party to any such proceeding; provided that the Company and
the Principal Owners shall not be liable pursuant to this indemnity for any
Losses to the extent that a court having competent jurisdiction shall have
determined by a final judgment (not subject to further appeal) that such Loss
resulted from the gross negligence or willful misconduct of such Indemnified
Person or from a claim brought by the Company or any of its subsidiaries against
an Indemnified Person for breach in bad faith of such Indemnified Person’s
obligations hereunder. The Company and the Principal Owners shall
not, without the prior written consent of any Indemnified Person, effect any
settlement of any pending or threatened proceeding in respect of which such
Indemnified Person is a party and indemnity has been sought hereunder by such
Indemnified Person, unless such settlement includes an unconditional release
of
such Indemnified Person from all liability on claims that are the subject matter
of such indemnity.
2. CONSEQUENTIAL
DAMAGES. NO INDEMNIFIED
PERSON SHALL BE RESPONSIBLE OR LIABLE TO THE COMPANY OR ANY OTHER PERSON OR
ENTITY FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED
AS A RESULT OF THIS COMMITMENT LETTER, THE FEE LETTER, THE SENIOR CREDIT ACILITY
OR ANY OF THE LOAN DOCUMENTS OR ANY TRANSACTION CONTEMPLATED BY THIS COMMITMENT
LETTER.
3. Expenses. In
further consideration of the commitments and undertakings of SunTrust hereunder,
and recognizing that in connection herewith SunTrust will be incurring certain
costs and expenses (including, without limitation, fees and disbursements of
counsel, and costs and expenses for due diligence, syndication, transportation,
duplication, mailings, messenger services, dedicated web page on the internet
for the transactions contemplated by this Commitment Letter, appraisal, audit
and insurance), the Company and the Principal Owners, jointly and severally,
hereby agree to pay, or to reimburse SunTrust on demand for, all such reasonable
costs and expenses actually incurred (whether incurred before or after the
date
hereof), regardless of whether any of the transactions contemplated hereby
are
consummated. The Company and the Principal Owners, jointly and
severally, agree to pay all costs and expenses of SunTrust (including, without
limitation, reasonable fees and disbursements of counsel) incurred in connection
with the enforcement of any of its rights and remedies hereunder.
G. Special
Disclosure
The
Arranger is a wholly owned subsidiary of SunTrust Banks, Inc. (“STBI”)
and an affiliate of SunTrust Bank. The Arranger is a broker/dealer
registered with the Securities and Exchange Commission and a member of the
National Association of Securities Dealers, Inc. and the Securities Investor
Protection Corporation (“SIPC”). Although it is a subsidiary
of STBI, the Arranger is not a bank and is separate from SunTrust Bank or any
banking affiliate of SunTrust Bank. The Arranger is solely
responsible for its contractual obligations and
commitments. Securities and financial instruments sold, offered, or
recommended by the Arranger are not bank deposits, are not insured by the
Federal Deposit Insurance Corporation, SIPC or any governmental agency and
are
not obligations of or endorsed or guaranteed in any way by any bank affiliated
with the Arranger or any other bank unless otherwise stated.
H. Miscellaneous
1. Effectiveness. This
Commitment Letter shall constitute a binding obligation of SunTrust for all
purposes immediately upon the acceptance hereof by the Company in the manner
specified below. Notwithstanding any other provision of this Commitment Letter,
the commitments and undertakings of SunTrust set forth herein shall not be
or
become effective for any purpose unless and until this Commitment Letter and
the
Fee Letter shall have been accepted by the Company and the Principal Owners
in
the manner specified below.
2. Acceptance
by the Company. If the Company agrees
with the foregoing, the Company and the Principal Owners shall sign and return
the enclosed copy of this Commitment Letter and Fee Letter by fax and overnight
courier service to
Notwithstanding,
if this Commitment Letter is submitted or referred to in any bid or offer to
purchase shares of Target, whether or not executed by the Company, such
submission or reference shall be deemed to be acceptance of the terms of this
Commitment Letter and the Fee Letter by the Company.
3. Termination. Unless
this Commitment Letter and the Fee Letter have been executed by the Company
and
the Principal Owners and delivered to the Arranger, prior to 5:00 p.m.,
Atlanta, Georgia time, on June 29, 2007, the commitments and obligations of
SunTrust under this Commitment Letter shall terminate on such
date. If this Commitment Letter and the Fee Letter are executed and
delivered by the Company and the Principal Owners to the Arranger, or are
otherwise deemed accepted by the Company, this Commitment Letter, and the
commitments and obligations of SunTrust under this Commitment Letter, shall
terminate on December 31, 2007, unless the definitive credit agreement and
other
legal documents related to the Senior Credit Facilities have been executed
and
delivered on or prior to such date. In addition to the foregoing,
this Commitment Letter may be terminated at any time by mutual
agreement. Furthermore, by acceptance of this Commitment Letter, any
other commitments outstanding with respect to the Senior Credit Facilities
by
SunTrust will be terminated.
4. No
Third-Party Beneficiaries. This Commitment Letter is solely for
the benefit of the Company, SunTrust and the Indemnified Persons; no provision
hereof shall be deemed to confer rights on any other person or
entity.
5. No
Assignment; Amendment. This Commitment Letter and the Fee Letter
may not be assigned by the Company or the Principal Owners to any other person
or entity, but all of the obligations of the Company and the Principal Owners
hereunder and under the Fee Letter shall be binding upon the successors and
assigns of the Company and the heirs and representatives of the Principal
Owners, as applicable. This Commitment Letter and the Fee Letter may
be not be amended or modified except in writing executed by each of the parties
hereto.
6. Use
of Name and Information. The Company and the Principal Owners
agree that any references to SunTrust or any of its affiliates made in
connection with the Senior Credit Facilities are subject to the prior approval
of SunTrust, which approval shall not be unreasonably withheld; provided that
such references may be made in filings with the SEC and otherwise as required
by
law, stock market regulation or other legal process. SunTrust shall
be permitted to use information related to the syndication and arrangement
of
the Senior Credit Facilities in connection with marketing, press releases or
other transactional announcements or updates provided to investor or trade
publications; including, but not limited to, the placement of “tombstone”
advertisements in publications of its choice at its own expense.
