EXHIBIT 10.13
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of January 12, 1998
by and among
▇▇▇▇▇▇▇ WASTE SYSTEMS, INC.,
and its Subsidiaries
and
VARIOUS OTHER FINANCIAL INSTITUTIONS
PARTY THERETO (the "Banks")
and
BANKBOSTON, NA., as Agent
KEYBANK NATIONAL ASSOCIATION, as Co-Agent
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Co-Agent
with
BANCBOSTON SECURITIES, INC.,
acting as Loan Arranger
BOS-BUS:470101
Exhibits
Exhibit A -- Form of Revolving Credit Note
Exhibit B -- Form of Loan and Letter of Credit Request
Exhibit C -- [Intentionally Omitted]
Exhibit D -- Form of Compliance Certificate
Exhibit E -- Form of Environmental Compliance Certificate
Exhibit F -- Form of Subordination Agreement
Schedules
Schedule 1 - Subsidiaries of the Parent which are Borrowers
Schedule 2 - Banks' Commitment Percentages
Schedule 6.3 - Real Property
Schedule 6.7 - Litigation
Schedule 6.11 - Defaults
Schedule 6.13 - Financing Statements
Schedule 6.16 - Environmental Compliance
Schedule 6.18 - Certain Transactions
Schedule 6.19 - Subsidiaries of the Parent
Schedule 6.20(b)- Options, Etc.
Schedule 6.23 - Depository Accounts
Schedule 7.7 - Insurance
Schedule 8.1(c) - Existing Debt
Schedule 8.1(o) - Non-Compete Indebtedness
Schedule 8.2(g) - Existing Liens
Schedule 8.2(k) - Bristol Waste Management Liens
Schedule 8.3(g) - Existing Investments
BOS-BUSN:552657.1
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of the 12th
day of January, 1998 by and among ▇▇▇▇▇▇▇ WASTE SYSTEMS, INC., a Delaware
corporation (the "Parent"), its Subsidiaries listed on Schedule 1 hereto (the
"Subsidiaries," the Parent and such Subsidiaries herein collectively referred to
as the "Borrowers"), each of which Borrowers (unless otherwise listed on
Schedule 1 hereto) having its principal place of business at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ and BANKBOSTON, N.A., ("BankBoston"), a national banking
association having its principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, KEYBANK NATIONAL ASSOCIATION individually and as
Co-Agent, USTRUST, BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
individually and as Co-Agent, COMERICA BANK and such banks or other financial
institutions which may become a party hereto pursuant to 19 hereof (the "Banks")
and BankBoston as Agent for the Banks (the "Agent").
WHEREAS, the Borrowers, BankBoston, USTrust, KeyBank and the Agent were
parties to that certain Revolving Credit and Term Loan Agreement dated as of
January 25, 1995, as amended to date (as so amended, the "Original Credit
Agreement"), pursuant to which such Banks agreed to make Loans to the Borrowers
as set forth therein;
WHEREAS, the Borrowers, BankBoston, USTrust, KeyBank and the Agent amended
and restated the Original Credit Agreement in its entirety as set forth in that
certain Amended and Restated Revolving Credit and Term Loan Agreement dated as
of June 17, 1997 (the "June, 1997 Credit Agreement"), pursuant to which such
Banks agreed to make Loans to Borrowers as set forth therein;
WHEREAS, the Borrowers, BankBoston, USTrust, KeyBank, Bank of America
National Trust and Savings Association, BHF- Bank Aktiengesellschaft, Comerica
Bank and the Agent amended and restated the June, 1997 in its entirety as set
forth in that certain Amended and Restated Revolving Credit and Term Loan
Agreement dated as of August 7, 1997 (the "August, 1997 Credit Agreement"),
pursuant to which such Banks agreed to make loans to the Borrowers as set forth
therein;
WHEREAS, the Borrowers have acquired two new subsidiaries, All Cycle Waste,
Inc. and ▇▇▇▇▇▇▇ Brothers, Inc., and such subsidiaries are added as Borrowers
hereunder;
WHEREAS, the Borrowers have requested, and the Banks and the Agent have
agreed to amend and restate the August, 1997 Credit Agreement in its entirety as
set forth herein;
NOW, THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto hereby agree as follows:
BOS-BUSN:552657.1
1. DEFINITIONS AND RULES OF INTERPRETATION.
1.1. Definitions. The following terms shall have the meanings set forth in
this 1 or elsewhere in the provisions of this Agreement referred to below:
Accountants. See 6.4(a).
Agreement. This Amended and Restated Revolving Credit Agreement, including
the Schedules and Exhibits hereto.
Agent. BankBoston acting as agent for the Banks.
Agent's Head Office. The Agent's head office is located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
All Cycle. All Cycle Waste, Inc., a Vermont corporation.
Applicable Laws. See 7.10.
Applicable Rate. The applicable rate per annum of interest on the Loans set
forth in the following table:
@@
----------------------------------------------------------------
| | | |
| Pricing Ratio |Applicable Rate for |Applicable Rate for|
| | Base Rate Loans | Eurodollar Rate |
| | | Loans |
----------------------------------------------------------------
----------------------------------------------------------------
|less than 2.00:1 | Base Rate |Eurodollar Rate plus
| | | |
| | | 1.00% per annum |
----------------------------------------------------------------
----------------------------------------------------------------
|greater than or | Base Rate |Eurodollar Rate plus
| | | |
|equal to 2.00:1 | | 1.25% per annum |
| and less than | | |
| 2.50:1 | | |
----------------------------------------------------------------
----------------------------------------------------------------
|greater than or | Base Rate |Eurodollar Rate plus
| | | |
|equal to 2.50:1 | | 1.50% per annum |
| and less than | | |
| 3.00:1 | | |
----------------------------------------------------------------
----------------------------------------------------------------
|greater than or | Base Rate |Eurodollar Rate plus
| | | |
|equal to 3.00:1 | | 1.75% per annum |
| and less than | | |
| 3.50:1 | | |
----------------------------------------------------------------
----------------------------------------------------------------
|greater than or | Base Rate |Eurodollar Rate plus
| | | |
|equal to 3.50:1 | | 2.00% per annum |
----------------------------------------------------------------
@@
Each Applicable Rate shall become effective on the first day after receipt
by the Banks of financial statements delivered pursuant to 7.4(a) or (b) hereof
which indicate a change in the Pricing Ratio and in the Applicable Rate in
accordance with the above table. If at any time the financial statements
required to be delivered pursuant to 7.4(a) or (b) hereof are not delivered with
10 days after the time periods specified in such subsections, the Applicable
Rate shall be the rate set forth in the table for a Pricing Ratio greater than
or equal to 3.50:1, subject to adjustment upon actual receipt of such financial
statements.
Balance Sheet Date. April 30, 1997.
Bank of America. Bank of America National Trust and Savings Association
individually and as Co-Agent.
BankBoston. BankBoston, N.A.
Banks. See Preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Agent at its head office in Boston, Massachusetts, as its
"base rate" (it being understood that such rate is a reference rate and not
necessarily the lowest rate of interest charged by the Bank) or (b) one percent
(1%) above the overnight federal funds effective rate, as published by the Board
of Governors of the Federal Reserve System, as in effect from time to time.
Base Rate Loans. Revolving Credit Loans bearing interest calculated by
reference to the Base Rate.
Borrowers. See Preamble.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business, and, in the case
of Eurodollar Rate Loans, also a day which is a Eurodollar Business Day.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and good will); provided that Capital Assets shall not
include any item customarily charged directly to expense or depreciated over a
useful life of twelve (12) months or less in accordance with GAAP.
Capital Expenditures. Amounts paid or indebtedness incurred by any Person
in connection with the purchase and lease by such Person of Capital Assets that
would be required to be capitalized and shown on the balance sheet of such
Person in accordance with GAAP.
Casella Associates Leases. The leases between the Borrowers and Casella
Associates, a Vermont partnership, for the property in Rutland, Vermont and
Montpelier, Vermont.
Casella TIRES Real Estate. The Real Property in Elliot, Maine owned by
Casella T.I.R.E.S., Inc.
Certified. With respect to the financial statements of any Person, such
statements as audited by a firm of independent auditors, whose report expresses
the opinion, without qualification, that such financial statements present
fairly the financial position of such Person.
CFO. See 7.4(b).
Clinton Lease. The Operation, Management and Lease Agreement dated as of
July 10, 1996 between the Parent and Clinton County, New York for the lease of
the Clinton County Landfill and related assets.
Closing Date. The date on which the conditions precedent set forth in 10
are satisfied.
Code. The Internal Revenue Code of 1986, as amended and in effect from time
to time.
Collateral. All of the property, rights and interests of the Borrowers that
are or are intended to be subject to the security interests and mortgages
created by the Security Documents.
Collateral Assignment of Contracts and Permits. The Amended and Restated
Collateral Assignment of Contracts and Permits dated as of the Closing Date
among the Borrowers and the Agent, in form and substance satisfactory to the
Agent.
Commitment. With respect to each Bank, the amount determined by multiplying
such Bank's Commitment Percentage by the aggregate amount of the Banks' Total
Commitment to make Revolving Credit Loans to the Borrowers, as the same may be
reduced from time to time.
Commitment Fee Percentage. The applicable percentage per annum as set forth
below used in calculating the commitment fee payable pursuant to 5.2(a), which
percentage shall vary from time to time in accordance with the Pricing Ratio:
@@
------------------------------------------------
| | |
| Pricing Ratio | Commitment Fee |
| | Percentage |
------------------------------------------------
------------------------------------------------
| less than 2.00:1 | 1/4% |
------------------------------------------------
------------------------------------------------
|greater than or equal to | 1/4% |
| 2.00:1 and less than | |
| 2.50:1 | |
------------------------------------------------
------------------------------------------------
|greater than or equal to | 3/8% |
| 2.50:1 and less than | |
| 3.00:1 | |
------------------------------------------------
------------------------------------------------
|greater than or equal to | 1/2% |
| 3.00:1 and less than | |
| 3.50:1 | |
------------------------------------------------
------------------------------------------------
|greater than or equal to | 1/2% |
| 3.50:1 | |
------------------------------------------------
@@
The Commitment Fee Percentage shall become effective on the first day after
receipt by the Banks of financial statements delivered pursuant to 7.4(a) or
7.4(b) which indicate a change in the Pricing Ratio and in the Commitment Fee
Percentage in accordance with the above table.
If at any time the financial statements required to be delivered pursuant
to 7.4(a) or (b) hereof are not delivered with 10 days after the time periods
specified in such subsections, the Applicable Rate shall be the rate set forth
in the table for a Pricing Ratio greater than or equal to 3.50:1, subject to
adjustment upon actual receipt of such financial statements.
Commitment Percentage. With respect to each Bank, the percentage set forth
beside its name on Schedule 2 hereto as the amount of such Bank's percentage of
the aggregate Commitments of all of the Banks (subject to adjustment upon any
assignment pursuant to 19).
Compliance Certificate. See 7.4(c).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrowers consolidated in
accordance with GAAP.
Consolidated Earnings Before Interest and Taxes or EBIT. For any period,
the Consolidated Net Income (or Deficit) of the Borrowers determined in
accordance with GAAP, plus (a) interest expense, and (b) income tax expense.
Consolidated Earnings Before Interest Taxes Depreciation and Amortization
or EBITDA. For any period, the Consolidated Net Income (or Deficit) of the
Borrowers determined in accordance with GAAP, plus (a) interest expense, (b)
income taxes (c) amortization expense and (d) depreciation expense for such
period.
Consolidated Funded Indebtedness. See 9.3.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrowers after deduction of all expenses, taxes and proper
charges and before deduction of (a) the special pre-tax, one-time charges in the
amount of $650,000 incurred in the fiscal quarter ended April 30, 1997 in
connection with the settlement of the Meridian Litigation and (b) the $100,000
charge incurred in the fiscal quarter ended April 30, 1997 in connection with
the establishment of a reserve for the Casella T.I.R.E.S., Inc. stockpile in
Hampden, Maine.
Consolidated Total Interest Expense. For any period, the aggregate amount
of interest expense required to be paid or accrued by the Borrowers during such
period on all Indebtedness of the Borrowers outstanding during all or any part
of such period, including capitalized interest expense for such period, but
excluding therefrom the non-cash amortization of debt issuance costs.
Consolidated Total Assets. All assets of the Borrowers determined on a
consolidated basis in accordance with GAAP.
Consolidated Total Liabilities. All liabilities of the Borrowers determined
on a consolidated basis in accordance with GAAP.
Consulting Engineer. An environmental consulting firm acceptable to the
Banks.
Conversion Request. A notice given by the Borrowers to the Agent of the
Borrowers' election to convert or continue a Loan in accordance with 5.12.
Default. See 13.
Depository Accounts. See 6.23.
Disposal. See "Release".
Distribution. The declaration or payment of any dividend on or in respect
of any shares of any class of capital stock of any Person, other than dividends
payable solely in shares of common stock of such Person; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
such Person, directly or indirectly through a Subsidiary or otherwise; the
return of capital by any Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of
such Person.
Dollars or $. Dollars in lawful currency of the United States of America.
EBIT. See definition of Consolidated Earnings Before Interest and Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization.
Employee Benefit Plan. Any employee benefit plan within the meaning of 3(3)
of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate,
other than a Multiemployer Plan.
Environmental Laws. See 6.16(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with any
Borrower under 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of 4043 of ERISA and the regulations promulgated
thereunder as to which the requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Rate
Loan, the maximum rate (expressed as a decimal) at which any Bank subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other Dollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar Rate
Loan, the rate of interest equal to (i) the arithmetic rate per annum (rounded
upwards to the nearest 1/16 of one percent) at which Dollar deposits are offered
to the Agent by prime banks in whatever Eurodollar market may be selected by the
Agent in its sole discretion, acting in good faith at or about 10:00 a.m. local
time in such interbank market two Eurodollar Business Days prior to the
beginning of such Interest Period, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Rate Loan to which such Interest
Period applies, divided by (ii) a number equal to 1.00 minus the Eurocurrency
Reserve Rate, if applicable.
Eurodollar Rate Loans. Revolving Credit Loans bearing interest calculated
by reference to the Eurodollar Rate.
Event of Default. See 13.
Generally Accepted Accounting Principles or GAAP. When used in general,
Generally Accepted Accounting Principles means (1) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date, as shall be concurred in by independent
certified public accountants of recognized standing whose report expresses an
unqualified opinion (other than a qualification regarding changes in Generally
Accepted Accounting Principles) as to financial statements in which such
principles have been applied; and (2) when used with reference to the Borrowers,
such principles shall include (to the extent consistent with such principles)
the accounting practices reflected in the consolidated financial statements for
the year ended on the Balance Sheet Date.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of 3(2) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See 6.16(b).
Indebtedness. All obligations, contingent and otherwise, that in accordance
with GAAP should be classified upon the obligor's balance sheet as liabilities,
or to which reference should be made by footnotes thereto, including in any
event and whether or not so classified: (a) all debt and similar monetary
obligations (including capitalized leases and operating leases with a term
longer than 3 years), whether direct or indirect; (b) all obligations under any
lease (a "synthetic lease") treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S. income tax
purposes; (c) all liabilities secured by any mortgage, pledge, security
interest, lien, charge, or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (d) all guarantees, endorsements and other contingent
obligations in respect of indebtedness of others, whether direct or indirect,
including any obligation to supply funds to or in any manner to invest in,
directly or indirectly, the debtor, to purchase indebtedness, or to assure the
owner of indebtedness against loss, through an agreement to purchase goods,
supplies, or services for the purpose of enabling the debtor to make payment of
the indebtedness held by such owner or otherwise, the obligations to reimburse
the issuer in respect of any letters of credit and obligations in respect of
interest or exchange rate or commodity hedging arrangements, fuel price swaps,
fuel price caps, and fuel price collar or floor agreements, and similar
agreements or arrangements.
Interest Period. With respect to each Eurodollar Loan:
(a) initially, the period commencing on the date of a conversion from
a Base Rate Loan into a Eurodollar Loan or the making of a Eurodollar Loan,
and ending one (1), two (2), three (3) months or six (6) thereafter, as the
case may be, as the Borrowers may select pursuant to the provisions of this
Agreement; and
(b) thereafter, each subsequent Interest Period shall begin on the
last day of the preceding Interest Period, and end one (1), two (2), (3)
months or six (6) thereafter, as the case may be, as the Borrowers may
select pursuant to the provisions of this Agreement;
provided that all of the foregoing provisions relating to Interest Periods
are subject to the following:
(A) if any Interest Period would otherwise end on a day that is
not a Eurodollar Business Day, that Interest Period shall be extended to
the next succeeding Eurodollar Business Day unless the result of such
extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Eurodollar Business Day;
(B) if the Borrowers shall fail to give notice as provided in
5.12, the Borrowers shall be deemed to have requested a conversion of the
affected Eurodollar Rate Loan to a Base Rate Loan and the continuance of
all Base Rate Loans as Base Rate Loans on the last day of the then current
Interest Period with respect thereto;
(C) any Interest Period relating to any Eurodollar Rate Loan that
begins on the last Eurodollar Business Day of a calendar month (or on a day
for which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Eurodollar
Business Day of a calendar month; and
(D) no Interest Period shall extend beyond the Revolving Credit
Maturity Date.
Investments. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person. In determining the aggregate
amount of Investments outstanding at any particular time: (a) the amount of any
Investment represented by a guaranty shall be taken at not less than the
principal amount of the obligations guaranteed and still outstanding; (b) there
shall be included as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such interest is paid;
(c) there shall be deducted in respect of each such Investment any amount
received as a return of capital (but only by repurchase, redemption, retirement,
repayment, liquidating dividend or liquidating distribution); (d) there shall
not be deducted in respect of any Investment any amounts received as earnings on
such Investment, whether as dividends, interest or otherwise, except that
accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
KeyBank. KeyBank National Association individually and as Co-Agent.
Letters of Credit. Standby Letters of Credit issued or to be issued by the
Agent under 3 hereof for the account of the Borrowers.
Letter of Credit Applications. Letter of Credit Applications in such form
as may be agreed upon by any Borrower and the Agent from time to time which are
entered into pursuant to 3 hereof as such Letter of Credit Applications are
amended, varied or supplemented from time to time.
Letter of Credit Fee. See 5.2(b).
Letter of Credit Participation. See 3.1(b).
Letter of Credit Percentage. The percentage per annum equal to the margin
above the Eurodollar Rate charged on Eurodollar Loans, as in effect from time to
time, as set forth in the column "Applicable Rate for Eurodollar Rate Loans" in
the Applicable Rate table above.
Loan Documents. This Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, the Security Documents, and the
Subordination Agreements.
Loan and Letter of Credit Request. See 2.6.
Loans. The Revolving Credit Loans.
Maximum Drawing Amount. The maximum aggregate amount from time to time that
the beneficiaries may draw under outstanding Letters of Credit.
Meridian Litigation. The civil action brought by ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇. and
▇▇▇▇ ▇. ▇▇▇▇▇▇▇ derivatively on behalf of Meridian Group, Inc. against the
Parent and certain other parties in Rutland (Vermont) Superior Court.
Mortgages. The mortgages and deeds of trust, as amended and in effect from
time to time, from the Borrowers to the Agent with respect to the fee and
leasehold interests of the Borrowers in the Sanco Landfill, the ▇▇▇▇▇▇ Real
Estate, the Casella TIRES Real Estate, the Superior Real Estate, and the Waste
USA Landfill, each in form and substance satisfactory to the Agent, and any
other mortgages or deeds of trust requested by the Agent pursuant to 7.19.
Multiemployer Plan. Any multiemployer plan within the meaning of 3(37) of
ERISA maintained or contributed to by any Borrower or any ERISA Affiliate.
Notes. See 2.3.
Obligations. All indebtedness, obligations and liabilities of the Borrowers
to any of the Banks and the Agent, individually or collectively, existing on the
date of this Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred or the Letters of Credit, the Notes, interest rate protection
arrangements and similar agreements or arrangements provided by any of the Banks
or any other instrument at any time evidencing any thereof.
PBGC. The Pension Benefit Guaranty Corporation created by 4002 of ERISA and
any successor entity or entities having similar responsibilities.
Permit Note. The promissory note of New England Waste Services of Vermont,
Inc. dated January 25, 1995 and payable to the order of Waste USA in the
principal amount of $200,000.
Permitted Liens. See 8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Pricing Ratio. At the end of any fiscal quarter of the Borrowers, the ratio
of Indebtedness of the Borrowers for borrowed money and capitalized leases to
(b) EBITDA for the period of four (4) consecutive fiscal quarters then ended, as
calculated on the Compliance Certificate delivered by the Borrowers pursuant to
7.4(c).
Real Property. All real property heretofore, now, or hereafter owned or
leased by the Borrowers.
Reimbursement Obligation. The Borrowers' obligation to reimburse the Agent
and the Banks on account of any drawing under any Letter of Credit as provided
in 3.2.
Release. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. 9601
et seq. ("CERCLA") and the term "Disposal" (or "Disposed") shall have the
meaning specified in the Resource Conservation and Recovery Act of 1976, 42
U.S.C. 6901 et seq. ("RCRA") and regulations promulgated thereunder; provided,
that in the event either CERCLA or RCRA is amended so as to broaden the meaning
of any term defined thereby, such broader meaning shall apply as of the
effective date of such amendment and provided further, to the extent that the
laws of a state wherein the property lies establishes a meaning for "Release" or
"Disposal" which is broader than specified in either CERCLA or RCRA, such
broader meaning shall apply.
Required Banks. As of any date, the Banks holding sixty-six and two thirds
percent (66-2/3%) of the outstanding principal amount of the Loans on such date;
and if no such principal is outstanding, the Banks whose aggregate Commitments
constitute sixty-six and two thirds percent (66-2/3%) of the Total Commitment.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrowers pursuant to 2.
Revolving Credit Maturity Date. January 12, 2003.
Sanco Landfill. The Landfill in Bethlehem, New Hampshire, owned and
operated by North Country Environmental Services, Inc.
▇▇▇▇▇▇ Real Estate. The Real Property in Hampden, Maine owned by ▇▇▇▇▇▇
Environmental Services and ▇▇▇▇▇▇ Environmental Recovery Facilities, Inc.
Security and Pledge Agreement. The Amended and Restated Security and Pledge
Agreement, dated the Closing Date, among the Borrowers and the Agent in form and
substance satisfactory to the Agent.
