REVOLVING CREDIT AGREEMENT
by and among
EASTERN ENVIRONMENTAL SERVICES, INC.
(the "Parent")
and its Subsidiaries
listed on Schedule 1 hereto
(collectively the "Borrowers")
and
THE FIRST NATIONAL BANK OF BOSTON
("FNBB")
and
BANK OF AMERICA ILLINOIS
(collectively, the "Banks"),
and
FNBB, as Agent
September 25, 1996
Table of Contents
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Page
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(S)1. DEFINITIONS AND RULES OF INTERPRETATION.......................... 1
(S)1.1. Definitions........................................... 1
(S)1.2. Rules of Interpretation............................... 10
(S)2. THE REVOLVING CREDIT FACILITIES.................................. 11
(S)2.1. Commitment to Lend.................................... 11
(S)2.2. Reduction of Revolving Credit Commitment.............. 11
(S)2.3. The Notes............................................. 11
(S)2.4. Requests for Loans.................................... 12
(S)2.5. Funds for Loans....................................... 12
(S)2.6. Election of Eurodollar Rate; Notice of Election; Interest
Periods; Minimum Amounts....................................... 13
(S)2.7. Interest.............................................. 14
(S)2.8. Maturity of the Loans and Reimbursement Obligations... 14
(S)2.9. Mandatory Repayments of the Loans..................... 14
(S)2.10. Optional Prepayments or Repayments of Loans.......... 14
(S)3. LETTERS OF CREDIT................................................ 14
(S)3.1. Letter of Credit Commitments.......................... 14
(S)3.2. Reimbursement Obligation of the Borrowers............. 15
(S)3.3. Letter of Credit Payments............................. 16
(S)3.4. Obligations Absolute.................................. 16
(S)3.5. Reliance by Agent..................................... 16
(S)4. FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND
SEVERAL LIABILITY................................................ 17
(S)4.1. Fees.................................................. 17
(S)4.2. Payments.............................................. 17
(S)4.3. Computations.......................................... 18
(S)4.4. Capital Adequacy...................................... 18
(S)4.5. Interest on Overdue Amounts........................... 18
(S)4.6. Interest Limitation................................... 18
(S)4.7. Eurodollar Indemnity.................................. 19
(S)4.8. Illegality; Inability to Determine Eurodollar Rate.... 19
(S)4.9. Additional Costs, Etc................................. 20
(S)4.10. Certificate.......................................... 20
(S)4.11. Concerning Joint and Several Liability of the
Borrowers............................................ 20
(S)4.12. New Borrowers........................................ 22
(S)5. REPRESENTATIONS AND WARRANTIES................................. 22
(S)5.1. Corporate Authority................................... 22
(S)5.2. Governmental Approvals................................ 23
(S)5.3. Title to Properties; Leases........................... 23
(S)5.4. Financial Statements; Solvency........................ 23
(S)5.5. No Material Changes, Etc.............................. 23
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Table of Contents
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(S)5.6. Permits, Franchises, Patents, Copyrights, Etc......... 24
(S)5.7. Litigation............................................ 24
(S)5.8. No Materially Adverse Contracts, Etc.................. 24
(S)5.9. Compliance With Other Instruments, Laws, Etc.......... 24
(S)5.10. Tax Status............................................ 24
(S)5.11. No Event of Default................................... 25
(S)5.12. Holding Company and Investment Company Acts........... 25
(S)5.13. Absence of Financing Statements, Etc.................. 25
(S)5.14. Employee Benefit Plans................................ 25
(S)5.15. Use of Proceeds....................................... 25
(S)5.16. Environmental Compliance.............................. 26
(S)5.17. Perfection of Security Interests...................... 27
(S)5.18. Certain Transactions.................................. 27
(S)5.19. Subsidiaries.......................................... 27
(S)5.20. True Copies of Charter and Other Documents............ 27
(S)5.21. Disclosure............................................ 28
(S)5.22. Permits and Governmental Authority.................... 28
(S)5.23. Environmental Reports................................. 28
(S)6. AFFIRMATIVE COVENANTS OF THE BORROWERS............................ 28
(S)6.1. Punctual Payment...................................... 28
(S)6.2. Maintenance of Office................................. 28
(S)6.3. Records and Accounts.................................. 28
(S)6.4. Financial Statements, Certificates and Information.... 28
(S)6.5. Corporate Existence and Conduct of Business........... 30
(S)6.6. Maintenance of Properties............................. 30
(S)6.7. Insurance............................................. 30
(S)6.8. Taxes................................................. 30
(S)6.9. Inspection of Properties, Books, and Contracts........ 31
(S)6.10. Compliance with Laws, Contracts, Licenses and Permits;
Maintenance of Material Licenses and Permits................... 31
(S)6.11. Environmental Indemnification........................ 31
(S)6.12. Further Assurances................................... 32
(S)6.13. Notice of Potential Claims or Litigation............. 32
(S)6.14. Notice of Certain Events............................. 32
(S)6.15. Response Actions..................................... 33
(S)6.16. Notice of Default.................................... 33
(S)6.17. Closure and Post Closure Liabilities................. 33
(S)6.18. Subsidiaries......................................... 33
(S)7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS...................... 33
(S)7.1. Restrictions on Indebtedness......................... 33
(S)7.2. Restrictions on Liens................................ 34
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Table of Contents
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(S)7.3. Restrictions on Investments........................... 35
(S)7.4. Mergers, Consolidations, Sales, Acquisitions.......... 36
(S)7.5. Sale and Leaseback.................................... 37
(S)7.6. Restricted Distributions and Redemptions.............. 37
(S)7.7. Employee Benefit Plans................................ 37
(S)7.8. Subordinated Debt..................................... 38
(S)7.9. Capital Expenditures.................................. 38
(S)8. FINANCIAL COVENANTS OF THE BORROWERS............................. 38
(S)8.1. Interest Coverage Ratio............................... 38
(S)8.2. Leverage Ratio........................................ 38
(S)8.3. Profitable Operations................................. 38
(S)8.4. Proforma Leverage Ratio............................... 38
(S)9. CLOSING CONDITIONS............................................... 39
(S)9.1. Corporate Action...................................... 39
(S)9.2. Loan Documents, Etc................................... 39
(S)9.3. Certified Copies of Charter Documents................. 39
(S)9.4. Incumbency Certificate................................ 39
(S)9.5. Validity of Liens..................................... 39
(S)9.6. UCC Search Results.................................... 39
(S)9.7. Certificates of Insurance............................. 39
(S)9.8. Opinions of Counsel................................... 39
(S)9.9. Payoff Letters........................................ 40
(S)9.10. Closing Fee.......................................... 40
(S)9.11. Proceeds of Equity Offering.......................... 40
(S)9.12. Audited Financial Statements......................... 40
(S)9.13. Information Regarding Acquisitions................... 40
(S)10. CONDITIONS TO ALL LOANS.......................................... 40
(S)10.1. Representations True; No Event of Default............ 40
(S)10.2. Performance; No Event of Default..................... 40
(S)10.3. No Legal Impediment.................................. 41
(S)10.4. Governmental Regulation.............................. 41
(S)10.5. Proceedings and Documents............................ 41
(S)11. COLLATERAL SECURITY............................................. 41
(S)12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT...... 41
(S)12.1. Events of Default and Acceleration................... 41
(S)12.2. Termination of Commitments........................... 43
(S)12.3. Remedies............................................. 44
(S)13. SETOFF.......................................................... 44
(S)14. THE AGENT....................................................... 45
(S)14.1. Appointment of Agent, Powers and Immunities.......... 45
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Table of Contents
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(S)14.2. Actions By Agent..................................... 45
(S)14.3. Indemnification...................................... 45
(S)14.4. Reimbursement........................................ 46
(S)14.5. Documents............................................ 46
(S)14.6. Non-Reliance on Agent and Other Banks................ 46
(S)14.7. Resignation of Agent................................. 47
(S)14.8. Action by the Banks, Consents, Amendments,
Waivers, Etc......................................... 47
(S)15. EXPENSES........................................................ 47
(S)16. INDEMNIFICATION................................................. 48
(S)17. SURVIVAL OF COVENANTS, ETC...................................... 48
(S)18. ASSIGNMENT AND PARTICIPATION.................................... 48
(S)19. PARTIES IN INTEREST............................................. 49
(S)20. NOTICES, ETC.................................................... 50
(S)21. MISCELLANEOUS................................................... 50
(S)22. ENTIRE AGREEMENT, ETC........................................... 50
(S)23. WAIVER OF JURY TRIAL............................................ 50
(S)24. GOVERNING LAW................................................... 51
(S)25. SEVERABILITY.................................................... 51
REVOLVING CREDIT AGREEMENT
--------------------------
This REVOLVING CREDIT AGREEMENT is made as of the 25th day of
September, 1996 by and among EASTERN ENVIRONMENTAL SERVICES, INC., a Delaware
corporation (the "Parent"), its Subsidiaries listed on Schedule 1 hereto (the
Parent and such Subsidiaries herein collectively referred to as the "Borrowers"
and, individually, as a "Borrower"), each of which Borrowers (unless otherwise
listed on Schedule 1 hereto) having its principal place of business at ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇ and THE FIRST NATIONAL BANK OF
BOSTON ("FNBB"), a national banking association having its principal place of
business at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, BANK OF AMERICA
ILLINOIS, an Illinois banking corporation having its head office at ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("B of A") and such banks or other
financial institutions which become a party hereto (each a "Bank," and,
collectively, the "Banks"), and FNBB as Agent for the Banks (the "Agent").
(S)1. DEFINITIONS AND RULES OF INTERPRETATION.
---------------------------------------
(S)1.1. Definitions. The following terms shall have the meanings set forth
-----------
in this (S)1 or elsewhere in the provisions of this Agreement referred to below:
Accountants. See (S)5.4(a).
-----------
Agreement. This Revolving Credit Agreement, including the Schedules
---------
and Exhibits hereto, as amended and in effect from time to time.
Agent. See preamble.
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Agent's Head Office. The Agent's head office at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇,
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▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Agent may
designate from time to time.
Applicable Laws. See (S)6.10.
---------- ----
Applicable Rate. The applicable rate per annum of interest on the Loans
---------- ----
set forth in the following table:
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Applicable Rate for Base Applicable Rate for
Pricing Ratio Rate Loans Eurodollar Loans
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less than 2.00:1 Base Rate Eurodollar Rate plus
1.75%
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greater than or equal to
2.00:1, but less than Base Rate Eurodollar Rate plus 2%
2.50:1
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greater than or equal to
2.50:1 but less than Base Rate Eurodollar Rate plus
3.00:1 2.25%
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greater than or equal to
3.00:1 Base Rate Eurodollar Rate plus
2.50%
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Any change in the Applicable Rate shall become effective (a) with respect
to Base Rate Loans, on the first day after receipt by the Banks of financial
statements delivered pursuant to (S)(S)6.4(a) or (b) hereof which indicate a
change in the Pricing Ratio and in the Applicable Rate in accordance with the
above table, and (b) with respect to Eurodollar Loans, on the first day of each
Interest Period which begins three (3) or more days after receipt by the Banks
of such financial statements. Notwithstanding the foregoing, until receipt by
the Banks of financial statements delivered pursuant to (S)6.4(a) or (b) hereof
for the fiscal quarter ended September 30, 1996, the Applicable Rate for
Eurodollar Loans shall be the Eurodollar Rate plus _____% [to be based upon
6/30/96 financials]. If the Borrowers shall fail to deliver the financial
statements required by (S)6.4(a) or (b) hereof within the time period specified
therein, the Applicable Rate for Eurodollar Loans shall be the Eurodollar Rate
plus 2.50% for each Interest Period which begins after the date on which such
financial statements were due but before actual delivery thereof.
Balance Sheet Date. June 30, 1996.
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Base Rate. The higher of (a) the annual rate of interest announced from
---- ----
time to time by the Agent at its head office in Boston, Massachusetts, as its
"base rate" (it being understood that such rate is a reference rate and not
necessarily the lowest rate of interest charged by the 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.
B of A. See Preamble.
------
Borrowers. See Preamble.
---------
Business Day. Any day on which banking institutions in Boston,
-------- ---
Massachusetts are open for the transaction of banking business.
Capital Assets. Tangible fixed assets (such as land, buildings, fixtures,
--------------
machinery and equipment, landfills, and other items classified as property and
equipment in accordance with GAAP); provided that Capital Assets shall not
include any item customarily charged directly to expense or
depreciated over a useful life of twelve (12) months or less in accordance with
GAAP or any tangible assets acquired through an acquisition permitted by (S)7.4
hereof.
Capital Expenditures. Amounts paid or indebtedness incurred by any Person
------- ------------
in connection with the purchase and lease by such Person of Capital Assets that
would be required to be capitalized and shown on the balance sheet of such
Person in accordance with GAAP.
Capitalized Leases. Leases, 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.
Certified or 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 (S)6.4(b).
---
Closing Date. The date on which the conditions precedent set forth in (S)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 that
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are or are intended to be subject to the security interests and mortgages
created by the Security Documents.
Commitment. With respect to each Bank, the amount determined by multiplying
----------
such Bank's Commitment Percentage by the aggregate amount of the Total
Commitment, as the same may be reduced from time to time.
Commitment Fee. See (S)4.1(a).
--------------
Commitment Percentage. With respect to each Bank, the percentage set forth
---------- ----------
beside its name below (subject to adjustment upon any assignments pursuant to
(S)18):
Bank Percentage
---- ----------
FNBB 66 2/3%
B of A 33 1/3%
Compliance Certificate. See (S)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 consolidated in
accordance with GAAP.
Consolidated Earnings Before Interest and Taxes or EBIT. For any period,
------------ -------- ------ -------- --- ----- ----
the Consolidated Net Income (or Deficit) of the Borrowers determined in
accordance with GAAP, plus (a) interest
----
-4-
expense, and (b) income tax expense, to the extent that each of the same has
been deducted in calculating Consolidated Net Income (or Deficit).
Consolidated Earnings Before Interest, Taxes, Depreciation and Amortization
------------ -------- ------ -------- ----- ------------ ------------
or EBITDA. For any period, the Consolidated Net Income (or Deficit) of the
------
Borrowers determined in accordance with GAAP, plus (a) interest expense, (b)
----
income taxes (c) depreciation and landfill depletion expense, and (d)
amortization expense, to the extent that each of the same has been deducted in
calculating Consolidated Net Income (or Deficit), but excluding one-time charges
of not more than $2,820,000 for the fiscal quarter ended June 30, 1996.
