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EXHIBIT 10.18
THIRD AMENDMENT, WAIVER AND CONSENT
THIS THIRD AMENDMENT, WAIVER AND CONSENT dated as of April 16, 2001
(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 Definition. The following definition is added to
Section 1.1 in appropriate alphabetical order:
EarthAmerica Subsidiaries means, collectively, the Subsidiaries
listed under the heading "EarthAmerica Subsidiaries" on Schedule 9.8.
1.2 Amendment to Definition of "Floating Rate Margin". The
definition of "Floating Rate Margin" is amended in its entirety to read as
follows:
Floating Rate Margin means 1.50%.
1.3 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 January 1, 2001 and ending on the
last day of any month thereafter to be less than the sum of (i) product
of $500,000 multiplied by the number of months (or, with respect to the
month in which the sale of the EarthAmerica Subsidiaries occurs, a
fraction, the numerator of which is the number of days in such month
prior to the date of sale and the denominator of which is the number of
days in such month) elapsed between January 1, 2001 (i.e., $500,000 as
of January 31, 2001, $1,000,000 as of February 28, 2001, etc.)
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and the date on which the sale of the EarthAmerica Subsidiaries has been
consummated plus (ii) the product of $375,000 multiplied by the number
of months (or, with respect to the month in which the sale of the
EarthAmerica Subsidiaries occurs, a fraction, the numerator of which is
the number of days in such month from the date of such sale and the
denominator of which is the number of days in such month) elapsed since
the date on which the sale of the EarthAmerica Subsidiaries has been
consummated. 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.
1.4 Addition of Section 12.1.12. The following new Section 12.1.12
is added to the Credit Agreement in appropriate numerical sequence to read as
follows:
12.1.12 Sale of EarthLiquids Subsidiaries and EarthAmerica
Subsidiaries. The Company shall fail to consummate both (a) the sale of
the EarthLiquids Subsidiaries for cash consideration (net of reasonable
fees and expenses) of at least $31,000,000 within 45 days following the
effectiveness of the Third Amendment to this Agreement, provided that no
Event of Default shall be deemed to have occurred for failure of the
Company to comply with this subsection (a) if the Company has engaged a
strategic advisor acceptable to the Required Banks within 45 days
following the effectiveness of the Third Amendment to this Agreement to
facilitate the sale of the EarthLiquids Subsidiaries; and (b) the sale
of the EarthAmerica Subsidiaries for cash consideration of at least
$24,000,000 by April 30, 2001.
1.5 Amendment to Schedule 9.8. Schedule 9.8 is amended in its
entirety to read as set forth as Schedule 9.8 hereto.
SECTION 2 Waivers; Consents. (a) 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 Section 10.6.7 of the
Credit Agreement for the month ended December 31, 2000;
(ii) through the date hereof, the failure of ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, ▇▇. to deliver collateral to the Administrative Agent in the
amount required by the provisions of clause (i) of the fifth paragraph
in each of the Individual Guaranty and the Additional Guaranty following
the paragraph that begins "NOW, THEREFORE";
(iii) the delivery to the Administrative Agent of the
remaining common stock of ERMFI acquired pursuant to the acquisition of
ERMFI (the "ERMFI Common Stock") so long as such ERMFI Common Stock is
pledged to and held by CIB Bank;
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(iv) the Company's breach of Section 10.20 of the Credit
Agreement with respect to a loan in the amount of $400,000 made by the
Company to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. on December 29, 2000 so long as such
loan was repaid on or before January 31, 2001; and
(v) the failure by the Company to comply with Sections
6.1.3 and 6.2 of the Credit Agreement with respect to any Asset Sale
prior to the date of the effectiveness of this Amendment so long as
the gross proceeds from such Asset Sales did not exceed $500,000.
(b) Subject to the satisfaction of the conditions precedent set
forth in Section 4, the Required Banks hereby consent to:
(i) the issuance of preferred stock to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
▇▇. and Solid Waste Ventures in exchange for Debt owing to them by
ERMFI[NEED TO SEE FINAL TERMS], SO LONG AS THE COMPANY DELIVERS TO THE
BANKS COPIES OF ALL DOCUMENTS EXECUTED IN CONNECTION WITH SUCH
TRANSACTION NO LATER THAN APRIL 20, 2001; and
(ii) the sale of assets by the Company to ISN Software
Corporation pursuant to the Asset Purchase Agreement dated as of October
31, 2000 so long as the Administrative Agent receives, not later than
April 30, 2001, an executed acknowledgment and consent in the form of
Schedule II.
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 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 waivers and consents set forth in Section 2 above shall become
effective when the Administrative Agent shall have received the following:
(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 B, signed
by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇;
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(d) a Stock Purchase Warrant, substantially in the form of Exhibit
C, signed by the Company, for each Lender representing the right to purchase
75,000 shares of common stock, par value $.01, of the Company for an exercise
price of $3.60 per share;
(e) Stock Purchase Warrants to replace the existing stock purchase
warrants issued to the Lenders with a new exercise price of $3.60 per share; and
(f) an amendment to the Individual Guaranty in the form of Exhibit
D.
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 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 Proceeds of Sale of EarthAmerica Subsidiaries. The Required
Banks agree that, notwithstanding the provisions of Sections 6.1.3 and 6.2 of
the Credit Agreement, the Company may retain (a) $1,500,000 of the initial
$24,000,000 of Net Cash Proceeds from the sale of the EarthAmerica Subsidiaries
and (b) the first $2,000,000 of Net Cash Proceeds in excess of $24,000,000
received by the Company from the sale of the EarthAmerica Subsidiaries for its
general working capital purposes; provided that all other Net Cash Proceeds
shall be applied in accordance with Sections 6.1.3 and 6.2 of the Credit
Agreement.
5.6 Eurodollar Rate Loans. Notwithstanding any provision of the
Credit Agreement to the contrary, the Company agrees that, unless the Required
Banks otherwise consent in writing, the Company shall have no right to borrow or
continue, or to convert Loans into, Eurodollar Rate Loans at any time on or
after the effectiveness of this Amendment.
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5.7 Amendment Fees Related to Second Amendment. The Company agrees
to pay the amendment fees payable to each of Bank of America and Fleet National
Bank in connection with the Second Amendment to the Credit Agreement on the
earlier to occur of (i) the completion of the sale of the EarthAmerica
Subsidiaries and (ii) June 30, 2001.