Security Documents. The Security and Pledge Agreement, the Collateral
Assignment of Contracts and Permits, and the Mortgages, each as amended and in
effect from time to time, and any additional documents evidencing or perfecting
the Agent's lien on the assets of the Borrowers for the benefit of the Banks,
including Uniform Commercial Code financing statements.
Settlement. The making of, or receiving of, payments in immediately
available funds, by the Banks to or from the Agent in accordance with 2.7 to the
extent necessary to cause each Bank's actual share of the outstanding amount of
the Loans to be equal to each Bank's Commitment Percentage of the outstanding
amount of such Loans, in any case where, prior to such event or action, the
actual share is not so equal.
Settlement Amount. See 2.7(b).
Settlement Date. (a) The Drawdown Date relating to any Loan and Letter of
Credit Request, (b) the last Business Day of each week, (c) the Business Day
immediately following the Agent becoming aware of the existence of an Event of
Default, (d) any Business Day on which the amount of Revolving Credit Loans
outstanding from BankBoston is equal to or greater than BankBoston's Commitment,
or (e) the Business Day immediately following any Business Day on which the
amount of Revolving Credit Loans outstanding increases or decreases by more than
$1,000,000 as compared to the previous Settlement Date.
Settling Bank. See 2.7(b).
Subordinated Debt. Indebtedness of the Borrowers which has been
subordinated and made junior to the payment and performance in full of the
Obligations, and evidenced as such by the Subordination Agreements or by another
written instrument containing subordination provisions in form and substance
satisfactory to the Banks, including without limitation, the Permit Note and the
obligations to Waste USA under the Waste USA Lease; provided that (a) at the
time such Subordinated Debt is incurred, no Default or Event of Default has
occurred or would occur as a result of such incurrence, (b) the aggregate
Subordinated Debt incurred after the date hereof does not exceed $15,000,000;
and (c) the documentation evidencing such Subordinated Debt shall have been
delivered to the Agent and shall contain all of the following characteristics:
(i) it shall be unsecured, (ii) it shall bear a market rate of interest, (iii)
it shall have a final maturity of at least five (5) years, (iv) it shall not
require unscheduled principal repayments thereof prior to the maturity date, (v)
it shall have financial covenants (including covenants relating to incurrence of
indebtedness) which are meaningfully less restrictive than those set forth
herein, (vi) it shall have no restrictions on the Borrower's ability to grant
liens securing indebtedness ranking senior to such Subordinated Debt, (vii) it
shall permit the incurrence of senior indebtedness under this Credit Agreement,
(viii) it may be cross-accelerated with the Obligations and other senior
indebtedness of the Borrowers (but shall not be cross-defaulted except for
payment defaults which the senior lenders have not waived) and may be
accelerated upon bankruptcy, (ix) it shall provide that (A) upon any payment or
distribution of the assets of the Borrowers (including after the commencement of
a bankruptcy proceeding) of any kind or character, all of the Obligations
(including interest accruing after the commencement of any bankruptcy proceeding
at the rate specified for the applicable Obligation, whether or not such
interest is an allowable claim in any such proceeding) shall be paid in full
prior to any payment being received by the holders of the Subordinated Debt and
(B) until all of the Obligations (including the interest described in subclause
(A) above) are paid in full in cash, any payment or distribution to which the
holders of the Subordinated Debt would be entitled but for the subordination
provisions of the type described in clauses (x) and (xi) hereof shall be made to
the holders of the Obligations, (x) it shall provide that in the event of a
payment default under 13.1(a) or (b) hereof, the Borrowers shall not be required
to pay the principal of, or any interest, fees and all other amounts payable
with respect to the Subordinated Debt until the Obligations have been paid in
full in cash, (xi) it shall provide that in the event of any other Event of
Default, the Banks shall be permitted to block payments of principal, interest,
fees and all other amounts payable with respect to the Subordinated Debt for a
period of 180 days, and (xii) it shall acknowledge that none of the provisions
outlined in part (c) of this definition can be amended, modified or otherwise
altered without the prior written consent of the Banks.
Subordination Agreements. Collectively, (a) the Waste USA Subordination
Agreement, (b) the Subordination Agreement dated as of August 1, 1995 among the
Agent, the Parent and Green Mountain Sanitation, Inc., ▇▇▇▇▇▇▇▇ Recycling and
Salvage, Inc., Morrisville Maintenance, Inc. and Northern Transfer, Inc.
subordinating the $500,000 promissory note of the Parent referenced therein, (c)
any Subordination Agreement among the Agent, ▇▇▇▇▇▇▇ Waste Management, Inc. and
Northeast Waste Services, Ltd. subordinating certain obligations of ▇▇▇▇▇▇▇
Waste Management, Inc. to Northeast Waste Services, Ltd. referenced therein, (d)
any Subordination Agreement among the Agent, the Parent, and the sellers of the
capital stock of ▇▇▇▇▇▇ Environmental Recovery Facilities, Inc. and ▇▇▇▇▇▇
Environmental Services (such sellers, collectively, the "▇▇▇▇▇▇ Sellers"),
subordinating certain obligations of the Parent to the ▇▇▇▇▇▇ Sellers referenced
therein and (e) any other subordination agreements entered into by the Agent,
the Borrowers and any sellers of assets to any Borrower, subordinating the
obligations of such Borrower to such seller to the Obligations in substantially
the form of Exhibit F hereto.
Subsidiary. Any corporation, association, trust, or other business entity
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Superior Real Estate. The Real Property in Newfield, New York owned by
▇▇▇▇▇▇▇ Waste Management of N.Y., Inc.
Total Commitment. $150,000,000, as such amount may be reduced pursuant to
2.2 hereof.
Type. As to any Revolving Credit Loan, its nature as a Base Rate Loan or a
Eurodollar Rate Loan.
Waste USA. Waste U.S.A., Inc., a Vermont corporation.
Waste USA Landfill. The Landfill in Coventry, Vermont acquired from Waste
USA by New England Waste Services of Vermont, Inc.
Waste USA Lease. The lease of the airspace at the Waste USA Landfill
between the lessor thereunder and New England Waste Services of Vermont, Inc.
Waste USA Purchase Agreement. The Asset Purchase, Stock Purchase and Lease
Agreement dated as of May 6, 1994 among Waste USA, 161531 Canada Ltd. and New
England Waste Services, Inc., which agreement has been assigned by New England
Waste Services, Inc. to New England Waste Services of Vermont, Inc.
Waste USA Subordination Agreement. The Subordination Agreement dated as of
January 25, 1995, among the Agent and Waste USA.
▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇ Brothers, Inc., a Vermont corporation.
Year 2000 Problem. The risk that computer applications used by the
Borrowers may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to, and any date after, December 31,
1999.
1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms capitalized but not otherwise defined herein have
the meanings assigned to them by Generally Accepted Accounting Principles
applied on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by Generally Accepted
Accounting Principles, which terms are defined in the Uniform Commercial
Code as in effect in the Commonwealth of Massachusetts, have the meanings
assigned to them therein.
(h) Reference to a particular "" refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section
or subdivision of this Agreement.
2. THE REVOLVING CREDIT LOANS.
2.1. Commitment to Lend. Subject to the terms and conditions set forth in
this Agreement, each of the Banks severally agrees to lend to the Borrowers and
the Borrowers may borrow, repay, and reborrow from time to time between the
Closing Date and the Revolving Credit Maturity Date upon notice by the Borrowers
to the Agent given in accordance with 2.6, such Bank's Commitment Percentage of
such sums as are requested by the Borrowers in the minimum aggregate amount of
$500,000 or an integral multiple thereof; provided, that except as otherwise
provided herein, the outstanding amount of Revolving Credit Loans and the
Maximum Drawing Amount of the Letters of Credit shall not exceed the Total
Commitment at any time. Revolving Credit Loans made hereunder shall be made pro
rata in accordance with each Bank's Commitment Percentage. Each request for a
Revolving Credit Loan hereunder shall constitute a representation and warranty
by the Borrowers that the conditions set forth in 10 and 11, as the case may be,
have been satisfied on the date of such request. Any unpaid Reimbursement
Obligation under the Letters of Credit shall for all purposes be a Revolving
Credit Loan hereunder.
2.2. Reduction of Total Commitment.
(a) The Borrowers shall have the right at any time and from time to
time upon two (2) Business Days' prior written notice to the Agent to
reduce by $1,000,000 or an integral multiple thereof or terminate entirely
the Total Commitment, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages
of the amount specified in such notice or, as the case may be, terminated.
The Agent will notify the Banks promptly after receiving any notice of the
Borrowers delivered pursuant to this 2.2.
(b) No reduction or termination of the Total Commitment once made may
be revoked; the portion of the Total Commitment reduced or terminated may
not be reinstated; and amounts in respect of such reduced or terminated
portion may not be reborrowed.
2.3. The Notes. The Revolving Credit Loans shall be evidenced by promissory
notes of the Borrowers in substantially the form of Exhibit A hereto (each a
"Note"), dated as of the Closing Date and completed with appropriate insertions.
One Note shall be payable to the order of each Bank in a principal amount equal
to such Bank's Commitment or, if less, the outstanding amount of all Revolving
Credit Loans made by such Bank, plus interest accrued thereon, as set forth
below. The Borrowers irrevocably authorize each Bank to make or cause to be
made, in connection with a drawdown date of any Revolving Credit Loan or at the
time of receipt of any payment of principal on such Bank's Note, an appropriate
notation on such Bank's records reflecting the making of such Revolving Credit
Loan or the receipt of such payment (as the case may be). The outstanding amount
of the Revolving Credit Loans set forth on such Bank's record shall be prima
facie evidence of the principal amount thereof owing and unpaid to such Bank,
but the failure to record, or any error in so recording, any such amount shall
not limit or otherwise affect the obligations of the Borrowers hereunder or
under any Note to make payments of principal of or interest on any Note when
due.
2.4. Maturity of the Revolving Credit Loans. The Revolving Credit Loans
shall be due and payable on the Revolving Credit Maturity Date. The Borrowers
promise to pay on the Revolving Credit Maturity Date all Revolving Credit Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon. The Banks shall effect a Settlement on the Revolving Credit Maturity
Date.
2.5. Mandatory Repayments of the Revolving Credit Loans. If at any time the
outstanding amount of the Revolving Credit Loans plus the Maximum Drawing Amount
of all outstanding Letters of Credit exceeds the Total Commitment, whether by
reduction of the Total Commitment or otherwise, then the Borrowers shall
immediately pay the amount of such excess to the Agent for application to the
Revolving Credit Loans, subject to Settlement among the Banks in accordance with
2.7(b) hereof, or if no Revolving Credit Loans shall be outstanding, to be held
by the Agent as collateral security for the Reimbursement Obligations provided,
however, that if the amount of cash collateral held by the Agent pursuant to
this 2.5 exceeds the amount of the Obligations, the Agent shall return such
excess to the Borrowers.
2.6. Requests for Revolving Credit Loans. (a) The Borrowers shall give to
the Agent written notice in the form of Exhibit B hereto (or telephonic notice
confirmed by telecopy on the same Business Day in the form of Exhibit B hereto)
of each Revolving Credit Loan requested hereunder (a "Loan and Letter of Credit
Request") not later than 11:00 a.m. Boston time (i) no less than one (1)
Business Day prior to the proposed drawdown date (the "Drawdown Date") of any
Base Rate Loan and (ii) no less than three (3) Eurodollar Business Days prior to
the proposed Drawdown Date of any Eurodollar Rate Loan. Each such notice shall
specify (A) the amount of such Revolving Credit Loan, (B) the proposed Drawdown
Date of such Revolving Credit Loan, (C) the Type of such Revolving Credit Loan,
and (D) the Interest Period for such Revolving Credit Loan (if a Eurodollar Rate
Loan).
(b) Notwithstanding the notice and minimum amount requirements set forth in
2.6(a) and 2.1 respectively, but otherwise in accordance with the terms and
conditions of this Credit Agreement, the Agent may, in its sole discretion and
without conferring with the Banks, make Revolving Credit Loans which are Base
Rate Loans to the Borrowers by entry of credits to the Borrowers' operating
account(s) with the Agent or such other account designated by the Parent and
agreed to by the Agent to cover checks which the Borrowers have drawn or made
against such account. The Borrowers hereby request and authorize the Agent to
make from time to time such Revolving Credit Loans by means of appropriate
entries of such credits sufficient to cover checks then presented. The Borrowers
acknowledge and agree that the making of such Revolving Credit Loans shall, in
each case, be subject in all respects to the provisions of this Credit Agreement
as if they were Revolving Credit Loans covered by a Loan and Letter of Credit
Request including, without limitation, the limitations set forth in 2.1 and the
requirements that the applicable provisions of 10 (in the case of Revolving
Credit Loans made on the Closing Date) and 11 be satisfied. All actions taken by
the Agent pursuant to the provisions of this 2.6(b) shall be conclusive and
binding on the Borrowers absent manifest error or the Agent's gross negligence
or willful misconduct. Prior to a Settlement, interest on Revolving Credit Loans
made pursuant to this 2.6(b) shall be for the account of the Agent.
2.7. Funds for Loans; Settlements.
(a) Upon receipt of the documents required by 10 and 11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will deposit into the account of the Parent at the
Agent's Head Office the amount of such Revolving Credit Loans requested by
the Borrowers pursuant to 2.6 hereunder in immediately available funds not
later than 2:00 p.m. (Boston time) on the proposed Drawdown Date.
(b) The Banks shall effect Settlements on each Settlement Date. On or
before 12:00 p.m. (Boston time) on each such Settlement Date, the Agent
shall give telephonic notice to the Banks of (i) (A) the respective
outstanding amount of Revolving Credit Loans made by each Bank from the
immediately preceding Settlement Date through the close of business on the
prior day and (B) the unfunded amount, if any, of each Revolving Credit
Loan requested pursuant to 2.6(a) as of such time on such date, (ii) the
amount that any Bank, as applicable (the "Settling Bank"), shall pay to
effect a Settlement (the "Settlement Amount") and (iii) the portion (if
any) of the aggregate Settlement Amount to be paid to each Bank. A
statement of the Agent submitted to the Banks with respect to any amounts
owing under this 2.7(b) shall be prima facie evidence of the amount due and
owing. Each Settling Bank shall, as promptly as practical during normal
business hours on each Settlement Date, effect a wire transfer of
immediately available funds to the Agent in the amount of its Settlement
Amount. The Agent shall, as promptly as practicable during normal business
hours on each Settlement Date, effect a wire transfer of immediately
available funds to each Bank of the Settlement Amount to be paid to such
Bank. All funds advanced by any Bank as a Settling Bank pursuant to this
2.7(b) shall for all purposes be treated as a Revolving Credit Loan made by
such Settling Bank to the Borrowers and all funds received by any Bank
pursuant to this 2.7(b) shall for all purposes be treated as repayment of
amounts owed by the Borrowers with respect to Revolving Credit Loans made
by such Bank as of the date received by the Agent. In the event that any
bankruptcy, reorganization, liquidation, receivership or similar cases or
proceedings in which any of the Borrowers is a debtor prevents a Settling
Bank from making any Revolving Credit Loan to effect a Settlement as
contemplated hereby, such Settling Bank will make such disposition and
arrangements with the other Banks and the Agent with respect to such
Revolving Credit Loans, either by way of purchase of participations,
distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Bank's share of the outstanding Revolving Credit Loans
being equal, as nearly as may be, to such Bank's Commitment Percentage of
the outstanding amount of the Revolving Credit Loans.
(c) The Agent may (unless notified to the contrary by a Settling Bank
by 2:00 p.m. (Boston time) on the Settlement Date) assume that each
Settling Bank has made available to the Agent the Settlement Amount with
respect to its Revolving Credit Loans, and the Agent may (but shall not be
required to), in reliance upon such assumption, make available to the
Borrowers the aggregate Settlement Amount. If the Settlement Amount is made
available to the Agent (or, conversely, if the Agent makes the Settlement
Amount available to a Bank entitled thereto) on a date after the Settlement
Date, such Settling Bank shall pay the Agent (or, conversely, the Agent
shall pay such Bank entitled to such Settlement Amount) on demand an amount
equal to the product of (i) the average computed for the period referred to
in clause (iii) below, of the weighted average annual interest rate paid by
the Agent or such Bank, as applicable, for federal funds acquired by the
Agent or such Bank, as applicable during each day included in such period
times (ii) the Settlement Amount, times (iii) a fraction, the numerator of
which is the number of days that elapse from and including such Settlement
Date to but not including the date on which the Settlement Amount shall
become immediately available to the Agent or such Bank, as applicable, and
the denominator of which is 365; upon payment of such amount the Settling
Bank shall be deemed to have delivered the Settlement Amount of such
Settling Bank on the Settlement Date and shall become entitled to interest
payable by the Borrowers with respect to such Bank's Settlement Amount as
if such share were delivered on the Settlement Date. If the Settlement
Amount is not in fact made available to the Agent by the Settling Bank
within three (3) Business Days of such Settlement Date, the Agent shall be
entitled to debit the Borrowers' accounts to recover such amount from the
Borrowers, with interest thereon at the rate per annum applicable to any
Loans made on such Settlement Date.
(d) The failure or refusal of any of the Banks to make available to
the Agent at the aforesaid time on any date the amount of the Loans to be
made by such Bank shall not relieve any other Bank from its obligations
hereunder to make Settlements and Loans, on such Drawdown Date or on any
subsequent Drawdown Date, but in no event shall any Bank or the Agent be
responsible for funding or otherwise be liable for the failure of any other
Bank to make the Loans to be made by such other Bank.
2.8. Optional Prepayments or Repayments of Loans. The Borrowers shall have
the right, at their election, to repay or prepay the outstanding amount of the
Revolving Credit Loans, as a whole or in part, at any time without penalty or
premium; provided (i) each partial prepayment shall be in the principal amount
of $250,000 or an integral multiple thereof, and (ii) that the full or partial
prepayment of the outstanding amount of any Eurodollar Rate Loans pursuant to
this 2.8 may be made only on the last day of the Interest Period relating
thereto. The Borrowers shall give the Agent, no later than 11:00 a.m. (Boston
time) (a) at least one (1) Business Day written notice (or telephonic notice
confirmed in writing) of such proposed prepayment or repayment, written notice
(or telephonic notice confirmed in writing) of any proposed prepayment or
repayment pursuant to this 2.8 of Base Rate Loans and (b) at least three (3)
Eurodollar Business Days written notice (or telephonic notice confirmed in
writing) of any proposed prepayment or repayment pursuant to this 2.8 of
Eurodollar Rate Loans, in each case, specifying the proposed date of prepayment
or repayment of Revolving Credit Loans and the principal amount to be paid. Each
such partial prepayment shall be applied first to the principal of Base Rate
Loans and then to the principal of Eurodollar Rate Loans.
3. LETTERS OF CREDIT.
3.1. Letter of Credit Commitments.
(a) Subject to the terms and conditions hereof and the execution and
receipt of a Loan and Letter of Credit Request reflecting the Maximum
Drawing Amount of all Letters of Credit (including the requested Letter of
Credit) and a Letter of Credit Application, the Agent, on behalf of the
Banks and in reliance upon the agreement of the Banks set forth in 3.1(b)
and upon the representations and warranties of the Borrowers contained
herein, agrees to issue standby letters of credit, in such form as may be
requested from time to time by the Borrowers and agreed to by the Agent;
provided, however, that, after giving effect to such request, (i) the
aggregate Maximum Drawing Amount of all letters of credit issued at any
time under this 3.1(a) (the "Letters of Credit") shall not exceed
$25,000,000 and (ii) the aggregate Maximum Drawing Amount of all Letters of
Credit plus the sum of the outstanding amount of the Revolving Credit Loans
shall not exceed the Total Commitment; and provided further that no Letter
of Credit shall have an expiration date later than the earlier of (i) one
year after the date of issuance of the Letter of Credit, or (ii) thirty
(30) days prior to the Revolving Credit Maturity Date.
(b) Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any
other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage thereof, to reimburse the Agent on demand for the
amount of each draft paid by the Agent under each Letter of Credit to the
extent that such amount is not reimbursed by the Borrowers pursuant to 3.2
(such agreement for a Bank being called herein the "Letter of Credit
Participation" of such Bank). The Agent shall not issue any Letter of
Credit unless all of the conditions precedent under 11 hereof have been
satisfied.
(c) Each such payment made by a Bank shall be treated as the purchase
by such Bank of a participating interest in the Borrowers' Reimbursement
Obligation under 3.2 in an amount equal to such payment. Each Bank shall
share in accordance with its participating interest in any interest which
accrues pursuant to 3.2.
3.2. Reimbursement Obligation of the Borrowers. In order to induce the
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby agree to reimburse or pay to the Agent
with respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder as follows:
(a) on each date that any draft presented under any Letter of Credit
is honored by the Agent or the Agent otherwise makes payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other
costs and expenses whatsoever incurred by the Agent or any Bank in
connection with any payment made by the Agent or any Bank under, or with
respect to, such Letter of Credit; and
(b) upon the Revolving Credit Maturity Date or the acceleration of the
Reimbursement Obligations with respect to all Letters of Credit in
accordance with 13, an amount equal to the then Maximum Drawing Amount of
all Letters of Credit, which amount shall be held by the Agent for the
benefit of the Banks and the Agent as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid by
the Borrowers under this 3.2 at any time from the date such amounts become due
and payable (whether as stated in this 3.2, by acceleration or otherwise) until
payment in full (whether before or after judgment) shall be payable to the Agent
on demand at the rate specified in 5.7 for overdue amounts.
3.3. Letter of Credit Payments. If any draft shall be presented or other
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrowers of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. On the date that such draft is paid or other payment is made
by the Agent, the Agent shall promptly notify the Banks of the amount of any
unpaid Reimbursement Obligation. All such unpaid Reimbursement Obligations with
respect to Letters of Credit shall, provided that no Event of Default under
13(g) or 13(h) has occurred, become automatically a Revolving Credit Loan. No
later than 3:00 p.m. (Boston time) on the Business Day next following the
receipt of such notice, each Bank shall make available to the Agent, at the
Agent's Head Office, in immediately available funds, such Bank's Commitment
Percentage of such unpaid Reimbursement Obligation, together with an amount
equal to the product of (a) the average, computed for the period referred to in
clause (c) below, of the weighted average interest rate paid by the Agent for
federal funds acquired by the Agent during each day included in such period,
times (b) the amount equal to such Bank's Commitment Percentage of such unpaid
Reimbursement Obligation, times (c) a fraction, the numerator of which is the
number of days that have elapsed from and including the date the Agent paid the
draft presented for honor or otherwise made payment until the date on which such
Bank's Commitment Percentage of such unpaid Reimbursement Obligation shall
become immediately available to the Agent, and the denominator of which is 365.