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 Total Assets. All assets of the Borrowers determined on a
------------ ----- ------
consolidated basis in accordance with GAAP.
Consolidated Total Interest Expense. For any period, the aggregate amount
------------ ----- -------- -------
of interest expense required to be paid or accrued by the Borrowers during such
period on all Indebtedness of the Borrowers outstanding during all or any part
of such period, including capitalized interest expense for such period.
Consolidated Total Liabilities. All liabilities of the Borrowers determined
------------ ----- -----------
on a consolidated basis in accordance with GAAP.
Consulting Engineer. An environmental consulting firm acceptable to the
---------- --------
Agent.
Default. See (S)12.
-------
Disposal. See "Release".
--------
Distribution. The declaration or payment of any dividend on or in respect
------------
of any shares of any class of capital stock of any Person, other than dividends
payable solely in shares of common stock of such Person; the purchase,
redemption, or other retirement of any shares of any class of capital stock of
such Person, directly or indirectly through a Subsidiary or otherwise; the
return of capital by any Person to its shareholders as such; or any other
distribution on or in respect of any shares of any class of capital stock of
such Person.
Dollars or $. Dollars in lawful currency of the United States of America.
------- -
Drawdown Date. The date on which any Loan is made or is to be made.
-------------
EBIT. See definition of Consolidated Earnings Before Interest and Taxes.
----
-5-
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
------
Depreciation and Amortization.
Employee Benefit Plan. Any employee benefit plan within the meaning of
-------- ------- ----
(S)3(3) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate, other than a Multiemployer Plan.
Environmental Laws. See (S)5.16(a).
------------- ----
ERISA. The Employee Retirement Income Security Act of 1974, as amended and
-----
in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with any
----- ---------
Borrower under (S)414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed
----- ---------- -----
Pension Plan within the meaning of (S)4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar Loan,
------------ ------- ----
the maximum rate (expressed as a decimal) at which any lender subject thereto
would be required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or similar regulations
relating to such reserve requirements) against "Eurocurrency Liabilities" (as
that term is used in Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and as of the
effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
---------- -------- ---
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Agent in its sole
discretion acting in good faith.
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. 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 10:00 a.m. local time in such interbank market, two Business Days prior to
the commencement of an Interest Period for a period equal to such 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.
-6-
Eurodollar Rate. With respect to any Interest Period, the rate per annum,
---------- ----
rounded upwards to the nearest 1/16 of 1%, determined by the Agent two Business
Days prior to the commencement of such Interest Period, in accordance with the
following formula:
Eurodollar Rate = Eurodollar Offered Rate
-----------------------
1 - Eurocurrency Reserve Rate
Event of Default. See (S)12.
----- -- -------
Funded Debt. All Indebtedness of the Borrowers for borrowed money, plus all
------ ----
Indebtedness in respect of capitalized leases.
Generally Accepted Accounting Principles or GAAP. (i) When used in (S)8,
--------- -------- ---------- ---------- -- ----
whether directly or indirectly through reference to a capitalized term used
therein, means (A) 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, and
(B) to the extent consistent with such principles, the accounting practice of
the Borrowers reflected in their financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (B) consistently applied with past financial
statements of the Borrowers adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the
---------- ------- ----
meaning of (S)3(2) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
Hazardous Substances. See (S)5.16(b).
--------- ----------
Indebtedness. Collectively, without duplication, whether classified as
------------
Indebtedness, an Investment or otherwise on the obligor's balance sheet, (a) all
indebtedness for borrowed money or credit obtained or other similar monetary
obligations, direct or indirect, (b) all obligations for the deferred purchase
price of property or services or for future payment to the seller of property or
services (other than trade payables not overdue by more than ninety (90) days
incurred in the ordinary course of business), (c) all obligations evidenced by
notes, bonds, debentures or other similar debt instruments, (d) all obligations
created or arising under any conditional sale or other title retention agreement
with respect to property acquired (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations, liabilities and
indebtedness under Capitalized Leases, (f) all
-7-
obligations, contingent or otherwise, under acceptance, letter of credit or
similar facilities, (g) all agreements for indemnification or agreements to
guarantee others against losses of any kind, (h) all liabilities or obligations
in respect of judgments or awards against such Person, (i) all obligations,
liabilities or indebtedness (contingent or otherwise) under landfill closure and
post-closure bonds, (j) all Indebtedness of others referred to in clauses (a)
through (i) above which is guaranteed, or in effect guaranteed, directly or
indirectly in any manner, including through an agreement (A) to pay or purchase
such Indebtedness or to advance or supply funds for the payment or purchase of
such Indebtedness, (B) to purchase, sell or lease (as lessee or lessor)
property, or to purchase or sell services, primarily for the purpose of enabling
any Person to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, (C) to supply funds to or in any other manner invest
in any Person (including any agreement to pay for property or services
irrespective of whether such property is received or such services are rendered)
or (D) otherwise to assure any Person against loss, and (k) all Indebtedness
referred to in clauses (a) through (j) above secured or supported by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured or supported by) any lien or encumbrance on (or other
right of recourse to or against) property (including, without limitation,
accounts and contract rights), even though the owner of the property has not
assumed or become liable, contractually or otherwise, for the payment of such
Indebtedness.
Interest Period. With respect to each Eurodollar Loan:
-------- ------
(a) initially, the period commencing on the date of a conversion
from a Base Rate Loan into a Eurodollar Loan or the making of a Eurodollar
Loan, and ending one (1), two (2), three (3), or six (6) months thereafter, as
the case may be, as the Borrowers may select; and
(b) thereafter, each subsequent Interest Period shall begin on the
last day of the preceding Interest Period, and end one (1), two (2), three (3),
or six (6) months thereafter, as the case may be, as the Borrowers may select;
(c) provided that any Interest Period which would otherwise end on
a day which is not a Business Day shall end on the next succeeding Business
Day, unless the effect would be to extend such Interest Period to the next
calendar month, in which case such Interest Period shall end on the next
preceding Business Day.
Investments. All expenditures made and all liabilities incurred
-----------
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person, or pre-payments for the use of
landfill air space in excess of usual and customary industry practice. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (b) there shall be included as an Investment all interest accrued
with respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment,
-8-
liquidating dividend or liquidating distribution); (d) there shall not be
deducted in respect of any Investment any amounts received as earnings on such
Investment, whether as dividends, interest or otherwise, except that accrued
interest included as provided in the foregoing clause (b) may be deducted when
paid; and (e) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Letters of Credit. Standby Letters of Credit issued or to be issued by the
------- -- ------
Agent under (S)3 hereof for the account of the Borrowers.
Letter of Credit Applications. Letter of Credit Applications in such form
------ -- ------ ------------
as may be agreed upon by any Borrowers and the Agent from time to time which are
entered into pursuant to (S)3 hereof as such Letter of Credit Applications are
amended, varied or supplemented from time to time.
Letter of Credit Fee. See (S)4.1(b).
------ -- ------ ---
Letter of Credit Participation. See (S)3.1(b).
------ -- ------ -------------
Loan Documents. This Agreement, the Notes, the Letter of Credit
---- ---------
Applications, the Letters of Credit, and the Security Documents, each as
amended, modified, or supplemented and in effect from time to time.
Loan and Letter of Credit Request. See (S)2.4.
---- --- ------ -- ------ -------
Loans. Loans made by the Banks to the Borrowers pursuant to (S)2.1 hereof.
-----
Majority Banks. As of any date, (a) if the number of Banks is two or fewer,
-------- -----
the Banks holding one hundred percent (100%) of the outstanding principal amount
of the Loans on such date; and if no such principal is outstanding, the Banks
whose aggregate Commitments constitute one hundred percent (100%) of the
Revolving Credit Commitment, and (b) if the number of Banks is three or more,
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 Acquisition. See (S)7.4.
-------- -----------
Maturity Date. September 25, 1999.
-------------
Maximum Drawing Amount. The maximum aggregate amount from time to time that
------- ------- ------
the beneficiaries may draw under outstanding Letters of Credit.
Multiemployer Plan. Any multiemployer plan within the meaning of (S)3(37)
------------- ----
of ERISA maintained or contributed to by any Borrower or any ERISA Affiliate.
Notes. See (S)2.3.
-----
-9-
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 Agreement or arising thereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated or
unliquidated, secured or unsecured, arising by contract, operation of law or
otherwise, arising or incurred under this Agreement or any of the other Loan
Documents or in respect of any of the Loans made or Reimbursement Obligations
incurred or the Letters of Credit, the Notes or any other instrument at any time
evidencing any thereof.
Overnight Federal Funds Effective Rate. 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.
PBGC. The Pension Benefit Guaranty Corporation created by (S)4002 of ERISA
----
and any successor entity or entities having similar responsibilities.
Permitted Liens. See (S)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.
Pledge Agreement. The Pledge Agreement, dated as of the date hereof, among
------ ---------
the Borrowers and the Agent pledging all of the stock of the Subsidiaries of the
Parent to the Agent for the benefit of the Banks, as such agreement may be
further amended, modified, or supplemented from time to time.
Pricing Ratio. As at the end of any fiscal quarter of the Borrowers, the
------- -----
ratio of (a) Funded Debt to (b) EBITDA for the four fiscal quarters ending on
such date.
Proforma EBITDA. For any twelve month period, the Consolidated Net Income
-------- ------
(or Deficit) of the Borrowers and any Subsidiaries acquired within the past
twelve months or to be acquired as if the Subsidiaries had been owned for those
twelve months, determined in accordance with GAAP and, with respect to a
Subsidiary to be acquired or Subsidiary acquired within the last twelve months,
by reference to such Subsidiary's financial statements (which have been reviewed
and analyzed by the Parent in accordance with its standard due diligence
practices and which are in form and substance satisfactory to the Banks) as such
statements may be adjusted by agreement between the Banks and the Borrowers,
plus (a) interest expense, (b) income taxes, (c) depreciation and landfill
----
depletion expense, and (d) amortization expense, to the extent that each of the
same has been deducted in calculating such Consolidated Net Income (or Deficit),
but excluding one-time charges of not more than $2,820,000 for the fiscal
quarter ended June 30, 1996.
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 (S)3.2.
-10-
Release. Shall have the meaning specified in the Comprehensive
-------
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
(S)(S)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. (S)(S)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.
Security Documents. The Pledge Agreement and any additional documents
-------- ---------
evidencing or perfecting the Agent's lien on the shares of the Subsidiaries of
the Parent for the benefit of the Banks, including Uniform Commercial Code
financing statements, each as amended and in effect from time to time.
Subordinated Debt. Indebtedness of the Borrowers the terms and amount of
------------ ----
which has been approved in writing by the Banks and which has been subordinated
to the Obligations on terms and conditions satisfactory to the Banks.
Subordination Agreements. The documents evidencing the subordination of the
------------- ----------
Subordinated Debt to the Obligations, the terms of which have been approved in
writing by the Banks.
Subsidiary. Any corporation, association, trust, or other business entity
----------
of which the designated parent shall at any time own directly or indirectly
through a Subsidiary or Subsidiaries at least a majority of the outstanding
capital stock or other interest entitled to vote generally.
Total Commitment. See (S)2.1.
----- ----------
(S)1.2. Rules of Interpretation.
----- -- --------------
(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms capitalized but not otherwise defined herein have the
meanings assigned to them by Generally Accepted Accounting Principles applied on
a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by Generally Accepted
Accounting Principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, have the meanings assigned to
them therein.
(h) Reference to a particular "(S)" refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
(S)2. THE REVOLVING CREDIT FACILITIES.
--- --------- ------ ----------
(S)2.1. Commitment to Lend. Subject to the terms and conditions set forth
---------- -- ----
in this Agreement, each of the Banks severally agrees to lend to the Borrowers
and the Borrowers may borrow, repay, and reborrow from time to time between the
Closing Date and the Maturity Date, upon notice by the Borrowers to the Agent
given in accordance with (S)2.4, such Bank's Commitment Percentage of sums as
are requested by the Borrowers provided that the sum of the outstanding
principal amount of the Loans (giving effect to the requested Loan) plus the
Maximum Drawing Amount shall not exceed a maximum aggregate amount outstanding
of $30,000,000, as such amount may be reduced pursuant to (S)2.2 hereof (the
"Total Commitment"). Each request for a Loan or Letter of Credit hereunder shall
constitute a representation and warranty by the Borrowers that the conditions
set forth in (S)9 and (S)10, as the case may be, have been satisfied on the date
of such request. Any unpaid Reimbursement Obligation with respect to any Letter
of Credit shall be a Base Rate Loan hereunder.
(S)2.2. Reduction of Revolving Credit Commitment.
--------- -- --------- ------ -----------
(a) The Borrowers shall have the right at any time and from time to time
upon three (3) Business Day's prior written notice to the Agent to reduce by
$2,000,000 or greater amount or terminate entirely the Total Commitment,
whereupon the Commitment of each Bank shall be reduced pro rata in accordance
with such Bank's Commitment Percentage 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 delivered by the Borrowers pursuant to this (S)2.2.
Notwithstanding the foregoing, at no time may the Total Commitment be reduced to
an amount less than the sum of (i) the Maximum Drawing Amount and (ii) all Loans
then outstanding.
(b) No reduction or termination of the Total Commitment once made may be
revoked; the portion of the Total Commitment reduced or terminated may not be
reinstated; and amounts in respect of such reduced or terminated portion may not
be reborrowed.
(S)2.3. The Notes. The Revolving Credit Loans shall be evidenced by
--- -----
promissory notes of the Borrowers in substantially the form of Exhibit A hereto
(each, a "Note"), dated as of the Closing Date and completed with appropriate
insertions. One Note shall be payable to the order of each Bank in an amount
equal to such Bank's Commitment Percentage of the Total Commitment, and
representing the
-12-
obligation of the Borrowers to pay such Bank such principal amounts or, if less,
the outstanding principal amount of all 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 Loan
or at the time of receipt of any payment of principal on such Bank's Note, an
appropriate notation on such Bank's records reflecting the making of the Loan or
the receipt of such payment (as the case may be) and may, prior to any transfer
of its Note, endorse on the reverse side thereof the outstanding principal
amount of Loans evidenced thereby. 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
obligations of the Borrowers hereunder or under the Notes to make payments of
principal of or interest on any Note when due.