7. GOVERNING
LAW. THIS COMMITMENT LETTER AND THE FEE LETTER
WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF
NEW YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS
THEREOF.
8. WAIVER
OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH OF THE COMPANY, THE PRINCIPAL OWNERS AND SUNTRUST WAIVES
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATED TO THIS
COMMITMENT LETTER, THE FEE LETTER OR ANY OTHER DOCUMENTS CONTEMPLATED
HEREBY. Each ofthe Company and the
Principal Owners irrevocably and unconditionally submits to the exclusive
jurisdiction of any state court in the State of New York or the United States
District Court for the Southern District of New York for the purpose of any
suit, action or proceeding arising out of or relating to this Commitment Letter
or the Fee Letter.
Service
of any process, summons, notice or document may be made by registered mail
addressed to the Company and the Principal Owners at the address appearing
at
the beginning of this letter or to SunTrust at the address specified in
paragraph 2 of this Section H against such person for any suit, action or
proceeding brought in any such court pursuant to the agreement. Each
of the Company, the Principal Owners and SunTrust irrevocably and
unconditionally waive any objection to the laying of venue of any such suit,
action or proceeding brought in any such court and any claim that any such
suit,
action or proceeding has been brought in any such court and any claim that
any
such suit, action or proceeding has been brought in an inconvenient forum.
A
final judgment in any such suit, action or proceeding brought in any such court
may be enforced in any other courts to whose jurisdiction the Company, the
Principal Owners or SunTrust are or may be subject, by suit upon
judgment.
9. Survival. The
obligations and agreements of the Company and the Principal Owners contained
in Section F, and paragraphs 7, 8 and 10 of this Section
H shall survive the expiration and termination of this Commitment
Letter.
10. Confidentiality. The
Company and the Principal Owners will not disclose or permit disclosure of
this
Commitment Letter nor the contents thereof to any person or entity (including,
without limitation, any Lender other than SunTrust), either directly or
indirectly, orally or in writing, except (i) to the Company’s and Target’s
officers, directors, agents, accountants, financial advisors, and legal counsel
who are directly involved in the transactions contemplated hereby, in each
case
on a confidential basis or (ii) in filings with the SEC and otherwise as
required by law, stock market regulation, or other legal process (in which
case
the Company agrees to inform SunTrust promptly thereof). SunTrust
hereby notifies the Company and the Principal Owners that pursuant to the
requirements of the USA Patriot Act, Title III of Pub. L. 107-56 (signed into
law October 26, 2001) (the “Patriot Act”), it and its affiliates are
required to obtain, verify and record information that identifies the Company
and the Principal Owners, which information includes the name, address, tax
identification number and other information regarding the Company and the
Principal Owners that will allow SunTrust to identify the Company and the
Principal Owners in accordance with the Patriot Act. This notice is
given in accordance with the requirements of the Patriot Act and is effective
for SunTrust and its affiliates.
11. No
fiduciary duty. The Company acknowledges and agrees that (i) the
commitment to and syndication of the Senior Credit Facilities pursuant to this
Commitment Letter is an arm's-length commercial transaction between the Company,
on the one hand, and SunTrust, on the other, (ii) in connection with the
transactions contemplated hereby and the process leading to such transactions,
SunTrust is and has been acting solely as a principal and is not the agent
or
fiduciary of the Company or its stockholders, creditors, employees or any other
party, (iii) SunTrust has not assumed an advisory responsibility or fiduciary
duty in favor of the Company with respect to the transactions contemplated
hereby or the process leading thereto (irrespective of whether SunTrust has
advised or is currently advising the Company on other matters) or any other
obligation to the Company except the obligations expressly set forth in this
Commitment Letter, (iv) SunTrust and its affiliates may be engaged in a broad
range of transactions that involve interests that differ from those of the
Company, and (v) SunTrust has not provided any legal, accounting, regulatory
or
tax advice with respect to the transactions contemplated hereby and the Company
has consulted its own legal, accounting, regulatory and tax advisors to the
extent it deemed appropriate.
12. Counterparts. This
Commitment Letter and the Fee Letter may be executed in any number of separate
counterparts, each of which shall collectively and separately constitute one
agreement. Delivery of a counterpart hereof via facsimile or
electronic transmission shall be as effective as delivery of a manually executed
counterpart hereof.
13. Entire
Agreement. Upon acceptance by the Company as provided herein,
this Commitment Letter and the Fee Letter referenced herein shall supersede
all
understandings and agreements between the parties to this Commitment Letter
in
respect of the transactions contemplated hereby.
We
look
forward to working with you on this important transaction.
CAPITALIZED
TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANINGS SET FORTH
IN
THE COMMITMENT LETTER TO WHICH THIS TERM SHEET IS ATTACHED.
Summary
of Principal Terms and Conditions of
$372,000,000
FIRST LIEN FACILITIES
I.
DESCRIPTION
OF THE FIRST LIEN FACILITIES
First
Lien Facilities:
(A) $50,000,000
Revolving Credit Facility with a swingline subfacility in an amount
to be
determined and fully available for letters of credit (the “Revolver”),
available after the closing of the Merger.
(B) $92,000,000
Synthetic Letter of Credit Facility (the “LC Facility”), available after
the closing of the Merger.
(C) $40,000,000
Delayed Draw Synthetic Letter of Credit Facility (the “DDLC Facility”)
available for 9 months after the closing of the Merger.
(D) $190,000,000
Senior Tranche B Term Loan (“Term Loan B”, and together with the Revolver,
the LC Facility and the DDLC Facility, the “First Lien Facilities”),
available on the closing of the First Lien Facilities (the “Closing
Date”).
Borrower:
Initially,
the Company, and upon consummation of the Merger, the Target.
Guarantors:
Holdings
and all present and future direct and indirect material subsidiaries
of
the Borrower.
