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EXHIIBIT 10.1
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REVOLVING CREDIT AGREEMENT
Dated as of January 30, 1998
by and among
WASTE CONNECTIONS, INC.
AND ITS SUBSIDIARIES
(the "Borrowers")
THE LENDING INSTITUTIONS PARTY HERETO
(the "Banks")
and
BANKBOSTON, N.A., AS AGENT
With
BANCBOSTON SECURITIES INC., as Arranger
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TABLE OF CONTENTS
Section 1. DEFINITIONS AND RULES OF INTERPRETATION......................................................1
Section 1.1. Definitions. .................................................................1
Section 1.2. Rules of Interpretation........................................................17
Section 2. THE REVOLVING CREDIT FACILITY................................................................18
Section 2.1. Commitment to Lend. ..........................................................18
Section 2.2. Reduction of Total Commitment. ...............................................18
Section 2.3. The Revolving Credit Notes. ..................................................19
Section 2.4. Interest on Revolving Credit Loans. ..........................................19
Section 2.5. Election of Eurodollar Rate; Notice of Election; Interest Periods;
Minimum Amounts................................................................20
Section 2.6. Requests for Revolving Credit Loans. .........................................21
Section 2.7. Funds for Revolving Credit Loans. ............................................21
Section 2.8. Maturity of the Loans. .......................................................22
Section 2.9. Mandatory Repayments of the Revolving Credit Loans. ..........................22
Section 2.10. Optional Prepayments or Repayments of Revolving Credit Loans. .................23
Section 3. LETTERS OF CREDIT............................................................................23
Section 3.1. Letter of Credit Commitments...................................................23
Section 3.2. Reimbursement Obligation of the Borrowers. ...................................24
Section 3.3. Letter of Credit Payments. ...................................................25
Section 3.4. Obligations Absolute. ........................................................25
Section 3.5. Reliance by Agent. ...........................................................26
Section 4. FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY................................26
Section 4.1. Fees...........................................................................26
Section 4.2. Payments.......................................................................27
Section 4.3. Computations. ................................................................28
Section 4.4. Capital Adequacy. ............................................................28
Section 4.5. Certificate. .................................................................29
Section 4.6. Interest on Overdue Amounts. .................................................29
Section 4.7. Interest Limitation. .........................................................29
Section 4.8. Eurodollar Indemnity. ........................................................29
Section 4.9. Illegality; Inability to Determine Eurodollar Rate. ..........................30
Section 4.10. Additional Costs, Etc. ........................................................30
Section 4.11. Replacement of Banks. ........................................................31
Section 4.12. Concerning Joint and Several Liability of the Borrowers. ......................32
Section 5. REPRESENTATIONS AND WARRANTIES. ............................................................34
Section 5.1. Corporate Authority............................................................34
Section 5.2. Governmental Approvals. ......................................................35
Section 5.3. Title to Properties; Leases. .................................................35
Section 5.4. Financial Statements; Solvency.................................................36
Section 5.5. No Material Changes, Etc. ....................................................36
Section 5.6. Permits, Franchises, Patents, Copyrights, Etc. ...............................36
Section 5.7. Litigation. ..................................................................36
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Section 5.8. No Materially Adverse Contracts, Etc. ........................................37
Section 5.9. Compliance With Other Instruments, Laws, Etc. ................................37
Section 5.10. Tax Status. ..................................................................37
Section 5.11. No Event of Default. .........................................................38
Section 5.12. Holding Company and Investment Company Acts. .................................38
Section 5.13. Absence of Financing Statements, Etc. ........................................38
Section 5.14. Employee Benefit Plans.........................................................38
Section 5.15. Use of Proceeds. .............................................................39
Section 5.15.1. General. ....................................................39
Section 5.15.2. Regulations U and X. ........................................39
Section 5.15.3. Ineligible Securities. ......................................40
Section 5.16. Environmental Compliance. ....................................................40
Section 5.17. Perfection of Security Interests. ............................................41
Section 5.18. Transactions with Affiliates. ................................................42
Section 5.19. Subsidiaries. ................................................................42
Section 5.20. True Copies of Charter and Other Documents. ..................................42
Section 5.21. Disclosure. ..................................................................42
Section 5.22. Capitalization. ..............................................................43
Section 5.23. Year 2000 Problem. ...........................................................43
Section 6. AFFIRMATIVE COVENANTS OF THE BORROWERS. ....................................................43
Section 6.1. Punctual Payment. ............................................................43
Section 6.2. Maintenance of Offices. ......................................................44
Section 6.3. Records and Accounts. ........................................................44
Section 6.4. Financial Statements, Certificates and Information. ..........................44
Section 6.5. Corporate Existence and Conduct of Business. .................................46
Section 6.6. Maintenance of Properties. ...................................................46
Section 6.7. Insurance. ...................................................................46
Section 6.8. Taxes. .......................................................................47
Section 6.9. Inspection of Properties, Books, and Contracts. ..............................47
Section 6.10. Compliance with Laws, Contracts, Licenses and Permits;
Maintenance of Material Licenses and Permits. .................................47
Section 6.11. Environmental Indemnification. ...............................................48
Section 6.12. Further Assurances. ..........................................................48
Section 6.13. Notice of Potential Claims or Litigation. ....................................48
Section 6.14. Notice of Certain Events Concerning Insurance and
Environmental Claims...........................................................49
Section 6.15. Response Actions. ............................................................50
Section 6.16. Environmental Assessments. ...................................................50
Section 6.17. Notice of Default. ...........................................................50
Section 6.18. New Subsidiaries. ............................................................50
Section 6.19. Employee Benefit Plans. ......................................................51
Section 6.20. Notice of Loss of Material Contracts. ........................................51
Section 7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. ...............................................51
Section 7.1. Restrictions on Indebtedness. ................................................51
Section 7.2. Restrictions on Liens. .......................................................52
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Section 7.3. Restrictions on Investments. .................................................54
Section 7.4. Merger, Consolidation and Disposition of Assets. .............................55
Section 7.4.1. Mergers and Acquisitions. ....................................55
Section 7.4.2. Disposition of Assets. .......................................56
Section 7.5. Sale and Leaseback. ..........................................................57
Section 7.6. Restricted Distributions and Redemptions. ....................................57
Section 7.7. Employee Benefit Plans. ......................................................57
Section 7.8. Negative Pledges. ............................................................58
Section 7.9. Business Activities. .........................................................58
Section 7.10. Transactions with Affiliates. ................................................58
Section 8. FINANCIAL COVENANTS. .......................................................................58
Section 8.1. Leverage Ratio. ..............................................................58
Section 8.2. Funded Debt to Capitalization Ratio. .........................................59
Section 8.3. Interest Coverage Ratio. .....................................................59
Section 8.4. Profitable Operations. .......................................................59
Section 8.5. Consolidated Net Worth. ......................................................59
Section 8.6. Capital Expenditures. ........................................................59
Section 9. CLOSING CONDITIONS. ........................................................................59
Section 9.1. Corporate Action. ............................................................60
Section 9.2. Loan Documents, Etc. .........................................................60
Section 9.3. Certificate of Secretary; Good Standing Certificates. ........................60
Section 9.4. Validity of Liens. ...........................................................60
Section 9.5. Perfection Certificates and UCC Search Results. ..............................60
Section 9.6. Certificates of Insurance. ...................................................61
Section 9.7. Legal Opinions. ..............................................................61
Section 9.8. Environmental Permit Certificate. ............................................61
Section 9.9. Payment of Fees. .............................................................61
Section 9.10. Payoff Letters. ..............................................................61
Section 9.11. Closing Certificate. .........................................................61
Section 9.12. Audit. .......................................................................61
Section 9.13. Contracts. ...................................................................62
Section 9.14. Consents. ....................................................................62
Section 10. CONDITIONS OF ALL LOANS. ...................................................................62
Section 10.1. Representations True; No Event of Default. ...................................62
Section 10.2. Performance; No Event of Default. ............................................62
Section 10.3. No Legal Impediment. .........................................................62
Section 10.4. Governmental Regulation. .....................................................63
Section 10.5. Proceedings and Documents. ...................................................63
Section 11. COLLATERAL SECURITY. .......................................................................63
Section 11.1. Security of Borrowers. .......................................................63
Section 12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT. ................................63
Section 12.1. Events of Default and Acceleration. ..........................................63
Section 12.2. Termination of Commitments. ..................................................67
Section 12.3. Remedies. ....................................................................67
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Section 13. SETOFF. ....................................................................................68
Section 14. THE AGENT. .................................................................................68
Section 14.1. Appointment of Agent, Powers and Immunities. .................................68
Section 14.2. Actions By Agent. ............................................................69
Section 14.3. INDEMNIFICATION. .............................................................70
Section 14.4. Reimbursement. ...............................................................70
Section 14.5. Documents. ...................................................................71
Section 14.5.1. Closing Documentation. ......................................71
Section 14.5.2. Other Documents. ............................................71
Section 14.6. Non-Reliance on Agent and Other Banks. .......................................71
Section 14.7. Resignation or Removal of Agent. .............................................72
Section 14.8. Consents, Amendments, Waivers, Etc. ..........................................72
Section 14.9. Delinquent Banks. ............................................................73
Section 15. EXPENSES AND INDEMNIFICATION. ..............................................................74
Section 15.1. Expenses. ....................................................................74
Section 15.2. Indemnification. .............................................................74
Section 15.3. Survival. ....................................................................75
Section 16. SURVIVAL OF COVENANTS, ETC. ................................................................75
Section 17. ASSIGNMENT AND PARTICIPATION. ..............................................................76
Section 18. PARTIES IN INTEREST. .......................................................................77
Section 19. NOTICES, ETC. ..............................................................................77
Section 20. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION. .............................................78
Section 20.1. Sharing of Information with Section 20 Subsidiary. ...........................78
Section 20.2. Confidentiality. .............................................................78
Section 20.3. Prior Notification. ..........................................................79
Section 20.4. Other. .......................................................................79
Section 21. MISCELLANEOUS. .............................................................................79
Section 22. ENTIRE AGREEMENT, ETC. .....................................................................79
Section 23. WAIVER OF JURY TRIAL. ......................................................................80
Section 24. GOVERNING LAW. .............................................................................80
Section 25. SEVERABILITY. ..............................................................................80
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SCHEDULES & EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Loan and Letter of Credit Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Environmental Compliance Certificate
Exhibit E Form of Assignment and Acceptance
Exhibit F Form of Reliance Letter
Schedule 1 Banks; Addresses; Commitment Percentages
Schedule 2 Subsidiaries
Schedule 5.7 Litigation
Schedule 5.9 Material Contracts
Schedule 5.16 Environmental Matters
Schedule 5.18 Transactions with Affiliates
Schedule 7.2 Existing Liens
Schedule 7.3 Existing Investments
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REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of January 30, 1998 (the
"Credit Agreement"), by and among (a) WASTE CONNECTIONS, INC., a Delaware
corporation (the "Parent"), the subsidiaries of the Parent identified on
Schedule 2 hereto (the "Subsidiaries," and collectively with the Parent, the
"Borrowers"), (b) BankBoston, N.A., a national banking association having its
principal place of business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
(acting in its individual capacity, "BKB") and the other BANKS and lending
institutions which become parties hereto (collectively, the "Banks"), and (c)
BANKBOSTON, N.A., as agent for the Banks (the "Agent").
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. DEFINITIONS. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Credit
Agreement referred to below:
Accountants. An independent accounting firm of national standing
reasonably acceptable to the Banks and the Agent.
Affected Bank. See Section 4.11.
Agent. See Preamble.
Agent's Head Office. The Agent's head office located at ▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or such other location as the Agent may
designate from time to time.
Applicable Base Rate Margin. The applicable margin with respect to Base
Rate Loans as set forth in the Pricing Table.
Applicable Commitment Rate. The applicable rate with respect to the
Commitment Fee as set forth in the Pricing Table.
Applicable Eurodollar Margin. The applicable margin with respect to
Eurodollar Loans as set forth in the Pricing Table.
Applicable Laws. See Section 6.10.
Applicable L/C Margin. The applicable margin with respect to the Letter
of Credit Fee as set forth in the Pricing Table.
Arranger. BancBoston Securities Inc.
Assignment and Acceptance. See Section 17.
Balance Sheet Date. December 31, 1997.
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Banks. See Preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Agent at the Agent's Head Office as its "base rate" (it
being understood that such rate is a reference rate and not necessarily the
lowest rate of interest charged by the Agent) or (b) one percent (1%) above the
overnight federal funds effective rate, as published by the Board of Governors
of the Federal Reserve System, as in effect from time to time.
Base Rate Loans. Loans bearing interest calculated by reference to the
Base Rate.
BFI. ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇ Industries, Inc., a Delaware corporation.
BFI Notes. Collectively, the (a) Waste Bridge Note made by the Parent
payable to BFI in the principal amount of $500,000 and (b) Promissory Note made
by W.C. of Idaho payable to BFI in the principal amount of $1,450,000, each
dated as of September 30, 1997, as amended and in effect from time to time.
BKB. See Preamble.
Borrowers. See Preamble.
Business Day. Any day on which banking institutions in Boston,
Massachusetts, New York, New York, and Los Angeles, California are open for the
transaction of banking business.
Capital Assets. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); provided that Capital Assets shall not
include (a) any item customarily charged directly to expense or depreciated over
a useful life of twelve (12) months or less in accordance with generally
accepted accounting principles, or (b) any item obtained through an acquisition
permitted by Section 7.4 hereof.
Capital Expenditures. Amounts paid or indebtedness incurred by the
Borrowers and their Subsidiaries in connection with (i) the purchase or lease of
Capital Assets that would be required to be capitalized and shown on the balance
sheet of such Person in accordance with GAAP or (ii) the lease of any assets by
the Borrowers or any Subsidiary as lessee under any Synthetic Lease to the
extent that such assets would have been Capital Assets had the Synthetic Lease
been treated for accounting purposes as a Capitalized Lease.
Capitalized Leases. Leases under which any Borrower is the lessee or
obligor, the discounted future rental payment obligations under which are
required to be capitalized on the balance sheet of the lessee or obligor in
accordance with GAAP.
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CERCLA. See definition of Release.
Certified. With respect to the financial statements of any Person, such
statements as audited by a firm of independent auditors, whose report expresses
the opinion, without qualification, that such financial statements present
fairly the financial position of such Person.
CFO. See Section 6.4(b).
Closing Date. The date on which the conditions precedent set forth in
Section 9 are satisfied.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Collateral. All of the property, rights and interests of the Borrowers
(other than with respect to moneys due under the Excluded Contracts) that are or
are intended to be subject to the security interests created by the Security
Documents.
Commitment. With respect to each Bank, the amount determined by
multiplying such Bank's Commitment Percentage by the Total Commitment specified
inSection 2.1 hereof, as the same may be reduced from time to time.
Commitment Fee. See Section 4.1.
Commitment Percentage. With respect to each Bank, the percentage
initially set forth beside its name on Schedule 1 (subject to adjustment in
accordance withSection 17).
Compliance Certificate. See Section 6.4(c).
Consolidated or consolidated. With reference to any term defined herein,
shall mean that term as applied to the accounts of the Borrowers and their
Subsidiaries consolidated in accordance with GAAP.
Consolidated Earnings Before Interest and Taxes or EBIT. For any period,
the Consolidated Net Income (or Deficit) of the Borrowers, plus (a) interest
expense for such period (including, for the fiscal quarters ending December 31,
1997 and March 31, 1998, non-cash charges for interest expense attributable to
loan fees paid, and warrants issued to, Imperial Bank in connection with the
Imperial Credit Agreement of up to $650,000 in the aggregate), (b) income taxes
for such period, and (c) for the fiscal quarters ending December 31, 1997 and
March 31, 1998, start-up or organizational expenses taken as a special charge in
such quarters of up to $400,000 (pre-tax) in the aggregate and non-cash stock
compensation charges of up to $3,500,000 in the aggregate, to the extent that
each was deducted in determining Consolidated Net Income (or Deficit), provided
that, for purposes of calculating the
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financial covenants under Section 8 (but not the Pricing Ratio) for a Compliance
Certificate delivered pursuant to Section 7.4(a), EBIT (excluding any projected
cost savings or adjustments other than nonrecurring private company expenses
that are discontinued upon acquisition by the Parent or its Subsidiaries, such
as owner compensation and insurance and benefit cost reductions, and that are
approved by the Agent and the Majority Banks) of Subsidiaries acquired since the
date of the most recent financial statements delivered to the Banks pursuant to
Section 6.4 shall be included in the calculation of EBIT if (i) the financial
statements of such acquired Subsidiaries have been audited for the period sought
to be included by the Accountants or (ii) the Agent and the Majority Banks
consent to such inclusion after being furnished with unaudited financial
statements, together with a Compliance Certificate and other appropriate
documentation certifying the historical operating results and balance sheet of
the acquired companies.
Consolidated Earnings Before Interest, Taxes, Depreciation and
Amortization or EBITDA. For any period, EBIT plus (a) depreciation expense for
such period and (b) amortization expense relating to intangible assets for such
period, to the extent that each was deducted in determining Consolidated Net
Income (or Deficit), provided that, for purposes of calculating the financial
covenants under Section 8 (but not the Pricing Ratio), EBITDA (excluding any
projected cost savings or adjustments other than nonrecurring private company
expenses that are discontinued upon acquisition by the Parent or its
Subsidiaries, such as owner compensation and insurance and benefit cost
reductions, and that are approved by the Agent and the Majority Banks) of
Subsidiaries acquired since the date of the most recent financial statements
delivered to the Banks pursuant to Section 6.4 shall be included in the
calculation of EBITDA if (i) the financial statements of such acquired
Subsidiaries have been audited for the period sought to be included by the
Accountants or (ii) the Agent and the Majority Banks consent to such inclusion
after being furnished with unaudited financial statements, together with a
Compliance Certificate and other appropriate documentation certifying the
historical operating results and balance sheet of the acquired companies.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrowers after deduction of all expenses, taxes, and other
proper charges, determined in accordance with GAAP.
Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities, less, to the extent otherwise includable in the
computation of Consolidated Net Worth, any subscriptions receivable, plus the
value of the Preferred Stock to the extent otherwise excluded in the computation
of Consolidated Net Worth.
Consolidated Total Assets. All assets of the Borrowers and their
Subsidiaries determined on a consolidated basis in accordance with GAAP, plus
(i) without duplication, all assets leased by the Borrowers or any Subsidiary as
lessee under any
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Synthetic Lease to the extent that such assets would have been consolidated
balance sheet assets had the Synthetic Lease been treated for accounting
purposes as a Capitalized Lease, plus (ii) without duplication, all sold
receivables referred to in clause (vii) of the definition of the term
"Indebtedness" to the extent that such receivables would have been consolidated
balance sheet assets had they not been sold.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest required to be paid or accrued by the Borrowers and their
Subsidiaries during such period on all Indebtedness of the Borrowers and their
Subsidiaries outstanding during all or any part of such period, whether such
interest was or is required to be reflected as an item of expense or
capitalized, including payments consisting of interest in respect of any
Capitalized Lease or any Synthetic Lease and including commitment fees, agency
fees, facility fees, balance deficiency fees and similar fees or expenses in
connection with the borrowing of money (but excluding, for the fiscal quarters
ending December 31, 1997 and March 31, 1998, non-cash charges for interest
expense attributable to loan fees paid, and warrants issued to, Imperial Bank in
connection with the Imperial Credit Agreement of up to $650,000 in the
aggregate).
Consolidated Total Liabilities. All liabilities of the Borrowers
determined on a consolidated basis in accordance with GAAP and classified as
such on the consolidated balance sheet of the Borrowers, but excluding the
Preferred Stock to the extent that it is treated as a liability under GAAP.
Credit Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto, as amended and in effect from time to time.
Default. See Section 12.
Delinquent Bank. See Section 14.9.
Disposal (or Disposed). See definition of Release.
Distribution. The declaration or payment of any dividend or distribution
on or in respect of any shares of any class of capital stock, any partnership
interests or any membership interests of any Person (other than dividends or
other distributions payable solely in shares of common stock, partnership
interests or membership units of such Person, as the case may be); the purchase,
redemption, or other retirement of any shares of any class of capital stock,
partnership interests or membership units of such Person, directly or indirectly
through a Subsidiary or otherwise; the return of equity capital by any Person to
its shareholders, partners or members as such; or any other distribution on or
in respect of any shares of any class of capital stock, partnership interest or
membership unit of such Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
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Drawdown Date. The date on which any Revolving Credit Loan is made or is
to be made, and the date on which any Revolving Credit Loan is converted or
continued in accordance with Section 2.5.
EBIT. See definition of Consolidated Earnings Before Interest and Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization.
Eligible Assignee. Any of (i) a commercial bank organized under the laws
of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (ii) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development (the "OECD"), or a political subdivision of any such country, and
having total assets in excess of $1,000,000,000, provided that such bank is
acting through a branch or agency located in the country in which it is
organized or another country which is also a member of the OECD; (iv) the
central bank of any country which is a member of the OECD; and (v) if, but only
if, any Event of Default has occurred and is continuing, any other bank,
insurance company, commercial finance company or other financial institution
approved by the Agent, such approval not to be unreasonably withheld.
Eligible Foreign Bank. (a) Any commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Cooperation and Development (the "OECD"), or a political subdivision of any such
country, provided that such bank is acting through a branch or agency located in
the country in which it is organized or another country which is also a member
of the OECD; or (b) the central bank of any country which is a member of the
OECD.
Employee Benefit Plan. Any employee benefit plan within the meaning
of Section 3(3) of ERISA maintained or contributed to by the Borrowers or any
ERISA Affiliate, other than a Guaranteed Pension Plan or a Multiemployer Plan.
Environmental Laws. See Section 5.16(a).
EPA. See Section 5.16(b).
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with
the Borrowers under Section 414 of the Code.
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ERISA Reportable Event. A reportable event with respect to a Guaranteed
Pension Plan within the meaning of Section 4043 of ERISA and the regulations
promulgated thereunder.
Eurodollar Business Day. Any Business Day on which dealings in foreign
currency and exchange are carried on among banks in London, England.
Eurodollar Interest Determination Date. For any Interest Period, the
date two Eurodollar Business Days prior to the first day of such Interest
Period.
Eurodollar Loans. Revolving Credit Loans bearing interest calculated by
reference to the Eurodollar Rate.