(S)2.4. Requests for Loans. The Parent as agent for the Borrowers shall
-------- --- -----
give to the Agent written notice in the form of Exhibit B hereto (or telephonic
notice confirmed in writing or a telecopy in the form of Exhibit B hereto) of
each Loan requested hereunder (a "Loan and Letter of Credit Request") not later
than (a) 11:00 a.m. (Boston time) on the proposed Drawdown Date of any Base Rate
Loan, or (b) 12:00 noon (Boston time) three (3) Eurodollar Business Days prior
to the Drawdown Date of any Eurodollar Loan. Each Loan requested shall be in a
minimum amount of $500,000. Each such request shall specify the principal amount
of the Loan requested and shall reflect the Maximum Drawing Amount of all
Letters of Credit outstanding. Requests for Loans made hereunder shall be
irrevocable and binding on the Borrowers, and shall obligate the Borrowers to
accept the 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 Agreement or any other Loan Document shall be true
and correct in all material respects when made and shall, for all purposes of
this Agreement, be deemed to be repeated on and as of the date of the submission
of a Loan and Letter of Credit Request and on and as of the Drawdown Date of
such Loan or the date of issuance of such Letter of Credit (except to the extent
(i) of changes resulting from transactions contemplated or permitted by this
Agreement and the other Loan Documents, (ii) of changes occurring in the
ordinary course of business that singly or in the aggregate are not materially
adverse to the business, assets or financial condition of any Borrower or the
Borrowers taken as a whole, (iii) of changes disclosed to the Banks in writing
and accepted by the Banks, or (iv) that such representations and warranties
expressly relate only to an earlier date). The Agent shall promptly notify each
Bank of each Loan and Letter of Credit Request received by the Agent.
(S)2.5. Funds for Loans.
----- --- -----
(a) Not later than 1:00 p.m. (Boston time) on the proposed Drawdown Date of
any Loan, each of the Banks will make available to the Agent, at its Head
Office, in immediately available funds, the amount of such Bank's Commitment
Percentage of the amount of the requested Loan. Upon receipt from each Bank of
such amount, and upon receipt of the documents required by (S)9 or (S)10, as the
case may be, and the satisfaction of the other conditions set forth therein, to
the extent applicable, the Agent will make available to the Borrowers the
aggregate amount of such 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 Loan
-13-
shall not relieve any other Bank from its several obligations hereunder to make
available to the Agent the amount of such Bank's Commitment Percentage of any
requested Loan.
(b) The Agent may (unless earlier notified to the contrary by any Bank by
1:00 p.m. (Boston time) on any Drawdown Date) assume that each Bank has made
available (or will before the end of such Business Day make available) to the
Agent the amount of such Bank's Commitment Percentage with respect to the Loan
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 such amount available to the Agent on a
date after such Drawdown Date, such Bank shall pay 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 annual interest rate paid by the
Agent for federal funds acquired by the Agent during each day included in such
period multiplied by (ii) the amount equal to such Bank's Commitment Percentage
---------- --
of such Loan, multiplied by (iii) a fraction, the numerator of which is the
---------- --
number of days that elapse from and including such Drawdown Date to but not
including the date on which the amount equal to such Bank's Commitment
Percentage of such Loan 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 of the amount due and owing to the Agent by such Bank. If such amount
is not in fact made available to the Agent by such Bank within three (3)
Business Days of such Drawdown Date, the Agent shall be entitled to debit the
Borrowers' accounts to recover such amount from the Borrowers, with interest
thereon at the rate per annum applicable to any Loan made on such Drawdown Date.
(S)2.6. Election of Eurodollar Rate; Notice of Election; Interest Periods;
-------- -- ---------- ----- ------ -- --------- -------- --------
Minimum Amounts.
------- --------
(a) At the Parent's option, so long as no Default or Event of
Default has occurred and is then continuing, the Parent may (i) elect to convert
any 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 such requested 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
Parent gives notice to the Agent pursuant to (S)2.6(b) hereof. Upon determining
any Eurodollar Rate, the Agent shall forthwith provide notice thereof to the
Parent and each Bank, and each such notice to the Parent 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 Parent shall give written or telecopy notice
received by the Agent not later than 12:00 noon (Boston time) of its election
pursuant to (S)2.6(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 Parent shall fail to give the Agent notice
of its election hereunder together with all of the other information required by
this (S)2.6(b) with respect to any Loan, whether at the end of an Interest
Period or
-14-
otherwise, such Loan shall be deemed a Base Rate Loan. The Agent shall promptly
notify each Bank in writing (or by telephone confirmed in writing or by
telecopy) of such election.
(c) Notwithstanding anything herein to the contrary, the Borrowers
may not specify an Interest Period that would extend beyond the Maturity Date.
(d) All Eurodollar Loans shall be in a minimum amount of not less
than $1,000,000. In no event shall the Borrowers have more than five (5)
different maturities of borrowings of Eurodollar Loans outstanding at any time.
(S)2.7. Interest. The outstanding principal amount of the Loans shall bear
--------
interest at the rate per annum equal to the Applicable Rate. Interest shall be
payable (a) quarterly in arrears on the last Business Day of each fiscal quarter
for the fiscal quarter ending on such date, on Base Rate Loans, (b) on the last
day of the applicable Interest Period, and if such interest period is longer
than three (3) months, also on the day of each third month following the
commencement of such Interest Period which corresponds to the day on which such
Interest Period began on Eurodollar Loans, and (c) on the Maturity Dates on all
Loans.
(S)2.8. Maturity of the Loans and Reimbursement Obligations. The Loans and
-------- -- --- ----- --- ------------- -----------
all unpaid Reimbursement Obligations shall be due and payable on the Maturity
Date. Each of the Borrowers promises to pay on the Maturity Date all Loans and
all unpaid Reimbursement Obligations outstanding on such date, together with any
and all accrued and unpaid interest thereon and any fees and other amounts owing
hereunder.
(S)2.9. Mandatory Repayments of the Loans. If at any time the outstanding
--------- ---------- -- --- -----
amount of the Loans plus the Maximum Drawing Amount of all outstanding Letters
of Credit exceeds the Total Commitment whether by reduction of the Total
Commitment or otherwise, then the Borrowers shall immediately pay the amount of
such excess to the Agent (a) for application to the Loans (subject to (S)4.7),
or (b) if no Loans shall be outstanding, to be held by the Agent for the benefit
of the Banks as collateral security for the Reimbursement Obligations provided,
however, that if the amount of cash collateral held by the Agent pursuant to
this (S)2.9(b) exceeds the Maximum Drawing Amount, the Agent shall return such
excess to the Borrowers.
(S)2.10. Optional Prepayments or Repayments of Loans. Subject to the terms
-------- ----------- -- ---------- -- -----
and conditions of (S)4.7, the Borrowers shall have the right, at their election,
to repay or prepay the outstanding amount of the Loans, as a whole or in part,
at any time without penalty or premium. The Borrowers shall give the Agent, no
later than 12:00 noon (Boston time) three (3) Business Days prior to such
proposed prepayment or repayment, written notice (or telephonic notice confirmed
in writing or by telecopy) of any proposed prepayment or repayment pursuant to
this (S)2.10, specifying the proposed date of prepayment or repayment of Loans
and the principal amount to be paid (in integral multiples of $500,000, or, if
less, the balance of the Loans). The Agent shall promptly notify each Bank by
written notice (or telephonic notice confirmed in writing or by telecopy) of
such payment.
-15-
(S)3. LETTERS OF CREDIT.
------- -- -------
(S)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 (S)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 aggregate Maximum Drawing Amount of all
letters of credit issued at any time under this (S)3.1(a) (the "Letters of
Credit") shall not exceed $10,000,000, and no Letter of Credit shall have an
expiration date later than the earlier of (i) one year after the date of
issuance of the Letter of Credit, or (ii) thirty (30) days prior to the Maturity
Date
(b) Each Bank severally agrees that it shall be absolutely liable,
without regard to the occurrence of any Default or Event of Default or any other
condition precedent whatsoever, to the extent of such Bank's Commitment
Percentage thereof, to reimburse the Agent on demand for the amount of each
draft paid by the Agent under each Letter of Credit to the extent that such
amount is not reimbursed by the Borrowers pursuant to (S)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 (S)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 (S)3.2.
(S)3.2. Reimbursement Obligation of the Borrowers. In order to induce the
------------- ---------- -- --- ---------
Agent to issue, extend and renew each Letter of Credit and the Banks to
participate therein, the Borrowers hereby agree to reimburse or pay to the Agent
with respect to each Letter of Credit issued, extended or renewed by the Agent
hereunder as follows:
(a) on each date that any draft presented under any Letter of
Credit is honored by the Agent or the Agent otherwise makes payment with respect
thereto, (i) the amount paid by the Agent under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Agent in connection with any payment made by
the Agent under, or with respect to, such Letter of Credit; and
(b) upon the Maturity Date or the acceleration of the
Reimbursement Obligations with respect to all Letters of Credit in accordance
with (S)12, an amount equal to the then Maximum Drawing Amount of all Letters of
Credit, which amount shall be held by the Agent for the benefit of the Banks and
the Agent as cash collateral for all Reimbursement Obligations.
-16-
Each such payment shall be made to the Agent at the Agent's Head Office in
immediately available funds. Interest on any and all amounts remaining unpaid
by the Borrowers under this (S)3.2 at any time from the date such amounts become
due and payable (whether as stated in this (S)3.2, by acceleration or otherwise)
until payment in full (whether before or after judgment) shall be payable to the
Agent on demand at the rate specified in (S)4.5 for overdue amounts.
(S)3.3. Letter of Credit Payments. If any draft shall be presented or other
--------------------------
demand for payment shall be made under any Letter of Credit, the Agent shall
notify the Borrowers of the date and amount of the draft presented or demand for
payment and of the date and time when it expects to pay such draft or honor such
demand for payment. On the date that such draft is paid or other payment is made
by the Agent, the Agent shall promptly notify the Banks of the amount of any
unpaid Reimbursement Obligation. All such unpaid Reimbursement Obligations with
respect to Letters of Credit shall be deemed to be Base Rate Loans. No later
than 3:00 p.m. (Boston time) on the Business Day next following the receipt of
such notice, each Bank shall make available to the Agent, at the Agent's Head
Office, in immediately available funds, such Bank's Commitment Percentage of
such unpaid Reimbursement Obligation, together with an amount equal to the
product of (a) the average, computed for the period referred to in clause (c)
below, of the weighted average interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period, multiplied by (b)
---------- --
the amount equal to such Bank's Commitment Percentage of such unpaid
Reimbursement Obligation, multiplied by (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.
(S)3.4. Obligations Absolute. The Borrowers' obligations under this (S)3
---------------------
shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Agent, any Bank or any
beneficiary of a Letter of Credit. 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 (S)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.
-17-
(S)3.5. Reliance by Agent. To the extent not inconsistent with (S)3.4, the
------------------
Agent shall be entitled to rely, and shall be fully protected in relying upon,
any Letter of Credit, draft, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document believed by it to be genuine and correct and
to have been signed, sent or made by the proper Person or Persons and upon
advice and statements of legal counsel, independent accountants and other
experts selected by the Agent.
(S)4. FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY.
---- -------- --- ------------ ----- --- ------- ---------
(S)4.1. Fees.
----
(a) Commitment Fee. The Borrowers agree to pay to the Banks a
---------- ---
commitment fee (the "Commitment Fee") at the rate of three-eighths of one
percent (3/8%) per annum on the unused portion of the Total Commitment during
each fiscal 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). This Commitment Fee shall be payable quarterly in arrears on the last
day of each fiscal quarter for the fiscal quarter then ended commencing on the
last day of the calendar month in which the conditions set forth in (S)9 hereof
are first satisfied, with a final payment on the Maturity Date. The Commitment
Fee shall be shared pro rata by the Banks in accordance with their respective
Commitment Percentages.
(b) Letter of Credit Fee. The Borrowers shall pay a fee (the "Letter
------ -- ------ ---
of Credit Fee") to the Agent equal to one and three quarters percent (1 3/4%)
per annum on the average Maximum Drawing Amount of Letters of Credit outstanding
during each fiscal quarter, payable quarterly in arrears on the last day of each
fiscal quarter for the fiscal quarter then ended, plus the Agent's customary
issuance fee, payable in accordance with the Agent's customary practice. The
Letter of Credit Fee (but not the issuance fee) shall be shared pro-rata by each
of the Banks in accordance with their respective Commitment Percentages. The
Borrowers shall also pay the customary administrative fees of the Agent with
respect to the Letters of Credit, including, without limitation, fees for
modifying such Letters of Credit.
(c) The Borrowers shall pay an agent's fee to the Agent at the times
and in the amount as shall be agreed upon by the Borrowers and the Agent.
(S)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, received at the Agent's Head Office in immediately available
funds by 12:00 noon (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
-18-
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. 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.
(S)4.3. Computations. All computations of interest on the Loans and of Letter
-------------
of Credit Fees or other fees shall be based on a 365- or 366-day year except
that computations of interest on Eurodollar Loans shall be based on a 360-day
year, and shall be paid for the actual number of days elapsed. Whenever a
payment hereunder or under any of the other Loan Documents becomes due on a day
that is not a Business Day, the due date for such payment shall be extended to
the next Business Day, and interest shall accrue during such extension.
(S)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.
(S)4.5. Interest on Overdue Amounts. Overdue principal and (to the extent
----------------------------
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
compounded monthly and be payable on demand at a rate per annum equal to the
Base Rate plus 4% until such overdue amount shall be paid in full (after as well
as before judgment).
(S)4.6. Interest Limitation. Notwithstanding any other term of this Agreement
--------------------
or any Note or any other document referred to herein or therein, the maximum
amount of interest which may be
-19-
charged to or collected from any person liable hereunder or under any Note by
any Bank shall be absolutely limited to, and shall in no event exceed, the
maximum amount of interest which could lawfully be charged or collected under
applicable law (including, to the extent applicable, the provisions of Section
5197 of the Revised Statutes of the United States of America, as amended, 12
U.S.C. Section 85, as amended), so that the maximum of all amounts constituting
interest under applicable law, howsoever computed, shall never exceed as to any
Person liable therefor such lawful maximum, and any term of this Agreement, the
Notes, the Letter of Credit Applications, or any other document referred to
herein or therein which could be construed as providing for interest in excess
of such lawful maximum shall be and hereby is made expressly subject to and
modified by the provisions of this paragraph.