5.8 Collateral to be Pledged by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.. The
Company will cause ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. to provide all documents necessary
to perfect the lien of the Administrative Agent in the collateral listed on
Schedule I within 30 days following the effectiveness of this Amendment.
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Delivered at Chicago, Illinois, as of the day and year first above written.
EARTHCARE COMPANY
By
------------------------------------------
Title
---------------------------------------
BANK OF AMERICA, N.A., as Administrative
Agent
By
------------------------------------------
Title
---------------------------------------
BANK OF AMERICA, N.A., as Issuing Bank and
as a Bank
By
------------------------------------------
Title
---------------------------------------
FLEET NATIONAL BANK, as Syndication Agent
and as a Bank
By
------------------------------------------
Title
---------------------------------------
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CONFIRMATION
Dated as of April 16, 2001
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 Third Amendment,
Waiver and Consent dated as of April 16, 2001 to the Credit Agreement (the
"Third Amendment").
Each of the undersigned hereby confirms to the Administrative Agent and
the Banks that, after giving effect to the Third 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:
---------------------------
Name Printed:
-----------------
Title:
------------------------
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ALL COUNTY RESOURCE MANAGEMENT CORP.
BONE DRY ENTERPRISES, INC.
BREHMS CESSPOOL SERVICE, INC.
EARTHAMERICA COMPANY
EARTHAMERICA DISTRIBUTORS, INC.
EARTHCARE ACQUISITION SUB, INC.
EARTHCARE COMPANY OF FLORIDA
EARTHCARE COMPANY OF PENNSYLVANIA
EARTHCARE COMPANY OF NEW YORK
EARTHCARE COMPANY OF TEXAS
EARTHCARE RESOURCE MANAGEMENT OF
FLORIDA, INC.
EARTHLIQUIDS COMPANY
EC ACQUISITIONS, INC.
▇▇▇▇▇▇ ENVIRONMENTAL SERVICES, INC.
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.
▇▇▇▇ ▇▇▇▇▇▇ PLUMBING, HEATING & COOLING, INC.
LIQUID WASTE CONTROL SYSTEMS, INC.
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.
REIFSNEIDER TRANSPORTATION, INC.
SUB-SURFACE LIQUID INJECTION COMPANY, INC.
By:
---------------------------
Name Printed:
-----------------
Title:
------------------------
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CONFIRMATION
Dated as of April 16, 2001
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
Additional Guaranty dated as of October 31, 2000 executed by the undersigned, as
amended through the date hereof; and (c) the Third Amendment, Waiver and Consent
dated as of April 16, 2001 to the Credit Agreement (the "Third Amendment").
The undersigned hereby confirms to the Administrative Agent and the
Banks that, after giving effect to the Third Amendment and the transactions
contemplated thereby, the Additional Guaranty continues in full force and effect
and is the legal, valid and binding obligation of the undersigned, enforceable
against the undersigned in accordance with its terms.
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▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
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EXHIBIT C
TO THIRD AMENDMENT
FORM OF WARRANT
THE SECURITY REPRESENTED BY THIS CERTIFICATE (THE "WARRANT") HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"),
OR ANY STATE SECURITIES LAWS AND IS TRANSFERRABLE PURSUANT TO THE TERMS OF THIS
WARRANT.
STOCK PURCHASE WARRANT
Date of Issuance: April 16, 2001 Certificate No. __
For value received, EarthCare Company (the "Company") hereby grants to
_____________ or any of its permitted transferees as provided in Section 2 (the
"Registered Holder") the right to purchase from the Company 75,000 shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), at a
price per share equal to $3.60 (such price as adjusted and readjusted from time
to time in accordance with Section 3, the "Exercise Price"). The amount and kind
of securities purchasable pursuant to the rights granted hereunder and the
purchase price for such securities are subject to adjustment pursuant to the
provisions contained in this Warrant. Certain capitalized terms used herein are
defined in Section 4.
This Warrant is subject to the following provisions:
Section 1. Exercise of Warrant.
(a) Exercise Period. The Registered Holder may exercise, in whole
or in part, the purchase rights represented by this Warrant at any time and from
time to time during the period commencing on the date hereof and ending on April
16, 2006. If the Warrant remains unexercised, in whole or in part, on April 16,
2006, the Warrant or such unexercised part thereof shall terminate.
(b) Exercise Procedure.
(i) This Warrant shall be exercised, to the extent of the
number of shares of Common Stock described in clause (D) below, when the
Company has received all of the following items (the "Exercise Time"):
(A) the original executed copy of this Warrant;
(B) a completed Exercise Agreement, in the form of
Exhibit A, which shall be dated the actual date of execution
thereof;
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(C) if the Registered Holder is not _____________,
an Assignment in the form of Exhibit B, evidencing the
assignment of this Warrant; and
(D) subject to clause (ii) below, a cashier's check
payable to the Company or a wire transfer of immediately
available funds to an account specified by the Company in an
amount equal to the product of the Exercise Price multiplied by
the number of shares of Common Stock being purchased upon such
exercise.
(ii) Notwithstanding Section 1(b)(i)(D) above, at the
election of the Registered Holder, which election shall be set forth in
the Exercise Agreement, the number of shares of Common Stock being
purchased upon exercise of the Warrant shall be equal to the quotient
obtained by dividing (a) the product of (x) the Market Price at such
Exercise Time less the Exercise Price, multiplied by (y) the number of
shares of Common Stock as to which the Registered Holder elects to be
issued under this clause (ii) (which election shall reduce the number of
shares of Common Stock available for any subsequent exercise), by (b)
the Market Price at such Exercise Time. The number of shares issued
pursuant to this clause (ii) shall be excluded from the calculation of
the amount paid pursuant to Section 1(b)(i)(D) above.
(iii) Certificates for shares of Common Stock purchased upon
exercise of this Warrant shall be delivered by the Company to the
Registered Holder within five business days after the date of the
Exercise Time.
(iv) The Common Stock issuable upon exercise of this Warrant
shall be deemed to have been issued to the Registered Holder at the
Exercise Time, and the Registered Holder shall be the record holder of
such Common Stock at the Exercise Time.
(v) If this Warrant is exercised in part, the Company
shall, at the time of delivery of the certificate or certificates for
Common Stock, unless this Warrant has then expired, issue and deliver
to the Registered Holder a new Warrant evidencing the rights of the
Registered Holder to purchase the aggregate number of shares of Common
Stock for which this Warrant shall not have been exercised, and this
Warrant shall be cancelled.
