THIRD AMENDMENT
THIS THIRD AMENDMENT (this "Amendment") dated as of December 4, 2000
amends the Second Amended and Restated Credit Agreement dated as of November 26,
1999 (as previously amended, the "Credit Agreement") among CERI, L.P., a
Delaware limited partnership (the "Company"), CAPITAL ENVIRONMENTAL RESOURCE
INC./RESSOURCES ENVIRONNEMENTALES CAPITAL INC., an Ontario corporation
("Parent"), various financial institutions, CANADIAN IMPERIAL BANK OF COMMERCE,
as Syndication Agent, BANK OF AMERICA, N.A., as U.S. Agent, and BANK OF AMERICA
CANADA, as Canadian Agent. Capitalized terms used but not defined herein shall
have the meanings given to them in the Credit Agreement.
WHEREAS, Parent, the Company, the Lenders and the Agents have entered
into the Credit Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1. AMENDMENTS. Effective on (and subject to the occurrence of)
the Amendment Effective Date (as defined below), the Credit Agreement shall be
amended as set forth below:
1.1 ADDITION OF NEW DEFINITIONS. The following new definitions are
added to Section 1. 1 in appropriate alphabetical sequence:
ADJUSTED WORKING CAPITAL means at any time the excess of:
(a)(i) the consolidated current assets of Parent and its
Subsidiaries less (ii) the amount of cash and cash equivalents included
in such consolidated current assets;
OVER
(b)(i) the consolidated current liabilities of Parent and its
Subsidiaries LESS (ii) to the extent included in such consolidated
current liabilities, all Short-Term Debt of Parent and its Subsidiaries
PLUS any portion of Long-Term Debt of Parent and its Subsidiaries
which is payable within one year from the date of determination.
AGGREGATE BORROWING COMMITMENT means the remainder of (a) the sum of
the combined Canadian Commitments and the combined U.S. Commitments MINUS (b)
U.S.$4,000,000.
AGGREGATE BORROWINGS means at any time the aggregate principal Dollar
Equivalent amount of all outstanding Loans hereunder plus the Dollar Equivalent
face amount of all outstanding Bankers' Acceptances accepted hereunder plus the
Dollar Equivalent face amount of all outstanding BA Equivalent Notes hereunder.
ASSET SALE means the sale or other disposition by Parent or any
Subsidiary to any Person (other than Parent or any Subsidiary) of any asset or
rights of Parent or such Subsidiary (including any sale or other disposition of
stock of any Subsidiary, whether by merger, consolidation or otherwise, but
EXCLUDING (i) sales of inventory in the ordinary course of business and (ii)
transactions governed by SUBSECTION 8.11 (a) or (c)).
CAPITAL EXPENDITURES means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of Parent and its Subsidiaries, but excluding expenditures made in
connection with the replacement or restoration of assets to the extent financed
(i) from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
EXCESS CASH FLOW means, for any period, the remainder of
(a) Consolidated Net Income for such period before deducting cash
Interest Expense, taxes, depreciation, amortization,
LESS
(b) the total (without duplication) of
(i) regularly scheduled principal payments (including the
portion of all payments under capital leases which is attributable to
principal) arising with respect to any Long-Term Debt (including the
Term Loan Agreement) of Parent and its Subsidiaries made during such
period (other than Debt hereunder and the payment of principal under
the Term Loan Agreement on December 4, 2000),
PLUS
(ii) the amount of any reduction of the Commitments made
pursuant to SECTION 2.8.1(a) (other than the reduction on December 4,
2000) or 2.8.2 and the amount of all prepayments made pursuant to
Section 2.2.4 of the Term Loan Agreement during such period,
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PLUS
(iii) all income taxes paid by Parent and its Subsidiaries
during such period
PLUS
(iv) cash Interest Expense of Parent and its Subsidiaries
during such period
PLUS
(v) all Capital Expenditures made in cash during such
period,
PLUS
(vi) any increase in Adjusted Working Capital during such
period,
LESS
(vii) any decrease in Adjusted Working Capital during such
period.
LONG-TERM DEBT means all Funded Debt which matures more than one year
after the date of determination or which is renewable or extendable at the
option of the obligor to a date which is more than one year after the date of
determination.
NET CASH PROCEEDS means:
(a) with respect to any Asset Sale, the aggregate cash
proceeds (including cash proceeds received by way of deferred payment
of principal pursuant to a note, installment receivable or otherwise,
but only as and when received) received by Parent or any Subsidiary
pursuant to such Asset Sale net of (i) the direct costs relating to
such Asset Sale (including sales commissions and legal, accounting and
investment banking fees), (ii) taxes paid or reasonably estimated by
Parent to be payable as a result thereof (after taking into account any
available tax credits or deductions and any tax sharing arrangements),
(iii) amounts required to be applied to the repayment of any Debt
secured by a Lien on the asset subject to such Asset Sale (other than
Debt hereunder) and (iv) any cash proceeds which Parent certifies to
the U.S. Agent are to be used, and which are used, within 30 days after
such Asset Sale to purchase replacement assets which perform the same
or a similar function;
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(b) with respect to any issuance of equity securities or
Subordinated Debt described in clause (iii) of the definition thereof,
the aggregate cash proceeds received by Parent or any Subsidiary
pursuant to such issuance, net of the direct costs relating to such
issuance (including sales and underwriter's discounts and commissions,
upfront fees and legal, accounting and investment banking fees); and
(c) with respect to the termination of any Hedging Agreement,
the aggregate cash proceeds received by Parent or any Subsidiary
pursuant to such termination, net of any direct costs relating to such
termination.
SENIOR DEBT TO EBITDA RATIO means as of the last day of any
Fiscal Quarter, the ratio of: (i) all Funded Debt of Parent and its
Subsidiaries as of such day to (ii) EBITDA for the Computation Period
ending on such day (other than Debt of the type described in clause
(iii) of the definition of Subordinated Debt).
SHORT-TERM DEBT means all Funded Debt other than Long-Term
Debt.
1.2 AMENDMENT OF CERTAIN DEFINITIONS. The definitions of
"Canadian L/C Commitment", "Commitment Reduction Date", "EBITDA", "Interest
Coverage Ratio", "Termination Date" and "U.S. L/C Commitment" set forth in
Section 1.1 are amended in their entirety to read as follows, respectively:
Canadian L/C Commitment means the commitment of the Canadian
Issuing Lender to Issue, and the commitment of the Canadian Lenders
severally to participate in, Letters of Credit from time to time Issued
for the account of Parent under Article IV, in an aggregate Effective
Amount not to exceed on any date an amount equal to the lesser of (a)
the remainder of the Dollar Equivalent amount of U.S.$6,000,000 minus
the Effective Amount of all outstanding Letters of Credit issued for
the account of the Company and (b) the amount of the combined Canadian
Commitments; IT BEING UNDERSTOOD that the Canadian L/C Commitment is a
part of the combined Canadian Commitments, rather than a separate,
independent commitment.
COMMITMENT REDUCTION DATE- - see SECTION 2.8.1(a).
EBITDA means, with respect to any Computation period,
Consolidated Net Income for such period before deducting Interest
Expense, taxes, depreciation, amortization and excluding any non-cash
charges resulting from any write-off of unamortized finance fees during
such Computation Period, all calculated based on the assumption that
each Acquisition made during such Computation Period had been made on
the first day of such Computation Period, but excluding non-recurring
private company expenses which are discontinued upon any such
Acquisition, all as certified by Parent and agreed to by the Required
Lenders.
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INTEREST COVERAGE RATIO means the ratio for any Computation
Period of (a) Consolidated Net Income before deducting Interest
Expense, taxes, depreciation and amortization for such period, but
excluding (i) pooling charges taken during such period and (ii) any
non-cash charges resulting from any write-off of unamortized finance
fees during such period, TO (b) Interest Expense for such period.