(S)4.7. Eurodollar Indemnity. The Borrowers agree to indemnify the Banks
---------------------
and the Agent and to hold them harmless from and against any reasonable loss,
cost or expense that the Banks and the Agent may sustain or incur as a
consequence of (a) default by the Borrowers in payment of the principal amount
of or any interest on any Eurodollar 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) default by the Borrowers in making a borrowing or
conversion after the Borrowers have given (or are deemed to have given) notice
pursuant to (S)2.4 or (S)2.6, and (c) 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. Such loss or reasonable expense shall include an amount equal
to the excess, if any, as reasonably determined by each Bank of (i) its cost of
obtaining the funds for the Loan being paid, prepaid, converted, or not borrowed
(based on the Eurodollar Rate) for the period from the date of such payment,
prepayment, conversion, or failure to borrow to the last day of the Interest
Period for such Loan (or, in the case of a failure to borrow, the Interest
Period for the Loan which would have commenced on the date of such failure to
borrow) over (ii) the amount of interest (as reasonably determined by such Bank)
that would be realized by such Bank in reemploying the funds so paid, prepaid,
converted, or not borrowed for such period or Interest Period, as the case may
be.
(S)4.8. Illegality; Inability to Determine Eurodollar Rate. Notwithstanding
---------------------------------------------------
any other provision of this Agreement, if (a) the introduction of, any change
in, or any change in the interpretation of, any law or regulation applicable to
any Bank or the Agent shall make it unlawful, or any central bank or other
governmental authority having jurisdiction thereof shall assert that it is
unlawful, for any Bank or the Agent to perform its obligations in respect of any
Eurodollar 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 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 the Banks and the Agent to make Eurodollar Loans shall be
suspended until the Banks or
-20-
the Agent, as the case may be, determine that such circumstances no longer
exist, and to the extent permitted by law 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.
(S)4.9. Additional Costs, Etc. If any present or future applicable law,
---------------------
which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall
impose on any Bank or the Agent any tax, levy, impost, duty, charge fees,
deduction or withholdings of any nature or requirements with respect to this
Agreement, the other Loan Documents, the Loans, such Bank's Commitment, the
Letters of Credit or any class of loans or commitments or letters of credit of
which any of the Loans, such Bank's Commitment or the Letters of Credit forms a
part, and the result of any of the foregoing is:
(i) to increase the cost to such Bank or the Agent 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 or the Agent hereunder on account of such Bank's
Commitment, the Loans, drawings under the Letters of Credit, or
(iii) to require such Bank or the Agent 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
or the Agent at any time and from time to time and as often as the occasion
therefor may arise, pay to such Bank such additional amounts as will be
sufficient to compensate such Bank for such additional cost, reduction, payment
or foregone interest or other sum (after such Bank shall have allocated the same
fairly and equitably among all customers of any class generally affected
thereby).
(S)4.10. Certificate. A certificate setting forth any additional amounts
------------
payable pursuant to (S)(S)4.7 or (S)4.9 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.
(S)4.11. 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
-21-
and the Agent under this Agreement, for the mutual benefit, directly and
indirectly, of each of the Borrowers and in consideration of the undertakings of
each other Borrower to accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this (S)4.11), it being the intention of the parties
hereto that all the Obligations shall be the joint and several Obligations of
each of the Borrowers without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall fail to make any
payment with respect to any of the Obligations as and when due or to perform any
of the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation.
(d) The Obligations of each of the Borrowers under the provisions of this
(S)4.11 constitute full recourse Obligations of each of the Borrowers
enforceable against each such corporation to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this Agreement, each of the
Borrowers hereby waives notice of acceptance of its joint and several liability,
notice of any Loans made under this Agreement, notice of any action at any time
taken or omitted by the Banks or the Agent under or in respect of any of the
Obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement. Each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Banks or the Agent at any time or times in respect of any default by any of
the Borrowers in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement, any and all other indulgences
whatsoever by the Banks or the Agent 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 or
the Agent 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 (S)4.11, afford grounds for terminating, discharging or
relieving any of the Borrowers, in whole or in part, from any of its Obligations
under this (S)4.11, 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 (S)4.11 shall not be discharged except by performance
and then only to the extent of such performance. The Obligations of each of the
Borrowers under this (S)4.11 shall not be diminished or rendered unenforceable
by any winding up, reorganization, arrangement, liquidation, re-construction or
similar
-22-
proceeding with respect to any of the Borrowers or the Banks or the Agent. 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, the Agent, or the Banks.
(f) The provisions of this (S)4.11 are made for the benefit of the Banks
and the Agent and their successors and assigns, and may be enforced in good
faith against them from time to time against any or all of the Borrowers as
often as occasion therefor may arise and without requirement on the part of the
Banks or the Agent 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 (S)4.11 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 (S)4.11 will forthwith be reinstated in
effect, as though such payment had not been made.
(S)4.12. New Borrowers. Any newly-created or acquired Subsidiaries shall
--- ---------
become Borrowers hereunder by signing Notes (or, at the option of the Agent,
allonges to existing Notes), entering into an amendment to this Agreement with
the other parties hereto providing that such Subsidiary shall become a Borrower
hereunder, and providing such other documentation as the Banks or the Agent may
reasonably request including, without limitation, documentation with respect to
conditions noted in (S)9 hereof. In such event, the Agent is hereby authorized
by the parties to amend Schedule 1 hereto to include each such Subsidiary as a
Borrower hereunder.
(S)5. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and severally
-------------------------------
represent and warrant to the Banks and the Agent as follows:
(S)5.1. Corporate Authority.
--------------------
(a) Incorporation; Good Standing. Each of the Borrowers (i) is a
------------- ---- --------
corporation duly organized, validly existing and in good standing 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 the Borrowers considered as a whole.
(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 of the Borrowers, (ii) have been duly
authorized by all necessary corporate proceedings, (iii) do not conflict
with or result in any material breach or contravention of any provision of
law, statute, rule or regulation to which any of the Borrowers is subject or
any
-23-
judgment, order, writ, injunction, license or permit applicable to any
of the Borrowers so as to materially adversely affect the assets, business
or any activity of the Borrowers, and (iv) do not conflict with any
provision of the corporate charter or bylaws of the Borrowers or any
agreement or other instrument binding upon the Borrowers.
(c) Enforceability. The execution, delivery and performance of the
--------------
Loan Documents will result in valid and legally binding obligations of the
Borrowers enforceable against each in accordance with the respective terms
and provisions hereof and thereof, except as enforceability is limited by
bankruptcy, insolvency, reorganization, moratorium or other laws relating to
or affecting generally the enforcement of creditors' rights and except to
the extent that availability of the remedy of specific performance or
injunctive relief or other equitable remedy is subject to the discretion of
the court before which any proceeding therefor may be brought.
(S)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.
(S)5.3. Title to Properties; Leases. The Borrowers own all of the assets
----------------------------
reflected in the consolidated or combined 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.
(S)5.4. Financial Statements; Solvency.
-------------------------------
(a) There has been furnished to the Banks (i) the consolidated
balance sheet of the Borrowers dated the Balance Sheet Date and consolidated
statements of operations for the fiscal year then ended, certified by Ernst
& Young LLP or such other independent accounting firm acceptable to the
Banks (the "Accountants"), and (ii) a consolidated and consolidating balance
sheet and related consolidated and consolidating statement of operations of
the Borrowers dated the Interim Balance Sheet Date for the fiscal quarter
then ended. Said balance sheets and statements of operations have been
prepared in accordance with GAAP, fairly present in all material respects
the financial condition of the Borrowers on a consolidated basis, as at the
close of business on the date thereof and the results of operations for the
period then ended. There are no contingent liabilities of the Borrowers as
of such date involving amounts of $250,000 or more in the aggregate known to
the officers of the Borrowers which have not been disclosed in said balance
sheets and the related notes thereto, as the case may be.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent (i.e., they have
assets having a fair value in excess of the amount required to pay their
probable liabilities on their existing debts as they become absolute and
matured) and have, and expect to have, the ability to pay their debts from
time to time incurred in connection therewith as such debts mature.
-24-
(S)5.5. No Material Changes, Etc. Since the Balance Sheet Date, there have
-------------------------
occurred no material adverse changes in the financial condition or business of
the Borrowers as shown on or reflected in the consolidated balance sheet of such
corporations as at the Balance Sheet Date, or the consolidated statement of
income for the fiscal year then ended other than changes in the ordinary course
of business which have not had any material adverse effect either individually
or in the aggregate on the business or financial condition of any Borrower.
Since the Balance Sheet Date, there has not been any Distribution.
(S)5.6. Permits, Franchises, Patents, Copyrights, Etc. Each of the Borrowers
----------------------------------------------
possesses all franchises, patents, copyrights, trademarks, trade names, licenses
and permits, and rights in respect of the foregoing, adequate for the conduct of
its business substantially as now conducted without known conflict with any
rights of others.
(S)5.7. Litigation. To the knowledge of the Borrowers, except as shown on
-----------
Schedule 5.7 hereto, there are no actions, suits, proceedings or investigations
of any kind pending or threatened against any Borrower before any court,
tribunal or administrative agency or board which, if adversely determined,
might, either in any case or in the aggregate, materially adversely affect the
properties, assets, financial condition or business of the Borrowers considered
as a whole, or materially impair the right of the Borrowers 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.
(S)5.8. No Materially Adverse Contracts, Etc. None of the Borrowers is
-------------------------------------
subject to any charter, corporate or other legal restriction, or any judgment,
decree, order, rule or regulation which in the judgment of the Borrowers'
officers has or is expected in the future to have a materially adverse effect on
the business, assets or financial condition of the Borrowers considered as a
whole. None of the Borrowers is a party to any contract or agreement which in
the judgment of the Borrowers' officers has or is expected to have any
materially adverse effect on the business of the Borrowers considered as a
whole, except as otherwise reflected in adequate reserves.
(S)5.9. Compliance With Other Instruments, Laws, Etc. None of the Borrowers
---------------------------------------------
is violating any provision of its charter documents or by-laws or any agreement
or instrument by which any of them may be subject or by which any of them or any
of their properties may be bound or any decree, order, judgment, or any statute,
license, rule or regulation, in a manner which could result in the imposition of
substantial penalties or materially and adversely affect the financial
condition, properties or business of the Borrowers considered as a whole.
(S)5.10. Tax Status. The Borrowers have made or filed all federal and state
-----------
income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them are subject (unless and only to the extent
that any Borrower has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes); and have paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith; and have set aside on
-25-
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 an aggregate amount of $100,000 or more
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.
(S)5.11. No Event of Default. No Default or Event of Default has occurred
--------------------
and is continuing.
(S)5.12. Holding Company and Investment Company Acts. None of the Borrowers
--------------------------------------------
is a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", as such terms are defined in the Public
Utility Holding Company Act of 1935; nor is any of them a "registered investment
company", or an "affiliated company" or a "principal underwriter" of a
"registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
(S)5.13. Absence of Financing Statements, Etc. Except as contemplated by
-------------------------------------
(S)7.2 of this Agreement, there is no financing statement, security agreement,
chattel mortgage, real estate mortgage or other document filed or recorded with
any filing records, registry, or other public office, which purports to cover,
affect or give notice of any present or possible future lien on, or security
interest in, any assets or property of any of the Borrowers or rights
thereunder.
(S)5.14. Employee Benefit Plans.
-----------------------
(a) In General. Each Employee Benefit Plan has been maintained and
-- -------
operated in compliance in all material respects with the provisions of ERISA
and, to the extent applicable, the Code, including but not limited to the
provisions thereunder respecting prohibited transactions.
(b) Terminability of Welfare Plans. Under each Employee Benefit
------------- -- ------- -----
Plan which is an employee welfare benefit plan within the meaning of (S)3(1)
or (S)3(2)(B) of ERISA, no benefits are due unless the event giving rise to
the benefit entitlement occurs prior to plan termination (except as required
by Title I, part 6 of ERISA.) Each Borrower or ERISA Affiliate, as
appropriate, may terminate each such Plan at any time (or at any time
subsequent to the expiration of any applicable bargaining agreement) in the
discretion of such Borrower or ERISA Affiliate without liability to any
Person.
(c) Guaranteed Pension Plans. None of the Borrowers is a sponsor
---------- ------- -----
of, or contributor to, a Guaranteed Pension Plan.
(d) Multiemployer Plans. No Borrower, nor any ERISA Affiliate has
------------- -----
incurred any material liability (including secondary liability) to any
Multiemployer Plan as a result of a complete or partial withdrawal from such
Multiemployer Plan under (S)4201 of ERISA or as a result of a sale of assets
described in (S)4204 of ERISA. No Borrower, nor any ERISA Affiliate has been
notified that any Multiemployer Plan is in reorganization or is insolvent
under and within the meaning of (S)4241 or (S)4245 of ERISA or that any
Multiemployer Plan intends to terminate or has been terminated under
(S)4041A of ERISA.
-26-
(S)5.15. Use of Proceeds. The proceeds of the Loans shall be used to repay
----------------
certain existing Indebtedness of the Borrowers, for working capital purposes,
for Letters of Credit, and for additional acquisitions permitted by (S)7.4
hereof or otherwise approved in writing by the Banks. No proceeds of the Loans
shall be used in any way that will violate Regulations G, T, U or X of the Board
of Governors of the Federal Reserve System.
(S)5.16. Environmental Compliance. The Borrowers have taken all reasonable
-------------------------
and prudent steps to investigate the past and present condition and usage of the
Real Properties and the operations conducted thereon and, based upon such
diligent investigation, have determined that, except as shown on Schedule 5.16:
(a) None of the Borrowers, nor any operator of their properties, is
in violation, or alleged violation, of any judgment, decree, order, law,
permit, license, rule or regulation pertaining to environmental matters,
including without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 as amended ("CERCLA"), the Superfund
Amendments and Reauthorization Act of 1986 ("▇▇▇▇"), the Federal Clean Water
Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
other federal, 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 considered as a
whole.
