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EXHIBIT 99.1
SECOND AMENDMENT
THIS SECOND AMENDMENT dated as of October __, 2000 (this "Amendment")
amends the Amended and Restated Credit Agreement dated as of February 15, 2000
(as previously amended, the "Credit Agreement") among EarthCare Company (the
"Company"), various financial institutions (the "Banks") and Bank of America,
N.A., as Administrative Agent (in such capacity, the "Administrative Agent").
Terms defined in the Credit Agreement are, unless otherwise defined herein or
the context otherwise requires, used herein as defined therein.
WHEREAS, the Company, the Banks and the Administrative Agent have entered
into the Credit Agreement; and
WHEREAS, the parties hereto desire to amend the Credit Agreement in
certain respects as more fully set forth herein;
NOW, THEREFORE, the parties hereto agree as follows:
SECTION 1 Amendments. Subject to the satisfaction of the conditions
precedent set forth in Section 4, the Credit Agreement shall be amended as
follows:
1.1 Addition of Definitions. The following definitions are added to
Section 1.1 in appropriate alphabetical order:
Asset Sale means the sale, lease, assignment or other transfer
for value by the Company or any Subsidiary to any Person (other than the
Company or any Subsidiary) of any asset or right of the Company or such
Subsidiary (including any sale or other transfer of stock of any
Subsidiary, whether by merger, consolidation or otherwise).
Demand Subordinated Debt means Debt of the Company owing to
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and/or ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ in an amount not to
exceed $2,000,000 outstanding at any time which meets the qualifications
of clause (c) of the definition of Subordinated Debt.
EarthLiquids Subsidiaries means, collectively, Magnum
Environmental Services, Inc., Magnum World Enterprises, Inc., Magnum
Property Development Corporation, Magnum East Coast Properties, Ltd.,
Magnum West Coast Properties, Ltd., Magnum North East Properties,
Ltd., International Petroleum Corporation, International Petroleum
Corporation of LA, International Petroleum Corp. of Maryland,
International Petroleum Corp. of Delaware, International Petroleum of
Georgia, International Petroleum Corp. of Lafayette, International
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Petroleum Corporation of Pennsylvania and International Environmental
Services, Inc.
ERMFI means EarthCare Resource Management of Florida, Inc., a
Florida corporation.
Net Cash Proceeds means:
(a) with respect to any Asset Sale, the aggregate cash proceeds
(including cash proceeds received by way of deferred payment of principal
pursuant to a note, installment receivable or otherwise, but only as and
when received) received by the Company or any Subsidiary pursuant to such
Asset Sale, net of (i) the direct costs relating to such Asset Sale
(including sales commissions and legal, accounting and investment banking
fees), (ii) taxes paid or reasonably estimated by the Company to be
payable as a result thereof (after taking into account any available tax
credits or deductions and any tax sharing arrangements), (iii) amounts
required to be applied to the repayment of any Debt secured by a Lien on
the asset subject to such Asset Sale (other than Debt hereunder), (iv)
breakage costs in connection with the repayment of any Debt described in
clause (iii), any prepayment of any Loans required by Section 6.2(b) or
the termination of any Hedging Agreement related to any such Debt or
Loans and (v) any fees payable pursuant to Section 5.5 of the Second
Amendment hereto; and
(b) with respect to any issuance of equity securities, the
aggregate cash proceeds received by the Company or any Subsidiary
pursuant to such issuance, net of the direct costs relating to such
issuance (including sales and underwriter's discounts and commissions and
legal, accounting and investment banking fees).
1.2 Amendments to Section 2.1. (a) Section 2.1.1 is amended by deleting
the proviso contained therein and substituting the following therefor:
provided that the Total Outstandings will not at any time exceed (a)
prior to the sale of the EarthLiquids Subsidiaries, the Commitment Amount
less the result, if positive, of (i) $10,000,000 minus (ii) 80% of the
consolidated accounts receivable of the Company and its Subsidiaries
(other than ERMFI) as of the last Business Day of the preceding month,
and (b) after the sale of the EarthLiquids Subsidiaries, the greater of
(i) the amount calculated pursuant to clause (a) above or (ii) the amount
of cash collateral on deposit with the Administrative Agent at such time
pursuant to any Loan Document.
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(b) The following Section 2.1.3 is added to the Credit Agreement in
appropriate numerical sequence:
2.1.3 Limitation on Total Outstandings. Notwithstanding the
foregoing provisions of this Section 2.1 or any other provision of this
Agreement, unless the Required Banks otherwise consent, Total
Outstandings shall not exceed $55,000,000.
1.3 Amendment to Section 5.1. The first sentence of Section 5.1 is
amended in its entirety to read as follows:
The Company agrees to pay to the Administrative Agent for the account of
each Bank a non-use fee, for the period from the Effective Date to the
Termination Date, at 0.5% of the daily average of the unused amount of
such Bank's Percentage of the lesser of (i) the Commitment Amount or (ii)
the maximum Total Outstandings allowed under Section 2.1.3.