Agent:
SunTrust
Bank (“SunTrust” or the “Agent”).
Synthetic
LC Issuer:
SunTrust
Bank.
Lead
Arranger:
SunTrust
Capital Markets, Inc. (the “Arranger”).
Lenders:
SunTrust
and a syndicate of financial institutions acceptable to the Borrower,
the
Arranger and SunTrust, as Agent (together, the “Lenders”).
Swingline
Lender:
SunTrust
Bank.
Issuing
Bank:
SunTrust
Bank.
Purpose:
(A) Proceeds
of the Revolver shall be used to fund working capital needs of the
Company, for other seasonal financing needs of the Company, to provide
letters of credit and for general corporate purposes.
(B) Proceeds
of the LC Facility shall be used to prefund letters of credit to
be issued
by the Synthetic LC Issuer used to backstop workers compensation,
auto
liability, and other fully or partially self-insured claims.
(C) Proceeds
of the DDLC Facility will be available for up to 9 months after the
Closing Date to prefund additional letters of credit to be issued
by the
Synthetic LC Issuer to backstop additional workers compensation,
auto
liability, and other fully or partially self-insured claims.
(D) Proceeds
of the Term Loan B shall be used to finance the Transaction on the
Closing
Date, to pay transaction costs and expenses incurred in connection
therewith and to refinance indebtedness of the Target and its
subsidiaries.
Maturity
Date:
(A) Revolver
shall terminate on the fifth anniversary of the Closing Date.
(B) LC
Facility shall terminate on the seventh anniversary of the Closing
Date.
(C) DDLC
Facility shall terminate seven years after the earlier of the date
that
the DDLC Facility is fully drawn and nine months after the Closing
Date.
(D) Term
Loan B shall mature on the seventh anniversary of the Closing
Date.
Collateral:
All
First Lien Facilities shall be cross-collateralized by a first priority
security interest in and lien on all personal property of Borrower
and
Guarantors, including without limitation, all accounts, inventory,
equipment, general intangibles, goods, documents, contracts, trademarks,
patents, copyrights, intercompany obligations, stock, securities,
and
notes owned by Borrower or any Guarantor; provided however that Collateral
shall exclude (i) all equipment securing the Equipment Notes, (ii)
all
other assets securing indebtedness as of the date hereof (other than
assets securing the existing revolving credit facility and accounts
receivable securitization, which assets shall be Collateral in any
event),
(iii) real property and (iv) assets securing other indebtedness and
lease
financing in amounts to be mutually agreed upon in the definitive
loan
documentation. All First Lien Facilities shall be
cross-collateralized by a pledge of 100% of the capital stock of
Borrower
and each of the Guarantors (excluding Holdings); provided, however,
that
all stock of the Target acquired in connection with the Transaction
shall
be excluded from Collateral until the Merger is
consummated. Real Estate will not be included in the
Collateral, but all real estate that is unencumbered as of the Closing
Date and all real estate acquired after the Closing Date that remains
unencumbered for 120 days shall be subject to a negative
pledge.
Increase
in Revolver:
The
Borrower may, at its option, so long as no default or event of default
has
occurred and is continuing, elect to increase the Revolver before
the
Closing Date (but after the primary syndication of the First Lien
Facilities has been completed as determined by the Arranger) and/or
after
the Closing Date by an aggregate amount of commitments not to exceed
$50,000,000 through the addition of new lenders (or increases of
commitments by existing lenders), provided that any such new lenders
are
acceptable to the Agent.
Note: Italicized
terms are defined in the attached Exhibit A (“Selected
Definitions”).
II.
PRICING
AND PAYMENT TERMS FOR THE FACILITIES
Interest
Rate Options:
The
Borrower shall be entitled to select between the following interest
rate
options for the Revolver and the Term Loan B:
(A) For
the Revolver, (i) Base Rate or (ii) LIBOR, plus in each
case the Applicable Margin; provided, however, that loans under
the Swingline subfacility shall bear interest at the Swingline
Rate.
(B) For
the Term Loan B, (i) Base Rate plus 1.50% per annum or (ii)
LIBOR plus 2.75% per annum.
Interest
Payments:
Interest
shall be calculated on the basis of a 360-day year and shall be payable
on
outstanding advances as follows:
(i)
Base
Rate advances and Swingline Rate advances – On the last day
of each calendar quarter, in arrears.
(ii)
LIBOR
advances – At the expiration of each Interest Period, and with
respect to loans made for an Interest Period longer than three
months, on the last day of each three month period prior to the expiration
of the Interest Period.
Default
Rate:
If
any event of default has occurred and is continuing, the otherwise
then
applicable rates and any letter of credit fees (including fees paid
with
respect to the LC Facility and the DDLC Facility) shall be increased
by 2%
per annum; provided that, for any LIBOR advances under the
Revolver, at the end of the applicable Interest Period, interest
shall accrue at the Base Rate plus the Applicable Margin
plus 2% per annum and for any LIBOR advances under the Term Loan
B, at the end of the applicable Interest Period, interest shall
accrue at the Base Rate plus 3.50% per annum. Default
interest shall be payable on demand.
Commitment
Fee:
A
commitment fee shall be payable quarterly in arrears on the average
daily
unused portion of (x) the Revolver in an amount equal to the Applicable
Commitment Fee Percentage designated in Exhibit B based on the ratio
of
Borrower’s total leverage ratio (to be defined in a mutually
acceptable manner) and (y) the DDLC Facility in an amount equal to
0.75% thereof. The Applicable Commitment Fee Percentage for the
Revolver shall initially be 0.50%, provided, however, that upon delivery
to the Agent of Borrower’s financial statements for each fiscal quarter
ending after the Closing Date, the Applicable Commitment Fee Percentage
for the Revolver shall be reset to the Applicable Commitment Fee
Percentage designated in Exhibit B based on the Borrower’s ratio of total
leverage ratiofor the preceding four fiscal quarter period
then ending, such new Applicable Commitment Fee Percentage for
the Revolver being effective as of the second business day following
the
date that the Agent receives the Borrower’s applicable financial
statements.