(b) None of the Borrowers has received notice from any third party
including, without limitation, any federal, state or local governmental
authority, (i) that any one of them has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party
under CERCLA with respect to a site listed on the National Priorities List,
40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (ii) that any hazardous waste, as defined by
42 U.S.C. (S)6903(5), any hazardous substances as defined by 42 U.S.C.
(S)9601(14), any pollutant or contaminant as defined by 42 U.S.C.
(S)9601(33) and any toxic substance, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or disposed of
has been found at any site at which a federal, state or local agency or
other third party has conducted or has ordered that any Borrower conduct a
remedial investigation, removal or other response action pursuant to any
Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, legal or administrative
proceeding arising out of any third party's incurrence of costs, expenses,
losses or damages of any kind whatsoever in connection with the release of
Hazardous Substances.
(c) (i) No portion of the Real Property has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
material compliance with applicable Environmental Laws; and no underground
tank or other underground storage receptacle for Hazardous Substances is
located on such properties; (ii) in the course of any activities conducted
by the Borrowers, or operators of the Real Property, no Hazardous Substances
have been generated or are being used on such properties except in material
compliance with
-27-
applicable Environmental Laws; (iii) there have been no unpermitted Releases
or threatened Releases of Hazardous Substances on, upon, into or from the
Real Property, which Releases would have a material adverse effect on the
value of such properties; (iv) to the best of the Borrowers' knowledge,
there have been no Releases on, upon, from or into any real property in the
vicinity of the Real Property which, through soil or groundwater
contamination, may have come to be located on, and which would have a
material adverse effect on the value of, such properties; and (v) in
addition, any Hazardous Substances that have been generated on the Real
Property have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as required under
applicable Environmental Laws, which transporters and facilities, to the
best of the Borrowers' knowledge, have been and are operating in material
compliance with such permits and applicable Environmental Laws.
(d) none of the Real Property is or shall be subject to any
applicable environmental clean-up responsibility law or environmental
restrictive transfer law or regulation, by virtue of the transactions set
forth herein and contemplated hereby.
(S)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 under applicable law, or reasonably requested
by the Agent or any of the Banks, to establish and perfect the Agent's security
interests in the Collateral as described in the Security Documents. The
Collateral and the Agent's rights with respect to the Collateral are not subject
to any setoff, claims, withholdings or other defenses, except for Permitted
Liens. The Borrowers are the owners of the Collateral free from any lien,
security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
(S)5.18. Certain Transactions. Except as set forth on Schedule 5.18 and
---------------------
except for arm's length transactions pursuant to which the Borrowers make
payments in the ordinary course of business upon terms no less favorable than
the Borrowers could obtain from third parties, none of the officers, directors,
or employees of the Borrowers are presently a party to any transaction with the
Borrowers (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
(S)5.19. Subsidiaries. Schedule 1 sets forth a complete and accurate list
-------------
of the Subsidiaries, including the name of each Subsidiary and its jurisdiction
of incorporation, together with the number of authorized and outstanding shares
of each Subsidiary. Each Subsidiary is directly or indirectly wholly owned by
the Parent. The Parent has good and marketable title to all of the shares it
purports to own of the stock of each Subsidiary, free and clear in each case of
any lien. All such shares have been duly issued and are fully paid and non-
assessable.
-28-
(S)5.20. True Copies of Charter and Other Documents. The Borrowers have
------------------------------------------
furnished the Agent copies, in each case true and complete as of the Closing
Date, of (a) all charter and other incorporation documents (together with any
amendments thereto) and (b) by-laws (together with any amendments thereto).
(S)5.21. Disclosure. No representation or warranty made by the Borrowers
----------
in this Agreement or in any agreement, instrument, document, certificate,
statement or letter furnished to the Banks or the Agent by or on behalf of or at
the request of the Borrowers in connection with any of the transactions
contemplated by the Loan Documents contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which they are
made.
(S)5.22. Permits and Governmental Authority. Except as disclosed in Schedule
-----------------------------------
5.22 hereto, all permits (other than those the absence of which would not have a
material adverse effect on the business, operations or financial condition of
any Borrower) required for the construction and operation of all landfills
currently owned or operated by the Borrowers have been obtained and remain in
full force and effect and are not subject to any appeals or further proceedings
or to any unsatisfied conditions that may allow material modification or
revocation. None of the Borrowers, nor, to the knowledge of the Borrowers, the
holder of such permits is in violation of any such permits, except for any
violation which would not have a material adverse effect on the business,
operations or financial condition of the Borrowers considered as a whole.
(S)5.23. Environmental Reports. The Borrowers have delivered to the Agent
---------------------
copies of all environmental reports in their possession (or in the possession of
their agents, consultants, or professional advisors) relating to the Real
Property.
(S)6. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly and
---------------------------------------
severally covenant and agree that, so long as any Loan, any Note, or any Letter
of Credit 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:
(S)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 Agreement and the other
Loan Documents, all in accordance with the terms of this Agreement and such
other Loan Documents.
(S)6.2. Maintenance of Office. The Borrowers will maintain their chief
----------------------
executive offices at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, or at
such other place in the United States of America as the Borrowers shall
designate upon 30 days prior written notice to the Agent.
(S)6.3. Records and Accounts. Each of the Borrowers will keep true and
---------------------
accurate records and books of account in which full, true and correct entries
will be made in accordance with GAAP and with the requirements of all regulatory
authorities and maintain adequate accounts and reserves for all taxes (including
income taxes), depreciation, depletion, obsolescence and amortization of its
properties, all other contingencies, and all other proper reserves.
-29-
(S)6.4. Financial Statements, Certificates and Information. The Borrowers
---------------------------------------------------
will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than 90 days
after the end of each fiscal year of the Borrowers, the consolidated and
consolidating balance sheets of Borrowers as at the end of such year,
statements of cash flows, and the related consolidated and consolidating
statements of operations, each setting forth in comparative form the figures
for the previous fiscal year, all such consolidated and consolidating
financial statements to be in reasonable detail, prepared, in accordance
with GAAP and, with respect to the consolidated financial statements,
certified by the Accountants. In addition, simultaneously therewith, the
Borrowers shall use their best efforts to provide the Banks with a written
statement from such Accountants to the effect that the Borrowers are in
compliance with the covenants set forth in (S)8 hereof, and that, in making
the examination necessary to said certification, nothing has come to the
attention of such Accountants that would indicate that any Default or Event
of Default exists, or, if such accountants shall have obtained knowledge of
any then existing Default or Event of Default they shall disclose in such
statement any such Default or Event of Default; provided that such
Accountants shall not be liable to the Banks for failure to obtain knowledge
of any Default or Event of Default;
(b) as soon as practicable, but in any event not later than 45 days
after the end of each fiscal quarter of the Borrowers commencing with the
fiscal quarter ending September 30, 1996, 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, subject to year-end adjustments in accordance with GAAP;
(c) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, (i) 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 (S)(S)6, 7 and 8
hereof as of the end of the applicable period setting forth in reasonable
detail computations evidencing compliance with (S)(S)7.1, 7.3, 7.9, and 8
hereof, provided that if the Borrowers shall at the time of issuance of such
certificate or at any other time obtain knowledge of any Default or Event of
Default, the Borrowers shall include in such certificate or otherwise
deliver forthwith to the Banks a certificate specifying the nature and
period of existence thereof and what action the Borrowers propose to take
with respect thereto, and (ii) a certificate in the form of Exhibit D hereto
with respect to the operating permits of the Borrowers;
(d) contemporaneously with, or promptly following, the filing or
mailing thereof, copies of all material of a financial nature filed with the
Securities and Exchange Commission or sent to the stockholders of the
Parent; and
-30-
(e) from time to time such other financial data and other
information (including accountants' management letters) as the Banks or the
Agent may reasonably request.
The Borrowers hereby authorize the Banks and the Agent to disclose any
information obtained pursuant to this Agreement to all appropriate governmental
regulatory authorities where required by law.
(S)6.5. Corporate Existence and Conduct of Business. Except where the failure
--------------------------------------------
of a Borrower to remain so qualified would not materially adversely impair the
financial condition of such Borrower, each Borrower will do or cause to be done
all things necessary to preserve and keep in full force and effect its corporate
existence, corporate rights and franchises; effect and maintain its foreign
qualifications, licensing, domestication or authorization except as terminated
by its Board of Directors in the exercise of its reasonable judgment; use its
best efforts to comply with all applicable laws; and shall not become obligated
under any contract or binding arrangement which, at the time it was entered into
would materially adversely impair the financial condition of such Borrower. Each
Borrower will continue to engage primarily in the businesses now conducted by it
and in related businesses.
(S)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 section shall prevent any Borrower from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of such Borrower, desirable in the conduct of
its or their business and which does not in the aggregate materially adversely
affect the business of the Borrowers considered as a whole.
(S)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, which risks may, but
shall not be required by the Banks to be, covered by insurance maintained by the
Borrowers) and in the relative proportionate amounts usually carried by
reasonable and prudent companies conducting businesses similar to that of the
Borrowers (including but not limited to business interruption and, to the extent
such insurance becomes commercially available at reasonable cost, environmental
impairment insurance), but in no event less than the amounts and coverages set
forth in Schedule 6.7 hereto. In addition, the Borrowers will furnish from time
to time, upon the Agent's request, a summary of the insurance coverage of each
of the Borrowers, which summary shall be in form and substance satisfactory to
the Agent and, if requested by the Agent, will furnish to the Agent copies of
the applicable policies.
(S)6.8. Taxes. The Borrowers will each duly pay and discharge, or cause to
-----
be paid and discharged, before the same shall become overdue, all taxes,
assessments and other governmental charges (other than taxes, assessments and
other governmental charges imposed by foreign
-31-
jurisdictions which in the aggregate are not material to the business or assets
of any Borrower on an individual basis or of the Borrowers on a consolidated
basis) imposed upon it and its real properties, sales and activities, or any
part thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies, which if unpaid might by law become a lien or
charge upon any of its property; provided, however, that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if such Borrower shall have set aside on its books adequate reserves with
respect thereto; and provided, further, that such Borrower will pay all such
taxes, assessments, charges, levies or claims forthwith upon the commencement of
proceedings to foreclose any lien which may have attached as security therefor.
(S)6.9. Inspection of Properties, Books, and Contracts. The Borrowers shall
---------- -- ----------- ------ --- ----------
permit the Banks, the Agent or any of their designated representatives, upon
reasonable notice, to visit and inspect any of the properties of the Borrowers,
to examine the books of account of the Borrowers (including the making of
periodic accounts receivable reviews), or contracts (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
the Borrowers with, and to be advised as to the same by, their officers, all at
such times and intervals as the Banks or the Agent may reasonably request.
(S)6.10. Compliance with Laws, Contracts, Licenses and Permits; Maintenance of
---------- ---- ----- ---------- -------- --- -------- ----------- --
Material Licenses and Permits. Each Borrower will (i) comply with the
-------- -------- --- --------
provisions of its charter documents and by-laws and all agreements and
instruments by which it or any of its properties may be bound; (ii) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits ("Applicable Laws"), except where noncompliance with such
Applicable Laws would not have a material adverse effect singly or in the
aggregate on the financial condition, properties or businesses of the Borrowers
considered as a whole; (iii) comply in all material respects with all agreements
and instruments by which it or any of its properties may be bound; (iv) maintain
all material operating permits for all landfills now owned or hereafter
acquired; and (v) dispose of hazardous waste only at licensed disposal
facilities operating, to the best of such Borrower's knowledge after reasonable
inquiry, in compliance with Environmental Laws. If at any time while the Notes,
or any Loan or Letter of Credit is outstanding or any Bank or the Agent has any
obligation to make Loans or issue Letters of Credit hereunder, any
authorization, consent, approval, permit or license from any officer, agency or
instrumentality of any government shall become necessary or required in order
that any Borrower may fulfill any of its obligations hereunder, such Borrower
will immediately take or cause to be taken all reasonable steps within the power
of such Borrower to obtain such authorization, consent, approval, permit or
license and furnish the Banks with evidence thereof.
(S)6.11. Environmental Indemnification. The Borrowers covenant and agree that
------------------------------
they will indemnify and hold the Banks and the Agent 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 or the Agent)
relating to (a) any Release or threatened Release of Hazardous Substances on the
Real Property; (b) any violation of any Environmental Laws with respect to
conditions at the Real Property or the operations conducted thereon; or (c) the
investigation or remediation of offsite locations at which the Borrowers, or
their predecessors are alleged to have directly or indirectly
-32-
Disposed of Hazardous Substances. It is expressly acknowledged by the Borrowers
that this covenant of indemnification shall survive any foreclosure or any
modification, release or discharge of any or all of the Security Documents or
the payment of the Loans and shall inure to the benefit of the Banks, the Agent,
and their successors and assigns.
(S)6.12. Further Assurances. The Borrowers will cooperate with the Banks and
-------------------
the Agent and execute such further instruments and documents as the Banks or the
Agent shall reasonably request to carry out to the Banks' satisfaction the
transactions contemplated by this Agreement.
(S)6.13. Notice of Potential Claims or Litigation. The Borrowers shall
-----------------------------------------
deliver to the Banks, within 30 days of receipt thereof, written notice of the
initiation of any action, claim, complaint, or any other notice of dispute or
potential litigation (including without limitation any alleged violation of any
Environmental Law), wherein the potential liability is in excess of $250,000,
together with a copy of each such notice received by any Borrower.
(S)6.14. Notice of Certain Events.
-------------------------
(a) The Borrowers will provide the Banks with written notice as to
any cancellation or material change in any insurance of any of the Borrowers
within ten (10) Business Days after such Borrower's receipt of any notice
(whether formal or informal) of such cancellation or change by any of its
insurers.
