Exhibit 10.23
OMNIBUS AMENDMENT AGREEMENT
THIS OMNIBUS AMENDMENT AGREEMENT, LIMITED CONSENT AND WAIVER(this “Amendment”) is made and entered into as of November 5, 2010, and shall be effective as of November 5, 2010 (the “Effective Date”) by and betweenSWISHER INTERNATIONAL, INC., a Nevada corporation (“Swisher”),HB SERVICE, LLC, a Delaware limited liability company (“HB Service”), andWELLS FARGO BANK, NATIONAL ASSOCIATION(as successor by merger to Wachovia Bank, National Association)(the “Bank”) and the other Persons party hereto.
BACKGROUND STATEMENT
A. Swisher and the Bank are parties to a Credit Agreement, dated as of November 14, 2005, as amended by that certain First Amendment to Credit Agreement dated as of April 26, 2006, by that certain Second Amendment and Waiver to Credit Agreement dated as of September 8, 2006, by that certain Third Amendment and Waiver to Credit Agreement dated as of March 21, 2008, by that certain Fourth Amendment and Waiver to Credit Agreement dated as of June 25, 2008, by that certain Fifth Amendment and Waiver to Credit Agreement dated as of June 30, 2009, by that certain Sixth Amendment to Credit Agreement, dated as of November 18, 2009, by that certain Omnibus Amendment Agreement, Limited Consent and Waiver, dated as of August 13, 2010, and by that certain Omnibus Amendment Agreement, Limited Consent and Waiver, dated as of October 28, 2010 (the “Swisher Credit Agreement”), pursuant to which the Bank has made available to Swisher a revolving credit facility in the aggregate principal amount of $10,000,000. As of the date hereof, the current outstanding principal amount of the loans outstanding under the Swisher Credit Agreement is $10,000,000, and pursuant to the terms of the Swisher Credit Agreement, the current Applicable Margin (as defined in the Swisher Credit Agreement) is 2.85%. The obligations of Swisher under the Swisher Credit Agreement have been guaranteed by (i) the Subsidiary Guarantors (as defined in the Swisher Credit Agreement) pursuant to the Guaranty (as defined in the Swisher Credit Agreement), (ii) HB Service and its subsidiaries pursuant to the HB Service Guaranty (as defined in the Swisher Credit Agreement) and (iii) H. Wayne Huizenga (“Huizenga”) pursuant to the guaranty agreement made by Huizenga in favor of the Bank, dated as of June 25, 2008 (as amended from time to time, the “Huizenga Swisher Guaranty”), subject to the terms and conditions therein. The obligations of Swisher under the Swisher Credit Agreement have been secured by a lien on the assets of Swisher and the Subsidiary Guarantors and HB Service and it subsidiaries pursuant to the terms of the Security Agreement and the HB Service Security Agreement (each as defined in the Swisher Credit Agreement), respectively.
B. HB Service and the Bank are parties to a Credit Agreement, dated as of June 25, 2008, as amended by that certain First Amendment and Waiver to Credit Agreement dated as of June 30, 2009, by that certain Second Amendment to Credit Agreement dated as of November 18, 2009, by that certain Omnibus Amendment Agreement, Limited Consent and Waiver, dated as of August 13, 2010, and by that certain Omnibus Amendment Agreement, Limited Consent and Waiver, dated as of October 28, 2010 (the “HB Service Credit Agreement”), pursuant to which the Bank has made available to HB Service a revolving credit facility in the aggregate principal amount of $15,000,000. As of the date hereof, the current outstanding principal amount of the loans outstanding under the HB Service Credit Agreement is $15,000,000, and pursuant to the terms of the HB Service Credit Agreement, the current Applicable Margin (as defined in the HB Service Credit Agreement) as of the date hereof is 1.50%. The obligations of HB Service under the HB Service Credit Agreement have been guaranteed by Huizenga pursuant to the guaranty agreement made by Huizenga in favor of the Bank, dated as of June 25, 2008 (as amended from time to time, the “Huizenga HB Service Guaranty”).
C. Swisher and HB Service have requested certain amendments to the Swisher Credit Agreement and the HB Service Credit Agreement, and the Bank has agreed to make such amendments on the terms and subject to the conditions set forth herein.
STATEMENT OF AGREEMENT
NOW, THEREFORE, in consideration of the foregoing premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
AMENDMENTS TO SWISHER CREDIT AGREEMENT
AMENDMENTS TO SWISHER CREDIT AGREEMENT
1.1Amendment to Article VI of the Swisher Credit Agreement (Financial Covenants). Article VI of the Swisher Credit Agreement is hereby deleted in its entirety and replaced with the following:
ARTICLE VI
FINANCIAL COVENANTS
6.1Unencumbered Liquidity. The Borrower shall maintain, at all times, unencumbered cash and Cash Equivalents in excess of $15,000,000.