Outstanding
letters of credit under the Revolver will be deemed usage of the
Revolver,
but loans under the Swingline shall not be deemed usage of the
Revolver.
Letter
of Credit Fees:
A
letter of credit fee for letters of credit issued under the Revolver
shall
be payable quarterly in arrears at a rate equal to 2.75% per annum
on the
average outstanding letters of credit under the Revolver, to be shared
proportionately by lenders in accordance with their participation
in the
respective letters of credit. In addition, a facing fee of
0.25% and other customary administrative charges shall be paid to
the
Issuing Bank for its own account for letters of credit under the
Revolver. In each case, fees shall be calculated on the
aggregate stated amount of the letters of credit under the Revolver
for
the duration thereof.
Draws
under the LC Facility and the DDLC Facility will be deposited in
a deposit
account in the name of the Synthetic LC Issuer invested to return
LIBOR. The Synthetic LC Issuer will issue letters of
credit secured by such deposit account and the funds contained
therein. The Borrower will pay to the Lenders holding the LC
Facility and the DDLC Facility a fee payable quarterly in arrears
at a
rate equal to LIBOR plus the Applicable Margin for LIBOR
loans under the Revolver, less the return paid on the
LIBOR-invested deposit account. Customary administrative charges
(but no other facing or fronting fees) shall be paid to the Synthetic
LC
Issuer for its own account for letters of credit under the LC Facility
and
the DDLC Facility.
Repayments:
(A) All
principal and unpaid accrued interest on all loans under the Revolver,
the
LC Facility and the DDLC Facility shall be due and payable on the
Maturity
Date of the Revolver, the LC Facility and the DDLC Facility.
(B) The
Term Loan B will be repaid in equal quarterly installments of principal
in
an aggregate annual amount equal to 1% per annum of the principal
amount
of the Term Loan B, and all unpaid principal shall be due and payable
on
the Maturity Date for Term Loan B.
Voluntary
Prepayments:
Prepayments
may be made without premium or penalty, provided that the prepayment
of a
LIBOR advance on any day other than the last day of the current
Interest Period shall obligate the Borrower to indemnify Lenders
for
customary breakage costs. Otherwise, with respect to a
LIBOR or Base Rate advance, the Borrower must give the
Agent at least three business days and one business day, respectively,
prior written notice of the amount and time of any prepayment, and
prepayments shall be in minimum amounts of $5,000,000 and in integral
multiples of $1,000,000.
Mandatory
Prepayments:
The
Borrower shall be required to make mandatory principal prepayments
on Term
Loan B from (i) 100% of the net proceeds received by the Borrower
and any
of its subsidiaries from any sale or other disposition by the Borrower
and
any of its subsidiaries of any assets other than (a) assets subject
to
liens permitted under the definitive loan documents (to the extent
of the
indebtedness repaid and secured by such liens) and (b) assets sold
in the
ordinary course of business, (ii) 100% of net proceeds of any equity
offering for cash and not as part of any employee compensation, and
(iii)
75% of excess cash flow (to be defined in a mutually acceptable manner),
reduced to 50% of such excess cash flow if the total leverage ratio
(to be
defined in a mutually acceptable manner) as of the last day of the
fiscal
year is less than or equal to 4.00:1.00 but greater than 3.00:1.00,
and
reduced to 0% of such excess cash flow if the total leverage ratio
as of
the last day of the fiscal year is less than or equal to
3.00:1.00. All such prepayments shall be applied to
installments of the Term Loan B in inverse order of maturity.
Payments:
All
payments by the Borrower shall be made not later than 12:00 noon
(Atlanta,
Georgia time) to the Agent in immediately available funds, free and
clear
of any defenses, set-offs, counterclaims, or withholdings or deductions
for taxes. Any Lender not organized under the laws of the
United States or any state thereof must, prior to the time it becomes
a
Lender, furnish Borrower and Agent with forms or certificates as
may be
appropriate to verify that such Lender is exempt from U.S. tax withholding
requirements.
Pricing/Yield
Protection Provisions:
Customary
provisions with respect to: payment of withholding tax “gross-up” amounts;
suspension of LIBOR pricing options due to illegality or
inability to ascertain funding costs; payment of reserve requirements,
increased funding costs and capital adequacy compensation; and payment
of
breakage and redeployment costs in connection with fundings and repayments
of LIBOR advances.
III.
CONDITIONS
TO CLOSING AND FUNDING
Closing
and funding will be subject only to the conditions contained in the
Commitment Letter and the following:
Conditions
toClosing and Initial
Borrowing:
(1)
Execution
and delivery of credit agreement, guaranty agreements, security documents,
intercreditor agreements, solvency certificate and other loan
documents.
(2)
Evidence
that all shares of capital stock of Target owned by the Rollover
Participants (as reported in the Schedule 14A filed with the SEC
on April11, 2007) have been contributed to Holdings (and further contributed
to
the Borrower).
(3)
Certified
copies of all documents relating to the Second Lien Loan and evidence
that
all conditions precedent to such investment have been
satisfied.
(4)
Evidence
that the structure, terms and conditions of the Transaction (other
than
price) are on terms and conditions reasonably satisfactory to the
Agent
and the Arranger; certified copies of all filings, merger agreements
and
other documents relating to the Transaction, all of which shall be
in form
and substance reasonably satisfactory to the Agent and the Arranger;
evidence that the Tender Offer has been completed and all shares
have been
accepted for payment, the Rollover has been consummated, the Borrower
owns
at least 90% of the shares of capital stock of the Target, all conditions
precedent to the Transaction, other than the funding of the First
Lien
Facilities, have been satisfied and the Tender Offer, if applicable,
and
the Merger will be consummated simultaneously with the funding of
the Term
Loan B and the Second Lien Loan. The corporate and capital
structure of Holdings and the Borrower shall be substantially the
same as
the corporate and capital structure described in the Commitment
Letter.