The responsibility of the Agent to the Borrowers and the Banks shall be only to
determine that the documents (including each draft) delivered under each Letter
of Credit in connection with such presentment shall be in conformity in all
material respects with such Letter of Credit.
3.4. Obligations Absolute. The Borrowers' obligations under this 3 shall be
absolute and unconditional under any and all circumstances and irrespective of
the occurrence of any Default or Event of Default or any condition precedent
whatsoever or any setoff, counterclaim or defense to payment which the Borrowers
may have or have had against the Agent, any Bank or any beneficiary of a Letter
of Credit. Subject to the obligations of the Banks pursuant to Article V of the
Uniform Commercial Code, the Borrowers further agree with the Agent and the
Banks that the Agent and the Banks shall not be responsible for, and the
Borrowers' Reimbursement Obligations under 3.2 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among the
Borrowers, the beneficiary of any Letter of Credit or any financing institution
or other party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrowers against the beneficiary of any Letter of
Credit or any such transferee. The Agent and the Banks shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrowers agree that any action taken or omitted by the Agent or any
Bank under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon the Borrowers and
shall not result in any liability on the part of the Agent or any Bank to the
Borrowers.
3.5. Reliance by Agent. To the extent not inconsistent with 3.4, the Agent
shall be entitled to rely, and shall be fully protected in relying upon, any
Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent.
4. INTENTIONALLY OMITTED.
5. INTEREST, FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY.
5.1. Interest. Except as otherwise provided in 5.7, the outstanding
principal amount of the Loans shall bear interest at the rate per annum equal to
the Applicable Rate. Interest shall be payable (a) quarterly in arrears on the
last Business Day of each calendar quarter for the quarter ending on such date,
for Base Rate Loans, (b) on the earlier of (i) the last day of the applicable
Interest Period or (ii) ninety (90) days after the Drawdown Date, on Eurodollar
Rate Loans, and (c) on the Revolving Credit Maturity Date. Any change in the
interest rate resulting from a change in the Base Rate is to be effective at the
beginning of the day of such change in the Base Rate.
5.2. Fees.
(a) Commitment Fee. The Borrowers agree to pay to the Agent for the
benefit of the Banks a commitment fee in an amount equal to the Commitment
Fee Percentage of the unused portion of the Total Commitment during each
calendar quarter or portion thereof from the Closing Date to the Revolving
Credit Maturity Date (or to the date of termination in full of the Total
Commitment, if earlier). This commitment fee shall be payable quarterly in
arrears on the first day of each calendar quarter for the immediately
preceding calendar quarter, with a final payment on the Revolving Credit
Maturity Date. The Agent agrees to pay to the Banks the commitment fee
received under this 5.2(a) pro-rata in accordance with their respective
Commitment Percentages.
(b) Letter of Credit Fee. The Borrowers shall, upon the issuance,
extension or renewal of any Letter of Credit, pay a fee (the "Letter of
Credit Fee") to the Agent equal to (i) the product of (A) the Letter of
Credit Percentage multiplied by (B) the Maximum Drawing Amount of each
Letter of Credit, plus (ii) the Agent's customary issuance fee, payable in
accordance with the Agent's customary practice. That portion of the Letter
of Credit Fee equal to one eighth of one percent (1/8%) per annum of the
Maximum Drawing Amount of each Letter of Credit shall be paid solely to the
Agent, and the balance (other than the issuance fee) shall be shared
pro-rata by each of the Banks in accordance with their respective
Commitment Percentages. The Letter of Credit Fee shall be payable quarterly
in arrears on the first day of each calendar quarter for the immediately
preceding calendar quarter, with a final payment on the expiration date of
each Letter of Credit.
(c) The Borrowers shall pay to the Agent an agent's fee and an
underwriting fee as set forth in a separate letter agreement between the
Borrowers and the Agent.
5.3. Payments.
(a) All payments of principal, interest, Reimbursement Obligations,
fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the
Banks and the Agent, received at the Agent's Head Office in immediately
available funds by 12:00 p.m. (Boston time) on any due date.
(b) All payments by the Borrowers hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and
clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any
jurisdiction or any political subdivision thereof or taxing or other
authority therein unless the Borrowers are compelled by law to make such
deduction or withholding. If any such obligation is imposed upon the
Borrowers with respect to any amount payable by them hereunder or under any
of the other Loan Documents, the Borrowers will pay to the Agent, for the
account of the Banks or (as the case may be) the Agent, on the date on
which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable
the Banks or the Agent to receive the same net amount which the Banks or
the Agent would have received on such due date had no such obligation been
imposed upon the Borrowers. In the event that the Borrowers are required to
make such deduction or withholding as a result of the fact that a Bank is
organized outside of the United States, such Bank shall use its reasonable
best efforts to transfer its Loans to an affiliate organized within the
United States if such transfer would have no adverse effect on such Bank or
the Loans. The Borrowers will deliver promptly to the Bank certificates or
other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrowers hereunder or under such
other Loan Document.
5.4. Computations. All computations of interest on the Loans and of Letter
of Credit Fees or other fees shall, unless otherwise expressly provided herein,
be based on a 360-day year and paid for the actual number of days elapsed.
Except as otherwise provided in the definition of the term "Interest Period"
with respect to Eurodollar Rate Loans, whenever a payment hereunder or under any
of the other Loan Documents becomes due on a day that is not a Business Day, the
due date for such payment shall be extended to the next succeeding Business Day,
and interest shall accrue during such extension.
5.5. Capital Adequacy. If any present or future law, governmental rule,
regulation, policy, guideline or directive (whether or not having the force of
law) or the interpretation thereof by a court or governmental authority with
appropriate jurisdiction affects the amount of capital required or expected to
be maintained by any Bank or the Agent or any corporation controlling such Bank
or the Agent and such Bank or the Agent determines that the amount of capital
required to be maintained by it is increased by or based upon the existence of
such Bank's or the Agent's Loans, Letter of Credit Participations or Letters of
Credit, or commitment with respect thereto, then such Bank or the Agent may
notify the Borrowers of such fact. To the extent that the costs of such
increased capital requirements are not reflected in the Base Rate (if relating
to Base Rate Loans), the Borrowers and such Bank or (as the case may be) the
Agent shall thereafter attempt to negotiate in good faith, within thirty (30)
days of the day on which the Borrowers receive such notice, an adjustment
payable hereunder that will adequately compensate such Bank or the Agent in
light of these circumstances. If the Borrowers and such Bank or the Agent are
unable to agree to such adjustment within thirty (30) days of the date on which
the Borrowers receive such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in such Bank's or the Agent's reasonable determination, provide adequate
compensation. Each Bank and the Agent shall allocate such cost increases among
its customers in good faith and on an equitable basis.
5.6. Certificate. A certificate setting forth any additional amounts
payable pursuant to 5.5 and a reasonable explanation of such amounts which are
due, submitted by any Bank or the Agent to the Borrowers, shall be conclusive,
absent manifest error, that such amounts are due and owing.
5.7. Interest on Overdue Amounts. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and payable on demand at a rate per annum equal to the Base
Rate plus two percentage points (2.00%) until such amount shall be paid in full
(after as well as before judgment).
5.8. Interest Limitation. Notwithstanding any other term of this Agreement
or any Note or any other document referred to herein or therein, the maximum
amount of interest which may be charged to or collected from any person liable
hereunder or under any Note by any Bank shall be absolutely limited to, and
shall in no event exceed, the maximum amount of interest which could lawfully be
charged or collected under applicable law (including, to the extent applicable,
the provisions of Section 5197 of the Revised Statutes of the United States of
America, as amended, 12 U.S.C. Section 85, as amended), so that the maximum of
all amounts constituting interest under applicable law, howsoever computed,
shall never exceed as to any person liable therefor such lawful maximum, and any
term of this Agreement, the Notes, the Letter of Credit Applications, or any
other document referred to herein or therein which could be construed as
providing for interest in excess of such lawful maximum shall be and hereby is
made expressly subject to and modified by the provisions of this paragraph.
5.9. Additional Costs, Etc. If any present or future applicable law, which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank by
any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall impose on any Bank any tax, levy, impost, duty,
charge fees, deduction or withholdings of any nature or requirements with
respect to this Agreement, the other Loan Documents, the Loans, such Bank's
Commitment, the Letters of Credit or any class of loans or commitments or
letters of credit of which any of the Loans, the Commitment or the Letters of
Credit forms a part, and the result of any of the foregoing is:
(i) to increase the cost to such Bank of making, funding, issuing,
renewing, extending or maintaining the Loans, such Bank's Commitment, or
the Letters of Credit; or
(ii) to reduce the amount of principal, interest or other amount
payable to such Bank hereunder on account of such Bank's Commitment, the
Loans, drawings under the Letters of Credit, or
(iii) to require such Bank to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross
amount of any sum receivable or deemed received by such Bank from the
Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such
Bank at any time and from time to time and as often as the occasion therefor may
arise, pay to such Bank such additional amounts as will be sufficient to
compensate such Bank for such additional cost, reduction, payment or foregone
interest or other sum (after such Bank shall have allocated the same fairly and
equitably among all customers of any class generally affected thereby).
5.10. Concerning Joint and Several Liability of the Borrowers.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the
financial accommodations to be provided by the Banks under this Agreement,
for the mutual benefit, directly and indirectly, of each of the Borrowers
and in consideration of the undertakings of each other Borrower to accept
joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the other Borrowers, with
respect to the payment and performance of all of the Obligations
(including, without limitation, any Obligations arising under this 5.10),
it being the intention of the parties hereto that all the Obligations shall
be the joint and several Obligations of each of the Borrowers without
preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to
perform any of the Obligations in accordance with the terms thereof, then
in each such event the other Borrowers will make such payment with respect
to, or perform, such Obligation.
(d) The Obligations of each of the Borrowers under the provisions of
this 5.10 constitute full recourse Obligations of each of the Borrowers
enforceable against each such corporation to the full extent of its
properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each of
the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Loans made under this Agreement, notice of any
action at any time taken or omitted by the Banks under or in respect of any
of the Obligations, and, generally, to the extent permitted by applicable
law, all demands, notices and other formalities of every kind in connection
with this Agreement. Each of the Borrowers hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any
of the Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any waiver,
consent or other action or acquiescence by the Banks at any time or times
in respect of any default by any of the Borrowers in the performance or
satisfaction of any term, covenant, condition or provision of this
Agreement, any and all other indulgences whatsoever by the Banks in respect
of any of the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any security for any
of the Obligations or the addition, substitution or release, in whole or in
part, of any of the Borrowers. Without limiting the generality of the
foregoing, each of the Borrowers assents to any other action or delay in
acting or failure to act on the part of the Banks with respect to the
failure by any of the Borrowers to comply with any of its respective
Obligations, including, without limitation, any failure strictly or
diligently to assert any right or to pursue any remedy or to comply fully
with applicable laws or regulations thereunder, which might, but for the
provisions of this 5.10, afford grounds for terminating, discharging or
relieving any of the Borrowers, in whole or in part, from any of its
Obligations under this 5.10, it being the intention of each of the
Borrowers that, so long as any of the Obligations hereunder remain
unsatisfied, the Obligations of such Borrowers under this 5.10 shall not be
discharged except by performance and then only to the extent of such
performance. The Obligations of each of the Borrowers under this 5.10 shall
not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, re-construction or similar
proceeding with respect to any of the Borrowers or the Banks. The joint and
several liability of the Borrowers hereunder shall continue in full force
and effect notwithstanding any absorption, merger, amalgamation or any
other change whatsoever in the name, membership, constitution or place of
formation of any of the Borrowers or the Banks.
(f) The provisions of this 5.10 are made for the benefit of the Banks
and their successors and assigns, and may be enforced in good faith against
them from time to time against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part of the
Banks first to marshal any of their claims or to exercise any of their
rights against any other Borrower or to exhaust any remedies available to
them against any other Borrower or to resort to any other source or means
of obtaining payment of any of the Obligations hereunder or to elect any
other remedy. The provisions of this 5.10 shall remain in effect until all
of the Obligations shall have been paid in full or otherwise fully
satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Obligations, is rescinded or must otherwise be
restored or returned by the Banks upon the insolvency, bankruptcy or
reorganization of any of the Borrowers, or otherwise, the provisions of
this 5.10 will forthwith be reinstated in effect, as though such payment
had not been made.
5.11. New Borrowers. Any newly-created or newly-acquired Subsidiaries shall
become Borrowers hereunder by signing Notes, entering into an amendment to this
Agreement with the other parties hereto providing that such Subsidiary shall
become a Borrower hereunder, and providing such other documentation as the Banks
or the Agent may reasonably request including, without limitation, documentation
with respect to conditions noted in 10 hereof. In such event, the Agent is
hereby authorized by the parties to amend Schedule 1 hereto to include such
Subsidiary as a Borrower hereunder.
5.12. Election of Eurodollar Rate; Notice of Election; Interest Periods;
Minimum Amounts.
(a) At the Borrowers' option, so long as no Default or Event of
Default has occurred and is then continuing, the Borrowers may (i) elect to
convert any Base Rate Loan or a portion thereof to a Eurodollar Rate Loan,
(ii) at the time of any Loan and Letter of Credit Request, specify that
such requested Revolving Credit Loan shall be a Eurodollar Rate Loan, or
(iii) upon expiration of the applicable Interest Period, elect to maintain
an existing Eurodollar Rate Loan as such, provided that the Borrowers gives
notice to the Agent pursuant to 5.12(b) hereof. Upon determining any
Eurodollar Rate, the Agent shall forthwith provide notice thereof to the
Borrowers and each Bank, and each such notice to the Borrowers shall be
considered prima facie correct and binding, absent manifest error.
(b) Three (3) Eurodollar Business Days prior to the making of any
Eurodollar Rate Loan or the conversion of any Base Rate Loan to a
Eurodollar Rate Loan, or, in the case of an outstanding Eurodollar Rate
Loan, the expiration date of the applicable Interest Period, the Borrowers
shall give written, telex or telecopy notice received by the Agent not
later than 11:00 a.m. (Boston time) of its election pursuant to 5.12(a).
Each such notice delivered to the Agent shall specify the aggregate
principal amount of the Loans to be borrowed or maintained as or converted
to Eurodollar Rate Loans and the requested duration of the Interest Period
that will be applicable to such Eurodollar Rate Loan, and shall be
irrevocable and binding upon the Borrower. If the Borrowers shall fail to
give the Agent notice of its election hereunder together with all of the
other information required by this 5.12(b) with respect to any Loan,
whether at the end of an Interest Period or otherwise, such Loan shall be
deemed a Base Rate Loan, and, if such Loan is an existing Eurodollar Rate
Loan, shall be automatically converted to a Base Rate Loan on the last day
of the Interest Period relating thereto. No Eurodollar Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the
last day of the Interest Period relating thereto. The Agent shall promptly
notify each Bank in writing (or by telephone confirmed in writing or by
telecopy) of such election by the Borrower hereunder.
(c) Notwithstanding anything herein to the contrary, the Borrowers may
not specify an Interest Period that would extend beyond the maturity date
of any Loan.
(d) All Eurodollar Rate Loans shall be in a minimum amount of not less
than $1,000,000. In no event shall the Borrowers have more than five (5)
different maturities of borrowings of Eurodollar Rate Loans outstanding at
any time.
5.13. Eurodollar Indemnity. The Borrowers agree to indemnify the Banks and
the Agent and to hold them harmless from and against any reasonable loss, cost
or expense that the Banks and the Agent may sustain or incur as a consequence of
(a) default by the Borrowers in payment of the principal amount of or any
interest on any Eurodollar Rate Loans as and when due and payable, including any
such loss or expense arising from interest or fees payable by any Bank or the
Agent to lenders of funds obtained by it in order to maintain its Eurodollar
Rate Loans, (b) default by the Borrowers in making a borrowing or conversion
after the Borrowers have given (or are deemed to have given) notice pursuant to
2.6 or 5.12, and (c) the making of any payment of a Eurodollar Rate Loan or the
making of any conversion of any such Eurodollar Rate Loan to a Base Rate Loan on
a day that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by such Bank to lenders of funds
obtained by it in order to maintain any such Loans.
5.14. Illegality; Inability to Determine Eurodollar Rate. Notwithstanding
any other provision of this Agreement (other than 5.8) if, (a) the introduction
of, any change in, or any change in the interpretation of, any law, regulation,
treaty or directive applicable to any Bank or the Agent shall make it unlawful,
or any central bank or other governmental authority having jurisdiction thereof
shall assert that it is unlawful, for any Bank or the Agent to perform its
obligations in respect of any Eurodollar Rate Loans, or (b) if the Agent shall
reasonably determine or be notified by the Required Banks that (i) by reason of
circumstances affecting any Eurodollar interbank market, adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate which would otherwise
be applicable during any Interest Period, or (ii) deposits of Dollars in the
relevant amount for the relevant Interest Period are not available in any
Eurodollar interbank market, or (iii) the Eurodollar Rate does not or will not
accurately reflect the cost of obtaining or maintaining the applicable
Eurodollar Rate Loans during any Interest Period, then the Agent shall promptly
give telephonic, telex or cable notice of such determination to the Borrowers
and the Banks (which notice shall be conclusive and binding upon the Borrower
and the Banks). Upon such notification by the Agent, the obligation of the Banks
and the Agent to make Eurodollar Rate Loans or convert Base Rate Loans to
Eurodollar Rate Loans shall be suspended until the Agent or the Required Banks,
as the case may be, determine that such circumstances no longer exist, and to
the extent permitted by law the outstanding Eurodollar Rate Loans shall continue
to bear interest at the applicable rate based on the Eurodollar Rate until the
end of the applicable Interest Period, and shall be automatically converted to
Base Rate Loans in equal principal amounts on the last day of each Interest
Period applicable to such Eurodollar Rate Loans, or within such earlier period
as may be required by applicable law.
6. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and severally
represent and warrant to the Banks that on and as of the date of this Agreement
(any disclosure on a schedule pursuant to this 6 shall be deemed to apply to all
relevant representations and warranties, regardless of whether such schedule is
referenced in each relevant representation):
6.1. Corporate Authority.
(a) Incorporation; Good Standing. Each of the Borrowers (i) is a
corporation duly organized, validly existing and in good standing or in
current status under the laws of its respective state of incorporation,
(ii) has all requisite corporate power to own its property and conduct its
business as now conducted and as presently contemplated, and (iii) is in
good standing as a foreign corporation and is duly authorized to do
business in each jurisdiction in which its property or business as
presently conducted or contemplated makes such qualification necessary
except where a failure to be so qualified would not have a material adverse
effect on the business, assets or financial condition of such Borrower.
(b) Authorization. The execution, delivery and performance of its Loan
Documents and the transactions contemplated hereby and thereby (i) are
within the corporate authority of each of the Borrowers, (ii) have been
duly authorized by all necessary corporate proceedings, (iii) do not
conflict with or result in any material breach or contravention of any
provision of law, statute, rule or regulation to which any of the Borrowers
is subject or any judgment, order, writ, injunction, license or permit
applicable to any of the Borrowers so as to materially adversely affect the
assets, business or any activity of the Borrowers, and (iv) do not conflict
with any provision of the corporate charter or bylaws of the Borrowers or
any agreement or other instrument binding upon the Borrowers.
(c) Enforceability. The execution, delivery and performance of the
Loan Documents will result in valid and legally binding obligations of the
Borrowers enforceable against each in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating
to or affecting generally the enforcement of creditors' rights and except
to the extent that availability of the remedy of specific performance or
injunctive relief or other equitable remedy is subject to the discretion of
the court before which any proceeding therefor may be brought.
6.2. Governmental Approvals. The execution, delivery and performance by the
Borrowers of the Loan Documents and the transactions contemplated hereby and
thereby do not require any approval or consent of, or filing with, any
governmental agency or authority other than those already obtained.
6.3. Title to Properties; Leases. The Borrowers own all of the assets
reflected in the consolidated balance sheets as at the Balance Sheet Date or
acquired since that date (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date), subject to no mortgages,
capitalized leases, conditional sales agreements, title retention agreements,
liens or other encumbrances except Permitted Liens. Schedule 6.3 sets forth a
list of all of the Real Property of the Borrowers.
6.4. Financial Statements; Solvency.
(a) There has been furnished to the Banks (i) consolidated balance
sheets of the Borrowers dated the Balance Sheet Date and consolidated
statements of operations for the fiscal year then ended, certified by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ & Co. or an independent accounting firm of national
standing acceptable to the Banks (the "Accountants") and (ii) unaudited
consolidated balance sheets of the Borrowers dated October 31, 1997 and
unaudited consolidated statements of operations for the six (6) month
period then ended. Said balance sheets and statements of operations have
been prepared in accordance with GAAP, fairly present in all material
respects the financial condition of the Borrowers, on a consolidated basis,
as at the close of business on the date thereof and the results of
operations for the period then ended. There are no contingent liabilities
of the Borrowers as of such date involving material amounts, known to the
officers of the Borrowers which have not been disclosed in said balance
sheets and the related notes thereto, as the case may be.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent (i.e., they have
assets having a fair value in excess of the amount required to pay their
probable liabilities on their existing debts as they become absolute and
matured) and have, and expect to have, the ability to pay their debts from
time to time incurred in connection therewith as such debts mature.
6.5. No Material Changes, Etc. Since the Balance Sheet Date, there have
occurred no material adverse changes in the financial condition or business of
the Borrowers as shown on or reflected in the consolidated balance sheet of the
Borrowers as at the Balance Sheet Date, or the consolidated statement of income
for the fiscal year then ended other than changes in the ordinary course of
business which have not had any material adverse effect either individually or
in the aggregate on the business or financial condition of the Parent, the
Borrowers. Since the Balance Sheet Date, there has not been any Distribution.
6.6. Permits, Franchises, Patents, Copyrights, Etc. Each of the Borrowers
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
its business substantially as now conducted without known conflict with any
rights of others.