(b) The Borrowers will promptly notify the Banks in writing of any
of the following events:
(i) upon any Borrower's obtaining knowledge of any violation
of any Environmental Law regarding the Real Property or any
Borrower's operations which violation, together with all such other
violations, could result in a fine or penalty of $50,000 or more or
which would reasonably be expected to require expenditures of $50,000
or more to remedy; (ii) upon any Borrower's obtaining knowledge of
any potential or known Release, or threat of Release, of any
Hazardous Substance at, from, or into the Real Property which it
reports in writing or is required to report in writing to any
governmental authority and which is material in amount or nature or
which could materially affect the value of the Real Property; (iii)
upon any Borrower's receipt of any notice of violation of any
Environmental Laws or of any Release or threatened Release of
Hazardous Substances, including a notice or claim of liability or
potential responsibility from any third party (including without
limitation any federal, state or local governmental officials) and
including notice of any formal inquiry, proceeding, demand,
investigation or other action with regard to (A) any Borrower's, or
any Person's operation of the Real Property, (B) contamination on,
from or into the Real Property, or (C) investigation or remediation
of offsite locations at which any Borrower, or any of their
predecessors are alleged to have directly or indirectly Disposed of
Hazardous Substances; (iv) upon any Borrower's obtaining knowledge
that any expense or loss has been incurred by such governmental
authority in connection with the assessment, containment, removal or
remediation of any Hazardous Substances with respect to
-33-
which any Borrower may be liable or for which a lien may be
imposed on the Real Property; (v) any setoff, claims (including,
with respect to the Real Estate, environmental claims),
withholdings or other defenses to which any of the Collateral, or
the Agent's rights with respect to the Collateral, are subject; or
(vi) any labor dispute or union contract dispute involving any of
the Borrowers.
(S)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.
(S)6.16. Notice of Default. The Borrowers will promptly notify the Banks
------ -- -------
in writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or any
other note, evidence of indebtedness, indenture or other obligation evidencing
indebtedness in excess of $250,000 as to which any Borrower is a party or
obligor, whether as principal or surety, the Borrowers shall forthwith give
written notice thereof to the Banks, describing the notice of action and the
nature of the claimed default.
(S)6.17. Closure and Post Closure Liabilities. The Borrowers shall at all
------- --- ---- ------- -----------
times adequately accrue, in accordance with GAAP, and fund, as required by
applicable Environmental Laws, all closure and post closure liabilities with
respect to the operations of the Borrowers.
(S)6.18. Subsidiaries. The Parent shall at all times directly or
------------
indirectly through a Subsidiary own all of the shares of the capital stock of
each other Borrower, and such shares shall be pledged to the Agent for the
benefit of the Banks. The Parent shall, on or before March 31, 1997, wind up the
business of Eastern Environmental Services of Northeast, Inc., Advanced
Analytical Laboratories, Inc., Eastern Real Properties, Inc., Pulaski
Sanitation, Inc., WRN Properties, Inc., Eastern Environmental Services of
Southeast, Inc., ▇.▇. ▇▇▇▇▇ Co., Inc., and AWS of Va., Inc., and terminate each
such corporation's existence in accordance with applicable law on or before such
date.
(S)7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers agree
------- -------- --------- -- --- ---------
that, so long as any Loan, any Note, or any Letter of Credit 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:
(S)7.1. Restrictions on Indebtedness. None of the Borrowers nor any of
------------ -- ------------
their Subsidiaries 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:
-34-
(a) Indebtedness to the Banks and the Agent arising under this
Agreement or the Loan Documents;
(b) Subject to (S)7.8, the Subordinated Debt;
(c) Existing Indebtedness listed on Schedule 7.1(c) hereto on
the terms and conditions in effect as of the date hereof (and any
subsequent refinancing of the principal amount of such Indebtedness
outstanding on the date hereof on substantially the same terms and
conditions in effect on the date hereof), provided that no such
Indebtedness may be prepaid without prior written consent of the Banks;
(d) Indebtedness of the Borrowers in respect of judgments or
awards which have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which any Borrower shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which a
stay of execution shall have been obtained pending such appeal or review
and in respect of which the Borrowers have maintained adequate reserves;
(e) Indebtedness of any Borrower with respect to guaranty,
suretyship or indemnification obligations in connection with such
Borrower's performance of services for its respective customers in the
ordinary course of its business;
(f) Indebtedness of the Borrowers incurred in connection with
the acquisition after the date hereof of any real or personal property by
the Borrowers, provided that the aggregate principal amount of such
Indebtedness of the Borrowers shall not exceed the aggregate amount of
$5,000,000 at any one time; and
(g) Indebtedness of the Borrowers incurred after the date hereof
with respect to landfill closure bonds, jointly not to exceed an aggregate
amount of $10,000,000 outstanding at any time.
(S)7.2. Restrictions on Liens. None of the Borrowers nor any of their
------------ -- -----
Subsidiaries will 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
thirty (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"):
-35-
(a) Purchase money liens securing Indebtedness permitted under
(S)7.1(f) hereof, provided that such Liens shall encumber only the property
or assets so acquired and shall not exceed the fair market value thereof;
(b) Liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect of obligations
not overdue;
(c) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness
with respect to which is permitted by (S)7.1(d);
(e) Liens of carriers, warehousemen, mechanics and materialmen,
and other like liens, in existence less than 120 days from the date of
creation thereof in respect of obligations not overdue;
(f) Encumbrances consisting of easements, rights of way, zoning
restrictions, restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens under
leases to which any Borrower is a party, and other minor liens or
encumbrances none of which in the opinion of the respective Borrower
interferes materially with the use of the property affected in the ordinary
conduct of the business of such Borrower, which defects do not individually
or in the aggregate have a material adverse effect on the business of such
Borrower individually or of the Borrowers on a consolidated basis;
(g) Liens existing as of the date hereof securing Indebtedness
permitted under (S)7.1(c) hereof and listed on Schedule 7.2(g) hereto; and
(h) Liens granted pursuant to the Security Documents.
(S)7.3. Restrictions on Investments. Except to the extent provided in
------------ -- -----------
(S)7.4, none of the Borrowers nor any of their Subsidiaries shall make or permit
to exist or to remain outstanding any other Investment other than the following
Investments made or to be made by the Borrowers:
(a) Investments in obligations of the United States of America
and agencies thereof and obligations guaranteed by the United States of
America that are due and payable within one year from the date of
acquisition and prior to the Maturity Date;
(b) certificates of deposit, time deposits or repurchase
agreements which are fully insured or are issued by commercial banks
organized under the laws of the United States of America or any state
thereof and having a combined capital, surplus, and undivided profits of
not less than $100,000,000;
-36-
(c) commercial paper, maturing not more than nine months from
the date of issue, provided that, at the time of purchase, such commercial
paper is not rated lower than "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc., or
"A-1" by Standard & Poor's Corporation;
(d) Investments associated with insurance policies or surety
bonds required or allowed by state law to be posted as financial assurance
for landfill closure and post-closure liabilities;
(e) Investments by the Parent in any other Borrower and
Investments permitted by (S)7.4;
(f) existing Investments in Subsidiaries of the Parent which are
not Borrowers in the amounts set forth on Schedule 7.3(f) hereto; and
(g) other Investments not to exceed $1,000,000 in the aggregate
at any time outstanding;
provided that before and after giving effect to any permitted Investment
made after the date hereof (other than an investment by the Parent in any
other Borrower), no Default or Event of Default shall exist or would occur
as a result of making such Investment.
(S)7.4. Mergers, Consolidations, Sales, Acquisitions. None of the
------- -------------- ----- ------------
Borrowers shall be a party to any merger, consolidation or exchange of stock, or
purchase or otherwise acquire all or substantially all of the assets or stock
of, or any partnership or joint venture interest in, any other Person except as
otherwise provided in (S)7.3 or this (S)7.4, or sell, transfer, convey or lease
any stock or assets or group of assets (except sales of equipment in the
ordinary course of business and sales of assets totaling an aggregate from the
date hereof through the Maturity Date of no more than 5% of the Consolidated
Total Assets of the Borrowers) or sell or assign, with or without recourse, any
receivables. A Borrower may purchase or otherwise acquire all or substantially
all of the assets or stock of any class of any Person provided that (a) no Event
of Default has occurred and is continuing and the proposed transaction will not
otherwise create an Event of Default hereunder; (b) the business to be acquired
involves non-hazardous solid waste disposal, collection, hauling, recycling or
transfer; (c) the business to be acquired operates in the United States of
America; (d) in the case of an asset acquisition, all of the assets to be
acquired shall be owned by an existing or newly created Subsidiary of the
Parent, 100% of the stock of which has been or will be pledged to the Agent on
behalf of the Banks and which is a Borrower or, in the case of a stock
acquisition or an acquisition by merger, the acquired company shall become or
shall be merged with a wholly-owned Subsidiary of the Parent that is a Borrower;
(e) the aggregate cash consideration to be paid by the Borrowers in connection
with any such acquisition (including the aggregate amount of all Indebtedness
assumed but excluding landfill closure and post-closure bonds) shall not exceed
$5,000,000; and (f) in the case of an acquisition for which the sum of the value
of the Stock given by the Borrowers in consideration for the acquisition plus
the cash paid and Indebtedness assumed or incurred (excluding landfill closure
and post-closure bonds) is $7,500,000 or more (a "Material Acquisition"), the
Banks shall have been provided with (i) a Compliance Certificate demonstrating
that the Borrowers are in current compliance with and, giving effect to the
proposed acquisition (including any borrowings made or to be made in connection
-37-
therewith), will continue to be in compliance with, all of the covenants in (S)8
hereof, (ii) a copy of the purchase agreement, together with audited (if
available, or otherwise unaudited) financial statements for any business to be
acquired for the preceding two (2) fiscal years, and (iii) a summary of the
results of the Borrower's due diligence investigations. Notwithstanding the
foregoing, no Person, or group of Persons which are affiliated or which are
otherwise acting in concert, may acquire voting interests in the Parent which
would exceed an aggregate of 51% of the voting control interest in the Parent
without the prior written consent of the Banks. In addition, notwithstanding the
foregoing, no Borrower shall merge with or into any Person except for mergers of
a non-Borrower into a Borrower as permitted by clause (d) of the second sentence
of this (S)7.4, and for mergers of any Borrower (other than the Parent or any
Borrower which holds a solid waste disposal permit) into another Borrower.
(S)7.5. Sale and Leaseback. None of the Borrowers shall enter into any
---- --- ---------
arrangement, directly or indirectly, whereby any Borrower shall sell or transfer
any property owned by it in order then or thereafter to lease such property or
lease other property which such Borrower intends to use for substantially the
same purpose as the property being sold or transferred, without the prior
written consent of the Banks.
(S)7.6. Restricted Distributions and Redemptions. None of the Borrowers
---------- ------------- --- -----------
may make Distributions except as set forth in this (S)7.6. Each Borrower may
make distributions payable solely in common stock of such Borrower. Borrowers
other than the Parent may declare or pay Distributions other than Distributions
payable solely in common stock of such Borrowers to the Parent. In addition, the
Borrowers (other than the Parent) shall not redeem, convert, retire or otherwise
acquire shares of any class of capital stock of such Borrowers. The Parent may
declare or pay Distributions and may redeem, convert, retire, or otherwise
acquire shares of its Capital Stock, provided that (a) the aggregate of all such
Distributions and Stock Acquisitions by the Parent shall not exceed $500,000
during the term of this Agreement. None of the Borrowers may make any
Distribution or otherwise acquire stock under this (S)7.6 if a Default or Event
of Default exists or would be created by the making of such Distribution or the
acquisition of such stock. The Borrowers shall not effect or permit any change
in or amendment to any document or instrument pertaining to the terms of the
Borrowers' capital stock.
(S)7.7. Employee Benefit Plans. None of the Borrowers nor any ERISA
-------- ------- -----
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning of
(S)406 of ERISA or (S)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 (S)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 (S)302(f) or (S)4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of (S)4001 of ERISA) of all
Guaranteed Pension Plans exceeding the value of
-38-
the aggregate assets of such Plans, disregarding for this purpose the
benefit liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
The Borrowers will (i) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Banks a copy of the most
recent actuarial statement required to be submitted under (S)103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to
the Banks any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under (S)(S)302, 4041, 4042, 4043, 4063, 4065, 4066 and
4068 of ERISA, or in respect of a Multiemployer Plan, under (S)(S)4041A, 4202,
4219, or 4245 of ERISA.
(S)7.8. Subordinated Debt. None of the Borrowers will amend, supplement,
------------ ----
or otherwise modify the terms of the Subordinated Debt without the prior written
consent of the Banks. The Borrowers will not make any payments with respect to
the Subordinated Debt other than payments by the terms of the Subordination
Agreements.
(S)7.9. Capital Expenditures. The Borrowers shall not make or commit to
------- ------------
make Capital Expenditures (excluding landfill closure and post-closure
expenditures which are not capitalized) in excess of (a) the sum of (i)
$10,000,000 plus (ii) two times the depreciation and amortization expense of
businesses acquired after the date hereof for the fiscal year ending June 30,
1997, or (b) two times the depreciation and landfill amortization expense of the
Borrowers for any other fiscal year.
(S)8. FINANCIAL COVENANTS OF THE BORROWERS. The Borrowers agree that,
--------- --------- -- --- ---------
so long as any Loan or any Note is outstanding or the Banks have any obligation
to make Loans or the Agent has any obligation to issue, extend or renew any
Letters of Credit hereunder:
(S)8.1. Interest Coverage Ratio. Commencing with the fiscal quarter
-------- -------- -----
ending September 30, 1996, the ratio of (a) EBIT to (b) Consolidated Total
Interest Expense as at the end of any fiscal quarter (i) on a cumulative basis
with respect to fiscal quarters ending September 30, 1996 through March 31,
1997, and (ii) with respect to any fiscal quarter ending after March 31, 1997,
for the prior four (4) consecutive fiscal quarters ending on such date shall not
be less than 2.00:1.
(S)8.2. Leverage Ratio. At the time of the making of any Material
-------- -----
Acquisition and as at the end of any fiscal quarter, the ratio of (a) Funded
Debt to (b) the sum of (i) the excess of Consolidated Total Assets over
Consolidated Total Liabilities plus (ii) Funded Debt shall not at any time
exceed 0.60:1.
(S)8.3. Profitable Operations. The Borrowers will not permit Consolidated
---------- ----------
Net Income before one-time extraordinary charges for pooling costs for any
fiscal quarter (other than the fiscal quarter ending March 31 in any year) to be
less than $0 for any such fiscal quarter.