(5)
Delivery
of certified articles of incorporation, good standing certificates
and
certified copies of other organizational documents, including bylaws,
authorizing resolutions of board of directors, and incumbency certificates
for the Borrower and all Guarantors, favorable opinions of
counsel for the Borrower and all Guarantors, including local counsel
where
requested by Agent, and lien searches, it being understood that such
items
from the Target and its subsidiaries may be delivered a reasonable
time
after the Closing Date to the extent the Borrower’s commercially
reasonable efforts do not produce such items on or prior to the Closing
Date.
(6)
Delivery
of certified copies of all consents, approvals, authorizations,
registrations, or filings required to be made or obtained by the
Borrower,
the guarantors and the Target in connection with the First Lien
Facilities, the Transaction and any other transaction being financed
with
the proceeds of the First Lien Facilities, and such consents, approvals,
authorizations, registrations, filings and orders shall be in full
force
and effect and all applicable waiting periods shall have expired
and no
investigation or inquiry by any governmental authority regarding
the First
Lien Facilities, the Transaction or any transaction being financed
with
the proceeds thereof shall be ongoing.
(7)
Delivery
of certificate of insurance issued on behalf of insurers of the Borrower
and all guarantors, describing in reasonable detail the types and
amounts
of insurance (property and liability) maintained by the Borrower
and all
guarantors, naming Agent as additional insured and loss payee, as
appropriate, it being understood that such items from the Target
and its
subsidiaries may be delivered at a reasonable time after the Closing
Date
to the extent the Borrower’s commercially reasonable efforts do not
produce such items on or prior to the Closing Date.
(8)
Payment
in full of all fees and invoiced expenses related to the First Lien
Facilities.
(9)
Receipt
from Standard & Poor’s and Moody’s Investor Services of corporate
family ratings for the Borrower and its subsidiaries (after giving
effect
to the Transaction) and facility ratings for the second lien
loan.
(10)
Evidence
that EBITDA of the Target and its subsidiaries measured for the most
recently ended four fiscal quarters is at least $112
million.
For
purposes of this condition, EBITDA shall mean, for the Target and
its
subsidiaries, the sum of (a) net income for such period plus (b)
to the
extent deducted in determining net income for such period, interest
expense, income tax expense, depreciation, amortization and all other
non-cash charges, determined on a consolidated basis in accordance
with
GAAP. EBITDA shall exclude the net income of persons that are
acquired or become subsidiaries during such period, for the portion
of the
period prior to such acquisition or additional
investment.
Conditions
to All Borrowings:
(1)
No
default or event of default shall then exist or would result from
such
borrowing, and pro forma compliance with the total leverage
ratio.
(2)
All
representations and warranties shall continue to be true and correct
in
all material respects on and as of the date of each borrowing and
the
issuance of each letter of credit, except those expressly made only
as of
an earlier date.
(3)
Since
the date of the most recent audited financial statements of the Target
delivered prior to the Closing Date, there shall have been no change
that
has had or could be reasonably expected to have a material adverse
effect
on the Borrower and the Guarantors taken as a whole, excluding, however,
the direct effect of the Transaction and the related financing on
the
financial condition, results of operation and cash flows of the Target
and
its subsidiaries on a consolidated basis.
(4)
Agent
shall have received such other documents, certificates, information
or legal opinions as it or the Required Lenders has reasonably
requested.
IV.
REPRESENTATIONS
AND WARRANTIES; COVENANTS; DEFAULTS
Representations
and Warranties:
Customary
for transactions of this type, given after giving pro forma effect
to the
Transaction, including as to due organization, good standing, power
and
authority; due authorization, execution, delivery and enforceability;
no
consents or approvals; no violation of law, regulation or agreements;
no
creation of a lien, other than securing the Senior Credit Facilities;
accuracy of financial statements; no material adverse change; no
litigation; material compliance with laws and material agreements;
not an
investment company or subject to regulation restricting the transactions;
taxes; margin regulations; use of proceeds; ERISA; ownership of assets;
insurance; intellectual property; no misleading information; absence
of
labor disputes; identification of subsidiaries; solvency; Patriot
Act and
OFAC compliance; validity of liens.
Financial
Covenants:
Total
leverage ratio, fixed charge coverage ratio and maximum capital
expenditures, to be defined in a mutually acceptable manner and set
at
levels to be mutually agreed upon.
Reporting
Requirements:
Annual
unqualified audited financial statements within 120 days after the
end of
each fiscal year, accompanied by an accountant’s certificate as to no
knowledge of any Default or Event of Default and that the financial
statements fairly present the financial condition of the Borrower
in all
material respects; quarterly unaudited financial statements within
45 days
after the end of each fiscal quarter; compliance certificates; and
other
customary notifications, including notice of any
Default. Financial statements shall include a balance sheet,
income statement, and statement of cash flows for the Borrower and
its
subsidiaries on a consolidated and consolidating basis.
Affirmative
Covenants:
Affirmative
covenants customary for transactions of this type, including, without
limitation, as to maintenance of existence, property and
insurance and material intellectual property; engaging in same
business or businesses reasonably related thereto; compliance with
laws;
payment of taxes and other charges that can result in liens; books
and
records; visitation and inspection; use of proceeds; margin regulations;
future guarantors/collateral; and covenant to merge the Borrower
with and
into Target immediately upon consummation of the tender offer for
at least
90% of the shares of the Target, on terms and conditions approved
by the
Lenders prior to the Closing Date.