1.4 Addition of Section 6.1.3. A new Section 6.1.3 is added in
appropriate numerical sequence to read as follows:
6.1.3 Mandatory Reductions of the Commitment Amount. Concurrently
with the receipt by the Company or any Subsidiary of any Net Cash
Proceeds from any Asset Sale or issuance of equity or Debt, the
Commitment Amount shall be reduced by an amount (rounded down, if
necessary, to an integral multiple of $100,000) equal to 100% of all such
Net Cash Proceeds received since September 30, 2000 minus the aggregate
amount previously applied to reduce the Commitment Amount pursuant to
this Section 6.1.3.
1.5 Amendment to Section 6.2. Section 6.2 is amended by (a) inserting the
caption "(a) Voluntary Prepayments." at the beginning of such Section, (b)
deleting the last two sentences of the existing Section 6.2 and (c) inserting
the following new subsections (b) and (c) at the end thereof:
(b) Mandatory Prepayments. (i) On each date on which the
Commitment Amount is reduced pursuant to Section 6.1.3, the Company shall
prepay Loans in the amount, if any, by which the Total Outstandings
exceed the Commitments after giving effect to such reduction.
(ii) On the fifth Business Day of each month, the Company
shall prepay Loans by an amount equal to the result, if positive,
of (x) $10,000,000 less (y) 80% of the consolidated accounts
receivable of the Company and its Subsidiaries (other than ERMFI)
as of the last day of the preceding month.
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(c) All Prepayments. All prepayments shall be applied to prepay
the Loans of the Banks pro rata according to their respective
Percentages. Any prepayment of a Eurodollar Loan on a day other than the
last day of an Interest Period therefor shall include interest on the
principal amount being repaid and shall be subject to Section 8.4.
1.6 Amendment to Section 10.1. Section 10.1.11 is redesignated as
"Section 10.1.12", and a new Section 10.1.11 is added to read as follows:
10.1.11 Weekly Reports. On the first Business Day of each week,
beginning on November 6, 2000 through the week ending December 31, 2000,
(i) cash flow projections for the Company and its Subsidiaries for such
week and (ii) a statement of actual cash flows for the Company and its
Subsidiaries for the previous week.
1.7 Amendment to Section 10.6.7. Section 10.6.7 (Minimum EBITDA
Covenant) is amended in its entirety to read as follows:
10.6.7 Minimum EBITDA. Not permit Adjusted EBITDA (as defined
below) for any period beginning on October 1, 2000 and ending on the last
day of any month thereafter to be less than the product of $500,000
multiplied by the number of months elapsed since October 1, 2000 (i.e.,
$500,000 as of October 31, 2000, $1,000,000 as of November 30, 2000,
etc.). For purposes of the foregoing, "Adjusted EBITDA" means EBITDA
calculated (i) without including any financial results from ERMFI and
(ii) with the addition of the first $2,800,000 of non-cash charges, to
the extent taken in the applicable period, related to the writeoff of the
Company's investment in Crossroads Environmental.
1.8 Amendment of Section 10.7. Section 10.7 is amended in its entirety to
read as follows:
10.7 Limitations on Debt. Not, and not permit any Subsidiary to,
create, incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C
Applications and the Letters of Credit;
(b) unsecured Debt of the Company which represents all or part
of the purchase price payable in connection with a
transaction permitted by Section 10.11(c); provided that
the aggregate principal amount of all such unsecured Debt
shall not at any time exceed $5,000,000;
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(c) Debt of the Company or any Subsidiary (other than ERMFI)
secured by Liens permitted by subsection 10.8(c) or (d),
and refinancings of any such Debt so long as the terms
applicable to such refinanced Debt are no less favorable
to the Company or the applicable Subsidiary than the terms
in effect immediately prior to such refinancing, provided
that the aggregate amount of all such Debt at any time
outstanding shall not exceed $2,000,000;
(d) Debt of the Company or any Subsidiary (other than ERMFI)
arising under Capital Leases in an aggregate amount not at
any time exceeding $1,000,000;
(e) Debt of Subsidiaries owed to the Company;
(f) unsecured Debt of the Company to Subsidiaries;
(g) Subordinated Debt;
(h) Debt arising under Hedging Agreements entered into in the
ordinary course of business as bona fide hedging
transactions (including any Hedging Agreement entered into
pursuant to Section 10.21) and not for speculative
purposes;
(i) Debt of ERMFI listed on Schedule I to the Second Amendment
to this Agreement and refinancings of such Debt so long as
the terms applicable to such refinanced Debt are no less
favorable to ERMFI than the terms in effect immediately
prior to such refinancing; provided that neither the
Company nor any other Subsidiary shall guarantee or
otherwise have any liability with respect to any such
Debt; and
(j) additional Debt of ERMFI not at any time exceeding in the
aggregate $4,000,000; provided that neither the Company
nor any other Subsidiary shall guarantee or otherwise have
any liability with respect to any such Debt.