(vi) The issuance of certificates for shares of Common Stock
upon exercise of this Warrant shall be made without charge to the
Registered Holder for costs incurred by the Company in connection with
such exercise and the related issuance of shares of Common Stock, except
the Registered Holder shall pay any issuance taxes in respect thereof.
(vii) The Company shall not close its books against the
transfer of this Warrant or of any shares of Common Stock issued or
issuable upon exercise of this Warrant in any manner that interferes
with the timely exercise of this Warrant. The Company shall
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from time to time take all such action as may be necessary to assure
that the par value per share of the unissued Common Stock issuable upon
exercise of this Warrant is at all times equal to or less than the
Exercise Price then in effect.
(viii) The Company shall at all times reserve and keep
available out of its authorized but unissued shares of Common Stock
solely for the purpose of issuance upon exercise of this Warrant, such
number of shares of Common Stock as are then issuable upon exercise of
this Warrant. All shares of Common Stock which are so issuable shall,
when issued, be duly and validly issued, and upon payment of the
Exercise Price therefor, shall be fully paid and nonassessable and free
from all taxes, liens and charges. The Company shall take all such
actions as may be necessary to assure that all such shares of Common
Stock may be so issued without violation of any applicable law or
governmental regulation or any requirements of any domestic securities
exchange upon which shares of Common Stock are listed (except for
official notice of issuance, which shall be immediately delivered by the
Company upon each such issuance).
(ix) Upon any exercise of this Warrant, the Company may
require customary representations from the Registered Holder to assure
that the issuance of the Common Stock hereunder shall not require
registration or qualification under the Securities Act or any state
securities laws.
Section 2. Restrictions on Transfer. The Registered Holder shall
not sell, transfer, assign, pledge or otherwise dispose of ("Transfer") any
interest in this Warrant unless all of the following conditions are satisfied:
(a) such Registered Holder and the transferee shall deliver
to the Company written notice of the Transfer five business days prior
to the Transfer and shall execute an Assignment substantially in the
form set forth in Exhibit B, a copy of which shall be delivered to the
Company within 30 days after the date of execution of such Assignment;
and
(b) such Transfer has been registered or is exempt from
registration under the Securities Act and any applicable state
securities laws.
Section 3. Adjustment of Exercise Price and Number of Shares. In
order to prevent dilution of the rights granted under this Warrant, the Exercise
Price shall be subject to adjustment from time to time as provided in this
Section 3, and the number of shares of Common Stock issuable upon exercise of
this Warrant shall be subject to adjustment from time to time as provided in
this Section 3.
(a) Subdivision or Combination of Common Stock. If the
Company at any time subdivides (by any stock split, stock dividend,
recapitalization or otherwise) one or more classes of its outstanding
shares of Common Stock into a greater number of shares, the Exercise
Price in effect immediately prior to such subdivision shall be
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proportionately decreased and the number of shares of Common Stock
issuable upon exercise of this Warrant shall be proportionately
increased. If the Company at any time combines (by reverse stock split
or otherwise) one or more classes of its outstanding shares of Common
Stock into a smaller number of shares, the Exercise Price in effect
immediately prior to such combination shall be proportionately increased
and the number of shares of Common Stock issuable upon exercise of this
Warrant shall be proportionately decreased.
(b) Dividends and Stock Repurchases. If the Company shall
declare, pay or distribute dividends upon the Common Stock (excluding a
dividend referred to in Section 3(a)) in any calendar year which, in the
aggregate, exceed 5% of the Market Price of the Common Stock on the date
of declaration, then the Exercise Price shall be decreased by
multiplying the Exercise Price immediately prior to such decrease by a
fraction, (A) the denominator of which equals the product of (1) the
Exercise Price immediately prior to such decrease multiplied by (2) the
number of shares of Common Stock outstanding at such time and (B) the
numerator of which equals the denominator as determined pursuant to
clause (A) above minus the amount by which all such dividends for such
calendar year, in the aggregate, exceed 5% of the Market Price of the
Common Stock on such date of declaration. Any such decrease shall take
effect on the record date for the dividend. If the Company shall
repurchase shares of Common Stock for a per share consideration which
exceeds the Exercise Price in effect immediately prior to the first such
repurchase, then the Exercise Price shall be adjusted in accordance with
the foregoing provisions, as if, in lieu of such repurchase, the Company
had (i) paid a dividend having a fair market value equal to the fair
market value of all property and cash expended in the repurchases and
(ii) effected a reverse split of the Common Stock in the proportion
necessary to reduce the number of shares of Common Stock outstanding
from (A) the number of shares outstanding immediately prior to the first
such repurchase to (B) the number of shares outstanding immediately
following all such repurchases.
(c) Minimum Adjustment. In the event that any adjustment
made pursuant to this Section 3 would result in an adjustment to the
Exercise Price of less than $0.05 per share of Common Stock, no such
adjustment shall be made and such adjustment shall be carried forward
and shall be made at the time and together with the next subsequent
adjustment which, together with any adjustments so carried forward,
shall amount to an adjustment in the Exercise Price of $0.05 or more per
share of Common Stock; provided that, upon any adjustment of the
Exercise Price resulting from (i) the declaration of a dividend upon, or
the making of any distribution in respect of, any securities of the
Company payable in Common Stock or Convertible Securities or (ii) the
reclassification, by subdivision, combination or otherwise, of the
outstanding shares of Common Stock into a greater or smaller number of
shares, the $0.05 per share number (or such number as last adjusted)
shall be proportionately adjusted.
(d) Reorganization, Reclassification, Consolidation, Merger
or Sale. Any recapitalization, reorganization, reclassification,
consolidation, merger, sale of all or
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substantially all of the Company's assets or other transaction that is
effected in such a way that holders of Common Stock are entitled to
receive (either directly or upon subsequent liquidation) stock,
securities or assets with respect to or in exchange for Common Stock is
referred to herein as "Organic Change." Prior to the consummation of any
Organic Change, the Company shall make appropriate provision (in form
and substance satisfactory to the Registered Holders representing a
majority of the Common Stock issuable upon exercise of the Warrants then
outstanding) to insure that the Registered Holders shall thereafter have
the right to acquire and receive in lieu of or in addition to (as the
case may be) the shares of Common Stock immediately theretofore issuable
upon exercise of each Warrant, such shares of stock, securities or
assets as may be issued or payable with respect to or in exchange for
the number of shares of Common Stock immediately theretofore issuable
upon exercise of each Warrant had such Organic Change not taken place.