Negative
Covenants:
Negative
covenants customary for transactions of this type (and with customary
exceptions thereto), including, without limitation, as to restrictions
on
indebtedness (subject to exceptions for purchase money and lease
financing
of tractors and trailers in the ordinary course of business, purchase
money and lease financing for other assets in an amount to be mutually
agreed upon, and real estate financing in an amount to be mutually
agreed
upon), liens (subject to permitted liens to be mutually agreed upon);
mergers, consolidations and acquisitions (subject to permitted
acquisitions to be mutually agreed upon); sale of assets (subject
to
exclusion for the sale of assets subject to permitted liens to the
extent
of any indebtedness secured by such permitted liens, and sale of
assets in
the ordinary course); engaging in business other than current business
and
those reasonably related thereto; investments (subject to permitted
investments to be mutually agreed upon, including but not limited
to
additional investment in Arnold and Total subject to limits to be
mutually
agreed upon and other permitted investments in shares of companies
in
which the Target and its subsidiaries are minority investors as of
the
Closing Date so long as after giving effect to such investment, the
Target
and its subsidiaries are majority investors, subject to a limit to
be
mutually agreed upon); dividends and other payments to junior capital
(other than inter-company dividends made by subsidiaries of the Borrower,
on at least a pro rata basis for subsidiaries that are not wholly
owned,
dividends made by Borrower to Holdings (and by Holdings to its
shareholders) not to exceed an amount to be mutually agreed upon
and only
if no default has occurred and is continuing and pro forma compliance
with
financial tests to be mutually agreed to, and dividends made by Borrower
to Holdings (and by Holdings to its shareholders) in such amounts
as may
be required for shareholders of Holdings to pay income taxes attributable
to the income of Holdings and its subsidiaries to the extent that
Holdings
is a pass-through entity for tax purposes); affiliate transactions
(subject to exception for arms length transactions and transactions
related to funding of taxes payable by shareholders of Holdings
attributable to the income of Holdings and its subsidiaries to the
extent
that Holdings is a pass-through entity for tax purposes); sale/leaseback
transactions; speculative hedging; amendments to material agreements;
change in fiscal year or accounting practices (provided, that Holdings
may
elect S Corp status).
Events
of Default
Events
of default customary for transactions of this type, including, without
limitation, payment default; breach of representations in any material
respect; breach of financial covenants, reporting covenants and negative
covenants; breach of affirmative covenants and other obligations
with a 30
day grace period; cross-default to the Second Lien Loan and other
material
indebtedness (to be defined in a mutually acceptable manner); bankruptcy;
ERISA; material judgments; change in control; termination of guaranty
or
intercreditor agreement; failure of liens to be perfected; defaults
under
other loan documents.
Participations
and Assignments:
Assignments
to other banks, financial institutions and funds of the First Lien
Facilities will be permitted by any Lender with the written approval
of
the Borrower and the Agent (such approval not to be unreasonably
withheld
or delayed, and such approval not required by Borrower if an Event
of
Default has occurred) in minimum increments of $1,000,000, provided,
however, that (i) no such consent of the Borrower or the Agent shall
be
required to any assignment by a Lender to an affiliate of such Lender
or
to a fund managed by a Lender or an affiliate of a Lender and (ii)
the
minimum increment requirement shall not apply if a Lender is assigning
its
entire commitment. An administrative fee of $3,500 shall be due
and payable by such assigning Lender to the Agent upon the occurrence
of
any assignment. Participations to other banks and financial
institutions will be permitted without restriction. Such
participation will not release the selling Lender from its obligations
with respect to the First Lien Facilities.
Required
Lenders:
Lenders
holding more than 50% of the committed amount of the Revolver, the
committed amount of the LC Facility, the committed amount of the
DDLC
Facility and the outstanding Term Loans.
Indemnification:
The
Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses
of
the Agent and its Affiliates, including the reasonable
fees, charges and disbursements of counsel for the Agent and its
Affiliates, in connection with the syndication of the credit facilities
provided for herein, the preparation and administration of the loan
documents and any amendments, modifications or waivers thereof (whether
or
not the transactions contemplated herein shall be consummated), (ii)
all
reasonable out-of-pocket expenses incurred by the Issuing Bank and
the
Synthetic LC Issuer in connection with the issuance, amendment, renewal
or
extension of any letter of credit or any demand for payment thereunder
and
(iii) all out-of-pocket costs and expenses (including, without limitation,
the reasonable fees, charges and disbursements of outside counsel)
incurred by the Agent, the Issuing Bank, the Synthetic LC Issuer
or any
Lender in connection with the enforcement or protection of its rights
in
connection with the loan documentation or the loans made thereunder
or
letters of credit issued thereunder. The Borrower shall
indemnify the Agent, the Issuing Bank, the Synthetic LC Issuer and
each
Lender against all reasonable costs, losses, liabilities, damages,
and
expenses incurred by them in connection with any investigation,
litigation, or other proceedings asserted against any such party
by a
third party or by Borrower or any of its subsidiaries relating to
the
First Lien Facilities, except for instances of gross negligence or
willful
misconduct on the part of the indemnified party.
Governing
Law:
State
of New York.
Confidential
SunTrust Capital Markets, Inc.
EXHIBIT
A
SELECTED
DEFINITIONS
Applicable
Margin shall mean for Revolver loans and advances under the LC
Facility and the DDLC Facility, the percentage designated in the “Pricing Grid”
attached hereto as Exhibit B based on the total leverage
ratio. The Applicable Margin for Revolver loans and advances under
the LC Facility and the DDLC Facility shall initially be 2.75%; provided,
however, that upon delivery to the Agent of Borrower’s financial
statements for the first full fiscal quarter ending after the Transaction,
the
Applicable Margin for Revolver loans and advances under the LC Facility and
the
DDLC Facility shall be reset to the percentage designated in Exhibit B
based on the Borrower’s ratio of total leverage ratio for the preceding four
fiscal quarter period then ending, measured quarterly, such Applicable Margin
being effective as of the second business day following the date that the Agent
receives the Borrower’s applicable financial statements.
Base
Rate
shall mean the higher of (i) the rate which SunTrust announces from time to
time
as its prime lending rate, as in effect from time to time, or (ii) the Federal
Funds rate, as in effect from time to time, plus one-half of one percent (½%)
per annum (any changes in such rates to be effective as of the date of any
change in such rate). The SunTrust prime lending rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. SunTrust may make commercial loans or other loans at
rates of interest at, above, or below the SunTrust prime lending
rate.
Equipment
Notes shall mean those certain revenue equipment installment notes
with finance companies, with a weighted average interest rate of 6.01% and
5.99%
at March 31, 2007 and December 31, 2006, respectively, due in monthly
installments with final maturities at various dates through August 2013, secured
by related revenue equipment with a net book value of $277.9 million at March31, 2007 and $265.8 million at December 31, 2006, and any similar notes entered
into subsequent to March 31, 2007.
