AMENDED AND RESTATED
CREDIT AGREEMENT
dated as of April 10, 1998
among
U S LIQUIDS INC.,
VARIOUS FINANCIAL INSTITUTIONS
BANKBOSTON,N.A.
and
▇▇▇▇▇ FARGO BANK, N.A.,
as Co-Agents,
and
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
as Agent
Arranged by BANCAMERICA ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|| TABLE OF CONTENTS
Page
SECTION 1 DEFINITIONS.....................................................1
1.1 Definitions.....................................................1
1.2 Other Interpretive Provisions..................................13
1.3 Reallocation of Percentages and Revolving Loans................13
SECTION 2 COMMITMENTS OF THE BANKS; BORROWING, CONVERSION AND
LETTER OF CREDIT PROCEDURES; SWING LINE LOANS..................14
2.1 Commitments....................................................14
2.1.1 Revolving Loan Commitment.............................14
2.1.2 L/C Commitment........................................15
2.2 Revolving Loan Procedures......................................15
2.2.1 Various Types of Revolving Loans......................15
2.2.2 Borrowing Procedures..................................15
2.2.3 Procedures for Conversion of Type of
Revolving Loan......................................16
2.3 Letter of Credit Procedures..................................16
2.3.1 L/C Applications......................................16
2.3.2 Participation in Letters of Credit....................17
2.3.3 Reimbursement Obligations.............................17
2.3.4 Limitation on Obligations of Issuing Banks............18
2.3.5 Funding by Banks to Issuing Banks.....................18
2.4 Swing Line Loans...............................................19
2.4.1 Swing Line Loans......................................19
2.4.2 Swing Line Loan Procedures............................19
2.4.3 Refunding of, or Funding of Participations
in, Swing Line Loans................................19
2.4.4 Repayment of Participations...........................20
2.4.5 Participation Obligations Unconditional...............20
2.5 Commitments Several............................................21
2.6 Certain Conditions.............................................21
SECTION 3 NOTES EVIDENCING LOANS...........................................21
3.1 Notes..........................................................21
3.2 Recordkeeping..................................................21
SECTION 4 INTEREST..........................................................22
4.1 Interest Rates.................................................22
4.2 Interest Payment Dates.........................................22
4.3 Interest Periods...............................................22
4.4 Setting and Notice of Eurodollar Rates.........................23
4.5 Computation of Interest........................................23
SECTION 5 FEES..............................................................24
5.1 Non-Use Fee..................................................24
5.2 Letter of Credit Fees........................................24
5.3 Arrangement and Agent's Fees.................................24
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SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS..................................................25
6.1 Reduction or Termination of the Commitments..................25
6.1.1 Voluntary Reduction or Termination of the
Commitments.........................................25
6.1.2 Mandatory Reductions of Commitments...................25
6.1.3 All Reductions of the Commitments.....................25
6.2 Prepayments..................................................25
6.2.1 Voluntary Prepayments.................................25
6.2.2 Mandatory Payments....................................25
6.2.3 All Prepayments.......................................26
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES...................26
7.1 Making of Payments...........................................26
7.2 Application of Certain Payments..............................26
7.3 Due Date Extension...........................................26
7.4 Setoff.......................................................26
7.5 Proration of Payments........................................27
7.6 Taxes........................................................27
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR EURODOLLAR
LOANS.............................................................28
8.1 Increased Costs................................................28
8.2 Basis for Determining Interest Rate Inadequate or
Unfair.......................................................30
8.3 Changes in Law Rendering Eurodollar Loans Unlawful.............30
8.4 Funding Losses.................................................31
8.5 Right of Banks to Fund through Other Offices...................31
8.6 Discretion of Banks as to Manner of Funding....................31
8.7 Mitigation of Circumstances; Replacement of Affected
Bank.........................................................32
8.8 Conclusiveness of Statements; Survival of
Provisions...................................................32
SECTION 9 WARRANTIES........................................................33
9.1 Organization, etc..............................................33
9.2 Authorization; No Conflict.....................................33
9.3 Validity and Binding Nature....................................33
9.4 Financial Condition............................................34
9.5 No Material Adverse Change.....................................34
9.6 Litigation and Contingent Liabilities..........................34
9.7 Ownership of Properties; Liens.................................34
9.8 Subsidiaries...................................................35
9.9 Pension and Welfare Plans......................................35
9.10 Investment Company Act.........................................35
9.11 Public Utility Holding Company Act.............................35
9.12 Regulation U...................................................35
9.13 Taxes..........................................................36
9.14 Solvency, etc..................................................36
9.15 Environmental Matters..........................................36
9.16 Year 2000 Problem..............................................38
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9.17 Information....................................................38
SECTION 10 COVENANTS........................................................38
10.1 Reports, Certificates and Other Information...................38
10.1.1 Audit Report.........................................38
10.1.2 Quarterly Reports....................................39
10.1.3 Compliance Certificates..............................39
10.1.4 Reports to SEC and to Shareholders...................39
10.1.5 Notice of Default, Litigation and
ERISA Matters......................................40
10.1.6 Subsidiaries.........................................41
10.1.7 Management Reports...................................41
10.1.8 Projections..........................................41
10.1.9 Other Information....................................41
10.2 Books, Records and Inspections................................41
10.3 Insurance.....................................................42
10.4 Compliance with Laws; Payment of Taxes and
Liabilities.................................................42
10.5 Maintenance of Existence, etc.................................42
10.6 Financial Covenants...........................................42
10.6.1 Minimum Net Worth....................................42
10.6.2 Minimum Interest Coverage............................43
10.6.3 Funded Debt to EBITDA Ratio..........................43
10.6.4 Capital Expenditures.................................43
10.7 Limitations on Debt...........................................43
10.8 Liens.........................................................44
10.9 Operating Leases..............................................45
10.10 Restricted Payments...........................................45
10.11 Mergers, Consolidations, Sales................................45
10.12 Modification of Organizational Documents......................46
10.13 Use of Proceeds...............................................47
10.14 Further Assurances............................................47
10.15 Transactions with Affiliates..................................47
10.16 Employee Benefit Plans........................................47
10.17 Environmental Matters.........................................47
10.18 Unconditional Purchase Obligations............................48
10.19 Inconsistent Agreements.......................................48
10.20 Business Activities...........................................48
10.21 Advances and Other Investments................................49
10.22 Restriction of Amendments to Asset Purchase
Agreement...................................................50
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.......................50
11.1 Effectiveness..................................................50
11.1.1 Notes................................................50
11.1.2 Resolutions..........................................50
11.1.3 Consents, etc........................................50
11.1.4 Incumbency and Signature Certificates................51
11.1.5 Guaranty.............................................51
11.1.6 Security Agreement...................................51
11.1.7 Pledge Agreements....................................51
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11.1.8 Confirmation.........................................51
11.1.9 Opinion of Counsel for the Company and
the Guarantors.....................................51
11.1.10 Other................................................51
11.2 Conditions...........................................51
11.2.1 Compliance with Warranties, No Default,
etc................................................51
11.2.2 Confirmatory Certificate.............................52
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT...............................53
12.1 Events of Default.............................................53
12.1.1 Non-Payment of the Loans, etc.......................53
12.1.2 Non-Payment of Other Debt...........................53
12.1.3 Other Material Obligations..........................53
12.1.4 Bankruptcy, Insolvency, etc.........................53
12.1.5 Non-Compliance with Provisions of This
Agreement.........................................54
12.1.6 Warranties..........................................54
12.1.7 Pension Plans.......................................54
12.1.8 Judgments...........................................54
12.1.9 Invalidity of Guaranty, etc.........................54
12.1.10 Invalidity of Collateral Documents, etc.............55
12.1.11 Change in Control...................................55
12.2 Effect of Event of Default....................................55
SECTION 13 THE AGENT........................................................56
13.1 Appointment and Authorization.................................56
13.2 Delegation of Duties..........................................57
13.3 Liability of Agent............................................57
13.4 Reliance by Agent.............................................57
13.5 Notice of Default.............................................58
13.6 Credit Decision...............................................58
13.7 Indemnification...............................................59
13.8 Agent in Individual Capacity..................................60
13.9 Successor Agent...............................................60
13.10 Withholding Tax...............................................61
13.11 Collateral Matters............................................63
13.12 Co-Agents.....................................................63
SECTION 14 GENERAL..........................................................63
14.1 Waiver; Amendments............................................63
14.2 Confirmations.................................................64
14.3 Notices.......................................................64
14.4 Computations..................................................64
14.5 Regulation U..................................................65
14.6 Costs, Expenses and Taxes.....................................65
14.7 Subsidiary References.........................................66
14.8 Captions......................................................66
14.9 Assignments; Participations...................................66
14.9.1 Assignments.........................................66
14.9.2 Participations......................................67
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14.10 Governing Law.................................................68
14.11 Counterparts..................................................68
14.12 Successors and Assigns........................................68
14.13 Indemnification by the Company................................69
14.14 Forum Selection and Consent to Jurisdiction...................69
14.15 Waiver of Jury Trial..........................................70
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SCHEDULE 1.1 Pricing Schedule
SCHEDULE 2.1 Banks and Percentages
SCHEDULE 9.6(a) Litigation and Contingent Liabilities
SCHEDULE 9.6(b) Contingent Payments
SCHEDULE 9.8 Subsidiaries
SCHEDULE 9.15 Environmental Matters
SCHEDULE 10.6 Approved Acquisitions
SCHEDULE 10.7 Existing Debt
SCHEDULE 10.8 Existing Liens
SCHEDULE 12.1.11 Key Executives
SCHEDULE 14.3 Addresses for Notices
EXHIBIT A Form of Note
(Section 3.1)
EXHIBIT B Form of Compliance Certificate
(Section 10.1.3)
EXHIBIT C Copy of Guaranty
(Section 1)
EXHIBIT D Copy of Security Agreement
(Section 1)
EXHIBIT E Copy of Company Pledge Agreement
(Section 1)
EXHIBIT F-1 Copy of Subsidiary Pledge Agreement
(Mesa Processing, Inc.) (Section 11.1.7)
EXHIBIT F-2 Form of Subsidiary Pledge Agreement
(Section 11.1.7)
EXHIBIT G Form of Assignment Agreement
(Section 14.9)
EXHIBIT H Form of Confirmation
(Section 11.1.8)
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AMENDED AND RESTATED CREDIT AGREEMENT
This AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 10, 1998
(this "AGREEMENT"), is entered into among U S LIQUIDS INC., a Delaware
corporation (the "COMPANY"), the financial institutions that are or may from
time to time become parties hereto (together with their respective successors
and assigns, the "BANKS"), BANKBOSTON, N.A. and ▇▇▇▇▇ FARGO BANK, N.A., as
co-agents for the Banks and BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION (in its individual capacity, "BOFA"), as agent for the Banks.
WHEREAS, the Company, various financial institutions and the Agent have
entered into a Credit Agreement, dated as of December 17, 1997 (the "EXISTING
AGREEMENT");
WHEREAS, the parties hereto have agreed to amend and restate the
Existing Agreement so as to, among other things, (a) increase the amount of the
revolving credit facility to $100,000,000, (b) amend certain covenants and
various other provisions of the Existing Agreement, (c) add a swing line
facility and (d) add additional financial institutions to the lender group; and
WHEREAS, the parties hereto intend that this Agreement and the documents
executed in connection herewith not effect a novation of the obligations of the
Company under the Existing Agreement, but merely a restatement and, where
applicable, an amendment of the terms governing such obligations;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the Existing Agreement is amended and restated in its entirety, and
the parties hereto agree as follows:
SECTION 1 DEFINITIONS.
1.1 DEFINITIONS. When used herein the following terms shall have the
following meanings:
AFFECTED BANK means any Bank that has given notice to the Company (which
has not been rescinded) of (i) any obligation by the Company to pay any amount
pursuant to SECTION 7.6 or 8.1 or (ii) the occurrence of any circumstances of
the nature described in SECTION 8.2 or 8.3.
AFFILIATE of any Person means (i) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (ii) any officer or director of such Person.
AGENT means BofA in its capacity as agent for the Banks hereunder and
any successor thereto in such capacity.
AGENT-RELATED PERSONS means BofA and any successor agent arising under
SECTION 13.9, together with their respective Affiliates (including, in the case
of BofA, the Arranger), and the officers, directors, employees, agents and
attorneys-in-fact of such Persons and Affiliates.
AGREEMENT - see the PREAMBLE.
APPROVED ACQUISITION - see SECTION 10.6.
ARRANGER means BancAmerica ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, a Delaware corporation.
ASSIGNMENT AGREEMENT - see SECTION 14.9.1.
BANK - see the PREAMBLE. References to the "Banks" shall include the
Issuing Bank and the Swing Line Bank; for purposes of clarification only, to the
extent that BofA (or any successor Issuing Bank or Swing Line Bank) may have any
rights or obligations in addition to those of the other Banks due to its status
as Issuing Bank or Swing Line Bank, its status as such will be specifically
referenced.
BASE RATE means at any time the greater of (a) the Federal Funds Rate
plus 0.5% and (b) the Reference Rate.
BofA - see the PREAMBLE.
BUSINESS DAY means any day on which BofA is open for commercial banking
business in Chicago, New York and San Francisco and, in the case of a Business
Day which relates to a Eurodollar Loan, on which dealings are carried on in the
interbank eurodollar market.
CAPITAL EXPENDITURES means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the Company, but excluding expenditures made in connection with the
replacement, substitution or restoration of assets to the extent financed (i)
from insurance proceeds (or other similar recoveries) paid on account of the
loss of or damage to the assets being replaced or restored or (ii) with awards
of compensation arising from the taking by eminent domain or condemnation of the
assets being replaced.
CAPITAL LEASE means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such
9
Person.
CASH EQUIVALENT INVESTMENT means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Bank or its holding company) rated at least A-l by
Standard & Poor's Ratings Group or P-l by ▇▇▇▇▇'▇ Investors Service, Inc., (c)
any certificate of deposit (or time deposits represented by such certificates of
deposit) or bankers acceptance, maturing not more than one year after such time,
or overnight Federal Funds transactions that are issued or sold by a commercial
banking institution that is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000, (d) any repurchase agreement entered into with any Bank (or other
commercial banking institution of the stature referred to in CLAUSE (C)) which
(i) is secured by a fully perfected security interest in any obligation of the
type described in any of CLAUSES (A) through (C) and (ii) has a market value at
the time such repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such Bank (or other commercial banking institution)
thereunder and (e) investments in short-term asset management accounts offered
by any Bank for the purpose of investing in loans to any corporation (other than
the Company or an Affiliate of the Company), state or municipality, in each case
organized under the laws of any state of the United States or of the District of
Columbia.
CERCLA - see SECTION 9.15.
CODE means the Internal Revenue Code of 1986.
COLLATERAL DOCUMENTS means the Company Pledge Agreement, each Subsidiary
Pledge Agreement, the Security Agreement and any other agreement pursuant to
which the Company or any Guarantor grants collateral to the Agent for the
benefit of the Banks.
COMMITMENT AMOUNT means $100,000,000 as reduced from time to time
pursuant to SECTION 6.1.
COMMITMENT means, as to any Bank, such Bank's commitment to make Loans,
and to issue or participate in Letters of Credit, under this Agreement.
COMPANY - see the PREAMBLE.
10
COMPANY PLEDGE AGREEMENT means the pledge agreement dated as of December
17, 1997 between the Company and the Agent, a copy of which is attached hereto
as EXHIBIT E.
COMPUTATION PERIOD means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter.
CONSOLIDATED NET INCOME means, with respect to the Company and its
Subsidiaries for any period, the net income (or loss) of the Company and its
Subsidiaries for such period, EXCLUDING any extraordinary gains during such
period.
CONTINGENT PAYMENT means any payment that has been (or is required to
be) made by the Company or any Subsidiary in connection with the achievement of
any particular business goal (excluding (i) employee compensation and bonuses in
the ordinary course of business and (ii) periodic, variable payments based upon
performance-related criteria, such as revenues or earnings).
A Contingent Payment shall be deemed to be "outstanding" from the time
that the Company or any Subsidiary enters into the agreement containing the
obligation to make such Contingent Payment until such time as either such
Contingent Payment has been made in full or it has become certain that such
Contingent Payment will never have to be made. If the amount of any Contingent
Payment is not determinable or is variable based on factors which are not yet
determinable, then the amount of such Contingent Payment shall be deemed to be
the maximum amount which, under any and all reasonably foreseeable
circumstances, the Company or the applicable Subsidiary would reasonably be
expected to be required to pay in respect thereof.
CONTROLLED GROUP means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with the Company, are treated
as a single employer under Section 414 of the Code or Section 4001 of ERISA.
DEBT of any Person means, without duplication, (a) all indebtedness of
such Person for borrowed money, whether or not evidenced by bonds, debentures,
notes or similar instruments, (b) all obligations of such Person as lessee under
Capital Leases which have been or should be recorded as liabilities on a balance
sheet of such Person, (c) all obligations of such Person to pay the deferred
purchase price of property or services (including Contingent Payments but
excluding trade accounts payable in the ordinary course of business), (d) all
indebtedness secured by a Lien on the property of such Person, whether or not
such indebtedness shall have been assumed by such Person (it being understood
that if such Person has not assumed or otherwise become personally liable for
any such indebtedness, the amount of
11
the Debt of such Person in connection therewith shall be limited to the lesser
of the face amount of such indebtedness or the fair market value of all property
of such Person securing such indebtedness), (e) all obligations, contingent or
otherwise, with respect to the face amount of all letters of credit (whether or
not drawn) and banker's acceptances issued for the account of such Person
(including the Letters of Credit), (f) net liabilities of such Person under all
Hedging Obligations and (g) all Suretyship Liabilities of such Person.