In any such case, the Company shall make appropriate provision (in form
and substance satisfactory to the Registered Holders representing a
majority of the Common Stock issuable upon exercise of the Warrants then
outstanding) with respect to the Registered Holders' rights and
interests to insure that the provisions of this Section 3 shall
thereafter be applicable to each Warrant (including, without limitation,
in the case of any such consolidation, merger or sale in which the
successor entity or purchasing entity is other than the Company, an
immediate adjustment of the Exercise Price to the value for the Common
Stock reflected by the terms of such consolidation, merger or sale, and
a corresponding immediate adjustment in the number of shares of Common
Stock issuable upon exercise of each Warrant, if the value so reflected
is less than the Exercise Price in effect immediately prior to such
consolidation, merger or sale). The Company shall not effect any such
consolidation, merger or sale, unless prior to the consummation thereof,
the successor entity (if other than the Company) resulting from
consolidation or merger or the corporation purchasing such assets
assumes by written instrument (in form and substance satisfactory to the
Registered Holders representing a majority of the Common Stock issuable
upon exercise of the Warrants then outstanding), the obligation to
deliver to the Registered Holders such shares of stock, securities or
assets as, in accordance with the foregoing provisions, such holder may
be entitled to acquire.
(e) Notices.
(i) Immediately upon any adjustment of the Exercise
Price, the Company shall give written notice thereof to the
Registered Holders, setting forth in reasonable detail and
certifying the calculation of such adjustment.
(ii) The Company shall give written notice to the
Registered Holders at least 20 days prior to the date on which
the Company closes its books or takes a record (A) with respect
to any dividend or distribution upon the Common Stock, (B) with
respect to any pro rata subscription offer to holders of Common
Stock or (C) for determining rights to vote with respect to any
Organic Change, dissolution or liquidation.
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(iii) The Company shall also give written notice to
the Registered Holders at least 20 days prior to the date on
which any Organic Change, dissolution or liquidation shall take
place.
Section 4. Definitions. The following terms shall have the
meanings set forth herein for the purposes of this Warrant:
"Commission" shall mean the Securities and Exchange Commission
or any other federal agency at the time administering the Securities
Act.
"Common Stock" means, collectively, the Common Stock and any
capital stock of any class of the Company hereafter authorized which is
not limited to a fixed sum or percentage of par or stated value in
respect to the rights of the holders thereof to participate in dividends
or in the distribution of assets upon any liquidation, dissolution or
winding up of the Company.
"Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended, and the rules and regulations of the Commission thereunder,
all as the same shall be in effect at the relevant time.
"Market Price" means as to any security the closing sales price
if such security is listed on a national securities exchange, or if not,
is reported on the NASDAQ National Market System, or if there have been
no sales on any such exchange or the NASDAQ National Market System on
any day, the average of the highest bid and lowest asked prices at the
end of such day, or if on any day such security is not so listed, the
average of the representative bid and asked prices quoted in the NASDAQ
System as of 4:00 P.M., New York time, on such day, or if on any day
such security is not quoted in the NASDAQ System, the average of the
highest bid and lowest asked prices on such day in the domestic
over-the-counter market as reported by the National Quotation Bureau,
Incorporated, or any similar successor organization, in each such case
averaged over a period of 21 days consisting of the day as of which
"Market Price" is being determined and the 20 consecutive business days
prior to such day; provided that, if such security is listed on any
national securities exchange, the term "business days" as used in this
sentence means business days on which such exchange is open for trading.
If at any time such security is not listed on any national securities
exchange or the NASDAQ National Market System or quoted in the NASDAQ
System or the domestic over-the-counter market, the "Market Price" shall
be the fair value thereof (based upon the pro rata ownership interest of
the security without any discount thereto as a minority ownership
interest) determined in good faith by the Company's Board of Directors,
which determination may be based upon the most recent bona fide private
offering of the same class of security by the Company to third parties
within the six-month period prior to such determination.
16
The terms "Register," "Registered" and "Registration" refer to a
registration effected by preparing and filing a registration statement
in compliance with the Securities Act providing for the sale by the
Registered Holders of Registrable Shares and the declaration or ordering
of the effectiveness of such registration statement by the Commission.
"Registrable Shares" shall mean the Underlying Shares, except
that as to any particular Underlying Shares, once issued such securities
shall cease to be Registrable Shares when (a) a registration statement
with respect to the sale of such securities shall have become effective
under the Securities Act and such securities shall have been disposed of
in accordance with such registration statement, or (b) such securities
shall have been sold in accordance with Rule 144 (or any successor
provision) under the Securities Act.
"Registration Expenses" shall mean all out-of-pocket expenses
(excluding Selling Expenses) incurred by the Company in complying with
Sections 7 and 8 hereof, including, without limitation, the following:
(a) all registration, filing and listing fees; (b) fees and expenses of
compliance with federal and state securities laws (including, without
limitation, reasonable fees and disbursements of the Company's counsel
in connection with state securities qualifications of the Registrable
Shares under the laws of such jurisdictions as the Registered Holders
may reasonably designate); (c) printing (including, without limitation,
expenses of printing or engraving certificates for the Registrable
Shares in a form eligible for deposit with The Depository Trust Company
and otherwise meeting the requirements of any securities exchange on
which they are listed and of printing registration statements and
prospectuses), messenger, telephone, shipping and delivery expenses; (d)
fees and disbursements of counsel for the Company; (e) fees and
disbursements of all independent public accountants of the Company
(including without limitation the expenses of any annual or special
audit and "cold comfort" letters required by the managing underwriter);
(f) Securities Act liability insurance if the Company so desires; (g)
fees and expenses of other Persons reasonably necessary in connection
with the registration, including any experts, retained by the Company;
(h) fees and expenses incurred in connection with the listing of the
Registrable Shares on each securities exchange on which securities of
the same class or series are then listed; and (i) fees and expenses
associated with any filing with the National Association of Securities
Dealers, Inc. required to be made in connection with the registration
statement.
"Rule 144" shall mean Rule 144 promulgated by the Commission
under the Securities Act.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations of the Commission thereunder, all
as the same shall be in effect at the relevant time.
17
"Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to any sale of
Registrable Shares.
"Stockholders" means the holders of the shares of Common Stock.