1.9 Amendment of Section 10.8. Section 10.8 is amended by (a) deleting
the word "and" at the end of clause (f); (b) substituting a semi-colon followed
by the word "and" at the end of clause (g); and (c) inserting the following new
clause (h):
(h) Liens on assets of ERMFI securing Debt permitted by Section
10.7(i) and (j).
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1.10 Amendment to Section 10.10. Section 10.10 is amended by (a) deleting
the word "and" at the end of clause (ii); (b) substituting a comma followed by
the word "and" at the end of clause (iii); and (c) inserting the following new
clause (iv):
(iv)(x) so long as no Event of Default or Unmatured Event of Default
exists or would result therefrom and (y) the Commitment Amount shall be
at least $1,000,000 greater than the Total Outstandings after giving
effect to such payment, the Company may pay interest on or prepay
principal of Demand Subordinated Debt during the five days following
delivery of the compliance certificate pursuant to Section 10.1.4.
1.11 Amendment to Section 10.11. Clause (c) of Section 10.11 is amended
in its entirety to read as follows:
(c) any such other purchase or acquisition by the Company or any
Subsidiary made with the prior written consent of the Required Banks.
1.12 Amendment of Section 10.13. Section 10.13 is amended in its entirety
to read as follows:
10.13 Further Assurances. Take, and cause each Subsidiary to
take, such actions as are necessary, or as the Administrative Agent (or
the Required Banks acting through the Administrative Agent) may
reasonably request, from time to time (including the execution and
delivery of guaranties, security agreements, pledge agreements, financing
statements and other documents, the filing or recording of any of the
foregoing, and the delivery of stock certificates and other collateral
with respect to which perfection is obtained by possession) to ensure
that (i) the obligations of the Company hereunder and under the other
Loan Documents are secured by substantially all of the assets of the
Company and guaranteed by all Subsidiaries (including, promptly upon the
acquisition or creation thereof, any Subsidiary acquired or created after
the date hereof) by execution of a counterpart of the Subsidiary Guaranty
and (ii) the obligations of each Subsidiary under the Subsidiary Guaranty
are secured by substantially all of the assets of such Subsidiary;
provided that ERMFI shall not be obligated to ▇▇▇▇▇ ▇ ▇▇▇▇ on any of its
assets as security for its obligations under the Subsidiary Guaranty so
long as, and to the extent that, granting such Lien on such assets would
violate any agreement relating to Debt of ERMFI permitted by Section
10.7.
1.13 Amendments to Section 10.20. The "provided, however," clause at the
end of Section 10.20 is amended in its entirety to read as follows:
provided, however, that (i) no Investment otherwise permitted by clause
(b), (c), (d), (e), (f), (g), (j) or (k) shall be permitted to be made
if, immediately before or
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after giving effect thereto, any Event of Default or Unmatured Event of
Default shall have occurred and be continuing and (ii) neither the
Company nor any Subsidiary shall make any investment in ERMFI (other than
the acquisition by the Company of stock of ERMFI in accordance with the
provisions of the Second Amendment to this Agreement).
1.14 Amendment to Schedules. Each of Schedule 1.1, Schedule 9.6 and
Schedule 9.15 is amended in its entirety to read as set forth as Schedule 1.1,
Schedule 9.6 and Schedule 9.15 hereto, respectively.
SECTION 2 Waiver. Subject to the satisfaction of the conditions precedent
set forth in Section 4, the Required Banks hereby waive (i) the Company's
non-compliance with Sections 10.6.1, 10.6.2, 10.6.3, 10.6.4, 10.6.5 and 10.6.6
of the Credit Agreement for all periods ended on or prior to September 30, 2000
and (ii) the failure of ▇▇▇▇▇▇▇ ▇▇▇▇ and ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. to deliver
collateral to the Administrative Agent pursuant to the provisions of clause (i)
of the fifth paragraph in the Individual Guaranty following the paragraph that
begins "NOW, THEREFORE" (it being understood that such waiver shall not release
such individuals from their obligations under clauses (ii) and (iii) of such
fifth paragraph).
SECTION 3 Representations and Warranties. The Company represents and
warrants to the Administrative Agent and the Banks that, after giving effect to
the effectiveness hereof, (a) each warranty set forth in Section 9 (excluding
Sections 9.6 and 9.8) of the Credit Agreement is true and correct as of the date
of the execution and delivery of this Amendment by the Company, with the same
effect as if made on such date and (b) no Event of Default or Unmatured Event of
Default exists.
SECTION 4 Effectiveness. The amendments set forth in Section 1 above and
the waiver set forth in Section 2 above shall become effective when the
Administrative Agent shall have received (a) counterparts of this Amendment
executed by the Company and the Required Banks, (b) a Confirmation,
substantially in the form of Exhibit A, signed by the Company and each
Subsidiary, (c) a Confirmation, substantially in the form of Exhibit C, signed
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇, (d) the personal financial
statement of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. as of a date satisfactory to the Required
Banks, (e) all stock certificates for the shares of EarthCare Resource
Management of Florida, Inc. ("ERMFI") purchased by the Company prior to the date
hereof (together with related stock powers executed in blank) and (f) an
Individual Guaranty, substantially in the form of Exhibit B, signed by ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇.