DISPOSAL - see the definition of "RELEASE".
DOLLAR and the sign "$" mean lawful money of the United States of
America.
EBITDA means, for any period, Consolidated Net Income for such period
PLUS, to the extent deducted in determining such Consolidated Net Income,
Interest Expense, income tax expense, depreciation and amortization for such
period; PROVIDED that for purposes of calculating EBITDA for any period, the
consolidated net income of any Person acquired by the Company or any Subsidiary
during such period (plus, to the extent deducted in determining such
consolidated net income, interest expense, income tax expense, depreciation and
amortization of such Person) shall be included on a PRO FORMA basis for such
period (assuming the consummation of each such acquisition and the incurrence or
assumption of any Debt in connection therewith occurred on the first day of such
period) if (i) the audited consolidated balance sheet of such acquired Person
and its consolidated Subsidiaries as at the end of the fiscal year of such
Person preceding the acquisition of such Person and the related audited
consolidated statements of income, stockholders' equity and cash flows for the
such fiscal year have been provided to the Agent and the Banks and (ii) any
subsequent unaudited financial statements for such Person for the period prior
to the acquisition of such Person were prepared on a basis consistent with such
audited financial statements.
EFFECTIVE DATE - see SECTION 11.1.
ENVIRONMENTAL CLAIMS means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
ENVIRONMENTAL LAWS means all federal, state or local laws, statutes,
common law duties, rules, regulations, ordinances and codes, together with all
administrative orders, directed duties, requests, licenses, authorizations and
permits of, and agreements with, any governmental authority, in each case
relating to environmental matters.
EQUITY OFFERING means an offering (which may be public or
12
private) by the Company of its common stock which is completed on or before
December 31, 1998 and pursuant to which the Company receives net cash proceeds
of not less than $50,000,000.
ERISA means the Employee Retirement Income Security Act of 1974.
References to sections of ERISA also refer to any successor sections.
EUROCURRENCY RESERVE PERCENTAGE means, with respect to any Eurodollar
Loan for any Interest Period, a percentage (expressed as a decimal) equal to the
daily average during such Interest Period of the percentage in effect on each
day of such Interest Period, as prescribed by the Board of Governors of the
Federal Reserve System (or any successor), for determining the aggregate maximum
reserve requirements applicable to "Eurocurrency Liabilities" pursuant to
Regulation D or any other then applicable regulation of such Board of Governors
which prescribes reserve requirements applicable to "Eurocurrency Liabilities"
as presently defined in Regulation D.
EURODOLLAR LOAN means any Revolving Loan which bears interest at a rate
determined by reference to the Eurodollar Rate (Reserve Adjusted).
EURODOLLAR MARGIN - see SCHEDULE 1.1.
EURODOLLAR OFFICE means with respect to any Bank the office or offices
of such Bank which shall be making or maintaining the Eurodollar Loans of such
Bank hereunder or such other office or offices through which such Bank
determines its Eurodollar Rate. A Eurodollar Office of any Bank may be, at the
option of such Bank, either a domestic or foreign office.
EURODOLLAR RATE means, with respect to any Eurodollar Loan for any
Interest Period, the rate per annum at which Dollar deposits in immediately
available funds are offered to the Eurodollar Office of BofA two Business Days
prior to the beginning of such Interest Period by major banks in the interbank
eurodollar market as at or about 10:00 A.M., Chicago time, for delivery on the
first day of such Interest Period, for the number of days comprised therein and
in an amount equal or comparable to the amount of the Eurodollar Loan of BofA
for such Interest Period.
EURODOLLAR RATE (RESERVE ADJUSTED) means, with respect to any Eurodollar
Loan for any Interest Period, a rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) determined pursuant to the following formula:
Eurodollar Rate = EURODOLLAR RATE
(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
13
EVENT OF DEFAULT means any of the events described in SECTION 12.1.
EXISTING AGREEMENT - see the RECITALS.
FEDERAL FUNDS RATE means, for any day, the rate set forth in the weekly
statistical release designated as H.15(519), or any successor publication,
published by the Federal Reserve Bank of New York (including any such successor
publication, "H.15(519)") on the preceding Business Day opposite the caption
"Federal Funds (Effective)"; or, if for any relevant day such rate is not so
published on any such preceding Business Day, the rate for such day will be the
arithmetic mean as determined by the Agent of the rates for the last transaction
in overnight Federal funds arranged prior to 9:00 a.m. (New York City time) on
that day by each of three leading brokers of Federal funds transactions in New
York City selected by the Agent.
FINANCIAL LETTER OF CREDIT means any Letter of Credit determined by the
applicable Issuing Bank to be a "financial guaranty-type Standby Letter of
Credit" as defined in footnote 13 to Appendix A to the Risk Based Capital
Guidelines issued by the Comptroller of the Currency (or in any successor
regulation, guideline or ruling by any applicable banking regulatory authority).
FISCAL QUARTER means a fiscal quarter of a Fiscal Year.
FISCAL YEAR means the fiscal year of the Company and its Subsidiaries,
which period shall be the 12-month period ending on December 31 of each year.
References to a Fiscal Year with a number corresponding to any calendar year
(e.g., "Fiscal Year 1997") refer to the Fiscal Year ending on December 31 of
such calendar year.
FLOATING RATE LOAN means any Loan which bears interest at or by
reference to the Base Rate.
FLOATING RATE MARGIN - see SCHEDULE 1.1.
FUNDED DEBT means all Debt of the Company and its Subsidiaries,
excluding (i) contingent obligations in respect of undrawn letters of credit and
Suretyship Liabilities (except, in each case, to the extent constituting
Suretyship Liabilities in respect of Debt of a Person other than the Company or
any Subsidiary), (ii) Hedging Obligations, (iii) Debt of the Company to
Subsidiaries and Debt of Subsidiaries to the Company or to other Subsidiaries
and (iv) the Contingent Payments incurred in connection with the acquisition of
City Environmental, Inc.
14
listed as the first item on SCHEDULE 9.6(b).
FUNDED DEBT TO EBITDA RATIO means, as of the last day of any Fiscal
Quarter, the ratio of (i) Funded Debt as of the last day of such Fiscal Quarter
to (ii) EBITDA for the Computation Period ending on the last day of such Fiscal
Quarter.
GAAP means generally accepted accounting principles set forth from time
to time in the opinions and pronouncements of the Accounting Principles Board
and the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession), which are applicable to the circumstances as of the date of
determination.
GROUP - see SECTION 2.2.1.
GUARANTOR means, on any day, each Subsidiary that has executed a
counterpart of the Guaranty on or prior to that day (or is required to execute a
counterpart of the Guaranty on that date).
GUARANTY means the Guaranty dated as of December 17, 1997, executed by
various Subsidiaries of the Company, a copy of which is attached hereto as
EXHIBIT C.
HAZARDOUS SUBSTANCES - see SECTION 9.15.
HEDGING OBLIGATIONS means, with respect to any Person, all liabilities
of such Person under interest rate, currency and commodity swap agreements, cap
agreements and collar agreements, and all other agreements or arrangements
designed to protect such Person against fluctuations in interest rates, currency
exchange rates or commodity prices.
INTEREST COVERAGE RATIO means the ratio of (a) Consolidated Net Income
before deducting Interest Expense and income tax expense for any Computation
Period to (b) Interest Expense for such Computation Period.
INTEREST EXPENSE means for any period the consolidated interest expense
of the Company and its Subsidiaries for such period (including all imputed
interest on Capital Leases and before giving effect to any capitalization of
interest but excluding amortization of deferred financing costs).
INTEREST PERIOD - see SECTION 4.3.
INVESTMENT means, relative to any Person, (a) any loan or advance made
by such Person to any other Person (excluding any commission, travel or similar
advances made to directors,
15
officers and employees of the Company or any of its Subsidiaries), (b) any
Suretyship Liability of such Person, (c) any ownership or similar interest held
by such Person in any other Person and (d) deposits and the like relating to
prospective acquisitions of businesses.
ISSUING BANK means BofA in its capacity as an issuer of Letters of
Credit hereunder and any other Bank which, with the written consent of the
Company and the Agent, is the issuer of one or more Letters of Credit hereunder.
L/C APPLICATION means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
applicable Issuing Bank at the time of such request for the type of letter of
credit requested.
LETTER OF CREDIT - see SECTION 2.1.2.
LIEN means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person which secures payment or performance of any
obligation and shall include any mortgage, lien, encumbrance, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
LOAN DOCUMENTS means this Agreement, the Notes, the Guaranty, the L/C
Applications and the Collateral Documents.
LOANS means Revolving Loans and Swing Line Loans.
MARGIN STOCK means any "margin stock" as defined in Regulation U of the
Board of Governors of the Federal Reserve System.
MATERIAL ADVERSE EFFECT means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole, or (b) a material adverse effect upon any substantial portion of the
collateral under the Collateral Documents or upon the legality, validity,
binding effect or enforceability against the Company or any Guarantor of any
Loan Document.
MULTIEMPLOYER PENSION PLAN means a multiemployer plan, as such term is
defined in Section 4001(a)(3) of ERISA, and to which the Company or any member
of the Controlled Group may have any liability.
NET WORTH means the Company's consolidated stockholders' equity
(including preferred stock accounts).
16
NON-FINANCIAL LETTER OF CREDIT means any Letter of Credit other than a
Financial Letter of Credit.
NOTE - see SECTION 3.1.
OPERATING LEASE means any lease of (or other agreement conveying the
right to use) any real or personal property by the Company or any Subsidiary, as
lessee, other than any Capital Lease.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
PENSION PLAN means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a Multiemployer
Pension Plan), and to which the Company or any member of the Controlled Group
may have any liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
PERCENTAGE means, with respect to any Bank, the percentage specified
opposite such Bank's name on SCHEDULE 2.1 hereto, reduced (or increased) by
subsequent assignments pursuant to SECTION 14.9.1.
PERSON means any natural person, corporation, partnership, trust,
limited liability company, association, governmental authority or unit, or any
other entity, whether acting in an individual, fiduciary or other capacity.
RCRA - see SECTION 9.15.
RELEASE has the meaning specified in CERCLA and the term "DISPOSAL" (or
"DISPOSED") has the meaning specified in RCRA; 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, that to the extent that the laws of a state
wherein any affected property lies establish a meaning for "RELEASE" or
"DISPOSAL" which is broader than is specified in either CERCLA or RCRA, such
broader meaning shall apply.
REFERENCE RATE means, for any day, the rate of interest in effect for
such day as publicly announced from time to time by BofA in San Francisco,
California, as its "reference rate." (The "reference rate" is a rate set by BofA
based upon various factors,
17
including BofA's costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some loans, which may be
priced at, above, or below such announced rate.) Any change in the reference
rate announced by BofA shall take effect at the opening of business on the day
specified in the public announcement of such change.
REQUIRED BANKS means Banks having Percentages aggregating 66-2/3% or
more; PROVIDED that if and so long as any Bank fails to fund its participation
in any Swing Line Loan when required by SECTION 2.4.3, such Bank's Percentage
shall be deemed for purposes of this definition to be reduced by the percentage
which the defaulted amount constitutes of such Bank's Percentage, and the
Percentage of the Swing Line Bank shall be deemed for purposes of this
definition to be increased by such percentage; and PROVIDED, FURTHER, that at
any time there are less than three Banks, "REQUIRED BANKS" shall mean all Banks
and PROVIDED FURTHER, that at any time there are less than three Banks,
"REQUIRED BANKS" shall mean all Banks.
REVOLVING LOAN - see SECTION 2.1.1.
SEC means the Securities and Exchange Commission.
SECURITY AGREEMENT means the Security Agreement among the Company, the
various Subsidiaries of the Company and the Agent, a copy of which is attached
hereto as EXHIBIT D.
SENIOR DEBT means all Debt of the Company and its Subsidiaries other
than Subordinated Debt.
STATED AMOUNT means, with respect to any Letter of Credit at any date of
determination, the maximum aggregate amount available for drawing thereunder at
any time during the then ensuing term of such Letter of Credit under any and all
circumstances, plus the aggregate amount of all unreimbursed payments and
disbursements under such Letter of Credit.
SUBORDINATED DEBT means any unsecured indebtedness of the Company which
(x) is owed to Persons other than officers, employees, directors or Affiliates
of the Company, (y) has no amortization prior to [December 31, 2001] and (z) has
subordination terms, covenants, pricing and other terms applicable to such
indebtedness which have been approved in writing by the Required Banks.
SUBSIDIARY means, with respect to any Person, a corporation of which
such Person and/or its other Subsidiaries own, directly or indirectly, such
number of outstanding shares as have more than 50% of the ordinary voting power
for the election of directors. Unless the context otherwise requires, each
reference
18
to Subsidiaries herein shall be a reference to Subsidiaries of the Company.
SUBSIDIARY PLEDGE AGREEMENT means the Subsidiary Pledge Agreement, dated
as of December 17, 1997 between Mesa Processing, Inc. and the Agent, a copy of
which is attached as EXHIBIT F-1 hereto, and each other pledge agreement
substantially in the form of EXHIBIT F-2 issued by any Subsidiary, whether
pursuant to SECTION 11.1.7 or SECTION 10.14.
SURETYSHIP LIABILITY means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to or otherwise to invest in a
debtor, or otherwise to assure a creditor against loss) any indebtedness,
obligation or other liability of any other Person (other than by endorsements of
instruments in the course of collection), or guarantees the payment of dividends
or other distributions upon the shares of any other Person. The amount of any
Person's obligation in respect of any Suretyship Liability shall (subject to any
limitation set forth therein) be deemed to be the principal amount of the debt,
obligation or other liability supported thereby.
SWING LINE BANK means BofA in its capacity as swing line lender
hereunder, together with any replacement swing line lender arising under SECTION
13.9.
SWING LINE LOAN - see SECTION 2.4.1.
TERMINATION DATE means the earlier to occur of (a) April 10, 2001, or
such later date to which the Termination Date may be extended at the request of
the Company and with the consent of each Bank or (b) such other date on which
the Commitments shall terminate pursuant to SECTION 6 or 12.
TOTAL OUTSTANDINGS means at any time the sum of (a) the aggregate
principal amount of all outstanding Loans (including Swing Line Loans) plus (b)
the Stated Amount of all Letters of Credit.
TYPE OF REVOLVING LOAN OR BORROWING - see SECTION 2.2.1. The types of
Revolving Loans or borrowings under this Agreement are as follows: Floating Rate
Loans or borrowings and Eurodollar Loans or borrowings.
UNMATURED EVENT OF DEFAULT means any event that, if it continues
uncured, will, with lapse of time or notice or both, constitute an Event of
Default.
WELFARE PLAN means a "welfare plan", as such term is defined
19
in Section 3(1) of ERISA.
1.2 OTHER INTERPRETIVE PROVISIONS. (a) The meanings of
defined terms are equally applicable to the singular and plural
forms of the defined terms.
(b) SECTION, SCHEDULE and EXHIBIT references are to this
Agreement unless otherwise specified.
(c) (i) The term "including" is not limiting and means "including
without limitation."
(ii) In the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and
including"; the words "to" and "until" each mean "to but excluding", and
the word "through" means "to and including."
(d) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement) and other contractual instruments shall be
deemed to include all subsequent amendments and other modifications thereto, but
only to the extent such amendments and other modifications are not prohibited by
the terms of any Loan Document, and (ii) references to any statute or regulation
are to be construed as including all statutory and regulatory provisions
consolidating, amending, replacing, supplementing or interpreting such statute
or regulation.
(e) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters. All such limitations, tests and measurements are cumulative and shall
each be performed in accordance with their terms.
(f) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Agent, the Company,
the Banks and the other parties thereto and are the products of all parties.
Accordingly, they shall not be construed against the Agent or the Banks merely
because of the Agent's or Banks' involvement in their preparation.
1.3. REALLOCATION OF PERCENTAGES AND REVOLVING LOANS.
(a) The Company and each Bank agree that, effective on the Effective
Date, (i) this Agreement shall amend and restate in its entirety the Existing
Agreement and (ii) the Percentages of the Banks shall be reallocated in
accordance with the terms hereof.