TERMINATION DATE means November 1, 2002.
U.S. L/C COMMITMENT means the commitment of the U.S. Issuing
Lender to Issue, and the commitment of the U.S. Lenders severally to
participate in, Letters of Credit from time to time Issued for the
account of the Company under ARTICLE IV, in an aggregate Effective
Amount not to exceed on any date the lesser of (a) the remainder of
U.S.$6,000,000 minus the Effective Amount of all Letters of Credit
issued for the account of Parent and (b) the amount of the combined
U.S. Commitments; IT BEING UNDERSTOOD that the U.S. L/C Commitment is a
part of the combined U.S. Commitments, rather than a separate,
independent commitment.
1.3 AMENDMENT TO SECTION 2.1.1. The first proviso to the first
sentence of Section 2.1.1 is amended in its entirety to read as follows:
PROVIDED that, after giving effect to any Borrowing of U.S. Dollar
Loans by the Company, (i) the Total Company Outstandings shall not
exceed the amount of the combined U.S. Commitments and (ii) the
Aggregate Borrowings shall not exceed the Aggregate Borrowing
Commitment;
1.4 AMENDMENT TO SECTION 2.1.2. The first proviso to the first
sentence of Section 2.1.2 is amended in its entirety to read as follows:
PROVIDED that, after giving effect to any Borrowing of U.S. Dollar
Loans by Parent, (i) the Total Parent Outstandings shall not exceed the
amount of the combined Canadian Commitments and (ii) the Aggregate
Borrowings shall not exceed the Aggregate Borrowing Commitment;
1.5 AMENDMENT TO SECTION 2.2.1. The first proviso in Section
2.2.1 is amended in its entirety to read as follows:
PROVIDED that, after giving effect to any Canadian Dollar Borrowing,
(i) the Total Parent Outstandings shall not exceed the combined
Canadian Commitments and (ii) the Aggregate Borrowings shall not exceed
the Aggregate Borrowing Commitment;
1.6 AMENDMENT TO SECTION 2.3.1. The first proviso in Section
2.3.1 is amended in its entirety to read as follows:
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PROVIDED that, after giving effect to any BA Borrowing, (i) the Total
Parent Outstandings shall not exceed the combined Canadian Commitments
and (ii) the Aggregate Borrowings shall not exceed the Aggregate
Borrowing Commitment;
1.7 AMENDMENT TO SECTION 2.7.1. Section 2.7.1 is amended by
deleting the reference to "SUBSECTION 2.8.1(a) or 2.8.2(a), respectively"
therein and substituting "Section 2.8.1 therefor.
1.8 AMENDMENT TO SECTION 2.7.2. The first two sentences of Section
2.7.2 are amended in their entirety to read as follows:
If, on any Computation Date: (a) the Total Parent Outstandings exceed
the combined Canadian Commitments, then Parent shall immediately prepay
Loans in an amount sufficient to eliminate such excess; or (b) the
Aggregate Borrowings exceed the Aggregate Borrowing Commitment, then
one or both Borrowers shall immediately prepay Loans in an amount
sufficient to eliminate such excess. Any such prepayment shall be made
in accordance with the provisions of Section 2.1.5 or 2.2.5, as
applicable, except that such prepayment shall be required and not
optional.
1.9 AMENDMENT OF SECTIONS 2.8.1 and 2.8.2. Sections 2.8.1 and
2.8.2 are amended in their entirety to read as follows:
2.8.1 MANDATORY REDUCTION OF COMMITMENTS. (a) The Commitments shall be
reduced on each of the following dates (each a "COMMITMENT REDUCTION
DATE"), pro rata (except for a non-pro rata reduction of the
Commitments, on December 4, 2000) between the combined U.S. Commitments
and the combined Canadian Commitments as in effect after the first
Commitment Reduction Date, by an amount equal to the sum of (i) the
amount (if any) by which the principal amount of the loans under the
Term Loan Agreement would have been required to be repaid on such date
absent the provisions of Section 2.2.5(c) of the Term Loan Agreement
PLUS (ii) the amount set forth below opposite such date:
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Date Amount
---- ------
December 4, 2000 U.S.$6,204,450
December 31, 2000 765,000
March 31, 2001 765,000
June 30, 2001 765,000
September 30, 2001 765,000
December 31, 2001 765,000
March 31, 2002 956,300
June 30, 2002 956,300
September 30, 2002 956,300
(b) In addition, the Commitments shall be reduced, pro
rata between the combined U.S. Commitments and the combined Canadian
Commitments as in effect after the first Commitment Reduction Date, (i)
within 90 days after the end of each Fiscal Year, by an amount equal to
the sum of 78,795,550/103,000,000ths of Excess Cash Flow for such
Fiscal Year; (ii) concurrently with the receipt by Parent or any of its
Subsidiaries of any Net Cash Proceeds from any Asset Sale, any issuance
of equity securities or of Debt described in CLAUSE (iii) of the
definition of Subordinated Debt or any termination of any Hedging
Agreement, by an amount equal to 78,795,550/103,000,000ths of such Net
Cash Proceeds; and (iii) at the time of any reduction pursuant to
CLAUSE (i) or (ii) above, by the amount (if any) by which the principal
amount of the loans under the Term Loan Agreement would have been
required to be repaid on such date pursuant to Section 2.2.5(b) of the
Term Loan Agreement absent the provisions of Section 2.2.5(c) of the
Term Loan Agreement. Notwithstanding the foregoing, no reduction of the
Commitments shall be required to be made pursuant to CLAUSE (ii) or
(iii) above on account of the receipt of any Net Cash Proceeds unless
and until the aggregate amount of the all Net Cash Proceeds which have
been received since December 4, 2000 which are required to be applied
to reduce the Commitments and/or to prepay loans under the Term Loan
Agreement, less the aggregate amount of all Net Cash Proceeds
previously applied to reduce the Commitments pursuant to CLAUSE (ii) or
(iii) above PLUS all Net Cash Proceeds previously applied to prepay
loans under the Term Loan Agreement, equals or exceeds U.S.$100,000.
2.8.2 VOLUNTARY REDUCTION OF COMMITMENTS.
(a) The Company may from time to time on at
least three Business Days' prior written notice received by
the U.S. Agent (which shall promptly advise each U.S. Lender
thereof) permanently reduce the amount of the combined U.S.
Commitments to an amount not less than the Total Company
Outstandings. Any such reduction shall be in an amount not
less than U.S.$30,000, PROVIDED that concurrently with such
reduction
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the Company shall prepay the loans under the Term Loan
Agreement by an amount equal to 24,204,450/19,263,700ths of
the amount of such reduction and Parent shall reduce the
Canadian Commitments by an amount equal to
59,531,850/19,263,700ths of the amount of such reduction. The
Company may at any time on like notice terminate the U.S.
Commitments upon payment in full by the Company of all Loans
to the Company and all other obligations of the Company
hereunder and Cash Collateralization in full, pursuant to
documentation in form and substance reasonably satisfactory to
the U.S. Lenders, of all obligations (contingent or otherwise)
arising with respect to the Letters of Credit issued for the
account of the Company.