SECTION 5 Miscellaneous.
5.1 Continuing Effectiveness, etc. As herein amended, the Credit
Agreement shall remain in full force and effect and is hereby ratified and
confirmed in all respects. After the effectiveness of this Amendment, all
references in the Credit Agreement and
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the other Loan Documents to "Credit Agreement" or similar terms shall refer to
the Credit Agreement as amended hereby.
5.2 Counterparts. This Amendment may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original but all such counterparts
shall together constitute one and the same Amendment.
5.3 Governing Law. This Amendment shall be a contract made under and
governed by the laws of the State of Illinois applicable to contracts made and
to be performed entirely within such state.
5.4 Successors and Assigns. This Amendment shall be binding upon the
Company, the Banks and the Administrative Agent and their respective successors
and assigns, and shall inure to the benefit of the Company, the Banks and the
Administrative Agent and the respective successors and assigns of the Banks and
the Administrative Agent.
5.5 Amendment Fees. The Company agrees to pay an amendment fee of
$150,000 to Bank of America and an amendment fee of $150,000 to Fleet National
Bank, such fees to be paid upon the earlier to occur of (i) the completion of
the sale of the EarthLiquids Subsidiaries and (ii) the Termination Date.
5.6 Further Assurances. (a) The Company agrees that promptly after the
effectiveness hereof (and, in any event, no later than November 15, 2000) it
will, and will cause each Subsidiary (other than ERMFI) to, execute a mortgage
or deed of trust in favor of the Administrative Agent, in form and substance
reasonably satisfactory to the Administrative Agent, on each parcel of real
property owned by the Company or such Subsidiary.
(b) The Company further agrees that it will, or will cause the applicable
Subsidiary to, promptly after the effectiveness hereof (and, in any event, no
later than November 15, 2000), provide the following documents in connection
with each mortgage or deed of trust referred to in clause (a) above: (i)
original or certified copies of all insurance policies required to be maintained
with respect to such property by the Credit Agreement, the applicable mortgage
or any other Loan Document; and (ii) a flood insurance policy concerning such
property, reasonably satisfactory to the Administrative Agent, if required by
the Flood Disaster Protection Act of 1973 (or confirmation that such a policy is
not required).
(c) The Company further agrees that it will, or will cause the applicable
Subsidiary to, within 30 days following a request by the Required Banks, provide
(i) an ALTA Loan Title Insurance Policy (or an equivalent form of title policy
reasonably acceptable to the Administrative Agent), issued by an insurer
acceptable to the
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Administrative Agent, insuring the Administrative Agent's Lien on each parcel of
real property owned by the Company or such Subsidiary and containing such
endorsements as the Administrative Agent may reasonably require; and (ii) copies
of all documents of record concerning each such property as shown on the
commitment for the ALTA Loan Title Insurance Policy (or its equivalent).
(d) The Company agrees that promptly after the effectiveness hereof (and,
in any event, no later than November 15, 2000) it will, and will cause each
Subsidiary (other than ERMFI) to, deliver to the Administrative Agent the
certificate of title for each motor vehicle owned by the Company or such
Subsidiary, together with such instruments or documents as the Administrative
Agent may reasonably request to facilitate the notation on such certificate of
title of the Administrative Agent's security interest in such vehicle under the
Security Agreement.
5.7 Consent to Acquisition. Notwithstanding any provision of Section
10.11 of the Credit Agreement to the contrary, the Required Banks hereby agree
that the Company may acquire 520,100 shares of the capital stock of ERMFI (which
represent all shares of such stock not currently owned by the Company) so long
as (i) all of the consideration for such acquisition is stock of the Company,
(ii) at the time of such acquisition, ERMFI does not have more than $10,500,000
in Debt, (iii) neither the Company nor any other Subsidiary shall guarantee or
otherwise have any liability with respect to any Debt or other obligations of
ERMFI, and (iv) concurrently with such acquisition, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and
Solid Waste Ventures shall exchange all Debt owing to them by ERMFI for common
stock of the Company.
5.8 Suspension of Certain Financial Covenants. The Required Lenders
hereby agree that the covenants contained in Sections 10.6.1 (Minimum
Consolidated Net Worth), 10.6.2 (Interest Coverage Ratio), 10.6.5 (Debt to
Capitalization Ratio) and 10.6.6 (Capital Expenditures) will not be applicable
until the Computation Period ended June 30, 2001 except that (i) such covenants
(other than the covenant contained in Section 10.6.6) shall continue to apply
for purposes of (a) the definition of "Release Date" and (b) Section
10.11(c)(4)) and (ii) the Company will not permit the aggregate amount of all
Capital Expenditures made by the Company and its Subsidiaries (other than ERMFI)
from September 30, 2000 to June 30, 2001 to exceed $3,000,000.
5.9 Financial Reports. The Company agrees to deliver, or cause to be
delivered, to the Administrative Agent and the Banks (a) promptly after receipt
thereof, a copy of the final management letter delivered to the Company by
PriceWaterhouseCoopers in connection with the 1999 audit of the Company and its
Subsidiaries and (b) no later than October 31, 2000, the personal financial
statement of ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ as of a date satisfactory to the Required Banks.