(b) To facilitate the reallocation described in CLAUSE (a),
20
on the Effective Date, (i) all loans under the Existing Agreement shall be
deemed to be Revolving Loans hereunder, (ii) each Bank which is a party to the
Existing Agreement (an "Existing Bank") shall transfer to the Agent an amount
equal to the excess, if any, of such Bank's Percentage of all outstanding
Revolving Loans hereunder (including any Revolving Loans requested by the
Company on the Effective Date) over the amount of all of such Bank's loans under
the Existing Agreement, (iii) each Bank which is not a party to the Existing
Agreement shall transfer to the Agent an amount equal to such Bank's Percentage
of all outstanding Revolving Loans hereunder (including any Revolving Loans
requested by the Company on the Effective Date), (iv) the Agent shall apply the
funds received from the Banks pursuant to CLAUSES (II) and (III), FIRST, on
behalf of the Banks (pro rata according to the amount of the loans each is
required to purchase to achieve the reallocation described in CLAUSE (A)), to
purchase from each Existing Bank which is not a party hereto the loans of such
Existing Bank under the Existing Agreement (and, if applicable to purchase from
any Existing Bank which is a party hereto but which has loans under the Existing
Agreement in excess of such Bank's Percentage of all then-outstanding Revolving
Loans hereunder (including any Revolving Loans requested by the Company on the
Effective Date), a portion of such loans equal to such excess), SECOND, to pay
to each Existing Bank all interest, fees and other amounts (including amounts
payable pursuant to Section 8.4 of the Existing Agreement, assuming for such
purpose that the loans under the Existing Agreement were prepaid rather than
reallocated on the Effective Date) owed to such Existing Bank under the Existing
Agreement (whether or not otherwise then due) and, THIRD, as the Company shall
direct, (v) the Company shall select new Interest Periods to apply to all
Revolving Loans hereunder (or, to the extent the Company fails to do so, such
Revolving Loans shall be Floating Rate Loans).
SECTION 2 COMMITMENTS OF THE BANKS; BORROWING, CONVERSION
AND LETTER OF CREDIT PROCEDURES; SWING LINE LOANS.
2.1 COMMITMENTS. On and subject to the terms and conditions of this
Agreement, each of the Banks, severally and for itself alone, agrees to make
loans to, and to issue or participate in the issuance of letters of credit for
the account of, the Company as follows:
2.1.1 REVOLVING LOAN COMMITMENT. Each Bank will make loans on a
revolving basis ("REVOLVING LOANS") from time to time before the Termination
Date in such Bank's Percentage of such aggregate amounts as the Company may from
time to time request from all Banks; PROVIDED that the Total Outstandings will
not at any time exceed the Commitment Amount.
2.1.2 L/C COMMITMENT. (a) The Issuing Banks will issue
21
standby letters of credit, in each case containing such terms and conditions as
are permitted by this Agreement and are reasonably satisfactory to the
applicable Issuing Bank (each, a "LETTER OF CREDIT"), at the request of and for
the account of the Company or any Subsidiary from time to time before the
Termination Date and (b) as more fully set forth in SECTION 2.3.5, each Bank
agrees to purchase a participation in each such Letter of Credit; PROVIDED that
the aggregate Stated Amount of all Letters of Credit shall not at any time
exceed the lesser of (i) [$7,500,000] and (ii) the excess, if any, of the
Commitment Amount over the aggregate principal amount of all outstanding Loans
(including Swing Line Loans).
2.2 REVOLVING LOAN PROCEDURES.
2.2.1 VARIOUS TYPES OF REVOLVING LOANS. Each Revolving Loan shall be
either a Floating Rate Loan or a Eurodollar Loan (each a "TYPE" of Revolving
Loan), as the Company shall specify in the related notice of borrowing or
conversion pursuant to SECTION 2.2.2 or 2.2.3. Eurodollar Loans having the same
Interest Period are sometimes called a "GROUP" or collectively "GROUPS".
Floating Rate Loans and Eurodollar Loans may be outstanding at the same time,
PROVIDED that (i) not more than eight different Groups of Eurodollar Loans shall
be outstanding at any one time, (ii) the aggregate principal amount of each
Group of Eurodollar Loans shall at all times be at least $1,000,000 and an
integral multiple of $250,000 and (iii) during the 60 days immediately following
the Effective Date, the Company may not select any Interest Period for any Group
of Eurodollar Loans which would end after the date specified by the Agent as the
date on which the Arranger plans to complete the primary syndication of the
credit facility established hereunder. All borrowings, conversions and
repayments of Revolving Loans shall be effected so that each Bank will have a
pro rata share (according to its Percentage) of all types and Groups of
Revolving Loans.
2.2.2 BORROWING PROCEDURES. The Company shall give written notice or
telephonic notice (followed immediately by written confirmation thereof) to the
Agent of each proposed borrowing not later than (a) in the case of a Floating
Rate borrowing, 11:00 A.M., Chicago time, on the proposed date of such
borrowing, and (b) in the case of a Eurodollar borrowing, 9:00 A.M., Chicago
time, at least two Business Days prior to the proposed date of such borrowing.
Each such notice shall be effective upon receipt by the Agent, shall be
irrevocable, and shall specify the date, amount and type of borrowing and, in
the case of a Eurodollar borrowing, the initial Interest Period therefor.
Promptly upon receipt of such notice, the Agent shall advise each Bank thereof.
Not later than 1:00 p.m., Chicago time, on the date of a proposed borrowing,
each Bank shall provide the Agent at the office
22
specified by the Agent with immediately available funds covering such Bank's
Percentage of such borrowing and, so long as the Agent has not received written
notice that the conditions precedent set forth in SECTION 11 with respect to
such borrowing have not been satisfied (and does not have knowledge of any
default in the payment of any principal, interest or fees to be paid to the
Agent for the account of the Banks), the Agent shall pay over the requested
amount to the Company on the requested borrowing date. Each borrowing shall be
on a Business Day. Each Floating Rate borrowing shall be in an aggregate amount
of at least $1,000,000 and an integral multiple of $250,000.
2.2.3 PROCEDURES FOR CONVERSION OF TYPE OF REVOLVING LOAN. Subject to
the provisions of SECTION 2.2.1, the Company may convert all or any part of any
outstanding Revolving Loan into a Revolving Loan of a different type by giving
written notice or telephonic notice (followed immediately by written
confirmation thereof) to the Agent not later than (a) in the case of conversion
into a Floating Rate Loan, 11:00 A.M., Chicago time, on the proposed date of
such conversion, and (b) in the case of a conversion into a Eurodollar Loan,
9:00 A.M., Chicago time, at least two Business Days prior to the proposed date
of such conversion. Each such notice shall be effective upon receipt by the
Agent, shall be irrevocable, and shall specify the date and amount of such
conversion, the Revolving Loans to be so converted, the type of Revolving Loans
to be converted into and, in the case of a conversion into Eurodollar Loans, the
initial Interest Period therefor. Promptly upon receipt of such notice, the
Agent shall advise each Bank thereof. Subject to SECTION 2.6, such Revolving
Loans shall be so converted on the requested date of conversion. Each conversion
shall be on a Business Day. Each conversion of a Eurodollar Loan on a day other
than the last day of an Interest Period therefor shall be subject to the
provisions of SECTION 8.4.
2.3 LETTER OF CREDIT PROCEDURES.
2.3.1 L/C APPLICATIONS. The Company shall give notice to the Agent and
the applicable Issuing Bank of the proposed issuance of each Letter of Credit on
a Business Day which is at least three Business Days (or such lesser number of
days as the Agent and such Issuing Bank shall agree in any particular instance)
prior to the proposed date of issuance of such Letter of Credit. Each such
notice shall be accompanied by an L/C Application, duly executed by the Company
(together with any Subsidiary for the account of which the related Letter of
Credit is to be issued) and in all respects satisfactory to the Agent and the
applicable Issuing Bank, together with such other documentation as the Agent or
such Issuing Bank may request in support thereof, it being understood that each
L/C Application shall specify, among other things, the date on which the
proposed
23
Letter of Credit is to be issued, the expiration date of such Letter of
Credit (which shall not be later than the Termination Date) and whether such
Letter of Credit is to be transferable in whole or in part. So long as the
applicable Issuing Bank has not received written notice that the conditions
precedent set forth in SECTION 11 with respect to the issuance of such Letter of
Credit have not been satisfied, such Issuing Bank shall issue such Letter of
Credit on the requested issuance date. Each Issuing Bank shall promptly advise
the Agent of the issuance of each Letter of Credit by such Issuing Bank and of
any amendment thereto, extension thereof or event or circumstance changing the
amount available for drawing thereunder.
2.3.2 PARTICIPATION IN LETTERS OF CREDIT. Concurrently with the issuance
of each Letter of Credit, the applicable Issuing Bank shall be deemed to have
sold and transferred to each other Bank, and each other Bank shall be deemed
irrevocably and unconditionally to have purchased and received from such Issuing
Bank, without recourse or warranty, an undivided interest and participation, to
the extent of such other Bank's Percentage, in such Letter of Credit and the
Company's reimbursement obligations with respect thereto. For the purposes of
this Agreement, the unparticipated portion of each Letter of Credit shall be
deemed to be the applicable Issuing Bank's "participation" therein. Each Issuing
Bank hereby agrees, upon request of the Agent or any Bank, to deliver to such
Bank a list of all outstanding Letters of Credit issued by such Issuing Bank,
together with such information related thereto as such Bank may reasonably
request.
2.3.3 REIMBURSEMENT OBLIGATIONS. The Company hereby unconditionally and
irrevocably agrees to reimburse the applicable Issuing Bank for each payment or
disbursement made by such Issuing Bank under any Letter of Credit honoring any
demand for payment made by the beneficiary thereunder, in each case on the date
that such payment or disbursement is made. Any amount not reimbursed on the date
of such payment or disbursement shall bear interest from the date of such
payment or disbursement to the date that such Issuing Bank is reimbursed by the
Company therefor, payable on demand, at a rate per annum equal to the Base Rate
from time to time in effect PLUS the Floating Rate Margin from time to time in
effect PLUS, beginning on the three Business Day after receipt of notice from
the Issuing Bank of such payment or disbursement, 2%. The applicable Issuing
Bank shall notify the Company and the Agent whenever any demand for payment is
made under any Letter of Credit by the beneficiary thereunder; PROVIDED,
HOWEVER, that the failure of such Issuing Bank to so notify the Company shall
not affect the rights of such Issuing Bank or the Banks in any manner
whatsoever.
2.3.4 LIMITATION ON OBLIGATIONS OF ISSUING BANKS. In determining whether
to pay under any Letter of Credit, no Issuing
24
Bank shall have any obligation to the Company or any Bank other than to confirm
that any documents required to be delivered under such Letter of Credit appear
to have been delivered and appear to comply on their face with the requirements
of such Letter of Credit. Any action taken or omitted to be taken by an Issuing
Bank under or in connection with any Letter of Credit, if taken or omitted in
the absence of gross negligence and willful misconduct, shall not impose upon
such Issuing Bank any liability to the Company or any Bank and shall not reduce
or impair the Company's reimbursement obligations set forth in SECTION 2.3.3 or
the obligations of the Banks pursuant to SECTION 2.3.5.
2.3.5 FUNDING BY BANKS TO ISSUING BANKS. If an Issuing Bank makes any
payment or disbursement under any Letter of Credit and the Company has not
reimbursed such Issuing Bank in full for such payment or disbursement by 11:00
A.M., Chicago time, on the date of such payment or disbursement, or if any
reimbursement received by such Issuing Bank from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Bank shall be obligated to pay to the Agent for
the account of such Issuing Bank, in full or partial payment of the purchase
price of its participation in such Letter of Credit, its pro rata share
(according to its Percentage) of such payment or disbursement (but no such
payment shall diminish the obligations of the Company under SECTION 2.3.3), and
upon notice from the applicable Issuing Bank, the Agent shall promptly notify
each other Bank thereof. Each other Bank irrevocably and unconditionally agrees
to so pay to the Agent in immediately available funds for the applicable Issuing
Bank's account the amount of such other Bank's Percentage of such payment or
disbursement. If and to the extent any Bank shall not have made such amount
available to the Agent by 2:00 P.M., Chicago time, on the Business Day on which
such Bank receives notice from the Agent of such payment or disbursement (it
being understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the applicable Issuing Bank's account forthwith on demand for each day from the
date such amount was to have been delivered to the Agent to the date such amount
is paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of any such payment or disbursement shall not relieve any
other Bank of its obligation hereunder to make available to the Agent such other
Bank's Percentage of such payment, but no Bank shall be responsible for the
failure of any other Bank to make available to the Agent such other Bank's
Percentage of any such payment or disbursement.
25
2.4 SWING LINE LOANS.
2.4.1 SWING LINE LOANS. Subject to the terms and conditions of this
Agreement, the Swing Line Bank may from time to time, in its discretion, make
loans to the Company (collectively the "SWING LINE LOANS" and individually each
a "SWING LINE LOAN") in accordance with this SECTION 2.4 in an aggregate amount
not at any time exceeding $5,000,000; PROVIDED that the Total Outstandings shall
not at any time exceed the Commitment Amount. Amounts borrowed under this
SECTION 2.4 may be borrowed, repaid and (subject to the agreement of the Swing
Line Bank) reborrowed until the Termination Date.
2.4.2 SWING LINE LOAN PROCEDURES. The Company shall give written or
telephonic notice to the Agent (which shall promptly inform the Swing Line Bank)
of each proposed Swing Line Loan not later than 12:00 noon, Chicago time, on the
proposed date of such Swing Line Loan. Each such notice shall be effective upon
receipt by the Agent and shall specify the date and amount of such Swing Line
Loan, which shall be not less than $100,000 or a higher integral multiple
thereof. So long as the Swing Line Bank has not received written notice that the
conditions precedent set forth in SECTION 11 with respect to the making of such
Swing Line Loan have not been satisfied, the Swing Line Bank may make the
requested Swing Line Loan. If the Swing Line Bank agrees to make the requested
Swing Line Loan, the Swing Line Bank shall pay over the requested amount to the
Company on the requested borrowing date. Concurrently with the making of any
Swing Line Loan, the Swing Line Bank shall be deemed to have sold and
transferred, and each other Bank shall be deemed to have purchased and received
from the Swing Line Bank, an undivided interest and participation to the extent
of such other Bank's Percentage in such Swing Line Loan (but such participation
shall remain unfunded until required to be funded pursuant to SECTION 2.4.3).
2.4.3 REFUNDING OF, OR FUNDING OF PARTICIPATIONS IN, SWING LINE LOANS.
The Swing Line Bank may at any time, in its sole discretion, on behalf of the
Company (which hereby irrevocably authorizes the Swing Line Bank to act on its
behalf) deliver a notice to the Agent requesting that each Bank (including the
Swing Line Bank in its individual capacity) make a Revolving Loan (which shall
be a Floating Rate Loan) in such Bank's Percentage of the aggregate amount of
Swing Line Loans outstanding on such date for the purpose of repaying all Swing
Line Loans (and, upon receipt of the proceeds of such Revolving Loans, the Agent
shall apply such proceeds to repay Swing Line Loans); PROVIDED that if the
conditions precedent to a borrowing of Revolving Loans are not then satisfied or
for any other reason the Banks may not then make Revolving Loans, then instead
of making Revolving Loans each Bank (other than the Swing Line Bank) shall
become immediately obligated to fund its participation in all outstanding Swing
Line Loans
26
and shall pay to the Agent for the account of the Swing Line Bank an amount
equal to such Bank's Percentage of such Swing Line Loans. If and to the extent
any Bank shall not have made such amount available to the Agent by 2:00 P.M.,
Chicago time, on the Business Day on which such Bank receives notice from the
Agent of its obligation to fund its participation in Swing Line Loans (it being
understood that any such notice received after 12:00 noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Bank agrees to pay interest on such amount to the Agent for
the Swing Line Bank's account forthwith on demand for each day from the date
such amount was to have been delivered to the Agent to the date such amount is
paid, at a rate per annum equal to (a) for the first three days after demand,
the Federal Funds Rate from time to time in effect and (b) thereafter, the Base
Rate from time to time in effect. Any Bank's failure to make available to the
Agent its Percentage of the amount of all outstanding Swing Line Loans shall not
relieve any other Bank of its obligation hereunder to make available to the
Agent such other Bank's Percentage of such amount, but no Bank shall be
responsible for the failure of any other Bank to make available to the Agent
such other Bank's Percentage of any such amount.
2.4.4 REPAYMENT OF PARTICIPATIONS. Upon (and only upon) receipt by the
Agent for the account of the Swing Line Bank of immediately available funds from
or on behalf of the Company (a) in reimbursement of any Swing Line Loan with
respect to which a Bank has paid the Agent for the account of the Swing Line
Bank the amount of such Bank's participation therein or (b) in payment of any
interest on a Swing Line Loan, the Agent will pay to such Bank its pro rata
share (according to its Percentage) thereof (and the Swing Line Bank shall
receive the amount otherwise payable to any Bank which did not so pay the Agent
the amount of such Bank's participation in such Swing Line Loan).
2.4.5 PARTICIPATION OBLIGATIONS UNCONDITIONAL. (a) Each Bank's
obligation to make available to the Agent for the account of the Swing Line Bank
the amount of its participation interest in all Swing Line Loans as provided in
SECTION 2.4.3 shall be absolute and unconditional and shall not be affected by
any circumstance, including (i) any set-off, counterclaim, recoupment, defense
or other right which such Bank may have against the Swing Line Bank or any other
Person, (ii) the occurrence or continuance of an Event of Default or Unmatured
Event of Default, (iii) any adverse change in the condition (financial or
otherwise) of the Company or any Subsidiary thereof, (iv) any termination of the
Commitments or (v) any other circumstance, happening or event whatsoever.
(b) Notwithstanding the provisions of CLAUSE (a) above, no
27
Bank shall be required to purchase a participation interest in any Swing Line
Loan if, prior to the making by the Swing Line Bank of such Swing Line Loan, the
Swing Line Bank received written notice specifying that one or more of the
conditions precedent to the making of such Swing Line Loan were not satisfied
and, in fact, such conditions precedent were not satisfied at the time of the
making of such Swing Line Loan.