Eurodollar Offered Rate. The rate per annum at which deposits of dollars
are offered to the Agent by prime banks in whatever Eurodollar interbank market
may be selected by the Agent, in its sole discretion, acting in good faith, at
or about 11:00 a.m. local time in such interbank market, on the Eurodollar
Interest Determination Date, for a period equal to the requested Interest Period
in an amount substantially equal to the principal amount requested to be loaned
at or converted to a rate based on the Eurodollar Rate.
Eurodollar Rate. The rate per annum, rounded upwards to the nearest 1/16
of 1%, determined by the Agent with respect to an Interest Period in accordance
with the following formula:
Eurodollar Rate = Eurodollar Offered Rate
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1-Reserve Rate
Event of Default. See Section 12.
Excluded Contracts. The (a) Contract for Curbside and Drop Box Recycling
Services among (i) the Six East Snohomish County Cities of Snohomish, Monroe,
Lake Stevens, Sultan, Granite Falls and Gold Bar (Operating as ESCARC) and (ii)
Fibres International, Incorporated d.b.a. Pacific Resource Management/Bill's
Disposal, dated as of September 1, 1995 and (b) Single Family Recyclables
Collection Contract between City of Vancouver and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Industries of
Washington, Inc., dated as of December 2, 1996, each as amended and in effect
from time to time.
Funded Debt. Consolidated Indebtedness of the Borrowers for borrowed
money, the net present value (using the Base Rate as the discount rate) of every
obligation of such Person issued or assumed as the deferred purchase price of
property or services (including securities repurchase agreements but excluding
trade accounts payable or accrued liabilities arising in the ordinary course of
business which are not overdue or which are being contested in good faith), and
guarantees of such Indebtedness, recorded on the Consolidated balance sheet of
the Borrowers, including reimbursement obligations
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of the Borrowers with respect to letters of credit and the amount of any
Indebtedness of such Persons for Capitalized Leases which corresponds to
principal.
generally accepted accounting principles or GAAP. When used in general,
generally accepted accounting principles means (1) principles that are
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, in effect for the fiscal year
ended on the Balance Sheet Date, as shall be concurred in by independent
certified public accountants of recognized standing whose report expresses an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been applied; and (2) when used with reference to the Borrowers,
such principles shall include (to the extent consistent with such principles)
the accounting practices reflected in the consolidated financial statements for
the year ended on the Balance Sheet Date.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrowers
or any ERISA Affiliate, the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Hazardous Substances. See Section 5.16(b).
Imperial Credit Agreement. The Loan and Security Agreement, dated as of
September 30, 1997, among Imperial Bank and the Parent, ▇▇▇▇▇▇▇▇-▇▇▇▇▇▇
Industries of Washington, Inc., and Fibres International, Inc., as amended and
in effect from time to time.
Indebtedness. As to any Person and whether recourse is secured by or is
otherwise available against all or only a portion of the assets of such Person
and whether or not contingent, but without duplication:
(i) every obligation of such Person for money borrowed,
(ii) every obligation of such Person evidenced by bonds,
debentures, notes or other similar instruments, including obligations
incurred in connection with the acquisition of property, assets or
businesses,
(iii) every reimbursement obligation of such Person with respect
to letters of credit, bankers' acceptances or similar facilities issued
for the account of such Person,
(iv) the net present value (using the Base Rate as the discount
rate) of every obligation of such Person issued or assumed as the
deferred purchase price of property or services (including securities
repurchase agreements but excluding (A) trade accounts payable or
accrued liabilities arising in the ordinary course of business which are
not overdue or which are being
15
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contested in good faith and (B) contingent purchase price obligations
solely to the extent that the contingency upon which such obligation is
conditioned has not yet occurred),
(v) every obligation of such Person under any Capitalized Lease,
(vi) every obligation of such Person under any Synthetic Lease,
(vii) all sales by such Person of (A) accounts or general
intangibles for money due or to become due, (B) chattel paper,
instruments or documents creating or evidencing a right to payment of
money or (C) other receivables (collectively, "receivables"), whether
pursuant to a purchase facility or otherwise, other than in connection
with the disposition of the business operations of such Person relating
thereto or a disposition of defaulted receivables for collection and not
as a financing arrangement, and together with any obligation of such
Person to pay any discount, interest, fees, indemnities, penalties,
recourse, expenses or other amounts in connection therewith, provided,
however, that sales referred to in clauses (B) and (C) shall not
constitute Indebtedness to the extent that such sales are non-recourse
to such Person;
(viii) every obligation of such Person (an "equity related
purchase obligation") to purchase, redeem, retire or otherwise acquire
for value any shares of capital stock of any class issued by such
Person, any warrants, options or other rights to acquire any such
shares, or any rights measured by the value of such shares, warrants,
options or other rights, excluding the Preferred Stock to the extent
that it is treated as a liability under GAAP,
(ix) every obligation of such Person under any forward contract,
futures contract, swap, option or other financing agreement or
arrangement (including, without limitation, caps, floors, collars and
similar agreements), the value of which is dependent upon interest
rates, currency exchange rates, commodities or other indices,
(x) every obligation in respect of Indebtedness of any other
entity (including any partnership in which such Person is a general
partner) to the extent that such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such
entity, except to the extent that the terms of such Indebtedness provide
that such Person is not liable therefor and such terms are enforceable
under applicable law,
(xi) every obligation, contingent or otherwise, of such Person
guaranteeing, or having the economic effect of guarantying or otherwise
acting as surety for, any obligation of a type described in any of
clauses (i) through (x) (the "primary obligation") of another Person
(the "primary obligor"), in any manner, whether directly or indirectly,
and including, without limitation, any
16
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obligation of such Person (A) to purchase or pay (or advance or supply
funds for the purchase of) any security for the payment of such primary
obligation, (B) to purchase property, securities or services for the
purpose of assuring the payment of such primary obligation, or (C) to
maintain working capital, equity capital or other financial statement
condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such primary obligation.
The "amount" or "principal amount" of any Indebtedness at any
time of determination represented by (v) any Indebtedness, issued at a
price that is less than the principal amount at maturity thereof, shall
be the amount of the liability in respect thereof determined in
accordance with generally accepted accounting principles, (w) any
Capitalized Lease shall be the principal component of the aggregate of
the rentals obligation under such Capitalized Lease payable over the
term thereof that is not subject to termination by the lessee, (x) any
sale of receivables shall be the amount of unrecovered capital or
principal investment of the purchaser (other than the Borrowers)
thereof, excluding amounts representative of yield or interest earned on
such investment, (y) any Synthetic Lease shall be the stipulated loss
value, termination value or other equivalent amount and (z) any equity
related purchase obligation shall be the maximum fixed redemption or
purchase price thereof inclusive of any accrued and unpaid dividends to
be comprised in such redemption or purchase price.
Ineligible Securities. Securities which may not be underwritten or dealt
in by member banks of the Federal Reserve System under Section 16 of the Banking
Act of 1993 (12 U.S.C. Section 24, Seventh), as amended.
Interest Period. With respect to each Eurodollar Loan:
(a) initially, the period commencing on the date of the making
of a Eurodollar Loan or the conversion from a Base Rate Loan into a Eurodollar
Loan and ending one (1), two (2), three (3), or six (6) months thereafter, as
selected by the Borrowers in a Loan and Letter of Credit Request; and
(b) thereafter, each subsequent Interest Period shall begin on
the last day of the preceding Interest Period and shall end one (1), two (2),
three (3), or six (6) months thereafter, as selected by the Borrowers in a Loan
and Letter of Credit Request;
provided, however, that whenever the first day of any Interest
Period occurs on a day of an initial calendar month for which there is no
numerically corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in such
Interest Period, such Interest Period shall end on the last Business Day of such
succeeding calendar month.
Interim Balance Sheet Date. November 30, 1997.
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Letter of Credit Applications. Letter of Credit Applications in such
form as may be agreed upon by the Borrowers and the Agent from time to time
which are entered into pursuant to Section 3 hereof, as such Letter of Credit
Applications are amended, varied or supplemented from time to time.
Letter of Credit Fee. See Section 4.1(b).
Letter of Credit Participation. See Section 3.1(b).
Letters of Credit. Standby Letters of Credit issued or to be issued by
the Agent under Section 3 hereof for the account of the Borrowers.
Leverage Ratio. See Section 8.1.
Loan and Letter of Credit Request. See Section 2.6.
Loan Documents. This Credit Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, and the Security Documents, each as amended
and in effect from time to time.
Loans. The Revolving Credit Loans.
Majority Banks. As of any date, the Banks holding sixty-six and
two-thirds percent (66-2/3%) of the outstanding principal amount of the Loans on
such date; and if no such principal is outstanding, the Banks whose aggregate
Commitments constitute sixty-six and two-thirds percent (66-2/3%) of the Total
Commitment.
Material Contract. Any contract, franchise agreement or G Permit from
which the Borrowers derived more than five percent (5%) of their consolidated
revenues for the fiscal year most recently ending.
Maturity Date. January 30, 2001.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit.
Maximum Rate. With respect to each Bank, the maximum lawful nonusurious
rate of interest (if any) which under Applicable Law such Bank may charge the
Borrowers on the Loans and other Obligations from time to time.
▇▇▇▇▇▇▇▇▇▇▇▇ Pledge Agreement. The Stock Pledge Agreement, dated as of
the date hereof, between the Trustee and the Agent in form and substance
satisfactory to the Agent, as amended and in effect from time to time, pursuant
to which all of the capital stock of the Parent issued to the Trustee is pledged
to the Agent for the benefit of the Banks.
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Multiemployer Plan. Any multiemployer plan within the meaning of Section
3(37) of ERISA maintained or contributed to by the Borrowers or any ERISA
Affiliate.
Notes. The Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities of the
Borrowers to any of the Banks or the Agent, individually or collectively,
existing on the date of this Credit Agreement or arising thereafter, direct or
indirect, joint or several, absolute or contingent, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract, operation
of law or otherwise, arising or incurred under this Credit Agreement or any of
the other Loan Documents, or under any Swap Contract between the Borrowers and
any Bank, or in respect of any of the Loans made or Reimbursement Obligations
incurred or the Letters of Credit, the Notes or any other instrument at any time
evidencing any thereof.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. See Section 7.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Preferred Stock. The Series A Preferred Stock issued by the Parent
pursuant to the Certificate of Designations, Preferences and Rights of Preferred
Stock, Series A, dated as of September 29, 1997, consisting of not more than
2,500,000 shares.
Pricing Ratio. As of the end of any fiscal quarter of the Borrowers
commencing with the fiscal quarter ending September 30, 1998, the ratio of (a)
Funded Debt as at the end of such quarter to (b) EBITDA for the period of four
(4) consecutive fiscal quarters ending on such date. For the fiscal quarter
ending (i) December 31, 1997, the denominator of such ratio shall be EBITDA for
such quarter multiplied by four (4), (ii) March 31, 1998, the denominator of
such ratio shall be EBITDA for the period of two consecutive fiscal quarters
ending on such date multiplied by two (2), and (iii) June 30, 1998, the
denominator of such ratio shall be EBITDA for the period of three consecutive
fiscal quarters ending on such date multiplied by 1.33.
Pricing Table:
---------------------------------------------------------------------------------------------------------------------
APPLICABLE APPLICABLE BASE RATE APPLICABLE
PRICING RATIO EURODOLLAR MARGIN APPLICABLE COMMITMENT RATE
MARGIN (PER ANNUM) L/C MARGIN (PER ANNUM)
(PER ANNUM) (PER ANNUM)
---------------------------------------------------------------------------------------------------------------------
Less than 2.50:1 2.00% 0.00% 2.00% 0.50%
---------------------------------------------------------------------------------------------------------------------
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---------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.50:1 2.25% 0.25% 2.25% 0.50%
but less than 3.00:1
---------------------------------------------------------------------------------------------------------------------
Greater than or equal to 3.00:1 2.75% 0.50% 2.75% 0.50%
---------------------------------------------------------------------------------------------------------------------
Initial Pricing 2.75% 0.50% 2.75% 0.50%
---------------------------------------------------------------------------------------------------------------------
Any change in the applicable margin shall become effective on the first day
after receipt by the Banks of financial statements delivered pursuant to Section
6.4(a) or (b) which indicate a change in the Pricing Ratio or, with respect to
the Eurodollar Applicable Margin, on the first day of each Interest Period which
begins three (3) or more days after receipt of such financial statements. If at
any time such financial statements are not delivered within the time periods
specified in Section 6.4(a) or (b), the applicable margin shall be the highest
rate set forth in the respective column of the Pricing Table, subject to
adjustment upon actual receipt of such financial statements. The initial pricing
set forth in the table above shall be effective until the Borrowers deliver to
the Agent a calculation of the Pricing Ratio for the fiscal quarter ending
December 31, 1997.
RCRA. See definition of Release.
Real Property. All real property heretofore, now, or hereafter owned or
leased by the Borrowers.
Reimbursement Obligation. The Borrowers' obligation to reimburse the
Agent and the Banks on account of any drawing under any Letter of Credit as
provided in Section 3.2.
Release. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Sections 9601 et seq. ("CERCLA") and the term "Disposal" (or "Disposed") shall
have the meaning specified in the Resource Conservation and Recovery Act of
1976, 42 U.S.C. Sections 6901 et seq. ("RCRA") and regulations promulgated
thereunder; provided that in the event either CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply as of the effective date of such amendment and provided further, to the
extent that the laws of a state wherein the property lies establishes a meaning
for "Release" or "Disposal" which is broader than specified in either CERCLA or
RCRA, such broader meaning shall apply.
Replacement Bank. See Section 4.11.
Replacement Notice. See Section 4.11.
Reserve Rate. The rate, expressed as a decimal, at which the Banks
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any subsequent or similar regulation
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
such term is defined in
20
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Regulation D), or against any other category of liabilities which might be
incurred by the Banks to fund Eurodollar Loans, if such liabilities were
outstanding.
Revolving Credit Loans. Revolving credit loans made or to be made by the
Banks to the Borrowers pursuant to Section 2.
Revolving Credit Notes. The promissory notes of the Borrowers evidencing
the Revolving Credit Loans hereunder, dated as of the date hereof and in
substantially the form of Exhibit A hereto.
Section 20 Subsidiary. A subsidiary of the bank holding company
controlling any Bank, which subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Security Agreement. The Security Agreement, dated as of the date hereof,
among the Borrowers and the Agent in form and substance satisfactory to the
Agent, as amended and in effect from time to time.
Security Documents. The Security Agreement, Stock Pledge Agreements and
▇▇▇▇▇▇▇▇▇▇▇▇ Pledge Agreement, each as amended and in effect from time to time,
and any other instruments or documents evidencing or perfecting the Agent's lien
on the assets of the Borrowers for the benefit of the Banks.
Stock Pledge Agreements. Collectively, the Stock Pledge Agreements,
dated as of the date hereof, (a) between the Parent and the Agent, pursuant to
which 100% of the capital stock of the Subsidiaries (other than W.C.
International) is pledged to the Agent for the benefit of the Banks and (b)
between W.C. of Washington and the Agent, pursuant to which 100% of the stock of
W.C. International is pledged to the Agent for the benefit of the Banks, each in
form and substance satisfactory to the Agent, as amended and in effect from time
to time.
Subsidiary. Any corporation, association, trust, or other business
entity of which any Borrower shall at any time own directly, or indirectly
through a Subsidiary or Subsidiaries, at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Swap Contracts. Any agreement (including any master agreement and any
agreement, whether or not in writing, relating to any single transaction) that
is an interest rate swap agreement, basis swap, forward rate agreement,
commodity swap, commodity option, equity or equity index swap or option, bond
option, interest rate option, forward foreign exchange agreement, rate cap,
collar or floor agreement, currency swap agreement, cross-currency rate swap
agreement, swaption, currency option or other similar agreement (including any
option to enter into any of the foregoing).
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Synthetic Lease. Any lease treated as an operating lease under generally
accepted accounting principles and as a loan or financing for U.S. income tax
purposes.
Total Commitment. See Section 2.1.
Trustee. ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇, as Trustee for the ▇▇▇▇▇▇▇▇▇▇▇▇ Family
Trust dated 6/18/97.
W.C. of Idaho. Waste Connections of Idaho, Inc., a Delaware corporation
and a wholly-owned Subsidiary of the Parent.
W.C. International. Waste Connections International, Inc., a Washington
corporation and a wholly-owned Subsidiary of W.C. of Washington.
W.C. of Washington. Waste Connections of Washington, Inc., a Washington
corporation and a wholly-owned Subsidiary of the Parent.
Year 2000 Problem. The risk that computer applications used by the
Borrowers may be unable to recognize and properly perform date-sensitive
functions involving certain dates prior to, and any date after, December 31,
1999.
Section 1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Credit Agreement.
(b) The singular includes the plural and the plural
includes the singular.
(c) A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms capitalized but not otherwise defined
herein have the meanings assigned to them by generally accepted accounting
principles applied on a consistent basis by the accounting entity to which they
refer.
(f) The words "include," "includes" and "including" are not
limiting.
(g) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in
22
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effect in the Commonwealth of Massachusetts, have the meanings assigned to them
therein.
(h) Reference to a particular "Section" refers to that
section of this Credit Agreement unless otherwise indicated.
(i) The words "herein," "hereof," "hereunder" and words of
like import shall refer to this Credit Agreement as a whole and not to any
particular section or subdivision of this Credit Agreement.
(j) Unless otherwise expressly indicated, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including," the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and including."
Section 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Credit Agreement, each of the Banks severally agrees to lend to
the Borrowers and the Borrowers may borrow, repay, and reborrow from time to
time from the Closing Date to the Maturity Date, upon notice by the Borrowers to
the Agent given in accordance with Section 2.6, its Commitment Percentage of the
Revolving Credit Loans as are requested by the Borrowers, provided that the
outstanding amount of Revolving Credit Loans, unpaid Reimbursement Obligations,
and the Maximum Drawing Amount shall not exceed a maximum aggregate amount
outstanding of $25,000,000 at any time, as such amount may be reduced pursuant
to Section 2.2 hereof (the "Total Commitment"), and provided further that the
maximum amount of Loans and Letters of Credit available hereunder shall be
$17,000,000 until a CFO acceptable to the Banks has commenced employment with
the Borrowers. The Revolving Credit Loans shall be made pro rata in accordance
with each Bank's Commitment Percentage. Each request for a Loan hereunder shall
constitute a representation and warranty by the Borrowers that the conditions
set forth in Section 9 and Section 10, as the case may be, have been satisfied
on the date of such request.
Section 2.2. REDUCTION OF TOTAL COMMITMENT.
(a) The Borrowers shall have the right at any time and from time to time
upon five (5) Business Days' prior written notice to the Agent to reduce by
$1,000,000 or an integral multiple of $500,000 in excess thereof, or terminate
entirely, the Total Commitment, whereupon the Commitments of the Banks shall be
reduced pro rata in accordance with their respective Commitment Percentages of
the amount specified in such notice or, as the case may be, terminated. The
Agent will notify the Banks promptly after receiving any notice of the Borrowers
delivered pursuant to this Section 2.2.
23
-17-
(b) No reduction or termination of the Commitments once made may be
revoked; the portion of the Commitments reduced or terminated may not be
reinstated; and amounts in respect of such reduced or terminated portion may not
be reborrowed.
Section 2.3. THE REVOLVING CREDIT NOTES. The Revolving Credit Loans
shall be evidenced by separate promissory notes of the Borrowers in
substantially the form of Exhibit A hereto (each a "Revolving Credit Note"),
dated as of the Closing Date and completed with appropriate insertions. One
Revolving Credit Note shall be payable to the order of each Bank in a principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Revolving Credit Loans made by such Bank, plus interest accrued thereon, as
set forth below. The Borrowers irrevocably authorize each Bank to make or cause
to be made, in connection with a Drawdown Date of any Revolving Credit Loan or
at the time of receipt of any payment of principal on such Bank's Revolving
Credit Note, an appropriate notation on such Bank's records reflecting the
making of such Loan or the receipt of such payment (as the case may be). The
outstanding amount of the Loans set forth on such Bank's record shall be prima
facie evidence of the principal amount thereof owing and unpaid to such Bank,
but the failure to record, or any error in so recording, any such amount shall
not limit or otherwise affect the obligation of the Borrowers hereunder or under
any Revolving Credit Note to make payments of principal of or interest on any
Revolving Credit Note when due.
Section 2.4. INTEREST ON REVOLVING CREDIT LOANS. The outstanding
principal amount of the Revolving Credit Loans shall bear interest at the rate
per annum equal to (a) the Base Rate plus the Applicable Base Rate Margin on
Base Rate Loans or (b) the Eurodollar Rate plus the Applicable Eurodollar Margin
on Eurodollar Loans. Interest shall be payable (i) quarterly in arrears on the
first Business Day of each calendar quarter, commencing April 1, 1998, on Base
Rate Loans, (ii) on the last day of the applicable Interest Period, and if such
Interest Period is longer than three (3) months, also on the day which is three
(3) months after the commencement of such Interest Period, on Eurodollar Loans,
and (iii) on the Maturity Date for all Revolving Credit Loans.
Section 2.5. ELECTION OF EURODOLLAR RATE; NOTICE OF ELECTION; INTEREST
PERIODS; MINIMUM AMOUNTS.
(a) At the Borrowers' option, so long as no Default or
Event of Default has occurred and is then continuing, the Borrowers may (i)
elect to convert any Revolving Credit Loan which is a Base Rate Loan or a
portion thereof to a Eurodollar Loan, (ii) at the time of any Loan and Letter of
Credit Request, specify that a requested Revolving Credit Loan shall be a
Eurodollar Loan, or (iii) upon expiration of the applicable Interest Period,
elect to maintain an existing Eurodollar Loan as such, provided that the
Borrowers give notice to the Agent pursuant to Section 2.5(b) hereof. Upon
determining any Eurodollar Rate, the Agent shall forthwith
24
-18-
provide notice thereof to the Borrowers and the Banks, and each such notice to
the Borrowers and the Banks shall be considered prima facie correct and binding,
absent manifest error.
(b) Three (3) Eurodollar Business Days prior to the making
of any Eurodollar Loan or the conversion of any Base Rate Loan to a Eurodollar
Loan, or, in the case of an outstanding Eurodollar Loan, the expiration date of
the applicable Interest Period, the Borrowers shall give telephonic notice
(confirmed by telecopy on the same Eurodollar Business Day) to the Agent not
later than 11:00 a.m. (Boston time) of their election pursuant to Section
2.5(a). Each such notice delivered to the Agent shall specify the aggregate
principal amount of the Loans to be borrowed or maintained as or converted to
Eurodollar Loans and the requested duration of the Interest Period that will be
applicable to such Eurodollar Loan, and shall be irrevocable and binding upon
the Borrowers. If the Borrowers shall fail to give the Agent notice of their
election hereunder together with all of the other information required by this
Section 2.5(b) with respect to any Revolving Credit Loan, such Loan shall be
deemed a Base Rate Loan. In the event that the Borrowers fail to provide any
such notice with respect to the continuation of any Eurodollar Loan as such,
then such Eurodollar Loan shall be automatically converted to a Base Rate Loan
at the end of the then expiring Interest Period relating thereto.