6.7. Litigation. Except as shown on Schedules 6.7 and 6.16 hereto, there
are no actions, suits, proceedings or investigations of any kind pending or, to
the knowledge of the Borrowers, threatened against any Borrower before any
court, tribunal or administrative agency or board which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrowers,
considered as a whole, or materially impair the right of the Borrowers,
considered as a whole, to carry on business substantially as now conducted, or
result in any substantial liability not adequately covered by insurance, or for
which adequate reserves are not maintained on the consolidated balance sheet or
which question the validity of any of the Loan Documents, or any action taken or
to be taken pursuant hereto or thereto.
6.8. No Materially Adverse Contracts, Etc. None of the Borrowers is subject
to any charter, corporate or other legal restriction, or any judgment, decree,
order, rule or regulation which in the judgment of the Borrowers' officers has
or is expected in the future to have a materially adverse effect on the
business, assets or financial condition of the Borrowers as a whole. None of the
Borrowers is a party to any contract or agreement which in the judgment of the
Borrowers' officers has or is expected to have any materially adverse effect on
the business of the Borrowers as a whole, except as otherwise reflected in
adequate reserves.
6.9. Compliance With Other Instruments, Laws, Etc. None of the Borrowers is
violating any provision of its charter documents or by-laws or any agreement or
instrument by which any of them may be subject or by which any of them or any of
their properties may be bound or any decree, order, judgment, or any statute,
license, rule or regulation, in a manner which could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of any of the Borrowers.
6.10. Tax Status. The Borrowers have made or filed all federal and state
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them are subject (unless and only to the extent
that any Borrower has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes); and have paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith; and have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Borrowers know of no basis for any
such claim.
6.11. No Event of Default. Except as set forth on Schedule 6.11 hereto, no
Default or Event of Default has occurred and is continuing as of the date of
this Agreement.
6.12. Holding Company and Investment Company Acts. None of the Borrowers is
a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is any of them a "registered investment
company", or an "affiliated company" or a "principal underwriter" of a
"registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
6.13. Absence of Financing Statements, Etc. Except as contemplated by 8.2
of this Agreement and as set forth on Schedule 6.13 hereto, there is no
financing statement, security agreement, chattel mortgage, real estate mortgage
or other document filed or recorded with any filing records, registry, or other
public office, which purports to cover, affect or give notice of any present or
possible future lien on, or security interest in, any assets or property of any
of the Borrowers or rights thereunder.
6.14. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan has been maintained and
operated in compliance in all material respects with the provisions of
ERISA and, to the extent applicable, the Code, including but not limited to
the provisions thereunder respecting prohibited transactions.
(b) Terminability of Welfare Plans. Under each Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of 3(1) or
3(2)(B) of ERISA, no benefits are due unless the event giving rise to the
benefit entitlement occurs prior to plan termination (except as required by
Title I, part 6 of ERISA.) Each Borrower or ERISA Affiliate, as
appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in the
discretion of such Borrower or ERISA Affiliate without liability to any
Person.
(c) Guaranteed Pension Plans. None of the Borrowers is a sponsor of,
or contributor to, a Guaranteed Pension Plan.
(d) Multiemployer Plans. No Borrower, nor any ERISA Affiliate has
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from
such Multiemployer Plan under 4201 of ERISA or as a result of a sale of
assets described in 4204 of ERISA. No Borrower, nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or is
insolvent under and within the meaning of 4241 or 4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been terminated under 4041A
of ERISA.
6.15. Use of Proceeds. The proceeds of the Revolving Credit Loans shall be
used solely for working capital and other general corporate purposes, Letters of
Credit, to refinance other indebtedness of the Borrowers, and to fund
acquisitions permitted pursuant to 8.4 hereof. No proceeds of the Loans shall be
used in any way that will violate Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
BOS-BUSN:552657.1
6.16. Environmental Compliance. The Borrowers have taken all necessary
steps to investigate the past and present condition and usage of the Real
Properties and the operations conducted thereon and, based upon such diligent
investigation, have determined that, except as shown on Schedule 6.16:
(a) None of the Borrowers, nor any operator of their properties, is in
violation, or alleged violation, of any judgment, decree, order, law,
permit, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or
any state or local statute, regulation, ordinance, order or decree relating
to health, safety or the environment (the "Environmental Laws"), which
violation would have a material adverse effect on the business, assets or
financial condition of the Borrowers on a consolidated basis.
(b) None of the Borrowers has received notice from any third party
including, without limitation: any federal, state or local governmental
authority, (i) that any one of them has been identified by the United
States Environmental Protection Agency ("EPA") as a potentially responsible
party under CERCLA with respect to a site listed on the National Priorities
List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as
defined by 42 U.S.C. 6903(5), any hazardous substances as defined by 42
U.S.C. 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
9601(33) and any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed
of has been found at any site at which a federal, state or local agency or
other third party has conducted or has ordered that any Borrower conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
(c) (i) No portion of the Real Property has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
material compliance with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is
located on such properties; (ii) in the course of any activities conducted
by the Borrowers, or operators of the Real Property, no Hazardous
Substances have been generated or are being used on such properties except
in material compliance with applicable Environmental Laws; (iii) there have
been no unpermitted Releases or threatened Releases of Hazardous Substances
on, upon, into or from the Real Property, which Releases would have a
material adverse effect on the value of such properties; (iv) to the best
of the Borrowers' knowledge, there have been no Releases on, upon, from or
into any real property in the vicinity of the Real Property which, through
soil or groundwater contamination, may have come to be located on, and
which would have a material adverse effect on the value of, such
properties; and (v) in addition, any Hazardous Substances that have been
generated on the Real Property have been transported offsite only by
carriers having an identification number issued by the EPA, treated or
disposed of only by treatment or disposal facilities maintaining valid
permits as required under applicable Environmental Laws, which transporters
and facilities, to the best of the Borrowers' knowledge, have been and are
operating in material compliance with such permits and applicable
Environmental Laws.
(d) none of the Real Property is or shall be subject to any applicable
environmental clean-up responsibility law or environmental restrictive
transfer law or regulation, by virtue of the transactions set forth herein
and contemplated hereby.
6.17. Perfection of Security Interests. All filings, assignments, pledges
and deposits of documents or instruments have been made and all other actions
have been taken that are necessary under applicable law, or reasonably requested
by the Agent or any of the Banks, to establish and perfect the Agent's security
interests in the Collateral as described in the Security Documents (including
the notation of the Agent's security interests in motor vehicles on the
certificates of title relating to such vehicles). The Collateral and the Agent's
rights with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses, except for Permitted Liens. The Borrowers are
the owners of the Collateral free from any lien, security interest, encumbrance
and any other claim or demand, except for Permitted Liens.
6.18. Certain Transactions. Except as set forth on Schedule 6.18 and except
for arm's length transactions pursuant to which the Borrowers make payments in
the ordinary course of business upon terms no less favorable than the Borrowers
could obtain from third parties, none of the officers, directors, or employees
of the Borrowers are presently a party to any transaction with the Borrowers
(other than for services as employees, officers and directors), including any
contract, agreement or other arrangement providing for the furnishing of
services to or by, providing for rental of real or personal property to or from,
or otherwise requiring payments to or from any officer, director or such
employee or, to the knowledge of the Borrowers, any corporation, partnership,
trust or other entity in which any officer, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
6.19. Subsidiaries. Schedule 6.19 sets forth a complete and accurate list
of the Subsidiaries, including the name of each Subsidiary and its jurisdiction
of incorporation, together with the number of authorized and outstanding shares
of each Subsidiary. Each Subsidiary is directly or indirectly wholly owned by
the Parent. The Parent has good and marketable title to all of the shares it
purports to own of the stock of each Subsidiary, free and clear in each case of
any lien. All such shares have been duly issued and are fully paid and
non-assessable.
6.20. Capitalization.
(a) Capital Stock. As of the Closing Date, the authorized capital
stock of the Parent consists of (i) 30,000,000 shares of Class A Common
stock (par value $.01 per share) of which 9,778,745 shares are outstanding,
(ii) 1,000,000 shares of Class B Common Stock (par value $.01 per share) of
which 1,000,000 shares are outstanding, and (iii) 1,000,000 shares of
Preferred Stock (par value $.01 per share) of which no shares are
outstanding. All such outstanding shares have been duly issued and are full
paid and non-assessable.
(b) Options, Etc. Except as set forth on Schedule 6.20(b), no Person
has outstanding any rights (either pre-emptive or other) or options (except
for the options for common stock issued to management employees, in
accordance with a bona fide option plan approved by the Board of Directors
of the Parent) to subscribe for or purchase from the Parent, or any
warrants or other agreements providing for or requiring the issuance by the
Parent of, any capital stock or any securities convertible into or
exchangeable for its capital stock.
6.21. True Copies of Charter and Other Documents. The Borrowers have
furnished the Agent copies, in each case true and complete as of the Closing
Date, of (a) all charter and other incorporation documents (together with any
amendments thereto) and (b) by-laws (together with any amendments thereto).
6.22. Disclosure. No representation or warranty made by the Borrowers in
this Agreement or in any agreement, instrument, document, certificate, statement
or letter furnished to the Banks or the Agent by or on behalf of or at the
request of the Borrowers in connection with any of the transactions contemplated
by the Loan Documents contains any untrue statement of a material fact or omits
to state a material fact necessary in order to make the statements contained
therein not misleading in light of the circumstances in which they are made.
6.23. Deposit Accounts. Other than the accounts maintained at the Agent's
Head Office (the "Depository Accounts"), the Borrowers maintain the deposit
accounts listed on Schedule 6.23 hereto and no other deposit accounts, unless
approved in writing by the Agent. The aggregate amount of collected funds held
in each such deposit account at the close of any Business Day shall not exceed
the amount specified for such account on Schedule 6.23; any amounts in excess of
the amounts specified in Schedule 6.23 shall be immediately transferred to the
Depository Accounts.
6.24. Year 2000 Problem. The Borrowers have reviewed the areas within their
business and operations which could be adversely affected by, and have developed
or are developing a program to address on a timely basis, the Year 2000 Problem.
Based on such review and program, the Year 2000 Problem will not have a material
adverse effect on their business and operations.
7. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly and
severally covenant and agree that, so long as any Loan or Note is outstanding or
the Banks have any obligation to make Loans or the Agent has any obligation to
issue, extend, or renew any Letters of Credit hereunder:
7.1. Punctual Payment. The Borrowers will duly and punctually pay or cause
to be paid the principal and interest on the Loans, all Reimbursement
Obligations, fees and other amounts provided for in this Agreement and the other
Loan Documents, all in accordance with the terms of this Agreement and such
other Loan Documents.
7.2. Maintenance of Office. The Borrowers will maintain their chief
executive offices at the locations set forth on Schedule 1 attached hereto, or
at such other place in the United States of America as each Borrower shall
designate upon 30 days prior written notice to the Agent.
7.3. Records and Accounts. Each of the Borrowers will keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with GAAP and with the requirements of all regulatory
authorities and maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties, all other contingencies, and all other proper reserves.
7.4. Financial Statements, Certificates and Information. The Borrowers will
deliver to the Banks:
(a) as soon as practicable, but, in any event not later than 90 days
after the end of each fiscal year of the Borrowers, the consolidated and
consolidating balance sheets of Borrowers as at the end of such year,
statements of cash flows, and the related consolidated and consolidating
statements of operations, each setting forth in comparative form the
figures for the previous fiscal year, all such consolidated and
consolidating financial statements to be in reasonable detail, prepared, in
accordance with GAAP and, with respect to the consolidated financial
statements, Certified by the Accountants. In addition, simultaneously
therewith, the Borrowers shall use their best efforts to provide the Banks
with a written statement from such Accountants to the effect that the
Borrowers are in compliance with the covenants set forth in 9 hereof, and
that, in making the examination necessary to said certification, nothing
has come to the attention of such Accountants that would indicate that any
Default or Event of Default exists, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default they
shall disclose in such statement any such Default or Event of Default;
provided, that such Accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrowers, copies of the
consolidated and consolidating balance sheets and statement of operations
of the Borrowers as at the end of such quarter including profit and loss
statements by division, subject to year end adjustments, and the related
statement of cash flows, all in reasonable detail and prepared in
accordance with GAAP with a certification by the principal financial or
accounting officer of the Borrowers (the "CFO") that the consolidated
financial statements were prepared in accordance with GAAP and fairly
present the consolidated financial condition of the Borrowers as at the
close of business on the date thereof and the results of operations for the
period then ended;
(c) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, a statement in the form of Exhibit D
hereto (the "Compliance Certificate") certified by the CFO that the
Borrowers are in compliance with the covenants contained in 7, 8 and 9
hereof as of the end of the applicable period setting forth in reasonable
detail computations evidencing such compliance, provided that if the
Borrowers shall at the time of issuance of such certificate or at any other
time obtain knowledge of any Default or Event of Default, the Borrowers
shall include in such certificate or otherwise deliver forthwith to the
Banks a certificate specifying the nature and period of existence thereof
and what action the Borrowers propose to take with respect thereto and a
certificate of the Borrowers' Chief Operating Officer in the form attached
hereto as Exhibit E with respect to environmental matters;
(d) [intentionally omitted];
(e) contemporaneously with, or promptly following, the filing or
mailing thereof, copies of all material of a financial nature filed with
the Securities and Exchange Commission or sent to the stockholders of the
Parent or any of the Borrowers;
(f) as soon as practicable, but in any event not later than 15 days
after the end of each fiscal quarter, copies of the Borrower's profit and
loss statements by division, subject to year end adjustments, and the
related statements of cash flows, all in reasonable detail and prepared in
accordance with GAAP;
(g) as soon as practicable, but in any event not later than fifteen
(15) days prior to the commencement of the next fiscal year of the
Borrowers, a copy of the annual budget for such fiscal year; and
(h) from time to time such other financial data and other information
(including accountants' management letters) as the Banks may reasonably
request;
The Borrowers hereby authorize the Banks to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law; provided, however, that the Banks shall, to
the extent practicable and allowable under law, notify the Borrowers within a
reasonable period prior to the time any such disclosure is made; and provided
further, this authorization shall not be deemed to be a waiver of any rights to
object to the disclosure by the Banks of any such information which any Borrower
has or may have under the federal Right to Financial Privacy Act of 1978, as in
effect from time to time.
7.5. Corporate Existence and Conduct of Business. Except where the failure
of a Borrower to remain so qualified would not materially adversely impair the
financial condition of the Borrowers on a consolidated basis, each Borrower will
do or cause to be done all things necessary to preserve and keep in full force
and effect its corporate existence, corporate rights and franchises; effect and
maintain its foreign qualifications, licensing, domestication or authorization
except as terminated by its Board of Directors in the exercise of its reasonable
judgment; use its best efforts to comply with all applicable laws; and shall not
become obligated under any contract or binding arrangement which, at the time it
was entered into would materially adversely impair the financial condition of
the Borrowers, on a consolidated basis. Each Borrower will continue to engage
primarily in the businesses now conducted by it and in related businesses.
7.6. Maintenance of Properties. The Borrowers will cause all material
properties used or useful in the conduct of their businesses to be maintained
and kept in good condition, repair and working order and supplied with all
necessary equipment and will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrowers may be necessary so that the businesses carried on in connection
therewith may be properly and advantageously conducted at all times; provided,
however, that nothing in this section shall prevent any Borrower from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of such Borrower, desirable in the conduct of
its or their business and which does not in the aggregate materially adversely
affect the business of the Borrowers on a consolidated basis.
7.7. Insurance. The Borrowers will maintain with financially sound and
reputable insurance companies, funds or underwriters' insurance of the kinds,
covering the risks (other than risks arising out of or in any way connected with
personal liability of any officers and directors thereof, which risks may, but
shall not be required by the Banks to be, covered by insurance maintained by the
Borrowers) and in the relative proportionate amounts usually carried by
reasonable and prudent companies conducting businesses similar to that of the
Borrowers, but in no event less than the amounts and coverages set forth in
Schedule 7.7 hereto. In addition, the Borrowers will furnish from time to time,
upon the Agent's request, a summary of the insurance coverage of each of the
Borrowers, which summary shall be in form and substance satisfactory to the
Agent and, if requested by the Agent, will furnish to the Agent copies of the
applicable policies.
7.8. Taxes. The Borrowers will each duly pay and discharge, or cause to be
paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes, assessments and
other governmental charges imposed by foreign jurisdictions which in the
aggregate are not material to the business or assets of any Borrower on an
individual basis or of the Borrowers on a consolidated basis) imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies, which if unpaid might by law become a lien or charge upon any of its
property; provided, however, that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if such Borrower shall
have set aside on its books adequate reserves with respect thereto; and
provided, further, that such Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor.
7.9. Inspection of Properties, Books, and Contracts. The Borrowers shall
permit the Banks, the Agent or any of their designated representatives, upon
reasonable notice, to visit and inspect any of the properties of the Borrowers,
to examine the books of account of the Borrowers (including the making of
periodic accounts receivable reviews), or contracts (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
the Borrowers with, and to be advised as to the same by, their officers, all at
such times and intervals as the Banks may reasonably request.
7.10. Compliance with Laws, Contracts, Licenses and Permits; Maintenance of
Material Licenses and Permits. Each Borrower will (i) comply with the provisions
of its charter documents and by-laws and all agreements and instruments by which
it or any of its properties may be bound; (ii) comply with all applicable laws
and regulations (including Environmental Laws), decrees, orders, judgments,
licenses and permits, including, without limitation, all environmental permits
hereto ("Applicable Laws"), except where noncompliance with such Applicable Laws
would not have a material adverse effect in the aggregate on the consolidated
financial condition, properties or businesses of the Borrowers; (iii) comply in
all material respects with all agreements and instruments by which it or any of
its properties may be bound; (iv) maintain all material operating permits for
all landfills now owned or hereafter acquired; and (v) dispose of hazardous
waste only at licensed disposal facilities operating, to the best of such
Borrower's knowledge after reasonable inquiry, in compliance with Environmental
Laws. If at any time while the Notes, or any Loan or Letter of Credit is
outstanding or any Bank or the Agent has any obligation to make Loans or issue
Letters of Credit hereunder, any authorization, consent, approval, permit or
license from any officer, agency or instrumentality of any government shall
become necessary or required in order that any Borrower may fulfill any of its
obligations hereunder, such Borrower will immediately take or cause to be taken
all reasonable steps within the power of such Borrower to obtain such
authorization, consent, approval, permit or license and furnish the Banks with
evidence thereof.
7.11. Environmental Indemnification. The Borrowers covenant and agree that
they will jointly and severally indemnify and hold the Agent and the Banks, and
their respective affiliates, agents, directors, officers and shareholders,
harmless from and against any and all claims, expense, damage, loss or liability
incurred by such indemnified parties (including all costs of legal
representation incurred by such indemnified parties) relating to (a) any Release
or threatened Release of Hazardous Substances on the Real Property; (b) any
violation of any Environmental Laws with respect to conditions at the Real
Property or the operations conducted thereon; or (c) the investigation or
remediation of offsite locations at which the Borrowers, or their predecessors
are alleged to have directly or indirectly Disposed of Hazardous Substances. It
is expressly acknowledged by the Borrowers that this covenant of indemnification
shall survive any foreclosure or any modification, release or discharge of any
or all of the Security Documents or the payment of the Loans and shall inure to
the benefit of the Agent and the Banks and their respective successors and
assigns.
7.12. Further Assurances. The Borrowers will cooperate with the Banks and
execute such further instruments and documents as the Banks shall reasonably
request to carry out to the Banks' satisfaction the transactions contemplated by
this Agreement, including granting additional mortgages on Real Property at the
Banks' request as set forth in 7.19 hereof.
7.13. Notice of Potential Claims or Litigation. The Borrowers shall deliver
to the Banks, within 30 days of receipt thereof, written notice of the
initiation of any action, claim, complaint, or any other notice of dispute or
potential litigation (including without limitation any alleged violation of any
Environmental Law), wherein the potential liability is in excess of $500,000,
together with a copy of each such notice received by any Borrower.
7.14. Notice of Certain Events Concerning Insurance and Environmental
Claims.
(a) The Borrowers will provide the Banks with written notice as to any
cancellation or material change in any insurance of any of the Borrowers
within ten (10) Business Days after such Borrower's receipt of any notice
(whether formal or informal) of such cancellation or change by any of its
insurers.
(b) The Borrowers will promptly notify the Banks in writing of any of
the following events:
(i) upon any Borrower's obtaining knowledge of any violation of
any Environmental Law regarding the Real Property or any Borrower's
operations which violation could have a material adverse effect on the Real
Property or on any Borrower's operations; (ii) upon any Borrower's
obtaining knowledge of any potential or known Release, or threat of
Release, of any Hazardous Substance at, from, or into the Real Property
which it reports in writing or is reportable by it in writing to any
governmental authority and which is material in amount or nature or which
could materially affect the value of the Real Property; (iii) upon any
Borrower's receipt of any notice of violation of any Environmental Laws or
of any Release or threatened Release of Hazardous Substances, including a
notice or claim of liability or potential responsibility from any third
party (including without limitation any federal, state or local
governmental officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard to (A) any
Borrower's, or any Person's operation of the Real Property, (B)
contamination on, from or into the Real Property, or (C) investigation or
remediation of offsite locations at which any Borrower, or any of their
predecessors are alleged to have directly or indirectly Disposed of
Hazardous Substances; (iv) upon any Borrower's obtaining knowledge that any
expense or loss has been incurred by such governmental authority in
connection with the assessment, containment, removal or remediation of any
Hazardous Substances with respect to which any Borrower may be liable or
for which a lien may be imposed on the Real Property; or (v) any setoff,
claims (including, with respect to the Real Estate, environmental claims),
withholdings or other defenses to which any of the Collateral, or the
Agent's rights with respect to the Collateral, are subject.
7.15. Response Actions. The Borrowers covenant and agree that if any
Release or Disposal of Hazardous Substances shall occur or shall have occurred
on the Real Property, the Borrowers will cause the prompt containment and
removal of such Hazardous Substances and remediation of the Real Property as
necessary to comply with all Environmental Laws or to preserve the value of the
Real Property.