(b) Parent may from time to time on at least
three Business Days' prior written notice received by the
Canadian Agent (which shall promptly advise each Canadian
Lender thereof) permanently reduce the amount of the combined
Canadian Commitments to an amount not less than the Total
Parent Outstandings. Any such reduction shall be in an amount
not less than U.S.$100,000, PROVIDED that concurrently with
such reduction the Company shall prepay the loans under the
Term Loan Agreement by an amount equal to
24,204,450/59,531,850ths of the amount of such reduction and
the Company shall reduce the U.S. Commitments by an amount
equal to 19,263,700/59,531,850ths of the amount of such
reduction. Parent may at any time on like notice terminate the
combined Canadian Commitments upon payment in full by Parent
of all Loans to Parent and all other obligations of Parent
hereunder and Cash Collateralization in full, pursuant to
documentation in form and substance reasonably satisfactory to
the Canadian Lenders, of all obligations (contingent or
otherwise) arising with respect to the Letters of Credit
issued for the account of Parent and of all obligations of
Parent in respect of outstanding Bankers' Acceptances and BA
Equivalent Notes.
1.10 AMENDMENT TO SECTION 2.8.3. Section 2.8.3 is amended by (i)
deleting the reference to "SUBSECTION 2.8.1(b) or 2.8.2(b), respectively"
therein and substituting "SECTION 2.8.2" therefor and (ii) deleting the
reference to "SUBSECTION 2.8.1(a) or 2.8.2(a)" therein and substituting "SECTION
2.8.1" therefor.
1.11 AMENDMENT TO SECTION 8.1.2. Section 8.1.2 is amended in its
entirety to read as follows:
8.1.2 INTERIM REPORTS. (a) Promptly when available and in
any event within 45 days after the end of each Fiscal Quarter (except
the last Fiscal Quarter) of each Fiscal Year, unaudited consolidated
and consolidating balance sheets of Parent and its Subsidiaries as of
the end of such Fiscal Quarter and unaudited consolidated and
consolidating statements of earnings and cash flow for such Fiscal
Quarter and for the period beginning with the first day of such Fiscal
Year and ending on the last day of such
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Fiscal Quarter; (b) promptly when available and in any event within 30
days after the end of each of the first two months of each Fiscal
Quarter, unaudited consolidated balance sheets of Parent and its
Subsidiaries as of the end of such month and unaudited consolidated
statements of earnings for such month; (c) concurrently with each set
of financial statements referred to in CLAUSE (a) or (b) above, (i) a
certificate of the chief executive officer or the chief financial
officer of Parent certifying that such financial statements (which may
be prepared by Parent) fairly present the financial condition and
results of operations of Parent and its Subsidiaries as of the dates
and periods indicated, subject to changes resulting from normal
year-end adjustments, (ii) a report from Parent's financial advisor as
to the status of any potential issuance by Parent of equity or Debt
which would satisfy the requirements of SUBSECTION 9.1(o), (iii) a
report (or a column in the applicable financial statements) showing any
variances from the forecast most recently provided pursuant to CLAUSE
(d) below and (iv) a detailed report of Capital Expenditures and Asset
Sales for the period then ended; and (d) concurrently with each set of
financial statements referred to in CLAUSE (a) above, a copy of the
forecast (including a projected consolidated and consolidating balance
sheet, and projected statements of earnings and cash flow and updated
projections) of Parent and its Subsidiaries for the following four
Fiscal Quarters.
1.12 AMENDMENT TO SECTION 8.1.3. Section 8.1.3 is amended by (i)
deleting the word "and" after the reference "SECTION 8.1.1" and inserting a ","
therefor and (ii) inserting the words "and each set of monthly statements"
after the words "quarterly statements" therein.
1.13 ADDITION OF WEEKLY REPORTS. Section 8.1 is amended by
renumbering the existing Section 8.1.9 as 8.1.10 and inserting the following new
8.1.9:
8.1.9 WEEKLY REPORTS. Not later than the second Business
Day of each week, a report outlining any major business development
with respect to Parent or any Subsidiary and any significant progress
made on the potential issuance of equity or Debt which would satisfy
the requirements of SUBSECTION 9.1(o).
1.14 AMENDMENT TO SECTION 8.6.2. The chart contained in Section
8.6.2 is amended in its entirety to read as follows:
-------------------------------------------------
Computation Interest
Period Ending: Coverage Ratio
-------------------------------------------------
6/30/00 through 6/30/01 1.75 to 1.00
-------------------------------------------------
9/30/01 and thereafter 2.00 to 1.00
-------------------------------------------------
1.15 AMENDMENT TO SECTION 8.6.3. The chart contained in Section
8.6.3 is amended in its entirety to read as follows:
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-------------------------------------------------
Fiscal Total Debt to
Quarter Ending: EBITDA Ratio
-------------------------------------------------
6/30/00 through 12/31/00 5.25 to 1.00
-------------------------------------------------
3/31/01 5.15 to 1.00
-------------------------------------------------
6/30/01 4.75 to 1.00
-------------------------------------------------
9/30/01 4.35 to 1.00
-------------------------------------------------
12/31/01 4.25 to 1.00
-------------------------------------------------
3/31/02 4.15 to 1.00
-------------------------------------------------
6/30/02 4.05 to 1.00
-------------------------------------------------
9/30/02 3.95 to 1.00
-------------------------------------------------
1.16 AMENDMENT TO SECTION 8.6.4. Section 8.6.4 is amended in its
entirety to read as follows:
8.6.4 TOTAL DEBT TO CAPITALIZATION. Not permit the ratio of
(a) Total Debt to (b) the sum of Total Debt plus Adjusted Net Worth to
exceed at any time 0.675 to 1.0.
1.17 AMENDMENT TO SECTION 8.7. Section 8.7(h)(i) is amended by
deleting the reference to "U.S. $15,000,000" and substituting "U.S. $5,000,000"
therefor.
1.18 AMENDMENT TO SECTION 8.11. Clause (d)(iv) of Section 8.11 is
amended in its entirety to read as follows:
(iv) the Required Lenders have consented in writing to
such Acquisition;
1.19 AMENDMENT TO SECTION 8.12. Clause (c) of Section 8.12 is
amended by deleting the amount "U.S.$1,000,000" therein and substituting the
amount "U.S.$500,000" therefor.
1.20 AMENDMENT TO SECTION 8.22. Section 8.22 is amended in its
entirety to read as follows:
8.22 CAPITAL EXPENDITURES. Not permit all Capital
Expenditures (excluding, to the extent included in Capital
Expenditures, (a) assets acquired in a Permitted Acquisition and (b) up
to U.S.$1,000,000 of Capital Expenditures in any Fiscal Year ending
after December 31, 2000 which Parent demonstrates, to the reasonable
satisfaction of the Administrative Agent and the Syndication Agent,
were required in connection with new municipal contracts entered into
by
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Parent or a Subsidiary) during the period beginning June 30, 2000 and
ending December 31, 2000 to exceed U.S.$5,000,000 and during any Fiscal
Year thereafter to exceed U.S.$7,500,000.
1.21 AMENDMENT TO SECTION 8.27. Section 8.27 is deleted in its
entirety.
1.22 ADDITION TO SECTION 9. 1. Section 9.1 is amended by adding the
following new CLAUSES (o), (p) and (q):
(o) RECAPITALIZATION TRANSACTIONS. (i) Failure by Parent
to receive, prior to June 1, 2001, Net Cash Proceeds in a Dollar
Equivalent amount equal to or greater than the Junior Capital Amount
(as defined below) from the issuance of either (x) equity or (y) Debt
of the type described in CLAUSE (iii) of the definition of Subordinated
Debt; or (ii) failure by Parent to deliver to the Lenders, prior to
March 15, 2001, a binding commitment letter from one or more financing
sources, reasonably acceptable to the U.S. Agent and the Required
Lenders, to provide equity or Debt meeting the requirements of the
foregoing CLAUSE (i). For purposes of the foregoing, "Junior Capital
Amount" means U.S.$25,000,000 MINUS the lesser of U.S.$5,000,000 and
50% of the aggregate amount of Net Cash Proceeds received from Asset
Sales on or prior to January 31, 2001.