1.2Amendments to Section 7.2 (Defined Terms) of the Swisher Credit Agreement. Section 7.2 of the Swisher Credit Agreement is hereby amended by deleting clause (v) thereof and replacing it with the following:
(v) Indebtedness of the Borrower and its Subsidiaries consisting of seller notes on franchise and other acquisitions within the same line of business of the Borrower and its Subsidiaries, and including, without duplication, any standby letter of credit obligations of the Borrower and its Subsidiaries in respect of letters of credit issued on behalf of the Borrower and its Subsidiaries to provide support for such seller notes,provided that all such Indebtedness existing at any time shall not exceed $25,000,000; andprovidedfurther that Borrower shall deliver to the Bank aSchedule 7.2(v) with the financial statements required to be delivered bySections 5.1(a) and5.1(b) hereof, identifying all such Indebtedness existing as of such date;
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1.3Amendments to Section 7.3 (Liens) of the Swisher Credit Agreement. Section 7.3 of the Swisher Credit Agreement is hereby amended by (a) deleting the “and” at the end of clause (viii) thereof, (b) re-numbering clause (ix) thereof as the new clause (x) and (c) inserting a new clause (ix) as follows:
(ix) Liens in favor of the Bank securing obligations of the Borrower and its Subsidiaries under any letter of credit issued by the Bank outside of this Agreement; and
1.4Amendments to Section 7.5 (Restricted Investments) of the Swisher Credit Agreement. Section 7.5 of the Swisher Credit Agreement is hereby amended by deleting clause (xi) thereof and replacing it with the foregoing:
(xi) Investments consisting of the acquisition of capital stock or substantially all the assets of Franchisees, or other Persons in the same line of business as the Borrower and its Subsidiaries, in the United States, Canada or Australia,provided that (i) with respect to such acquisitions of all Persons that are not Franchisees, the aggregate consideration paid with respect to all such acquisitions from November 5, 2010 through the Revolving Credit Termination Date (including the amount of cash paid, the value of all Capital Stock of the Borrower or its Affiliates issued, the amount of all Indebtedness incurred, assumed or acquired, the maximum amount of contingent purchase price obligations and all other amounts paid, or the fair market value of all property paid, in connection with such acquisition) shall not exceed $25,000,000, (ii) no Default or Event of Default has occurred and is continuing as of the date of such acquisition, both immediately before and after giving effect thereto (and the incurrence of any Indebtedness in connection therewith), and (iii) in the case of an acquisition of capital stock, the Borrower, or HB Service, as the case may be, complies withSection 5.10;
ARTICLE II
AMENDMENTS TO HB SERVICE CREDIT AGREEMENT
2.1Amendment to Article VI of the HB Service Credit Agreement (Financial Covenants). Article VI of the HB Service Credit Agreement is hereby deleted in its entirety and replaced with the following:
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ARTICLE VI
FINANCIAL COVENANTS
6.1Unencumbered Liquidity. Swisher shall maintain, at all times, unencumbered cash and Cash Equivalents in excess of $15,000,000.
2.2Amendments to Section 7.2 (Defined Terms) of the HB Service Credit Agreement. Section 7.2 of the HB Service Credit Agreement is hereby amended by deleting clause (iv) thereof and replacing it with the following:
(iv) Indebtedness consisting of seller notes on franchise and other acquisitions within the same line of business of Swisher and its Subsidiaries, and including, without duplication, any standby letter of credit obligations in respect of letters of credit issued on behalf of Swisher and its Subsidiaries to provide support for such seller notes,provided that all such Indebtedness of Swisher and its Subsidiaries existing at any time shall not exceed $25,000,000; andprovidedfurther that Borrower shall deliver to the Bank aSchedule 7.2(v) with the financial statements required to be delivered bySections 5.1(a) and5.1(b) hereof, identifying all such Indebtedness existing as of such date;
2.3Amendments to Section 7.3 (Liens) of the HB Service Credit Agreement. Section 7.3 of the HB Service Credit Agreement is hereby amended by (a) deleting the period at the end of clause (viii) thereof and replacing it with “; and”, and (b) inserting a new clause (ix) as follows:
(ix) Liens in favor of the Bank securing obligations of the Borrower and its Subsidiaries under any letter of credit issued by the Bank.