7.16. Environmental Assessments. If (a) with respect to the Real Property
subject to a Mortgage, the Banks in their good faith judgment, after discussion
with the Borrowers, have reason to believe that the environmental condition of
such Real Property has deteriorated, after reasonable notice by the Banks,
whether or not an Event of Default shall have occurred, or (b) with respect to
Real Property not subject to a Mortgage, the Banks so request, the Banks may,
from time to time, for the purpose of assessing the value of the Real Property,
obtain one or more environmental assessments or audits of the Real Property
prepared by a hydrogeologist, an independent engineer or other qualified
consultant or expert approved by the Banks to evaluate or confirm (i) whether
any Hazardous Substances are present in the soil or water at the Real Property
and (ii) whether the use and operation of the Real Property complies with all
Environmental Laws. Environmental assessments may include without limitation
detailed visual inspections of the Real Property including, without limitation,
any and all storage areas, storage tanks, drains, dry ▇▇▇▇▇ and leaching areas,
and the taking of soil samples, surface water samples and ground water samples,
as well as such other investigations or analyses as the Banks deem appropriate.
All such environmental assessments shall be at the sole cost and expense of the
Borrowers.
7.17. Notice of Default. The Borrowers will promptly notify the Banks in
writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or any
other note, evidence of indebtedness, indenture or other obligation evidencing
indebtedness in excess of $250,000 as to which any Borrower is a party or
obligor, whether as principal or surety, the Borrowers shall forthwith give
written notice thereof to the Banks, describing the notice of action and the
nature of the claimed default.
7.18. Closure and Post Closure Liabilities. The Borrowers shall at all
times adequately accrue, in accordance with GAAP, and fund, as required by
applicable Environmental Laws, all closure and post closure liabilities with
respect to the operations of the Borrowers.
7.19. Additional Mortgages. If after the Closing Date the Agent so
requests, the Borrowers shall forthwith execute and deliver to the Agent a fully
executed mortgage or deed of trust over Real Property of the Borrowers in
addition to the Sanco Landfill, the Waste USA Landfill, the ▇▇▇▇▇▇ Real Estate
and the Casella TIRES Real Estate, in form and substance satisfactory to the
Agent, together with title insurance policies, surveys, evidences of insurance,
legal opinions and other documents and certificates with respect to such Real
Property as the Agent may request. The Borrowers agree that following the taking
of such actions with respect to such Real Property, the Agent shall have a valid
and enforceable first priority mortgage or deed of trust over such Real
Property, subject only to Permitted Liens. If after the Closing Date the Agent
so requests, the Borrowers shall forthwith execute and deliver to the Agent
fully executed amendments to the Mortgages, in form and substance satisfactory
to the Agent, together with title insurance policy endorsements, legal opinions
and other documents and certificates with respect to such amendments as the
Agent may request in order to confirm the Agent's first priority security
interest in the Real Property subject to such Mortgages.
7.20. Subsidiaries. The Parent shall at all times directly or indirectly
through a Subsidiary own all of the shares of the capital stock of each
Subsidiary.
7.21. Pine Tree Waste, Inc. The Borrowers covenant and agree that the newly
acquired subsidiary, Pine Tree Waste, Inc., a Maine corporation, will merge into
▇▇▇▇▇▇ Environmental Services (with ▇▇▇▇▇▇ Environmental Services as the
surviving entity) within 90 days of the Closing Date.
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers agree that,
so long as any Loan or any Note is outstanding or the Banks have any obligation
to make Loans or the Agent has any obligation to issue, extend or renew any
Letters of Credit hereunder:
8.1. Restrictions on Indebtedness. None of the Borrowers shall become or be
a guarantor or surety of, or otherwise create, incur, assume, or be or remain
liable, contingently or otherwise, with respect to any Indebtedness, or become
or be responsible in any manner (whether by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services or otherwise) with respect to any undertaking
or Indebtedness of any other Person, or incur any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under this
Agreement or the Loan Documents;
(b) Subject to 8.9, Subordinated Debt in an aggregate outstanding
principal amount not to exceed $15,000,000;
(c) Existing Indebtedness with respect to loans and capitalized leases
listed on Schedule 8.1(c) hereto in an aggregate amount not to exceed
$7,500,000, on the terms and conditions in effect as of the date hereof,
together with any renewals, extensions or refinancings thereof on terms
which are not materially different than those in effect as of the date
hereof;
(d) Current liabilities incurred in the ordinary course of business
not incurred through (i) the borrowing of money, or (ii) the obtaining of
credit except for credit on an open account basis customarily extended and
in fact extended in connection with normal purchases of goods and services;
(e) Indebtedness in respect of taxes, assessments, governmental
charges or levies and claims for labor, materials and supplies to the
extent that payment therefor shall not at the time be required to be made
in accordance with the provisions of 7.8 and Indebtedness of the Borrowers
secured by liens of carriers, warehousemen, mechanics and materialmen
permitted by 8.2;
(f) Indebtedness in respect of judgments or awards which have been in
force for less than the applicable period for taking an appeal so long as
execution is not levied thereunder or in respect of which any Borrower
shall at the time in good faith be prosecuting an appeal or proceedings for
review and in respect of which a stay of execution shall have been obtained
pending such appeal or review and in respect of which the Borrowers have
maintained adequate reserves;
(g) Indebtedness of any Borrower with respect to guaranty, suretyship
or indemnification obligations in connection with such Borrower's
performance of services for its respective customers in the ordinary course
of its business;
(h) [Intentionally omitted];
(i) Indebtedness of any Subsidiary owing to the Parent;
(j) Intercompany Indebtedness among the Subsidiaries;
(k) Indebtedness in respect of a letter of credit issued by Allbank
Bank in the face amount of $168,000; provided that if the Agent, in its
sole and absolute discretion, at any time and for any reason so requests,
the Borrowers shall promptly replace such letter of credit with a Letter of
Credit issued by the Agent pursuant to the terms of this Credit Agreement;
(l) Indebtedness incurred in connection with the acquisition after the
date hereof of any personal property by the Borrowers under any lease;
provided that the aggregate outstanding principal amount of such
Indebtedness of the Borrowers shall not exceed $10,000,000 at any time;
(m) Indebtedness incurred in connection with the acquisition by the
Borrowers of real or personal property, including Indebtedness in respect
of non-compete payments; provided that the aggregate outstanding principal
amount of such Indebtedness of the Borrowers shall not exceed $15,000,000
at any time;
(n) Indebtedness in an aggregate amount not to exceed $10,501,284
payable to Clinton County, New York under and in accordance with the terms
of the Clinton Lease;
(o) Indebtedness under fuel price swaps, fuel price caps, and fuel
price collar or floor agreements, and similar agreements or arrangements
designed to protect against or manage fluctuations in fuel prices with
respect to fuel purchased in the ordinary course of business of the
Borrowers, provided that the aggregate amount of such agreements do not
exceed $500,000, the maturity of such agreements do not exceed six (6)
months, the terms are consistent with past practices of the Borrowers, and
such agreements are entered into with the Agent or any Bank and secured by
the Collateral; and
(p) Indebtedness in respect of interest rate protection arrangements
satisfactory to the Agent entered into with the Agent or any Bank and
secured by the Collateral.
8.2. Restrictions on Liens. None of the Borrowers will create or incur or
suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, negative pledge, charge, restriction or other security interest of any
kind upon any property or assets of any character, whether now owned or
hereafter acquired, or upon the income or profits therefrom; or transfer any of
such property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; or acquire, or agree
or have an option to acquire, any property or assets upon conditional sale or
other title retention or purchase money security agreement, device or
arrangement; or suffer to exist for a period of more than 30 days after the same
shall have been incurred any Indebtedness or claim or demand against it which if
unpaid might by law or upon bankruptcy or insolvency, or otherwise, be given any
priority whatsoever over its general creditors; or sell, assign, pledge or
otherwise transfer any accounts, contract rights, general intangibles or chattel
paper, with or without recourse, except as follows (the "Permitted Liens"):
(a) purchase money security interests in or purchase money liens on
property other than the Mortgaged Property to secure Indebtedness permitted
under 8.1(m) hereof, provided that such Liens (i) shall encumber only the
property or assets so acquired, (ii) shall not exceed the fair market value
thereof and (iii) shall not encumber property with an aggregate value in
excess of $10,000,000;
(b) Liens to secure taxes, assessments and other government charges or
claims for labor, material or supplies in respect of obligations not
overdue;
(c) Deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or
other social security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness with
respect to which is permitted by 8.1(f);
(e) Liens of carriers, warehousemen, mechanics and materialmen, and
other like liens, in existence less than 120 days from the date of creation
thereof in respect of obligations not overdue;
(f) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which any Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the respective Borrower
interferes materially with the use of the property affected in the ordinary
conduct of the business of such Borrower, which defects do not individually
or in the aggregate have a material adverse effect on the business of such
Borrower individually or of the Borrowers on a consolidated basis;
(g) Liens existing as of the date hereof securing Indebtedness
permitted under 8.1(c) hereof and listed on Schedule 8.2(g) hereto;
(h) Liens granted pursuant to the Security Documents;
(i) A second mortgage lien on the Waste USA Landfill in favor of the
sellers of the Waste USA Landfill, subordinated to the Agent's Mortgage on
terms acceptable to the Banks;
(j) Liens on the assets of Bristol Waste Management, Inc. granted to
secure the Indebtedness permitted by 8.1(k) hereof and listed on Schedule
8.2(k) hereto; and
(k) Liens granted to secure the Indebtedness permitted by 8.1(l)
hereof.
8.3. Restrictions on Investments. None of the Borrowers shall make or
permit to exist or to remain outstanding any other Investment other than:
(a) Investments in obligations of the United States of America and
agencies thereof and obligations guaranteed by the United States of America
that are due and payable within one year from the date of acquisition;
(b) certificates of deposit, time deposits or repurchase agreements
which are fully insured or are issued by commercial banks organized under
the laws of the United States of America or any state thereof and having a
combined capital, surplus, and undivided profits of not less than
$100,000,000;
(c) commercial paper, maturing not more than nine months from the date
of issue, provided that, at the time of purchase, such commercial paper is
not rated lower than "P- 1" by ▇▇▇▇▇'▇ Investors Service, Inc., or "A- 1"
by Standard & Poor's Corporation;
(d) Investments associated with insurance policies required or allowed
by state law to be posted as financial assurance for landfill closure and
post-closure liabilities;
(e) Investments by any Borrower in any wholly owned Subsidiary which
is also a Borrower;
(f) Investments existing on the date hereof and listed on Schedule
8.3(g) hereto;
(g) Any money market account, short- term asset management account or
similar investment account maintained with one of the Banks; and
(h) other Investments not to exceed $500,000 in the aggregate at any
time outstanding.
provided; that none of the Borrowers shall make or permit to exist or to remain
outstanding any Investment in any Subsidiary unless both before and after giving
effect thereto there does not exist a Default or Event of Default and no Default
or Event of Default would be created by the making of such Investment.
8.4. Mergers, Consolidations, Sales. None of the Borrowers shall be a party
to any merger, consolidation or exchange of stock, or purchase or otherwise
acquire all or substantially all of the assets or stock of, or any partnership
or joint venture interest in, any other Person (except as otherwise provided in
this 8.4), or sell, transfer, convey or lease any stock or assets or group of
assets (except for (i) sales of equipment in the ordinary course of business and
(ii) sales of other assets so long as the aggregate book value of such assets to
be sold, together with the aggregate book value of all other such assets sold by
the Borrowers during the term of this Agreement, does not exceed 5% of
Consolidated Total Assets at the time of such sale) or sell or assign, with or
without recourse, any receivables, provided, however notwithstanding the
foregoing so long as no Default or Event of Default has occurred and is
continuing and the proposed transaction will not otherwise create an Event of
Default as a result thereof, the Borrowers shall be permitted (i) simultaneously
with the consummation of its initial public offering to exchange any of its
preferred stock into shares of common stock and (ii) to authorize and issue
additional shares of its capital stock. Notwithstanding the foregoing, a
Borrower may purchase or otherwise acquire for cash, stock or other
consideration all or substantially all of the assets or stock of any class of
any Person provided that (a) the Banks shall have been provided with a
Compliance Certificate demonstrating that the Borrowers are in current
compliance with and, giving effect to the proposed acquisition (including any
borrowings made or to be made in connection therewith), will continue to be in
compliance with, all of the covenants in 9 hereof; (b) no Event of Default has
occurred and is continuing and the proposed transaction will not otherwise
create an Event of Default hereunder; (c) the business or assets to be acquired
involves solid waste collection, hauling, recycling or transfer or related
businesses; (d) the business or assets to be acquired operates in the United
States; (e) all of the assets to be acquired shall be pledged to the Agent for
the benefit of the Banks and shall be owned by an existing or newly created
Subsidiary of the Parent, 100% of the stock of which has been or will be pledged
to the Agent on behalf of the Banks and which is a Borrower or, in the case of a
stock acquisition, the acquired company shall become or shall be merged with a
wholly-owned Subsidiary of the Parent that is a Borrower; (f) a copy of the
purchase agreement, together with audited (if available, or otherwise unaudited)
financial statements for any business to be acquired for the preceding two (2)
fiscal years and due diligence summaries shall have been furnished to the Banks,
if the purchase price, excluding the payment of all fees and expenses relating
to such purchase, exceeds $1,000,000; (g) if such acquisition is made by a
merger, such Borrower shall be the surviving entity; (h) the cash consideration
in connection with any such acquisition (including the aggregate amount of all
liabilities assumed) shall not exceed $10,000,000; and (i) the Borrower shall
provide to the Banks written consent or approval of the board of directors or
equivalent governing body of the entity whose business or assets are to be
acquired. Notwithstanding the foregoing, no Person may acquire a controlling
interest in any Borrower, nor may a Borrower purchase or otherwise acquire all
or substantially all of the assets or stock of any class of another Borrower, in
each case, without the prior written consent of the Banks. In addition,
notwithstanding the foregoing, no Borrower shall merge with or into any Person
except for mergers of a non-Borrower into a Borrower as permitted by clause (g)
of the second sentence of this 8.4; provided, however, that so long as (x) no
Default or Event of Default has occurred and is continuing, or would occur after
giving effect thereto, and (y) the surviving entity becomes a Borrower hereunder
and all assets of such surviving entity are pledged to the Agent for the benefit
of the Banks, North Country Environmental Services, Inc. may merge with a newly
created corporation which is formed solely for the purpose of acquiring the
assets of North Country Environmental Services, Inc. only and which is directly
or indirectly wholly-owned by the Parent.
8.5. Sale and Leaseback. None of the Borrowers shall enter into any
arrangement, directly or indirectly, whereby any Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property which such Borrower intends to use for substantially the
same purpose as the property being sold or transferred, without the prior
written consent of the Banks.
8.6. Restricted Distributions and Redemptions. None of the Borrowers will
declare or pay any cash Distributions; provided that (a) any Subsidiary may
declare or pay cash Distributions to the Parent and (b) so long as no Default or
Event of Default has occurred and is continuing, or would occur after giving
effect thereto, the Parent may make cash Distributions to its shareholders in an
aggregate amount, together with redemptions permitted by the following sentence,
not to exceed $100,000 during the term of this Agreement. In addition, the
Borrowers shall not redeem, convert, retire or otherwise acquire shares of any
class of capital stock of the Borrowers in aggregate amount, together with cash
Distributions by the Parent permitted by the previous sentence, in excess of
$100,000 during the term of this Agreement. The Borrowers shall not effect or
permit any change in or amendment to the charter documents or by-laws of any
Borrower or any document or instrument pertaining to the terms of the Parent's
capital stock.
8.7. Employee Benefit Plans. None of the Borrowers nor any ERISA Affiliate
will:
(a) engage in any "prohibited transaction" within the meaning of 406
of ERISA or 4975 of the Code which could result in a material liability for
any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated
funding deficiency", as such term is defined in 302 of ERISA, whether or
not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could
result in the imposition of a lien or encumbrance on the assets of any
Borrower pursuant to 302(f) or 4068 of ERISA; or
(d) permit or take any action which would result in the aggregate
benefit liabilities (with the meaning of 4001 of ERISA) of all Guaranteed
Pension Plans exceeding the value of the aggregate assets of such Plans,
disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
The Borrowers will (i) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Banks a copy of the most
recent actuarial statement required to be submitted under 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to
the Banks any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under 302, 4041, 4042, 4043, 4063, 4065, 4066 and 4068
of ERISA, or in respect of a Multiemployer Plan, under 4041A, 4202, 4219, or
4245 of ERISA.
8.8. Capital Expenditures. As at the end of any fiscal quarter, the
Borrowers will not permit the amount of Capital Expenditures (excluding any
acquisitions permitted by 8.4 hereof) made by the Borrowers in the period of
four (4) consecutive fiscal quarters then ended to exceed an amount equal to 2.0
times the sum of depreciation and landfill amortization expense for such period.
8.9. Subordinated Debt. None of the Borrowers will amend, supplement, or
otherwise modify the terms of the Subordinated Debt, the Subordination
Agreements, the Stockholder Stand-off Agreement or the Waste USA Lease without
the prior written consent of the Banks. None of the Borrowers will prepay the
Waste USA Lease, terminate the Waste USA Lease or exercise any option of
purchase the leasehold estate subject to the Waste USA Lease during the term of
this Credit Agreement without the prior written consent of the Banks. None of
the Borrowers will amend, supplement or otherwise modify the terms of the
Clinton Lease, prepay the Clinton Lease, terminate the Clinton Lease, or
exercise any option to purchase the landfill and related property subject to the
Clinton Lease during the term of this Agreement without the prior written
consent of the Banks. The Borrowers will not make any payments of the
Subordinated Debt other than scheduled payments of principal and interest
permitted under the Subordination Agreements; provided that so long as no
Default or Event of Default has occurred and is continuing, the Borrowers may
make unscheduled principal payments on Indebtedness permitted under Section
8.1(m) consisting of notes payable to sellers of assets, the principal face
amount of each of which notes does not exceed $250,000, in an aggregate amount
not to exceed $5,000,000 (less amounts prepaid under the August, 1997 Credit
Agreement, provided that such prepaid amounts do not exceed $1,750,000) during
the term of this Agreement.
8.10. Negative Pledge. The Borrowers will not enter into any agreement
containing any provision prohibiting the creation or assumption of any lien or
security interest upon its properties (other than prohibitions on liens for
particular assets set forth in a security instrument in connection with secured
Indebtedness permitted by 8.1(m) relating to such assets and the granting or
effect of such liens does not otherwise constitute a Default or Event of
Default), revenues or assets, whether now owned or hereafter acquired, or
restricting the ability of the Borrowers to amend or modify this Agreement or
any other Loan Document.
9. FINANCIAL COVENANTS OF THE BORROWERS. The Borrowers agree that, so long
as any Loan or any Note is outstanding or the Banks have any obligation to make
Loans or the Agent has any obligation to issue, extend or renew any Letters of
Credit hereunder:
9.1. Interest Coverage Ratios As of the end of any fiscal quarter, for the
period of the four consecutive fiscal quarters then ended, the ratio of EBITDA
to Consolidated Total Interest Expense shall not be less than 3.5:1.
9.2. Profitable Operations. The Borrowers will not permit Consolidated Net
Income to be less than $0 in any quarter.
9.3. Funded Debt to EBITDA Ratio. As at the end of any fiscal quarter, the
ratio of (a) Indebtedness of the Borrowers for borrowed money and capitalized
leases ("Consolidated Funded Indebtedness") to (b) EBITDA for the period of four
consecutive fiscal quarters ending on such date (subject to the provisions
below) shall not exceed the stated ratio for the respective periods set forth
below:
Period Ratio
Closing Date through 4/30/99 3.75:1
Thereafter 3.50:1
For purposes of calculating the Consolidated Funded Indebtedness to EBITDA
ratio (a) for (i) the fiscal quarter ending July 31, 1997, EBITDA shall be
deemed equal to four (4) times EBITDA for the three month period then ended,
(ii) the fiscal quarter ending October 31, 1997, EBITDA shall be deemed equal to
two (2) times EBITDA for the six month period then ended and (iii) the fiscal
quarter ending January 31, 1998, EBITDA shall be deemed equal to one and
one-third (1 1/3) times EBITDA for the nine month period then ended and (b) the
financial results of any businesses acquired after May 1, 1997 by the Borrowers
during such fiscal period shall be included in the calculation of EBITDA so long
as (i) the acquired business had annual revenue of at least $5,000,000 for the
most recent fiscal year, (ii) the Agent is satisfied that the financial
information for the acquired business fairly presents the financial condition of
such business and (iii) the Agent receives a letter in form and substance
satisfactory to the Banks from the Borrowers' Accountants as to adjustments for
non-recurring expenses.
9.4. Funded Debt to Capitalization. As of the end of any fiscal quarter,
the Borrowers shall not permit the ratio of (a) Consolidated Funded Indebtedness
to (b) the sum of (i) Consolidated Funded Indebtedness plus (ii) shareholder's
equity in the Parent as determined in accordance with GAAP to exceed 0.60 to 1.
10. CLOSING CONDITIONS.
The obligations of the Banks to make the Loans and the Agent to issue
Letters of Credit on the Closing Date and otherwise be bound by the terms of
this Agreement shall be subject to the satisfaction of each of the following
conditions precedent:
10.1. Corporate Action. All corporate action necessary for the valid
execution, delivery and performance by each Borrower of the Loan Documents shall
have been duly and effectively taken, and evidence thereof satisfactory to the
Agent shall have been provided to the Agent.
10.2. Loan Documents, Etc. Each of the Loan Documents shall have been duly
and properly authorized, executed and delivered by the respective parties
thereto and shall be in full force and effect in a form satisfactory to the
Banks, provided that the Borrowers shall have thirty (30) days after the Closing
Date to execute and deliver the amendments to the Mortgages.
10.3. Officer's Certificate; Certified Copies of Charter Documents. For
each Borrower that was a party to the August, 1997 Credit Agreement, the Agent
shall have received a certificate of a duly authorized officer of such Person as
to the existence, good standing, and lack of changes to its charter documents
since last delivered to the Agent. For All Cycle and ▇▇▇▇▇▇▇, the Agent shall
have received from the Borrowers a copy, certified by a duly authorized officer
of such Person to be true and complete on the Closing Date, of each of (a) its
charter or other incorporation documents (including certificates of merger and
name changes) as in effect on such date of certification, and (b) its by-laws as
in effect on such date.
10.4. Incumbency Certificate. The Agent shall have received an incumbency
certificate, dated as of the Closing Date, signed by duly authorized officers
giving the name and bearing a specimen signature of each individual who shall be
authorized: (a) to sign the Loan Documents on behalf of the Borrowers; (b) to
make Loan and Letter of Credit Requests; and (c) to give notices and to take
other action on the Borrowers' behalf under the Loan Documents.