(S)8.4. Proforma Leverage Ratio. At the time of the making of any
-------- -------- -----
Material Acquisition and at the end of any fiscal quarter, the ratio of (a)
Funded Debt to (b) Proforma EBITDA shall not exceed the stated ratio for the
respective periods set forth below:
-39-
Period Ratio
------ -----
Closing through 06/30/97 4.00:1
07/1/97 through 06/30/98 3.75:1
Thereafter 3.50:1
(S)9. CLOSING CONDITIONS. The obligations of the Banks to make the
------- ----------
Loans and the Agent to issue Letters of Credit on and after the Closing Date and
otherwise be bound by the terms of this Agreement shall be subject to the
satisfaction of each of the following conditions precedent:
(S)9.1. Corporate Action. All corporate action necessary for the valid
--------- ------
execution, delivery and performance by each Borrower of the Loan Documents shall
have been duly and effectively taken, and evidence thereof satisfactory to the
Agent shall have been provided to the Agent.
(S)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 and in form and substance
satisfactory to the Banks.
(S)9.3. Certified Copies of Charter Documents. The Agent shall have
--------- ------ -- ------- ---------
received from the Borrowers a copy, certified by a duly authorized officer of
such Person to be true and complete on the Closing Date, of each of (a) its
charter or other incorporation documents (including certificates of merger and
name changes) as in effect on such date of certification, and (b) its by-laws as
in effect on such date.
(S)9.4. Incumbency Certificate. The Agent shall have received an
---------- -----------
incumbency certificate, dated as of the Closing Date, signed by duly authorized
officers giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign the Loan Documents on behalf of the Borrowers;
(b) to make Loan and Letter of Credit Requests; and (c) to give notices and to
take other action on the Borrowers' behalf under the Loan Documents.
(S)9.5. Validity of Liens. The Security Documents shall be effective to
-------- -- -----
create in favor of the Agent a legal, valid and enforceable first security
interest in and lien upon the Collateral, subject only to Permitted Liens. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Agent to protect and preserve such security
interests shall have been duly effected. The Agent shall have received evidence
thereof in form and substance satisfactory to the Agent.
(S)9.6. UCC Search Results. The Agent shall have received the results of
--- ------ -------
UCC searches with respect to the assets of the Borrowers indicating no liens
other than Permitted Liens and otherwise in form and substance satisfactory to
the Agent.
(S)9.7. Certificates of Insurance. The Agent shall have received a
------------ -- ---------
certificate of insurance from an independent insurance broker dated as of the
Closing Date, or within 15 days prior thereto,
-40-
identifying insurers, types of insurance, insurance limits, and policy terms,
and otherwise describing the insurance obtained in accordance with the
provisions hereof.
(S)9.8. Opinions of Counsel. The Banks shall have received from outside
-------- -- -------
counsel to the Borrowers, an opinion addressed to the Banks, dated the date of
the closing, in form and substance satisfactory to the Banks regarding (i)
enforceability and corporate matters; and (ii) such other matters as the Agent
may reasonably request.
(S)9.9. Payoff Letters. The Banks shall have received a payoff letter
------ -------
from each of Corestates Bank and First Union Bank indicating the amount to be
paid to such lender on the Closing Date in order to fully discharge the
Borrowers' obligations to such lender and acknowledging 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 and security interests in favor of such lender.
(S)9.10. Closing Fee. The Agent shall have received from the Borrowers a
------- ---
closing fee in the amount of $60,000, such fee to be shared pro rata by the
Banks in accordance with their respective Commitment Percentages.
(S)9.11. Proceeds of Equity Offering. The Parent shall have received at
-------- -- ------ --------
least $10,000,000 in gross cash proceeds from an offering of its common shares,
and evidence thereof satisfactory to the Banks shall have been received by the
Banks.
(S)9.12. Audited Financial Statements. The Banks shall have received the
------- --------- ----------
audited financial statements of the Borrowers for the fiscal year ended June 30,
1996, in form and substance satisfactory to the Banks.
(S)9.13. Information Regarding Acquisitions. The Banks shall have received
----------- --------- ------------
copies of the purchase agreements and the other information and documentation
required by (S)7.4(f) hereof for all pending acquisitions currently contemplated
by the Borrowers.
(S)9.14. Certificate Regarding Permits. The Banks shall have received a
----------- --------- -------
certificate in the form of Exhibit D hereto regarding operating permits of the
Borrowers.
(S)9.15. Initial Compliance Certificate. The Banks shall have received a
------- ---------- -----------
Compliance Certificate in the form of Exhibit C hereto regarding compliance with
the covenants set forth in (S)8.2 and (S)8.4 hereof as of June 30, 1996
(adjusted to account for the proceeds of the equity offering made after such
date).
(S)10. CONDITIONS TO ALL LOANS. The obligations of the Banks to make
---------- -- --- -----
any Loan (including without limitation the obligation of the Agent to issue any
Letter of Credit) on and subsequent to the Closing Date is subject to the
following conditions precedent:
-41-
(S)10.1. Representations True; No Event of Default. Each of the
--------------- ---- -- ----- -- -------
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Loan with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement, changes disclosed to
the Banks in writing and accepted by the Banks, and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.
(S)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 them prior to or at the time of the making of any
Loan or the issuance, extension, or renewal of any Letter of Credit, and at the
time of the making of any Loan or the issuance, extension, or renewal of any
Letter of Credit, there shall exist no Event of Default or condition which would
result in an Event of Default upon consummation of such Loan (including without
limitation any amounts to be drawn under a Letter of Credit). Each request by
the Borrowers for a Loan (including without limitation each request for issuance
of a Letter of Credit) subsequent to the first Loan shall constitute
certification by the Borrowers that the conditions specified in (S)(S)10.1 and
10.2 will be duly satisfied on the date of such Loan or Letter of Credit
issuance.
(S)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 or for
the Agent to issue, extend, or renew Letters of Credit hereunder.
(S)10.4. Governmental Regulation. The Banks shall have received such
------------ ----------
statements in substance and form reasonably satisfactory to the Banks as they
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
(S)10.5. Proceedings and Documents. All proceedings in connection with
----------- --- ---------
the transactions contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Banks and the Agent as of the date
hereof in substance and in form satisfactory to the Banks and the Agent,
including without limitation a Loan and Letter of Credit Request in the form
attached hereto as Exhibit B, and the Banks and the Agent shall have received
all information and such counterpart originals or certified or other copies of
such documents as the Banks and the Agent may reasonably request.
(S)11. COLLATERAL SECURITY. The Obligations shall be secured by a
---------- --------
perfected security interest (having, with respect to each category of
Collateral, the respective rights and priorities set forth in the Security
Documents) in all of the shares of the Subsidiaries of the Parent, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrowers are parties.
-42-
(S)12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
------ -- ------- ------------ ----------- -- ----------
(S)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 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;
(b) if the Borrowers shall fail to pay any Reimbursement
Obligation, interest, 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 (S)(S)6.1, 6.3, 6.4, 6.5, 6.7, 6.13, 6.14, 6.16, 6.18, 7 or 8
hereof;
(d) if the Borrowers shall fail to perform any term, covenant or
agreement contained herein or in any of the other Loan Documents (other
than those specified in subsections (a), (b), and (c) above) within thirty
(30) days after written notice of such failure has been given to the
Borrowers by the Banks;
(e) if any representation or warranty contained in this
Agreement or in any document or instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any
material respect upon the date when made or repeated;
(f) if any Borrower shall fail to pay at maturity, or within any
applicable period of grace, any and all obligations for borrowed money or
any guaranty with respect thereto in an aggregate amount greater than
$250,000, or fail to observe or perform any material term, covenant or
agreement contained in any agreement by which it is bound, evidencing or
securing borrowed money in an aggregate amount greater than $250,000 for
such period of time as would, or would have permitted (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof; or
(g) if any Borrower makes an assignment for the benefit of
creditors, or admits in writing its inability to pay or generally fails to
pay its debts as they mature or become due, or petitions or applies for the
appointment of a trustee or other custodian, liquidator or receiver of any
Borrower or of any substantial part of the assets of any Borrower or
commences any case or other proceeding relating to any Borrower under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or
hereafter in effect, or takes any action to authorize or in furtherance of
any of the foregoing, or if any such petition or application is filed or
any such case or other
-43-
proceeding is commenced against any Borrower and or any Borrower indicates
its approval thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower bankrupt or
insolvent, or approving a petition in any such case or other proceeding, or
a decree or order for relief is entered in respect of any Borrower in an
involuntary case under federal bankruptcy laws as now or hereafter
constituted, and such decree or order remains in effect for more than sixty
(60) days, whether or not consecutive;
(i) if there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty (30) days, whether or not consecutive,
any final judgment against any Borrower which, with other outstanding final
judgments, against the Borrowers exceeds in the aggregate $250,000 after
taking into account any undisputed insurance coverage;
(j) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Banks shall have determined in
their reasonable discretion that such event reasonably could be expected to
result in liability of any Borrower to the PBGC or the Plan in an aggregate
amount exceeding $250,000 and such event in the circumstances occurring
reasonably could constitute grounds for the termination of such Plan by the
PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Plan; or a trustee shall have been
appointed by the United States District Court to administer such Plan; or
the PBGC shall have instituted proceedings to terminate such Plan;
(k) any of the Subordinated Debt shall be in default or all or
any part of the Subordinated Debt shall be paid, prepaid, redeemed or
repurchased in whole or in part other than as permitted under the terms of
the Subordination Agreement, hereof and thereof; or
(l) if any of the Loan Documents shall be canceled, terminated,
revoked or rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of the Banks,
or any action at law, suit or in equity or other legal proceeding to
cancel, revoke or rescind any of the Loan Documents shall be commenced by
or on behalf of the Borrowers or any of their respective stockholders, or
any court or any other governmental or regulatory authority or agency of
competent jurisdiction shall make a determination that, or issue a
judgment, order, decree or ruling to the effect that, any one or more of
the Loan Documents is illegal, invalid or unenforceable in accordance with
the terms thereof,
then, and in any such event, so long as the same may be continuing, the Agent
may, and upon the request of the Majority Banks shall, by notice in writing to
the Borrowers, declare all amounts owing with respect to this Agreement, the
Notes and the other Loan Documents and all Reimbursement Obligations to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrowers; provided that in the event of any
Event of Default specified in (S)12.1(g) or 12.1(h), all such amounts shall
become immediately due and payable automatically and without any requirement
-44-
of notice from the Agent or any Bank. Upon demand by the Banks after the
occurrence of any Event of Default, the Borrowers shall immediately provide to
the Agent cash in an amount equal to the aggregate Maximum Drawing Amount of all
Letters of Credit outstanding, to be held by the Agent as collateral security
for the Obligations.
(S)12.2. Termination of Commitments. If any Event of Default shall occur,
----------- -- -----------
or if on any Drawdown Date the conditions precedent to the making of the Loans
to be made on such Drawdown Date or the issuance of any Letters of Credit to be
issued on such date are not satisfied (except as a consequence of a default on
the part of the Banks), the Banks may by notice to the Borrowers, terminate the
unused portion of the Total Commitment hereunder, and upon such Notice being
given, such unused portion of the Total Commitment hereunder shall terminate
immediately and the Banks and the Agent 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 if an Event of Default specified in (S)12.1(g)
or 12.1(h) shall have occurred, such unused portion of the Total Commitment
shall terminate immediately and the Banks and the Agent shall be relieved of all
further obligations to make Loans to or issue Letters of Credit for the account
of the Borrowers without the requirement of notice from the Banks or the Agent.
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.
(S)12.3. Remedies. Subject to (S)14.8, in case any one or more of the
--------
Events of Default shall have occurred and be continuing, and whether or not the
Banks shall have accelerated the maturity of the Loans pursuant to (S)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 proceed to protect and
enforce its rights by suit in equity, action at law or other appropriate
proceeding, whether for the specific performance of any covenant or agreement
contained in this Agreement and the other Loan Documents or any instrument
pursuant to which the Obligations 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.
(S)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. Each of the Banks agrees with
each other Bank that (a) if an amount to be set off is to be applied to
Indebtedness of the Borrowers to such Bank, other than Indebtedness evidenced by
the Notes held by such Bank or constituting Reimbursement Obligations owed to
such Bank, such amount shall be applied ratably to such other Indebtedness and
to the Indebtedness evidenced by all such Notes held by such Bank or
constituting Reimbursement Obligations owed to such Bank, and (b) if such Bank
shall receive from the Borrowers, whether by voluntary payment, exercise of the
right of setoff,
-45-
counterclaim, cross action, enforcement of the claim evidenced by the Notes held
by, or constituting Reimbursement Obligations owed to, such Bank by proceedings
against the Borrowers at law or in equity or by proof thereof in bankruptcy,
reorganization, liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes held by, or
Reimbursement Obligations owed to, such Bank any amount in excess of its ratable
portion of the payments received by all of the Banks with respect to the Notes
held by, and Reimbursement Obligations owed to, all of the Banks, such Bank will
make such disposition and arrangements with the other Banks with respect to such
excess, either by way of distribution, pro tanto assignment of claims,
--- -----
subrogation or otherwise as shall result in each Bank receiving in respect of
the Notes held by it or Reimbursement Obligations owed it, such Bank's
proportionate payment as contemplated by this Agreement; provided that if all or
--------
any part of such excess payment is thereafter recovered from such Bank, such
disposition and arrangements shall be rescinded and the amount restored to the
extent of such recovery, but without interest.
(S)14. THE AGENT.
--- -----
(S)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. Except as provided in this (S)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 hereunder and in the Security Documents and all related documents,
together with such other powers as are reasonably incidental thereto. It is
agreed that the duties, rights, privileges and immunities of the Agent, in its
capacity as issuer of Letters of Credit hereunder, shall be identical to its
duties, rights, privileges and immunities as Bank as provided in this (S)14. The
Agent shall not have any duties or responsibilities or any fiduciary
relationship with any Bank except those expressly set forth in this Agreement.
Neither the Agent nor any of its affiliates shall be responsible to the Banks
for any recitals, statements, representations or warranties made by the
Borrowers or any other Person whether contained herein or otherwise or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the other Loan Documents or any other document referred to or
provided for herein or therein or for any failure by the Borrowers or any other
Person to perform its obligations hereunder or thereunder or in respect of the
Notes. The Agent may employ agents and attorneys-in-fact and shall not be
responsible for the negligence or misconduct of any such agents or attorneys-in-
fact selected by it with reasonable care. Neither the Agent nor any of its
directors, officers, employees or agents shall be responsible for any action
taken or omitted to be taken by it or them hereunder or in connection herewith,
except for its or their own gross negligence or willful misconduct. FNBB in its
separate capacity as a Bank shall have the same rights and powers hereunder as
any other Bank.