2.4Amendments to Section 7.5 (Restricted Investments) of the HB Service Credit Agreement. Section 7.5 of the HB Service Credit Agreement is hereby amended by (a) deleting the “and” at the end of clause (vi) thereof, (b) re-numbering clause (vii) thereof as the new clause (viii) and (c) inserting a new clause (vi) as follows:
(xi) Investments consisting of the acquisition of capital stock or substantially all the assets of franchisees of Swisher or the Borrower, or other Persons in the same line of business as Swisher and its Subsidiaries, in the United States, Canada or Australia,provided that (i) with respect to such acquisitions of all Persons that are not franchisees of the Borrower or Swisher, the aggregate consideration paid with respect to all such acquisitions from November 5, 2010 through the Revolving Credit Termination Date (including the amount of cash paid, the value of all Capital Stock of the Borrower or its Affiliates issued, the amount of all Indebtedness incurred, assumed or acquired, the maximum amount of contingent purchase price obligations and all other amounts paid, or the fair market value of all property paid, in connection with such acquisition) shall not exceed $25,000,000, and (ii) no Default or Event of Default has occurred and is continuing as of the date of such acquisition, both immediately before and after giving effect thereto (and the incurrence of any Indebtedness in connection therewith); and
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ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each of Swisher and HB Service hereby represents and warrants that:
3.1Representations in Credit Agreement. The representations and warranties of Swisher set forth in the Swisher Credit Agreement and of HB Service set forth in the HB Service Credit Agreement are true and correct in all material respects as of the date hereof, except to the extent such representations and warranties relate solely to or are specifically expressed as of a particular date or period.
3.2Compliance with Credit Agreement. After giving effect to this Amendment, each of HB Service and Swisher is in compliance with all covenants, terms and provisions set forth in the HB Service Credit Agreement and the Swisher Credit Agreement, respectively, to be observed or performed by it.
3.3Due Authorization. This Amendment has been duly authorized, validly executed and delivered by one or more authorized officers of Swisher, HB Service and each of their respective subsidiaries and each of this Amendment, the HB Service Credit Agreement and the Swisher Credit Agreement, constitutes the legal, valid and binding obligation of HB Service and Swisher, to the extent each is a party thereto, enforceable against it in accordance with its terms and each of the other Credit Documents (as defined in each of the HB Service Credit Agreement and the Swisher Credit Agreement) constitutes the legal, valid and binding obligation of Swisher, HB Service, and each of their respective Subsidiaries, to the extent party thereto, enforceable against each such party in accordance with its terms.
3.4No Event of Default. No Default or Event of Default under the HB Service Credit Agreement or the Swisher Credit Agreement has occurred or is continuing (after giving effect to this Amendment).
3.5Continuing Security Interests. All obligations of Swisher, the Subsidiary Guarantors and HB Service and its Subsidiaries under the Swisher Credit Agreement and the other Credit Documents (as defined in the Swisher Credit Agreement) continue to be or will be secured by the Bank’s security interests in all of the collateral granted under the Swisher Credit Agreement and the Security Documents (as defined in the Swisher Credit Agreement), and nothing herein will affect the validity, enforceability, perfection or priority of such security interests.
3.6No Defenses. Neither Swisher nor HB Service has any right of setoff, counterclaim, or defense to payment of its respective liabilities or obligations under the Swisher Credit Agreement or HB Service Credit Agreement, respectively. The Bank hereby expressly reserves all rights and remedies it may have against Swisher, HB Service and all other Persons (as defined in both the Swisher Credit Agreement and the HB Service Credit Agreement) who may be or may hereafter become secondarily liable for the repayment of the obligations thereunder.
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ARTICLE IV
CONDITIONS TO EFFECTIVENESS
This Amendment shall become effective as of the Effective Date upon the satisfaction of each of the following conditions precedent:
(a) The Bank shall have received a duly executed counterpart of this Amendment from each of Swisher, the Subsidiary Guarantors (as defined in the Swisher Credit Agreement), HB Service and each of its subsidiaries and Huizenga (collectively, the “Amendment Parties”);
(b) Swisher and HB Service shall have paid all reasonable out-of-pocket costs and expenses of the Bank in connection with the preparation, negotiation, execution and delivery of this Amendment (including, without limitation, the reasonable fees and out-of-pocket expenses of counsel for the Bank with respect thereto); and
(c) The Bank shall have received such other documents, certificates, opinions, instruments and other evidence as the Bank may reasonably request, all in a form and substance satisfactory to the Bank and its counsel.