Interest
Period shall mean with respect to LIBOR loans, the period
of 1, 2, 3 or 6 months selected by the Borrower and subject to customary
adjustments in duration.
LIBOR
shall
mean, for any Interest Period, the British Bankers’ Association
Interest Settlement Rate per annum for deposits in U.S. dollars for a period
equal to the Interest Period appearing on the display designated as
Page 3750 on the Dow Jones Markets Service (or such other page on that service
or such other service designated by the British Bankers’ Association for the
display of such Association’s Interest Settlement Rates for Dollar deposits) as
of 11:00 a.m. (London, England time) on the day that is two Business Days
prior to the first day of the Interest Period or if such Page 3750 is
unavailable for any reason at such time, the rate which appears on the
Reuters Screen ISDA Page as of such date and such time; provided, that if
the Administrative Agent determines that the relevant foregoing sources are
unavailable for the relevant Interest Period, LIBOR shall mean the rate of
interest determined by the Administrative Agent to be the average (rounded
upward, if necessary, to the nearest 1/100th of 1%)
of the
rates per annum at which deposits in U.S. dollars are offered to the
Administrative Agent two (2) business days preceding the first day of such
Interest Period by leading banks in the London interbank market as of
10:00 a.m. for delivery on the first day of such Interest Period, for
the number of days comprised therein and in an amount comparable to the amount
of the Administrative Agent’s portion of the relevant LIBOR
borrowing. Such rates may be adjusted for any applicable reserve
requirements.
Swingline
Rate shall mean, for any Interest Period, the rate as offered by
the Agent and accepted by the Borrower. The Borrower is under no
obligation to accept this rate and the Agent is under no obligation to provide
it.
EXHIBIT
B
PRICING
GRID
Level
Total
Leverage Ratio
Applicable
Margin for LIBOR Advances
Applicable
Margin for Base Rate Advances
Applicable
Commitment
Fee
Percentage
I
<
2.00:1.00
1.50%
per annum
0.25%
per annum
0.375%
per annum
II
≥
2.00:1.00 but < 2.50:1.00
1.75%
per annum
0.50%
per annum
0.375%
per annum
III
≥
2.50:1.00 but < 3.00:1.00
2.00%
per annum
0.75%
per annum
0.50%
per annum
IV
≥
3.00:1.00 but < 3.50:1.00
2.25%
per annum
1.00%
per annum
0.50%
per annum
V
≥
3.50:1.00 but < 4.00:1.00
2.50%
per annum
1.25%
per annum
0.50%
per annum
VI
≥
4.00:1.00 but <
4.50:1.00
2.75%
per annum
1.50%
per annum
0.50%
per annum
VII
≥
4.50:1.00
3.00%
per annum
1.75%
per annum
0.50%
per annum
Confidential
SunTrust Capital Markets, Inc.
ANNEX
II
Summary
of Principal Terms and Conditions of
Up
to $60,000,000 Second Lien Loan
CAPITALIZED
TERMS USED HEREIN AND NOT OTHERWISE DEFINED SHALL HAVE THE MEANINGS SET FORTH
IN
THE COMMITMENT LETTER TO WHICH THIS TERM SHEET IS ATTACHED AND OTHERWISE IN
THE
FIRST LIEN TERM SHEET.
Borrower:
Initially,
Mountain Lake Acquisition Company, and upon consummation of the Merger,
the Target.
Guarantors:
All
guarantors that guaranty the First Lien Facilities.
Agent:
A
financial institution acceptable to Borrower and the Arranger (the
“Agent”) will act as administrative agent.
Lead
Arranger:
SunTrust
Capital Markets, Inc., acting through its division, SunTrust Robinson
Humphrey (“Arranger”).
Second
Lien Lenders:
A
syndicate of financial institutions acceptable to the Borrower and
the
Arranger (together, the “Lenders”).
Purpose:
Proceeds
shall be used to finance the Transaction and all transaction costs
and
expenses incurred in connection therewith and in connection with
the
Second Lien Loan.
Maturity
Date:
Second
Lien Loan shall mature and be due and payable on the eighth anniversary
of
the Closing Date. Once repaid, no portion of the Second Lien
Loan may be reborrowed.
Amortization:
No
amortization shall be required with respect to the Second Lien
Loan.
Collateral:
The
Second Lien Loan will be secured by a second priority perfected security
interest in and lien on all “Collateral” securing obligations of the
Borrower under the First Lien Facilities.
The
second priority security interest shall be second only to the first
priority security interest of the lenders or their agent under the
First
Lien Facilities.
Interest
Rate Options:
The
Borrower shall be entitled to select between (i) Base
Rateplus 5.00% or (ii) LIBOR plus 6.25%.
Interest
Payments:
Interest
shall be calculated on the basis of a 360-day year and shall be payable
on
outstanding advances as follows:
(i)
Base
Rate advances– On the last day of each calendar quarter, in
arrears.
(ii)
LIBOR
advances – At the expiration of each Interest Period, and with
respect to loans made for an Interest Period longer than three months,
on
the last day of each three month period prior to the expiration of
the
Interest Period.
Default
Rate:
If
any event of default has occurred and is continuing, the otherwise
then
applicable interest rates shall be increased by 2.00% per annum;
provided
that, for any LIBOR advances, at the end of the applicable Interest
Period, interest shall accrue at the Base Rate plus 7.00% per
annum. Default interest shall be payable on
demand.
Funding:
The
Second Lien Loan shall be funded in a single draw on the Closing
Date in
an amount not to exceed $60,000,000.
Repayment:
The
Second Lien Loan will be due and payable in full on the Maturity
Date.
Optional
Prepayments:
The
Second Lien Loan may be prepaid in whole or in part, at the Borrower’s
option, subject to: (i) payment of the “Prepayment Premium”, if any, set
forth below, (ii) the terms of the intercreditor agreement and (iii)
payment of breakage costs to the extent any LIBOR loan is paid on
a date
other than the date of expiration of the current Interest Period
applicable thereto.