(p) FINANCIAL ADVISOR. Failure by Parent to retain prior
to December 15, 2000, and at all times thereafter (unless the Required
Lenders otherwise consent or the requirements of SUBSECTION (o) above
have been satisfied) to continue to retain, a financial advisor
reasonably acceptable to the Required Lenders for the purpose of
raising equity or Debt which meets the requirements of SUBSECTION (o)
above.
(q) REFINANCING. Failure by Parent to deliver to the
Lenders, prior to August 1, 2002, a binding commitment letter from one
or more lenders, reasonably acceptable to the U.S. Agent and the
Required Lenders, in an amount sufficient to repay in full all
outstanding Loans and other obligations of the Borrowers hereunder.
1.23 AMENDMENT OF SCHEDULES 1.1.A, 1.1.B and 1.1.C. Schedule 1.1.A,
Schedule 1.1.B and Schedule 1.1C to the Credit Agreement shall each be amended
in its entirety by substituting SCHEDULE 1.1A, SCHEDULE 1.1B and SCHEDULE 1.1C
hereto therefor, respectively.
SECTION 2. REPRESENTATIONS AND WARRANTIES. Parent and the Company
represent and warrant to each Agent and each Lender that: (a) after giving
effect hereto, the representations and warranties made in Section 7 of the
Credit Agreement are true and correct in all material respects on and as of the
Amendment Effective Date with the same effect as if made on and as of the
Amendment Effective Date; (b) except for any such event which will be cured upon
the effectiveness hereof, no Event of Default or Unmatured Event of Default
exists or will result from the effectiveness of this Amendment; (c) the
execution and delivery by Parent and the Company of this Amendment and the
performance by Parent and the Company of their respective obligations under the
Credit Agreement as amended hereby (as so amended, the
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"AMENDED CREDIT AMENDMENT") (i) are within such Borrower's power, (ii) have been
duly authorized by all necessary action, (iii) have received all necessary
approval from any governmental agency or authority and (iv) do not and will not
contravene or conflict with any provision of law or of any provision of such
Borrower's Organization Documents or of any agreement or instrument binding on
such Borrower or any court or administrative order or decree applicable to such
Borrower, (e) the Amended Credit Agreement is the legal, valid and binding
obligation of such Borrower, enforceable against such Borrower in accordance
with its terms, except as enforceability may be limited by applicable
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally or by equitable principles relating to enforceability; and (f)
Parent has previously delivered to each Lender a true and correct copy of the
employment contract between Parent and each of ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇▇▇▇▇ ▇▇▇▇▇, and each such contract is in full force and
effect on the date hereof.
SECTION 3. WAIVER. Subject to the occurrence of the Amendment Effective
Date, the Required Lenders hereby waive Parent's non-compliance with Sections
8.6.2 and 8.6.3 of the Credit Agreement as in effect prior to the Amendment
Effective Date for any period ending prior to the date of this Amendment but not
any non-compliance with such Sections 8.6.2 and 8.6.3 as in effect after the
Amendment Effective Date.
SECTION 4. EFFECTIVENESS OF AMENDMENT. This Amendment shall become
effective on December 4, 2000 (the "AMENDMENT EFFECTIVE DATE") if on or before
such date the U.S. Agent has received (i) counterparts of this Amendment
executed by Parent, the Company, the Required Lenders, the U.S. Agent and the
Canadian Agent, (ii) a Confirmation in the form of EXHIBIT A hereto signed by
Parent, the Company and all of the Parent's other Subsidiaries, (iii) copies of
resolutions of the board of directors (or other appropriate governing body) of
each of Parent and the Company, respectively, authorizing the transactions
contemplated hereby, certified by the Secretary or an Assistant Secretary (or
other appropriate representative) of Parent or the Company, as the case may be,
(iv) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Goodyear, LLP, U.S. counsel to
Parent and the Company, substantially in the form of EXHIBIT B hereto, (v) an
opinion of Torys, Ontario counsel to Parent, substantially in the form of
EXHIBIT C hereto, (vi) an amendment fee for each Lender that executes a
counterpart hereof on or before 4:00 p.m. (Chicago time) on December 1, 2000 in
an amount equal to 0.50% of such Lender's Commitment after giving effect hereto
and (vii) any additional amounts payable resulting from the amendment to
Schedule 1.1C set forth herein, it being understood that the amendment to
Schedule 1.1C shall be deemed effective as of August 14, 2000.
SECTION 5. MISCELLANEOUS.
5.1 INTEREST PERIODS. Notwithstanding any other provision of the
Amended Credit Agreement, (a) prior to the receipt by Parent of equity or
Subordinated Debt which meets the requirements of subsection 9.1 (o) of the
Amended Credit Agreement, no Interest Period shall extend beyond June 1, 2001,
(b) no Interest Period for any Offshore Rate Loan shall be longer than three
months and (c) no Bankers' Acceptance or BA Equivalent Note shall have a term of
more than three months.
-12-
5.2 CAPTIONS. Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
5.3 GOVERNING LAW, SEVERABILITY. THIS AMENDMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE ENTIRELY PERFORMED IN SAID STATE. Wherever possible
each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable laws, but if any provision of this
Amendment shall be prohibited by or invalid under such laws, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.
5.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Amendment.
5.5 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
the parties hereto and their respective successors and assigns, and shall inure
to the sole benefit of the parties hereto and the successors and assigns of each
Agent and each Lender.
5.6 CONTINUED EFFECTIVENESS. Except as specifically provided
herein, the Credit Agreement and the other Loan Documents shall remain
unmodified and are specifically confirmed to be in full force and effect. Upon
effectiveness of this Amendment, all references in the Credit Agreement and in
the other Loan Documents to "Credit Agreement" or the like shall refer to the
Credit Agreement as hereby amended.
5.7 FURTHER ASSURANCES. The Parent agrees to cause the obligations
of the Company and its Subsidiaries under the Loan Documents to be secured by
each motor vehicle owned by Parent and its Subsidiaries, including those motor
vehicles subject to a statute requiring notation on a certificate of title to
perfect a security interest in such vehicle.
[SIGNATURES BEGIN ON NEXT PAGE]
-13-
Delivered at Chicago, Illinois, as of the day and year first above written.
CAPITAL ENVIRONMENTAL RESOURCE,
INC./RESSOURCES ENVIRONNEMENTALES
CAPITAL INC.
By:
------------------------------------------
Title:
---------------------------------------
CERI, L.P.
By: 1312654 Ontario Inc., its General Partner
By:
------------------------------------------
Title:
---------------------------------------
BANK OF AMERICA, N.A. as U.S. Agent
By:
------------------------------------------
Title:
---------------------------------------
BANK OF AMERICA CANADA,
as Canadian Agent
By:
------------------------------------------
Title:
---------------------------------------
COMERICA BANK, as a U.S. Lender
By:
------------------------------------------
Title:
---------------------------------------
S-1
LASALLE BANK NATIONAL ASSOCIATION, as
a U.S. Lender
By:
------------------------------------------
Title:
---------------------------------------
UNION BANK OF CALIFORNIA, as a U.S. Lender
By:
------------------------------------------
Title:
---------------------------------------
BANK OF AMERICA, N.A., as an Issuing Lender
By:
------------------------------------------
Title:
---------------------------------------
BANK OF AMERICA CANADA, as a Canadian
Lender and as an Issuing Lender
By:
------------------------------------------
Title:
---------------------------------------
CANADIAN IMPERIAL BANK OF COMMERCE,
as a Canadian Lender and as Syndication Agent
By:
------------------------------------------
Title:
---------------------------------------
S-2
CREDIT SUISSE FIRST BOSTON CANADA, as a
Canadian Lender
By:
------------------------------------------
Title:
---------------------------------------
S-3
SCHEDULE 1.1.A
U.S. COMMITMENTS, PRO RATA SHARES
AND PERCENTAGES
================================================================================
U.S. LENDER U.S. COMMITMENT* U.S. PRO RATA SHARE
--------------------------------------------------------------------------------
LaSalle Bank National Association U.S. $2,407,962.50 12.5%
--------------------------------------------------------------------------------
Union Bank of California U.S. $9,631,850.00 50.0%
--------------------------------------------------------------------------------
Comerica Bank U.S. $7,223,887.50 37.5%
--------------------------------------------------------------------------------
TOTALS U.S. $19,263,700.00 100.0%
================================================================================
*As in effect after the frst Commitment Reduction Date.