(c) Notwithstanding anything herein to the contrary, the
Borrowers may not specify an Interest Period that would extend beyond the
Maturity Date.
(d) All Revolving Credit Loans shall be in a minimum amount
of $100,000 or an integral multiple of $100,000 in excess thereof. In no event
shall the Borrowers have more than five (5) different maturities of Eurodollar
Loans outstanding at any time.
Section 2.6. REQUESTS FOR REVOLVING CREDIT LOANS. The Borrowers shall
give to the Agent written notice in the form of Exhibit B hereto (or telephonic
notice confirmed by telecopy on the same Business Day in the form of Exhibit B
hereto) of each Revolving Credit Loan requested hereunder (a "Loan and Letter of
Credit Request") not later than (a) 11:00 a.m. Boston time one (1) Business Day
prior to the proposed Drawdown Date of any Revolving Credit Loan which is a Base
Rate Loan, or (b) 11:00 a.m. Boston time three (3) Eurodollar Business Days
prior to the proposed Drawdown Date of any Eurodollar Loan. Each such notice
shall be given by the Borrowers and shall specify the principal amount of the
Revolving Credit Loan requested and shall include a current Loan and Letter of
Credit Request reflecting the Maximum Drawing Amount. Each Loan and Letter of
Credit Request shall be irrevocable and binding on the Borrowers and shall
obligate the Borrowers to accept the Revolving Credit Loan requested from the
Banks on the proposed Drawdown Date. Each of the representations and warranties
made by or on behalf of the Borrowers to the Banks or the Agent in this Credit
Agreement or any other Loan Document shall be true and correct in all material
respects when made and shall, for
25
-19-
all purposes of this Credit Agreement, be deemed to be repeated on and as of the
date of the submission of any Loan and Letter of Credit Request and on and as of
the Drawdown Date of such Revolving Credit Loan, or the date of issuance of such
Letter of Credit (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and the other Loan Documents
and changes occurring in the ordinary course of business that singly or in the
aggregate are not materially adverse, or to the extent that such representations
and warranties expressly relate solely to an earlier date). The Agent shall
promptly notify each Bank of each Loan and Letter of Credit Request received by
the Agent.
Section 2.7. FUNDS FOR REVOLVING CREDIT LOANS.
(a) Not later than 1:00 p.m. (Boston time) on the proposed Drawdown Date
of any Revolving Credit Loan, each of the Banks will make available to the
Agent, at the Agent's Head Office, in immediately available funds, the amount of
such Bank's Commitment Percentage of the amount of the requested Revolving
Credit Loans. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by Section ss.9 and 10 and the satisfaction of the other
conditions set forth therein, to the extent applicable, the Agent will make
available to the Borrowers in immediately available funds the aggregate amount
of such Revolving Credit Loans made available to the Agent by the Banks. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Revolving Credit Loans shall not relieve any other Bank from its
several obligation hereunder to make available to the Agent the amount of such
other Bank's Commitment Percentage of any requested Revolving Credit Loans.
(b) The Agent may, unless notified to the contrary by any Bank prior to
a Drawdown Date, assume that such Bank has made available to the Agent on such
Drawdown Date the amount of such Bank's Commitment Percentage of the Revolving
Credit Loans to be made on such Drawdown Date, and the Agent may (but shall not
be required to), in reliance upon such assumption, make available to the
Borrowers a corresponding amount. If any Bank makes available to the Agent such
amount on a date after such Drawdown Date, such Bank shall pay to the Agent on
demand an amount equal to the product of (i) the average computed for the period
referred to in clause (iii) below, of the weighted average interest rate paid by
the Agent for federal funds acquired by the Agent during each day included in
such period, times (ii) the amount of such Bank's Commitment Percentage of such
Revolving Credit Loans, times (iii) a fraction, the numerator of which is the
number of days that elapse from and including such Drawdown Date to the date on
which the amount of such Bank's Commitment Percentage of such Revolving Credit
Loans shall become immediately available to the Agent, and the denominator of
which is 365. A statement of the Agent submitted to such Bank with respect to
any amounts owing under this paragraph shall be prima facie evidence, absent
manifest error, of the amount due and
26
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owing to the Agent by such Bank. If the amount of such Bank's Commitment
Percentage of such Revolving Credit Loans is not made available to the Agent by
such Bank within three (3) Business Days following such Drawdown Date, the Agent
shall be entitled to recover such amount from the Borrowers on demand, with
interest thereon at the rate per annum applicable to the Revolving Credit Loans
made on such Drawdown Date.
Section 2.8. MATURITY OF THE LOANS. The Revolving Credit Loans shall be
due and payable on the Maturity Date. The Borrowers jointly and severally
promise to pay on the Maturity Date all Revolving Credit Loans outstanding on
such date, together with any and all accrued and unpaid interest thereon.
Section 2.9. MANDATORY REPAYMENTS OF THE REVOLVING CREDIT LOANS. If at
any time the outstanding amount of the Revolving Credit Loans plus the Maximum
Drawing Amount plus unpaid Reimbursement Obligations exceeds the Total
Commitment, whether by reduction of the Total Commitment or otherwise, then the
Borrowers shall immediately pay the amount of such excess to the Agent for
application to the Revolving Credit Loans, or if no Revolving Credit Loans shall
be outstanding, to be held by the Agent as collateral security for the
Reimbursement Obligations, provided, however, that if the amount of cash
collateral held by the Agent pursuant to this Section 2.9 exceeds the amount of
the Obligations, the Agent shall return such excess to the Borrowers.
Section 2.10. OPTIONAL PREPAYMENTS OR REPAYMENTS OF REVOLVING CREDIT
LOANS. The Borrowers shall have the right, at their election, to repay or prepay
the outstanding amount of the Revolving Credit Loans, as a whole or in part, at
any time without penalty or premium (other than the obligation to reimburse the
Banks and the Agent pursuant to Section 4.8 hereof). The Borrowers shall give
written notice to the Agent (or telephonic notice confirmed in writing) no later
than (a) 1:00 p.m. (Boston time) on the Business Day of the proposed prepayment
or repayment of any Base Rate Loan or (b) 1:00 p.m. (Boston time) three (3)
Eurodollar Business Days prior to the proposed prepayment or repayment of any
Eurodollar Loan, in each case specifying the proposed date of prepayment or
repayment of Revolving Credit Loans and the principal amount to be paid. Each
such partial repayment of the Revolving Credit Loans shall be $50,000 or an
integral multiple of $50,000 in excess thereof, and shall be accompanied by the
payment of accrued interest on the principal prepaid to the date of repayment
and shall be applied, in the absence of instruction by the Borrowers, first to
the principal of Base Rate Loans and then to the principal of Eurodollar Loans.
Each partial prepayment shall be allocated among the Banks, in proportion, as
nearly as practicable, to the respective unpaid principal amount of each Bank's
Revolving Credit Loans, with adjustments to the extent practicable to equalize
any prior repayments not exactly in proportion. Unless the Borrowers elect to
repay the total aggregate outstanding amount of the Revolving Credit Loans, the
Borrowers
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may not elect to make any repayments which would reduce the total aggregate
outstanding amount of the Revolving Credit Loans to an amount less than $50,000.
Section 3. LETTERS OF CREDIT.
Section 3.1. LETTER OF CREDIT COMMITMENTS.
(a) Subject to the terms and conditions hereof and the
execution and receipt of a Loan and Letter of Credit Request reflecting the
Maximum Drawing Amount of all Letters of Credit (including the requested Letter
of Credit) and a Letter of Credit Application, the Agent, on behalf of the Banks
and in reliance upon the agreement of the Banks set forth in Section 3.1(b) and
upon the representations and warranties of the Borrowers contained herein,
agrees to issue standby letters of credit, in such form as may be requested from
time to time by the Borrowers and agreed to by the Agent; provided, however,
that, after giving effect to such request, the Maximum Drawing Amount shall not
exceed the lesser of (i) $5,000,000 or (ii) the Total Commitment minus the
aggregate outstanding amount of the Revolving Credit Loans. No Letter of Credit
shall have an expiration date later than the earlier of (i) one (1) year after
the date of issuance of the Letter of Credit (which may incorporate automatic
renewals for periods of up to one (1) year, provided that the Agent may, upon 30
days' notice to the beneficiary, cancel such Letter of Credit which has been
renewed beyond its initial one (1) year term), or (ii) thirty (30) days prior to
the Maturity Date.
(b) Each Bank severally agrees that it shall be absolutely
liable, without regard to the occurrence of any Default or Event of Default or
any other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage thereof, to reimburse the Agent on demand for the amount
of each draft paid by the Agent under each Letter of Credit issued in accordance
with the terms hereof to the extent that such amount is not reimbursed by the
Borrowers pursuant to Section 3.2 (such agreement for a Bank being called herein
the "Letter of Credit Participation" of such Bank).
(c) Each such payment made by a Bank shall be treated as
the purchase by such Bank of a participating interest in the Borrowers'
Reimbursement Obligation under Section 3.2 in an amount equal to such payment.
Each Bank shall share in accordance with its participating interest in any
interest which accrues pursuant to Section 3.2.
Section 3.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to
induce the Agent to issue, extend and renew each Letter of Credit and the Banks
to participate therein, the Borrowers hereby agree to reimburse or pay to the
Agent with respect to each Letter of Credit issued, extended or renewed by the
Agent hereunder as follows:
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(a) on each date that any draft presented under any Letter
of Credit is honored by the Agent or the Agent otherwise makes payment with
respect thereto, (i) the amount paid by the Agent under or with respect to such
Letter of Credit, and (ii) the amount of any taxes, fees, charges or other costs
and expenses whatsoever incurred by the Agent or any Bank in connection with any
payment made by the Agent or any Bank under, or with respect to, such Letter of
Credit; provided however, if the Borrowers do not reimburse the Agent on the
Drawdown Date, such amount shall, provided that no Event of Default under
Sections 12.1(h) or 12.1(i) has occurred, become automatically a Revolving
Credit Loan which is a Base Rate Loan advanced hereunder in an amount equal to
such sum; and
(b) upon the Maturity Date, or the termination of the Total
Commitment, or the acceleration of the Reimbursement Obligations in accordance
with Section 12, an amount equal to the Maximum Drawing Amount, which amount
shall be held by the Agent for the benefit of the Banks and the Agent as cash
collateral for all Reimbursement Obligations.
Section 3.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented
or other demand for payment shall be made under any Letter of Credit, the Agent
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. On the date that such draft is paid or other
payment is made by the Agent, the Agent shall promptly notify the Banks of the
amount of any unpaid Reimbursement Obligation. No later than 3:00 p.m. (Boston
time) on the Business Day next following the receipt of such notice, each Bank
shall make available to the Agent, at the Agent's Head Office, in immediately
available funds, such Bank's Commitment Percentage of such Reimbursement
Obligation, together with an amount equal to the product of (a) the weighted
average, computed for the period referred to in clause (c) below, of the
interest rate paid by the Agent for federal funds acquired by the Agent during
each day included in such period, times (b) the amount equal to such Bank's
Commitment Percentage of such unpaid Reimbursement Obligation, times (c) a
fraction, the numerator of which is the number of days that have elapsed from
and including the date the Agent paid the draft presented for honor or otherwise
made payment until the date on which such Bank's Commitment Percentage of such
unpaid Reimbursement Obligation shall become immediately available to the Agent,
and the denominator of which is 365. The responsibility of the Agent to the
Borrowers and the Banks shall be only to determine that the documents (including
each draft) delivered under each Letter of Credit in connection with such
presentment shall be in conformity in all material respects with such Letter of
Credit.
Section 3.4. OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or
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have had against the Agent, any Bank or any beneficiary of a Letter of Credit.
Subject to the obligations of the Banks pursuant to Article V of the Uniform
Commercial Code and the obligations of the Agent pursuant to the last sentence
of Section 3.3, the Borrowers further agree with the Agent and the Banks that
the Agent and the Banks shall not be responsible for, and the Borrowers'
Reimbursement Obligations under Section 3.2 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even if such documents should in fact prove to be in any or all
respects invalid, fraudulent or forged, or any dispute between or among the
Borrowers, the beneficiary of any Letter of Credit or any financing institution
or other party to which any Letter of Credit may be transferred or any claims or
defenses whatsoever of the Borrowers against the beneficiary of any Letter of
Credit or any such transferee. The Agent and the Banks shall not be liable for
any error, omission, interruption or delay in transmission, dispatch or delivery
of any message or advice, however transmitted, in connection with any Letter of
Credit. The Borrowers agree that any action taken or omitted by the Agent or any
Bank under or in connection with each Letter of Credit and the related drafts
and documents, if done in good faith, shall be binding upon the Borrowers and
shall not result in any liability on the part of the Agent or any Bank to the
Borrowers.
Section 3.5. RELIANCE BY AGENT. To the extent not inconsistent with
Section 3.4, the Agent shall be entitled to rely, and shall be fully protected
in relying upon, any Letter of Credit, draft, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document believed by it to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent.
Section 4. FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL
LIABILITY.
Section 4.1. FEES.
(a) COMMITMENT FEE. The Borrowers agree to pay to the
Agent, for the respective account of each Bank, a fee (the "Commitment Fee")
equal to the Applicable Commitment Rate multiplied by the average daily amount
of the unused portion of such Bank's Commitment during each calendar quarter or
portion thereof from the Closing Date to the Maturity Date (or to the date of
termination in full of the Total Commitment, if earlier). The Commitment Fee
shall be payable quarterly in arrears on the first day of each calendar quarter
for the immediately preceding calendar quarter commencing on April 1, 1998, with
a final payment on the Maturity Date.
(b) LETTER OF CREDIT FEES. The Borrowers shall pay a fee
(the "Letter of Credit Fee") equal to the Applicable L/C Margin multiplied by
the Maximum Drawing Amount of each Letter of Credit. Such Letter of Credit Fee
shall
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be payable to the Agent for the account of the Banks, to be shared pro rata by
the Banks in accordance with their respective Commitment Percentages. The
Borrowers shall also pay a fee (the "Issuance Fee") to the Agent, for its own
account, equal to 0.125% per annum on the Maximum Drawing Amount of all Letters
of Credit issued by such Bank, plus its customary administrative charges. The
Letter of Credit Fee and the Issuance Fee shall be payable for the number of
days each Letter of Credit is outstanding, and shall be payable quarterly in
arrears on the first day of each calendar quarter for the immediately preceding
calendar quarter, and on the Maturity Date.
(c) CLOSING FEES. The Borrowers shall pay at closing any
fees owing to any of the Banks, as previously agreed between the Borrowers and
the Agent.
Section 4.2. PAYMENTS.
(a) All payments of principal, interest, Reimbursement
Obligations, fees and any other amounts due hereunder or under any of the other
Loan Documents shall be made to the Agent, for the respective accounts of the
Banks and the Agent, to be received at the Agent's Head Office in immediately
available funds by 12:00 p.m. (Boston time) on any due date.
(b) All payments by the Borrowers hereunder and under any
of the other Loan Documents shall be made without setoff or counterclaim and
free and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Borrowers are compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrowers with respect to any amount payable
by them hereunder or under any of the other Loan Documents, the Borrowers will
pay to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or under
such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrowers. In the event that the Borrowers are
required to make such deduction or withholding as a result of the fact that a
Bank is organized outside of the United States, such Bank shall use its
reasonable best efforts to transfer its Loans to an affiliate organized within
the United States if such transfer would have no adverse effect on such Bank or
the Loans. The Borrowers will deliver promptly to the Bank certificates or other
valid vouchers for all taxes or other charges deducted from or paid with respect
to payments made by the Borrowers hereunder or under such other Loan Document.
(c) Whenever a payment hereunder or under any of the other
Loan Documents becomes due on a day that is not a Business Day, the due date for
such
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payment shall be extended to the next succeeding Business Day, and interest
shall accrue during such extension; provided that any Interest Period for any
Eurodollar Loan which ends on a day that is not a Eurodollar Business Day shall
end on the next succeeding Eurodollar Business Day unless the result of such
extension would be to carry such Interest Period into another calendar month, in
which event such Interest Period shall end on the immediately preceding
Eurodollar Business Day.
Section 4.3. COMPUTATIONS. All computations of interest on Base Rate
Loans and of Commitment Fees, Letter of Credit Fees or other fees shall, unless
otherwise expressly provided herein, be based on a 365-day year (or 366-day
year, as applicable) and paid for the actual number of days elapsed. All
computations of interest on Eurodollar Loans shall, unless otherwise expressly
provided herein, be based on a 360-day year and paid for the actual number of
days elapsed.
Section 4.4. CAPITAL ADEQUACY. If any present or future law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by any Bank or the Agent or any
corporation controlling such Bank or the Agent, and such Bank or the Agent
determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of such Bank's or the Agent's Loans,
Letter of Credit Participations or Letters of Credit, or commitment with respect
thereto, then such Bank or the Agent may notify the Borrowers of such fact. To
the extent that the costs of such increased capital requirements are not
reflected in the Base Rate (if relating to Base Rate Loans), the Borrowers and
such Bank or (as the case may be) the Agent shall thereafter attempt to
negotiate in good faith, within thirty (30) days of the day on which the
Borrowers receive such notice, an adjustment payable hereunder that will
adequately compensate such Bank or the Agent in light of these circumstances. If
the Borrowers and such Bank or the Agent are unable to agree to such adjustment
within thirty (30) days of the date on which the Borrowers receive such notice,
then commencing on the date of such notice (but not earlier than the effective
date of any such increased capital requirement), the fees payable hereunder
shall increase by an amount that will, in such Bank's or the Agent's reasonable
determination, provide adequate compensation. Each Bank and the Agent shall
allocate such cost increases among its customers in good faith and on an
equitable basis.
Section 4.5. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to Section 4.4 and a reasonable explanation of such
amounts which are due, submitted by any Bank or the Agent to the Borrowers,
shall be conclusive, absent manifest error, that such amounts are due and owing.
Section 4.6. INTEREST ON OVERDUE AMOUNTS. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest
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compounded monthly and payable on demand at a rate per annum equal to the Base
Rate plus the Applicable Base Rate Margin plus two (2) percentage points (2.00%)
until such amount shall be paid in full (after, as well as before, judgment).
Section 4.7. INTEREST LIMITATION. Notwithstanding any other term of this
Credit Agreement or any Note or any other document referred to herein or
therein, the maximum amount of interest which may be charged to or collected
from any person liable hereunder or under any Note by any Bank shall be
absolutely limited to, and shall in no event exceed, the maximum amount of
interest which could lawfully be charged or collected under applicable law
(including, to the extent applicable, the provisions of Section 5197 of the
Revised Statutes of the United States of America, as amended, 12 U.S.C. Section
85, as amended), so that the maximum of all amounts constituting interest under
applicable law, howsoever computed, shall never exceed as to any Person liable
therefor such lawful maximum, and any term of this Credit Agreement, the Notes,
the Letter of Credit Applications, or any other document referred to herein or
therein which could be construed as providing for interest in excess of such
lawful maximum shall be and hereby is made expressly subject to and modified by
the provisions of this paragraph.
Section 4.8. EURODOLLAR INDEMNITY. The Borrowers agree to indemnify the
Banks and the Agent and to hold them harmless from and against any loss, cost or
expenses (including loss of anticipated profits) that the Banks and the Agent
may sustain or incur as a consequence of (a) default by the Borrowers in payment
of the principal amount of or any interest on any Eurodollar Loans as and when
due and payable, including any such loss or expense arising from interest or
fees payable by any Bank or the Agent to lenders of funds obtained by it in
order to maintain its Eurodollar Loans, (b) a prepayment of principal on any
Eurodollar Loan, including prepayments which are the result of acceleration by
the Banks, or (c) default by the Borrowers in making a borrowing or conversion
after the Borrowers have given (or are deemed to have given) notice pursuant to
Section 2.5 or Section 2.6, the making of any payment of a Eurodollar Loan or
the making of any conversion of any such Eurodollar Loan to a Base Rate Loan on
a day that is not the last day of the applicable Interest Period with respect
thereto, including interest or fees payable by any Bank to lenders of funds
obtained by it in order to maintain any such Loans.
Section 4.9. ILLEGALITY; INABILITY TO DETERMINE EURODOLLAR RATE.
Notwithstanding any other provision of this Credit Agreement, if (a) the
introduction of, any change in, or any change in the interpretation of, any law
or regulation applicable to the Agent or any Bank shall make it unlawful, or any
central bank or other governmental authority having jurisdiction thereof shall
assert that it is unlawful, for any Bank or the Agent to perform its obligations
in respect of any Eurodollar Loans, or (b) if any Bank or the Agent shall
reasonably determine with respect to Eurodollar Loans that (i) by reason of
circumstances affecting any Eurodollar interbank market, adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate which would otherwise
be
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applicable during any Interest Period, or (ii) deposits of Dollars in the
relevant amount for the relevant Interest Period are not available to such Bank
or the Agent in any Eurodollar interbank market, or (iii) the Eurodollar Rate
does not or will not accurately reflect the cost to such Bank or the Agent of
obtaining or maintaining the applicable Eurodollar Loans during any Interest
Period, then such Bank or the Agent shall promptly give telephonic, telex or
cable notice of such determination to the Borrowers (which notice shall be
conclusive and binding upon the Borrowers). Upon such notification by such Bank
or the Agent, the obligation of such Bank or the Agent to make Eurodollar Loans
shall be suspended until such Bank or the Agent determines that such
circumstances no longer exist, and the outstanding Eurodollar Loans shall
continue to bear interest at the applicable rate based on the Eurodollar Rate
until the end of the applicable Interest Period, and thereafter shall be deemed
converted to Base Rate Loans in equal principal amounts.