Prepayment
Premiums
Years
From
Closing
Date
0-1
1-2
Thereafter
Premium
2.0%
1.0%
0.0%
Years
From
Closing
Date
0-1
1-2
Thereafter
Premium
2.0%
1.0%
0.0%
Mandatory
Prepayments:
During
the first 24 months after closing, the Borrower shall be required to offer
to
prepay the Second Lien Loan in full after the occurrence of a change of control
at 101% of par.
Mandatory
prepayments consistent with the First Lien Facilities, except that mandatory
prepayments shall not be applied to the Second Lien Loan (i) until all of the
term loans under the First Lien Facilities have been paid in full and (ii)
unless such payments are permitted pursuant to the intercreditor
agreement.
Payments:
All
payments by the Borrower shall be made not later than 12:00 noon (Atlanta,
Georgia time) to the Agent in immediately available funds, free and clear of
any
defenses, set-offs, counterclaims, or withholdings or deductions for
taxes. Any Lender not organized under the laws of the United States
or any state thereof must, prior to the time it becomes a Lender, furnish
Borrower and Agent with forms or certificates as may be appropriate to verify
that such Lender is exempt from U.S. tax withholding requirements.
Pricing/Yield
Protection Provisions:
Customary
provisions with respect to: payment of withholding tax “gross-up” amounts;
suspension of LIBOR pricing options due to illegality or inability to ascertain
funding costs; payment of reserve requirements, increased funding costs and
capital adequacy compensation; and payment of breakage and redeployment costs
in
connection with fundings and repayments of LIBOR advances.
Ranking
and Intercreditor Provisions:
The
Second Lien Loan and guarantees thereofwill be pari
passu in right of payment to the First Lien Facilities, will be secured on
a second priority lien basis and will be subject to the terms of an
intercreditor agreement.
Financial
Covenants:
Total
leverage ratio and fixed charge coverage ratio to be defined in a mutually
acceptable manner and set at required levels that are mutually acceptable and
to
be less restrictive than the levels required under the First Lien Facilities
by
a cushion to be mutually agreed with the lenders holding the First Lien
Facilities.
Conditions
to Closing:
The
effectiveness of the agreement evidencing the Second Lien Loan and the
obligation to make the term loans thereunder shall be subject to usual and
customary conditions precedent for transactions of this type (similar to but
not
more extensive than those set forth in the First Lien Facilities (to the extent
applicable to the Second Lien Loan)).
Representations
and Warranties:
The
Second Lien Loan will contain representations and warranties usual and customary
for transactions of this type, to be mutually agreed upon by the parties, and
in
any event substantially similar to those in the First Lien
Facilities.
Affirmative
Covenants:
The
Second Lien Loan will contain affirmative covenants customary for facilities
and
transactions of this type, to be mutually agreed upon by the parties, and in
any
event similar to those in the First Lien Facilities (with modifications and
setbacks to be less restrictive than the comparable provisions under the First
Lien Facilities by a margin to be agreed).
Negative
Covenants:
The
Second Lien Loan will contain negative covenants customary for facilities and
transactions of this type, to be mutually agreed upon by the parties, and in
any
event similar to those in the First Lien Facilities (with modifications and
setbacks to be less restrictive than the comparable provisions under the First
Lien Facilities by a margin to be agreed).
Events
of Default:
Similar
as those in the First Lien Facilities with certain materiality thresholds and
grace period being less restrictive than comparable provisions under the First
Lien Facilities (by a margin to be agreed).
Participations
and Assignments:
Assignments
to other banks, financial institutions and funds of the Second Lien Loan will
be
permitted by any Second Lien Lender with the written approval of the Borrower
and the Administrative Agent (such approval not to be unreasonably withheld
or
delayed, and such approval not required by the Borrower if an event of default
has occurred) in minimum increments of $1,000,000; provided, however, that
(i)
no such consent of the Borrower or the Administrative Agent shall be required
to
any assignment by a Second Lien Lender to an affiliate of such Lender or to
a
fund managed by a Second Lien Lender or an affiliate of a Second Lien Lender
and
(ii) the minimum increment requirement shall not apply if a Second Lender is
assigning its entire commitment. An administrative fee of $3,500
shall be due and payable by such assigning Second Lien Lender to the
Administrative Agent upon the occurrence of any
assignment. Participations to other banks and financial institutions
will be permitted without restriction. Such participation will not
release the selling Second Lien Lender from its obligations with respect to
the
Second Lien Loan.
Required
Lenders:
Lenders
holding more than 50% of the outstanding Second Lien Loan.
Indemnification:
The
Borrower shall pay (i) all reasonable, out-of-pocket costs and expenses of
the
Lead Arranger and its affiliates, including the reasonable
fees, charges and disbursements of counsel for the Lead Arranger and its
affiliates, in connection with the preparation and administration of the loan
documents and any amendments, modifications or waivers thereof (whether or
not
the transactions contemplated herein shall be consummated), and (ii) all
out-of-pocket costs and expenses (including, without limitation, the reasonable
fees, charges and disbursements of outside counsel and the allocated cost
of inside counsel) incurred by the Lead Arranger or any Second Lien Lender
in
connection with the enforcement or protection of its rights under the loan
documentation or the loans made thereunder. The Borrower shall
indemnify the Lead Arranger and each Second Lien Lender against all costs,
losses, liabilities, damages, and expenses incurred by them in connection with
any investigation, litigation, or other proceedings asserted against any such
party by a third party or by the Borrower or any of its subsidiaries relating
to
the Second Lien Loan, except for instances of gross negligence or willful
misconduct on the part of the indemnified party.
Governing
Law:
State
of
New York
Definitions:
Certain
terms used but not defined herein, such as “Base Rate”, “LIBOR”, “EBITDA” and
“Total Debt” shall be defined in a mutually satisfactory manner consistent with
the definitions under the First Lien Term Sheet.
Dates Referenced Herein and Documents Incorporated by Reference