"Underlying Shares" means (i) the shares of Common Stock issued
or issuable upon exercise of this Warrant and (ii) any securities issued
or issuable with respect to such shares by way of any stock split, stock
dividend, recapitalization or otherwise.
"Warrants" means all warrants representing portions of the
purchase rights represented by this Warrant held by any Registered
Holder. The date the Company initially issues this Warrant shall be
deemed to be the "Date of Issuance" of all Warrants regardless of the
number of times new certificates representing the unexpired and
unexercised purchase rights formerly represented by this Warrant shall
be issued.
Section 5. Company Representations and Warranties. The Company
represents and warrants to Registered Holder as follows:
(a) Due Organization. The Company has been duly organized
and is validly existing and in good standing under the laws of the State
of Delaware, and is qualified to do business and in good standing in all
jurisdictions where such qualification is necessary to carry on its
business as now conducted or as proposed by it to be conducted on the
date hereof, except where failure to so qualify would not have a
material adverse effect on the financial position or results of
operations of the Company or any adverse effect on the ability of the
Company to carry out its obligations under this Warrant.
(b) Due Authorization. The Company has full power and
authority to issue this Warrant. The execution, delivery and issuance by
the Company of this Warrant have been duly and validly approved by all
necessary corporate or other applicable action and no other actions or
proceedings on the part of the Company are necessary to authorize this
Warrant. This Warrant constitutes the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by
applicable bankruptcy, insolvency, moratorium, reorganization or similar
laws in effect which affect the enforcement of creditors' rights
generally and by equitable limitations on the availability of specific
remedies.
(c) Capitalization. As of the date hereof, the authorized
capital stock of the Company consists of 100,000,000 shares of Common
Stock, of which [10,199,000] 16,897,312 shares of Common Stock are
currently issued and outstanding. Except as contemplated by this
Warrant, there are no securities convertible or exchangeable for shares
of Common Stock or any rights or options to subscribe for or purchase
any shares of Common Stock or securities convertible or exchangeable for
shares of Common Stock.
18
(d) Issuance of Shares. The Common Stock issuable hereunder,
when issued in accordance with the provisions of this Warrant, will be
duly and validly authorized and issued and will be fully paid and
non-assessable. All of the Common Stock to be issued hereunder will be
issued in compliance with all applicable federal and state securities
laws.
Section 6. No Voting Rights; Limitations of Liability. This Warrant
shall not entitle any Registered Holder to any voting rights or other rights as
a stockholder of the Company. No provision hereof, in the absence of affirmative
action by a Registered Holder to purchase Common Stock, and no enumeration
herein of the rights or privileges of the Registered Holders shall give rise to
any liability of a Registered Holder for the Exercise Price of Common Stock
issuable upon exercise of this Warrant or as a stockholder of the Company.
Section 7. Piggyback Registrations.
(a) If the Company proposes to register any of its common
equity securities or any securities convertible into its common equity
securities under the Securities Act (other than pursuant to (i) a
registration on Form S-4 or any successor form, or (ii) an offering of
securities in connection with an employee benefit, share dividend, share
ownership or dividend reinvestment plan) and the registration form to be
used may be used for the registration of Registrable Shares, the Company
will give prompt written notice to all holders of Registrable Shares of
its intention to effect such a registration (each a "Piggyback Notice")
and, subject to subparagraph 7(c) below, the Company will include in
such registration all Registrable Shares with respect to which the
Company has received written requests for inclusion therein within 15
business days after the date of sending the Piggyback Notice (a
"Piggyback Registration"), unless, if the Piggyback Registration is not
an underwritten offering, the Company in its reasonable judgement
determines that, or in the case of an underwritten Piggyback
Registration, the managing underwriters advise the Company in writing
that in their opinion, the inclusion of Registrable Shares would
adversely interfere with such offering, affect the Company's securities
in the public markets, or otherwise adversely affect the Company.
Nothing herein shall affect the right of the Company to withdraw any
such registration in its sole discretion.
(b) If a Piggyback Registration is a primary registration
on behalf of the Company and, if the Piggyback Registration is not an
underwritten offering, the Company in its reasonable judgement
determines that, or in the case of an underwritten Piggyback
Registration, the managing underwriters advise the Company in writing
that in their opinion, the number of securities requested to be included
in such registration exceeds the number which can be sold in an orderly
manner within a price range acceptable to the Company, the Company will
include in such registration (i) first, the securities the Company
proposes to sell and (ii) second, the Registrable Shares requested to be
included in such Registration and any other securities requested to be
included in such registration, pro rata among the holders of Registrable
Shares requesting such
19
registration and the holders of such other securities on the basis of
the number of Shares requested for inclusion in such registration by
each such holder.
(c) If a Piggyback Registration is a secondary registration
on behalf of holders of the Company's securities other than the holders
of Registrable Shares, and, if the Piggyback Registration is not an
underwritten offering, the Company determines that, or in the case of an
underwritten Piggyback Registration, the managing underwriters advise
the Company in writing that in their opinion, the number of securities
requested to be included in such registration exceeds the number which
can be sold in an orderly manner in such offering within a price range
acceptable to the holders initially requesting such registration, the
Company will include in such registration the securities requested to be
included therein by the holders requesting such registration and the
Registrable Shares requested to be included in such registration, pro
rata among the holders of securities requesting such registration on the
basis of the number of Shares requested for inclusion in such
registration by each such holder.
(d) In the case of an underwritten Piggyback Registration,
the Company will have the right to select the investment banker(s) and
manager(s) to administer the offering. If requested by the underwriters
for any underwritten offerings by Registered Holders, under a
registration requested pursuant to Section 7(a), the Company will enter
into a customary underwriting agreement with such underwriters for such
offering, to contain such representations and warranties by the Company
and such other terms which are customarily contained in agreements of
this type. The Registered Holders shall be a party to such underwriting
agreement and may, at their option, require that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement be conditions precedent to the obligations of
Registered Holders. The Registered Holders shall not be required to make
any representations or warranties to or agreement with the Company or
the underwriters other than representations, warranties or agreements
regarding the Registered Holders and the Registered Holders' intended
method of distribution and any other representation or warranties
required by law.
Section 8. Registration Procedures.