Section 4.10. ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall impose on any
Bank any tax, levy, impost, duty, charge fees, deduction or withholdings of any
nature or requirements with respect to this Credit Agreement, the other Loan
Documents, the Loans, such Bank's Commitment, the Letters of Credit or any class
of loans or commitments or letters of credit of which any of the Loans, the
Commitments or the Letters of Credit forms a part, and the result of any of the
foregoing is:
(i) to increase the cost to such Bank of making, funding,
issuing, renewing, extending or maintaining the Loans, such Bank's Commitment,
or the Letters of Credit; or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank hereunder on account of such Bank's Commitment, the
Loans, or drawings under the Letters of Credit, or
(iii) to require such Bank to make any payment or to forego
any interest or other sum payable hereunder, the amount of which payment or
foregone interest or other sum is calculated by reference to the gross amount of
any sum receivable or deemed received by such Bank from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by such Bank
at any time and from time to time and as often as the occasion therefor may
arise, pay to such Bank such additional amounts as will be sufficient to
compensate such Bank for such additional cost, reduction, payment or foregone
interest or other sum (after such
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Bank shall have allocated the same fairly and equitably among all customers of
any class generally affected thereby).
Section 4.11. REPLACEMENT OF BANKS. If any Bank (an "Affected Bank") (i)
makes demand upon the Borrowers for (or if the Borrowers are otherwise required
to pay) amounts pursuant to Sections 4.4 or 4.10 or (ii) is unable to
make or maintain Eurodollar Loans as a result of a condition described in
Section 4.9, the Borrowers may, within 90 days of receipt of such demand or
notice (or the occurrence of such other event causing the Borrowers to be
required to pay such compensation or causing Section 4.9 to be applicable), by
notice in writing to the Agent and such Affected Bank (a "Replacement Notice")
(A) request the Affected Bank to cooperate with the Borrowers in obtaining a
replacement bank satisfactory to the Agent and the Borrowers (the "Replacement
Bank"); (B) request the non-Affected Banks to acquire and assume all of the
Affected Bank's Loans and Commitment, as provided herein, but none of such Banks
shall be under an obligation to do so; or (C) designate a Replacement Bank
reasonably satisfactory to the Agent. If any satisfactory Replacement Bank shall
be obtained, and/or any of the non-Affected Banks shall agree to acquire and
assume all of the Affected Bank's Loans and Commitment, then such Affected Bank
shall, so long as no Event of Default shall have occurred and be continuing,
assign, in accordance with Section 17, all of its Commitment, Loans, Notes and
other rights and obligations under this Credit Agreement and all other Loan
Documents to such Replacement Bank or non-Affected Banks, as the case may be, in
exchange for payment of the principal amount so assigned and all interest and
fees accrued on the amount so assigned, plus all other Obligations then due and
payable to the Affected Bank; provided, however, that (i) such assignment shall
be without recourse, representation or warranty and shall be on terms and
conditions reasonably satisfactory to such Affected Bank and such Replacement
Bank and/or non-Affected Banks, as the case may be, and (ii) prior to any such
assignment, the Borrowers shall have paid to such Affected Bank all amounts
properly demanded and unreimbursed under Sections 4.4, 4.8, 4.9 and 4.10.
Upon the effective date of such assignment, the Borrowers shall issue
replacement Notes to such Replacement Bank and/or non-Affected Banks, as the
case may be, and such institution shall become a "Bank" for all purposes under
this Credit Agreement and the other Loan Documents.
Section 4.12. CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Banks under this Credit Agreement, for the
mutual benefit, directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each other Borrower to accept joint and
several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and
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several liability with the other Borrowers with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 4.12), it being the intention of the
parties hereto that all of the Obligations shall be the joint and several
Obligations of each of the Borrowers without preferences or distinction among
them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event the other Borrowers will make such payment with respect to, or perform,
such Obligation.
(d) The Obligations of each of the Borrowers under the provisions of
this Section 4.12 constitute full recourse Obligations of each of the Borrowers
enforceable against each such corporation to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Credit Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Credit Agreement,
each of the Borrowers hereby waives notice of acceptance of its joint and
several liability, notice of any Loans made under this Credit Agreement, notice
of any action at any time taken or omitted by the Banks under or in respect of
any of the Obligations, and, generally, to the extent permitted by applicable
law, all demands, notices and other formalities of every kind in connection with
this Credit Agreement. Each of the Borrowers hereby assents to, and waives
notice of, any extension or postponement of the time for the payment of any of
the Obligations, the acceptance of any payment of any of the Obligations, the
acceptance of any partial payment thereon, any waiver, consent or other action
or acquiescence by the Banks at any time or times in respect of any default by
any of the Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Credit Agreement, any and all other indulgences
whatsoever by the Banks in respect of any of the Obligations, and the taking,
addition, substitution or release, in whole or in part, at any time or times, of
any security for any of the Obligations or the addition, substitution or
release, in whole or in part, of any of the Borrowers. Without limiting the
generality of the foregoing, each of the Borrowers assents to any other action
or delay in acting or failure to act on the part of the Banks with respect to
the failure by any of the Borrowers to comply with any of its respective
Obligations, including, without limitation, any failure strictly or diligently
to assert any right or to pursue any remedy or to comply fully with applicable
laws or regulations thereunder, which might, but for the provisions of this
Section 4.12, afford grounds for terminating, discharging or relieving any of
the Borrowers, in whole or in part, from any of its Obligations under this
Section 4.12, it being the intention of each of the Borrowers that, so long as
any of the Obligations hereunder remain unsatisfied, the Obligations of such
Borrowers under this Section 4.12 shall not be discharged except by performance
and then only to the extent
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of such performance. The Obligations of each of the Borrowers under this Section
4.12 shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, re-construction or similar proceeding
with respect to any of the Borrowers or the Banks. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any of
the Borrowers or the Banks.
(f) The provisions of this Section 4.12 are made for the benefit of the
Banks and their successors and assigns, and may be enforced in good faith by
them from time to time against any or all of the Borrowers as often as the
occasion therefor may arise and without requirement on the part of the Banks
first to marshal any of their claims or to exercise any of their rights against
any other Borrower or to exhaust any remedies available to them against any
other Borrower or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy. The provisions of
this Section 4.12 shall remain in effect until all of the Obligations shall have
been paid in full or otherwise fully satisfied. If at any time, any payment, or
any part thereof, made in respect of any of the Obligations, is rescinded or
must otherwise be restored or returned by the Banks upon the insolvency,
bankruptcy or reorganization of any of the Borrowers, or otherwise, the
provisions of this Section 4.12 will forthwith be reinstated in effect, as
though such payment had not been made.
Section 5. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and
severally represent and warrant to the Banks that on and as of the date of this
Credit Agreement, each Drawdown Date, and the date of issuance of any Letter of
Credit (with any disclosure on a schedule pursuant to this Section 5 applying to
all relevant representations and warranties, regardless of whether such schedule
is referenced in each relevant representation):
Section 5.1. CORPORATE AUTHORITY.
(a) INCORPORATION; GOOD STANDING. Each Borrower (i) is a corporation
duly organized, validly existing and in good standing or in current status under
the laws of its respective state of incorporation, (ii) has all requisite
corporate power to own its property and conduct its business as now conducted
and as presently contemplated, and (iii) is in good standing as a foreign
corporation and is duly authorized to do business in each jurisdiction in which
its property or business as presently conducted or contemplated makes such
qualification necessary except where a failure to be so qualified would not have
a material adverse effect on the business, assets or financial condition of such
Borrower.
(b) AUTHORIZATION. The execution, delivery and performance of the Loan
Documents and the transactions contemplated hereby and thereby (i) are within
the corporate authority of each Borrower, (ii) have been duly authorized by all
necessary corporate proceedings, (iii) do not conflict with or result in any
material breach or
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contravention of any provision of law, statute, rule or regulation to which any
Borrower is subject or any judgment, order, writ, injunction, license or permit
applicable to any Borrower so as to materially adversely affect the assets,
business or any activity of the Borrowers, and (iv) do not conflict with any
provision of the corporate charter or bylaws of any Borrower or any agreement or
other instrument binding upon them.
(c) ENFORCEABILITY. The execution, delivery and performance of the Loan
Documents will result in valid and legally binding obligations of the Borrowers
enforceable against each in accordance with the respective terms and provisions
hereof and thereof, except as enforceability is limited by bankruptcy,
insolvency, reorganization, moratorium or other laws relating to or affecting
generally the enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding therefor may
be brought.
Section 5.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrowers of the Loan Documents and the transactions
contemplated hereby and thereby do not require any approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained.
Section 5.3. TITLE TO PROPERTIES; LEASES. The Borrowers own all of the
assets reflected in the consolidated balance sheets as at the Interim Balance
Sheet Date or acquired since that date (except property and assets sold or
otherwise disposed of in the ordinary course of business since that date),
subject to no mortgages, capitalized leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
Section 5.4. FINANCIAL STATEMENTS; SOLVENCY.
(a) There has been furnished to the Banks audited
consolidated financial statements of the Borrowers dated the Interim Balance
Sheet Date. Said financial statements have been prepared in accordance with GAAP
and fairly present in all material respects the financial condition of the
Borrowers on a consolidated basis, as at the close of business on the date
thereof and the results of operations for the period then ended. There are no
contingent liabilities of the Borrowers involving material amounts, known to the
officers of the Borrowers, which have not been disclosed in said balance sheets
and the related notes thereto or otherwise in writing to the Banks.
(b) The Borrowers on a consolidated basis (both before and
after giving effect to the transactions contemplated by this Credit Agreement)
are and will be solvent (i.e., they have assets having a fair value in excess of
the amount required to pay their probable liabilities on their existing debts as
they become absolute and
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matured) and have, and expect to have, the ability to pay their debts from time
to time incurred in connection therewith as such debts mature.
Section 5.5. NO MATERIAL CHANGES, ETC. Since the Interim Balance Sheet
Date, there have occurred no material adverse changes in the financial condition
or businesses of the Borrowers, taken as a whole, as shown on or reflected in
the consolidated balance sheet of the Borrowers as of the Interim Balance Sheet
Date, or the consolidated statement of income for the fiscal year then ended.
Since the Interim Balance Sheet Date, there have not been any Distributions
other than as permitted by Section 7.6 hereof.
Section 5.6. PERMITS, FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each
Borrower possess all franchises, patents, copyrights, trademarks, trade names,
licenses and permits, and rights in respect of the foregoing, adequate for the
conduct of their businesses substantially as now conducted without known
conflict with any rights of others.
Section 5.7. LITIGATION. Except as shown on Schedules 5.7 and 5.16
hereto, there are no actions, suits, proceedings or investigations of any kind
pending or, to the knowledge of any Borrower, threatened against any Borrower
before any court, tribunal or administrative agency or board which, if adversely
determined, might, either in any individual case or in the aggregate, materially
adversely affect the properties, assets, financial condition or business of the
Borrowers, taken as a whole, or materially impair the right of the Borrowers,
taken as a whole, to carry on business substantially as now conducted, or result
in any substantial liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the consolidated balance sheet or which
question the validity of any of the Loan Documents or any action taken or to be
taken pursuant hereto or thereto.
Section 5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. No Borrower is
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Borrowers'
officers has or is expected in the future to have a materially adverse effect on
the business, assets or financial condition of the Borrowers, taken as a whole.
No Borrower is a party to any contract or agreement which in the judgment of the
Borrowers' officers has or is expected to have any materially adverse effect on
the business of the Borrowers, taken as a whole, except as otherwise reflected
in adequate reserves.
Section 5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. No Borrower
is violating any provision of its charter documents or by-laws or any agreement
or instrument by which any of them may be subject or by which any of them or any
of their properties may be bound or any decree, order, judgment, or any statute,
license, rule or regulation, in a manner which could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of any Borrower. All Material Contracts (a
complete and accurate list of
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which is attached hereto as Schedule 5.9) are in full force and effect, and no
default or event of default has occurred and is continuing under any Material
Contract.
Section 5.10. TAX STATUS. Each Borrower has made or filed all federal
and state income and all other tax returns, reports and declarations required by
any jurisdiction to which any of them is subject (unless and only to the extent
that such Borrower has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes); and have paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith; and have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the officers of the Borrowers know of no basis for any
such claim.
Section 5.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing as of the date of this Credit Agreement.
Section 5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. No Borrower
is a "holding company," or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company," as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is any of them a "registered investment
company," or an "affiliated company" or a "principal underwriter" of a
"registered investment company," as such terms are defined in the Investment
Company Act of 1940, as amended.
Section 5.13. ABSENCE OF FINANCING STATEMENTS, ETC. Other than Permitted
Liens and the liens of Imperial Bank and BFI to be discharged in accordance with
the payoff letters under Section 9.10, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, which
purports to cover, affect or give notice of any present or possible future lien
on, or security interest in, any assets or property of any Borrower, or any
rights relating thereto.
Section 5.14. EMPLOYEE BENEFIT PLANS.
(a) Each Employee Benefit Plan and each Guaranteed Pension Plan has been
maintained and operated in compliance in all material respects with the
provisions of ERISA and, to the extent applicable, the Code, including but not
limited to the provisions thereunder respecting prohibited transactions and the
bonding of fiduciaries and other persons handling plan funds as required by
Section 412 of ERISA. Each Borrower has heretofore delivered to the Agent the
most recently completed annual report, Form 5500, with all required attachments,
and actuarial statement
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required to be submitted under Section 103(d) of ERISA, with respect to each
Guaranteed Pension Plan.
(b) No Employee Benefit Plan, which is an employee welfare benefit plan
within the meaning of Section 3(1) or Section 3(2)(B) of ERISA, provides benefit
coverage subsequent to termination of employment, except as required by Title I,
Part 6 of ERISA or the applicable state insurance laws. A Borrower may terminate
each such Plan at any time (or at any time subsequent to the expiration of any
applicable bargaining agreement) in the discretion of such Borrower without
liability to any Person other than for claims arising prior to termination.
(c) Each contribution required to be made to a Guaranteed Pension Plan,
whether required to be made to avoid the incurrence of an accumulated funding
deficiency, the notice or lien provisions of Section 302(f) of ERISA, or
otherwise, has been timely made. No waiver of an accumulated funding deficiency
or extension of amortization periods has been received with respect to any
Guaranteed Pension Plan, and no Borrower nor any ERISA Affiliate is obligated to
or has posted security in connection with an amendment to a Guaranteed Pension
Plan pursuant to Section 307 of ERISA or Section 401(a)(29) of the Code. No
liability to the PBGC (other than required insurance premiums, all of which have
been paid) has been incurred by any Borrower or any ERISA Affiliate with respect
to any Guaranteed Pension Plan and there has not been any ERISA Reportable Event
(other than an ERISA Reportable Event as to which the requirement of 30 days
notice has been waived), or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the PBGC. Based
on the latest valuation of each Guaranteed Pension Plan (which in each case
occurred within twelve months of the date of this representation), and on the
actuarial methods and assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans within the meaning of
Section 4001 of ERISA did not exceed the aggregate value of the assets of all
such Guaranteed Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities.
(d) No Borrower nor any ERISA Affiliate has incurred any material
liability (including secondary liability) to any Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer Plan under Section
4201 of ERISA or as a result of a sale of assets described in Section 4204 of
ERISA. No Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under and within the
meaning of Section 4241 or Section 4245 of ERISA or is at risk of entering
reorganization or becoming insolvent, or that any Multiemployer Plan intends to
terminate or has been terminated under Section 4041A of ERISA.
Section 5.15. USE OF PROCEEDS.
Section 5.15.1. GENERAL. The proceeds of the Loans shall
be used solely as follows: (a) to repay existing Indebtedness of the Borrowers;
(b) to finance
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acquisitions permitted pursuant to Section 7.4; and (c) for capital
expenditures, working capital, and general corporate purposes.
Section 5.15.2. REGULATIONS U AND X. No portion of any
Loan is to be used, and no portion of any Letter of Credit is to be obtained,
for the purpose of purchasing or carrying any "margin security" or "margin
stock" as such terms are used in Regulations U and X of the Board of Governors
of the Federal Reserve System, 12 C.F.R. Parts 221 and 224.
Section 5.15.3. INELIGIBLE SECURITIES. No portion of the
proceeds of any Loans is to be used, and no portion of any Letter of Credit is
to be obtained, for the purpose of (a) knowingly purchasing, or providing credit
support for the purchase of, Ineligible Securities from a Section 20 Subsidiary
during any period in which such Section 20 Subsidiary makes a market in such
Ineligible Securities, (b) knowingly purchasing, or providing credit support for
the purchase of, during the underwriting or placement period, any Ineligible
Securities being underwritten or privately placed by a Section 20 Subsidiary, or
(c) making, or providing credit support for the making of, payments of principal
or interest on Ineligible Securities underwritten or privately placed by a
Section 20 Subsidiary and issued by or for the benefit of the Borrowers or other
Affiliate of the Borrowers.
Section 5.16. ENVIRONMENTAL COMPLIANCE. Each Borrower has investigated
the past and present condition and usage of the Real Property and the operations
conducted thereon and, based upon such diligent investigation, has determined
that, except as shown on Schedule 5.16:
(a) No Borrower, nor any operator of the Borrowers' properties, is in
violation, or alleged violation, of any judgment, decree, order, law, permit,
license, rule or regulation pertaining to environmental matters, including
without limitation, those arising under RCRA, CERCLA, the Superfund Amendments
and Reauthorization Act of 1986, the Federal Clean Water Act, the Federal Clean
Air Act, the Toxic Substances Control Act, or any state or local statute,
regulation, ordinance, order or decree relating to health, safety or the
environment (the "Environmental Laws"), which violation would have a material
adverse effect on the business, assets or financial condition of the Borrowers
on a consolidated basis.
(b) No Borrower has received notice from any third party, including,
without limitation: any federal, state or local governmental authority, (i) that
any of the Borrowers has been identified by the United States Environmental
Protection Agency ("EPA") as a potentially responsible party under CERCLA with
respect to a site listed on the National Priorities List, 40 C.F.R. Part ▇▇▇
▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined by 42 U.S.C. Section
6903(5), any hazardous substances as defined by 42 U.S.C. Section 9601(14), any
pollutant or contaminant as defined by 42 U.S.C. Section 9601(33) or any toxic
substance, oil or hazardous materials or other chemicals or substances regulated
by any Environmental Laws ("Hazardous
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Substances") which any of the Borrowers has generated, transported or disposed
of has been found at any site at which a federal, state or local agency or other
third party has conducted or has ordered that any Borrower conduct a remedial
investigation, removal or other response action pursuant to any Environmental
Law; or (iii) that it is or shall be a named party to any claim, action, cause
of action, complaint, legal or administrative proceeding arising out of any
third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
(c) Except where it would not have a material adverse effect on the
value of the Real Property, (i) no portion of the Real Property has been used
for the handling, processing, storage or disposal of Hazardous Substances; and
no underground tank or other underground storage receptacle for Hazardous
Substances is located on such properties; (ii) in the course of any activities
conducted by the Borrowers, or operators of the Real Property, no Hazardous
Substances have been generated or are being used on such properties; (iii) there
have been no unpermitted Releases or threatened Releases of Hazardous Substances
on, upon, into or from the Real Property; (iv) to the best of the Borrowers'
knowledge, there have been no Releases on, upon, from or into any real property
in the vicinity of the Real Property which, through soil or groundwater
contamination, may have come to be located on such properties; and (v) in
addition, when required under applicable Environmental Laws, any Hazardous
Substances that have been generated on the Real Property have been transported
offsite only by carriers having an identification number issued by the EPA,
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under applicable Environmental Laws, which
transporters and facilities, to the best of the Borrowers' knowledge, have been
and are operating in material compliance with such permits and applicable
Environmental Laws.
(d) None of the Real Property is or shall be subject to any applicable
environmental clean-up responsibility law or environmental restrictive transfer
law or regulation, by virtue of the transactions set forth herein and
contemplated hereby.
Section 5.17. PERFECTION OF SECURITY INTERESTS. All filings,
assignments, pledges and deposits of documents or instruments have been made and
all other actions have been taken that are necessary or advisable under
applicable law to establish and perfect the Agent's security interest in the
Collateral. The Collateral and the Agent's rights with respect to the Collateral
are not subject to any setoff, claims, withholdings or other defenses.
Section 5.18. TRANSACTIONS WITH AFFILIATES. Except as disclosed in
Schedule 5.18 or filings made by the Borrowers under the Securities Exchange Act
of 1934 prior to the Closing Date, and except for arm's length transactions
pursuant to which a Borrower makes payments in the ordinary course of business
upon terms no less favorable than such Borrower could obtain from third parties,
none of the officers, directors, or employees of any Borrower is presently a
party to any transaction with another
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Borrower (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of any Borrower, any corporation,
partnership, trust or other entity in which any officer, director, or any such
employee has a substantial interest or is an officer, director, trustee or
partner.
Section 5.19. SUBSIDIARIES. Schedule 2 sets forth a complete and
accurate list of the Subsidiaries of the Parent, including the name of each
Subsidiary, the location of its chief executive office, and its jurisdiction of
incorporation, together with the number of authorized and outstanding shares of
each Subsidiary. Each Subsidiary listed on Schedule 2 is (a) wholly owned by the
Parent (other than W.C. International, which is wholly-owned by W.C. of
Washington) and (b) is a Borrower hereunder, 100% of the assets and stock of
which have been pledged to the Agent on behalf of the Banks pursuant to the
Security Documents. The Parent has good and marketable title to all of the
shares it purports to own of the stock of each such Subsidiary, and W.C. of
Washington has good and marketable title to all of the shares it purports to own
of the stock of W.C. International, free and clear in each case of any lien. All
such shares have been duly issued and are fully paid and non-assessable.
Section 5.20. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. Each Borrower
has furnished the Agent copies, in each case true and complete as of the Closing
Date, of its (a) charter and other incorporation documents and (b) by-laws, each
including any amendments thereto.
Section 5.21. DISCLOSURE. Neither this Credit Agreement, nor any of the
other Loan Documents, nor any document or information furnished by the Borrowers
in connection therewith contains any untrue statement of a material fact or
omits to state a material fact (known to any Borrower in the case of any
document or information not furnished by the Borrowers) necessary in order to
make the statements herein or therein not misleading. There is no fact known to
any Borrower which materially adversely affects, or which is reasonably likely
in the future to materially adversely affect, the business, assets, or financial
condition of any Borrower, exclusive of effects resulting from changes in
general economic conditions, legal standards or regulatory conditions.
Section 5.22. CAPITALIZATION.
(a) As of the Closing Date, the authorized capital stock of the Parent
consists of 15,000,000 shares of common stock (par value $0.01) per share) of
which 2,300,000 shares were outstanding as of the Closing Date and 10,000,000
shares of preferred stock (par value $0.01) of which 2,499,998 shares were
outstanding as of the Closing Date. All of such outstanding shares are fully
paid and non-assessable. In addition, as of the Closing Date, the Board of
Directors of the Parent has duly
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reserved 1,451,000 shares of the Parent's common stock for issuance pursuant to
outstanding warrants, and has reserved 819,000 shares of the Parent's common
stock for issuance upon the exercise of employee stock options.