ARTICLE V
ACKNOWLEDGEMENTS; REPRESENTATIONS
5.1Amendment Parties. Each of the Amendment Parties hereby approves and consents to the transactions contemplated by this Amendment and the Proposed Transaction, confirms and agrees that, after giving effect to this Amendment, each of the Swisher Credit Agreement, the HB Service Credit Agreement and the other Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement) to which it is a party, remains in full force and effect and enforceable against it in accordance with its terms and shall not be discharged, diminished, limited or otherwise affected in any respect, and represents and warrants to the Bank that it has no knowledge of any claims, counterclaims, offsets, or defenses to or with respect to its obligations under the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement), or if it has any such claims, counterclaims, offsets, or defenses to such Credit Documents or any transaction related to such Credit Documents, the same are hereby waived, relinquished, and released in consideration of the execution of this Amendment. Furthermore, each of Amendment Parties acknowledges and agrees that its obligations under the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement) shall not be discharged, limited or otherwise affected by reason of the Bank’s actions with respect to any other Amendment Party, or with respect to, or in adding or releasing, any other guarantor of the obligations of Swisher
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under the Swisher Credit Agreement or HB Service under the HB Service Credit Agreement, in each case without the necessity of giving notice to or obtaining the consent of the Guarantor. Without limiting the generality of the foregoing, Huizenga hereby specifically reaffirms all of his obligations and covenants under each of the Swisher Huizenga Guaranty and the HB Service Huizenga Guaranty and agrees that none of such obligations and covenants shall be affected by the execution and delivery of this Amendment and the consummation of the Proposed Transaction. The acknowledgements and confirmations by each of the Amendment Parties herein is made and delivered to induce the Bank to enter into this Amendment and continue to extend credit to Swisher, HB Service and the other Amendment Parties, and each of the Amendment Parties acknowledges that the Bank would not enter into this Amendment and continue to extend such credit in the absence of the acknowledgement and confirmation contained herein.
5.2Swisher Guarantors. Each of the Subsidiary Guarantors, HB Service and each of its Subsidiaries and H. Wayne Huizenga (collectively, the “Swisher Guarantors”) further represents that it has knowledge of Swisher’s, HB Service’s and the other Amendment Parties’ financial condition and affairs and that it has adequate means to obtain from Swisher, HB Service and the other Amendment Parties on an ongoing basis information relating thereto and to Swisher’s, HB Service’s and the other Amendment Parties’ ability to pay and perform their respective obligations under the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement), and agrees to assume the responsibility for keeping, and to keep, so informed for so long as the guaranty of each such Swisher Guarantor remains in effect. Each Swisher Guarantor agrees that the Bank shall have no obligation to investigate the financial condition or affairs of Swisher, HB Service or any of the Amendment Parties for the benefit of any Swisher Guarantor nor to advise any Swisher Guarantor of any fact respecting, or any change in, the financial condition or affairs of Swisher, HB Service or any of the Amendment Parties that might become known to the Bank at any time, whether or not the Bank knows or believes or has reason to know or believe that any such fact or change is unknown to any Swisher Guarantor, or might (or does) materially increase the risk of any Swisher Guarantor as guarantor, or might (or would) affect the willingness of any Swisher Guarantor to continue as a guarantor of the obligations of Swisher or HB Service, as the case may be, under the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement). These representations and agreements by each of the Swisher Guarantors are made and delivered to induce the Bank to enter into this Amendment and continue to extend credit to Swisher, HB Service and the other Amendment Parties under the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement), and each of the Swisher Guarantors acknowledges that the Bank would not enter into this Amendment and continue to extend such credit in the absence of the representations and agreements contained herein.
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ARTICLE VI
GENERAL
6.1Full Force and Effect. This Amendment is limited as specified and, except as specifically set forth herein, shall not constitute a modification, acceptance or waiver of any other provision of any of the Credit Documents (as defined in each of the Swisher Credit Agreement and the HB Service Credit Agreement). Each of the Swisher Credit Agreement and the HB Service Credit Agreement, as amended by the amendments set forth herein, shall continue to be in full force and effect in accordance with the provisions thereof after giving effect to such amendments. Any reference to the Swisher Credit Agreement in any of the Security Documents or other Credit Documents (each as defined in the Swisher Credit Agreement) shall mean the Swisher Credit Agreement as amended by the Amendment and as may be further amended, modified, restated, or supplemented from time to time. Any reference to the HB Service Credit Agreement in any of the Credit Documents (as defined in the HB Service Credit Agreement) shall mean the HB Service Credit Agreement as amended by the Amendment and as may be further amended, modified, restated, or supplemented from time to time. This Amendment shall be a Credit Document under (and as defined in) each of the Swisher Credit Agreement and the HB Service Credit Agreement.