2.5 COMMITMENTS SEVERAL. The failure of any Bank to make a requested
Loan on any date shall not relieve any other Bank of its obligation (if any) to
make a Loan on such date, but no Bank shall be responsible for the failure of
any other Bank to make any Loan to be made by such other Bank.
2.6 CERTAIN CONDITIONS. Notwithstanding any other provision of this
Agreement, no Bank shall have an obligation to make any Loan, or to permit the
continuation of or any conversion into any Eurodollar Loan, and no Issuing Bank
shall have any obligation to issue any Letter of Credit, if an Event of Default
or Unmatured Event of Default exists.
SECTION 3 NOTES EVIDENCING LOANS.
3.1 NOTES. The Loans of each Bank shall be evidenced by a promissory
note (each a "NOTE") substantially in the form set forth in EXHIBIT A, with
appropriate insertions, payable to the order of such Bank in a face principal
amount equal to such Bank's Percentage of the Commitment Amount (or, in the case
of the Swing Line Bank, an amount equal to the maximum principal amount of all
Revolving Loans and Swing Line Loans which the Swing Line Bank may at any time
have outstanding hereunder).
3.2 RECORDKEEPING. Each Bank shall record in its records, or at its
option on the schedule attached to its Note, the date and amount of each Loan
made by such Bank, each repayment or conversion thereof and, in the case of each
Eurodollar Loan, the dates on which each Interest Period for such Loan shall
begin and end. The aggregate unpaid principal amount so recorded shall be
rebuttable presumptive evidence of the principal amount owing and unpaid on such
Note. The failure to so record any such amount or any error in so recording any
such amount shall not, however, limit or otherwise affect the obligations of the
Company hereunder or under any Note to repay the principal amount of the Loans
evidenced by such Note together with all interest accruing thereon.
SECTION 4 INTEREST.
4.1 INTEREST RATES. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in
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full as follows:
(a) at all times while such Loan is a Floating Rate Loan, at a
rate per annum equal to the sum of the Base Rate from time to time in
effect plus the Floating Rate Margin from time to time in effect;
(b) at all times while such Loan is a Eurodollar Loan, at a rate
per annum equal to the sum of the Eurodollar Rate (Reserve Adjusted)
applicable to each Interest Period for such Loan plus the Eurodollar
Margin from time to time in effect; and
(c) at all times while such Loan is a Swing Line Loan, at a rate
per annum separately agreed to by the Company and the Swing Line Bank
from time to time (provided that if at any time the Banks are obligated
to fund participations in Swing Line Loans pursuant to SECTION 2.4.3,
all of such Swing Line Loans shall bear interest, from the date the
obligation to fund such participations first arises to the date such
Swing Line Loans are paid in full, at a rate per annum equal to the sum
of the Base Rate from time to time in effect plus the Floating Rate
Margin from time to time in effect);
PROVIDED, HOWEVER, that at any time an Event of Default exists, the interest
rate applicable to each Loan shall be increased by 2%.
4.2 INTEREST PAYMENT DATES. Accrued interest on each Floating Rate Loan
and Swing Line Loan shall be payable in arrears on the last Business Day of each
calendar quarter and at maturity. Accrued interest on each Eurodollar Loan shall
be payable on the last day of each Interest Period relating to such Loan (and,
in the case of a Eurodollar Loan with a six-month Interest Period, on the
three-month anniversary of the first day of such Interest Period) and at
maturity. After maturity, accrued interest on all Loans shall be payable on
demand.
4.3 INTEREST PERIODS. Each "Interest Period" for a Eurodollar Loan shall
commence on the date such Eurodollar Loan is made or converted from a Floating
Rate Loan, or on the expiration of the immediately preceding Interest Period for
such Eurodollar Loan, and shall end on the date which is one, two, three or six
months thereafter (or, during the 60 days immediately following the Effective
Date, such other period of time as the Company and all Banks may agree upon), as
the Company may specify:
(a) in the case of an Interest Period which commences on the date
a Eurodollar Loan is made or converted from a
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Floating Rate Loan, in the related notice of borrowing or conversion
pursuant to SECTION 2.2.2 or 2.2.3, or
(b) in the case of a succeeding Interest Period with respect to
any Eurodollar Loan, by written notice or telephonic notice (followed
immediately by written confirmation thereof) to the Agent not later than
9:00 A.M., Chicago time, at least two Business Days prior to the first
day of such succeeding Interest Period, it being understood that (i)
each such notice shall be effective upon receipt by the Agent and (ii)
if the Company fails to give such notice, such Loan shall automatically
become a Floating Rate Loan at the end of its then-current Interest
Period.
Each Interest Period that begins on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month shall end on the
last Business Day of the appropriate subsequent calendar month. Each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the immediately succeeding Business Day (unless such immediately succeeding
Business Day is the first Business Day of a calendar month, in which case such
Interest Period shall end on the immediately preceding Business Day). The
Company may not select any Interest Period for a Eurodollar Loan (a) which would
end after the scheduled Termination Date or (b) which would result in the
aggregate principal amount of all Eurodollar Loans having Interest Periods
ending after a date on which the Commitment Amount is scheduled to be reduced
pursuant to SECTION 6.1.2, PLUS the Stated Amount of all Letters of Credit
having expiration dates after the date of such scheduled reduction, being in
excess of the Commitment Amount which is scheduled to be in effect after giving
effect to such scheduled reduction.
4.4 SETTING AND NOTICE OF EURODOLLAR RATES. The applicable Eurodollar
Rate for each Interest Period shall be determined by the Agent, and notice
thereof shall be given by the Agent promptly to the Company and each Bank. Each
determination of the applicable Eurodollar Rate by the Agent shall be conclusive
and binding upon the parties hereto, in the absence of demonstrable error. The
Agent shall, upon written request of the Company or any Bank, deliver to the
Company or such Bank a statement showing the computations used by the Agent in
determining any applicable Eurodollar Rate hereunder.
4.5 COMPUTATION OF INTEREST. All determinations of interest for Floating
Rate Loans and Swing Line Loans when the Base Rate is determined by the
Reference Rate shall be made on the basis of a year of 365 or 366 days, as the
case may be, and the actual number of days elapsed. All other computations of
interest shall be computed for the actual number of days elapsed on the basis of
a year of 360 days. The applicable interest rate for each Floating Rate Loan
shall change simultaneously with each
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change in the Base Rate.
SECTION 5 FEES.
5.1 NON-USE FEE. The Company agrees to pay to the Agent for the account
of each Bank a non-use fee, for the period from the Effective Date to the
Termination Date, at the rate per annum in effect from time to time pursuant to
SCHEDULE 1.1 of the daily average of the unused amount of such Bank's Percentage
of the Commitment Amount. For purposes of calculating usage under this Section,
the Commitment Amount shall be deemed used to the extent of the aggregate
principal amount of all outstanding Loans plus the undrawn amount of all Letters
of Credit. Such non-use fee shall be payable in arrears on the last Business Day
of each calendar quarter and on the Termination Date for any period then ending
for which such non-use fee shall not have theretofore been paid. The non-use fee
shall be computed for the actual number of days elapsed on the basis of a year
of 360 days.
5.2 LETTER OF CREDIT FEES. (a) The Company agrees to pay to the Agent
for the account of the Banks pro rata according to their respective Percentages
a letter of credit fee for each Letter of Credit in an amount equal to the rate
per annum in effect from time to time pursuant to SCHEDULE 1.1 of the undrawn
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); PROVIDED that the rate applicable to each
Letter of Credit shall be increased by 2% at any time that an Event of Default
exists. Such letter of credit fee shall be payable in arrears on the last
Business Day of each calendar quarter and on the Termination Date for the period
from the date of the issuance of each Letter of Credit to the date such payment
is due or, if earlier, the date on which such Letter of Credit expired or was
terminated.
(b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the applicable Issuing Bank, for its own account, (i) such fees
and expenses as such Issuing Bank customarily requires in connection with the
issuance, negotiation, processing and/or administration of letters of credit in
similar situations and (ii) a letter of credit fee in the amount separately
agreed to by the Company and such Issuing Bank.
5.3 ARRANGEMENT AND AGENT'S FEES. The Company agrees to pay to the
Arranger and the Agent such arrangement and agent's fees as are mutually agreed
to from time to time by the Company and the Agent.
SECTION 6 REDUCTION AND TERMINATION OF THE COMMITMENTS;
PREPAYMENTS.
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6.1 REDUCTION OR TERMINATION OF THE COMMITMENTS.
6.1.1 VOLUNTARY REDUCTION OR TERMINATION OF THE COMMITMENTS. The
Company may from time to time on at least five Business Days' prior written
notice received by the Agent (which shall promptly advise each Bank thereof)
permanently reduce the Commitment Amount to an amount not less than the Total
Outstandings. Any such reduction shall be in an amount not less than $5,000,000
or a higher integral multiple of $1,000,000. The Company may at any time on like
notice terminate the Commitments upon payment in full of all Loans and all other
obligations of the Company hereunder and cash collateralization in full,
pursuant to documentation in form and substance reasonably satisfactory to the
Banks, of all obligations arising with respect to the Letters of Credit.
6.1.2 MANDATORY REDUCTIONS OF COMMITMENTS. If the Equity Offering
is not completed on or before December 31, 1998, the Commitment Amount shall be
reduced by $3,750,000 on January 1, 1999 and on each April 1, July 1, October 1
and January 1 thereafter until the Termination Date. The scheduled reductions
under this Section shall not be reduced by any reductions under SECTION 6.1.1.
6.1.3 ALL REDUCTIONS OF THE COMMITMENTS. All reductions of the
Commitment Amount shall reduce the Commitments pro rata among the Banks
according to their respective Percentages.
6.2 PREPAYMENTS.
6.2.1 VOLUNTARY PREPAYMENTS. The Company may from time to time
prepay the Loans in whole or in part, PROVIDED that the Company shall give the
Agent (which shall promptly advise each Bank) notice thereof not later than
10:00 A.M. (or, in the case of prepayment of Swing Line Loans, 12:00 noon),
Chicago time, on the day of such prepayment (which shall be a Business Day),
specifying the Loans to be prepaid and the date and amount of prepayment.
6.2.2 MANDATORY PAYMENTS. If, after giving effect to
any reduction of the Commitment Amount pursuant to SECTION 6.1.2, the Total
Outstandings exceed the Commitment Amount, then concurrently with such reduction
the Company shall make a prepayment of the Loans in an amount equal to or
greater than such excess (it being understood that if all outstanding Loans have
been prepaid and the Stated Amount of all Letters of Credit exceeds such reduced
Commitment Amount, the Company shall provide cash collateral in an amount equal
to such excess pursuant to documentation reasonably satisfactory to the Agent).
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6.2.3 ALL PREPAYMENTS. Each partial prepayment shall be in a
principal amount of $100,000 or a higher integral multiple thereof. Any
prepayment of a Eurodollar Loan on a day other than the last day of an Interest
Period therefor shall include interest on the principal amount being repaid and
shall be subject to SECTION 8.4.
SECTION 7 MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 MAKING OF PAYMENTS. All payments of principal of or interest on the
Notes, and of all non-use fees and Letter of Credit fees, shall be made by the
Company to the Agent in immediately available funds at the office specified by
the Agent not later than noon, Chicago time, on the date due; and funds received
after that hour shall be deemed to have been received by the Agent on the next
following Business Day. The Agent shall promptly remit to each Bank or other
holder of a Note its share of all such payments received in collected funds by
the Agent for the account of such Bank or holder.
All payments under SECTION 8.1 shall be made by the Company directly to
the Bank entitled thereto.
7.2 APPLICATION OF CERTAIN PAYMENTS. Each payment of principal shall be
applied to such Loans as the Company shall direct by notice to be received by
the Agent on or before the date of such payment or, in the absence of such
notice, as the Agent shall determine in its discretion. Concurrently with each
remittance to any Bank of its share of any such payment, the Agent shall advise
such Bank as to the application of such payment.
7.3 DUE DATE EXTENSION. If any payment of principal or interest with
respect to any of the Notes, or of non-use fees or Letter of Credit fees, falls
due on a day which is not a Business Day, then such due date shall be extended
to the immediately following Business Day (unless, in the case of a Eurodollar
Loan, such immediately following Business Day is the first Business Day of a
calendar month, in which case such date shall be the immediately preceding
Business Day) and, in the case of principal, additional interest shall accrue
and be payable for the period of any such extension.
7.4 SETOFF. The Company agrees that the Agent and each Bank have all
rights of set-off and bankers' lien provided by applicable law, and in addition
thereto, the Company agrees that at any time any Event of Default exists, the
Agent and each Bank may apply to the payment of any obligations of the Company
hereunder, whether or not then due, any and all balances, credits, deposits,
accounts or moneys of the Company then or thereafter with the Agent or such
Bank.
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7.5 PRORATION OF PAYMENTS. If any Bank shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
but excluding any payment pursuant to SECTION 8.7 or 14.9 or any payment to the
Swing Line Bank in respect of a Swing Line Loan) on account of principal of or
interest on any Note (or on account of its participation in any Letter of Credit
or Swing Line Loan) in excess of its pro rata share of payments and other
recoveries obtained by all Banks on account of principal of and interest on
Notes (or such participation) then held by them, such Bank shall purchase from
the other Banks such participation in the Notes (or sub-participation in Letters
of Credit or Swing Line Loans) held by them as shall be necessary to cause such
purchasing Bank to share the excess payment or other recovery ratably with each
of them; PROVIDED, HOWEVER, that if all or any portion of the excess payment or
other recovery is thereafter recovered from such purchasing Bank, the purchase
shall be rescinded and the purchase price restored to the extent of such
recovery.
7.6 TAXES. All payments of principal of, and interest on, the Loans and
all other amounts payable hereunder shall be made free and clear of and without
deduction for any present or future income, excise, stamp or franchise taxes and
other taxes, fees, duties, withholdings or other charges of any nature
whatsoever imposed by any taxing authority, but excluding franchise taxes and
taxes imposed on or measured by any Bank's net income or receipts (all
non-excluded items being called "TAXES"). If any withholding or deduction from
any payment to be made by the Company hereunder is required in respect of any
Taxes pursuant to any applicable law, rule or regulation, then the Company will:
(a) pay directly to the relevant authority the full
amount required to be so withheld or deducted;
(b) promptly forward to the Agent an official receipt or other
documentation satisfactory to the Agent evidencing such payment to such
authority; and
(c) pay to the Agent for the account of the Banks such additional
amount or amounts as is necessary to ensure that the net amount actually
received by each Bank will equal the full amount such Bank would have
received had no such withholding or deduction been required.
Moreover, if any Taxes are directly asserted against the Agent or any Bank with
respect to any payment received by the Agent or such Bank hereunder, the Agent
or such Bank may pay such Taxes and the Company will promptly pay such
additional amounts (including any penalty, interest and expense) as is necessary
in order that the net amount received by such Person after the
34
payment of such Taxes (including any Taxes on such additional amount) shall
equal the amount such Person would have received had such Taxes not been
asserted.
If the Company fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Agent, for the account of the respective
Banks, the required receipts or other required documentary evidence, the Company
shall indemnify the Banks for any incremental Taxes, interest or penalties that
may become payable by any Bank as a result of any such failure. For purposes of
this SECTION 7.6, a distribution hereunder by the Agent or any Bank to or for
the account of any Bank shall be deemed a payment by the Company.
Upon the request from time to time of the Company or the Agent, each
Bank that is organized under the laws of a jurisdiction other than the United
States of America shall execute and deliver to the Company and the Agent one or
more (as the Company or the Agent may reasonably request) United States Internal
Revenue Service Forms 4224 or Forms 1001 or such other forms or documents,
appropriately completed, as may be applicable to establish the extent, if any,
to which a payment to such Bank is exempt from withholding or deduction of
Taxes.
The obligations of the Company under this SECTION 7.6 are subject to the
limitation set out in SECTION 14.9.1.
SECTION 8 INCREASED COSTS; SPECIAL PROVISIONS FOR
EURODOLLAR LOANS.
8.1 INCREASED COSTS. (a) If, after the date hereof, the adoption of any
applicable law, rule or regulation, or any change therein, or any change in the
interpretation or administration thereof by any governmental authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Bank (or any Eurodollar Office of such Bank) with
any request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency
(A) shall subject any Bank (or any Eurodollar Office of such
Bank) to any tax, duty or other charge with respect to its Eurodollar
Loans, its Note or its obligation to make Eurodollar Loans, or shall
change the basis of taxation of payments to any Bank of the principal of
or interest on its Eurodollar Loans or any other amounts due under this
Agreement in respect of its Eurodollar Loans or its obligation to make
Eurodollar Loans (except for changes in the rate of tax on the overall
net income of such Bank or its Eurodollar Office imposed by the
jurisdiction in which such Bank's principal executive office or
Eurodollar Office is located); or
35
(B) shall impose, modify or deem applicable any reserve
(including any reserve imposed by the Board of Governors of the Federal
Reserve System, but excluding any reserve included in the determination
of interest rates pursuant to SECTION 4), special deposit or similar
requirement against assets of, deposits with or for the account of, or
credit extended by any Bank (or any Eurodollar Office of such Bank); or
(C) shall impose on any Bank (or its Eurodollar Office) any other
condition affecting its Eurodollar Loans, its Note or its obligation to
make Eurodollar Loans;
and the result of any of the foregoing is to increase the cost to (or in the
case of Regulation D of the Board of Governors of the Federal Reserve System, to
impose a cost on) such Bank (or any Eurodollar Office of such Bank) of making or
maintaining any Eurodollar Loan, or to reduce the amount of any sum received or
receivable by such Bank (or its Eurodollar Office) under this Agreement or under
its Note with respect thereto, then within 10 days after demand by such Bank
(which demand shall be accompanied by a statement setting forth the basis for
such demand and a calculation of the amount thereof in reasonable detail, a copy
of which shall be furnished to the Agent), the Company shall pay directly to
such Bank such additional amount as will compensate such Bank for such increased
cost or such reduction.