(b) The shares of the capital stock of the Subsidiaries pledged to the
Agent pursuant to the Stock Pledge Agreements are held of record as set forth on
the respective Annex A to each Stock Pledge Agreement. Such capital stock
constitutes, of record, 100% of the outstanding capital stock of each such
Subsidiary, and, to our knowledge, on a fully-diluted basis, 100% of such
outstanding capital stock.
Section 5.23. YEAR 2000 PROBLEM. The Borrowers have reviewed the areas
within their business and operations which could be adversely affected by, and
have developed or are developing a program to address on a timely basis, the
Year 2000 Problem. Based on such review and program, the Year 2000 Problem will
not have a material adverse effect on their business and operations.
Section 6. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly
and severally covenant and agree that, so long as any Loan or Note is
outstanding or the Banks have any obligation to make Loans or the Agent has any
obligation to issue, extend, or renew any Letters of Credit hereunder:
Section 6.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually
pay or cause to be paid the principal and interest on the Loans, all
Reimbursement Obligations, fees and other amounts provided for in this Credit
Agreement and the other Loan Documents, all in accordance with the terms of this
Credit Agreement and such other Loan Documents.
Section 6.2. MAINTENANCE OF OFFICES. The Parent will maintain its chief
executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, and each Subsidiary will maintain its chief executive offices at the
location set forth on Schedule 2, or at such other place in the United States as
the Borrowers shall designate upon 30 days' prior written notice to the Agent.
Section 6.3. RECORDS AND ACCOUNTS. Each Borrower will (i) keep true and
accurate records and books of account in which full, true and correct entries
will be made in accordance with generally accepted accounting principles, (ii)
maintain adequate accounts and reserves for all taxes (including income taxes),
depreciation, depletion, obsolescence and amortization of its properties,
contingencies, and other reserves, and (iii) at all times engage the Accountants
as the independent certified public accountants of the Borrowers.
Section 6.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrowers will deliver to the Banks:
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(a) as soon as practicable, but, in any event not later than 90 days
after the end of each fiscal year of the Borrowers, the consolidated and
consolidating balance sheets of the Borrowers as at the end of such year,
statements of cash flows, and the related consolidated and consolidating
statements of operations, each setting forth in comparative form the figures for
the previous fiscal year, all such consolidated and consolidating financial
statements to be in reasonable detail, prepared in accordance with GAAP and,
with respect to the consolidated financial statements, certified by the
Accountants. In addition, simultaneously therewith, the Borrowers shall use
reasonable efforts to provide the Banks with a written statement from the
Accountants to the effect that the Borrowers are in compliance with the
covenants set forth in Section 8 hereof, and that, in making the examination
necessary to said certification, nothing has come to the attention of the
Accountants that would indicate that any Default or Event of Default exists, or,
if the Accountants shall have obtained knowledge of any then existing Default or
Event of Default they shall disclose in such statement any such Default or Event
of Default; provided that the Accountants shall not be liable to the Banks for
failure to obtain knowledge of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrowers, copies of the
consolidated and consolidating balance sheets and statement of operations of the
Borrowers as at the end of such quarter, subject to year end adjustments, and
the related statement of cash flows, all in reasonable detail and prepared in
accordance with GAAP, with a certification by the principal financial or
accounting officer of the Borrowers (the "CFO") that the consolidated financial
statements are prepared in accordance with GAAP and fairly present the
consolidated financial condition of the Borrowers as at the close of business on
the date thereof and the results of operations for the period then ended;
(c) as soon as practicable, but in any event within thirty (30) days
after the end of each month in each fiscal year of the Borrowers, unaudited
monthly consolidated and consolidating financial statements of the Borrowers for
such month, prepared in accordance with GAAP, with a certification by the CFO
that the information contained in such financial statements fairly presents the
financial condition of the Borrowers on the date thereof (subject to year-end
adjustments);
(d) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, a statement in the form of Exhibit C hereto
(the "Compliance Certificate") certified by the CFO that the Borrowers are in
compliance with the covenants contained in Sections 6, 7 and 8 hereof as of the
end of the applicable period setting forth in reasonable detail computations
evidencing such compliance, provided that if the Borrowers shall at the time of
issuance of such certificate or at any other time obtain knowledge of any
Default or Event of Default, the Borrowers shall include in such certificate or
otherwise deliver forthwith to the Banks a certificate
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specifying the nature and period of existence thereof and what action the
Borrowers propose to take with respect thereto and a certificate of the
Borrowers' Chief Operating Officer in the form attached hereto as Exhibit D with
respect to environmental matters;
(e) contemporaneously with or promptly following the delivery thereof to
the boards of directors of the Borrowers, copies of the financial statements,
financial projections, annual budget, variance reports and business plan
concerning the Borrowers in substantially the same form in which such
information is supplied to the boards of directors of the Borrowers;
(f) contemporaneously with, or promptly following, the filing or mailing
thereof, copies of all material of a financial nature filed with the Securities
and Exchange Commission or sent to the stockholders of the Borrowers; and
(g) from time to time, such other financial data and other information
(including accountants' management letters) as the Banks may reasonably request.
The Borrowers hereby authorize the Banks to disclose any information
obtained pursuant to this Credit Agreement to all appropriate governmental
regulatory authorities where required by law; provided, however, that this
authorization shall not be deemed to be a waiver of any rights to object to the
disclosure by the Banks of any such information which the Borrowers have or may
have under the federal Right to Financial Privacy Act of 1978, as in effect from
time to time.
Section 6.5. CORPORATE EXISTENCE AND CONDUCT OF BUSINESS. Each Borrower
will do or cause to be done all things necessary to preserve and keep in full
force and effect its corporate existence, corporate rights and franchises;
effect and maintain its foreign qualifications, licensing, domestication or
authorization except as terminated by such Borrower's Board of Directors in the
exercise of its reasonable judgment and except where the failure of a Borrower
to remain so qualified would not materially adversely impair the financial
condition of the Borrowers on a consolidated basis; use its best efforts to
comply with all applicable laws; and shall not become obligated under any
contract or binding arrangement which, at the time it was entered into would
materially adversely impair the financial condition of the Borrowers on a
consolidated basis. Each Borrower will continue to engage primarily in the
businesses now conducted by it and in related businesses.
Section 6.6. MAINTENANCE OF PROPERTIES. The Borrowers will cause all
material properties used or useful in the conduct of their businesses to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrowers may be necessary so that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times;
provided, however, that nothing in this
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section shall prevent the Borrowers from discontinuing the operation and
maintenance of any of their properties if such discontinuance is, in the
judgment of the Borrowers, desirable in the conduct of their business and which
does not in the aggregate materially adversely affect the businesses of the
Borrowers on a consolidated basis.
Section 6.7. INSURANCE. The Borrowers will maintain with financially
sound and reputable insurance companies, funds or underwriters' insurance of the
kinds, covering the risks (other than risks arising out of or in any way
connected with personal liability of any officers and directors thereof) and in
the relative proportionate amounts usually carried by reasonable and prudent
companies conducting businesses similar to that of the Borrowers, but in no
event less than that required under Section 7 of the Security Agreement. In
addition, the Borrowers will furnish from time to time, upon the Agent's
request, a summary of the insurance coverage of each of the Borrowers, which
summary shall be in form and substance satisfactory to the Agent and, if
requested by the Agent, will furnish to the Agent copies of the applicable
policies.
Section 6.8. TAXES. The Borrowers will duly pay and discharge, or cause
to be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes, assessments and
other governmental charges imposed by foreign jurisdictions which in the
aggregate are not material to the business or assets of any Borrower on an
individual basis or of the Borrowers on a consolidated basis) imposed upon it
and its real properties, sales and activities, or any material part thereof, or
upon the income or profits therefrom, as well as all claims for labor,
materials, or supplies, which if unpaid might by law become a lien or charge
upon any material portion of its property, unless such lien is a Permitted Lien;
provided, however, that any such tax, assessment, charge, levy or claim need not
be paid if the validity or amount thereof shall currently be contested in good
faith by appropriate proceedings and if such Borrower shall have set aside on
its books adequate reserves with respect thereto; and provided, further, that
the Borrowers will pay all such taxes, assessments, charges, levies or claims
forthwith upon the commencement of proceedings to foreclose any lien which may
have attached as security therefor.
Section 6.9. INSPECTION OF PROPERTIES, BOOKS, AND CONTRACTS. The
Borrowers will permit the Banks, the Agent or any of their designated
representatives, upon reasonable notice and during normal business hours, to
visit and inspect any of their properties, to examine their books of account
(including the making of periodic accounts receivable reviews), or contracts
(and to make copies thereof and extracts therefrom), and to discuss their
affairs, finances and accounts with, and to be advised as to the same by, their
officers, all at such times and intervals as the Banks may reasonably request.
Section 6.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS;
MAINTENANCE OF MATERIAL LICENSES AND PERMITS. The Borrowers will (i) comply
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with the provisions of their charter documents and by-laws and all agreements
and instruments by which they or any of their properties may be bound; and (ii)
comply with all applicable laws and regulations (including Environmental Laws),
decrees, orders, judgments, licenses and permits, including, without limitation,
all environmental permits hereto ("Applicable Laws"), except where noncompliance
with such Applicable Laws would not have a material adverse effect in the
aggregate on the consolidated financial condition, properties or businesses of
the Borrowers. If at any time while the Notes, or any Loan or Letter of Credit
is outstanding or any Bank or the Agent has any obligation to make Loans or
issue Letters of Credit hereunder, any authorization, consent, approval, permit
or license from any officer, agency or instrumentality of any government shall
become necessary or required in order that the Borrowers may fulfill any of
their obligations hereunder, the Borrowers will immediately take or cause to be
taken all reasonable steps within the power of the Borrowers to obtain such
authorization, consent, approval, permit or license and furnish the Banks with
evidence thereof.
Section 6.11. ENVIRONMENTAL INDEMNIFICATION. Each Borrower covenants and
agrees that it will indemnify and hold the Banks harmless from and against any
and all claims, expense, damage, loss or liability incurred by the Banks
(including all costs of legal representation incurred by the Banks) relating to
(a) any release or threatened release of hazardous substances on the Real
Property; (b) any violation of any Environmental Laws with respect to conditions
at the Real Property or the operations conducted thereon; or (c) the
investigation or remediation of offsite locations at which any Borrower or its
predecessors are alleged to have directly or indirectly disposed of hazardous
substances. It is expressly acknowledged by each Borrower that this covenant of
indemnification shall include claims, expense, damage, loss or liability
incurred by the Banks based upon the Banks' negligence, and this covenant shall
survive any foreclosure or any modification, release or discharge of the Loan
Documents or the payment of the Loans and shall inure to the benefit of the
Banks, their successors and assigns.
Section 6.12. FURTHER ASSURANCES. The Borrowers will cooperate with the
Banks and execute such further instruments and documents as the Banks shall
reasonably request to carry out to the Banks' satisfaction the transactions
contemplated by this Credit Agreement and the Loan Documents.
Section 6.13. NOTICE OF POTENTIAL CLAIMS OR LITIGATION. The Borrowers
will deliver to the Banks, within 30 days of receipt thereof, written notice of
the initiation of any action, claim, complaint, or any other notice of dispute
or potential litigation (including without limitation any alleged violation of
any Environmental Law), wherein the potential liability is in excess of
$150,000, together with a copy of each such notice received by any Borrower.
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Section 6.14. NOTICE OF CERTAIN EVENTS CONCERNING INSURANCE AND
ENVIRONMENTAL CLAIMS.
(a) The Borrowers will provide the Banks with written
notice as to any material cancellation or material change in any insurance of
the Borrowers within ten (10) Business Days after the Borrowers' receipt of any
notice (whether formal or informal) of such cancellation or change by any of
their insurers.
(b) The Borrowers will promptly notify the Banks in
writing of any of the following events:
(i) upon any Borrower obtaining knowledge of any
violation of any Environmental Law regarding the Real Property or any Borrower's
operations, which violation could have a material adverse effect on the Real
Property or on such Borrower's operations; (ii) upon any Borrower obtaining
knowledge of any potential or known Release or threat of Release of any
Hazardous Substance at, from, or into the Real Property which any Borrower
reports in writing or is reportable by it in writing to any governmental
authority and which is material in amount or nature or which could materially
affect the value of the Real Property; (iii) upon any Borrower's receipt of any
notice of violation of any Environmental Laws or of any Release or threatened
Release of Hazardous Substances, including a notice or claim of liability or
potential responsibility from any third party (including without limitation any
federal, state or local governmental officials) and including notice of any
formal inquiry, proceeding, demand, investigation or other action with regard to
(A) any Borrower's or any Person's operation of the Real Property, (B)
contamination on, from or into the Real Property, or (C) investigation or
remediation of offsite locations at which any Borrower or any of its
predecessors is alleged to have directly or indirectly Disposed of Hazardous
Substances, which violation or Release in any such case could have a material
adverse effect on the Real Property or on any Borrower's operations; or (iv)
upon any Borrower obtaining knowledge that any material expense or loss has been
incurred by such governmental authority in connection with the assessment,
containment, removal or remediation of any Hazardous Substances with respect to
which any Borrower may be liable or for which a lien may be imposed on the Real
Property.
Section 6.15. RESPONSE ACTIONS. The Borrowers covenant and agree that if
any Release or Disposal of Hazardous Substances shall occur or shall have
occurred on the Real Property, the Borrowers will cause the prompt containment
and removal of such Hazardous Substances and remediation of the Real Property as
necessary to comply with all Environmental Laws or to preserve the value of the
Real Property.
Section 6.16. ENVIRONMENTAL ASSESSMENTS. If the Banks in their good
faith judgment, after discussion with the Borrowers, have reason to believe that
the environmental condition of the Real Property has deteriorated, after
reasonable notice by the Banks, whether or not an Event of Default shall have
occurred, the Banks may,
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from time to time, for the purpose of assessing and ensuring the value of the
Real Property, obtain one or more environmental assessments or audits of the
Real Property prepared by a hydrogeologist, an independent engineer or other
qualified consultant or expert approved by the Banks to evaluate or confirm (i)
whether Hazardous Substances are present in the soil or water at the Real
Property in material amounts and (ii) whether the use and operation of the Real
Property is in material compliance with all Environmental Laws. Environmental
assessments may include without limitation detailed visual inspections of the
Real Property including, without limitation, any and all storage areas, storage
tanks, drains, dry ▇▇▇▇▇ and leaching areas, and the taking of soil samples,
surface water samples and ground water samples, as well as such other
investigations or analyses as the Banks deem appropriate. All such environmental
assessments shall be at the sole cost and expense of the Borrowers.
Section 6.17. NOTICE OF DEFAULT. The Borrowers will promptly notify the
Banks in writing of the occurrence of any Default or Event of Default. If any
Person shall give any notice or take any other action in respect of a claimed
default (whether or not constituting an Event of Default) under this Credit
Agreement or any other note, evidence of Indebtedness, indenture or other
obligation evidencing Indebtedness in excess of $250,000 as to which any
Borrower is a party or obligor, whether as principal or surety, the Borrowers
shall forthwith give written notice thereof to the Banks, describing the notice
of action and the nature of the claimed default.
Section 6.18. NEW SUBSIDIARIES.
(a) Any newly-created or acquired Subsidiaries permitted under Section
7.4 shall become Borrowers hereunder by (i) signing a joinder agreement in form
and substance satisfactory to the Agent, (ii) entering into an amendment to this
Credit Agreement and the Security Documents, as applicable, with the other
parties hereto and thereto providing that such Subsidiary shall become a
Borrower hereunder, 100% of the stock and assets of which shall be pledged to
the Agent for the benefit of the Banks, and (iii) providing such other
documentation as the Banks or the Agent may reasonably request, including,
without limitation, documentation with respect to the conditions specified in
Section 9 hereof. In such event, the Agent is hereby authorized by the parties
to amend Schedule 2 to include such new Subsidiary.
(b) The Parent shall at all times directly or indirectly through a
Subsidiary own all of the shares of capital stock of each of the Subsidiaries
which are corporations, and such shares shall at all times be pledged to the
Agent pursuant to the Stock Pledge Agreements. The Parent shall at all times
directly or indirectly through a Subsidiary own all of the partnership or joint
venture interests in each of the Subsidiaries which are partnerships or joint
ventures, and such interests shall at all times be pledged to the Agent pursuant
to a partnership pledge agreement in form and substance satisfactory to the
Agent.
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Section 6.19. EMPLOYEE BENEFIT PLANS. The Borrowers will (i) promptly
upon filing the same with the Department of Labor or Internal Revenue Service,
upon request of the Agent, furnish to the Agent a copy of the most recent
actuarial statement required to be submitted under Section 103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to
the Agent any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under Sections 4041A,
4202, 4219, 4242, or 4245 of ERISA.
Section 6.20. NOTICE OF LOSS OF MATERIAL CONTRACTS. The Borrowers will
promptly (and in any event within fifteen (15) Business Days after the
occurrence thereof) notify the Banks in writing of the termination, or (if
earlier) the receipt of a notice of termination of, or any default by any
Borrower under, any Material Contract.
Section 7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. Each Borrower
agrees that, so long as any Loan or any Note or other Obligation is outstanding
or the Banks have any obligation to make Loans or the Agent has any obligation
to issue, extend or renew any Letters of Credit hereunder:
Section 7.1. RESTRICTIONS ON INDEBTEDNESS. No Borrower shall become or
be a guarantor or surety of, or otherwise create, incur, assume, or be or remain
liable, contingently or otherwise, with respect to any Indebtedness, or become
or be responsible in any manner (whether by agreement to purchase any
obligations, stock, assets, goods or services, or to supply or advance any
funds, assets, goods or services or otherwise) with respect to any undertaking
or Indebtedness of any other Person, or incur any Indebtedness other than:
(a) Indebtedness to the Banks and the Agent arising under this Credit
Agreement or the Loan Documents;
(b) incurrence of guaranty, suretyship or indemnification obligations in
connection with the Borrowers' performance of services for their respective
customers in the ordinary course of their businesses;
(c) Indebtedness of one Borrower to another Borrower;
(d) Subject to Section 8.6, Indebtedness of the Borrowers with respect
to equipment leases or equipment chattel mortgages, including any such
Indebtedness assumed in connection with an acquisition permitted under Section
7.4, in an aggregate amount not to exceed $250,000 at any time outstanding;
(e) Indebtedness of the Borrowers, including assumed obligations,
incurred in connection with acquisitions after the date hereof of any stocks of,
partnership or joint venture interests in, or assets of any Person and owing to
the seller(s) of such
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stocks, partnership or joint venture interests, or assets; provided that such
acquisitions are otherwise permitted pursuant to Section 7.4 and the principal
amount of any such Indebtedness shall not exceed $250,000 in the aggregate
(excluding Indebtedness of acquired companies which is discharged within 30 days
of such acquisition);
(f) Indebtedness of the Borrowers with respect to performance bonds
existing as of the Closing Date, including extensions and renewals thereof, in
an aggregate amount not to exceed $500,000.
Section 7.2. RESTRICTIONS ON LIENS. No Borrower shall create or incur or
suffer to be created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any kind upon any
property or assets of any character, whether now owned or hereafter acquired, or
upon the income or profits therefrom; or transfer any of such property or assets
or the income or profits therefrom for the purpose of subjecting the same to the
payment of Indebtedness or performance of any other obligation in priority to
payment of its general creditors; or acquire, or agree or have an option to
acquire, any property or assets upon conditional sale or other title retention
or purchase money security agreement, device or arrangement; or suffer to exist
for a period of more than 30 days after the same shall have been incurred any
Indebtedness or claim or demand against it which if unpaid might by law or upon
bankruptcy or insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or sell, assign, pledge or otherwise transfer any
accounts, contract rights, general intangibles or chattel paper, with or without
recourse, except as follows (the "Permitted Liens"):
(a) Liens to secure taxes, assessments and other government charges in
respect of obligations not overdue or liens on properties to secure claims for
labor, material or supplies in respect of obligations not overdue;
(b) Deposits or pledges made in connection with, or to secure payment
of, workmen's compensation, unemployment insurance, old age pensions or other
social security obligations;
(c) Liens in respect of judgments or awards which have been in force for
less than the applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which the applicable Borrower shall at the
time in good faith be prosecuting an appeal or proceedings for review and in
respect of which a stay of execution shall have been obtained pending such
appeal or review and in respect of which such Borrower maintains adequate
reserves;
(d) Liens of carriers, warehousemen, mechanics and materialmen, and
other like liens, in existence less than 120 days from the date of creation
thereof in respect of obligations not overdue, provided that such liens may
continue to exist for a period of more than 120 days if the validity or amount
thereof shall currently be contested by the applicable Borrower in good faith by
appropriate proceedings and if such
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Borrower shall have set aside on its books adequate reserves with respect
thereto as required by GAAP and provided further that such Borrower will pay any
such claim forthwith upon commencement of proceedings to foreclose any such
lien;
(e) Encumbrances on Real Property consisting of easements, rights of
way, zoning restrictions, restrictions on the use of real property and defects
and irregularities in the title thereto, landlord's or lessor's liens under
leases to which any Borrower is a party, and other minor liens or encumbrances
none of which in the opinion of such Borrower interferes materially with the use
of the property affected in the ordinary conduct of the business of such
Borrower, which defects do not individually or in the aggregate have a material
adverse effect on the business of such Borrower individually or of the Borrowers
on a consolidated basis;
(f) Liens existing as of the date hereof and listed on Schedule 7.2 on
the terms and conditions in effect as of the date hereof;
(g) Liens securing Indebtedness permitted under Section 7.1(d) incurred
in connection with the lease or acquisition of property or fixed assets useful
or intended to be used in carrying on the business of the Borrowers, provided
that such Liens shall encumber only the property or assets so acquired and shall
not exceed the fair market value thereof;
(h) Liens securing Indebtedness permitted by Section 7.1(e);
(i) Liens in favor of the Agent for the benefit of the Banks and the
Agent under the Loan Documents.