(S)14.2. Actions By Agent. The Agent shall be fully justified in failing
------- -- -----
or refusing to take any action under this Agreement as it reasonably deems
appropriate unless it shall first have received such advice or concurrence of
the Banks and shall be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing
-46-
to take any such action. The Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any of the Loan
Documents in accordance with a request of the Banks, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the Banks
and all future holders of the Notes or any Letter of Credit Participation.
(S)14.3. Indemnification. Without limiting the obligations of the
---------------
Borrowers hereunder or under any other Loan Document, the Banks agree to
indemnify the Agent, ratably in accordance with their respective Commitment
Percentages, for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements or any
kind or nature whatsoever which may at any time be imposed on, incurred by or
asserted against the Agent in any way relating to or arising out of this
Agreement or any other Loan Document or any documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or the enforcement of any of the terms hereof or thereof or of any such other
documents; provided that no Bank shall be liable for any of the foregoing to the
extent they arise from the gross negligence or willful misconduct of the Agent
(or any agent thereof).
(S)14.4. Reimbursement. Without limiting the provisions of (S)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 apparent that the Agent did not then
receive a payment in an amount equal to the sum paid out, then any Person to
whom the Agent made the funds available shall, on demand from the Agent, refund
to the Agent the sum paid to that Person. If, in the opinion of the Agent, the
distribution of any amount received by it in such capacity hereunder or under
the Loan Documents might involve it in liability, it may refrain from making
distribution until its right to make distribution shall have been adjudicated by
a court of competent jurisdiction. If a court of competent jurisdiction shall
adjudge that any amount received and distributed by the Agent is to be repaid,
each Person to whom any such distribution shall have been made shall either
repay to the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such Persons as shall be
determined by such court.
(S)14.5. Documents. The Agent will forward to each Bank, promptly after
---------
the Agent's receipt thereof, a copy of each notice or other document furnished
to the Agent for such Bank hereunder; provided, however, that, notwithstanding
the foregoing, the Agent may furnish to the Banks a monthly summary with respect
to Letters of Credit issued hereunder in lieu of copies of the related Letter of
Credit Applications.
(S)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 Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Agent or any other
Bank, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own appraisals and decisions in taking or not
taking action under this Agreement or any other Loan
-47-
Document. The Agent shall not be required to keep informed as to the performance
or observance by the Borrowers of this Agreement, the other Loan Documents or
any other document referred to or provided for herein or therein or by any other
Person of any other agreement or to make inquiry of, or to inspect the
properties or books of, any Person. Except for notices, reports and other
documents and information expressly required to be furnished to the Banks by the
Agent hereunder, the Agent shall not have any duty or responsibility to provide
any Bank with any credit or other information concerning any person which may
come into the possession of the Agent or any of its affiliates. Each Bank shall
have access to all documents relating to the Agent's performance of its duties
hereunder at such Bank's request. Unless any Bank shall promptly object to any
action taken by the Agent hereunder (other than actions to which the provisions
of (S)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.
(S)14.7. Resignation of Agent. The Agent may resign at any time by giving
----------- -- -----
sixty (60) days prior written notice thereof to the Banks and the Borrowers.
Upon any such resignation, the Banks shall have the right to appoint a successor
Agent with the consent of the Borrowers, such consent not to be unreasonably
withheld. If no successor Agent shall have been so appointed by the Banks and
shall have accepted such appointment within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be a financial institution
having a combined capital and surplus in excess of $150,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation, the provisions of this Agreement shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken by
it while it was acting as Agent. Any new Agent appointed pursuant to this
(S)14.7 shall immediately issue new Letters of Credit in place of Letters of
Credit previously issued by the Agent.
(S)14.8. Action by the Banks, Consents, Amendments, Waivers, Etc. Except
------ -- --- ----- -------- ---------- ------- ---
as otherwise expressly provided in this (S)14.8, any action to be taken
(including the giving of notice) may be taken or any consent or approval
required or permitted by the Agreement or any other Loan Document to be given by
the Banks may be given, and any term of this Agreement, any other Loan Document
or any other instrument, document or agreement related to this Agreement or the
other Loan Documents or mentioned therein may be amended and the performance or
observance by the Borrowers or any other person of any of the terms thereof and
any Default or Event of Default (as defined in any of the above-referenced
documents or instruments) may be waived (either generally or in a particular
instance and either retroactively or prospectively) only with the written
consent of the Majority Banks; provided, however, that no such consent or
amendment which affects the rights, duties or liabilities of the Agent shall be
effective without the written consent of the Agent. Notwithstanding the
foregoing, no amendment, waiver or consent shall, do any of the following unless
in writing and signed by ALL of the Banks (a) increase the principal amount of
---
the Total Commitment (or subject the Banks to any additional obligations), (b)
reduce the principal of or interest on the Notes (including, without limitation,
interest on overdue amounts) or any fees payable hereunder, (c) postpone any
date fixed for any payment in respect of principal or interest (including,
without limitation, interest on overdue amounts) on the Notes, or any fees
payable hereunder; (d) change the definition of "Majority Banks" or
-48-
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 (S)14.8; (f) change the
Commitment Percentage of any Bank, except as permitted under (S)18 hereof; or
(g) except as otherwise permitted hereunder, release any Collateral.
(S)15. EXPENSES. Whether or not the transactions contemplated herein
--------
shall be consummated, the Borrowers hereby promise to reimburse Agent for all
reasonable out-of-pocket fees and disbursements (including all reasonable
attorneys' fees, collateral evaluation costs and Consulting Engineer's fees),
incurred or expended in connection with the preparation, filing or recording, or
interpretation of this Agreement, the other Loan Documents, or any amendment,
modification, approval, consent or waiver hereof or thereof. The Borrowers
further agree to reimburse the Agent and the Banks for all such fees and
disbursements expended in connection with the enforcement of any Obligations or
the satisfaction of any indebtedness of the Borrowers hereunder or under any of
the other Loan Documents, or in connection with any litigation, proceeding or
dispute hereunder in any way related to the credit hereunder, including, without
limitation, the so-called "workout" thereof after the occurrence of a Default or
Event of Default. The Borrowers will pay any taxes (including any interest and
penalties in respect thereof) other than the Agent's or the Banks' federal and
state income taxes, payable on or with respect to the transactions contemplated
by this Agreement (the Borrowers hereby agreeing to indemnify the Agent and the
Banks with respect thereto).
(S)16. INDEMNIFICATION. The Borrowers agree to indemnify and hold
---------------
harmless the Agent and the Banks, as well as the Agent's and the Banks'
shareholders, directors, agents, officers, subsidiaries and affiliates, from and
against all damages, losses, settlement payments, obligations, liabilities,
claims, suits, penalties, assessments, citations, directives, demands,
judgments, actions or causes of action, whether statutorily created or under the
common law, and reasonable costs and expenses incurred, suffered, sustained or
required to be paid by an indemnified party by reason of or resulting from the
transactions contemplated hereby, except any of the foregoing which result from
the gross negligence or willful misconduct of the indemnified party. In any
investigation, proceeding or litigation, or the preparation therefor, each Bank
shall be entitled to select its own counsel and, in addition to the foregoing
indemnity, the Borrowers agree to pay promptly the reasonable fees and expenses
of such counsel. In the event of the commencement of any such proceeding or
litigation, the Borrowers shall be entitled to participate in such proceeding or
litigation with counsel of their choice at their expense, provided that such
counsel shall be reasonably satisfactory to the Banks. The covenants of this
(S)16 shall survive payment or satisfaction of payment of amounts owing with
respect to the Notes or any other Loan Document.
(S)17. SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein, all
-------- -- --------- ---
covenants, agreements, representations and warranties made herein, in the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers pursuant hereto shall be deemed to have been relied upon by the
Banks and the Agent, notwithstanding any investigation heretofore or hereafter
made by any of them, and shall survive the making by the Banks of the Loans and
the issuance, extension or renewal of any Letters of Credit, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement, any Letter of Credit or the Notes remains outstanding
and unpaid or any Bank has any obligation to make any Loans or the Agent has any
obligation to 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
-49-
transactions contemplated hereby shall constitute representations and warranties
by the Borrowers hereunder.
(S)18. ASSIGNMENT AND PARTICIPATION. It is understood and agreed that
---------- --- -------------
each Bank shall have the right to assign at any time all or a portion of its
Commitment Percentage and interests in the risk relating to the Loans,
outstanding Letters of Credit, and its Commitment hereunder in an amount equal
to or greater than $5,000,000 (which assignment shall be of an equal percentage
of the Commitment, the Loans and outstanding Letters of Credit unless otherwise
agreed to by the Agent) to additional banks or other financial institutions with
the prior written approval of the Agent and, if no Default or Event of Default
exists, the Borrowers, which approvals shall not be unreasonably withheld. Any
Bank may at any time, and from time to time, assign to any branch, lending
office, or affiliate or such Bank all or any part of its rights and obligations
under the Loan Documents by notice to the Agent and the Borrower. It is further
agreed that each bank or other financial institution which executes and delivers
to the Agent and the Borrowers hereunder an Assignment and Acceptance
substantially in the form of Exhibit E hereto together with an assignment fee in
the amount of $2,500 payable by the assigning Bank to the Agent, shall, on the
date specified in such Assignment and Acceptance, become a party to this
Agreement and the other Loan Documents for all purposes of this Agreement and
the other Loan Documents, and its portion of the Commitment, the Loans and
Letters of Credit shall be as set forth in such Assignment and Acceptance. The
Bank assignor thereunder shall, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights and be released from its obligations under this Agreement.
Upon the execution and delivery of such Assignment and Acceptance, (a) the
Borrowers shall issue to the bank or other financial institution a Note in the
amount of such bank's or other financial institution's Commitment dated the date
of the assignment or such other date as may be specified by the Agent and
otherwise completed in substantially the form of Exhibit A and to the extent any
assigning Bank has retained a portion of its obligations hereunder, an
appropriate replacement Note to the assigning Bank reflecting its assignment;
(b) the Agent shall distribute to the Borrowers, the Banks and such bank or
financial institution a schedule reflecting such changes; and (c) this Agreement
shall be appropriately amended to reflect (i) the status of the bank or
financial institution as a party hereto and (ii) the status and rights of the
Banks hereunder.
Each Bank shall also have the right to grant participations to one or more
banks or other financial institutions in its Commitment, the Loans and
outstanding Letters of Credit. The documents evidencing any such participation
shall limit such participating bank or financial institutions voting rights with
respect to this Agreement to the matters set forth in (S)14.8 which require the
vote of all Banks.
Notwithstanding the foregoing, no assignment or participation shall operate
to increase the Commitment hereunder or otherwise alter the substantive terms of
this Agreement, and no Bank which retains a Commitment hereunder shall have a
Commitment of less than $5,000,000, as such amount may be reduced upon
reductions in the Total Commitment pursuant to (S)2.2 hereof.
Anything contained in this (S)18 to the contrary notwithstanding, any Bank
may at any time pledge all or any portion of its interest and rights under this
Agreement (including all or any
-50-
portion of its Notes) to any of the twelve Federal Reserve Lenders organized
under (S)4 of the Federal Reserve Act, 12 U.S.C. (S)341. No such pledge or the
enforcement thereof shall release the pledgor Lender from its obligations
hereunder or under any of the other Loan Documents.
(S)19. PARTIES IN INTEREST. All the terms of this Agreement and the
------- -- --------
other Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; provided that no Borrower shall assign or transfer its rights hereunder
without the prior written consent of the Banks.
(S)20. NOTICES, ETC. Except as otherwise expressly provided in this
------- ---
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States first-class mail, postage
prepaid, or sent by telecopier and confirmed by letter, addressed as follows:
(a) if to the Borrowers, at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, Attention: President, telecopy number (▇▇▇) ▇▇▇-▇▇▇▇,
with a copy to: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq., ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ & Associates,
P.C., ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
telecopy number (▇▇▇) ▇▇▇-▇▇▇▇;
(b) if to the Agent or FNBB, at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Director,
telecopy number ▇▇▇-▇▇▇-▇▇▇▇;
or such other address for notice as shall have last been furnished in writing to
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or made
and to have become effective (a) if delivered by hand to a responsible officer
of the party to which it is directed, at the time of the receipt thereof by such
officer, (b) if sent by registered or certified first-class mail, postage
prepaid, five Business Days after the posting thereof, and (c) if sent by
telecopier, at the time of the dispatch thereof, if in normal business hours in
the place of receipt, or otherwise at the opening of business on the following
Business Day.
(S)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 Agreement are for convenience of reference
only and shall not define or limit the provisions hereof. This Agreement and any
amendment hereof may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
(S)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
Agreement nor any term hereof may be changed, waived, discharged or terminated,
except as provided in (S)14.8. No waiver shall extend to or
-51-
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.
(S)23. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS HEREBY WAIVES ITS
------ -- ---- -----
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWERS (a) CERTIFY THAT NO REPRESENTATIVE, AGENT OR ATTORNEY 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 AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY
BECAUSE OF, AMONG OTHER THINGS, THE BORROWERS' WAIVERS AND CERTIFICATIONS
CONTAINED HEREIN.
(S)24. GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE
--------- ---
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS
CONSENT TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE
COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS
OF ANY BANK OR THE AGENT UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS.
(S)25. SEVERABILITY. The provisions of this Agreement are severable and
------------
if any one clause or provision hereof shall be held invalid or unenforceable in
whole or in part in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in such
jurisdiction, and shall not in any manner affect such clause or provision in any
other jurisdiction, or any other clause or provision of this Agreement in any
jurisdiction.
-52-
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement under
seal as of the date first set forth above.
THE BORROWERS:
--------------
EASTERN ENVIRONMENTAL SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
NHD, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
PULAKSI GRADING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
CAROLINA GRADING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
S&S GRADING, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
ALLIED WASTE SERVICES, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇.
--------------------------
Title: PRESIDENT
-----------------------
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OLNEY SANITARY SYSTEM, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
Title: President
-----------------------
EASTERN WASTE OF NEW YORK, INC.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇.
--------------------------
Title: President
-----------------------
THE BANKS:
---------
BANK OF AMERICA ILLINOIS
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
-----------------------
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
--------------------------
Title: Morgaging Director
-----------------------