SCHEDULE 1.1.B
CANADIAN COMMITMENTS, PRO RATA SHARES
AND PERCENTAGES
================================================================================
CANADIAN
CANADIAN LENDER CANADIAN COMMITMENT* PRO RATA SHARE
--------------------------------------------------------------------------------
Bank of America Canada U.S.$19,462,335.58 32.69230769%
--------------------------------------------------------------------------------
Canadian Imperial Bank of Commerce U.S.$26,331,395.19 44.▇▇▇▇▇▇▇▇%
--------------------------------------------------------------------------------
Credit Suisse First Boston Canada U.S.$13,738,119.23 23.07692308%
--------------------------------------------------------------------------------
TOTALS U.S.$59,531,850.00 100%
================================================================================
*As in effect after the first Commitment Reduction Date.
SCHEDULE 1.1.C
PRICING SCHEDULE
The Applicable Margin, the Stamping Fee Rate and the rate for Letter of
Credit fees and non-use fees shall be determined based on the applicable Senior
Debt to EBITDA Ratio as set forth below.
=================================================================================================================================
APPLICABLE MARGIN
FOR OFFSHORE
U.S. DOLLAR LOANS
AND OFFSHORE
CANADIAN DOLLAR
LOANS, STAMPING APPLICABLE
FEE RATE MARGIN FOR BASE
AND RATE FOR RATE LOANS APPLICABLE RATE FOR
FINANCIAL TO COMPANY AND MARGIN FOR BASE NON-FINANCIAL RATE FOR
SENIOR DEBT LETTER OF CREDIT PRIME RATE RATE LOANS TO LETTER OF NON-USE
TO EBITDA RATIO FEES LOANS PARENT CREDIT FEES FEES
---------------------------------------------------------------------------------------------------------------------------------
Level I less than 3.00 to 1.0 3.00% 1.50% 2.00% 1.500% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level II greater than or equal to
3.00 to 1.0 but less than
3.25 to 1.0 3.25% 1.75% 2.25% 1.625% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level III greater than or equal to
3.25 to 1.0 but less than
3.50 to 1.0 3.50% 2.00% 2.50% 1.750% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level IV greater than or equal to
3.50 to 1.0 but less than
3.75 to 1.0 3.75% 2.25% 2.75% 1.875% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level V greater than or equal to
3.75 to 1.0 but less than
4.25 to 1.0 4.00% 2.50% 3.00% 2.000% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level VI greater than or equal to
4.25 to 1.0 but less than
4.75 to 1.0 4.25% 2.75% 3.25% 2.125% 0.50%
---------------------------------------------------------------------------------------------------------------------------------
Level VII greater than or equal to
4.75 to 1.0 4.50% 3.00% 3.50% 2.250% 0.50%
=================================================================================================================================
The Applicable Margin, the Stamping Fee Rate and the rate for Letter of
Credit fees and non-use fees shall be adjusted, to the extent applicable, 45
days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days)
after the end of each Fiscal Quarter based on the Senior Debt to EBITDA Ratio as
of the last day of such Fiscal Quarter; PROVIDED that if Parent fails to deliver
the financial statements required by SECTION 8.1 and the related compliance
certificate in the form of EXHIBIT C by the due date therefor, the Applicable
Margin, the Stamping Fee Rate and the rate for Letter of Credit fees and non-use
fees that would apply at Level VII shall be applicable from such due date until
such financial statements are delivered.
THIRD AMENDMENT
THIS THIRD AMENDMENT (this "AMENDMENT") dated as of December 4, 2000
amends the Term Loan Agreement dated as of November 26, 1999 (as previously
amended, the ("AGREEMENT") among CAPITAL ENVIRONMENTAL RESOURCE INC./RESSOURCES
ENVIRONNEMENTALES CAPITAL INC., an Ontario corporation (the "BORROWER"), various
financial institutions and BANK OF AMERICA, N.A., as Agent. Capitalized terms
used but not defined herein shall have the meanings given to them in the
Agreement.
WHEREAS, the Borrower, the Lenders and the Agent have entered into the
Agreement; and
WHEREAS, the parties hereto desire to amend the Agreement;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1. AMENDMENTS. Effective on (and subject to the occurrence of)
the Amendment Effective Date (as defined below), the Agreement shall be amended
as set forth below:
1.1 ADDITION OF NEW DEFINITIONS. The following new definitions are
added to Section 1.1 in appropriate alphabetical sequence:
ADJUSTED WORKING CAPITAL means at any time the excess of:
(a) (i) the consolidated current assets of the Borrower and
its Subsidiaries LESS (ii) the amount of cash and cash equivalents
included in such consolidated current assets;
OVER
(b) (i) the consolidated current liabilities of the Borrower
and its Subsidiaries LESS (ii) to the extent included in such
consolidated current liabilities, all Short-Term Debt of the Borrower
and its Subsidiaries PLUS any portion of Long-Term Debt of the
Borrower and its Subsidiaries which is payable within one year from the
date of determination.
ASSET SALE means the sale or other disposition by the Borrower
or any Subsidiary to any Person (other than the Borrower or any
Subsidiary) of any asset or rights of the Borrower or such Subsidiary
(including any sale or other disposition of stock of any Subsidiary,
whether by merger, consolidation or otherwise, but EXCLUDING (i) sales
of
inventory in the ordinary course of business and (ii) transactions
governed by SUBSECTION 7.11(a) or (c)).
CAPITAL EXPENDITURES means all expenditures which, in
accordance with GAAP, would be required to be capitalized and shown on
the consolidated balance sheet of the Borrower and its Subsidiaries,
but excluding expenditures made in connection with the replacement or
restoration of assets to the extent financed (i) from insurance
proceeds (or other similar recoveries) paid on account of the loss of
or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or
condemnation of the assets being replaced.
EXCESS CASH FLOW means, for any period, the remainder of
(a) Consolidated Net Income for such period before deducting
cash Interest Expense, taxes, depreciation, amortization,
LESS
(b) the total (without duplication) of
(i) regularly scheduled principal payments
(including the portion of all payments under capital leases
which is attributable to principal) arising with respect to
any Long-Term Debt (including this Agreement) of the Borrower
and its Subsidiaries made during such period (other than the
payment of principal under the Term Loan Agreement on December
4, 2000),
PLUS
(ii) the amount of any reduction of the
commitments made pursuant to Section 2.8.1(a) (other than
the reduction on December 4, 2000) or 2.8.2 of the Existing
Credit Agreement and the amount of all prepayments made
pursuant to SECTION 2.2.4 during such period,
PLUS
(iii) all income taxes paid by the Borrower and
its Subsidiaries during such period,
PLUS
(iv) cash Interest Expense of the Borrower and
its Subsidiaries during such period,
PLUS
-2-
(v) all Capital Expenditures made in cash during
such period,
PLUS
(vi) any increase in Adjusted Working Capital
during such period,
LESS
(vii) any decrease in Adjusted Working Capital
during such period.
LONG-TERM DEBT means all Funded Debt which matures more than
one year after the date of determination or which is renewable or
extendable at the option of the obligor to a date which is more than
one year after the date of determination.