(a) The Company shall promptly notify the Registered
Holders of the occurrence of the following events:
(i) when any registration statement relating to the
Registrable Shares or post-effective amendment thereto filed
with the Commission has become effective;
(ii) the issuance by the Commission of any stop
order suspending the effectiveness of any registration statement
relating to the Registrable Shares;
20
(iii) the Company's receipt of any notification of the
suspension of the qualification of any Registrable Shares
covered by a registration statement for sale in any
jurisdiction; and
(iv) the existence of any event, fact or
circumstance that results in a registration statement or
prospectus relating to Registrable Shares or any document
incorporated therein by reference containing an untrue statement
of material fact or omitting to state a material fact required
to be stated therein or necessary to make the statements therein
not misleading during the distribution of securities.
The Company agrees to use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any such registration
statement or any state qualification as promptly as possible. The Registered
Holder agrees by acquisition of the Registrable Shares that upon receipt of any
notice from the Company of the occurrence of any event of the type described in
Section 8(a)(ii), (iii) or (iv) to immediately discontinue its disposition of
Registrable Shares pursuant to any registration statement relating to such
securities until the Registered Holder's receipt of written notice from the
Company that such disposition may be made.
(b) The Company shall provide to the Registered Holders, at
no cost to the Registered Holders, a copy of the registration statement
and any amendment thereto used to effect the Registration of the
Registrable Shares, each prospectus contained in such registration
statement or post-effective amendment and any amendment or supplement
thereto and such other documents as the requesting Registered Holders
may reasonably request in order to facilitate the disposition of the
Registrable Shares covered by such registration statement. The Company
consents to the use of each such prospectus and any supplement thereto
by the Registered Holders in connection with the offering and sale of
the Registrable Shares covered by such registration statement or any
amendment thereto. The Company shall also file a sufficient number of
copies of the prospectus and any post-effective amendment or supplement
thereto with the securities exchange or market on which the Common Stock
is then listed so as to enable the Registered Holders to have the
benefits of the prospectus delivery provisions of Rule 153 under the
Securities Act.
(c) The Company agrees to use its reasonable best efforts
to cause the Registrable Shares covered by a registration statement to
be registered with or approved by such state securities authorities as
may be necessary to enable the Registered Holders to consummate the
disposition of such shares pursuant to the plan of distribution set
forth in the registration statement.
(d) If any event, fact or circumstance requiring an
amendment to a registration statement relating to the Registrable Shares
or supplement to a prospectus relating to the Registrable Shares shall
exist, immediately upon becoming aware thereof the Company agrees to
notify the Registered Holders and prepare and furnish to the
21
Registered Holders a post-effective amendment to the registration
statement or supplement to the prospectus or any document incorporated
therein by reference or file any other required document so that, as
thereafter delivered to the purchasers of the Registrable Shares, the
prospectus will not contain an untrue statement of a material fact or
omit to state any material fact required to be stated therein or
necessary to make the statements therein not misleading.
(e) The Company agrees to use its reasonable best efforts
(including the payment of any listing fees) to obtain the listing of all
Registrable Shares covered by the registration statement on each
securities exchange on which securities of the same class or series are
then listed.
(f) The Company agrees to use its reasonable best efforts
to comply with the Securities Act and the Exchange Act in connection
with the offer and sale of Registrable Shares pursuant to a registration
statement, and, as soon as reasonably practicable following the end of
any fiscal year during which a registration statement effecting a
Registration of the Registrable Shares shall have been effective, to
make available to its security holders an earnings statement satisfying
the provisions of Section 11(a) of the Securities Act.
(g) The Company agrees to cooperate with the selling
Registered Holders to facilitate the timely preparation and delivery of
certificates representing Registrable Shares to be sold pursuant to a
Registration and not bearing any Securities Act legend; and enable
certificates for such Registrable Shares to be issued for such numbers
of shares and registered in such names as the Registered Holders may
reasonably request at least two business days prior to any sale of
Registrable Shares.
Section 9. Expenses of Registration. The Company shall pay all
Registration Expenses incurred in connection with the registration,
qualification or compliance pursuant to Sections 7 and 8 hereof. All Selling
Expenses incurred in connection with the sale of Registrable Shares by any of
the Registered Holders shall be borne by the Registered Holder selling such
Registrable Shares. Each Registered Holder shall pay the expenses of its own
counsel.
Section 10. Indemnification.
(a) The Company will indemnify each Registered Holder, each
Registered Holder's officers and directors, and each person controlling
such Registered Holder within the meaning of Section 15 of the
Securities Act, against all expenses, claims, losses, damages and
liabilities (including reasonable legal expenses), arising out of or
based on any untrue statement (or alleged untrue statement) of a
material fact contained in any registration statement or prospectus
relating to the Registrable Shares, or any amendment or supplement
thereto, or based on any omission (or alleged omission) to state therein
a material fact required to be stated therein or necessary to make the
22
statements therein not misleading, provided, however, that the Company
will not be liable in any such case to the extent that any such claim,
loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission,
made in reliance upon and in conformity with information furnished in
writing to the Company by such Registered Holder for inclusion therein.
(b) Each Registered Holder will indemnify the Company, each
of its directors and each of its officers who signs the registration
statement, each underwriter, if any, of the Company's securities covered
by such registration statement, and each person who controls the Company
or such underwriter within the meaning of Section 15 of the Securities
Act, against all claims, losses, damages and liabilities (including
reasonable legal fees and expenses) arising out of or based on any
untrue statement (or alleged untrue statement) of a material fact
contained in any such registration statement or prospectus, or any
amendment or supplement thereto, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, in each case
to the extent, but only to the extent, that such untrue statement (or
alleged untrue statement) or omission (or alleged omission) is made in
such registration statement or prospectus, in reliance upon and in
conformity with information furnished in writing to the Company by such
Registered Holder for inclusion therein.