5.10 Interest Periods. Notwithstanding any provision of the Credit
Agreement to the contrary, the maximum duration of any Interest Period beginning
after the
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effectiveness of this Amendment shall be one month, unless the Required Banks
notify the Company otherwise.
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Delivered at Chicago, Illinois, as of the day and year first above written.
EARTHCARE COMPANY
By
---------------------------------
Title
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BANK OF AMERICA, N.A., as
Administrative Agent
By
---------------------------------
Title
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BANK OF AMERICA, N.A., as Issuing
Bank and as a Bank
By
---------------------------------
Title
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FLEET NATIONAL BANK, as Syndication
Agent and as a Bank
By
---------------------------------
Title
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S-1
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SCHEDULE 1.1
PRICING SCHEDULE
The Floating Rate Margin, the Eurodollar Margin and the rate per annum
applicable for letter of credit fees for Financial Letters of Credit and
Non-Financial Letters of Credit, respectively, shall be determined in accordance
with the table below and the other provisions of this Schedule 1.1.
▇▇▇▇▇ ▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ Level V
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Eurodollar Margin 1.750% 2.000% 2.250% 2.500% 2.750%
Floating Rate Margin 0.500% 0.750% 1.000% 1.250% 1.500%
Rate for
Non-Financial LC Fee 0.875% 1.000% 1.125% 1.250% 1.375%
Rate for
Financial LC Fee 1.750% 2.000% 2.250% 2.500% 2.750%
Level I applies when the Leverage Ratio is less than 2.50 to 1.0.
Level II applies when the Leverage Ratio is equal to or greater than 2.50
to 1.0 but less than 3.00 to 1.0.
Level III applies when the Leverage Ratio is equal to or greater than 3.00
to 1.0 but less than 3.50 to 1.0.
Level IV applies when the Leverage Ratio is equal to or greater than 3.50
to 1.0 but less than 4.00 to 1.0.
Level V applies when the Leverage Ratio is equal to or greater than 4.00 to
1.0.
Initially, the applicable Level shall be Level V. The applicable Level
shall be adjusted, to the extent applicable, 45 days (or, in the case of the
last Fiscal Quarter of any Fiscal Year, 90 days) after the end of each Fiscal
Quarter, beginning with the Fiscal Quarter ending June 30, 2001, based on the
Leverage Ratio as of the last day of such Fiscal Quarter; provided that if the
Company fails to deliver the financial statements required by Section 10.1.1 or
10.1.2, as applicable, and the related certificate required by Section 10.1.3 by
the 45th day (or, if applicable, the 90th day) after any Fiscal Quarter, Level V
shall apply until such financial statements are delivered.
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SCHEDULE 9.6
[TO BE PROVIDED BY THE COMPANY]
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SCHEDULE 9.15
[TO BE PROVIDED BY THE COMPANY]
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EXHIBIT A
CONFIRMATION
Dated as of October __, 2000
To: Bank of America, N.A., individually and as Administrative Agent, and the
other financial institutions party to the Credit Agreement referred to
below
Please refer to: (a) the Amended and Restated Credit Agreement dated as
of February 15, 2000 (as previously amended, the "Credit Agreement") among
EarthCare Company, various financial institutions (the "Banks") and Bank of
America, N.A., as Administrative Agent (the "Administrative Agent"); (b) the
other "Loan Documents" (as defined in the Credit Agreement), including the
Subsidiary Guaranty and the Security Agreement; and (c) the Second Amendment
dated as of October__, 2000 to the Credit Agreement (the "Second Amendment").
Each of the undersigned hereby confirms to the Administrative Agent and
the Banks that, after giving effect to the Second Amendment and the transactions
contemplated thereby, each Loan Document to which such undersigned is a party
continues in full force and effect and is the legal, valid and binding
obligation of such undersigned, enforceable against such undersigned in
accordance with its terms.
EARTHCARE COMPANY
By:
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Name Printed:
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Title:
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BONE DRY ENTERPRISES, INC.
By:
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Name Printed:
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Title:
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EARTHCARE COMPANY OF FLORIDA
By:
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Name Printed:
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Title:
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EARTHCARE COMPANY OF PENNSYLVANIA
By:
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Name Printed:
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Title:
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EARTHCARE COMPANY OF NEW YORK
By:
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Name Printed:
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Title:
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REIFSNEIDER TRANSPORTATION, INC.
By:
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Name Printed:
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Title:
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BREHMS CESSPOOL SERVICE, INC.
By:
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Name Printed:
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Title:
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EC ACQUISITIONS, INC.
By:
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Name Printed:
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Title:
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SUB-SURFACE LIQUID INJECTION
COMPANY, INC.
By:
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Name Printed:
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Title:
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MAGNUM ENVIRONMENTAL SERVICES, INC.
MAGNUM WORLD ENTERPRISES, INC.