6.2Applicable Law. This Amendment shall be governed by and construed in accordance with the internal laws and judicial decisions of the State of North Carolina.
6.3Counterparts; Execution. This Amendment may be executed in two or more counterparts, each of which shall constitute an original, but all of which when taken together shall constitute but one instrument. The exchange of copies of this Amendment and of signature pages by facsimile transmission shall constitute effective execution and delivery of this Amendment and such copies may be used in lieu of the original Amendment for all purposes. Delivery of an executed counterpart of a signature page of this Agreement by facsimile transmission shall be effective as delivery of a manually executed counterpart of this Amendment.
6.4Expenses. Each of Swisher and HB Service, jointly and severally, agrees to pay on demand all reasonable out-of-pocket expenses incurred by the Bank in connection with the preparation, execution and delivery of this Amendment, including, without limitation, all reasonable attorneys’ fees.
6.5Further Assurances. Each of the Amendment Parties shall execute and deliver to the Bank such documents, certificates, and opinions as the Bank may reasonably request to effect the amendments contemplated by this Amendment and, with respect to the Swisher Credit Agreement, to continue the existence, perfection and first priority of the Bank’s security interests in the collateral securing the obligations under the Credit Documents (as defined in the Swisher Credit Agreement).
6.6Headings. The headings of this Amendment are for the purposes of reference only and shall not affect the construction of this Amendment.
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IN WITNESS WHEREOF, the parties hereto have caused this Omnibus Amendment Agreement, Limited Consent and Waiver to be executed and delivered by their duly authorized officers all as of the date first above written.
SWISHER INTERNATIONAL, INC. | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer | |||
HB SERVICE, LLC | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer | |||
[Signature Pages Continued on the Following Page]
WELLS FARGO BANK, NATIONAL ASSOCIATION | ||||
By: | /s/ Cavan J. Harris | |||
Cavan J. Harris | ||||
Senior Vice President | ||||
[Signature Pages Continued on the Following Page]
GUARANTORS: SWISHER HYGIENE FRANCHISE CORP. SWISHER PEST CONTROL CORP. SWISHER MAIDS, INC. | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer | |||
SHFC BUFFALO, LLC SHFC MINNEAPOLIS, LLC SHFC OKLAHOMA, LLC SHFC OPERATIONS, LLC SHFC ARIZONA, LLC SHFC TEXAS, LLC | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer | |||
[Signature Pages Continued on the Following Page]
SERVICE BALTIMORE, LLC SERVICE BEVERLY HILLS, LLC SERVICE BIRMINGHAM, LLC SERVICE CALIFORNIA, LLC SERVICE CAROLINA, LLC SERVICE CENTRAL FL, LLC SERVICE CHARLOTTE LLC SERVICE CHATTANOOGA, LLC SERVICE CINCINNATI, LLC SERVICE COLUMBIA, LLC SERVICE COLUMBUS, LLC SERVICE DC, LLC SERVICE DENVER, LLC SERVICE FCS, LLC SERVICE FLORIDA, LLC SERVICE FRESNO, LLC SERVICE GAINESVILLE, LLC SERVICE GOLD COAST, LLC SERVICE GREENSBORO, LLC SERVICE GREENVILLE, LLC SERVICE GULF COAST, LLC SERVICE HOUSTON, LLC SERVICE INDIANAPOLIS, LLC SERVICE LAS VEGAS, LLC SERVICE LOUISVILLE, LLC SERVICE MEMPHIS, LLC SERVICE MIDATLANTIC, LLC SERVICE MIDWEST, LLC SERVICE NASHVILLE, LLC SERVICE NEW ORLEANS, LLC SERVICE NEW YORK, LLC | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer |
SERVICE NORTH, LLC SERVICE NORTH-CENTRAL, LLC SERVICE OKLAHOMA CITY, LLC SERVICE PHILADELPHIA, LLC SERVICE PHOENIX, LLC SERVICE RALEIGH, LLC SERVICE SALT LAKE CITY, LLC SERVICE SEATTLE, LLC SERVICE SOUTH, LLC SERVICE ST. LOUIS, LLC SERVICE TALLAHASSEE, LLC SERVICE TAMPA, LLC SERVICE TRI-CITIES, LLC SERVICE VIRGINIA, LLC SERVICE WEST COAST, LLC | ||||
By: | /s/ Hugh H. Cooper | |||
Name: | Hugh H. Cooper | |||
Title: | Chief Financial Officer | |||
[Signature Pages Continued on the Following Page]
/s/ H. Wayne Huizenga | ||||
H. WAYNE HUIZENGA | ||||