(c) Each party entitled to indemnification under this
Section 10 (the "Indemnified Party") shall give notice to the party
required to provide indemnification (the "Indemnifying Party") promptly
after such Indemnified Party has actual knowledge of any claim as to
which indemnity may be sought, but the omission to so notify the
Indemnifying Party shall not relieve it from any liability which it may
have to the Indemnified Party pursuant to the provisions of this Section
10 except to the extent of the actual damages suffered by such delay in
notification. The Indemnifying Party shall assume the defense of such
action, including the employment of counsel to be chosen by the
Indemnifying Party to be reasonably satisfactory to the Indemnified
Party, and payment of expenses. The Indemnified Party shall have the
right to employ its own counsel in any such case, but the legal fees and
expenses of such counsel shall be at the expense of the Indemnified
Party, unless the employment of such counsel shall have been authorized
in writing by the Indemnifying Party in connection with the defense of
such action, or the Indemnifying Party shall not have employed counsel
to take charge of the defense of such action or the Indemnified Party
shall have reasonably concluded that there may be defenses available to
it or them which are different from or additional to those available to
the Indemnifying Party (in which case the Indemnifying Party shall not
have the right to direct the defense of such action on behalf of the
Indemnified Party), in any of which events such fees and expenses shall
be borne by the Indemnifying Party. No Indemnifying Party, in the
defense of any such claim or litigation, shall, except with the consent
of each Indemnified Party, consent to entry of any judgment or enter
into any settlement which does not include as an unconditional term
thereof the giving by the
23
claimant or plaintiff to such Indemnified Party of a release from all
liability in respect to such claim or litigation.
(d) In no event shall any Registered Holder be liable for
any expenses, claims, losses, damages or liabilities pursuant to this
Section 10 in excess of the net proceeds to such Registered Holder of
any Registrable Shares sold by such Registered Holder.
Section 11. Information to be Furnished by Registered Holders. Each
Registered Holder shall furnish to the Company such information as the Company
may reasonably request and as shall be required in connection with the
Registration and related proceedings referred to in Section 9 hereof. If any
Registered Holder fails to provide the Company with such information within 15
days of receipt of the Company's request, the Company's obligations under
Section 9 hereof, as applicable, with respect to such Registered Holder or the
Registrable Shares owned by such Registered Holder shall be suspended until such
Registered Holder provides such information.
Section 12. Rule 144 Sales.
(a) The Company covenants that it will file the reports
required to be filed by the Company under the Exchange Act so as to
enable any Registered Holder to sell Registrable Shares pursuant to Rule
144 under the Securities Act.
(b) In connection with any sale, transfer or other
disposition by any Registered Holder of any Registrable Shares pursuant
to Rule 144 under the Securities Act, the Company shall cooperate with
such Registered Holder to facilitate the timely preparation and delivery
of certificates representing Registrable Shares to be sold, and enable
certificates for such Registrable Shares to be for such number of shares
and registered in such names as the selling Registered Holder may
reasonably request at least two business days prior to any sale of
Registrable Shares.
Section 13. Replacement. Upon receipt of evidence reasonably
satisfactory to the Company (an affidavit of the Registered Holder shall be
satisfactory) of the ownership and the loss, theft, destruction or mutilation of
any certificate evidencing this Warrant, and in the case of any such loss, theft
or destruction, upon receipt of indemnity reasonably satisfactory to the Company
(provided that, if the holder is a financial institution or other institutional
investor, its own agreement shall be satisfactory), or, in the case of any such
mutilation upon surrender of such certificate, the Company shall (at its
expense) execute and deliver in lieu of such certificate a new certificate of
like kind representing the same rights represented by such lost, stolen,
destroyed or mutilated certificate and dated the date of such lost, stolen,
destroyed or mutilated certificate.
Section 14. Notices. Except as otherwise expressly provided herein,
any notice, request, instruction or other document to be given hereunder shall
be in writing and shall be deemed to have been given, (a) when received if given
in person or by courier or a courier
24
service, (b) on the date of transmission if sent by telex, facsimile or other
wire transmission or (c) three business days (seven business days for overseas
mail) after being deposited in the U.S. mail, certified or registered mail,
postage prepaid, addressed (i) to the Company, at its principal executive
offices, and (ii) to any Registered Holder, at such holder's address as it
appears in the records of the Company (unless otherwise indicated by any such
holder).
Section 15. Amendment. Except as otherwise provided herein, this
Warrant may be amended, modified or supplemented, but only if the Company has
obtained the written consent of the Registered Holders representing a majority
of the shares of Common Stock issuable upon exercise of the Warrants then
outstanding.
Section 16. Waiver. Except as otherwise provided herein, no waiver
of any condition to be satisfied by the Company or of any breach of any term,
covenant, representation or warranty of the Company contained in this Warrant
shall be effective unless the Company has obtained the written consent of the
Registered Holders representing a majority of the shares of Common Stock
issuable upon exercise of the Warrants then outstanding.
Section 17. Interpretation. The headings preceding the text of
Sections and paragraphs included in this Warrant and the headings to Exhibits
attached to this Warrant are for convenience only and shall not be deemed part
of this Warrant or be given any effect in interpreting this Warrant. The use of
the masculine, feminine or neuter gender herein shall not limit any provision of
this Warrant. The use of the terms "including" or "include" shall in all cases
mean "including, without limitation" or include, without limitation,"
respectively. Underscored references to Sections or Exhibits shall refer to
those portions of this Warrant.
Section 18. Governing Law. THIS WARRANT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO
THE PRINCIPLES OF CONFLICTS OF LAWS.
Section 19. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS
AGREEMENT, 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. EACH OF THE PARTIES 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. EACH OF THE PARTIES HEREBY
EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT 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.
25
Section 20. Waiver of Jury Trial. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HEREBY IRREVOCABLY WAIVE ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS WARRANT OR
THE TRANSACTIONS CONTEMPLATED HEREBY.
26
IN WITNESS WHEREOF, the Company has caused this Warrant to be executed
and attested by its duly authorized officers and to be dated the Date of
Issuance hereof.
EARTHCARE COMPANY
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
Attest:
----------------------------
Secretary
ACCEPTED AND AGREED:
-------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
27
Exhibit A
Exercise Agreement
To: Dated:
The undersigned, pursuant to the provisions set forth in the attached
Warrant (Certificate No. __), hereby subscribes for the purchase of __________
shares of the Common Stock covered by such Warrant and [makes payment herewith
in full therefor at the price per share provided by such Warrant] [makes
election to exercise the procedure set forth in Section 1(b)(ii)].
By executing this Exercise Agreement, the undersigned (i) acknowledges
that it has read, and agrees to be bound by, Section 2 of such Warrant and (ii)
represents and warrants that (A) it is acquiring such shares of Common Stock for
its own account and not with a view to or for sale in connection with any public
distribution thereof within the meaning of the Securities Act of 1933, as
amended (the "Securities Act"), (B) it understands that such shares of Common
Stock have not been registered under the Securities Act or any state securities
laws and cannot be resold without registration thereunder or exemption
therefrom, (C) it has sufficient knowledge and experience in financial and
business matters to enable it to evaluate the merits and risks of an investment
in such shares of Common Stock and has the ability to bear the economic risk of
acquiring such shares of Common Stock, (D) it has been supplied with, or had
access to, information to which a reasonable investor would attach significance
in making investment decisions, including, but not limited to, all information
as it has requested, to answer all of its inquiries about the Company, and to
enable it to make its decision to acquire such shares of Common Stock, (E) it
agrees that it will not transfer all or any portion of such shares of Common
Stock unless such transfer has been registered or is exempt from registration
under the Securities Act and any applicable state securities laws and (F) it is
an "accredited investor," as such term is defined in Regulation D promulgated
under the Securities Act.