MAGNUM PROPERTY DEVELOPMENT
CORPORATION
MAGNUM EAST COAST PROPERTIES, LTD.
MAGNUM WEST COAST PROPERTIES, LTD.
MAGNUM NORTH EAST PROPERTIES, LTD.
By:
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Name Printed:
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Title:
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EARTHCARE COMPANY OF TEXAS
By:
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Name Printed:
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Title:
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▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, INC.
By:
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Name Printed:
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Title:
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▇▇▇▇ ▇▇▇▇▇▇ PLUMBING, HEATING &
COOLING, INC.
By:
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Name Printed:
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Title:
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ALL COUNTY RESOURCE MANAGEMENT
CORP.
By:
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Name Printed:
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Title:
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EARTHAMERICA COMPANY
By:
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Name Printed:
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Title:
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EARTHAMERICA DISTRIBUTORS, INC.
By:
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Name Printed:
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Title:
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INTERNATIONAL PETROLEUM
CORPORATION
INTERNATIONAL PETROLEUM
CORPORATION OF LA
INTERNATIONAL PETROLEUM CORP. OF
MARYLAND
INTERNATIONAL PETROLEUM CORP. OF
DELAWARE
INTERNATIONAL PETROLEUM OF GEORGIA
INTERNATIONAL PETROLEUM CORP. OF
LAFAYETTE
INTERNATIONAL PETROLEUM
CORPORATION OF PENNSYLVANIA
INTERNATIONAL ENVIRONMENTAL
SERVICES, INC.
By:
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Name Printed:
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Title:
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EXHIBIT B
ADDITIONAL GUARANTY
THIS GUARANTY dated as of October __, 2000 is executed in favor of BANK
OF AMERICA, N.A., as Agent, and the Lender Parties referred to below.
WITNESSETH:
WHEREAS, EARTHCARE COMPANY (the "Company") has entered into an Amended
and Restated Credit Agreement dated as of February 15, 2000 (as amended or
otherwise modified from time to time, the "Credit Agreement"; terms used but not
defined herein are used as defined in the Credit Agreement) with various
financial institutions and BANK OF AMERICA, N.A., as agent (in its capacity as
agent, together with any successor in such capacity, the "Agent"), pursuant to
which such financial institutions have agreed to make loans to, and issue or
participate in letters of credit for the account of, the Company;
WHEREAS, the Agent, the Required Banks and the Company have entered into
a Second Amendment to the Credit Agreement dated as of the date hereof (the
"Second Amendment);
WHEREAS, the undersigned is a significant investor in the Company, and
has previously executed a Guaranty dated as of February 15, 2000 (the "Existing
Guaranty") in favor of the Agent to guaranty the Liabilities (as defined below);
and
WHEREAS, in consideration of the amendments, waivers and consents set
forth in the Second Amendment, the undersigned, subject to the terms hereof, is
willing to further guaranty the Liabilities as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned hereby
unconditionally and irrevocably, as primary obligor and not merely as surety,
guarantees the full and prompt payment when due, whether by acceleration or
otherwise, and at all times thereafter, of all obligations of the Company to
each of the Agent and each Lender Party (as defined below) under or in
connection with the Credit Agreement, the Notes, any other Loan Document, any
Hedging Contract entered into with any Lender Party and any other instrument or
document executed in connection with any of the foregoing, in each case
howsoever created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due (all such
obligations being herein collectively called the "Liabilities"); provided,
however, that the liability of the undersigned hereunder shall be limited to the
Maximum Principal Liability Amount (as defined below) plus interest accruing on
such amount (or such lesser amount of the Liabilities as is outstanding) after
demand by the Agent hereunder (including interest at the rate specified in any
applicable agreement accruing after any bankruptcy or
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insolvency proceeding with respect to the Company regardless of whether such
interest is an allowed claim in such proceeding) plus all costs and expenses
paid or incurred by the Agent or any Lender Party in enforcing this Guaranty
against the undersigned). As used herein, (i) "Lender Party" means each Bank
under and as defined in the Credit Agreement and any Affiliate of such a Bank
which is a party to a Hedging Contract with the Company; and (ii) Maximum
Principal Liability Amount means $20,000,000; provided that if the Company has
not completed a sale of the [EarthLiquids Subsidiaries] on or before December
31, 2000, the Maximum Principal Liability Amount shall be automatically
increased to an amount equal to the remainder of $40,000,000 minus the amount of
all Asset Sale Commitment Reductions made during the period from September ___,
2000 through December 31, 2000; and provided, further, that if the Maximum
Principal Liability Amount is increased on December 31, 2000, then the Maximum
Principal Liability Amount shall be decreased (but not below $20,000,000) by the
amount of all Asset Sale Commitment Reductions made after December 31, 2000. For
purposes of the foregoing, "Asset Sale Commitment Reduction" means any reduction
in the Commitments made pursuant to Section 6.1.3(b) of the Credit Agreement at
a time when no Event of Default or Unmatured Event of Default exists or will
result from such reduction or the sale of assets giving rise thereto. Except as
set forth above, the Maximum Principal Liability Amount shall not be increased
without the prior written agreement of the undersigned.