TRIGGERING EVENT DISPOSITION means an Asset Sale (or series of
related Asset Sales) which results in the sale or other disposition of
assets which (i) represent more than 50% of the net book value of all
assets of the Borrower and its Subsidiaries or (ii) generated more than
50% of the consolidated revenues of the Borrower and its Subsidiaries
during the preceding Fiscal Year.
TRIGGERING EVENT OFFER - see SUBSECTION 2.2.5(d).
NET CASH PROCEEDS means:
(a) with respect to any Asset Sale, the
aggregate cash proceeds (including cash proceeds received by
way of deferred payment of principal pursuant to a note,
installment receivable or otherwise, but only as and when
received) received by the Borrower or any Subsidiary pursuant
to such Asset Sale, net of (i) the direct costs relating to
such Asset Sale (including sales commissions and legal,
accounting and investment banking fees), (ii) taxes paid or
reasonably estimated by the Borrower to be payable as a result
thereof (after taking into account any available tax credits
or deductions and any tax sharing arrangements), (iii) amounts
required to be applied to the repayment of any Debt secured by
a Lien on the asset subject to such Asset Sale (other than
Debt hereunder), and (iv) any cash proceeds which the Borrower
certifies to the Agent are to be used, and which are used,
within 30 days after such Asset Sale to purchase replacement
assets which perform the same or a similar function;
(b) with respect to any issuance of equity
securities or Subordinated Debt described in CLAUSE (iii) of
the definition thereof, the aggregate cash proceeds received
by the Borrower or any Subsidiary pursuant to such issuance,
net of the direct costs relating to such issuance (including
sales and underwriter's
-3-
discounts and commissions, upfront fees and legal, accounting
and investment banking fees); and
(c) with respect to the termination of any
Hedging Agreement, the aggregate cash proceeds received by the
Borrower or any Subsidiary pursuant to such termination, net
of any direct costs relating to such termination.
SENIOR DEBT TO EBITDA RATIO means as of the last day of any
Fiscal Quarter, the ratio of: (i) all Funded Debt of the Borrower and
its Subsidiaries as of such day to (ii) EBITDA for the Computation
Period ending on such day (other than Debt of the type described in
CLAUSE (iii) of the definition of Subordinated Debt).
SHORT-TERM DEBT means all Funded Debt other than Long-Term
Debt.
1.2 AMENDMENT OF DEFINITIONS. The definitions of "EBITDA" and
"Interest Coverage Ratio" set forth in Section 1.1 are amended in their entirety
to read as follows, respectively:
EBITDA means, with respect to any Computation Period,
Consolidated Net Income for such period before deducting Interest
Expense, taxes, depreciation, amortization and excluding any non-cash
charges resulting from any write-off of unamortized finance fees during
such Computation Period, all calculated based on the assumption that
each Acquisition made during such Computation Period had been made on
the first day of such Computation Period, but excluding non-recurring
private company expenses which are discontinued upon any such
Acquisition, all as certified by the Borrower and agreed to by the
Required Lenders.
INTEREST COVERAGE RATIO means the ratio for any Computation
Period of (a) Consolidated Net Income before deducting Interest
Expense, taxes, depreciation and amortization for such period, but
excluding (i) pooling charges taken during such period and (ii) any
non-cash charges resulting from any write-off of unamortized finance
fees during such period, TO (b) Interest Expense for such period.
1.3 AMENDMENT OF SECTION 2.2.4. The first sentence in Section
2.2.4 is amended in its entirety to read as follows:
Subject to SECTION 4.4, the Borrower may, from time to time, ratably
prepay the Loans in whole or in part, in an aggregate amount of
U.S.$40,000, PROVIDED that concurrently with such prepayment the
Borrower shall permanently reduce the amount of the commitments under
the Existing Credit Agreement by an amount equal to the product of (x)
the amount of such prepayment multiplied by (y) a fraction, the
numerator of which is 78,795,550 and the denominator of which is
24,204,450.
-4-
1.4 AMENDMENT OF SECTION 2.2.5. Section 2.2.5 is amended in its
entirety to read as follows:
2.2.5 REPAYMENT OF LOANS. (a) The Loans of each Lender
shall be repaid in installments on the dates set forth below, in each
case in such Lender's Pro Rata Share (as in effect after December 4,
2000) of the aggregate principal amount of the Loans to be repaid on
the applicable date.
Date Amount
---- ------
December 4, 2000 U.S.$795,550
December 31, 2000 235,000
March 31, 2001 235,000
June 30, 2001 235,000
September 30, 2001 235,000
December 31, 2001 235,000
March 31, 2002 293,700
June 30, 2002 293,700
September 30, 2002 293,700
November 1, 2002 3,398,350
(b) In addition, the Borrower shall prepay the Loans
ratably (i) within 90 days after the end of each Fiscal Year, by an
amount equal to 24,204,450/103,000,000ths of Excess Cash Flow for such
Fiscal Year; and (ii) concurrently with the receipt by the Borrower or
any of its Subsidiaries of any Net Cash Proceeds from any Asset Sale,
any issuance of equity securities or of Debt described in CLAUSE (iii)
of the definition of Subordinated Debt or any termination of any
Hedging Agreement, by an amount equal to 24,204,450/103,000,000ths of
such Net Cash Proceeds. Notwithstanding the foregoing, no prepayment of
the Loans shall be required to be made pursuant to CLAUSE (ii) above on
account of the receipt of any Net Cash Proceeds unless and until the
aggregate amount of the all Net Cash Proceeds which have been received
since December 4, 2000 which are required to be applied to prepay Loans
and/or reduce the commitments under the Existing Credit Agreement, less
the aggregate amount of all Net Cash Proceeds previously applied to
prepay Loans pursuant to CLAUSE (ii) above PLUS all Net Cash Proceeds
previously applied to reduce the commitments under the Existing Credit
Agreement, equals or exceeds U.S.$100,000.
(c) Notwithstanding the foregoing provisions of this
SECTION 2.2.5, no payment of the Loans shall be required prior to
November 27, 2004 to the extent that after giving effect to such
payment the aggregate amount of the Loans required to be prepaid
pursuant to this SECTION 2.2.5 (excluding any prepayment resulting from
-5-
acceptance of a Triggering Event Offer) would be greater than 25% of
the aggregate original principal amount of the Loans.
(d) Notwithstanding SUBSECTION 2.2.5(c), if a Triggering
Event Disposition occurs, the Borrower shall promptly (and in any event
within two Business Days) make an offer in writing to the Agent to
repay Loans ratably using 24,204,450/103,000,000ths of the Net Cash
Proceeds of such Triggering Event Disposition (a "TRIGGERING EVENT
OFFER"). If the Agent (acting with the consent of the Required Lenders)
notifies the Borrower in writing of its acceptance of a Triggering
Event Offer within five Business Days after its receipt of such
Triggering Event Offer, the Borrower shall, within one Business Day of
the Agent's acceptance of such Triggering Event Offer, use
24,204,450/103,000,000ths of the Net Cash Proceeds of the applicable
Triggering Event Disposition to ratably repay Loans. If the Agent does
not accept a Triggering Event Offer within five Business Days after its
receipt of a Triggering Event Offer, such Triggering Event Offer shall
be deemed rejected and the Company shall have no obligation to repay
Loans with the Net Cash Proceeds of the applicable Triggering Event
Disposition.