10.5. Validity of Liens. The Security Documents shall be effective to
create in favor of the Agent a legal, valid and enforceable first security
interest in and lien upon the Collateral, subject only to Permitted Liens. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such security
interests, and any necessary amendments to the Mortgages, shall have been duly
effected, provided that the Borrowers shall have five (5) business days to
deliver the stock certificates of All Cycle and ▇▇▇▇▇▇▇ to the Agent. The Agent
shall have received evidence thereof in form and substance satisfactory to the
Agent.
10.6 UCC Search Results. The Agent shall have received the results of UCC
searches with respect to the Collateral owned by any Borrower acquired after
August 7, 1997, indicating no other liens other than Permitted Liens, and
otherwise in form and substance satisfactory to the Agent.
10.7. [Intentionally Omitted.]
10.8. Certificates of Insurance. The Agent shall have received (i) a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, or within 15 days prior thereto, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions of the Security Documents
and (ii) copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the insurer).
10.9. Opinion of Counsel. The Banks shall have received from ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd., an opinion addressed to the Banks, dated the Closing
Date, in form and substance satisfactory to the Banks, as to (i) authorization,
enforceability of Loan Documents and other corporate matters; (ii) Vermont
security and real estate matters.
10.10. Payment of Fees. The Borrowers shall have paid to the Agent for the
accounts of the Bank or its own account, as applicable, all fees and expenses
that are due and payable as of the Closing Date in accordance with this
Agreement.
10.11. Good Standing Certificates. The Agent shall have received
certificates from governmental officials evidencing the legal existence, good
standing and foreign qualifications of All Cycle and ▇▇▇▇▇▇▇.
10.12. Affirmation of Subordination Agreements. The Agent shall have
received an opinion of ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇, Ltd. that such a
reaffirmation of the Waste USA Subordination Agreement is not required to allow
the provisions of such agreement to remain in full force and effect.
11. CONDITIONS OF ALL LOANS.
The obligations of the Banks to make any Loan (including without limitation
the obligation of the Agent to issue any Letter of Credit) on and subsequent to
the Closing Date is subject to the following conditions precedent:
11.1. Representations True; No Event of Default. Each of the
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Loan with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement and changes occurring
in the ordinary course of business which singly or in the aggregate are not
materially adverse, and to the extent that such representations and warranties
relate expressly to an earlier date) and no Default or Event of Default shall
have occurred and be continuing.
11.2 Performance; No Event of Default. The Borrowers shall have performed
and complied with all terms and conditions herein required to be performed or
complied with by them prior to or at the time of any Loan, and at the time of
any Loan, there shall exist no Event of Default or condition which would result
in an Event of Default upon consummation of such Loan (including without
limitation any amounts to be drawn under a Letter of Credit). Each request by
the Borrowers for a Loan (including without limitation each request for issuance
of a Letter of Credit) subsequent to the first Loan shall constitute
certification by the Borrowers that the conditions specified in 10.1 and 10.2
will be duly satisfied on the date of such Loan or Letter of Credit issuance.
11.3. No Legal Impediment. No change shall have occurred in any law or
regulations thereunder or interpretations thereof which in the reasonable
opinion of the Banks would make it illegal for the Banks to make Loans
hereunder.
11.4. Governmental Regulation. The Banks shall have received such
statements in substance and form reasonably satisfactory to the Banks as they
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
11.5. Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and all documents incident thereto
shall have been delivered to the Banks as of the date hereof in substance and in
form satisfactory to the Banks, including without limitation a Letter of Credit
and Loan Request in the form attached hereto as Exhibit B, and the Banks shall
have received all information and such counterpart originals or certified or
other copies of such documents as the Banks may reasonably request.
12. COLLATERAL SECURITY. The Obligations shall be secured by a perfected
security interest (having, with respect to each category of Collateral, the
respective rights and priorities set forth in the Security Documents) in all of
the assets of the Borrowers, whether now owned or hereafter acquired, pursuant
to the terms of the Security Documents to which the Borrowers are parties. It is
the intention of the parties that all of the Revolving Credit Loans (including
any increase in the amount of the Revolving Credit Loans pursuant to 2 hereof)
be secured by the Mortgages, whether or not the Mortgages, or any one of them,
is amended in order to reflect the full amount of and/or any increase in the
amount of the Revolving Credit Loans.
13. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
13.1. Events of Default and Acceleration. If any of the following events
("Events of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice and/or lapse of time, "Defaults") shall
occur:
(a) if the Borrowers shall fail to pay any principal of the Loans when
the same shall become due and payable, whether at the Revolving Credit
Maturity Date or any accelerated date of maturity or at any other date
fixed for payment;
(b) if the Borrowers shall fail to pay any interest or fees or other
amounts owing hereunder within five (5) Business Days after the same shall
become due and payable whether at the Maturity Date or any accelerated date
of maturity or at any other date fixed for payment;
(c) if the Borrowers shall fail to comply with the covenants contained
in 7 (other than 7.6, 7.14, 7.15 and 7.18), 8 or 9 hereof;
(d) if the Borrowers shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other
than those specified in subsections (a), (b), and (c) above) within 30 days
after written notice of such failure has been given to the Borrowers by the
Banks;
(e) if any representation or warranty contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with
this Agreement shall prove to have been false in any material respect upon
the date when made or repeated;
(f) if any Borrower shall fail to pay at maturity, or within any
applicable period of grace, any and all obligations for borrowed money or
any guaranty with respect thereto in an aggregate amount greater than
$250,000, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing borrowed money in an aggregate amount greater than $250,000 for
such period of time as would, or would have permitted (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof; or
(g) if any Borrower makes an assignment for the benefit of creditors,
or admits in writing its inability to pay or generally fails to pay its
debts as they mature or become due, or petitions or applies for the
appointment of a trustee or other custodian, liquidator or receiver of any
Borrower or of any substantial part of the assets of any Borrower or
commences any case or other proceeding relating to any Borrower under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or takes any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application is filed or
any such case or other proceeding is commenced against any Borrower and or
any Borrower indicates its approval thereof, consent thereto or
acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or
a decree or order for relief is entered in respect of any Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted, and such decree or order remains in effect for more than sixty
(60) days, whether or not consecutive;
(i) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any
final judgment against any Borrower which, with other outstanding final
judgments, against the Borrowers exceeds in the aggregate $250,000 after
taking into account any undisputed insurance coverage;
(j) with respect to any Guaranteed Pension Plan, an ERISA Reportable
Event shall have occurred and the Banks shall have determined in their
reasonable discretion that such event reasonably could be expected to
result in liability of any Borrower to the PBGC or the Plan in an aggregate
amount exceeding $250,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Plan by the
PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or
the PBGC shall have instituted proceedings to terminate such Plan;
(k) any of the Subordinated Debt shall be in default or all or any
part of the Subordinated Debt shall be paid, prepaid, redeemed or
repurchased in whole or in part other than as permitted under the terms of
the Subordination Agreements, hereof and thereof; or
(l) if any of the Loan Documents shall be cancelled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks,
or any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by
or on behalf of the Borrowers or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof;
(m) ▇▇▇▇ ▇▇▇▇▇▇▇ and ▇▇▇▇▇ ▇▇▇▇▇▇ shall cease to serve as senior
management of the Parent and shall fail to be replaced by other Persons
reasonably acceptable to the Banks within 30 days;
then, and in any such event, so long as the same may be continuing, the Agent
shall upon the request of the Required Banks, by notice in writing to the
Borrowers, declare all amounts owing with respect to this Agreement, the Notes
and the other Loan Documents and all Reimbursement Obligations to be, and they
shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
Event of Default specified in 13.1(g) or 13.1(h), all such amounts shall become
immediately due and payable automatically and without any requirement of notice
from the Agent or any Bank. Upon demand by the Banks after the occurrence of any
Event of Default, the Borrowers shall immediately provide to the Agent cash in
an amount equal to the aggregate Maximum Drawing Amount of all Letters of Credit
outstanding, to be held by the Agent as collateral security for the Obligations.
13.2. Termination of Commitments. If any Event of Default shall occur, any
unused portion of the Total Commitment hereunder shall forthwith terminate and
the Banks shall be relieved of all obligations to make Loans to or issue Letters
of Credit for the account of any of the Borrowers; or if on any Drawdown Date
the conditions precedent to the making of the Loans to be made on such Drawdown
Date or the issuance of any Letters of Credit to be issued on such date are not
satisfied (except as a consequence of a default on the part of the Banks), the
Banks may by notice to the Borrowers, terminate the unused portion of the Total
Commitment hereunder, and upon such Notice being given, such unused portion of
the Total Commitment hereunder shall terminate immediately and the Banks shall
be relieved of all further obligations to make Loans to or issue Letters of
Credit for the account of the Borrowers hereunder. No termination of any portion
of the Total Commitment hereunder shall relieve the Borrowers of any of their
existing Obligations to the Banks hereunder or elsewhere.
13.3. Remedies. Subject to 15.8, in case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans pursuant to 13.1, each Bank, if
owed any amount with respect to the Loans or the Reimbursement Obligations, may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations or the Guaranteed
Obligations to such Bank are evidenced, including, without limitation, as
permitted by applicable law the obtaining of the ex parte appointment of a
receiver, and, if such amount shall have become due, by declaration or
otherwise, proceed to enforce the payment thereof or any legal or equitable
right of such Bank. No remedy herein conferred upon any Bank or the Agent or the
holder of any Note or purchaser of any Letter of Credit Participation is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
14. SETOFF. Regardless of the adequacy of any collateral, during the
continuance of an Event of Default, any deposits or other sums credited by or
due from any Bank to the Borrowers and any securities or other property of the
Borrowers in the possession of such Bank may be applied to or set off against
the payment of the Obligations and any and all other liabilities, direct, or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to the Banks. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrowers, whether by voluntary payment, exercise of the
right of setoff, counterclaim, cross action, enforcement of the claim evidenced
by the Notes held by, or constituting Reimbursement Obligations owed to, such
Bank by proceedings against the Borrowers at law or in equity or by proof
thereof in bankruptcy, reorganization, liquidation, receivership or similar
proceedings, or otherwise, and shall retain and apply to the payment of the Note
or Notes held by, or Reimbursement Obligations owed to, such Bank any amount in
excess of its ratable portion of the payments received by all of the Banks with
respect to the Notes held by, and Reimbursement Obligations owed to, all of the
Banks, such Bank will make such disposition and arrangements with the other
Banks with respect to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise as shall result in each Bank
receiving in respect of the Notes held by it or Reimbursement Obligations owed
it, such Bank's proportionate payment as contemplated by this Agreement;
provided that if all or any part of such excess payment is thereafter recovered
from such Bank, such disposition and arrangements shall be rescinded and the
amount restored to the extent of such recovery, but without interest.
15. THE AGENT.
15.1 Appointment of Agent, Powers and Immunities. Each Bank hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents. The Agent hereby acknowledges that it does not
have the authority to negotiate any agreement which would bind the Banks or
agree to any amendment, waiver or modification of any of the Loan Documents or
bind the Banks except as set forth in this Agreement or the Loan Documents.
Except as provided in this 15 and in the other Loan Documents, the Agent shall
take action or refrain from acting only upon instructions of the Banks and no
action taken or failure to act without the consent of the Banks shall be binding
on any Bank which has not consented. Each Bank irrevocably authorizes the Agent
to execute the Security Documents and all other instruments relating thereto and
to take such action on behalf of each of the Banks and to exercise all such
powers as are expressly delegated to the Agent hereunder and in the Security
Documents and all related documents, together with such other powers as are
reasonably incidental thereto. It is agreed that the duties, rights, privileges
and immunities of the Agent, in its capacity as issuer of Letters of Credit
hereunder, shall be identical to its duties, rights, privileges and immunities
as Bank as provided in this 15. The Agent shall not have any duties or
responsibilities or any fiduciary relationship with any Bank except those
expressly set forth in this Agreement. Neither the Agent nor any of its
affiliates shall be responsible to the Banks for any recitals, statements,
representations or warranties made by the Borrowers or any other Person whether
contained herein or otherwise or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement, the other Loan
Documents or any other document referred to or provided for herein or therein or
for any failure by the Borrowers or any other Person to perform its obligations
hereunder or thereunder or in respect of the Notes. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. Neither the Agent nor any of its directors, officers, employees
or agents shall be responsible for any action taken or omitted to be taken by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Bank in its separate capacity as a Bank
shall have the same rights and powers hereunder as any other Bank.
15.2. Actions By Agent. The Agent shall be fully justified in failing or
refusing to take any action under this Agreement as it reasonably deems
appropriate unless it shall first have received such advice or concurrence of
the Banks and shall be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, under this Agreement or
any of the Loan Documents in accordance with a request of the Banks, and such
request and any action taken or failure to act pursuant thereto shall be binding
upon the Banks and all future holders of the Notes or any Letter of Credit
Participation.
15.3. Indemnification. Without limiting the obligations of the Borrowers
hereunder or under any other Loan Document, the Banks agree to indemnify the
Agent and its affiliates, agents, directors, officers and shareholders, and
ratably in accordance with their respective Commitment Percentages, for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements or any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against the Agent in any
way relating to or arising out of this Agreement or any other Loan Document or
any documents contemplated by or referred to herein or therein or the
transactions contemplated hereby or thereby or the enforcement of any of the
terms hereof or thereof or of any such other documents; provided, that no Bank
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Agent (or any agent thereof).
15.4. Reimbursement. Without limiting the provisions of 15.3, the Banks and
the Agent hereby agree that the Agent shall not be obliged to make available to
any Person any sum which the Agent is expecting to receive for the account of
that Person until the Agent has determined that it has received that sum. The
Agent may, however, disburse funds prior to determining that the sums which the
Agent expects to receive have been finally and unconditionally paid to the
Agent, if the Agent wishes to do so. If and to the extent that the Agent does
disburse funds and it later becomes apparent that the Agent did not then receive
a payment in an amount equal to the sum paid out, then any Person to whom the
Agent made the funds available shall, on demand from the Agent, refund to the
Agent the sum paid to that Person. If, in the opinion of the Agent, the
distribution of any amount received by it in such capacity hereunder or under
the Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
15.5. Documents. The Agent will forward to each Bank, promptly after the
Agent's receipt thereof, a copy of each notice or other document furnished to
the Agent for such Bank hereunder; provided, however, that, notwithstanding the
foregoing, the Agent may furnish to the Banks a monthly summary with respect to
Letters of Credit issued hereunder in lieu of copies of the related Letter of
Credit Applications.
15.6. Non-Reliance on Agent and Other Banks. Each Bank represents that it
has, independently and without reliance on the Agent or any other Bank, and
based on such documents and information as it has deemed appropriate, made its
own appraisal of the financial condition and affairs of the Borrowers and
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement or any other Loan Document. The Agent shall
not be required to keep informed as to the performance or observance by the
Borrowers of this Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein or by any other Person of any
other agreement or to make inquiry of, or to inspect the properties or books of,
any Person. Except for notices, reports and other documents and information
expressly required to be furnished to the Banks by the Agent hereunder, the
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning any person which may come into the
possession of the Agent or any of its affiliates. Each Bank shall have access to
all documents relating to the Agent's performance of its duties hereunder at
such Bank's request. Unless any Bank shall promptly object to any action taken
by the Agent hereunder (other than actions to which the provisions of 15.8 are
applicable and other than actions which constitute gross negligence or willful
misconduct by the Agent), such Bank shall conclusively be presumed to have
approved the same.
15.7. Resignation of Agent. The Agent may resign at any time by giving 60
days prior written notice thereof to the Banks and the Borrowers. Upon any such
resignation, the Banks shall have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Banks and shall have
accepted such appointment within 30 days after the retiring Agent's giving of
notice of resignation, then the retiring Agent may, on behalf of the Banks,
appoint a successor Agent, which shall be a financial institution having a
combined capital and surplus in excess of $150,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent, such successor Agent
shall thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations hereunder. After any retiring Agent's
resignation, the provisions of this Agreement shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent. Any new Agent appointed pursuant to this 15.7 shall
immediately issue new Letters of Credit in place of Letters of Credit previously
issued by the Agent.
15.8. Action by the Banks, Consents, Amendments, Waivers, Etc. Except as
otherwise expressly provided in this 15.8, any action to be taken (including the
giving of notice) may be taken or any consent or approval required or permitted
by the Agreement or any other Loan Document to be given by the Banks may be
given, and any term of this Agreement, any other Loan Document or any other
instrument, document or agreement related to this Agreement or the other Loan
Documents or mentioned therein may be amended and the performance or observance
by the Borrowers or any other person of any of the terms thereof and any Default
or Event of Default (as defined in any of the above-referenced documents or
instruments) may be waived (either generally or in a particular instance and
either retroactively or prospectively) only with the written consent of the
Required Banks; provided, however, that no such consent or amendment which
affects the rights, duties or liabilities of the Agent shall be effective
without the written consent of the Agent. Notwithstanding the foregoing, no
amendment, waiver or consent shall, do any of the following unless in writing
and signed by ALL of the Banks (a) increase the principal amount of the Total
Commitment (or subject the Banks to any additional obligations), (b) reduce the
principal of or interest on the Notes (including, without limitation, interest
on overdue amounts) or any fees payable hereunder, (c) postpone any date fixed
for any payment in respect of principal or interest (including, without
limitation, interest on overdue amounts) on the Notes, or any fees payable
hereunder; (d) change the definition of "Required Banks" or number of Banks
which shall be required for the Banks or any of them to take any action under
the Loan Documents; (e) amend this 15.8; (f) change the Commitment Percentage of
any Bank, except as permitted under 19 hereof; or (g) except as otherwise
permitted hereunder, release any Collateral.
15.9. Co-Agents. None of the Banks identified on the cover page of this
Agreement as a "Co-Agent" shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than those applicable to all
Banks as such. Without limiting the foregoing, none of the Banks so identified
as a "Co-Agent" shall have or be deemed to have any fiduciary relationship with
any Bank. Each Bank acknowledges that it has not relied, and will not rely, on
any of the Banks so identified in deciding to enter into this Agreement or not
taking action hereunder.
16. EXPENSES. Whether or not the transactions contemplated herein shall be
consummated, the Borrowers hereby promise to (a) reimburse Agent as well as the
Agent's affiliates for all reasonable out-of-pocket fees and disbursements
(including all reasonable attorneys' fees, collateral evaluation costs and
Consulting Engineer's fees), incurred or expended in connection with the
preparation, filing or recording, or interpretation of this Agreement, the other
Loan Documents, or any amendment, modification, approval, consent or waiver
hereof or thereof, or with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrowers hereunder or thereunder, or in
connection with any litigation, proceeding or dispute hereunder in any way
related to the credit hereunder and (b) reimburse all reasonable out-of-pocket
fees and disbursements (including all reasonable attorneys' fees) incurred by
any Bank in connection with the enforcement of or preservation of rights under
any of the Loan Documents against the Borrowers or the administration thereof
after the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute hereunder in any way related to the credit hereunder. The
Borrowers will pay any taxes (including any interest and penalties in respect
thereof) other than the Banks' federal and state income taxes, payable on or
with respect to the transactions contemplated by this Agreement (the Borrowers
hereby agreeing to indemnify the Banks with respect thereto).
17. INDEMNIFICATION. The Borrowers agree to indemnify and hold harmless the
Agent and the Banks, as well as the Agent's and the Banks' shareholders,
directors, agents, officers, subsidiaries and affiliates, from and against all
damages, losses, settlement payments, obligations, liabilities, claims, suits,
penalties, assessments, citations, directives, demands, judgments, actions or
causes of action, whether statutory created or under the common law, and
reasonable costs and expenses incurred, suffered, sustained or required to be
paid by an indemnified party by reason of or resulting from the transactions
contemplated hereby, except any of the foregoing which result from the gross
negligence or willful misconduct of the indemnified party. In any investigation,
proceeding or litigation, or the preparation therefor, each Bank shall be
entitled to select its own counsel and, in addition to the foregoing indemnity,
the Borrowers agree to pay promptly the reasonable fees and expenses of such
counsel. In the event of the commencement of any such proceeding or litigation,
the Borrowers shall be entitled to participate in such proceeding or litigation
with counsel of their choice at their expense, provided that such counsel shall
be reasonably satisfactory to the Banks. The covenants of this 17 shall survive
payment or satisfaction of payment of amounts owing with respect to the Notes or
any other Loan Document.
18. SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein, all
covenants, agreements, representations and warranties made herein, in the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of the Loans and
the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement, any Letter of Credit or the Notes remains outstanding
and unpaid or any Bank has any obligation to make any Loans or issue any Letters
of Credit hereunder. All statements contained in any certificate or other paper
delivered by or on behalf of the Borrowers pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrowers hereunder.
19. SYNDICATION AND PARTICIPATION. It is understood and agreed that each
Bank shall have the right to assign at any time its portion of the Total
Commitment and interests in the risk relating to any Loans in an amount equal to
or greater than $5,000,000, to additional banks or other financial institutions
acceptable to Agent and Parent (unless an assignment is to a Bank or to an
affiliate of a Bank (so long as such assignment would not result in increased
costs to the Borrowers hereunder), in which case acceptance by the Agent and the
Parent shall not be necessary), which acceptances shall not be unreasonably
withheld, so long as (1) BankBoston will be the Agent hereunder, and that each
bank or other financial institution which executes and delivers to the Banks and
the Borrowers hereunder a counterpart joinder in form and substance satisfactory
to the Banks and such bank or financial institution shall, on the date specified
in such counterpart joinder, become a party to this Agreement and the other Loan
Documents for all purposes of this Agreement and the other Loan Documents, and
its Commitment shall be as set forth in such counterpart joinder. Upon the
execution and delivery of such counterpart joinder, (a) the Borrowers shall
issue to the bank or other financial institution Notes in the amount of such
bank's or other financial institution's Commitment dated the Closing Date or
such other date as may be specified by the Agent and otherwise completed in
substantially the form of the Notes executed and delivered on the Closing Date;
(b) the Agent shall distribute to the Borrowers, the Banks and such bank or
financial institution a schedule reflecting such changes; (c) this Agreement
shall be appropriately amended to reflect (i) the status of such bank or
financial institution as a party hereto and (ii) the status and rights of the
Banks and Agent hereunder; (d) the Borrowers shall take such action as the Agent
may reasonably request to perfect any security interests or mortgages in favor
of the Banks, including any bank or financial institution which becomes a party
to this Agreement; and (e) the assignee bank or financial institution shall pay
a processing and recordation fee of $2,500 to the Agent. Each Bank shall also
have the right to grant participations to one or more banks or other financial
institutions in or to all or any part of any Loans owing to such Bank and the
Note held by such Bank. The documents evidencing any such participation may
provide that, except with the consent of the bank or financial institution that
is a party thereto, such Bank will not consent to (a) the reduction in or
forgiveness of the stated principal of or rate of interest on or Commitment Fee
with respect to the portion of any Loan subject to such participation or
assignment, (b) the extension or postponement of any stated date fixed for
payment of principal or interest or Commitment Fee with respect to the portion
of any Loan subject to such participation or assignment, or (c) the waiver or
reduction of any right to indemnification of such Bank hereunder, or (d) except
as otherwise permitted hereunder, the release of any Collateral; provided that
such participating Bank shall not have more rights then those set forth in this
sentence. Notwithstanding the foregoing, no syndication, assignment or
participation shall operate to increase the Total Commitment hereunder or reduce
the Commitment of any Bank to be an amount less than $5,000,000 or otherwise
alter the substantive terms of this Agreement. Anything contained in this 19 to
the contrary notwithstanding, any Bank may at any time pledge all or any portion
of its interest and rights under this Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under 4 of the
Federal Reserve Act, 12 U.S.C. 341. No such pledge or the enforcement thereof
shall release the pledgor Bank from its obligations hereunder or under any of
the other Loan Documents.