(b) If any Bank shall reasonably determine that the adoption or phase-in
of any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Bank or any
Person controlling such Bank with any request or directive regarding capital
adequacy (whether or not having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of reducing the rate of
return on such Bank's or such controlling Person's capital as a consequence of
such Bank's obligations hereunder or under any Letter of Credit to a level below
that which such Bank or such controlling Person could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
controlling Person's policies with respect to capital adequacy) by an amount
deemed by such Bank or such controlling Person to be material, then from time to
time, within 10 days after demand by such Bank (which demand shall be
accompanied by a statement setting forth the basis for such demand and a
calculation of the amount thereof in reasonable detail, a copy of which shall be
furnished to the Agent), the Company shall pay to such Bank such additional
amount or amounts
36
as will compensate such Bank or such controlling Person for such reduction.
8.2 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR
UNFAIR. If with respect to any Interest Period:
(a) deposits in Dollars (in the applicable amounts) are not being
offered to the Agent in the interbank eurodollar market for such
Interest Period, or the Agent otherwise reasonably determines (which
determination, if made in good faith, shall be binding and conclusive on
the Company) that by reason of circumstances affecting the interbank
eurodollar market adequate and reasonable means do not exist for
ascertaining the applicable Eurodollar Rate; or
(b) Banks having an aggregate Percentage of 40% or more advise
the Agent that the Eurodollar Rate (Reserve Adjusted) as determined by
the Agent will not adequately and fairly reflect the cost to such Banks
of maintaining or funding such Eurodollar Loans for such Interest Period
(taking into account any amount to which such Banks may be entitled
under SECTION 8.1) or that the making or funding of Eurodollar Loans has
become impracticable as a result of an event occurring after the date of
this Agreement which in the opinion of such Banks materially affects
such Loans;
THEN the Agent shall promptly notify the other parties thereof and, so long as
such circumstances shall continue, (i) no Bank shall be under any obligation to
make or convert into Eurodollar Loans and (ii) on the last day of the current
Interest Period for each Eurodollar Loan, such Loan shall, unless then repaid in
full, automatically convert to a Floating Rate Loan.
8.3 CHANGES IN LAW RENDERING EURODOLLAR LOANS UNLAWFUL. In the event
that any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it (or in the good faith judgment of any
Bank cause a substantial question as to whether it is) unlawful for any Bank to
make, maintain or fund Eurodollar Loans, then such Bank shall promptly notify
each of the other parties hereto and, so long as such circumstances shall
continue, (a) such Bank shall have no obligation to make or convert into
Eurodollar Loans (but shall make Floating Rate Loans concurrently with the
making of or conversion into Eurodollar Loans by the Banks which are not so
affected, in each case in an amount equal to such Bank's pro rata share of all
Eurodollar Loans which would be made or converted into at such time in the
absence of such circumstances) and (b) on the last day of the current Interest
37
Period for each Eurodollar Loan of such Bank (or, in any event, on such earlier
date as may be required by the relevant law, regulation or interpretation), such
Eurodollar Loan shall, unless then repaid in full, automatically convert to a
Floating Rate Loan. Each Floating Rate Loan made by a Bank which, but for the
circumstances described in the foregoing sentence, would be a Eurodollar Loan
(an "AFFECTED LOAN") shall remain outstanding for the same period as the Group
of Eurodollar Loans of which such Affected Loan would be a part absent such
circumstances.
8.4 FUNDING LOSSES. The Company hereby agrees that upon demand by any
Bank (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the Agent),
the Company will indemnify such Bank against any net loss or expense which such
Bank may sustain or incur (including any net loss or expense incurred by reason
of the liquidation or reemployment of deposits or other funds acquired by such
Bank to fund or maintain any Eurodollar Loan), as reasonably determined by such
Bank, as a result of (a) any payment, prepayment or conversion of any Eurodollar
Loan of such Bank on a date other than the last day of an Interest Period for
such Loan (including any conversion pursuant to SECTION 8.3) or (b) any failure
of the Company to borrow or convert any Loan on a date specified therefor in a
notice of borrowing or conversion pursuant to this Agreement. For this purpose,
all notices to the Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 RIGHT OF BANKS TO FUND THROUGH OTHER OFFICES. Each Bank may, if it
so elects, fulfill its commitment as to any Eurodollar Loan by causing a foreign
branch or affiliate of such Bank to make such Loan, PROVIDED that in such event
for the purposes of this Agreement such Loan shall be deemed to have been made
by such Bank and the obligation of the Company to repay such Loan shall
nevertheless be to such Bank and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or affiliate.
8.6 DISCRETION OF BANKS AS TO MANNER OF FUNDING. Notwithstanding any
provision of this Agreement to the contrary, each Bank shall be entitled to fund
and maintain its funding of all or any part of its Loans in any manner it sees
fit, it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if such Bank had actually funded and
maintained each Eurodollar Loan during each Interest Period for such Loan
through the purchase of deposits having a maturity corresponding to such
Interest Period and bearing an interest rate equal to the Eurodollar Rate for
such Interest Period.
8.7 MITIGATION OF CIRCUMSTANCES; REPLACEMENT OF AFFECTED
38
BANK. (a) Each Bank shall promptly notify the Company and the Agent of any event
of which it has knowledge which will result in, and will use reasonable
commercial efforts available to it (and not, in such Bank's good faith judgment,
otherwise disadvantageous to such Bank) to mitigate or avoid, (i) any obligation
by the Company to pay any amount pursuant to SECTION 7.6 or 8.1 or (ii) the
occurrence of any circumstances of the nature described in SECTION 8.2 or 8.3
(and, if any Bank has given notice of any such event described in CLAUSE (I) or
(II) above and thereafter such event ceases to exist, such Bank shall promptly
so notify the Company and the Agent). Without limiting the foregoing, each Bank
will designate a different funding office if such designation will avoid (or
reduce the cost to the Company of) any event described in CLAUSE (I) or (II) of
the preceding sentence and such designation will not, in such Bank's sole
judgment, be otherwise disadvantageous to such Bank.
(b) At any time any Bank is an Affected Bank, the Company may replace
such Affected Bank as a party to this Agreement with one or more other bank(s)
or financial institution(s) reasonably satisfactory to the Agent (and upon
notice from the Company such Affected Bank shall assign pursuant to an
Assignment Agreement, and without recourse or warranty, its Commitment, its
Loans, its Note, its participation in Letters of Credit, and all of its other
rights and obligations hereunder to such replacement bank(s) or other financial
institution(s) for a purchase price equal to the sum of the principal amount of
the Loans so assigned, all accrued and unpaid interest thereon, its ratable
share of all accrued and unpaid non-use fees and Letter of Credit fees, any
amounts payable under SECTION 8.4 as a result of such Bank receiving payment of
any Eurodollar Loan prior to the end of an Interest Period therefor and all
other obligations owed to such Affected Bank hereunder).
8.8 CONCLUSIVENESS OF STATEMENTS; SURVIVAL OF PROVISIONS. Determinations
and statements of any Bank pursuant to SECTION 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Banks may use reasonable averaging and
attribution methods in determining compensation under SECTIONS 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Loans,
cancellation of the Notes, cancellation or expiration of the Letters of Credit
and any termination of this Agreement.
SECTION 9 WARRANTIES.
To induce the Agent and the Banks to enter into this Agreement and to
induce the Banks to make Loans and issue or purchase participations in Letters
of Credit hereunder, the Company warrants to the Agent and the Banks that:
9.1 ORGANIZATION, ETC. The Company is a corporation duly organized,
validly existing and in good standing under the laws
39
of the State of Delaware; each Subsidiary is a corporation duly organized,
validly existing and in good standing under the laws of the state of its
incorporation; and the Company and each Subsidiary is duly qualified to do
business in each jurisdiction where the nature of its business makes such
qualification necessary (except in those instances in which the failure to be
qualified or in good standing does not have a Material Adverse Effect) and has
full power and authority to own its property and conduct its business as
presently conducted by it.
9.2 AUTHORIZATION; NO CONFLICT. The execution and delivery by the
Company of this Agreement and each other Loan Document to which it is a party,
the borrowings hereunder, the execution and delivery by each Guarantor of each
Loan Document to which it is a party and the performance by each of the Company
and each Guarantor of its obligations under each Loan Document to which it is a
party are within the corporate powers of the Company and each Guarantor, have
been duly authorized by all necessary corporate action on the part of the
Company and each Guarantor (including any necessary shareholder action), have
received all necessary governmental approval (if any shall be required), and do
not and will not (a) violate any provision of law or any order, decree or
judgment of any court or other government agency which is binding on the Company
or any Guarantor, (b) contravene or conflict with, or result in a breach of, any
provision of the Certificate of Incorporation, By-Laws or other organizational
documents of the Company or any Guarantor or of any agreement, indenture,
instrument or other document which is binding on the Company, any Guarantor or
any other Subsidiary or (c) result in, or require, the creation or imposition of
any Lien on any property of the Company, any Guarantor or any other Subsidiary
(other than Liens arising under the Loan Documents).
9.3 VALIDITY AND BINDING NATURE. Each of this Agreement and each other
Loan Document to which the Company is a party is the legal, valid and binding
obligation of the Company, enforceable against the Company in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors' rights generally and to general principles of
equity; and each Loan Document to which any Guarantor is a party is, or upon the
execution and delivery thereof by such Guarantor will be, the legal, valid and
binding obligation of such Guarantor, enforceable against such Guarantor in
accordance with its terms, subject to bankruptcy, insolvency and similar laws
affecting the enforceability of creditors' rights generally and to general
principles of equity.
9.4 FINANCIAL CONDITION. The audited consolidated financial statements
of the Company and its Subsidiaries dated December 31, 1997, copies of which
have been furnished prior to the Effective Date to each Bank which is a party
hereto on the
40
Effective Date:
(i) were prepared in accordance with GAAP consistently
applied throughout the periods covered thereby, except as otherwise
expressly noted therein; and
(ii) fairly present in all material respects the financial
condition of the Company and its Subsidiaries as of the date thereof and
the results of operations for the period covered thereby.
9.5 NO MATERIAL ADVERSE CHANGE. Since December 31, 1997, there has been
no material adverse change in the financial condition, operations, assets,
business, properties or prospects of the Company and its Subsidiaries taken as a
whole.
9.6 LITIGATION AND CONTINGENT LIABILITIES. (a) No litigation (including
derivative actions), arbitration proceeding, labor controversy or governmental
investigation or proceeding is pending or, to the Company's knowledge,
threatened against the Company or any Subsidiary which might reasonably be
expected to have a Material Adverse Effect, except as set forth in SCHEDULE
9.6(A). Other than any liability incident to such litigation or proceedings,
neither the Company nor any Subsidiary has any material contingent liabilities
not listed in such SCHEDULE 9.6(A) or 9.6(B).
(b) SCHEDULE 9.6(B) sets out descriptions of all arrangements existing
on the Effective Date (or which will be existing after consummating the Approved
Acquisitions) pursuant to which the Company or any Subsidiary may be required to
pay any Contingent Payment.
9.7 OWNERSHIP OF PROPERTIES; LIENS. Each of the Company and each
Subsidiary owns good and, in the case of real property, marketable title to all
of its properties and assets, real and personal, tangible and intangible, of any
nature whatsoever (including patents, trademarks, trade names, service marks and
copyrights), free and clear of all Liens, charges and material claims (including
material infringement claims with respect to patents, trademarks, copyrights and
the like) except as permitted pursuant to SECTION 10.8.
9.8 SUBSIDIARIES. The Company has no Subsidiaries except those listed in
SCHEDULE 9.8.
9.9 PENSION AND WELFARE PLANS. (a) During the twelve-consecutive-month
period prior to the date of the execution and delivery of this Agreement or the
making of any Loan hereunder, (i) no steps have been taken to terminate any
Pension Plan and (ii) no contribution failure has occurred with respect to any
Pension Plan sufficient to give rise to a lien
41
under Section 302(f) of ERISA. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could result in the incurrence
by the Company of any material liability, fine or penalty. The Company has no
contingent liability with respect to any post-retirement benefit under a Welfare
Plan, other than liability for continuation coverage described in Part 6 of
Subtitle B of Title I of ERISA.
(b) All contributions (if any) have been made to any Multiemployer
Pension Plan that are required to be made by the Company or any other member of
the Controlled Group under the terms of the plan or of any collective bargaining
agreement or by applicable law; neither the Company nor any member of the
Controlled Group has withdrawn or partially withdrawn from any Multiemployer
Pension Plan, incurred any withdrawal liability with respect to any such plan,
received notice of any claim or demand for withdrawal liability or partial
withdrawal liability from any such plan, and no condition has occurred which, if
continued, might result in a withdrawal or partial withdrawal from any such
plan; and neither the Company nor any member of the Controlled Group has
received any notice that any Multiemployer Pension Plan is in reorganization,
that increased contributions may be required to avoid a reduction in plan
benefits or the imposition of any excise tax, that any such plan is or has been
funded at a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 INVESTMENT COMPANY ACT. Neither the Company nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940.
9.11 PUBLIC UTILITY HOLDING COMPANY ACT. Neither the Company nor any
Subsidiary is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", within the meaning of the Public Utility Holding Company
Act of 1935.
9.12 REGULATION U. The Company is not engaged principally,
or as one of its important activities, in the business of extending credit for
the purpose of purchasing or carrying Margin Stock.
9.13 TAXES. Each of the Company and each Subsidiary has filed all tax
returns and reports required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such taxes
or charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with
42
GAAP shall have been set aside on its books.
9.14 SOLVENCY, ETC. On the Effective Date (or, in the case of any Person
which becomes a Guarantor after the Effective Date, on the date such Person
becomes a Guarantor), and immediately prior to and after giving effect to the
issuance of each Letter of Credit and each borrowing hereunder and the use of
the proceeds thereof, (a) each of the Company's and each Guarantor's assets will
exceed its liabilities and (b) each of the Company and each Guarantor will be
solvent, will be able to pay its debts as they mature, will own property with
fair saleable value greater than the amount required to pay its debts and will
have capital sufficient to carry on its business as then constituted.
9.15 ENVIRONMENTAL MATTERS.
(a) NO VIOLATIONS. Except as set forth on SCHEDULE 9.15, neither
the Company nor any Subsidiary, nor any operator of the Company's or any
Subsidiary's properties, is in violation, or alleged violation, of any judgment,
decree, order, law, permit, license, rule or regulation pertaining to
environmental matters, including those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental Response,
Compensation and Liability Act of 1980 ("CERCLA"), the Superfund Amendments and
Reauthorization Act of 1986 or any other Environmental Law which (i) in any
single case, requires expenditures in any three-year period of $500,000 or more
by the Company and its Subsidiaries in penalties and/or for investigative,
removal or remedial actions or (ii) individually or in the aggregate otherwise
might reasonably be expected to have a Material Adverse Effect.
(b) NOTICES. Except as set forth on SCHEDULE 9.15, neither the
Company nor any Subsidiary has received notice from any third party, including
any Federal, state or local governmental authority: (a) that any one of them has
been identified by the U.S. Environmental Protection Agency as a potentially
responsible party under CERCLA with respect to a site listed on the National
Priorities List, 40 C.F.R. Part ▇▇▇ ▇▇▇▇▇▇▇▇ ▇; (b) that any hazardous waste, as
defined by 42 U.S.C. ss.6903(5), any hazardous substance as defined by 42 U.S.C.
ss.9601(14), any pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) or
any toxic substance, oil or hazardous material or other chemical or substance
regulated by any Environmental Law, excluding household hazardous waste (all of
the foregoing, "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 a remedial investigation,
removal or other response action pursuant to any Environmental Law; (c) that the
Company or any
43
Subsidiary must conduct a remedial investigation, removal, response action or
other activity pursuant to any Environmental Law; or (d) of any Environmental
Claim.