Section 7.3. RESTRICTIONS ON INVESTMENTS. No Borrower shall purchase or
acquire, or make any commitment therefor, any capital stock, equity interest, or
other obligations or securities of, or any interest in, any other Person, or
make or commit to make any acquisition under Section 7.4, or make or commit to
make any advance, loan, extension of credit or capital contribution to or any
other investment in, any other Person, other than:
(a) marketable direct or guaranteed obligations of the United States of
America that mature within one (1) year from the date of purchase;
(b) demand deposits, certificates of deposit, bankers acceptances and
time deposits of United States banks or Eligible Foreign Banks having unimpaired
capital and surplus in excess of $250,000,000;
(c) securities commonly known as "commercial paper" issued by a
corporation organized and existing under the laws of the United States of
America or any state thereof that at the time of purchase have been rated and
the ratings for
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which are not less than "P 1" if rated by ▇▇▇▇▇'▇ Investors Service, Inc., and
not less than "A 1" if rated by Standard and Poor's Rating Group;
(d) extensions of credit in the nature of accounts receivable or notes
receivable arising from the sale or lease of goods or services in the ordinary
course of business;
(e) investments existing on the date hereof and listed on Schedule 7.3;
(f) loans and advances by any Borrower to another Borrower;
(g) investments with respect to Indebtedness permitted by Section
7.1(e);
(h) investments permitted under Section 7.4;
(i) loans to employees of the Parent for the purpose of financing such
employees' acquisition of equity of the Parent (through the exercise of stock
options or otherwise) in an aggregate principal amount not to exceed $107,000 at
any time outstanding.
Section 7.4. MERGER, CONSOLIDATION AND DISPOSITION OF ASSETS.
Section 7.4.1. MERGERS AND ACQUISITIONS. No Borrower will
become a party to any merger or consolidation, or agree to or effect any asset
acquisition or stock acquisition (other than the acquisition of assets in the
ordinary course of business consistent with past practices) except the merger or
consolidation of two or more Borrowers and except as otherwise provided in this
Section 7.4. The Parent may purchase or otherwise acquire all or substantially
all of the assets or stock of any class of, or joint venture interest in, any
Person provided that:
(a) the Borrowers are in current compliance with and, giving effect to
the proposed acquisition (including any borrowings made or to be made in
connection therewith), will continue to be in compliance with all of the
covenants in Section 8 hereof on a pro forma historical combined basis as if the
transaction occurred on the first day of the period of measurement, and a
Compliance Certificate demonstrating such compliance shall have been provided to
the Banks;
(b) at the time of such acquisition, no Default or Event of Default has
occurred and is continuing, and such acquisition will not otherwise create a
Default or an Event of Default hereunder;
(c) the business to be acquired is predominantly in the same lines of
business as the Borrowers, or businesses reasonably related or incidental
thereto;
(d) the business to be acquired operates predominantly in the
continental United States;
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(e) all of the assets to be acquired shall be owned by an existing or
newly created Subsidiary of the Parent which shall be a Borrower, 100% of the
assets and stock of which have been or will be pledged to the Agent on behalf of
the Banks or, in the case of a stock acquisition, the acquired company shall
become or shall be merged with a wholly-owned Subsidiary that is a Borrower;
(f) a copy of the purchase agreement and financial projections, together
with audited (if available, or otherwise unaudited) financial statements for any
Subsidiary to be acquired or created for the preceding two (2) fiscal years
shall have been furnished to the Banks;
(g) each acquisition is preceded by the Borrowers' standard due
diligence practices, summaries of which shall have been provided to the Banks;
(h) each acquisition of a landfill is preceded by a Phase I
environmental assessment, and a copy of such report, together with a reliance
letter in substantially the form of Exhibit F, shall have been provided to the
Banks;
(i) the board of directors and (if required by applicable law) the
shareholders, or the equivalent thereof, of the business to be acquired has
approved such acquisition;
(j) if such acquisition is made by a merger, a Borrower shall be the
surviving entity; and
(k) after giving effect to such acquisition, the cash consideration to
be paid by the Parent in connection with such acquisition or series of related
acquisitions (including deferred payments and the aggregate amount of all
liabilities assumed) shall not exceed, without the consent of the Majority
Banks: (I) $1,000,000 if the Leverage Ratio is equal to or greater than 3.00:1
or if such acquisition includes a landfill, (II) $2,000,000 if the Leverage
Ratio is less than 3.00:1 and greater than or equal to 2.50:1, or (III)
$3,000,000 if the Leverage Ratio is less than 2.50:1.
Section 7.4.2. DISPOSITION OF ASSETS. No Borrower will
become a party to or agree to or effect any disposition of assets in excess of
$100,000 in the aggregate (the "Basket"), provided that the proceeds of any such
disposition shall be applied toward repayment of the Revolving Credit Loans.
Notwithstanding the foregoing, the sale of inventory, the licensing of
intellectual property and the disposition of obsolete assets, in each case in
the ordinary course of business consistent with past practices, are permitted
hereunder without being charged against the Basket.
Section 7.5. SALE AND LEASEBACK. The Borrowers shall not enter into any
arrangement, directly or indirectly, whereby any Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property which such Borrower intends to use for substantially the
same purpose as the
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property being sold or transferred, without the prior written consent of the
Majority Banks.
Section 7.6. RESTRICTED DISTRIBUTIONS AND REDEMPTIONS. The Borrowers
shall not make Distributions except as set forth in this Section 7.6. Any
Borrower may make Distributions to another Borrower. In addition, no Borrower
shall redeem, convert, retire or otherwise acquire shares of any class of its
capital stock. Notwithstanding the foregoing, no Borrower shall make any
Distribution under this Section 7.6 if a Default or Event of Default exists or
would be created by the making of such Distribution. The Borrowers shall not
effect or permit any change in or amendment to any document or instrument
pertaining to the terms of any Borrower's capital stock.
Section 7.7. EMPLOYEE BENEFIT PLANS. No Borrower nor any ERISA Affiliate
will:
(a) engage in any "prohibited transaction" within the meaning of Section
406 of ERISA or Section 4975 of the Code which could result in a material
liability for any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an "accumulated funding
deficiency", as such term is defined in Section 302 of ERISA, whether or not
such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an extent
which, or terminate any Guaranteed Pension Plan in a manner which, could result
in the imposition of a lien or encumbrance on the assets of any Borrower
pursuant to Section 302(f) or Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances requiring the
posting of security pursuant to Section 307 of ERISA or Section 401(a)(29) of
the Code; or
(e) permit or take any action which would result in the aggregate
benefit liabilities (within the meaning of Section 4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of the aggregate assets of such
Plans, disregarding for this purpose the benefit liabilities and assets of any
such Plan with assets in excess of benefit liabilities.
Section 7.8. NEGATIVE PLEDGES. No Borrower shall enter into or permit to
exist any arrangement or agreement, enforceable under applicable law, which
directly or indirectly prohibits such Borrower from creating or incurring any
lien, encumbrance, mortgage, pledge, charge, restriction or other security
interest in favor of the Agent for the benefit of the Banks and the Agent under
the Loan Documents other than customary anti-assignment provisions in leases and
licensing agreements entered into by such Borrower in the ordinary course of its
business
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Section 7.9. BUSINESS ACTIVITIES. No Borrower will engage directly or
indirectly (whether through Subsidiaries or otherwise) in any type of business
other than the businesses conducted by such Borrower on the Closing Date and in
related businesses.
Section 7.10. TRANSACTIONS WITH AFFILIATES. No Borrower will engage in
any transaction with any Affiliate (other than for services as employees,
officers and directors), including any contract, agreement or other arrangement
providing for the furnishing of services to or by, providing for rental of real
or personal property to or from, or otherwise requiring payments to or from any
such Affiliate or, to the knowledge of the Borrowers, any corporation,
partnership, trust or other entity in which any such Affiliate has a substantial
interest or is an officer, director, trustee or partner, on terms more favorable
to such Person than would have been obtainable on an arm's-length basis in the
ordinary course of business.
Section 8. FINANCIAL COVENANTS. The Borrowers covenant and agree that,
so long as any Loan, any Note, or any Reimbursement Obligation is outstanding or
the Banks have any obligation to make Loans or the Agent has any obligation to
issue, extend or renew any Letters of Credit hereunder:
Section 8.1. LEVERAGE RATIO. As of the end of any fiscal quarter of the
Borrowers commencing with the fiscal quarter ending September 30, 1998, the
ratio of (a) Funded Debt as at the end of such quarter to (b) EBITDA for the
period of four (4) consecutive fiscal quarters ending on such date shall not
exceed 3.50:1. For the fiscal quarter ending (i) December 31, 1997, the
denominator of such ratio shall be EBITDA for such quarter multiplied by four
(4), (ii) March 31, 1998, the denominator of such ratio shall be EBITDA for the
period of two consecutive fiscal quarters ending on such date multiplied by two
(2), and (iii) June 30, 1998, the denominator of such ratio shall be EBITDA for
the period of three consecutive fiscal quarters ending on such date multiplied
by 1.33.
Section 8.2. FUNDED DEBT TO CAPITALIZATION RATIO. The Borrowers shall
not at any time permit the ratio of (a) Funded Debt to (b) the sum of Funded
Debt plus Consolidated Net Worth to exceed 65%.
Section 8.3. INTEREST COVERAGE RATIO. As of the end of any fiscal
quarter of the Borrowers, the ratio of (a) EBIT to (b) Consolidated Total
Interest Expense shall not be less than 2.25:1 (i) for the fiscal quarter ending
on December 31, 1997, (ii) for the period of two (2) consecutive fiscal quarters
ending on ▇▇▇▇▇ ▇▇, ▇▇▇▇, (▇▇▇) for the period of three (3) consecutive fiscal
quarters ending on June 30, 1998, and (iv) for the period of four (4)
consecutive fiscal quarters ending thereafter.
Section 8.4. PROFITABLE OPERATIONS. The Borrowers will not permit
Consolidated Net Income to be less than $1.00 for any fiscal quarter, provided
that Consolidated Net Income for the fiscal quarters ending December 31, 1997
and March 31, 1998 may exclude (a) start-up or organizational expenses taken as
a special charge of up to
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$400,000 (pre-tax) in the aggregate, (b) non-cash charges for interest expense
attributable to loan fees paid, and warrants issued to, Imperial Bank in
connection with the Imperial Credit Agreement of up to $650,000 in the
aggregate, and (c) non-cash stock compensation charges of up to $3,500,000 in
the aggregate.
Section 8.5. CONSOLIDATED NET WORTH. The Borrowers will not permit
Consolidated Net Worth at any time to be less than (i) $6,750,000 from the
Closing Date to March 31, 1998 or (ii) thereafter, $6,750,000 plus the sum of
(A) 100% of positive Consolidated Net Income for each fiscal quarter on a
cumulative basis, beginning with the fiscal quarter ended March 31, 1998, and
(B) 100% of the proceeds of any sale by the Borrowers of equity securities
issued by the Borrowers or warrants or subscription rights for equity securities
issued by the Borrowers.
Section 8.6. CAPITAL EXPENDITURES. The Borrowers will not make Capital
Expenditures in any fiscal year that exceed $1,000,000 in the aggregate;
provided, however, that, if during any fiscal year the amount of Capital
Expenditures permitted for that fiscal year is not so utilized, such unutilized
amount may be utilized in the next succeeding fiscal year but not in any
subsequent fiscal year.
Section 9. CLOSING CONDITIONS. The obligations of the Banks to make the
Loans and the Agent to issue Letters of Credit on the Closing Date and otherwise
be bound by the terms of this Credit Agreement shall be subject to the
satisfaction of each of the following conditions precedent:
Section 9.1. CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by the Borrowers of the Loan Documents
shall have been duly and effectively taken, and satisfactory evidence thereof
shall have been provided to the Agent.
Section 9.2. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have
been duly and properly authorized, executed and delivered by the respective
parties thereto and shall be in full force and effect in a form satisfactory to
the Banks.
Section 9.3. CERTIFICATE OF SECRETARY; GOOD STANDING CERTIFICATES. The
Agent shall have received from each Borrower a certificate as to the good
standing of each from the Secretary of State or other appropriate official of
the state of its organization, dated as of a recent date. The Agent shall also
have received from each Borrower a certificate of its Secretary certifying the
following attachments thereto: (a) a copy of its certificate or articles of
incorporation or constitutive documents, in each case as amended to date,
certified as of a recent date by the Secretary of State or other appropriate
official of the state of its organization, (b) a true and correct copy of its
by-laws, including all amendments thereto, (c) a true and correct copy of the
resolutions of its board of directors authorizing the transactions contemplated
hereunder and under the other Loan Documents. Such Secretary's Certificate shall
also give the name and bear a specimen signature of each individual who shall be
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authorized (i) to sign the Loan Documents on behalf of the Borrowers; (ii) to
make Loan and Letter of Credit Requests; and (iii) to give notices and to take
other action on the Borrowers' behalf under the Loan Documents.
Section 9.4. VALIDITY OF LIENS. The Security Documents shall be
effective to create in favor of the Agent a legal, valid and enforceable first
(except for Permitted Liens entitled to priority under applicable law) security
interest in and lien upon the Collateral. All filings, recordings, deliveries of
instruments and other actions necessary or desirable in the opinion of the Agent
to protect and preserve such security interests shall have been duly effected.
The Agent shall have received evidence thereof in form and substance
satisfactory to the Agent.
Section 9.5. PERFECTION CERTIFICATES AND UCC SEARCH RESULTS. The Agent
shall have received from each Borrower a completed and fully executed Perfection
Certificate and the results of UCC searches with respect to the Collateral,
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Agent.
Section 9.6. CERTIFICATES OF INSURANCE. The Agent shall have received a
certificate of insurance signed by the insurer or an agent authorized to bind
the insurer dated as of the Closing Date, or within 15 days prior thereto,
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the Borrowers' insurance coverage.
Section 9.7. LEGAL OPINIONS. The Agent shall have received a favorable
legal opinion from counsel to the Borrowers, addressed to the Agent and each
Bank, dated as of the Closing Date, in form and substance satisfactory to the
Agent, including but not limited to an opinion regarding the Borrowers' Material
Contracts.
Section 9.8. ENVIRONMENTAL PERMIT CERTIFICATE. The Banks shall have
received an environmental permit certificate from the Borrowers satisfactory to
the Agent concerning principal operating permits at the Borrowers' principal
operating facilities.
Section 9.9. PAYMENT OF FEES. The Borrowers shall have paid any fees
owing to any of the Banks.
Section 9.10. PAYOFF LETTERS. The Agent shall have received payoff
letters from (a) Imperial Bank with respect to the Imperial Credit Agreement and
(b) BFI with respect to the BFI Notes, each indicating the amount of the loan
obligations of the Borrowers under such agreement or instrument to be discharged
on the Closing Date and an acknowledgment by Imperial Bank and BFI, as
applicable, that upon receipt of such funds it will forthwith execute and
deliver to the Agent for filing all termination statements and take such other
actions as may be necessary to discharge all mortgages, deeds of trust and
security interests granted by any Borrower in favor of such lenders.
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Section 9.11. CLOSING CERTIFICATE. The Borrowers shall have delivered to
the Agent a certificate, dated as of the Closing Date, stating that, as of such
date (a) the representations and warranties set forth herein or in any other
Loan Document are true and correct (b) no Default or Event of Default has
occurred and is continuing, and (c) each Material Contract is in full force and
effect, and no default or event of default has occurred and is continuing under
any Material Contract.
Section 9.12. AUDIT. The Borrowers shall have delivered to the Agent an
audit conducted by the Accountants, acceptable to the Agent, certifying the
Borrowers' consolidated balance sheet as of the Interim Balance Sheet Date and
the Borrowers' operations through such date.
Section 9.12. CONTRACTS. The Agent shall have received copies of all
Material Contracts.
Section 9.14. CONSENTS. Evidence that all requisite third-party consents
to the transactions contemplated hereunder and under the other Loan Documents
have been received.
Section 10. CONDITIONS OF ALL LOANS. The obligations of the Banks to
make any Loan (including without limitation the obligation of the Agent to
issue, extend or renew any Letter of Credit) on and subsequent to the Closing
Date is subject to the following conditions precedent:
Section 10.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrowers contained in this Credit
Agreement or in any document or instrument delivered pursuant to or in
connection with this Credit Agreement shall be true as of the date as of which
they were made and shall also be true at and as of the time of any Drawdown Date
or the issuance of any Letter of Credit with the same effect as if made at and
as of that time (except to the extent of changes resulting from transactions
contemplated or permitted by this Credit Agreement and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, or to the extent that such representations and warranties relate solely
and expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.
Section 10.2. PERFORMANCE; NO EVENT OF DEFAULT. The Borrowers shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by the Borrowers prior to or at the time of any Loan,
and at the time of any Loan, there shall exist no Event of Default or condition
which would result in an Event of Default upon consummation of such Loan
(including without limitation any amounts to be drawn under a Letter of Credit).
Each request by the Borrowers for a Loan (including without limitation each
request for issuance of a Letter of Credit) subsequent to the first Loan shall
constitute certification by the Borrowers
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that the conditions specified in Sections 10.1 and 10.2 will be duly satisfied
on the date of such Loan or Letter of Credit issuance.
Section 10.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Banks would make it illegal for the Banks to make Loans
hereunder.
Section 10.4. GOVERNMENTAL REGULATION. The Banks shall have received
such statements in form and substance reasonably satisfactory to the Banks as
they shall require for the purpose of compliance with any applicable regulations
of the Comptroller of the Currency or the Board of Governors of the Federal
Reserve System.
Section 10.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Credit Agreement and all documents
incident thereto shall have been delivered to the Banks as of the date hereof in
form and substance satisfactory to the Banks, including without limitation a
Loan and Letter of Credit Request in the form attached hereto as Exhibit B, and
the Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Banks may reasonably request.
Section 11. COLLATERAL SECURITY.
Section 11.1. SECURITY OF BORROWERS. The Obligations shall
be secured by a (i) perfected first priority security interest (subject only to
Permitted Liens entitled to priority under applicable law) in all of the assets
of the Borrowers (other than moneys due under the Excluded Contracts), whether
now owned or hereafter acquired, pursuant to the terms of the Security Documents
to which the Borrowers are a party, (ii) a pledge of all of the stock of each
Subsidiary pursuant to the terms of the Stock Pledge Agreements, and (iii) a
pledge of all of the Parent's stock held by the Trustee, provided that the
stock of the Parent shall be released by the Agent in connection with an initial
public offering of such stock.
Section 12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
Section 12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the
following events ("Events of Default" or, if the giving of notice or the lapse
of time or both is required, then, prior to such notice and/or lapse of time,
"Defaults") shall occur:
(a) if the Borrowers shall fail to pay any principal of the Loans or any
Reimbursement Obligation when the same shall become due and payable, whether at
the Maturity Date or any accelerated date of maturity or at any other date fixed
for payment;
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(b) if the Borrowers shall fail to pay any interest or fees or other
amounts owing hereunder within five (5) Business Days after the same shall
become due and payable whether at the Maturity Date or any accelerated date of
maturity or at any other date fixed for payment;
(c) if the Borrowers shall fail to comply with the covenants contained
in Sections 6.1, 6.7, 6.8, 6.10, 6.13, 6.14, 6.17, 6.18, 6.20, 7 or 8;
(d) if the Borrowers shall fail to comply with the covenants contained
in (i) Sections 6.2, 6.3, 6.5, 6.6, 6.9, 6.11, 6.12, 6.15, 6.16 or 6.19
within thirty (30) days of the Borrowers' knowledge of a violation of such
covenants or (ii) Section 6.4 within five (5) days of the Borrowers' knowledge
of a violation of such covenant;
(e) if the Borrowers shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other than
those specified in subsections (a), (b), (c) and (d) above) within 30 days after
written notice of such failure has been given to the Borrowers by the Agent or
any Bank;
(f) if any representation or warranty contained in this Credit Agreement
or in any document or instrument delivered pursuant to or in connection with
this Credit Agreement shall prove to have been false in any material respect
upon the date when made or repeated;
(g) if any Borrower shall fail to pay at maturity, or within any
applicable period of grace, any and all obligations for borrowed money (other
than the Obligations) or any guaranty with respect thereto in an aggregate
amount greater than $250,000 or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money in an aggregate amount greater than
$250,000 for such period of time as would, or would have permitted (assuming the
giving of appropriate notice if required) the holder or holders thereof or of
any obligations issued thereunder to accelerate the maturity thereof, unless the
same shall have been waived by the holder(s) thereof; or
(h) if any Borrower makes an assignment for the benefit of creditors, or
admits in writing its inability to pay or generally fails to pay its debts as
they mature or become due, or petitions or applies for the appointment of a
trustee or other custodian, liquidator or receiver of any Borrower or of any
substantial part of the assets of any Borrower or commences any case or other
proceeding relating to any Borrower under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or takes any action
to authorize or in furtherance of any of the foregoing, or if any such petition
or application is filed or any such case or other proceeding is commenced
against any Borrower or such Borrower indicates its approval thereof, consent
thereto or acquiescence therein, or such petition or
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application shall not have been dismissed within sixty (60) days following the
filing thereof;
(i) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any Borrower bankrupt or insolvent, or
approving a petition in any such case or other proceeding, or a decree or order
for relief is entered in respect of any Borrower in an involuntary case under
federal bankruptcy laws as now or hereafter constituted;
(j) if there shall remain in force, undischarged, unsatisfied and
unstayed, for more than thirty (30) days, whether or not consecutive, any final
judgment against any Borrower which, with other outstanding final judgments
against the Borrowers, exceeds in the aggregate $250,000 after taking into
account any undisputed insurance coverage;
(k) any Borrower or any ERISA Affiliate incurs any liability to the PBGC
or a Guaranteed Pension Plan pursuant to Title IV of ERISA in an aggregate
amount exceeding $250,000, or any Borrower or any ERISA Affiliate is assessed
withdrawal liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $250,000, or any of the following
occurs with respect to a Guaranteed Pension Plan: (i) an ERISA Reportable Event,
or a failure to make a required installment or other payment (within the meaning
of Section 302(f)(1) of ERISA), provided that the Agent determines in its
reasonable discretion that such event (A) could be expected to result in
liability of any Borrower to the PBGC or such Guaranteed Pension Plan in an
aggregate amount exceeding $250,000 and (B) could constitute grounds for the
termination of such Guaranteed Pension Plan by the PBGC, for the appointment by
the appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United States District
Court of a trustee to administer such Guaranteed Pension Plan; or (iii) the
institution by the PBGC of proceedings to terminate such Guaranteed Pension
Plan;
(l) if any of the Loan Documents shall be cancelled, terminated, revoked
or rescinded or the Agent's security interests or liens in a substantial portion
of the Collateral shall cease to be perfected, or shall cease to have the
priority contemplated by the Security Documents, in each case otherwise than in
accordance with the terms thereof or with the express prior written agreement,
consent or approval of the Banks, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan Documents
shall be commenced by or on behalf of any Borrower or any stockholder of any
Borrower who is an officer or director of such Borrower, or any court or any
other governmental or regulatory authority or agency of competent jurisdiction
shall make a determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal, invalid or
unenforceable in accordance with the terms thereof;
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(m) (i) the Parent shall at any time, legally or beneficially own less
than one hundred percent (100%) of the shares of the capital stock of each other
Borrower (indirectly through W.C. of Washington in the case of W.C.