------------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
28
Exhibit B
Assignment
FOR VALUE RECEIVED, ______________________________ hereby sells, assigns
and transfers to the Assignee set forth below all of the rights of the
undersigned under the attached Warrant (Certificate No. __) with respect to the
number of shares of Common Stock set forth below:
Name of Assignee Address No. of Shares
---------------- ------- -------------
Dated:
----------------------------
By:
----------------------------
Name:
-----------------------
Title:
-------------------------
29
EXHIBIT D
TO THIRD AMENDMENT
FORM OF SECOND AMENDMENT
THIS SECOND AMENDMENT dated as of April 16, 2001 (this "Amendment") is
to the Guaranty dated as of February 15, 2000 (as previously amended, the
"Guaranty") made by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇. and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ in favor of
Bank of America, N.A., as Agent, and the Lender Parties referred to in the
Guaranty. Unless otherwise defined herein, capitalized terms used but not
defined herein have the respective meanings set forth in the Guaranty.
WHEREAS, the parties hereto desire to amend the Guaranty in certain
respects;
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged), the parties hereto agree as follows:
SECTION 1 AMENDMENT. The following paragraph is inserted at the end of
the Guaranty:
Each of the undersigned agrees to deliver to the Agent promptly
when available and in any event no later than the fifteenth Business Day
of each month, a personal financial statement for such undersigned as of
the last day of the previous month.
SECTION 2 MISCELLANEOUS.
2.1 Continuing Effectiveness, etc. As herein amended, the Guaranty
shall remain in full force and effect and is hereby ratified and confirmed in
all respects. After the date hereof, all references in any document to the
"Guaranty" or similar terms shall refer to the Guaranty, as amended hereby.
2.2 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.
2.3 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 wholly performed within the State of Illinois.
30
Delivered as of the day and year first above written.
--------------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
Accepted:
BANK OF AMERICA, N.A., as Agent
By:
-----------------------------
Its:
----------------------------
-22-
31
SCHEDULE I
TO
THIRD AMENDMENT
Collateral to Be Pledged by ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, ▇▇.:
1. Membership Interests in Oak Hammock Disposal Company LLC.
2. Membership Interests in Omni Waste LLC
3. Partnership Interests in Argentum Capital Partners.
4. Partnership Interests in Argentum Medsite.
5. Partnership Interests in Productivity Fund IV
6. Ownership Interests in DLJ Asset Management Group
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SCHEDULE II
TO
THIRD AMENDMENT
FORM OF ACKNOWLEDGMENT AND CONSENT
April 16, 2001
Bank of America, N.A., as Administrative Agent
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear Ladies and Gentlemen:
Reference is made to (i) the Asset Purchase Agreement (the "Asset
Purchase Agreement") between the undersigned and EarthCare Company (the
"Company"), (ii) the Promissory Note (as defined in the Asset Purchase
Agreement) and (iii) the License Agreement (as defined in the Asset Purchase
Agreement) (the documents described in clauses (i) through (ii), and any related
documents, being referred to collectively herein as the "Assigned Documents").
Notwithstanding any provision in any of the Assigned Documents to the
contrary, the undersigned acknowledges that the Company has assigned all of its
right, title and interest in and to the Assigned Documents and any and all
rights of the Company to receive payments thereunder to Bank of America, N.A.,
as administrative agent (in such capacity, the "Administrative Agent"), under a
Security Agreement dated as of February 15, 2000 executed by the Company and
various subsidiaries thereof (the "Security Agreement"). The Administrative
Agent acknowledges that the assignment is not a delegation of any duty under any
of the Assigned Documents, and that this Acknowledgment and Consent does not in
any way limit the rights and remedies of the undersigned under any of the
Assigned Documents.
The undersigned irrevocably consents to the assignment of the Assigned
Documents and any and all rights of the Company to receive payments thereunder,
and agrees that, after receipt of written notice (which has not been rescinded)
from the Administrative Agent that a "Default" exists under and as defined in
the Security Agreement, the undersigned shall pay any amount it would otherwise
have paid to the Company under the Assigned Documents directly to the
Administrative Agent.
This Acknowledgment and Consent shall be binding upon the undersigned
and its successors and assigns, and shall inure, together with the rights and
remedies of the Administrative Agent hereunder, to the benefit of the
Administrative Agent, the Banks (as defined by reference in the Security
Agreement) and their respective successors, transferees and assigns.
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This Acknowledgment and Consent shall be governed by and construed in
accordance with the laws of the State of Illinois applicable to contracts made
and to be performed entirely within such state.
ISN NETWORLD
By:
----------------------------
Title:
-------------------------
Acknowledged and Agreed:
BANK OF AMERICA, N.A., as Agent
By:
---------------------------
Title:
------------------------
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SCHEDULE 9.8
SUBSIDIARIES
EarthLiquids Subsidiaries:
-------------------------
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 Petroleum Corporation of Pennsylvania
International Environmental Services, Inc.
EarthAmerica Subsidiaries:
-------------------------
All County Resource Management Corp.
Bone Dry Enterprises, Inc.
Brehms Cesspool Service, Inc.
EarthAmerica Company
EarthAmerica Distributors, Inc.
EarthCare Acquisition Sub, Inc.
EarthCare Company of Florida
EarthCare Company of Pennsylvania
EarthCare Company of New York
EarthCare Company of Texas
EARTHCARE RESOURCE MANAGEMENT OF FLORIDA, INC.
EarthLiquids Company
EC Acquisitions, Inc.
▇▇▇▇▇▇ Environmental Services, Inc.
▇▇▇▇ ▇▇▇▇▇▇ Plumbing, Heating & Cooling, Inc.
[Liquid Waste Control Systems, Inc.]
Reifsneider Transportation, Inc.
[Sub-Surface Liquid Injection Company, Inc.]
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