(c) HANDLING OF HAZARDOUS SUBSTANCES. Except as set forth on
SCHEDULE 9.15, (i) no portion of the real property or other assets of the
Company or any Subsidiary has been used for the handling, processing, storage or
disposal of Hazardous Substances except in accordance in all material respects
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 Company, any Subsidiary or the
operators of any real property of the Company or any Subsidiary, no Hazardous
Substances have been generated or are being used on such properties except in
accordance in all material respects with applicable Environmental Laws; (iii)
there have been no Releases or threatened Releases of Hazardous Substances on,
upon, into or from any real property or other assets of the Company or any
Subsidiary, which Releases singly or in the aggregate might reasonably be
expected to have a material adverse effect on the value of such real property or
assets; (iv) to the Company's actual knowledge, there have been no Releases on,
upon, from or into any real property in the vicinity of the real property or
other assets of the Company or any Subsidiary which, through soil or groundwater
contamination, may have come to be located on, and which might reasonably be
expected to have a material adverse effect on the value of, the real property or
other assets of the Company or any Subsidiary; and (v) any Hazardous Substances
generated by the Company and its Subsidiaries have been transported offsite only
by properly licensed carriers and delivered only to treatment or disposal
facilities maintaining valid permits as required under applicable Environmental
Laws, which transporters and facilities have been and are, to the best of the
Company's knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(d) INVESTIGATIONS. Except as set forth on SCHEDULE 9.15, the
Company and its Subsidiaries have taken all reasonable steps to investigate the
past and present condition and usage of the real property of the Company and its
Subsidiaries and the operations conducted by the Company and its Subsidiaries
with regard to environmental matters.
9.16 YEAR 2000 PROBLEM. The Company and its Subsidiaries have reviewed
the areas within their business and operations which could be adversely affected
by, and have developed or are developing a program to address on a timely basis,
the "Year 2000 Problem" (that is, the risk that computer applications used by
the Company and its Subsidiaries may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999). Based on such
44
review and program, the Company reasonably believes that the "Year 2000 Problem"
will not have a Material Adverse Effect.
9.17 INFORMATION. All information heretofore or contemporaneously
herewith furnished in writing by the Company or any Subsidiary to any Bank for
purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of the Company or any Subsidiary to any Bank pursuant hereto or in
connection herewith will be, true and accurate in every material respect on the
date as of which such information is dated or certified, and none of such
information is or will be incomplete by omitting to state any material fact
necessary to make such information not misleading in light of the circumstances
under which made (it being recognized by the Agent and the Banks that (a) any
projections and forecasts provided by the Company are based on good faith
estimates and assumptions believed by the Company to be reasonable as of the
date of the applicable projections or assumptions and that actual results during
the period or periods covered by any such projections and forecasts may differ
from projected or forecasted results and (b) any information provided by the
Company or any Subsidiary with respect to any Person or assets acquired or to be
acquired by the Company or any Subsidiary shall, for all periods prior to the
date of such acquisition, be limited to the knowledge of the Company or the
acquiring Subsidiary after reasonable inquiry).
SECTION 10 COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all obligations of the Company hereunder and under the other Loan
Documents are paid in full and all Letters of Credit have been terminated, the
Company agrees that, unless at any time the Required Banks shall otherwise
expressly consent in writing, it will:
10.1 REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish to the Agent
and each Bank:
10.1.1 AUDIT REPORT. Promptly when available and in any event within 90
days after the close of each Fiscal Year: (a) a copy of the annual audit report
of the Company and its Subsidiaries for such Fiscal Year, including therein
consolidated balance sheets of the Company and its Subsidiaries as of the end of
such Fiscal Year and consolidated statements of earnings and cash flow of the
Company and its Subsidiaries for such Fiscal Year certified without
qualification by independent auditors of recognized standing selected by the
Company and reasonably acceptable to the Required Banks, together with a written
statement from such accountants to the effect that in making the examination
necessary for the signing of such annual audit report
45
by such accountants, nothing came to their attention that caused them to believe
that the Company was not in compliance with any provision of SECTION 10.6, 10.7,
10.9 or 10.10 of this Agreement insofar as such provision relates to accounting
matters or, if something has come to their attention that caused them to believe
that the Company was not in compliance with any such provision, describing such
non-compliance in reasonable detail (it being understood that any such audit is
not directed primarily toward obtaining knowledge of such non-compliance); and
(b) consolidating balance sheets of the Company and its Subsidiaries as of the
end of such Fiscal Year and a consolidating statement of earnings for the
Company and its Subsidiaries for such Fiscal Year, certified by the Chief
Financial Officer, the Vice President, Finance, Controller or Treasurer of the
Company.
10.1.2 QUARTERLY REPORTS. Promptly when available and in any event
within 45 days after the end of each Fiscal Quarter (except the last Fiscal
Quarter) of each Fiscal Year, consolidated and consolidating balance sheets of
the Company and its Subsidiaries as of the end of such Fiscal Quarter, together
with consolidated and consolidating statements of earnings and a consolidated
statement of cash flows for such Fiscal Quarter and for the period beginning
with the first day of such Fiscal Year and ending on the last day of such Fiscal
Quarter, certified by the Chief Financial Officer, the Vice President, Finance,
Controller or Treasurer of the Company.
10.1.3 COMPLIANCE CERTIFICATES. Contemporaneously with the furnishing of
a copy of each annual audit report pursuant to SECTION 10.1.1 and of each set of
quarterly statements pursuant to SECTION 10.1.2, a duly completed compliance
certificate in the form of EXHIBIT B, with appropriate insertions, dated the
date of such annual report or such quarterly statements and signed by the Chief
Financial Officer, the Vice President, Finance, Controller or Treasurer of the
Company, containing a computation of each of the financial ratios and
restrictions set forth in SECTION 10.6 and to the effect that such officer has
not become aware of any Event of Default or Unmatured Event of Default that has
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.
10.1.4 REPORTS TO SEC AND TO SHAREHOLDERS. Promptly upon
the filing or sending thereof, copies of all regular, periodic or special
reports of the Company or any Subsidiary filed with the SEC (excluding
exhibits thereto, provided that the Company shall promptly deliver any such
exhibit to the Agent or any Bank upon request therefor); copies of all
registration statements of the Company or any Subsidiary filed with the SEC
(other than on Form S-8); and copies of all proxy statements or other
communications made to security holders generally concerning material
developments in the business of the Company or any Subsidiary.
46
10.1.5 NOTICE OF DEFAULT, LITIGATION AND ERISA MATTERS. Promptly upon
becoming aware of any of the following, written notice describing the same and
the steps being taken by the Company or the Subsidiary affected thereby with
respect thereto:
(a) the occurrence of an Event of Default or an
Unmatured Event of Default;
(b) any litigation, arbitration or governmental investigation or
proceeding not previously disclosed by the Company to the Banks which
has been instituted or, to the knowledge of the Company, is threatened
against the Company or any Subsidiary or to which any of the properties
of any thereof is subject which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the Controlled
Group or any other Person to terminate any Pension Plan, or the failure
of any member of the Controlled Group to make a required contribution to
any Pension Plan (if such failure is sufficient to give rise to a lien
under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or
the taking of any action with respect to a Pension Plan which could
result in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan or Multiemployer Pension Plan
which could result in the incurrence by any member of the Controlled
Group of any material liability, fine or penalty (including any claim or
demand for withdrawal liability or partial withdrawal from any
Multiemployer Pension Plan), or any material increase in the contingent
liability of the Company with respect to any post-retirement Welfare
Plan benefit, or any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to avoid a
reduction in plan benefits or the imposition of an excise tax, that any
such plan is or has been funded at a rate less than that required under
Section 412 of the Code, that any such plan is or may be terminated, or
that any such plan is or may become insolvent;
(d) any cancellation or material change in any insurance
maintained by the Company or any Subsidiary;
(e) any event (including (i) any violation of any Environmental
Law or the assertion of any Environmental Claim or (ii) the enactment or
effectiveness of any law, rule or regulation) which might reasonably be
expected to have a Material Adverse Effect; or
47
(f) any setoff, claims, withholdings or other defenses to which
any of the Collateral, or the Banks' rights with respect to the
Collateral, are subject.
10.1.6 SUBSIDIARIES. Promptly upon any change in the list of its
Subsidiaries, a written report of such change.
10.1.7 MANAGEMENT REPORTS. Promptly upon the request of the Agent or any
Bank, copies of all detailed financial and management reports submitted to the
Company by independent auditors in connection with each annual or interim audit
made by such auditors of the books of the Company.
10.1.8 PROJECTIONS. As soon as practicable and in any event within 60
days after the commencement of each Fiscal Year, financial projections for the
Company and its Subsidiaries for such Fiscal Year prepared in a manner
consistent with those projections delivered by the Company to the Banks prior to
the Effective Date or otherwise in a manner reasonably satisfactory to the
Agent.
10.1.9 OTHER INFORMATION. From time to time such other information
concerning the Company and its Subsidiaries as any Bank or the Agent may
reasonably request.
10.2 BOOKS, RECORDS AND INSPECTIONS. Keep, and cause each Subsidiary to
keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each Subsidiary to permit, any Bank or the Agent or any
representative thereof to inspect the properties and operations of the Company
and of such Subsidiary; and permit, and cause each Subsidiary to permit, at any
reasonable time and with reasonable notice (or at any time without notice if an
Event of Default exists), any Bank or the Agent or any representative thereof to
visit any or all of its offices, to discuss its financial matters with its
officers and its independent auditors (and the Company hereby authorizes such
independent auditors to discuss such financial matters with any Bank or the
Agent or any representative thereof, provided that so long as no Event of
Default exists, a representative of the Company shall be present at any such
discussions), and to examine (and, at the expense of the Company or the
applicable Subsidiary, photocopy extracts from) any of its books or other
corporate records.
10.3 INSURANCE. Maintain, and cause each Subsidiary to maintain, with
responsible insurance companies, such insurance as may be required by any law or
governmental regulation or court decree or order applicable to it and such other
insurance, to such extent and against such hazards and liabilities, as is
customarily maintained by companies similarly situated; and, upon
48
request of the Agent or any Bank, furnish to the Agent or such Bank a
certificate setting forth in reasonable detail the nature and extent of all
insurance maintained by the Company and its Subsidiaries.
10.4 COMPLIANCE WITH LAWS; PAYMENT OF TAXES AND LIABILITIES. (a) Comply,
and cause each Subsidiary to comply, in all material respects with all
applicable laws (including Environmental Laws), rules, regulations, decrees,
orders, judgments, licenses and permits; and (b) pay, and cause each Subsidiary
to pay, prior to delinquency, all taxes and other governmental charges against
it or any of its property, as well as claims of any kind which, if unpaid, might
become a Lien on any of its property; PROVIDED, HOWEVER, that the foregoing
shall not require the Company or any Subsidiary to pay any such tax or charge so
long as it shall contest the validity thereof in good faith by appropriate
proceedings and shall set aside on its books adequate reserves with respect
thereto in accordance with GAAP.
10.5 MAINTENANCE OF EXISTENCE, ETC. Maintain and preserve, and (subject
to SECTION 10.11) cause each Subsidiary to maintain and preserve, (a) its
existence and good standing in the jurisdiction of its incorporation and (b) its
qualification and good standing as a foreign corporation in each jurisdiction
where the nature of its business makes such qualification necessary (except in
those instances in which the failure to be qualified or in good standing does
not have a Material Adverse Effect).
10.6 FINANCIAL COVENANTS.
10.6.1 MINIMUM NET WORTH. Not permit its Net Worth at any time to be
less than the sum of (a) $20,000,000 PLUS (b) 75% of the sum of Consolidated Net
Income during the period beginning on January 1, 1998 and ending on the last day
of the most recently-ended Fiscal Quarter (PROVIDED that, if the sum of
Consolidated Net Income is less than zero for any Fiscal Quarter, for purposes
of this SECTION 10.6.1 such sum will be deemed to have been zero for such
quarter) PLUS (c) 100% of the net proceeds of any equity issued by the Company
or any of its Subsidiaries (on a consolidated basis) after the Effective Date.
10.6.2 MINIMUM INTEREST COVERAGE. Not permit the Interest Coverage Ratio
for any Computation Period to be less than the applicable ratio set forth below:
COMPUTATION INTEREST
PERIOD ENDING: COVERAGE RATIO
-------------- --------------
Effective Date through 12/31/98 2.0 to 1.0
1/1/99 through 12/31/99 2.25 to 1.0
1/1/00 and thereafter 2.5 to 1.0.
49
10.6.3 FUNDED DEBT TO EBITDA RATIO. Not permit the Funded Debt to EBITDA
Ratio as of the last day of any Fiscal Quarter to exceed the applicable ratio
set forth below:
FISCAL FUNDED DEBT TO
QUARTER ENDING: EBITDA RATIO
--------------- ------------
Effective Date through 12/31/98 3.75 to 1.0
3/31/00 and thereafter 3.50 to 1.0.
10.6.4 CAPITAL EXPENDITURES. The Company will not permit the aggregate
amount of all Capital Expenditures (excluding amounts, if any, paid to
consummate acquisitions permitted by SECTION 10.11(C) which constitute Capital
Expenditures) made by the Company and its Subsidiaries in any Fiscal Year to
exceed (i) if the Equity Offering does not occur, $8,000,000, and (ii) if the
Equity Offering occurs, the product of 1.5 multiplied by the depreciation and
amortization of the Company and its Subsidiaries during the prior Fiscal Year
(calculated on a PRO FORMA basis giving effect to acquisitions and sales and
other dispositions made subsequent to such prior Fiscal Year).
10.7 LIMITATIONS ON DEBT. Not, and not permit any Subsidiary to, create,
incur, assume or suffer to exist any Debt, except:
(a) obligations in respect of the Loans, the L/C
Applications and the Letters of Credit;
(b) unsecured Debt of the Company (other than Contingent Payments) which
represents all or part of the purchase price payable in connection with
a transaction permitted by SECTION 10.11(C); PROVIDED that the aggregate
principal amount of all such unsecured Debt (excluding Subordinated
Debt) shall not at any time exceed (i) prior to the Equity Offering,
$5,000,000 and (ii) after completion of the Equity Offering,
$10,000,000;
(c) Debt secured by Liens permitted by SUBSECTION 10.8(C) or (D), and
refinancings of any such Debt so long as the terms applicable to such
refinanced Debt are no less favorable to the Company or the applicable
Subsidiary than the terms in effect immediately prior to such
refinancing, PROVIDED that the aggregate amount of all such Debt at any
time outstanding shall not exceed (i) prior to the Equity Offering,
$2,000,000 and (ii) after completion of the Equity Offering,
$10,000,000;
(d) Debt of Subsidiaries owed to the Company;
50
(e) unsecured Debt of the Company to Subsidiaries;
(f) Subordinated Debt;
(g) Contingent Payments listed on SCHEDULE 9.6(B) and other Debt
outstanding on the date hereof and listed in SCHEDULE 10.7; and
(h) Contingent Payments, PROVIDED that the aggregate amount of all
Contingent Payments (other than Contingent Payments listed on SCHEDULE
9.6(B))shall not at any time exceed $5,000,000.
10.8 LIENS. Not, and not permit any Subsidiary to, create or permit to
exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except:
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and, in each case, for which it
maintains adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i) Liens
of carriers, warehousemen, mechanics and materialmen and other similar
Liens imposed by law and (ii) Liens incurred in connection with worker's
compensation, unemployment compensation and other types of social
security (excluding Liens arising under ERISA) or in connection with
surety bonds, bids, performance bonds and similar obligations) for sums
not overdue or being contested in good faith by appropriate proceedings
and not involving any deposits or advances or borrowed money or the
deferred purchase price of property or services, and, in each case, for
which it maintains adequate reserves;
(c) Liens identified in SCHEDULE 10.8;
(d) subject to the limitation set forth in SECTION 10.7(C),(i) Liens
arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of
the acquisition thereof by the Company or any Subsidiary (and not
created in contemplation of such acquisition) and (iii) Liens that
constitute purchase money security interests on any property securing
debt incurred for the purpose of financing all or any part of the cost
of acquiring such property, PROVIDED that any such Lien attaches to such
property within 60 days of the acquisition thereof and such Lien
attaches solely to the property so acquired;
51
(e) attachments, appeal bonds, judgments and other similar Liens, for
sums not exceeding $250,000 arising in connection with court
proceedings, provided the execution or other enforcement of such Liens
is effectively stayed and the claims secured thereby are being actively
contested in good faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of the
Company or any Subsidiary; and
(g) Liens in favor of the Agent arising under the Loan Documents.
10.9 OPERATING LEASES. Not permit the aggregate amount of all rental
payments made (or scheduled to be made) by the Company and its Subsidiaries (on
a consolidated basis) in any Fiscal Year to exceed (1) prior to the Equity
Offering, $1,500,000 and (b) after completion of the Equity Offering,
$3,000,000.
10.10 RESTRICTED PAYMENTS. Not, and not permit any Subsidiary to, (a)
declare or pay any dividends on any of its capital stock (other than stock
dividends), (b) purchase or redeem any such stock or any warrants, units,
options or other rights in respect of such stock, (c) make any other
distribution to shareholders, (d) prepay, purchase, defease or redeem any
Subordinated Debt or (e) set aside funds for any of the foregoing; PROVIDED that
any Subsidiary may declare and pay dividends to the Company or to any other
wholly-owned Subsidiary.