20. PARTIES IN INTEREST. All the terms of this Agreement and the other Loan
Documents shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto and thereto;
provided, that no Borrower shall assign or transfer its rights hereunder without
the prior written consent of the Banks.
21. NOTICES, ETC. Except as otherwise expressly provided in this Agreement,
all notices and other communications made or required to be given pursuant to
this Agreement or the other Loan Documents shall be in writing and shall be
delivered in hand, mailed by United States first- class mail, postage prepaid,
or sent by telegraph, telex or telecopier and confirmed by letter, addressed as
follows:
(a) if to the Borrowers, at ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇,
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, telecopy number ▇▇▇-▇▇▇-▇▇▇▇;
(b) if to the Agent or BankBoston, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Vice President,
telecopy number ▇▇▇-▇▇▇-▇▇▇▇;
or such other address for notice as shall have last been furnished in writing to
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand to a responsible officer
of the party to which it is directed, at the time of the receipt thereof by such
officer, (b) if sent by registered or certified first-class mail, postage
prepaid, five Business Days after the posting thereof, and (c) if sent by telex
or cable, at the time of the dispatch thereof, if in normal business hours in
the country of receipt, or otherwise at the opening of business on the following
Business Day.
22. MISCELLANEOUS. The rights and remedies herein expressed are cumulative
and not exclusive of any other rights which the Banks or Agent would otherwise
have. The captions in this Agreement are for convenience of reference only and
shall not define or limit the provisions hereof. This Agreement and any
amendment hereof may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
23. ENTIRE AGREEMENT, ETC. The Loan Documents and any other documents
executed in connection herewith or therewith express the entire understanding of
the parties with respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in 15.8. No waiver shall extend to or affect any obligation
not expressly waived or impair any right consequent thereon. No course of
dealing or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrowers shall entitle the Borrowers to other or further
notice or demand in similar or other circumstances.
24. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS HEREBY WAIVES ITS RIGHT TO
A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER HEREBY WAIVES
ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO IN THE
PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR
ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWERS (a)
CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OR ANY BANK OF THE AGENT HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (b)
ACKNOWLEDGE THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BECAUSE OF, AMONG
OTHER THINGS, THE BORROWERS' WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
25. GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE SPECIFICALLY
PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS
OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH (EXCLUDING THE
LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS CONSENT TO THE
JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE COMMONWEALTH
OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS OF ANY BANK
OR THE AGENT UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
26. SEVERABILITY. The provisions of this Agreement are severable and if any
one clause or provision hereof shall be held invalid or unenforceable in whole
or in part in any jurisdiction, then such invalidity or unenforceability shall
affect only such clause or provision, or part thereof, in such jurisdiction, and
shall not in any manner affect such clause or provision in any other
jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
27. TRANSITIONAL ARRANGEMENTS.
27.1. August, 1997 Credit Agreement Superseded. This Agreement shall
restate and supersede and replace the August, 1997 Credit Agreement in its
entirety, except as provided in this 27. On the Closing Date, the rights and
obligations of the parties under the August, 1997 Credit Agreement and the
"Notes" as defined therein shall be subsumed within and be governed by this
Agreement and the Notes issued hereunder. All "Revolving Credit Loans", "Term
Loans" or "Letters of Credit" (as defined in the August, 1997 Credit Agreement)
outstanding under the August, 1997 Credit Agreement on the Closing Date shall
become Revolving Credit Loans or Letters of Credit hereunder. The Banks'
interest in such Loans and participation in such Letters of Credit will be
reallocated on the Closing Date in accordance with each Banks' applicable
Commitment Percentage.
27.2. Interest and Fees Under Prior Credit Agreement. All interest and all
commitment, facility and other fees and expenses owing or accruing under or in
respect of the August, 1997 Credit Agreement shall be calculated as of the
Closing Date (prorated in the case of any fractional periods), and shall be paid
on the Closing Date in accordance with the terms of the August, 1997 Credit
Agreement.
28. PARI PASSU TREATMENT. Notwithstanding anything to the contrary set
forth herein, each payment or prepayment of principal and interest received
after the occurrence of an Event of Default hereunder shall be distributed pari
passu among the Banks, in accordance with the aggregate outstanding principal
amount of the Obligations owing to each Bank divided by the aggregate
outstanding principal amount of all Obligations.
BOS-BUSN:552657.1
IN WITNESS WHEREOF, the undersigned have duly executed this Amended and
Restated Revolving Credit Agreement under seal as of the date first set forth
above.
BANKBOSTON, N.A., individually
and as Agent
By:
Name:
Title:
KEYBANK NATIONAL ASSOCIATION,
individually and as Co-Agent
By:
Name:
Title:
USTRUST
By:
Name:
Title:
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION individually and
as Co-Agent
By:
Name:
Title:
COMERICA BANK
By:
Name:
Title:
[SIGNATURES CONTINUED ON NEXT PAGE]
BOS-BUSN:552657.1
▇▇▇▇▇▇▇ WASTE SYSTEMS, INC.
NEW ENGLAND WASTE SERVICES
OF VERMONT, INC.
NEWBURY WASTE MANAGEMENT, INC.
NEW ENGLAND WASTE SERVICES OF N.Y.,
INC.
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF N.Y., INC.
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF
PENNSYLVANIA, INC.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President of each of the
companies listed above
[SIGNATURES CONTINUED ON NEXT PAGE]
BOS-BUSN:552657.1
▇▇▇▇▇▇▇ WASTE MANAGEMENT, INC.
NEW ENGLAND WASTE SERVICES, INC.
BRISTOL WASTE MANAGEMENT, INC.
SUNDERLAND WASTE MANAGEMENT, INC.
NORTH COUNTRY ENVIRONMENTAL SERVICES,
INC.
▇▇▇▇▇▇ ENVIRONMENTAL RECOVERY
FACILITIES, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES
CASELLA T.I.R.E.S., INC.
▇▇▇▇▇ HOLLOW REGENERATION CORP.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President/Secretary of
each of the companies listed
above
ALL CYCLE WASTE, INC.
▇▇▇▇▇▇▇ BROTHERS, INC.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: of each of the companies listed
above
BOS-BUSN:552657.1
EXHIBIT A
[AMENDED AND RESTATED]
REVOLVING CREDIT NOTE
$_____________
January 12, 1998
FOR VALUE RECEIVED, the undersigned ▇▇▇▇▇▇▇ WASTE SYSTEMS, INC., a Delaware
corporation, ▇▇▇▇▇▇▇ WASTE MANAGEMENT, INC., a Vermont corporation, NEW ENGLAND
WASTE SERVICES, INC., a Vermont corporation, NEW ENGLAND WASTE SERVICES OF
VERMONT, INC., a Vermont corporation, BRISTOL WASTE MANAGEMENT, INC., a Vermont
corporation, SUNDERLAND WASTE MANAGEMENT, INC., a Vermont corporation, NEWBURY
WASTE MANAGEMENT, INC., a Vermont corporation, NORTH COUNTRY ENVIRONMENTAL
SERVICES, INC., a Virginia corporation, ▇▇▇▇▇▇ ENVIRONMENTAL RECOVERY
FACILITIES, INC., a Maine corporation, ▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, a Maine
corporation, CASELLA T.I.R.E.S., INC., a Maine corporation, NEW ENGLAND WASTE
SERVICES OF N.Y., INC., a New York corporation, ▇▇▇▇▇▇▇ WASTE MANAGEMENT OF
N.Y., INC., a New York corporation, ▇▇▇▇▇▇▇ WASTE MANAGEMENT OF PENNSYLVANIA,
INC., a Pennsylvania corporation, ▇▇▇▇▇ Hollow Regeneration Corp., a New York
corporation, ALL CYCLE WASTE, INC., a Vermont corporation, and ▇▇▇▇▇▇▇ BROTHERS,
INC., a Vermont corporation, (collectively, the "Borrowers"), hereby jointly and
severally promise to pay to the order of [INSERT NAME OF PAYEE BANK HERE], a
[Insert entity] (the "Bank") at the Agent's head office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇:
(a) on the Revolving Credit Maturity Date the principal amount of
__________________________ Dollars ($___________) or, if less, the
aggregate unpaid principal amount of Revolving Credit Loans advanced by the
Bank to the Borrowers pursuant to the Amended and Restated Revolving Credit
Agreement dated as of January 12, 1998 (as amended and in effect from time
to time, the "Credit Agreement"), among the Borrowers, the Bank, the other
Banks which are or may become parties thereto, and BankBoston, N.A., as
agent (in such capacity, the "Agent") for the Banks; and
(b) interest on the principal balance hereof from time to time
outstanding from the Closing Date through and including the date on which
such principal amount is paid in full, at the times and at the rates
provided in the Credit Agreement.
[This Note is one of the Notes that replaces the six (6) Revolving Credit
Notes, the six (6) Series A Term Notes and the three (3) Series B Term Notes,
all dated as of August 7, 1997 (collectively, the "August, 1997 Notes"), from
the Borrowers to certain of the Banks, and is issued in partial substitution
for, and not in payment of, such August, 1997 Notes.] This Note evidences
borrowings under and has been issued by the Borrowers in accordance with the
terms of the Credit Agreement. The Bank and any holder hereof is entitled to the
benefits of the Credit Agreement, the Security Documents and the other Loan
Documents, and may enforce the agreements of the Borrowers contained therein,
and any holder hereof may exercise the respective remedies provided for thereby
or otherwise available in respect thereof, all in accordance with the respective
terms thereof. All capitalized terms used in this Note and not otherwise defined
herein shall have the same meanings herein as in the Credit Agreement.
Each of the Borrowers irrevocably authorizes the Bank to make or cause to
be made, at or about the time of the Drawdown Date of any Revolving Credit Loan
or at the time of receipt of any payment of principal of this Note, an
appropriate notation on the grid attached to this Note, or the continuation of
such grid, or any other similar record, including computer records, reflecting
the making of such Revolving Credit Loan or (as the case may be) the receipt of
such payment. The outstanding amount of the Revolving Credit Loans set forth on
the grid attached to this Note, or the continuation of such grid, or any other
similar record, including computer records, maintained by the Bank with respect
to any Revolving Credit Loans shall be prima facie evidence of the principal
amount thereof owing and unpaid to the Bank, but the failure to record, or any
error in so recording, any such amount on any such grid, continuation or other
record shall not limit or otherwise affect the obligation of the Borrower
hereunder or under the Credit Agreement to make payments of principal of and
interest on this Note when due.
The Borrowers have the right in certain circumstances and the obligation
under certain other circumstances to prepay the whole or part of the principal
of this Note on the terms and conditions specified in the Credit Agreement.
If any one or more of the Events of Default shall occur, the entire unpaid
principal amount of this Note and all of the unpaid interest accrued thereon may
become or be declared due and payable in the manner and with the effect provided
in the Credit Agreement.
No delay or omission on the part of the Bank or any holder hereof in
exercising any right hereunder shall operate as a waiver of such right or of any
other rights of the Bank or such holder, nor shall any delay, omission or waiver
on any one occasion be deemed a bar or waiver of the same or any other right on
any further occasion.
Each of the Borrowers and every endorser and guarantor of this Note or the
obligation represented hereby waives presentment, demand, notice, protest and
all other demands and notices in connection with the delivery, acceptance,
performance, default or enforcement of this Note, and assents to any extension
or postponement of the time of payment or any other indulgence, to any
substitution, exchange or release of collateral and to the addition or release
of any other party or person primarily or secondarily liable.
THIS NOTE AND THE OBLIGATIONS OF THE BORROWERS HEREUNDER SHALL FOR ALL
PURPOSES BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAW OF THE
COMMONWEALTH OF MASSACHUSETTS (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR
CHOICE OF LAW). EACH OF THE BORROWERS AGREES THAT ANY SUIT FOR THE ENFORCEMENT
OF THIS NOTE MAY BE BROUGHT IN THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS
OR ANY FEDERAL COURT SITTING THEREIN AND THE CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BEING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN 21 OF THE CREDIT
AGREEMENT. EACH OF THE BORROWERS HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR
HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT
IS BROUGHT IN AN INCONVENIENT COURT.
This Note shall be deemed to take effect as a sealed instrument under the
laws of the Commonwealth of Massachusetts.
[remainder of this page intentionally left blank]
BOS-BUSN:552657.1
IN WITNESS WHEREOF, each of the undersigned has caused this [Amended and
Restated] Revolving Credit Note to be signed in its corporate name and its
corporate seal to be impressed thereon by its duly authorized officer as of
the day and year first above written.
[Corporate Seal]
▇▇▇▇▇▇▇ WASTE SYSTEMS, INC.
NEW ENGLAND WASTE SERVICES OF VERMONT,
INC.
NEWBURY WASTE MANAGEMENT, INC.
NEW ENGLAND WASTE SERVICES OF N.Y.,
INC.
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF N.Y., INC.
▇▇▇▇▇▇▇ WASTE MANAGEMENT OF
PENNSYLVANIA, INC.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: President of each of the
companies listed above
[SIGNATURES CONTINUED ON NEXT PAGE]
BOS-BUSN:552657.1
▇▇▇▇▇▇▇ WASTE MANAGEMENT, INC.
NEW ENGLAND WASTE SERVICES, INC.
BRISTOL WASTE MANAGEMENT, INC.
SUNDERLAND WASTE MANAGEMENT, INC.
NORTH COUNTRY ENVIRONMENTAL SERVICES,
INC.
▇▇▇▇▇▇ ENVIRONMENTAL RECOVERY
FACILITIES, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES
CASELLA T.I.R.E.S., INC.
▇▇▇▇▇ HOLLOW REGENERATION CORP.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President/Secretary
of each of the companies
listed above
ALL CYCLE WASTE, INC.
▇▇▇▇▇▇▇ BROTHERS, INC.
By:
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: of each of the
companies listed above
BOS-BUS:470101
----------------------------------------------------------------------
| | | | | |
| | | Amount of |Balance of | |
----------------------------------------------------------------------
| | Amount |Principal Paid |Principal | Notation |
----------------------------------------------------------------------
| Date | of Loan | or Prepaid | Unpaid | Made By: |
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
----------------------------------------------------------------------
BOS-BUS:470101
EXHIBIT B
FORM OF LOAN AND LETTER OF CREDIT REQUEST
▇▇▇▇▇▇▇ WASTE SYSTEMS, INC. (the "Parent")
and
the Subsidiaries of the Parent listed on Schedule 1 to the Amended and
Restated
Revolving Credit Agreement (the "Credit Agreement")
dated as of January 12, 1998
Revolving Credit Loan Request under Section 2.6(a)
Amount of this Loan Request $
Outstanding Revolving Credit Loans $
Outstanding Letters of Credit $
Total of All Outstanding Revolving Credit Loans $
Requested Revolving Credit Loans,
Outstanding Letters of Credit and
Requested Letters of Credit
Funding Date
Interest Period (if a Eurodollar Rate Loan)
Letter of Credit Request
Under Section 3.1
Outstanding Letters of Credit
Amount of this Request (from
attached Letter of Credit
Application)
Total (must be less than $25,000,000)
I certify that the above is true and correct, and that all of the conditions set
forth in 11 of the Credit Agreement have been satisfied as of the date hereof.
By:
Date: _____________
BOS-BUS:470101
EXHIBIT D
FORM OF COMPLIANCE CERTIFICATE
▇▇▇▇▇▇▇ WASTE SYSTEMS, INC.
Compliance Certificate dated ______________________
I, ____________________________, Chief Financial Officer of ▇▇▇▇▇▇▇ Waste
Systems, Inc., certify that the Borrowers are in compliance with 7, 8 and 9 of
the Amended and Restated Revolving Credit Agreement dated as of January 12,
1998, as the same may be amended, [as of the end of the quarter dated
___________] [giving effect to the acquisition of _________________________].
Computations to evidence such compliance are detailed below.
Chief Financial Officer
8.3(h) Other Investments
The following is a description of all other Investments by the Borrowers
pursuant to 8.3(h) of the Credit Agreement:
Description Amount
TOTAL $
Maximum Allowed $500,000
8.8 Capital Expenditures
Total Capital Expenditures for period of $ (a)
four (4) consecutive fiscal quarters
then ended
Sum of depreciation and landfill
amortization expense for such period $ (b)
(a) shall not exceed 2 times (b) at any time
9.1 Interest Coverage Ratio
For the period of four (4) consecutive
fiscal quarters then ended:
Consolidated Net Income or Deficit$
Plus:Interest Expense $
Income Taxes $
Amortization Expense$
Depreciation Expense$
EBITDA $ (a)
Consolidated Total Interest Expense $ (b)
Ratio of (a) to (b)
Minimum Required 3.5:1
9.2 Profitable Operations
Consolidated Net Income for the
quarter ending on the statement date $
Requirement: Consolidated Net Income shall be greater
than or equal to $0 in any quarter.
9.3 Funded Debt-to-EBITDA Ratio
Indebtedness for borrowed money and
capitalized leases ("Consolidated Funded
Indebtedness") $ (a)
Consolidated Net Income* $
Plus: Interest Expense* $
Income Taxes* $
Amortization Expense*$
Depreciation Expense*$
BOS-BUS:470101
EBITDA (annualized, if necessary*) $ (b)
Ratio of (a) to (b) $
Maximum Allowed 3.75:1 (Closing - 4/30/99)
3.50:1 (thereafter)
* EBITDA calculations shall be based on the period of four (4) consecutive
fiscal quarters then ended; provided that for purposes of calculating the
Consolidated Funded Indebtedness to EBITDA ratio (a) for (i) the fiscal quarter
ending July 31, 1997, EBITDA shall be deemed equal to four (4) times EBITDA for
the three month period then ended, (ii) the fiscal quarter ending October 31,
1997, EBITDA shall be deemed equal to two (2) times EBITDA for the six month
period then ended and (iii) the fiscal quarter ending January 31, 1998, EBITDA
shall be deemed equal to one and one-third (1-1/3) times EBITDA for the nine
month period then ended and (b) the financial results of any businesses acquired
after May 1, 1997 by the Borrowers during such fiscal period shall be included
in the calculation of EBITDA so long as (i) the acquired business had annual
revenue of at least $5,000,000 for the most recent fiscal year, (ii) the Agent
is satisfied that the financial information for the acquired business fairly
presents the financial condition of such business and (iii) the Agent receives a
letter in form and substance satisfactory to the Banks from the Borrowers'
Accountants as to adjustments for non-recurring expenses.
9.4 Funded Debt to Capitalization
For the fiscal quarter then ended:
Consolidated Funded Indebtedness $ (a)
(See (a) of 9.3 above)
The sum of:
Consolidated Funded Indebtedness$
Plus:shareholder's equity $
in the Parent
Total $ (b)
Ratio of (a) to (b)
Maximum Allowed 0.60:1.00
BOS-BUS:470101
1.1 "Pricing Ratio"
Indebtedness for borrowed money and $ (a)
capitalized leases
EBITDA for such period (See (a) of 9.1 above) $ (b)
Ratio of (a) to (b)
Capitalized Interest Expense
For quarter ended _______ $
Year to date $
Cash Taxes Paid by the Borrowers
For quarter ended _______ $
Year to date $
BOS-BUS:470101
EXHIBIT E
FORM OF ENVIRONMENTAL COMPLIANCE CERTIFICATE
I, ________________________, the Chief Operating Officer of ▇▇▇▇▇▇▇ Waste
Systems, Inc., ▇▇▇▇▇▇▇ Waste Management, Inc., New England Waste Services, Inc.,
New England Waste Services of Vermont, Inc., Bristol Waste Management, Inc.,
Sunderland Waste Management, Inc., Newbury Waste Management, Inc., North Country
Environmental Services, Inc., ▇▇▇▇▇▇ Environmental Recovery Facilities, Inc.,
▇▇▇▇▇▇ Environmental Services, Casella T.I.R.E.S., Inc., New England Waste
Services of N.Y., Inc., ▇▇▇▇▇▇▇ Waste Management of N.Y., Inc., ▇▇▇▇▇▇▇ Waste
Management of Pennsylvania, Inc., ▇▇▇▇▇ Hollow Regeneration Corp., All Cycle
Waste, Inc. and ▇▇▇▇▇▇▇ Brothers, Inc. (collectively, the "Borrowers"), hereby
certify that, as of the date hereof:
a. Each of the Borrowers is in material compliance with all Environmental
Laws (as defined in the Amended and Restated Revolving Credit Agreement (as
amended and in effect from time to time, the "Credit Agreement") dated as of
January 12, 1998 among the Borrowers, BankBoston, N.A. ("BankBoston") and the
other Banks which are or may become parties thereto and BankBoston, as Agent for
the Banks);
b. Each of the Borrowers possesses all material permits necessary for the
operation of its business, such permits are in full force and effect, and the
Borrowers have no knowledge of any circumstances which might lead to the
revocation, suspension, or other loss of any such permit; and
c. The representations and warranties contained in 6.16 of the Credit
Agreement are true and correct.