The undersigned acknowledges that the obligations of the undersigned
under this Guaranty are in addition to the obligations of the undersigned under
the Existing Guaranty and that the Agent and the Lender Parties may make demand
under this Guaranty, and enforce their rights and remedies under this Guaranty,
and enforce their rights and remedies under this Guaranty, before, after or
concurrently with making demand and/or enforcing rights and remedies under the
Existing Guaranty.
The undersigned agrees that, in the event of the dissolution or
insolvency of the Company, or the insolvency, death or legal incapacity of the
undersigned, or the inability or failure of the Company or the undersigned to
pay debts as they become due, or an assignment by the Company or the undersigned
for the benefit of creditors, or the occurrence of any other Event of Default
under Section 12.1.4 of the Credit Agreement, and if such event shall occur at a
time when any of the Liabilities may not then be due and payable, the
undersigned will pay to the Agent for the account of the Lender Parties
forthwith the full amount which would be payable hereunder by the undersigned if
all Liabilities were then due and payable.
This Guaranty shall in all respects be a continuing, irrevocable,
absolute and unconditional guaranty, and (except as expressly provided below)
shall remain in full force and effect (notwithstanding, without limitation, that
at any time or from time to time no Liabilities are outstanding) until all
Commitments have terminated and all Liabilities have been paid in full.
The undersigned agrees that if at any time all or any part of any
payment theretofore applied by the Agent or any Lender Party to any of the
Liabilities is or must
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be rescinded or returned by the Agent or such Lender Party for any reason
whatsoever (including the insolvency, bankruptcy or reorganization of the
Company or the undersigned), such Liabilities shall, for the purposes of this
Guaranty, to the extent that such payment is or must be rescinded or returned,
be deemed to have continued in existence, notwithstanding such application by
the Agent or such Lender Party, and this Guaranty shall continue to be effective
or be reinstated, as the case may be, as to such Liabilities, all as though such
application by the Agent or such Lender Party had not been made.
The Agent or any Lender Party may, from time to time, at its sole
discretion and without notice to the undersigned, take any or all of the
following actions: (a) retain or obtain a security interest in any property to
secure any of the Liabilities or any obligation hereunder, (b) retain or obtain
the primary or secondary obligation of any obligor or obligors, in addition to
the undersigned, with respect to any of the Liabilities, (c) extend or renew any
of the Liabilities for one or more periods (whether or not longer than the
original period), alter or exchange any of the Liabilities, or release or
compromise any obligation of the undersigned hereunder or any obligation of any
nature of any other obligor with respect to any of the Liabilities, (d) release
its security interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Liabilities or
any obligation hereunder, or extend or renew for one or more periods (whether or
not longer than the original period) or release, compromise, alter or exchange
any obligations of any nature of any obligor with respect to any such property,
and (e) resort to the undersigned for payment of any of the Liabilities when
due, whether or not the Agent or such Lender Party shall have resorted to any
property securing any of the Liabilities or any obligation hereunder or shall
have proceeded against any other obligor primarily or secondarily obligated with
respect to any of the Liabilities.
The undersigned agrees to deliver to the Agent cash collateral, or other
collateral reasonably satisfactory to the Agent, in an amount (with the value of
any non-cash collateral being determined by the Agent in its discretion) not
less than $5,000,000 on or before October 31, 2000 and an additional $10,000,000
on or before November 30, 2000. Such collateral shall be held by the Agent as
security for the obligations of the undersigned hereunder pursuant to
documentation reasonably satisfactory to the Agent. Upon any demand for payment
under this Guaranty by the Agent, the Agent may immediately apply such
collateral (or the proceeds thereof in the case of non-cash collateral) to the
payment of the Liabilities. The undersigned acknowledges that the obligation to
provide collateral set forth in this paragraph is in addition to any obligation
of the undersigned to provide collateral pursuant to the Existing Guaranty.
The undersigned hereby expressly waives: (a) notice of the acceptance by
the Agent or any Lender Party of this Guaranty, (b) notice of the existence or
creation or non-payment of all or any of the Liabilities, (c) presentment,
demand, notice of dishonor, protest, and all other notices whatsoever, and (d)
all diligence in collection or protection of or realization upon any Liabilities
or any security for or guaranty of any Liabilities.
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Notwithstanding any payment made by or for the account of the undersigned
pursuant to this Guaranty, the undersigned shall not be subrogated to any right
of the Agent or any Lender Party until such time as the Agent and the Lender
Parties shall have received final payment in cash of the full amount of all
Liabilities.
The undersigned further agrees to pay all expenses (including the
reasonable attorneys' fees and charges) paid or incurred by the Agent or any
Lender Party in endeavoring to collect the Liabilities of the undersigned, or
any part thereof, and in enforcing this Guaranty against the undersigned.
The creation or existence from time to time of additional Liabilities to
the Agent or the Lender Parties or any of them is hereby authorized, without
notice to the undersigned, and shall in no way affect or impair the rights of
the Agent or the Lender Parties or the obligations of the undersigned under this
Guaranty, but no such creation or existence shall increase the Maximum Principal
Liability Amount without the prior written agreement of the undersigned.