10.11 MERGERS, CONSOLIDATIONS, SALES. Not, and not permit any Subsidiary
to, be a party to any merger or consolidation, or purchase or otherwise acquire
all or substantially all of the assets or any stock of any class of, or any
partnership or joint venture interest in, any other Person, or sell, transfer,
convey or lease all or any substantial part of its assets, or sell or assign
with or without recourse any receivables, except for (a) any such merger or
consolidation, sale, transfer, conveyance, lease or assignment of or by any
wholly-owned Subsidiary into the Company or into, with or to any other wholly-
owned Subsidiary; (b) any such purchase or other acquisition by the Company or
any wholly-owned Subsidiary of the assets or stock of any wholly-owned
Subsidiary; (c) any such purchase or other acquisition by the Company or any
wholly-owned Subsidiary of the assets or stock of any other Person where (1)
such assets (in the case of an asset purchase) are for use, or such Person (in
the case of a stock purchase) is engaged, solely in the processing and disposal
of non-hazardous liquid waste and by-products thereof and nonhazardous oil field
waste and businesses which
52
are reasonably related thereto (including land farming bio-solids), PROVIDED
that this CLAUSE (1) shall not apply to the acquisitions described on SCHEDULE
10.6 (the "APPROVED ACQUISITIONS"); (2) immediately before or after giving
effect to such purchase or acquisition, no Event of Default or Unmatured Event
of Default shall have occurred and be continuing; (3) either (i) (x) the
aggregate consideration to be paid by the Company and its Subsidiaries
(including any Debt assumed or issued in connection therewith, the amount
thereof to be calculated in accordance with GAAP) in connection with such
purchase or other acquisition (or any series of related acquisitions) is not
greater than $7,000,000 (or $15,000,000 at any time after the Equity Offering)
and (y) the aggregate consideration to be paid in cash by the Company and its
Subsidiaries in connection with such purchase or acquisition (or any series of
related acquisitions) is not greater than $5,000,000 (or $10,000,000 at any time
after the Equity Offering) or (ii) such Acquisition is an Approved Acquisition
or the Required Banks have consented to such purchase or acquisition; (4) the
Company is in PRO FORMA compliance with all the financial ratios and
restrictions set forth in SECTION 10.6; and (5) such Person (or its board of
directors or similar body) has approved such acquisition or other purchase; and
(d) sales and dispositions of assets (including the stock of Subsidiaries) so
long as the net book value of all assets sold or otherwise disposed of in any
Fiscal Year (excluding the sale or other disposition of the stock or assets of
certain Subsidiary of City Environmental Services Inc. of Florida, Inc. ("CITY
ENVIRONMENTAL OF FLORIDA"), it being understood that neither the Company nor any
Subsidiary shall transfer any material assets to City Environmental of Florida
prior to such sale or other disposition) does not exceed (i) if the Equity
Offering does not occur, $500,000, and (ii) if the Equity Offering does occur,
5% of the consolidated assets of the Company as of the first day of such Fiscal
Year.
10.12 MODIFICATION OF ORGANIZATIONAL DOCUMENTS. Not permit the
Certificate of Incorporation, By-Laws or other organizational documents of the
Company or any Subsidiary to be amended or modified in any way which might
reasonably be expected to materially adversely affect the interests of the
Banks.
10.13 USE OF PROCEEDS. Use the proceeds of the Loans solely to finance
the Company's working capital, for acquisitions permitted by SECTION 10.11, for
Capital Expenditures and for other general corporate purposes, including the
payment of Debt to be Repaid; and not use or permit any proceeds of any Loan to
be used, either directly or indirectly, for the purpose, whether immediate,
incidental or ultimate, of "purchasing or carrying" any Margin Stock.
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10.14 FURTHER ASSURANCES. Take, and cause each Subsidiary to take, such
actions as are necessary, or as the Agent or the Required Banks may reasonably
request, from time to time (including the execution and delivery of guaranties,
security agreements, pledge agreements, financing statements and other
documents, the filing or recording of any of the foregoing, and the delivery of
stock certificates and other collateral with respect to which perfection is
obtained by possession) to ensure that (i) the obligations of the Company
hereunder and under the other Loan Documents are secured by substantially all of
the assets (other than real property and, unless the Required Banks otherwise
request in writing, any motor vehicle subject to a statute requiring notation on
a certificate of title to perfect a security interest in such vehicle) of the
Company and guaranteed by all of the Subsidiaries (including, promptly upon the
acquisition or creation thereof, any Subsidiary acquired or created after the
date hereof) by execution of a counterpart of the Guaranty and (ii) the
obligations of each Guarantor under the Guaranty are secured by substantially
all of the assets (other than real property and, unless the Required Banks
otherwise request in writing, any motor vehicle subject to a statute requiring
notation on a certificate of title to perfect a security interest in such
vehicle) of such Guarantor.
10.15 TRANSACTIONS WITH AFFILIATES. Not, and not permit any Subsidiary
to, enter into, or cause, suffer or permit to exist any transaction, arrangement
or contract with any of its other Affiliates (other than the Company and its
Subsidiaries) which is on terms which are less favorable than are obtainable
from any Person which is not one of its Affiliates.
10.16 EMPLOYEE BENEFIT PLANS. Maintain, and cause each Subsidiary to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
10.17 ENVIRONMENTAL MATTERS. (a) If any material Release or Disposal of
Hazardous Substances shall occur or shall have occurred on any real property or
any other assets of the Company or any Subsidiary, the Company shall, or shall
cause the applicable Subsidiary to, cause the prompt containment and removal of
such Hazardous Substances and the remediation of such real property or other
assets as necessary to comply in all material respects with all Environmental
Laws and to preserve the value of such real property or other assets (provided
that nothing set forth in this sentence shall prevent (a) City Environmental,
Inc. or Northern A-1 Services, Inc. from continuing to engage in the businesses
in which they were engaged on January 1, 1998 in a manner consistent with past
practice and (b) Re-claim Environmental Louisiana L.L.C. from accepting
"F-listed" and "K-listed" waste for reprocessing in the ordinary
54
course of business so long as such waste will not be hazardous waste after such
processing). Without limiting the generality of the foregoing, the Company
shall, and shall cause each Subsidiary to, comply in a reasonable and
cost-effective manner with any valid Federal or state judicial or administrative
order requiring the performance at any real property of the Company or any
Subsidiary of activities in response to the Release or threatened Release of a
Hazardous Substance except for the period of time that the Company or such
Subsidiary is diligently and in good faith contesting such order.
(b) To the extent that the transportation of "hazardous waste" as
defined by RCRA is permitted by this Agreement, the Company shall, and shall
cause its Subsidiaries to, dispose of such hazardous waste only at licensed
disposal facilities operating, to the best of the Company's or such Subsidiary's
knowledge after reasonable inquiry, in compliance with Environmental Laws.
10.18 UNCONDITIONAL PURCHASE OBLIGATIONS. Not, and not permit any
Subsidiary to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services, if such contract requires
that payment be made by it regardless of whether or not delivery is ever made of
such materials, supplies or other property or services; provided that the
foregoing shall not prohibit the Company or any Subsidiary from entering into
options for the purchase of particular assets or businesses.
10.19 INCONSISTENT AGREEMENTS. Not, and not permit any Subsidiary to,
enter into any agreement containing any provision which (a) would be violated or
breached by any borrowing by the Company hereunder or by the performance by the
Company or any Subsidiary of any of its obligations hereunder or under any other
Loan Document or (b) would prohibit the Company or any Subsidiary from granting
to the Agent, for the benefit of the Banks, a Lien on any of its assets.
10.20 BUSINESS ACTIVITIES. Not, and not permit any Subsidiary to, engage
in any line of business other than the processing and disposal of non-hazardous
liquid waste and by-products thereof and non-hazardous oil field waste and
businesses which are reasonably related thereto (including land farming bio-
solids); PROVIDED that City Environmental, Inc. and Northern A-1 Services, Inc.
may continue to engage in the businesses in which they were engaged on January
1, 1998 in a manner consistent with past practice.
10.21 ADVANCES AND OTHER INVESTMENTS. Not, and not permit any Subsidiary
to, make, incur, assume or suffer to exist any Investment in any other Person,
except (without duplication) the
55
following:
(a) equity Investments existing on the Effective Date in wholly-owned
Subsidiaries identified in SCHEDULE 9.8;
(b) equity Investments in Subsidiaries acquired after the Effective Date
in transactions permitted as acquisitions of stock or assets pursuant to
SECTION 10.11;
(c) in the ordinary course of business, contributions by the Company to
the capital of any of its Subsidiaries, or by any such Subsidiary to the
capital of any of its Subsidiaries;
(d) in the ordinary course of business, Investments by the Company in
any Subsidiary or by any of the Subsidiaries in the Company, by way of
intercompany loans, advances or guaranties, all to the extent permitted
by SECTION 10.7;
(e) Suretyship Liabilities permitted by SECTION 10.7;
(f) good faith deposits made in connection with prospective acquisitions
of stock or assets permitted by SECTION 10.11;
(g) loans to officers and employees not exceeding (i) $100,000 in the
aggregate to any single individual or (ii) $250,000 in the aggregate for
all such individuals;
(h) Cash Equivalent Investments; and
(i) bank deposits in the ordinary course of business; PROVIDED that the
aggregate amount of all such deposits (excluding (x) amounts in payroll
accounts or for accounts payable, in each case to the extent that checks
have been issued to third parties, and (y) amounts maintained (in the
ordinary course of business consistent with past practice) in accounts
of any Person which is acquired by the Company or a Subsidiary in
accordance with the terms hereof during the 45 days following the date
of such acquisition) which are maintained with any bank other than a
Bank shall not at any time exceed (x) in the case of such deposits with
any single bank, $100,000 for three consecutive Business Days and (y)
in the case of all such deposits, $2,500,000 for three consecutive
Business Days;
PROVIDED, HOWEVER, that no Investment otherwise permitted by CLAUSE (B), (C),
(D), (E), (F) or (G) shall be permitted to be made if, immediately before or
after giving effect thereto, any Event of Default or Unmatured Event of Default
shall have occurred and be continuing.
56
10.22 RESTRICTION OF AMENDMENTS TO ASSET PURCHASE AGREEMENT. Not amend
or otherwise modify, or waive any rights under, the Asset Purchase Agreement
dated as of December 2, 1996 by and among Sanifill, Inc., ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇.▇.,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, L.P. and the Company, if such amendment, modification or
waiver is adverse to the interests of the Banks.
SECTION 11 EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Bank to make its Loans and of any Issuing Bank to
issue Letters of Credit is subject to the following conditions precedent:
11.1 EFFECTIVENESS. This Agreement shall become effective, and all
outstanding loans made and letters of credit issued under the Existing Agreement
shall be deemed to have been made and issued (respectively) hereunder, on the
date (the "EFFECTIVE DATE") that the Agent shall have received (a) all amounts
which are then due and payable pursuant to SECTION 5 and (to the extent billed)
SECTION 14.6, and (b) all of the following, each duly executed and dated the
Effective Date (or such earlier date as shall be satisfactory to the Agent), in
form and substance satisfactory to the Agent, and each (except for the Notes, of
which only the originals shall be signed) in sufficient number of signed
counterparts to provide one for each Bank:
11.1.1 NOTES. The Notes.
11.1.2 RESOLUTIONS. Certified copies of resolutions of the Board of
Directors of the Company authorizing or ratifying the execution, delivery and
performance by the Company of this Agreement, the Notes and the other Loan
Documents to which the Company is a party; and certified copies of resolutions
of the Board of Directors of each Subsidiary (if any) which is to execute and
deliver any document pursuant to SECTION 11.1.5, 11.1.6 or 11.1.7 authorizing or
ratifying the execution, delivery and performance by such Subsidiary of each
Loan Document to which such Subsidiary is a party.
11.1.3 CONSENTS, ETC. Certified copies of all documents evidencing any
necessary corporate action, consents and governmental approvals (if any)
required for the execution, delivery and performance by the Company and each
Subsidiary of the documents referred to in this SECTION 11.
11.1.4 INCUMBENCY AND SIGNATURE CERTIFICATES. A certificate of the
Secretary or an Assistant Secretary of the Company and each Subsidiary of the
Company as of the Effective Date certifying the names of the officer or officers
of such entity authorized to sign the Loan Documents to which such entity is a
party, together with a sample of the true signature of each
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such officer (it being understood that the Agent and each Bank may conclusively
rely on each such certificate until formally advised by a like certificate of
any changes therein).
11.1.5 GUARANTY. A counterpart of the Guaranty executed by each
Subsidiary (if any) as of the Effective Date which has not previously executed a
counterpart thereof.
11.1.6 SECURITY AGREEMENT. A counterpart of the Security Agreement
executed by each Subsidiary (if any) as of the Effective Date which has not
previously executed a counterpart thereof, together with evidence, satisfactory
to the Agent, that all filings necessary to perfect the Agent's Lien on any
collateral granted under the Security Agreement have been duly made and are in
full force and effect.
11.1.7 PLEDGE AGREEMENTS. With respect to any Subsidiary that, as of the
Effective Date has not previously executed a Subsidiary Pledge Agreement and has
one or more Subsidiaries, a Subsidiary Pledge Agreement, in each case together
with all stock certificates, stock powers and other items required to be
delivered in connection therewith.
11.1.8 CONFIRMATION. A Confirmation, substantially in the form of
EXHIBIT H, executed by the Company and each Guarantor.
11.1.9 OPINION OF COUNSEL FOR THE COMPANY AND THE
GUARANTORS. The opinion of ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇.
11.1.10 OTHER. Such other documents as the Agent or any Bank may
reasonably request.
11.2 CONDITIONS. The obligation (a) of each Bank to make each Loan and
(b) of each Issuing Bank to issue each Letter of Credit is subject to the
following further conditions precedent that:
11.2.1 COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and
after giving effect to any borrowing and the issuance of any Letter of Credit
(but, if any Event of Default of the nature referred to in SECTION 12.1.2 shall
have occurred with respect to any other Debt, without giving effect to the
application, directly or indirectly, of the proceeds thereof) the following
statements shall be true and correct:
(a) the representations and warranties of the Company and the
Guarantors set forth in this Agreement (excluding SECTIONS 9.6 and 9.8)
and the other Loan Documents shall be true and correct in all material
respects with the same effect as if then made (except to the extent
stated to relate to an earlier date, in which case such
58
representations and warranties shall be true and correct in all material
respects as of such earlier date);
(b) except as disclosed by the Company to the Agent and the Banks
pursuant to SECTION 9.6,
(i) no litigation (including derivative actions),
arbitration proceeding, labor controversy or governmental
investigation or proceeding shall be pending or, to the knowledge
of the Company, threatened against the Company or any of its
Subsidiaries which might reasonably be expected to have a
Material Adverse Effect or which purports to affect the legality,
validity or enforceability of this Agreement, the Notes or any
other Loan Document; and
(ii) no development shall have occurred in any litigation
(including derivative actions), arbitration proceeding, labor
controversy or governmental investigation or proceeding disclosed
pursuant to SECTION 9.6 which might reasonably be expected to
have a Material Adverse Effect; and
(c) no Event of Default or Unmatured Event of Default shall have
then occurred and be continuing, and neither the Company nor any of its
Subsidiaries shall be in violation of any law or governmental regulation
or court order or decree where such violation or violations singly or in
the aggregate might reasonably be expected to have a Material Adverse
Effect.
11.2.2 CONFIRMATORY CERTIFICATE. If requested by the Agent or any Bank,
the Agent shall have received (in sufficient counterparts to provide one to each
Bank) a certificate dated the date of such requested Loan or Letter of Credit
and signed by a duly authorized representative of the Company as to the matters
set out in SECTION 11.2.1 (it being understood that each request by the Company
for the making of a Loan or the issuance of a Letter of Credit shall be deemed
to constitute a warranty by the Company that the conditions precedent set forth
in SECTION 11.2.1 will be satisfied at the time of the making of such Loan or
the issuance of such Letter of Credit), together with such other documents as
the Agent or any Bank may reasonably request in support thereof.
SECTION 12 EVENTS OF DEFAULT AND THEIR EFFECT.
12.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 NON-PAYMENT OF THE LOANS, ETC. Default in the
59
payment when due of the principal of any Loan; or default, and continuance
thereof for five days, in the payment when due of any interest, fee,
reimbursement obligation with respect to any Letter of Credit or other amount
payable by the Company hereunder or under any other Loan Document.
12.1.2 NON-PAYMENT OF OTHER DEBT. Any default shall occur under the
terms applicable to any Debt of the Company or any Subsidiary in an aggregate
amount (for all such Debt so affected) exceeding $250,000 and such default shall
(a) consist of the failure to pay such Debt when due (subject to any applicable
grace period), whether by acceleration or otherwise, or (b) accelerate the
maturity of such Debt or permit the holder or holders thereof, or any trustee or
agent for such holder or holders, to cause such Debt to become due and payable
prior to its expressed maturity.
12.1.3 OTHER MATERIAL OBLIGATIONS. Default in the payment when due, or
in the performance or observance of, any material obligation of, or condition
agreed to by, the Company or any Subsidiary with respect to any material
purchase or lease of goods or services where such default, singly or in the
aggregate with other such defaults might reasonably be expected to have a
Material Adverse Effect (except only to the extent that the existence of any
such default is being contested by the Company or such Subsidiary in good faith
and by appropriate proceedings and appropriate reserves have been made in
respect of such default).