Name:
Title:Chief Operating Officer
_______________________
Date
BOS-BUS:470101
EXHIBIT F
FORM OF
SUBORDINATION AGREEMENT
SUBORDINATION AGREEMENT (the "Agreement") dated as of _________________, ____,
between BANKBOSTON, N.A., as Agent for BankBoston, N.A., US Trust, KeyBank
National Association, Bank of America National Trust and Savings Association,
Comerica Bank and the other Banks that become party to the Credit Agreement
defined below (collectively, the "Banks"); _______________ (the "Subordinating
Creditor"), and [_______________, a _______________ corporation] with a
principal place of business in Rutland, Vermont (the "Borrower"). WHEREAS, the
Banks have, pursuant to an Amended and Restated Revolving Credit Agreement dated
as of January 12, 1998 (as amended, modified, supplemented, restated, amended
and restated and in effect from time to time, including any replacement
agreement therefor, the "Credit Agreement") agreed, upon the terms and subject
to the conditions contained therein, to make loans and otherwise to extend
credit to the Borrower and ▇▇▇▇▇▇▇ Waste Systems, Inc. (the "Parent"), New
England Waste Services, Inc., New England Waste Services of Vermont, Inc., New
England Waste Services of N.Y., Inc., Bristol Waste Management, Inc., Sunderland
Waste Management, Inc., Newbury Waste Management, Inc., North Country
Environmental Services, Inc., ▇▇▇▇▇▇ Environmental Services, ▇▇▇▇▇▇
Environmental Recovery Facilities, Inc., ▇▇▇▇▇ Hollow Regeneration Corp.,
Casella T.I.R.E.S., Inc., ▇▇▇▇▇▇▇ Waste Management of N.Y., Inc., ▇▇▇▇▇▇▇ Waste
Management of Pennsylvania, Inc., All Cycle Waste, Inc., ▇▇▇▇▇▇▇ Brothers, Inc.
and other Subsidiaries of the Parent that may become parties to the Credit
Agreement (collectively, the "Bank Borrowers"); and
WHEREAS, the Subordinating Creditor has agreed to extend credit to the Borrower
pursuant to a Promissory Note dated as of __________, ____ in effect from time
to time, (the "Subordinated Agreement"), between the Subordinating Creditor and
the Borrower; and
WHEREAS, it is a condition precedent to the Banks willingness to make loans and
otherwise to extend credit to the Bank Borrowers pursuant to the Credit
Agreement that the Borrower and the Subordinating Creditor enter into this
Agreement with the Agent;
WHEREAS, in order to induce the Banks to make loans and otherwise extend credit
to the Bank Borrowers pursuant to the Credit Agreement, the Borrower and the
Subordinating Creditor have agreed to enter into this Agreement with the Agent;
NOW, THEREFORE, in consideration of the foregoing, the mutual agreements herein
contained and other good and valuable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. Definitions. Terms not otherwise defined herein have the same respective
meanings given to them in the Credit Agreement. In addition, the following terms
shall have the following meanings:
Senior Debt. All principal, interest, fees, costs, enforcement expenses
(including legal fees and disbursements), collateral protection expenses and
other reimbursement or indemnity obligations created or evidenced by the Credit
Agreement or any of the other Loan Documents or any prior concurrent, or
subsequent notes, instruments or agreements of indebtedness, liabilities or
obligations of any type or form whatsoever relating thereto in favor of the
Agent of any of the Banks. Senior Debt shall expressly include (a) any and all
interest accruing or out of pocket costs or expenses incurred after the date of
any filing by or against the Bank Borrowers or any petition under the federal
Bankruptcy Code or any other bankruptcy, insolvency or reorganization act
regardless of whether the Agent's or any Bank's claim therefor is allowed or
allowable in the case or proceeding relating thereto, and (b) any credit
facilities extended to the Bank Borrowers to refinance or refund any of the
Senior Debt.
Subordinated Debt. All principal, interest, fees, costs, enforcement
expenses (including legal fees and disbursements), collateral protection
expenses and other reimbursement and indemnity obligations created or evidenced
by the Subordinated Agreement or any prior, concurrent or subsequent notes,
instruments or agreements of indebtedness, liabilities or obligations of any
type or form whatsoever relating thereto in favor of the Subordinating Creditor.
Subordinated Documents. Collectively, the Subordinated Agreement, any
promissory notes executed in connection therewith and any and all guarantees and
security interests, mortgages and other liens directly or indirectly guarantying
or securing any of the Subordinated Debt, and any and all other documents or
instruments evidencing or further guarantying or securing directly or indirectly
any of the Subordinated Debt, whether now existing or hereafter created.
2. General. The Subordinated Debt and any and all Subordinated Documents
shall be and hereby are subordinated and the payment thereof is deferred until
the full and final payment in cash of the Senior Debt, whether now or hereafter
incurred or owed by the Bank Borrowers. Notwithstanding the immediately
preceding sentence, the Borrower shall be permitted to pay, and the
Subordinating Creditor shall be permitted to receive, any regularly scheduled
payment of interest or principal on the Subordinated Debt so long as at the time
of such payment, or after giving effect thereto, no Default or Event of Default
has occurred and is continuing under the Credit Agreement or would occur after
giving effect thereto.
3. Enforcement. The Subordinating Creditor will not take or omit to take
any action or assert any claim with respect to the Subordinated Debt or
otherwise which is inconsistent with the provisions of this Agreement. Without
limiting the foregoing, the Subordinated Creditor will not assert, collect or
enforce the Subordinated Debt or any part thereof or take any action to
foreclose or realize upon the Subordinated Debt or any part thereof or enforce
any of the Subordinated Documents except (a) in each such case as necessary, so
long as no Default or Event of Default has occurred and is then continuing under
the Credit Agreement or would occur after giving effect thereto, to collect any
sums expressly permitted to be paid by the Borrower pursuant to 2 hereof, or (b)
to the extent (but only to such extent) that the commencement of a legal action
may be required to toll the running of any applicable statute of limitation.
Until the Senior Debt has been finally paid in full in cash, the Subordinating
Creditor shall not have any right of subrogation, reimbursement, restitution,
contribution or indemnity whatsoever from any assets of the Borrower, any other
Bank Borrower or any guarantor of or provider of collateral security for the
Senior Debt. The Subordinating Creditor further waives any and all rights with
respect to marshalling.
4. Payments Held in Trust. The Subordinating Creditor will hold in trust
and immediately pay over to the Agent for the account of the Banks, in the same
form of payment received, with appropriate endorsements, for application to the
Senior Debt any cash amount that the Borrower or any other Bank Borrower pays to
the Subordinating Creditor with respect to the Subordinated Debt, or as
collateral for the Senior Debt any other assets of the Borrower or any other
Bank Borrower that the Subordinating Creditor may receive with respect to the
Subordinated Debt in each case except with respect to payments expressly
permitted pursuant to 2 hereof.
5. Defense to Enforcement. If the Subordinating Creditor, in contravention
of the terms of this Agreement, shall commence, prosecute or participate in any
suit, action or proceeding against the Borrower, then the Borrower may interpose
as a defense or plea the making of this Agreement, and the Agent or any Bank may
intervene and interpose such defense or plea in its name or in the name of the
Borrower. If the Subordinating Creditor, in contravention of the terms of this
Agreement, shall attempt to collect any of the Subordinated Debt or enforce any
of the Subordinated Documents, then the Agent, any Bank or the Borrower may, by
virtue of this Agreement, restrain the enforcement thereof in its name or in the
name of the Borrower. If the Subordinating Creditor, in contravention of the
terms of this Agreement, obtains any cash or other assets of the Borrower or any
other Bank Borrower as a result of any administrative, legal or equitable
actions, or otherwise, the Subordinating Creditor agrees forthwith to pay,
deliver and assign to the Agent, for the account of the Banks, with appropriate
endorsements, any such cash for application to the Senior Debt and any such
other assets as collateral for the Senior Debt.
6. Bankruptcy, etc.
6.1 Payments Relating to Subordinated Debt. At any meeting of creditors
of the Borrower or in the event of any case or proceeding, voluntary or
involuntary, for the distribution, division or application of all or part of the
assets of the Borrower or the proceeds thereof, whether such case or proceeding
be for the liquidation, dissolution or winding up of the Borrower or its
business, a receivership, insolvency or bankruptcy case or proceeding, an
assignment for the benefit of creditors or a proceeding by or against the
Borrower for relief under the federal Bankruptcy Code or any other bankruptcy,
reorganization or insolvency law or any other law relating to the relief of
debtors, readjustment of indebtedness, reorganization, arrangement, composition
or extension or marshalling of assets or otherwise, the Agent is hereby
irrevocably authorized at any such meeting or in any such proceeding to receive
or collect for the benefit of the Banks any cash or other assets of the Borrower
distributed, divided or applied by way of dividend or payment, or any securities
issued on account of any Subordinated Debt, and apply such cash to or to hold
such other assets or securities as collateral for the Senior Debt, and to apply
to the Senior Debt any cash proceeds of any realization upon such other assets
or securities that the Agent in its discretion elects to effect, until all of
the Senior Debt shall have been paid in full in cash, rendering to the
Subordinating Creditor any surplus to which the Subordinating Creditor is then
entitled.
6.2 Securities by the Plan of Reorganization or Readjustment.
Notwithstanding the foregoing provisions of 6.1, the Subordinating Creditor
shall be entitled to receive and retain any securities of the Borrower or any
other corporation or other entity provided for by a plan of reorganization or
readjustment (i) the payment of which securities is subordinate, at least to the
extent provided in this Agreement with respect to the Subordinated Debt, to the
payment of all Senior Debt under any such plan of reorganization or readjustment
and (ii) all other terms of which are acceptable to the Banks and the Agent.
6.3 Subordinated Debt Voting Rights. At any such meeting of creditors or
in the event of any such case or proceeding, the Subordinating Creditor shall
retain the right to vote and otherwise act with respect to the Subordinated Debt
(including, without limitation, the right to vote to accept or reject any plan
of partial or complete liquidation, reorganization, arrangement, composition or
extension), provided that the Subordinating Creditor shall not vote with respect
to any such plan or take any other action in any way so as to contest (i) the
validity of any Senior Debt or any collateral therefor or guaranties thereof,
(ii) the relative rights and duties of any holders of any Senior Debt
established in any instruments or agreements creating or evidencing any of the
Senior Debt with respect to any of such collateral or guaranties or (iii) the
Subordinating Creditor's obligations and agreements set forth in this Agreement.
7. Lien Subordination. The Senior Debt, the Credit Agreement and the other
Loan Documents and any and all other documents and instruments evidencing or
creating the Senior Debt and all guaranties, mortgages, security agreements,
pledges and other collateral guarantying or securing the Senior Debt or any part
thereof shall be senior to the Subordinated Debt and all of the Subordinated
Documents irrespective of the time of the execution, delivery or issuance of any
thereof or the filing or recording for perfection of any thereof or the filing
of any financing statement or continuation statement relating to any thereof.
7.1 Further Assurances. The Subordinating Creditor hereby agrees, upon
request of the Agent at any time and from time to time, to execute such other
documents or instruments as may be requested by the Agent further to evidence of
public record or otherwise the senior priority of the Senior Debt as
contemplated hereby.
7.2 Books and Records. The Subordinating Creditor further agrees to
maintain on its books and records such notations as the Agent may reasonably
request to reflect the subordination contemplated hereby and to perfect or
preserve the rights of the Agent hereunder. A copy of this Agreement may be
filed as a financing statement in any Uniform Commercial Code recording office.
7.3 Release of Guaranties and Collateral. Without limiting any of the
rights of the Agent or any Bank under the Credit Agreement, the other Loan
Documents or applicable law, in the event that the Agent releases or discharges
any guaranties of the Senior Debt given by guarantors which have also guaranteed
the Subordinated Debt or any security interests in, or mortgages or liens upon,
any collateral securing the Senior Debt and also securing the Subordinated Debt,
such guarantors or (as the case may be) such collateral shall thereupon be
deemed to have been released from all such guaranties or security interests,
mortgages or liens in favor of the Subordinating Creditor provided that any net
cash proceeds received by the Borrower or such guarantor in connection with any
sale or other disposition of assets in which such release or discharge is
granted are applied, or are held for application, to the Senior Debt. The
Subordinating Creditor agrees that, within ten (10) days following the Agent's
written request therefor, the Subordinating Creditor will execute, deliver and
file any and all such termination statements, mortgage discharges, lien releases
and other agreements and instruments as the Agent reasonably deems necessary or
appropriate in order to give effect to the preceding sentence. The Subordinating
Creditor hereby irrevocably appoints the Agent, and its successors and assigns,
and their respective officers, with full power of substitution, the true and
lawful attorney(s) of the Subordinating Creditor for the purpose of effecting
any such executions, deliveries and filings if and to the extent that the
Subordinating Creditor shall have failed to perform such obligations pursuant to
the foregoing provisions of this 7.3 within such ten (10) day period.
8. Banks' Freedom of Dealing. The Subordinating Creditor agrees, with
respect to the Senior Debt and any and all collateral therefor or guaranties
thereof, that the Bank Borrowers and the Banks may agree to increase the amount
of the Senior Debt or otherwise modify the terms of any of the Senior Debt, and
the Banks may grant extensions of the time of payment or performance to and make
compromises, including releases of collateral or guaranties, and settlements
with the Bank Borrowers and all other persons, in each case without the consent
of the Subordinating Creditor or the Borrower and without affecting the
agreements of the Subordinating Creditor or the Borrower contained in this
Agreement; provided, however, that nothing contained in this 8 shall constitute
a waiver of the right of the Borrower itself to agree or consent to a settlement
or compromise of a claim which the Agent or any Bank may have against the
Borrower.
9. Modification or Sale of the Subordinated Debt. The Subordinating
Creditor will not, at any time while this Agreement is in effect, modify any of
the terms of any of the Subordinated Debt or any of the Subordinated Documents;
nor will the Subordinating Creditor sell, transfer, pledge, assign, hypothecate
or otherwise dispose of any or all of the Subordinated Debt to any person other
than a person who agrees in a writing, satisfactory in form and substance to the
Agent, to become a party hereto and to succeed to the rights and to bound by all
of the obligations of the Subordinating Creditor hereunder. In the case of any
such disposition by the Subordinating Creditor, the Subordinating Creditor will
notify the Agent at least 10 days prior to the date of any of such intended
disposition.
10. Borrower's Obligations Absolute. Nothing contained in this Agreement
shall impair, as between the Borrower and the Subordinating Creditor, the
obligation of the Borrower to pay to the Subordinating Creditor all amounts
payable in respect of the Subordinated Debt as and when the same shall become
due and payable in accordance with the terms thereof, or prevent the
Subordinating Creditor (except as expressly otherwise provided in 3 or 6) from
exercising all rights, powers and remedies otherwise permitted by Subordinated
Documents and by applicable law upon a default in the payment of the
Subordinated Debt or under any Subordinated Document, all, however, subject to
the rights of the Agent and the Banks as set forth in this Agreement.
11. Termination of Subordination. This Agreement shall continue in full
force and effect, and the obligations and agreements of the Subordinating
Creditor and the Borrower hereunder shall continue to be fully operative, until
all of the Senior Debt shall have been paid and satisfied in full in cash and
such full payment and satisfaction shall be final and not avoidable. To the
extent that the Bank Borrowers or any guarantor of or provider of collateral for
the Senior Debt makes any payment on the Senior Debt that is subsequently
invalidated, declared to be fraudulent or preferential or set aside or is
required to be repaid to a trustee, receiver or any other party under any
bankruptcy, insolvency or reorganization act, state or federal law, common law
or equitable cause (such payment being hereinafter referred to as a "Voided
Payment"), then to the extent of such Voided Payment, that portion of the Senior
Debt that had been previously satisfied by such Voided Payment shall be revived
and continue in full force and effect as if such Voided Payment had never been
made. In the event that a Voided Payment is recovered from any Bank, an Event of
Default shall be deemed to have existed and to be continuing under the Credit
Agreement from the date of such Bank's initial receipt of such Voided Payment
until the full amount of such Voided Payment is restored to such Bank. During
any continuance of any such Event of Default, this Agreement shall be in full
force and effect with respect to the Subordinated Debt. To the extent that the
Subordinating Creditor has received any payments with respect to the
Subordinated Debt subsequent to the date of any Bank's initial receipt of such
Voided Payment and such payments have not been invalidated, declared to be
fraudulent or preferential or set aside or are required to be repaid to a
trustee, receiver, or any other party under any bankruptcy act, state or federal
law, common law or equitable cause, the Subordinating Creditor shall be
obligated and hereby agrees that any such payment so made or received shall be
deemed to have been received in trust for the benefit of such Bank, and the
Subordinating Creditor hereby agrees to pay to such Bank, upon demand, the full
amount so received by the Subordinating Creditor during such period of time to
the extent necessary fully to restore to such Bank the amount of such Voided
Payment. Upon the payment and satisfaction in full in cash of all of the Senior
Debt, which payment shall be final and not avoidable, this Agreement will
automatically terminate without any additional action by any party hereto.
12. Notices. All notices and other communications which are required and
may be given pursuant to the terms of this Agreement shall be in writing and
shall be sufficient and effective in all respects if given in writing or
telecopied, delivered or mailed by registered or certified mail, postage
prepaid, as follows
If to the Agent BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇,
Vice President
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Subordinating Creditor:
Attn:
FAX: ( )
If to Borrower:[ ]
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
FAX: (▇▇▇) ▇▇▇-▇▇▇▇
or such other address or addresses as any party hereto shall have designated by
written notice to the other parties hereto. Notices shall be deemed given and
effective upon the earlier to occur of (i) the third day following deposit
thereof in the U.S. mail or (ii) receipt by the party to whom such notice is
directed.
13. Governing Law. This agreement shall be governed by and interpreted in
accordance with the laws of the Commonwealth of Massachusetts and shall be
sealed instrument under such laws.
14. Waiver of Jury Trial. Each of the Subordinating Creditor and the
Borrower each hereby waives its right to a jury trial with respect to any action
or claim arising out of any dispute in connection with this Agreement, any
rights or obligations hereunder or the performance of such rights and
obligations hereunder or the performance of such rights and obligations. Except
as prohibited by law, each of the Subordinating Creditor and the Borrower hereby
waives any right which it may have to claim or recover in any litigation
referred to in the preceding sentence any special exemplary, punitive or
consequential damages or any damages other than, or in addition to, actual
damages. Each of the Subordinating Creditor and the Borrower (a) certifies that
no representative, agent or attorney of the Agent has represented, expressly or
otherwise, that the Agent would not in the event of litigation, seek to enforce
the foregoing waivers and (b) acknowledges that the Agent has been induced to
enter into this Agreement by, among other things, the waivers and certifications
contained herein.
15. Miscellaneous. This Agreement may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought. The Agent may, in its sole and absolute discretion, waive
any provisions of this Agreement benefiting the Agent and the Banks; provided,
however, that such waiver shall be effective only if in writing and signed by
the Agent and shall be limited to the specific provision or provisions expressly
so waived. This Agreement shall be binding upon the successors and assigns of
the Subordinating Creditor and the Borrower and shall inure to the benefit of
the Banks, the Banks' successors and assigns, any lender or lenders refunding or
refinancing any of the Senior Debt and their respective successors and assigns,
but shall not otherwise create any rights or benefits for any third party. In
the event that any lender or lenders refund or refinance any of the Senior Debt,
the terms "Credit Agreement," "Loan Documents," "Event of Default" and the like
shall refer mutatis mutandis to the agreements and instruments in favor of such
lender or lenders and to the related definitions contained therein.
BOS-BUS:470101
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
IN THE PRESENCE OF:
BANKBOSTON, N.A., as Agent
By:
Title:
[SUBORDINATED CREDITOR]
By:
Title:
[BORROWER]
By:
Title:
BOS-BUS:470101
COMMONWEALTH OF MASSACHUSETTS
COUNTY OF
At in said County on this ____ day of , ____, personally appeared,
duly authorized agent of BANKBOSTON, N.A., and he acknowledged the above
instrument, by him sealed and subscribed, to be his free act and deed and the
free act and deed of BANKBOSTON, N.A.
Before me,
Notary Public
Commission Expires
STATE OF VERMONT
COUNTY OF
At in said County on this ____ day of , ____, personally appeared,
duly authorized agent of ________________, and he acknowledged the above
instrument, by him sealed and subscribed, to be his free act and deed and the
free act and deed of _____________.
Notary Public
Commission Expires
STATE OF VERMONT
COUNTY OF
At in said County on this ____ day of , ____, personally appeared,
duly authorized agent of ________________, and he acknowledged the above
instrument, by him sealed and subscribed, to be his free act and deed and the
free act and deed of ________________.
Notary Public
Commission Expires
BOS-BUS:470101
SCHEDULE 1
SUBSIDIARIES OF THE PARENT WHICH ARE BORROWERS
Parent: ▇▇▇▇▇▇▇ Waste Systems, Inc.,
a Delaware corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Subsidiaries: ▇▇▇▇▇▇▇ Waste Management, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
New England Waste Services, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ Waste Services of Vermont, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
North Country Environmental Services, Inc.,
a Virginia corporation
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇, ▇▇▇▇▇ ▇▇▇
Bow, New Hampshire 03304
Newbury Waste Management, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Bristol Waste Management, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Sunderland Waste Management, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
BOS-BUS:470101
▇▇▇▇▇▇ Environmental Recovery Facilities, Inc.,
a Maine Corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ Environmental Services,
a Maine corporation
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Casella T.I.R.E.S., Inc.,
a Maine corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
New England Waste Services of N.Y., Inc.,
a New York corporation
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Waste Management of N.Y., Inc.,
a New York corporation
▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Waste Management of Pennsylvania, Inc.,
a Pennsylvania corporation
▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ Hollow Regeneration Corp.,
a New York corporation
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
All Cycle Waste, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ Brothers, Inc.,
a Vermont corporation
▇▇ ▇▇▇▇▇▇ ▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
BOS-BUS:470101
SCHEDULE 2
Banks' Commitment Percentages
-------------------------------------
|BankBoston |31.6667% |
-------------------------------------
|KeyBank |20.0000% |
-------------------------------------
|USTrust |15.0000% |
-------------------------------------
|Bank of America |20.0000% |
-------------------------------------
|Comerica Bank |13.3333% |
-------------------------------------
| |100.0000% |
-------------------------------------
BOS-BUS:470101