The Agent and any Lender Party may from time to time without notice to
the undersigned, assign or transfer any or all of the Liabilities or any
interest therein; and, notwithstanding any such assignment or transfer or any
subsequent assignment or transfer thereof, such Liabilities shall be and remain
Liabilities for the purposes of this Guaranty, and each and every immediate and
successive assignee or transferee of any of the Liabilities or of any interest
therein shall, to the extent of the interest of such assignee or transferee in
the Liabilities, be entitled to the benefits of this Guaranty to the same extent
as if such assignee or transferee were an original Lender Party.
No delay on the part of the Agent or any Lender Party in the exercise of
any right or remedy shall operate as a waiver thereof, and no single or partial
exercise by the Agent or any Lender Party of any right or remedy shall preclude
other or further exercise thereof or the exercise of any other right or remedy;
nor shall any modification or waiver of any provision of this Guaranty be
binding upon the Agent or the Lender Parties, except as expressly set forth in a
writing duly signed and delivered on behalf of the Agent. No action of the Agent
or any Lender Party permitted hereunder shall in any way affect or impair the
rights of the Agent or any Lender Party or the obligations of the undersigned
under this Guaranty. For purposes of this Guaranty, Liabilities shall include
all obligations of the Company to the Agent or any Lender Party arising under or
in connection with the Credit Agreement, any Note, any other Loan Document, any
Swap Contract or any other document or instrument executed in connection with
any of the foregoing, notwithstanding any right or power of the Company or
anyone else to assert any claim or defense as to the invalidity or
unenforceability of any such obligation, and no such claim or defense shall
affect or impair the obligations of any of the undersigned hereunder.
Pursuant to the Credit Agreement, (a) this Guaranty has been delivered
to the Agent and (b) the Agent has been authorized to enforce this Guaranty on
behalf of itself
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and the Lender Parties. All payments by the undersigned pursuant to this
Guaranty shall be made to the Agent for the benefit of the Lender Parties.
This Guaranty shall be binding upon the undersigned and the heirs and
legal representatives of the undersigned. All references herein to the Company
shall be deemed to include any successor or successors, whether immediate or
remote, to such corporation.
This Guaranty shall be governed by and construed in accordance with the
laws of the State of Illinois applicable to contracts made and to be fully
performed in such State. Wherever possible, each provision of this Guaranty
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Guaranty shall be prohibited by or
invalid under such law, such provision shall be ineffective to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Guaranty.
This Guaranty may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, and each such counterpart
shall be deemed to be an original but all such counterparts shall together
constitute one and the same Guaranty.
This Guaranty may be secured by one or more security agreements, pledge
agreements or other similar documents to the extent mutually agreed to by the
undersigned and the Agent.
ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION
WITH THIS GUARANTY OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED
EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED STATES
DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR
OTHER PROPERTY MAY BE FOUND. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY
SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS AND OF THE
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS FOR THE
PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE UNDERSIGNED FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, TO THE ADDRESS SET FORTH OPPOSITE HIS SIGNATURE HERETO (OR SUCH OTHER
ADDRESS AS THE UNDERSIGNED SHALL HAVE SPECIFIED IN WRITING TO THE AGENT AS HIS
ADDRESS FOR NOTICES HEREUNDER) OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE
STATE OF ILLINOIS. THE UNDERSIGNED HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO
THE FULLEST EXTENT
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PERMITTED BY LAW, ANY OBJECTION WHICH HE MAY NOW OR HEREAFTER HAVE TO THE LAYING
OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND
ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
THE UNDERSIGNED, AND (BY ACCEPTING THE BENEFITS HEREOF) EACH OF THE AGENT
AND EACH LENDER PARTY, HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION
OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS GUARANTY, ANY OTHER
LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR
WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR
ARISING FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE
FOREGOING, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
IN WITNESS WHEREOF, this Guaranty has been duly executed and delivered as
of the day and year first above written.
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Address: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
c/o EarthCare Company
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CONFIRMATION
Dated as of October __, 2000
To: Bank of America, N.A., individually and as Administrative Agent, and the
other financial institutions party to the Credit Agreement referred to
below
Please refer to: (a) the Amended and Restated Credit Agreement dated as
of February 15, 2000 (as previously amended, the "Credit Agreement") among
EarthCare Company, various financial institutions (the "Banks") and Bank of
America, N.A., as Administrative Agent (the "Administrative Agent"); (b) the
Individual Guaranty (as defined in the Credit Agreement); and (c) the Second
Amendment dated as of October __, 2000 to the Credit Agreement (the "Second
Amendment").
Each of the undersigned hereby confirms to the Administrative Agent and
the Banks that, after giving effect to the Second Amendment and the transactions
contemplated thereby, the Individual Guaranty continues in full force and effect
and is the legal, valid and binding obligation of such undersigned, enforceable
against such undersigned in accordance with its terms.
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