International), as adjusted pursuant to any stock split, stock dividend or
recapitalization or reclassification of the capital of such Borrower; or (ii)
any person or group of persons (within the meaning of Section 13 or 14 of the
Securities Exchange Act of 1934, as amended) other than existing shareholders of
the Parent as of the Closing Date shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 20% or more of the outstanding shares of common
stock of the Parent; or, during any period of twelve consecutive calendar
months, individuals who were directors of the Parent on the first day of such
period shall cease to constitute a majority of the board of directors; provided,
however, that any such change of control resulting from an acquisition permitted
under Section 7.4 shall not constitute a Default or an Event of Default
hereunder, and provided further, that any change in the composition of the board
of directors of the Parent which occurs between the Closing Date and April 1,
1998 with the approval of ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇ shall not constitute a Default or
an Event of Default hereunder; or
(n) the early termination or cancellation of, or any material default by
a Borrower under, any Material Contract;
then, and in any such event, so long as the same may be continuing, the Agent
may, and at the request of the Majority Banks shall, by notice in writing to the
Borrowers, declare all amounts owing with respect to this Credit Agreement, the
Notes and the other Loan Documents and all Reimbursement Obligations to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
Event of Default specified in Sections 12.1(h) or 12.1(i), all such amounts
shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank. Upon demand by the Banks after
the occurrence of any Event of Default, the Borrowers shall immediately provide
to the Agent cash in an amount equal to the Maximum Drawing Amount, to be held
by the Agent as collateral security for the Obligations, provided that in the
event of any Event of Default specified in Sections 12.1(h) or 12.1(i), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from the Agent or any Bank.
Section 12.2. TERMINATION OF COMMITMENTS. If any Event of Default shall
occur, the Agent may, and at the request of the Majority Banks shall, by notice
to the Borrowers, terminate the unused portion of the Total Commitment
hereunder, and upon such notice being given, such unused portion of the Total
Commitment hereunder shall terminate immediately and the Banks shall be relieved
of all further obligations to make Loans to or issue Letters of Credit for the
account of the Borrowers hereunder, provided that in the event of any Event of
Default specified in
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Sections 12.1(h) or 12.1(i), all such amounts shall become immediately due and
payable automatically and without any requirement of notice from the Agent or
any Bank. No termination of any portion of the Total Commitment hereunder shall
relieve the Borrowers of any of their existing Obligations to the Banks
hereunder or elsewhere.
Section 12.3. REMEDIES. Subject to Section 13, in case any one or more
Events of Default shall have occurred and be continuing, and whether or not the
Banks shall have accelerated the maturity of the Loans pursuant to Section 12.1,
each Bank, if owed any amount with respect to the Loans or the Reimbursement
Obligations, may, with the consent of the Majority Banks but not otherwise, and
if the Agent shall have received opinions of nationally recognized law firms
specializing in California law, Louisiana law, and the law of any other state,
as applicable, having a one form of action rule to the effect that actions by
such Bank under such circumstances shall not constitute an action for purposes
of such state's one form of action rule or in any other way impair the
Collateral or the other Banks' rights hereunder or under the other Loan
Documents, proceed to protect and enforce its rights by suit in equity, action
at law or other appropriate proceeding, whether for the specific performance of
any covenant or agreement contained in this Credit Agreement and the other Loan
Documents or any instrument pursuant to which the Obligations to such Bank are
evidenced, including, without limitation, as permitted by applicable law the
obtaining of the ex parte appointment of a receiver, and, if such amount shall
have become due, by declaration or otherwise, proceed to enforce the payment
thereof or any legal or equitable right of such Bank. No remedy herein conferred
upon any Bank or the Agent or the holder of any Note or purchaser of any Letter
of Credit Participation is intended to be exclusive of any other remedy and each
and every remedy shall be cumulative and shall be in addition to every other
remedy given hereunder or now or hereafter existing at law or in equity or by
statute or any other provision of law.
Section 13. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of an Event of Default, any deposits or other sums credited by
or due from any Bank to the Borrowers and any securities or other property of
the Borrowers in the possession of such Bank may be applied to or set off
against the payment of the Obligations and any and all other liabilities, direct
or indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, of the Borrowers to the Banks. The Banks agree among
themselves that, if a Bank shall obtain payment on any Obligation outstanding
under this Credit Agreement through the exercise of a right of offset, banker's
lien or counterclaim, or from any other source including under Section 12.3
(other than by way of a pro rata payment under this Credit Agreement), it shall
promptly make such adjustments with the other Banks as shall be equitable to the
end that all the Banks shall share the benefits of such payments pro rata in
accordance with the aggregate unpaid amount of the Revolving Credit Notes held
by each Bank immediately prior to the payment obtained by such Bank as
aforesaid. The Banks further agree among themselves that if any payment to a
Bank obtained by such Bank through the exercise of a right of offset, banker's
lien
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or counterclaim, or from any other source (other than by way of a pro rata
payment) as aforesaid shall be rescinded or must otherwise be restored, the
Banks who shall have shared the benefit of such payment shall return their share
of that benefit to the Bank whose payment shall have been rescinded or otherwise
restored.
Section 14. THE AGENT.
Section 14.1. APPOINTMENT OF AGENT, POWERS AND IMMUNITIES. Each Bank
hereby irrevocably appoints and authorizes the Agent to act as its agent
hereunder and under the other Loan Documents, provided, however, the Agent is
hereby authorized to serve only as an administrative and collateral agent for
the Banks and to exercise such powers as are reasonably incidental thereto and
as are set forth in this Credit Agreement and the other Loan Documents. The
Agent hereby acknowledges that it does not have the authority to negotiate any
agreement which would bind the Banks or agree to any amendment, waiver or
modification of any of the Loan Documents or bind the Banks except as set forth
in this Credit Agreement or the Loan Documents. Except as provided in this
Section 14 and in the other Loan Documents, the Agent shall take action or
refrain from acting only upon instructions of the Banks and no action taken or
failure to act without the consent of the Banks shall be binding on any Bank
which has not consented. Each Bank irrevocably authorizes the Agent to execute
the Security Documents and all other instruments relating thereto and to take
such action on behalf of each of the Banks and to exercise all such powers as
are expressly delegated to the Agent under the Loan Documents and all related
documents, together with such other powers as are reasonably incidental thereto.
It is agreed that the duties, rights, privileges and immunities of BKB, in its
capacity as issuer of Letters of Credit hereunder, shall be identical to its
duties, rights, privileges and immunities as a Bank as provided in this Section
14. The Agent shall not have any duties or responsibilities or any fiduciary
relationship with any Bank except those expressly set forth in this Credit
Agreement. Neither the Agent nor any of its affiliates shall be responsible to
the Banks for any recitals, statements, representations or warranties made by
the Borrowers or any other Person whether contained herein or otherwise or for
the value, validity, effectiveness, genuineness, enforceability or sufficiency
of this Credit Agreement, the other Loan Documents or any other document
referred to or provided for herein or therein or for any failure by the
Borrowers or any other Person to perform its obligations hereunder or thereunder
or in respect of the Notes. The Agent may employ agents and attorneys-in-fact
and shall not be responsible for the negligence or misconduct of any such agents
or attorneys-in-fact selected by it with reasonable care. The Agent shall
exercise the same care in administering the Loans as it exercises with respect
to similar transactions entered into solely for its own account; however,
neither the Agent nor any of its directors, officers, employees or agents shall
be responsible for any action taken or omitted to be taken in good faith by it
or them hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Bank in its separate capacity as a Bank
shall have the same rights and powers hereunder as any other Bank.
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Section 14.2. ACTIONS BY AGENT. The Agent shall be fully justified in
failing or refusing to take any action under this Credit Agreement as it
reasonably deems appropriate unless it shall first have received such advice or
concurrence of the Banks and shall be indemnified to its reasonable satisfaction
by the Banks against any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action. The Agent shall in
all cases be fully protected in acting, or in refraining from acting, under this
Credit Agreement or any of the Loan Documents in accordance with a request of
the Majority Banks, and such request and any action taken or failure to act
pursuant thereto shall be binding upon the Banks and all future holders of the
Notes or any Letter of Credit Participation.
Section 14.3. INDEMNIFICATION. Without limiting the obligations of the
Borrowers under this Credit Agreement or any other Loan Document, the Banks
ratably agree hereby to indemnify and hold harmless the Agent, the Arranger, and
their affiliates from and against any and all claims, actions and suits (whether
groundless or otherwise), losses, damages, costs, expenses (including any
expenses for which the Agent, the Arranger or such affiliate has not been
reimbursed by the Borrowers as required by Section 15), and liabilities of every
nature and character arising out of or related to this Credit Agreement, the
Notes, or any of the other Loan Documents or the transactions contemplated or
evidenced hereby or thereby, or the Agent's actions taken hereunder or
thereunder, except to the extent that any of the same shall be directly caused
by the Agent's willful misconduct or gross negligence, it being the intent of
the parties hereto that all such indemnified parties shall be indemnified for
their ordinary sole or contributory negligence.
Section 14.4. REIMBURSEMENT. Without limiting the provisions of Section
14.3, the Banks and the Agent hereby agree that the Agent shall not be obliged
to make available to any Person any sum which the Agent is expecting to receive
for the account of that Person until the Agent has determined that it has
received that sum. The Agent may, however, disburse funds prior to determining
that the sums which the Agent expects to receive have been finally and
unconditionally paid to the Agent, if the Agent wishes to do so. If and to the
extent that the Agent does disburse funds and it later becomes known that the
Agent did not then receive a payment in an amount equal to the sum paid out,
then any Person to whom the Agent made the funds available shall, on demand from
the Agent, refund to the Agent the sum paid to that Person. If, in the opinion
of the Agent, the distribution of any amount received by it in such capacity
hereunder or under the Loan Documents might involve it in liability, it may
refrain from making distribution until its right to make distribution shall have
been adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
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Section 14.5. DOCUMENTS.
Section 14.5.1 CLOSING DOCUMENTATION. Section 14.5.1.
CLOSING DOCUMENTATION. For purposes of determining compliance with the
conditions set forth in Section 9, each Bank that has executed this Credit
Agreement shall be deemed to have consented to, approved or accepted, or to be
satisfied with, each document and matter either sent, or made available, by the
Agent or the Arranger to such Bank for consent, approval, acceptance or
satisfaction, or required thereunder to be consented to or approved by or
acceptable or satisfactory to such Bank, unless the Agent shall have received
notice from such Bank prior to the Closing Date specifying such Bank's objection
thereto and such objection shall not have been withdrawn by notice to the Agent
to such effect on or prior to the Closing Date.
Section 14.5.2. OTHER DOCUMENTS. The Agent will forward to
each Bank, promptly after the Agent's receipt thereof, a copy of each notice or
other document furnished to the Agent for such Bank hereunder; provided,
however, that notwithstanding the foregoing, the Agent may furnish to the Banks
a monthly summary with respect to Letters of Credit issued hereunder in lieu of
copies of the related Letter of Credit Applications.
Section 14.6. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank
represents that it has, independently and without reliance on the Agent or any
other Bank, and based on such documents and information as it has deemed
appropriate, made its own appraisal of the financial condition and affairs of
the Borrowers and decision to enter into this Credit Agreement and the other
Loan Documents and agrees that it will, independently and without reliance upon
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action under this Credit Agreement or any
other Loan Document. The Agent shall not be required to keep informed as to the
performance or observance by the Borrowers of this Credit Agreement, the other
Loan Documents or any other document referred to or provided for herein or
therein or by any other Person of any other agreement or to make inquiry of, or
to inspect the properties or books of, any Person. Except for notices, reports
and other documents and information expressly required to be furnished to the
Banks by the Agent hereunder, the Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning any person which may come into the possession of the Agent or any of
its affiliates. Each Bank shall have access to all documents relating to the
Agent's performance of its duties hereunder at such Bank's request. Unless any
Bank shall promptly object to any action taken by the Agent hereunder (other
than actions to which the provisions of Section 14.8 are applicable and other
than actions which constitute gross negligence or willful misconduct by the
Agent), such Bank shall conclusively be presumed to have approved the same.
Section 14.7. RESIGNATION OR REMOVAL OF AGENT. The Agent may resign at
any time by giving 60 days' prior written notice thereof to the Banks and the
Borrowers. Upon
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any such resignation, the Banks shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Banks (and,
provided that no Default or Event of Default shall have occurred and be
continuing, approved by the Borrowers, such approval not to be unreasonably
withheld) and shall have accepted such appointment within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Banks, appoint a successor Agent, which shall be a financial
institution having a combined capital and surplus in excess of $150,000,000.
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Credit Agreement shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Agent. Any new Agent appointed pursuant to
this Section 14.7 shall immediately issue new Letters of Credit in place of
Letters of Credit previously issued by the Agent (to the extent such Letters of
Credit are returned by the beneficiaries for purposes of such exchange).
Section 14.8. CONSENTS, AMENDMENTS, WAIVERS, ETC. Any consent or
approval required or permitted by this Credit Agreement to be given by the Banks
may be given, and any term of this Credit Agreement, the other Loan Documents or
any other instrument related hereto or mentioned herein may be amended, and the
performance or observance by the Borrowers of any terms of this Credit
Agreement, the other Loan Documents or such other instrument or the continuance
of any Default or Event of Default may be waived (either generally or in a
particular instance and either retroactively or prospectively) with, but only
with, the written consent of the Borrowers and the written consent of the
Majority Banks, provided however, that the Agent may, in its reasonable
discretion, release Collateral with an aggregate value of $500,000 or less in
any calendar year. Notwithstanding the foregoing, no amendment, waiver or
consent shall do any of the following unless in writing and signed by the
Borrowers and each of the Banks affected thereby: (a) increase the Commitments
of the Banks or subject any Bank to any additional obligations, or (b) reduce
the principal of or the rate of interest on the Notes (including, without
limitation, interest on overdue amounts) or any fees payable hereunder; and
FURTHER, no amendment, waiver or consent shall do any of the following unless in
writing and signed by ALL of the Banks: (c) postpone the Maturity Date or any
date fixed for any payment in respect of principal or interest (including,
without limitation, interest on overdue amounts) on the Notes, (d) change the
definition of "Majority Banks" or the number of Banks which shall be required
for the Banks or any of them to take any action under the Loan Documents; (e)
amend this Section 14.8 or Section 18; (f) release any Collateral with an
aggregate value exceeding $500,000 in any calendar year or (g) release any
Borrower from its obligations hereunder.
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No waiver shall extend to or affect any obligation not expressly waived
or impair any right consequent thereon. No course of dealing or delay or
omission on the part of the Agent or any Bank in exercising any right shall
operate as a waiver thereof or otherwise be prejudicial thereto. No notice to or
demand upon the Borrowers shall entitle the Borrowers to other or further notice
or demand in similar or other circumstances.
Section 14.9. DELINQUENT BANKS. Notwithstanding anything to the contrary
contained in this Credit Agreement or any of the other Loan Documents, any Bank
that fails (i) to make available to the Agent its pro rata share of any Loan or
to purchase any Letter of Credit Participation or (ii) to comply with the
provisions of Section 13 with respect to making dispositions and arrangements
with the other Banks, where such Bank's share of any payment received, whether
by setoff or otherwise, is in excess of its pro rata share of such payments due
and payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Credit Agreement, shall be deemed delinquent
(a "Delinquent Bank") and shall be deemed a Delinquent Bank until such time as
such delinquency is satisfied. A Delinquent Bank shall be deemed to have
assigned any and all payments due to it from the Borrowers, whether on account
of outstanding Loans, Reimbursement Obligations, interest, fees or otherwise, to
the remaining nondelinquent Banks for application to, and reduction of, their
respective pro rata shares of all outstanding Loans and Reimbursement
Obligations. The Delinquent Bank hereby authorizes the Agent to distribute such
payments to the nondelinquent Banks in proportion to their respective pro rata
shares of all outstanding Loans and Reimbursement Obligations. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Loans and
Reimbursement Obligations of the nondelinquent Banks, the Banks' respective pro
rata shares of all outstanding Loans and Reimbursement Obligations have returned
to those in effect immediately prior to such delinquency and without giving
effect to the nonpayment causing such delinquency.
Section 15. EXPENSES AND INDEMNIFICATION.
Section 15.1. EXPENSES. Whether or not the transactions contemplated
herein shall be consummated, the Borrowers agree to pay (i) the reasonable costs
of producing and reproducing this Credit Agreement, the other Loan Documents and
the other agreements and instruments mentioned herein, (ii) any taxes (including
any interest and penalties in respect thereto) payable by the Agent or any of
the Banks (other than taxes based upon the Agent's or any Bank's net income) on
or with respect to the transactions contemplated by this Credit Agreement (the
Borrowers hereby agreeing to indemnify the Agent and each Bank with respect
thereto), (iii) the reasonable fees, expenses and disbursements of counsel to
the Agent incurred in connection with the preparation, syndication,
administration or interpretation of the Loan Documents and other instruments
mentioned herein, each closing hereunder, any amendments,
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modifications, approvals, consents or waivers hereto or hereunder, or the
cancellation of any Loan Document upon payment in full in cash of all of the
Obligations or pursuant to any terms of such Loan Document providing for such
cancellation, (iv) the fees, expenses and disbursements of the Agent, the
Arranger, or any of their affiliates incurred by the Agent, the Arranger, or
such affiliate in connection with the preparation, syndication, administration
or interpretation of the Loan Documents and other instruments mentioned herein,
including all title insurance premiums and surveyor, engineering and appraisal
charges, (v) all reasonable out-of-pocket expenses (including without limitation
reasonable attorneys' fees and costs, which attorneys may be employees of any
Bank or the Agent, and reasonable consulting, accounting, appraisal, investment
banking and similar professional fees and charges) incurred by any Bank or the
Agent in connection with (A) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrowers or the administration thereof
after the occurrence of a Default or Event of Default and (B) any litigation,
proceeding or dispute whether arising hereunder or under any of the other Loan
Documents, in any way related to any Bank's or the Agent's relationship with the
Borrowers and (vi) all reasonable fees, expenses and disbursements of the Agent
incurred in connection with UCC searches and UCC filings.
Section 15.2. INDEMNIFICATION. The Borrowers agree to indemnify and hold
harmless the Agent, its affiliates and the Banks from and against any and all
claims, actions and suits whether groundless or otherwise, and from and against
any and all liabilities, losses, damages and expenses of every nature and
character arising out of this Credit Agreement or any of the other Loan
Documents or the transactions contemplated hereby including, without limitation,
(i) any actual or proposed use by the Borrowers of the proceeds of any of the
Loans or Letters of Credit, (ii) the Borrowers entering into or performing this
Credit Agreement or any of the other Loan Documents or (iii) with respect to the
Borrowers and their respective properties and assets, the violation of any
Environmental Law, the presence, disposal, escape, seepage, leakage, spillage,
discharge, emission, release or threatened release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to, claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding. In litigation, or the preparation
therefor, the Banks and the Agent, the Arranger, and their affiliates shall be
entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrowers agree to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrowers
under this Section 15.2 are unenforceable for any reason, the Borrowers hereby
agree to make the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law.
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Section 15.3. SURVIVAL. The covenants contained in this Section 15 shall
survive payment or satisfaction in full of all other Obligations.
Section 16. SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein,
all covenants, agreements, representations and warranties made herein, in the
other Loan Documents or in any documents or other papers delivered by or on
behalf of the Borrowers pursuant hereto shall be deemed to have been relied upon
by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of the
Loans and the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Credit Agreement, any Letter of Credit or the Notes remains
outstanding and unpaid or any Bank has any obligation to make any Loans or issue
any Letters of Credit hereunder. All statements contained in any certificate or
other paper delivered by or on behalf of the Borrowers pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the Borrowers hereunder.
Section 17. ASSIGNMENT AND PARTICIPATION. It is understood and agreed
that each Bank shall have the right to assign or participate at any time all or
a portion of its Commitment and interests in the risk relating to any Loans and
outstanding Letters of Credit hereunder in an amount equal to or greater than
$5,000,000 (which assignment shall be of an equal percentage of such Bank's
Commitment, the Revolving Credit Loans and outstanding Letters of Credit) to
Eligible Assignees with the prior written consent of the Agent and, unless a
Default or an Event of Default shall have occurred and be continuing, the
Borrowers, which approvals shall not be unreasonably withheld. It is further
agreed that each Eligible Assignee which executes and delivers to the Banks and
the Borrowers an Assignment and Acceptance in substantially the form of Exhibit
E (an "Assignment and Acceptance") shall, on the date specified in such
Assignment and Acceptance, become a party to this Credit Agreement and the other
Loan Documents for all purposes of this Credit Agreement and the other Loan
Documents, and its Commitment shall be as set forth in such Assignment and
Acceptance. Upon the execution and delivery of such Assignment and Acceptance
and payment by the assigning bank of an assignment fee in the amount of $3,500
to the Agent, (a) the Borrowers shall issue to such Eligible Assignee a
Revolving Credit Note in the amount of such Eligible Assignee's Commitment dated
the Closing Date or such other date as may be specified by the Agent and
otherwise completed in substantially the form of Exhibit A hereto and, to the
extent any assigning Bank has retained a portion of its obligations hereunder, a
replacement Revolving Credit Note to the assigning Bank; (b) the Agent shall
distribute to the Borrowers, the Banks and such Eligible Assignee a schedule
reflecting such changes; (c) this Credit Agreement shall be appropriately
amended to reflect (i) the status of such Eligible Assignee as a party hereto
and (ii) the status and rights of the Banks and Agent hereunder; and (d) the
Borrowers shall take such action as the Agent may reasonably request to perfect
any security interests in favor of the Banks, including any Eligible Assignee
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which becomes a party to this Credit Agreement. The documents evidencing any
such participation may provide that, except with the consent of the bank or
financial institution that is a party thereto, such Bank will not consent to (a)
the reduction in or forgiveness of the stated principal of or rate of interest
on or Commitment Fee with respect to the portion of any Loan subject to such
participation or assignment, (b) the extension or postponement of any stated
date fixed for payment of principal or interest or Commitment Fee with respect
to the portion of any Loan subject to such participation or assignment, or (c)
the waiver or reduction of any right to indemnification of such Bank hereunder.