1.5 AMENDMENT TO SECTION 7.1.2. Section 7.1.2 is amended in its
entirety to read as follows:
7.1.2 INTERIM REPORTS. (a) Promptly when available and in
any event within 45 days after the end of each Fiscal Quarter (except
the last Fiscal Quarter) of each Fiscal Year, unaudited consolidated
and consolidating balance sheets of the Borrower and its Subsidiaries
as of the end of such Fiscal Quarter and unaudited consolidated and
consolidating statements of earnings and cash flow for such Fiscal
Quarter and for the period beginning with the first day of such Fiscal
Year and ending on the last day of such Fiscal Quarter; (b) promptly
when available and in any event within 30 days after the end of each of
the first two months of each Fiscal Quarter, unaudited consolidated
balance sheets of the Borrower and its Subsidiaries as of the end of
such month and unaudited consolidated statements of earnings for such
month; (c) concurrently with each set of financial statements referred
to in CLAUSE (a) or (b) above, (i) a certificate of the chief executive
officer or the chief financial officer of the Borrower, certifying that
such financial statements (which may be prepared by the Borrower)
fairly present the financial condition and results of operations of the
Borrower and its Subsidiaries as of the dates and periods indicated,
subject to changes resulting from normal year-end adjustments, (ii) a
report from the Borrower's financial advisor as to the status of any
potential issuance by the Borrower of equity or Debt which would
satisfy the requirements of SUBSECTION 8.1(o), (iii) a report (or a
column in the applicable financial statements) showing any variances
from the forecast most recently provided pursuant to CLAUSE (d) below
and (iv) a detailed report of Capital Expenditures and Asset Sales for
the period then ended; and (d) concurrently with each set of financial
statements referred to in CLAUSE (a) above, a copy of the forecast
(including a projected consolidated and consolidating balance sheet,
-6-
and projected statements of earnings and cash flow and updated
projections) of the Borrower and its Subsidiaries for the following
four Fiscal Quarters.
1.6 AMENDMENT TO SECTION 7.1.3. Section 7.1.3 is amended by (i)
deleting the word "and" after the reference "SECTION 7.1.1" and inserting a ","
therefor and (ii) inserting the words "and each set of monthly statements" after
the words "quarterly statements" therein.
1.7 ADDITION OF WEEKLY REPORTS. Section 7.1 is amended by
renumbering the existing Section 7.1.9 as 7.1.10 and inserting the following new
7.1.9:
7.1.9 WEEKLY REPORTS. Not later than the second Business
Day of each week, a report outlining any major business development
with respect to the Borrower or any Subsidiary and any significant
progress made on the potential issuance of equity or Debt which would
satisfy the requirements of SUBSECTION 8.1(o).
1.8 AMENDMENT TO SECTION 7.6.2. The chart contained in Section
7.6.2 is amended in its entirety to read as follows:
---------------------------------------------------
COMPUTATION INTEREST
PERIOD ENDING: COVERAGE RATIO
---------------------------------------------------
6/30/00 through 6/30/01 1.75 to 1.00
---------------------------------------------------
9/30/01 and thereafter 2.00 to 1.00
---------------------------------------------------
1.9 AMENDMENT TO SECTION 7.6.3. The chart contained in Section
7.6.3 is amended in its entirety to read as follows:
---------------------------------------------------
FISCAL TOTAL DEBT TO
QUARTER ENDING: EBITDA RATIO
---------------------------------------------------
6/30/00 through 12/31/00 5.25 to 1.00
---------------------------------------------------
3/31/01 5.15 to 1.00
---------------------------------------------------
6/30/01 4.75 to 1.00
---------------------------------------------------
9/30/01 4.35 to 1.00
---------------------------------------------------
12/31/01 4.25 to 1.00
---------------------------------------------------
3/31/02 4.15 to 1.00
---------------------------------------------------
6/30/02 4.05 to 1.00
---------------------------------------------------
9/30/02 and thereafter 3.95 to 1.00
---------------------------------------------------
-7-
1.10 AMENDMENT TO SECTION 7.6.4. Section 7.6.4 is amended in its
entirety to read as follows:
7.6.4 TOTAL DEBT TO CAPITALIZATION. Not permit the ratio of
(a) Total Debt to (b) the sum of Total Debt plus Adjusted Net Worth to
exceed at any time 0.675 to 1.0.
1.11 AMENDMENT TO SECTION 7.7. Section 7.7(h)(i) is amended by
deleting the reference to "U.S.$15,000,000" and substituting "U.S.$5,000,000"
therefor.
1.12 AMENDMENT TO SECTION 7.11. Clause (d)(iv) of Section 7.11 is
amended in its entirety to read as follows:
(iv) the Required Lenders have consented in writing to
such Acquisition;
1.13 AMENDMENT TO SECTION 7.12. Clause (c) of Section 7.12 is
amended by deleting the amount "U.S.$1,000,000" therein and substituting the
amount "U.S.$500,000" therefor.
1.14 AMENDMENT TO SECTION 7.22. Section 7.22 is amended in its
entirety to read as follows:
7.22 CAPITAL EXPENDITURES. Not permit all Capital
Expenditures (excluding, to the extent included in Capital
Expenditures, (a) assets acquired in a Permitted Acquisition and (b) up
to U.S.$1,000,000 of Capital Expenditures in any Fiscal Year ending
after December 31, 2000 which the Borrower demonstrates, to the
reasonable satisfaction of the Agent, were required in connection with
new municipal contracts entered into by the Borrower or a Subsidiary)
during the period beginning June 30, 2000 and ending December 31, 2000
to exceed U.S.$5,000,000 and during any Fiscal Year thereafter to
exceed U.S.$7,500,000.
1.15 AMENDMENT TO SECTION 7.27. Section 7.27 is deleted in its
entirety.
1.16 ADDITION TO SECTION 8.1. Section 8.1 is amended by adding the
following new clauses (o), (p) and (q):
(o) RECAPITALIZATION TRANSACTIONS. (i) Failure by the
Borrower to receive, prior to June 1, 2001, Set Cash Proceeds in a
Dollar Equivalent amount equal to or greater than the Junior Capital
Amount (as defined below) from the issuance of either (x) equity or (y)
Debt of the type described in CLAUSE (iii) of the definition of
Subordinated Debt; or (ii) failure by the Borrower to deliver to the
Lenders, prior to March 15, 2001, a binding commitment letter from one
or more financing sources, reasonably acceptable to the Agent and the
Required Lenders, to provide equity or Debt meeting the requirements of
the foregoing CLAUSE (i). For purposes of the foregoing, "Junior
Capital Amount"
-8-
means U.S.$25,000,000 MINUS the lesser of U.S.$5,000,000 and 50% of
the aggregate amount of Net Cash Proceeds received from Asset Sales on
or prior to January 31, 2001.
(p) FINANCIAL ADVISOR. Failure by the Borrower to retain
prior to December 15, 2000, and at all times thereafter (unless the
Required Lenders otherwise consent or the requirements of SUBSECTION
(o) above have been satisfied) to continue to retain, a financial
advisor reasonably acceptable to the Required Lenders for the purpose
of raising equity or Debt which meets the requirements of SUBSECTION
(o) above.
(q) TRIGGERING EVENT OFFER. Failure by the Borrower to
make a Triggering Event Offer in accordance with SECTION 2.2.5(d); or
failure by the Borrower to use 24,204,450/103,000,000ths of the Net
Cash Proceeds of a Triggering Event Disposition to repay Loans in
accordance with SECTION 2.2.5(d) if a related Triggering Event Offer
has been accepted by the Agent.
1.17 AMENDMENT OF SCHEDULES 1.1A and 1.1B. Schedule 1.1A and
Schedule 1.1B to the Agreement shall each be amended in its entirety by
substituting SCHEDULE 1.1A and SCHEDULE 1.1B hereto therefor, respectively.