Notwithstanding the foregoing, no syndication or participation shall operate to
increase the Total Commitment hereunder or otherwise alter the substantive terms
of this Credit Agreement. Anything contained in this Section 17 to the contrary
notwithstanding, any Bank may at any time pledge all or any portion of its
interest and rights under this Credit Agreement (including all or any portion of
its Notes) to any of the twelve Federal Reserve Banks organized under Section 4
of the Federal Reserve Act, 12 U.S.C. Section 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
Section 18. PARTIES IN INTEREST. All the terms of this Credit Agreement
and the other Loan Documents shall be binding upon and inure to the benefit of
and be enforceable by the respective successors and assigns of the parties
hereto and thereto; provided that the Borrowers shall not assign or transfer
their rights hereunder without the prior written consent of each Bank.
Section 19. NOTICES, ETC. Except as otherwise expressly provided in this
Credit Agreement, all notices and other communications made or required to be
given pursuant to this Credit Agreement or the other Loan Documents shall be in
writing and shall be delivered in hand, mailed by United States first-class
mail, postage prepaid, or sent by telex or facsimile and confirmed by letter,
addressed as follows:
(a) if to the Borrowers, at Waste Connections, Inc., ▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇▇▇, President and CEO, telephone number ▇▇▇-▇▇▇-▇▇▇▇, fax number
▇▇▇-▇▇▇-▇▇▇▇;
(b) if to the Agent or BKB, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director, telephone number ▇▇▇-▇▇▇-▇▇▇▇,
telecopy number ▇▇▇-▇▇▇-▇▇▇▇;
or such other address for notice as shall have last been furnished in
writing to the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to a responsible
officer of the party to which it is directed, at the time of the receipt thereof
by such officer, (b) if sent by registered or certified first-class mail,
postage prepaid, five Business Days
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after the posting thereof, (c) if sent by telex or cable, at the time of the
dispatch thereof, if in normal business hours in the country of receipt, or
otherwise at the opening of business on the following Business Day, and (d) if
sent by facsimile, when transmitted, confirmation received.
Section 20. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
Section 20.1. SHARING OF INFORMATION WITH SECTION 20
SUBSIDIARY. The Borrowers acknowledge that from time to time financial advisory,
investment banking and other services may be offered or provided to the
Borrowers, in connection with this Credit Agreement or otherwise, by a Section
20 Subsidiary. The Borrowers hereby authorize (a) such Section 20 Subsidiary to
share with the Agent and each Bank any information delivered to such Section 20
Subsidiary by the Borrowers, and (b) the Agent and each Bank to share with such
Section 20 Subsidiary any information delivered to the Agent or such Bank by the
Borrowers pursuant to this Credit Agreement, or in connection with the decision
of such Bank to enter into this Credit Agreement; it being understood, in each
case, that any such Section 20 Subsidiary receiving such information shall be
bound by the confidentiality provisions of this Credit Agreement. Such
authorization shall survive the payment and satisfaction in full of all of the
Obligations.
Section 20.2. CONFIDENTIALITY. Each of the Banks and the
Agent agrees, on behalf of itself and each of their affiliates, directors,
officers, employees and representatives, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrowers pursuant to this Credit Agreement that is identified by such Person as
being confidential at the time the same is delivered to the Banks or the Agent,
provided that nothing herein shall limit the disclosure of any such information
(a) after such information shall have become public other than through a
violation of this Section 20, (b) to the extent required by statute, rule,
regulation or judicial process, (c) to counsel for any of the Banks or the
Agent, (d) to bank examiners or any other regulatory authority having
jurisdiction over any Bank or the Agent, or to auditors or accountants, (e) to
the Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Agent or any Section 20
Subsidiary is a party, or in connection with the enforcement of rights or
remedies hereunder or under any other Loan Document, (g) to a subsidiary or
affiliate of such Bank as provided in Section 20.1 or (h) to any assignee or
participant (or prospective assignee or participant) so long as such assignee or
participant agrees to be bound by the provisions of this Section 20.
Section 20.3. PRIOR NOTIFICATION. Unless specifically
prohibited by applicable law or court order, each of the Banks and the Agent
shall, prior to disclosure thereof, notify the Borrowers of any request for
disclosure of any such non-public information
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by any governmental agency or representative thereof (other than any such
request in connection with an examination of the financial condition of such
Bank by such governmental agency) or pursuant to legal process.
Section 20.4. OTHER. In no event shall any Bank or the Agent
be obligated or required to return any materials furnished to it or any Section
20 Subsidiary by the Borrowers. The obligations of each Bank under this Section
20 shall supersede and replace the obligations of such Bank under any
confidentiality letter in respect of this financing signed and delivered by such
Bank to the Borrowers prior to the date hereof and shall be binding upon any
assignee of, or purchaser of any participation in, any interest in any of the
Loans or Reimbursement Obligations from any Bank.
Section 21. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the Banks or Agent would
otherwise have. The captions in this Credit Agreement are for convenience of
reference only and shall not define or limit the provisions hereof. This Credit
Agreement and any amendment hereof may be executed in several counterparts and
by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, but all of which together shall constitute one
instrument. In proving this Credit Agreement it shall not be necessary to
produce or account for more than one such counterpart signed by the party
against whom enforcement is sought.
Section 22. ENTIRE AGREEMENT, ETC. The Loan Documents and any other
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Credit Agreement nor any term hereof may be changed,
waived, discharged or terminated, except as provided in Section 14.8. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or omission on the part of the
Agent or any Bank in exercising any right shall operate as a waiver thereof or
otherwise be prejudicial thereto. No notice to or demand upon the Borrowers
shall entitle the Borrowers to other or further notice or demand in similar or
other circumstances.
Section 23. WAIVER OF JURY TRIAL. EACH BORROWER HEREBY WAIVES ITS RIGHT
TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE
IN CONNECTION WITH THIS CREDIT AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
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ACTUAL DAMAGES. THE BORROWERS (A) CERTIFY THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT
SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE
THE FOREGOING WAIVERS AND (B) ACKNOWLEDGE THAT THE AGENT AND THE BANKS HAVE BEEN
INDUCED TO ENTER INTO THIS CREDIT AGREEMENT AND THE OTHER LOAN DOCUMENTS TO
WHICH THEY ARE A PARTY BECAUSE OF, AMONG OTHER THINGS, THE BORROWERS' WAIVERS
AND CERTIFICATIONS CONTAINED HEREIN.
Section 24. GOVERNING LAW. This Credit Agreement and each of the other
Loan Documents are contracts under the laws of the Commonwealth of Massachusetts
and shall for alL purposes be construed in accordance with and governed by the
laws of said commonwealth (excluding the laws applicable to conflicts or choice
of law). The Borrowers consent to the jurisdiction of any of the federal or
state courts located in the Commonwealth of Massachusetts in connection with any
suit to enforce the rights of any Bank or the Agent under this Credit Agreement
or any of the other Loan Documents.
Section 25. SEVERABILITY. The provisions of this Credit Agreement are
severable and if any one clause or provision hereof shall be held invalid or
unenforceable in whole or iN part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Credit
Agreement in any jurisdiction.
[Signature Pages Follow]
77
IN WITNESS WHEREOF, the undersigned have duly executed this Credit
Agreement under seal as of the date first set forth above.
THE BORROWERS:
--------------
WASTE CONNECTIONS, INC.
WASTE CONNECTIONS OF WASHINGTON, INC.
WASTE CONNECTIONS OF IDAHO, INC.
WASTE CONNECTIONS INTERNATIONAL, INC.
By: _________________________________________
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
THE LENDERS:
BANKBOSTON, N.A.,
individually and as Agent
By: _________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
78
FIRST AMENDMENT
TO REVOLVING CREDIT AGREEMENT
AND SECURITY DOCUMENTS
This FIRST AMENDMENT TO REVOLVING CREDIT AGREEMENT AND SECURITY
DOCUMENTS (this "Amendment") is made and entered into as of February 23, 1998,
by and among (a) WASTE CONNECTIONS, INC., a Delaware corporation (the "Parent"),
the subsidiaries of the Parent identified on Schedule 2 hereto (the
"Subsidiaries," and collectively with the Parent, the "Borrowers"), (b)
BankBoston, N.A., a national banking association having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (acting in its
individual capacity, "BKB") and the other BANKS and lending institutions which
become parties to the Credit Agreement, defined below (collectively, the
"Banks"), and (C) BANKBOSTON, N.A., as agent for the Banks (the "Agent").
Capitalized terms used herein without definition shall have the meanings
assigned to such terms in the Credit Agreement, defined below.
WHEREAS, the Borrowers, the Banks and the Agent are parties to a
Revolving Credit Agreement dated as of January 30, 1998 (as amended and in
effect from time to time, the "Credit Agreement"), pursuant to which the Banks
have extended credit to the Borrowers on the terms set forth therein;
WHEREAS, the Borrowers have informed the Banks that the Parent is
entering into an agreement to acquire all of the capital stock of Madera
Disposal Systems, Inc., a California corporation ("Madera"), in exchange for the
following consideration: (a) $8,185,000 in cash, as adjusted pursuant to Section
1.2 of the Stock Purchase Agreement (defined below), (b) 1,000,000 shares of
common stock of the Parent, and (c) warrants to purchase an aggregate of 200,000
shares of common stock of the Parent, plus (d) any additional contingent
purchase price pursuant to Section 1.3 of the Stock Purchase Agreement
(collectively, the "Total Consideration");
WHEREAS, the acquisition of Madera (the "Madera Acquisition") is to be
consummated substantially in accordance with the terms set forth in the Stock
Purchase Agreement dated as of February 4, 1998 (the "Stock Purchase Agreement")
among (a) Madera, (b) ▇▇▇▇ ▇▇▇▇▇▇▇▇, as trustee of the ▇▇▇▇▇▇▇▇ Family Trust B,
(c) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇, (d) ▇▇▇▇▇▇ ▇. ▇▇▇▇, (e) ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, (f) ▇▇▇▇
▇▇▇▇▇▇▇▇, and (g) the Parent;
WHEREAS, the Borrowers have requested that the Banks consent to the
Madera Acquisition, and the Banks are willing to consent thereto on the terms
set forth herein;
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WHEREAS, the Banks, the Agent, and the Borrowers have agreed to further
amend the Credit Agreement as hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing, and for other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties agree as follows:
1. CONSENT TO MADERA ACQUISITION. Each of the undersigned Banks hereby
consents to the Madera Acquisition, provided that the total aggregate purchase
price paid by the Borrowers in connection therewith shall not exceed the Total
Consideration.
2. AMENDMENT TO DEFINITIONS.
(b) Section 1.1 of the Credit Agreement is hereby amended by adding the
following new definitions in the proper alphabetical order:
Madera. Madera Disposal Systems, Inc., a California corporation.
Madera Adjustment. The applicable amount set forth in the
following table for the respective period, provided that such amount shall be
added to EBITDA for purposes of calculating the financial covenants under
Section 8 only, and not for calculation of the Pricing Ratio:
------------------------------ -------------------------------
Fiscal Quarter Ending: Adjustment
------------------------------ -------------------------------
March 31, 1998 $726,667
------------------------------ -------------------------------
June 30, 1998 $726,667
------------------------------ -------------------------------
September 30, 1998 $726,667
------------------------------ -------------------------------
December 31, 1998 $181,667
------------------------------ -------------------------------
(b) The definition of "Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization or EBITDA" is hereby amended to read as follows:
Consolidated Earnings Before Interest, Taxes, Depreciation and
Amortization or EBITDA. For any period, EBIT plus (a) depreciation expense for
such period and (b) amortization expense relating to intangible assets for such
period, to the extent that each was deducted in determining Consolidated Net
Income (or Deficit), plus the Madera Adjustment, if applicable, provided that,
for purposes of calculating the financial covenants under Section 8 (but not the
Pricing Ratio), EBITDA (excluding any projected cost savings or adjustments
other than nonrecurring private company expenses that are discontinued upon
acquisition by the Parent or its Subsidiaries, such as owner compensation and
insurance and benefit cost reductions, and that are approved by the Agent and
the Majority Banks) of Subsidiaries (other than Madera) acquired since the date
of the most recent financial statements
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delivered to the Banks pursuant to Section 6.4 shall be included in the
calculation of EBITDA if (i) the financial statements of such acquired
Subsidiaries have been audited for the period sought to be included by the
Accountants or (ii) the Agent and the Majority Banks consent to such inclusion
after being furnished with unaudited financial statements, together with a
Compliance Certificate and other appropriate documentation certifying the
historical operating results and balance sheet of the acquired companies.
3. AMENDMENT TO THE CREDIT AGREEMENT. The Credit Agreement is hereby
amended by deleting Schedule 2 attached thereto and substituting therefor the
Schedule 2 attached hereto.
4. AMENDMENT TO PARENT STOCK PLEDGE AGREEMENT. The Stock Pledge
Agreement between the Agent and the Parent (the "Parent Stock Pledge Agreement")
is hereby amended by deleting Annex A thereto and substituting therefor the
Annex A attached hereto. The Parent hereby pledges, assigns, grants a security
interest in, and delivers to the Agent for the benefit of the Banks and the
Agent all of the Parent's shares of capital stock of Madera listed on Annex A
attached hereto, and Madera hereby agrees to be bound by the applicable
provisions of the Parent Stock Pledge Agreement.
5. AMENDMENT TO SECURITY AGREEMENT.
(a) Madera is hereby added as a party to the Security Agreement, and
agrees to be bound by all of its terms and conditions, in all respects as if it
were an original signatory thereto.
(b) Madera hereby unconditionally, and jointly and severally with the
Borrowers, grants to the Agent, for the benefit of the Banks and the Agent, to
secure the payment and performance in full of all of the Obligations, a security
interest in, and so pledges and assigns to the Agent, for the benefit of the
Banks and the Agent, the Collateral, as defined in the Security Agreement, on
the terms set forth therein. Madera expressly acknowledges that it has reviewed
the definition of the term "Collateral" contained in the Security Agreement,
including the description of the existing and after-acquired assets of Madera
included and to be included therein.
6. AFFIRMATION AND ACKNOWLEDGMENT OF THE BORROWERS.
(a) Madera acknowledges that it has received and reviewed a copy of the
Credit Agreement and each of the other Loan Documents. Madera hereby agrees to
become a Borrower under the Credit Agreement and to be bound by all of the
terms, conditions and provisions thereof as if it were an original signatory
thereto. Madera acknowledges, without limitation, that such terms include
provisions concerning joint and several liability contained in Section 4.12 of
the Credit Agreement, the environmental
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indemnification contained in Section 6.11 of the Credit Agreement, the expense
and indemnification provisions contained in Sections 14 and 15 of the Credit
Agreement, the waiver of jury trial contained in Section 23 of the Credit
Agreement, and the governing law contained in Section 24 of the Credit
Agreement. In consideration therefor, the Banks and the Agent agree that, as a
Borrower under the Credit Agreement, Madera will be entitled to the benefits
thereof afforded to Borrowers under the Credit Agreement, upon the terms and
subject to the conditions contained therein.
(b) Each of the Borrowers and Madera hereby ratifies and confirms all of
its Obligations to the Agent and the Banks including, without limitation, the
Loans and the Reimbursement Obligations, and each of the Borrowers and Madera
hereby affirms its absolute and unconditional promise to pay to the Banks and
the Agent the Loans, Reimbursement Obligations and all other amounts due or to
become due and payable to the Banks and the Agent under the Credit Agreement and
the other Loan Documents, as amended hereby. Each of the Borrowers and Madera
hereby confirms that the Obligations are and remain secured pursuant to the
Security Documents and pursuant to all other instruments and documents executed
and delivered by such Borrower as security for the Obligations.
(c) The Credit Agreement, the other Loan Documents and all documents,
instruments and agreements related thereto are hereby ratified and confirmed in
all respects and shall continue in full force and effect. This Amendment and the
Credit Agreement shall hereafter be read and construed together as a single
document, and all references in the Credit Agreement or any related agreement or
instrument to the Credit Agreement shall hereafter refer to the Credit Agreement
as amended by this Amendment. This Amendment and the Parent Stock Pledge
Agreement shall hereafter be read and construed together as a single document,
and all references in the Parent Stock Pledge Agreement or any related agreement
or instrument to the Parent Stock Pledge Agreement shall hereafter refer to the
Parent Stock Pledge Agreement as amended by this Amendment.
7. REPRESENTATIONS. The Borrowers represent and warrant to the Agent and
the Banks that:
(a) as of the date hereof, no Default or Event of Default has occurred
and is continuing, and the Madera Acquisition will not otherwise create a
Default or an Event of Default under the Credit Agreement; and
(b) the Borrowers have delivered to the Agent all items required under
Section 7.4 of the Credit Agreement.
8. EFFECTIVENESS. This Amendment shall become effective upon the
execution and delivery of this Amendment by the Borrowers and Majority Banks and
the satisfaction of the following conditions (the "Effective Date"):
82
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(i) Allonge to Revolving Credit Note. The Agent shall have
received an executed allonge to the Revolving Credit Note, in form and
substance satisfactory to the Agent, adding Madera as a maker of the
Revolving Credit Note.
(ii) Certified Copies of Charter Documents. The Agent shall have
received from Madera a certificate as to the good standing of Madera
from the Secretary of State or other appropriate official of the state
of its organization, dated as of a recent date. The Agent shall also
have received from Madera a certificate of its Secretary certifying the
following attachments thereto: (a) a copy of its certificate or articles
of incorporation or constitutive documents, in each case as amended to
date, certified as of a recent date by the Secretary of State or other
appropriate official of the state of its organization, (b) a true and
correct copy of its by-laws, including all amendments thereto, (c) a
true and correct copy of the resolutions of its board of directors
authorizing the execution and delivery of this Amendment, the allonge to
the Revolving Credit Note, and all related documents. Such Secretary's
Certificate shall also give the name and bear a specimen signature of
each individual who shall be authorized (i) to sign this Amendment and
related documents on behalf of Madera; (ii) to make Loan and Letter of
Credit Requests; and (iii) to give notices and to take other action on
Madera's behalf under the Loan Documents.
(iii) Delivery of Stock. The stock certificates evidencing all of
the issued and outstanding shares of capital stock of Madera, together
with undated stock powers thereto duly executed in blank, shall have
been delivered to the Agent to be held upon the terms of the Parent
Stock Pledge Agreement.
(iv) Perfection Certificate and UCC Search Results. The Agent
shall have received from Madera a completed and fully executed
Perfection Certificate and the results of UCC searches with respect to
the Collateral, indicating no liens other than Permitted Liens and
otherwise in form and substance satisfactory to the Agent.
(v) Environmental Permit Certificate. The Agent shall have
received an environmental permit certificate from the Parent
satisfactory to the Agent, concerning principal operating permits of
Madera's principal operating facilities.
(vi) Consummation of Purchase Agreements. The Madera Acquisition
(other than the exchange of consideration) shall have been completed on
terms no less favorable to Madera and the Parent than those set forth in
the Stock Purchase Agreement dated as of February 4, 1998 among (a)
Madera,
83
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(
b) ▇▇▇▇ ▇▇▇▇▇▇▇▇, as trustee of the ▇▇▇▇▇▇▇▇ Family Trust, Trust B,
under a Trust Agreement dated March 8, 1997, (c) ▇▇▇▇ ▇▇▇▇▇▇▇, (d) ▇▇▇
▇▇▇▇, (e) The Administrators, as trustee of the ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Living Trust under a Trust Agreement dated 1/1/96, and (f) the Parent, a
copy of which was delivered to the Agent in connection with the Consent.
(vii) Legal Opinion. The Agent shall have received an opinion of
counsel to the Borrowers and Madera as to the due authorization and
enforceability of this Amendment as it relates to Madera, the allonge to
the Revolving Credit Note, the due organization, legal existence, and
good standing of Madera, the consummation of the Madera Acquisition, and
all other matters as the Agent may reasonably request;
(viii) Payoff Letters. The Agent shall have received payoff
letters, in form and substance satisfactory to the Agent, with respect
to all Indebtedness of Madera which is not permitted under the Credit
Agreement.
9. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL TAKE
EFFECT AS A SEALED INSTRUMENT IN ACCORDANCE WITH SUCH LAWS.
10. COUNTERPARTS. This Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument.
[Signature Pages Follow]
84
IN WITNESS WHEREOF, each of the undersigned has duly executed this
Amendment under seal as of the date first set forth above.
THE BORROWERS:
WASTE CONNECTIONS, INC.
WASTE CONNECTIONS OF WASHINGTON, INC.
WASTE CONNECTIONS OF IDAHO, INC.
WASTE CONNECTIONS INTERNATIONAL, INC.
By:
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President and Chief Executive Officer
MADERA DISPOSAL SYSTEMS, INC.
By:
---------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇▇
President
THE LENDERS:
BANKBOSTON, N.A.,
individually and as Agent
By:
---------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director
85
SCHEDULE 2
SUBSIDIARIES
--------------------------------- ------------------------ ----------------------------
Jurisdiction of
Subsidiary Incorporation 100% Owned By:
--------------------------------- ------------------------ ----------------------------
Waste Connections of Idaho, Inc. Delaware Parent
--------------------------------- ------------------------ ----------------------------
Waste Connections of Washington Parent
Washington, Inc.
--------------------------------- ------------------------ ----------------------------
Waste Connections Washington Waste Connections of
International, Inc. Washington, Inc.
--------------------------------- ------------------------ ----------------------------
Madera Disposal Systems, Inc. California Parent
--------------------------------- ------------------------ ----------------------------
86
ANNEX A TO PLEDGE AGREEMENT
None of the issuers has any authorized, issued or outstanding shares of
its capital stock of any class or any commitments to issue any shares of its
capital stock of any class or any securities convertible into or exchangeable
for any shares of its capital stock of any class except as otherwise stated in
this Annex A.
---------------- ----------- ----------- ------------ ----------- ----------- ------------
Number of Number of Number of Par or
Record Class of Authorized Issued Outstanding Liquidation
Issuer Owner Shares Shares Shares Shares Value
---------------- ----------- ----------- ------------ ----------- ----------- ------------
Waste Connections
of Idaho, Inc. Parent Common 10,000 300 300 $0.01
---------------- ----------- ----------- ------------ ----------- ----------- ------------
Waste Connections
of Washington,
Inc. Parent Common 1,000 1,000 1,000 $1.00
---------------- ----------- ----------- ------------ ----------- ----------- ------------
Madera Disposal
Systems, Inc. Parent Common 1,000,000 500 500 None
---------------- ----------- ----------- ------------ ----------- ----------- ------------