SECTION 2. REPRESENTATIONS AND WARRANTIES. The Borrower represents and
warrants to the Agent and each Lender that: (a) after giving effect hereto, the
representations and warranties made in Section 6 of the Agreement are true and
correct in all material respects on and as of the Amendment Effective Date with
the same effect as if made on and as of the Amendment Effective Date; (b) except
for any such event which will be cured upon the effectiveness hereof, no Event
of Default or Unmatured Event of Default exists or will result from the
effectiveness of this Amendment; (c) the execution and delivery by the Borrower
of this Amendment and the performance by the Borrower of its obligations under
the Agreement as amended hereby (as so amended, the "AMENDED AGREEMENT") (i) are
within such Borrower's power, (ii) have been duly authorized by all necessary
action, (iii) have received all necessary approval from any governmental agency
or authority and (iv) do not and will not contravene or conflict with any
provision of law or of any provision of such Borrower's Organization Documents
or of any agreement or instrument binding on such Borrower or any court or
administrative order or decree applicable to such Borrower; (e) the Amended
Agreement is the legal, valid and binding obligation of such Borrower,
enforceable against such Borrower in accordance with its terms, except as
enforceability may be limited by applicable bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally or by equitable
principles relating to enforceability and (f) the Borrower has previously
delivered to each Lender a true and correct copy of the employment contract
between the Borrower and each of ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇▇▇▇▇, and each such contract is in full force and effect on the date
hereof.
SECTION 3. WAIVER. Subject to the occurrence of the Amendment Effective
Date, the Required Lenders hereby waive the Borrower's non-compliance with
Sections 7.6.2 and 7.6.3 of the Agreement as in effect prior to the Amendment
Effective Date for any period ending
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prior to the date of this Amendment but not any non-compliance with such
Sections 7.6.2 and 7.6.3 as in effect after the Amendment Effective Date.
SECTION 4. EFFECTIVENESS OF AMENDMENT. This Amendment shall become
effective on December 4, 2000 (the "AMENDMENT EFFECTIVE DATE") if on or before
such date the Agent has received (i) counterparts of this Amendment executed by
the Borrower, the Required Lenders, and the Agent, (ii) a Confirmation in the
form of EXHIBIT A hereto signed by the Borrower and its Subsidiaries, (iii)
copies of resolutions of the board of directors of the Borrower authorizing the
transactions contemplated hereby, certified by the Secretary or Assistant
Secretary of the Borrower, (iv) an opinion of ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Goodyear, LLP, U.S. counsel to the Borrower, substantially in the form of
EXHIBIT B hereto, (v) an opinion of Torys, Ontario counsel to the Borrower,
substantially in the form of EXHIBIT C hereto, (vi) an amendment fee for each
Lender that executes a counterpart hereof on or before 4:00 p.m. (Chicago time)
on December 1, 2000 in an amount equal to 0.50% of such Lender's Loan after
giving effect hereto and (vii) any additional amounts payable resulting from the
amendment to Schedule 1.1C set forth herein, it being understood that the
amendment to Schedule 1.1C shall be deemed effective as of August 14, 2000.
SECTION 5. MISCELLANEOUS.
5.1 INTEREST PERIODS. Notwithstanding any other provision of the
Amended Agreement, no Interest Period for any Offshore Rate Tranche shall be
longer than three months.
5.2 CAPTIONS. Section captions used in this Amendment are for
convenience only and shall not affect the construction of this Amendment.
5.3 GOVERNING LAW, SEVERABILITY. THIS AMENDMENT SHALL BE A
CONTRACT MADE UNDER AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS MADE AND TO BE ENTIRELY PERFORMED IN SAID STATE. Wherever possible
each provision of this Amendment shall be interpreted in such manner as to be
effective and valid under applicable laws, but if any provision of this
Amendment shall be prohibited by or invalid under such laws, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Amendment.
5.4 COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Amendment.
5.5 SUCCESSORS AND ASSIGNS. This Amendment shall be binding upon
the parties hereto and their respective successors and assigns, and shall inure
to the sole benefit of the parties hereto and the successors and assigns of each
Agent and each Lender.
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5.6 CONTINUED EFFECTIVENESS. Except as specifically provided
herein, the Agreement and the other Loan Documents shall remain unmodified and
are specifically confirmed to be in full force and effect. Upon effectiveness of
this Amendment, all references in the Agreement and in the other Loan Documents
to "Agreement" or the like shall refer to the Agreement as hereby amended.
[SIGNATURES BEGIN ON NEXT PAGE]
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Delivered at Chicago, Illinois, as of the day and year first above written.
CAPITAL ENVIRONMENTAL RESOURCE,
INC./RESSOURCES ENVIRONNEMENTALES
CAPITAL INC.
By:
-------------------------------------------
Title:
-------------------------------------------
BANK OF AMERICA, N.A. as Agent
By:
-------------------------------------------
Title:
-------------------------------------------
BANK OF AMERICA, N.A., as a Lender
By:
-------------------------------------------
Title:
-------------------------------------------
LASALLE BANK NATIONAL ASSOCIATION, as a Lender
By:
-------------------------------------------
Title:
-------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ BANK, F.S.B, as a Lender
By:
-------------------------------------------
Title:
-------------------------------------------
S-1
SCHEDULE 1.1A
LENDERS AND PRO RATA SHARES
--------------------------------------------------------------------------------
LENDER AMOUNT OF LOAN* PRO RATA SHARE
--------------------------------------------------------------------------------
Bank of America, ▇.▇. ▇.▇.$7,261,335 30%
--------------------------------------------------------------------------------
▇▇▇▇▇▇▇ ▇▇▇▇▇ Bank, FSB U.S.$4,840,890 20%
--------------------------------------------------------------------------------
LaSalle Bank National Association U.S.$12,102,225 50%
--------------------------------------------------------------------------------
TOTALS U.S.$24,204,450 100.0%
--------------------------------------------------------------------------------
*As in effect after December 4, 2000.
SCHEDULE 1.1B
PRICING SCHEDULE
The Applicable Margin shall be determined based on the applicable
Senior Debt to EBITDA Ratio as set forth below.
================================================================================
APPLICABLE
APPLICABLE MARGIN FOR
MARGIN FOR BASE RATE LOANS
SENIOR DEBT TO EBITDA RATIO OFFSHORE RATE TO THE
TRANCHES BORROWER
--------------------------------------------------------------------------------
Level I less than 3.00 to 1.0 3.00% 1.50%
--------------------------------------------------------------------------------
Level II greater than or equal to 3.00 to 1.0
but less than 3.25 to 1.0 3.25% 1.75%
--------------------------------------------------------------------------------
Level III greater than or equal to 3.25 to 1.0
but less than 3.50 to 1.0 3.50% 2.00%
--------------------------------------------------------------------------------
Level IV greater than or equal to 3.50 to 1.0
but less than 3.75 to 1.0 3.75% 2.25%
--------------------------------------------------------------------------------
Level V greater than or equal to 3.75 to 1.0
but less than 4.25 to 1.0 4.00% 2.50%
--------------------------------------------------------------------------------
Level VI greater than or equal to 4.25 to 1.0
but less than 4.75 to 1.0 4.25% 2.75%
--------------------------------------------------------------------------------
Level VII greater than or equal to 4.75 to 1.0 4.50% 3.00%
================================================================================
The Applicable Margin shall be adjusted, to the extent applicable, 45
days (or, in the case of the last Fiscal Quarter of any Fiscal Year, 90 days)
after the end of each Fiscal Quarter based on the Senior Debt to EBITDA Ratio as
of the last day of such Fiscal Quarter; PROVIDED that if the Borrower fails to
deliver the financial statements required by SECTION 7.1 and the related
compliance certificate in the form of EXHIBIT C by the due date therefor, the
Applicable Margin that would apply at Level VII shall be applicable from such
due date until such financial statements are delivered.