12.1.4 BANKRUPTCY, INSOLVENCY, ETC. The Company or any Subsidiary
becomes insolvent or generally fails to pay, or admits in writing its inability
or refusal to pay, debts as they become due; or the Company or any Subsidiary
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for the Company or such Subsidiary or any property
thereof, or makes a general assignment for the benefit of creditors; or, in the
absence of such application, consent or acquiescence, a trustee, receiver or
other custodian is appointed for the Company or any Subsidiary or for a
substantial part of the property of any thereof and is not discharged within 60
days; or any bankruptcy, reorganization, debt arrangement, or other case or
proceeding under any bankruptcy or insolvency law, or any dissolution or
liquidation proceeding (except the voluntary dissolution, not under any
bankruptcy or insolvency law, of a Subsidiary), is commenced in respect of the
Company or any Subsidiary, and if such case or proceeding is not commenced by
the Company or such Subsidiary, it is consented to or acquiesced in by the
Company or such Subsidiary, or remains for 60 days undismissed; or the Company
or any Subsidiary takes any corporate action to authorize, or in furtherance of,
any of the foregoing.
60
12.1.5 NON-COMPLIANCE WITH PROVISIONS OF THIS AGREEMENT. (a) Failure by
the Company to comply with or to perform any covenant set forth in SECTIONS 10.5
through 10.13, 10.15 or 10.16; or (b) failure by the Company to comply with or
to perform any other provision of this Agreement (and not constituting an Event
of Default under any of the other provisions of this SECTION 12) and continuance
of such failure described in this CLAUSE (B) for 30 days (or, in the case of
SECTION 10.14, five Business Days) after notice thereof to the Company from the
Agent or any Bank.
12.1.6 WARRANTIES. Any warranty made by the Company herein is breached
or is false or misleading in any material respect, or any schedule, certificate,
financial statement, report, notice or other writing furnished by the Company to
the Agent or any Bank in connection herewith is false or misleading in any
material respect on the date as of which the facts therein set forth are stated
or certified.
12.1.7 PENSION PLANS. (i) Institution of any steps by the Company or any
other Person to terminate a Pension Plan if as a result of such termination the
Company could be required to make a contribution to such Pension Plan, or could
incur a liability or obligation to such Pension Plan, in excess of $250,000;
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA; or (iii) there shall occur
any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the
withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans
as a result of such withdrawal (including any outstanding withdrawal liability
that the Company and the Controlled Group have incurred on the date of such
withdrawal) exceeds $250,000.
12.1.8 JUDGMENTS. Final judgments which exceed an aggregate of $250,000
shall be rendered against the Company, or any Subsidiary and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
12.1.9 INVALIDITY OF GUARANTY, ETC. The Guaranty shall cease to be in
full force and effect with respect to any Guarantor, any Guarantor shall fail
(subject to any applicable grace period) to comply with or to perform any
applicable provision of the Guaranty, or any Guarantor (or any Person by,
through or on behalf of such Guarantor) shall contest in any manner the
validity, binding nature or enforceability of the Guaranty with respect to such
Guarantor.
12.1.10 INVALIDITY OF COLLATERAL DOCUMENTS, ETC. Any Collateral Document
shall cease to be in full force and effect with respect to the Company or any
61
Guarantor, the Company or any Guarantor shall fail (subject to any applicable
grace period) to comply with or to perform any applicable provision of any
Collateral Document to which such entity is a party, or the Company or any
Guarantor (or any Person by, through or on behalf of the Company or such
Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Collateral Document.
12.1.11 CHANGE IN CONTROL. (a) Any Person or group of Persons (within
the meaning of Section 13 or 14 of the Securities Exchange Act of 1934, but
excluding the executive managers of the Company as of the Effective Date) shall
acquire beneficial ownership (within the meaning of Rule 13d-3 promulgated under
such Act) of 30% or more of the outstanding shares of common stock of the
Company; (b) during any 24-month period, individuals who at the beginning of
such period constituted the Company's Board of Directors (together with any new
directors whose election by the Company's Board of Directors or whose nomination
for election by the Company's shareholders was approved by a vote of at least
two-thirds of the directors who either were directors at beginning of such
period or whose election or nomination was previously so approved) cease for any
reason to constitute a majority of the Board of Directors of the Company; or (c)
a period of 60 consecutive days shall have elapsed during which any of the
individuals named in SCHEDULE 12.1.11 shall have ceased to hold executive
offices with the Company at least equal in seniority to such individual's
present offices, as set out in such SCHEDULE 12.1.11, EXCLUDING any such
individual who has been replaced by another individual or individuals reasonably
satisfactory to the Required Banks (it being understood that any such
replacement individual shall be deemed added to SCHEDULE 12.1.11 on the date of
approval thereof by the Required Banks).
12.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
SECTION 12.1.4 shall occur, the Commitments (if they have not theretofore
terminated) shall immediately terminate and the Notes and all other obligations
hereunder shall become immediately due and payable and the Company shall become
immediately obligated to deliver to the Agent cash collateral in an amount equal
to the outstanding face amount of all Letters of Credit, all without
presentment, demand, protest or notice of any kind; and, if any other Event of
Default shall occur and be continuing, the Agent (upon written request of the
Required Banks) shall declare the Commitments (if they have not theretofore
terminated) to be terminated and/or declare all Notes and all other obligations
hereunder to be due and payable and/or demand that the Company immediately
deliver to the Agent cash collateral in amount equal to the outstanding face
amount of all Letters of Credit, whereupon the Commitments (if they have not
theretofore terminated) shall immediately terminate and/or all Notes and all
other obligations hereunder shall become
62
immediately due and payable and/or the Company shall immediately become
obligated to deliver to the Agent cash collateral in an amount equal to the face
amount of all Letters of Credit, all without presentment, demand, protest or
notice of any kind. The Agent shall promptly advise the Company of any such
declaration, but failure to do so shall not impair the effect of such
declaration. Notwithstanding the foregoing, the effect as an Event of Default of
any event described in SECTION 12.1.1 or SECTION 12.1.4 may be waived by the
written concurrence of all of the Banks, and the effect as an Event of Default
of any other event described in this SECTION 12 may be waived by the written
concurrence of the Required Banks. Any cash collateral delivered hereunder shall
be held by the Agent (without liability for interest thereon) and applied to
obligations arising in connection with any drawing under a Letter of Credit.
After the expiration or termination of all Letters of Credit, such cash
collateral shall be applied by the Agent to any remaining obligations hereunder
and any excess shall be delivered to the Company or as a court of competent
jurisdiction may elect.
SECTION 13 THE AGENT.
13.1 APPOINTMENT AND AUTHORIZATION. (a) Each Bank hereby irrevocably
(subject to SECTION 13.9) appoints, designates and authorizes the Agent to take
such action on its behalf under the provisions of this Agreement and each other
Loan Document and to exercise such powers and perform such duties as are
expressly delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental thereto.
Notwithstanding any provision to the contrary contained elsewhere in this
Agreement or in any other Loan Document, the Agent shall not have any duties or
responsibilities except those expressly set forth herein, nor shall the Agent
have or be deemed to have any fiduciary relationship with any Bank, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Agent.
(b) Each Issuing Bank shall act on behalf of the Banks with respect to
any Letters of Credit issued by it and the documents associated therewith. Each
Issuing Bank shall have all of the benefits and immunities (i) provided to the
Agent in this SECTION 13 with respect to any acts taken or omissions suffered by
such Issuing Bank in connection with Letters of Credit issued by it or proposed
to be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Agent", as used in
this SECTION 13, included such Issuing Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Issuing Banks.
63
(c) The Swing Line Bank shall have all of the benefits and immunities
(i) provided to the Agent in this SECTION 13 with respect to any acts taken or
omissions suffered by the Swing Line Bank in connection with Swing Line Loans
made or proposed to be made by it as fully as if the term "Agent", as used in
this SECTION 13, included the Swing Line Bank with respect to such acts or
omissions and (ii) as additionally provided in this Agreement with respect to
the Swing Line Bank.
13.2 DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or any other Loan Document by or through agents, employees or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Agent shall not be responsible for the
negligence or misconduct of any agent or attorney-in-fact that it selects with
reasonable care.
13.3 LIABILITY OF AGENT. None of the Agent-Related Persons shall (i) be
liable for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Loan Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct),
or (ii) be responsible in any manner to any of the Banks for any recital,
statement, representation or warranty made by the Company or any Subsidiary or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Agent under or in
connection with, this Agreement or any other Loan Document, or the validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document, or for any failure of the Company or any other party to
any Loan Document to perform its obligations hereunder or thereunder. No
Agent-Related Person shall be under any obligation to any Bank to ascertain or
to inquire as to the observance or performance of any of the agreements
contained in, or conditions of, this Agreement or any other Loan Document, or to
inspect the properties, books or records of the Company or any of the Company's
Subsidiaries or Affiliates.
13.4 RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall
be fully protected in relying, upon any writing, resolution, notice, consent,
certificate, affidavit, letter, telegram, facsimile, telex or telephone message,
statement or other document or conversation 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 (including counsel to the
Company), independent accountants and other experts selected by the Agent. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement or any other Loan Document unless it
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shall first receive such advice or concurrence of the Required Banks as it deems
appropriate and, if it so requests, confirmation from the Banks of their
obligation to indemnify the Agent against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. The Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Banks and such request and
any action taken or failure to act pursuant thereto shall be binding upon all of
the Banks.
13.5 NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge
or notice of the occurrence of any Event of Default or Unmatured Event of
Default except with respect to defaults in the payment of principal, interest
and fees required to be paid to the Agent for the account of the Banks, unless
the Agent shall have received written notice from a Bank or the Company
referring to this Agreement, describing such Event of Default or Unmatured Event
of Default and stating that such notice is a "notice of default". The Agent will
notify the Banks of its receipt of any such notice. The Agent shall take such
action with respect to such Event of Default or Unmatured Event of Default as
may be requested by the Required Banks in accordance with SECTION 12; PROVIDED,
HOWEVER, that unless and until the Agent has received any such request, the
Agent may (but shall not be obligated to) take such action, or refrain from
taking such action, with respect to such Event of Default or Unmatured Event of
Default as it shall deem advisable or in the best interest of the Banks.
13.6 CREDIT DECISION. Each Bank acknowledges that none of the
Agent-Related Persons has made any representation or warranty to it, and that no
act by the Agent hereafter taken, including any review of the affairs of the
Company and its Subsidiaries, shall be deemed to constitute any representation
or warranty by any Agent-Related Person to any Bank. Each Bank represents to the
Agent that it has, independently and without reliance upon any Agent-Related
Person and based on such documents and information as it has deemed appropriate,
made its own appraisal of and investigation into the business, prospects,
operations, property, financial and other condition and creditworthiness of the
Company and its Subsidiaries, and all applicable bank regulatory laws relating
to the transactions contemplated hereby, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Bank also
represents that it will, independently and without reliance upon any
Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan
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Documents, and to make such investigations as it deems necessary to inform
itself as to the business, prospects, operations, property, financial and other
condition and creditworthiness of the Company. Except for notices, reports and
other documents expressly herein required to be furnished to the Banks by the
Agent, the Agent shall not have any duty or responsibility to provide any Bank
with any credit or other information concerning the business, prospects,
operations, property, financial or other condition or creditworthiness of the
Company which may come into the possession of any of the Agent-Related Persons.
13.7 INDEMNIFICATION. Whether or not the transactions contemplated
hereby are consummated, the Banks shall indemnify upon demand the Agent-Related
Persons (to the extent not reimbursed by or on behalf of the Company and without
limiting the obligation of the Company to do so), pro rata, from and against any
and all Indemnified Liabilities; PROVIDED, HOWEVER, that no Bank shall be liable
for any payment to the Agent-Related Person of any portion of the Indemnified
Liabilities resulting solely from such Person's gross negligence or willful
misconduct. Without limitation of the foregoing, each Bank shall reimburse the
Agent upon demand for its ratable share of any costs or out-of-pocket expenses
(including reasonable fees of attorneys for the Agent (including the allocable
costs of internal legal services and all disbursements of internal counsel))
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
rights or responsibilities under, this Agreement, any other Loan Document, or
any document contemplated by or referred to herein, to the extent that the Agent
is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, any foreclosure under, or any modification, release or discharge
of, any or all of the Collateral Documents, any termination of this Agreement
and the resignation or replacement of the Agent.
For the purposes of this SECTION 13.7, "INDEMNIFIED LIABILITIES" shall
mean: any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, charges, expenses and disbursements (including
reasonable fees of attorneys for the Agent (including the allocable costs of
internal legal services and all disbursements of internal counsel)) of any kind
or nature whatsoever which may at any time (including at any time following
repayment of the Loans and the termination, resignation or replacement of the
Agent or the replacement of any Bank) be imposed on, incurred by or asserted
against any Agent-Related Person in any way relating to or arising out of this
Agreement or any document contemplated by or referred to herein, or the
transactions contemplated hereby, or
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any action taken or omitted by any such Person under or in connection with any
of the foregoing, including with respect to any investigation, litigation or
proceeding (including (a) any case, action or proceeding before any court or
other governmental authority relating to bankruptcy, reorganization, insolvency,
liquidation, receivership, dissolution, winding-up or relief of debtors, or (b)
any general assignment for the benefit of creditors, composition, marshalling of
assets for creditors, or other, similar arrangement in respect of its creditors
generally or any substantial portion of its creditors; undertaken under U.S.
Federal, state or foreign law, including the Bankruptcy Code, and including any
appellate proceeding) related to or arising out of this Agreement or the
Commitments or the use of the proceeds thereof, whether or not any Agent-Related
Person, any Bank or any of their respective officers, directors, employees,
counsel, agents or attorneys-in-fact is a party thereto.
13.8 AGENT IN INDIVIDUAL CAPACITY. BofA and its Affiliates may make
loans to, issue letters of credit for the account of, accept deposits from,
acquire equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with the Company and its
Subsidiaries and Affiliates as though BofA were not the Agent, the Issuing Bank
or the Swing Line Bank hereunder and without notice to or consent of the Banks.
The Banks acknowledge that, pursuant to such activities, BofA or its Affiliates
may receive information regarding the Company or its Affiliates (including
information that may be subject to confidentiality obligations in favor of the
Company or such Subsidiary) and acknowledge that the Agent shall be under no
obligation to provide such information to them. With respect to their Loans,
BofA and its Affiliates shall have the same rights and powers under this
Agreement as any other Bank and may exercise the same as though BofA were not
the Agent, the Issuing Bank and the Swing Line Bank, and the terms "Bank" and
"Banks" include BofA and its Affiliates, to the extent applicable, in their
individual capacities.
13.9 SUCCESSOR AGENT. The Agent may, and at the request of the Required
Banks shall, resign as Agent upon 30 days' notice to the Banks. If the Agent
resigns under this Agreement, the Required Banks shall, with (so long as no
Event of Default exists) the consent of the Company (which shall not be
unreasonably withheld or delayed), appoint from among the Banks a successor
agent for the Banks. If no successor agent is appointed prior to the effective
date of the resignation of the Agent, the Agent may appoint, after consulting
with the Banks and the Company, a successor agent from among the Banks. Upon the
acceptance of its appointment as successor agent hereunder, such successor agent
shall succeed to all the rights, powers and duties of the retiring Agent and the
term "Agent" shall mean such
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successor agent, and the retiring Agent's appointment, powers and duties as
Agent shall be terminated. After any retiring Agent's resignation hereunder as
Agent, the provisions of this SECTION 13 and SECTIONS 14.6 and 14.13 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement. If no successor agent has accepted appointment as
Agent by the date which is 30 days following a retiring Agent's notice of
resignation, the retiring Agent's resignation shall nevertheless thereupon
become effective and the Banks shall perform all of the duties of the Agent
hereunder until such time, if any, as the Required Banks appoint a successor
agent as provided for above. Notwithstanding the foregoing, however, BofA may
not be removed as the Agent at the request of the Required Banks unless BofA
shall also simultaneously be replaced as an "Issuing Bank" and the "Swing Line
Bank" hereunder pursuant to documentation in form and substance reasonably
satisfactory to BofA.
13.10 WITHHOLDING TAX.
(a) If any Bank is a "foreign corporation, partnership or trust"
within the meaning of the Code and such Bank claims exemption from, or a
reduction of, U.S. withholding tax under Sections 1441 or 1442 of the
Code, such Bank agrees to deliver to the Agent:
(i) if such Bank claims an exemption from, or a reduction
of, withholding tax under a United States tax treaty, properly
completed Internal Revenue Service ("IRS") Forms 1001 and W-8
before the payment of any interest in the first calendar year and
before the payment of any interest in each third succeeding
calendar year during which interest may be paid under this
Agreement;
(ii) if such Bank claims that interest paid under this
Agreement is exempt from United States withholding tax because it
is effectively connected with a United States trade or business
of such Bank, two properly completed and executed copies of IRS
Form 4224 before the payment of any interest is due in the first
taxable year of such Bank and in each succeeding taxable year of
such Bank during which interest may be paid under this Agreement,
and IRS Form W-9; and
(iii) such other form or forms as may be required under
the Code or other laws of the United States as a condition to
exemption
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from, or reduction of, United States withholding tax.
Such Bank agrees to promptly notify the Agent of any change in
circumstances which would modify or render invalid any claimed
exemption or reduction.
(b) If any Bank claims exemption from, or reduction of,
withholding tax under a United States tax treaty by providing IRS Form
1001 and such Bank sells, assigns, grants a participation in, or
otherwise transfers all or part of the obligations of the Company to
such Bank, such Bank agrees to notify the Agent of the percentage amount
in which it is no longer the beneficial owner of such obligations of the
Company hereunder. To the extent of such percentage amount, the Agent
will treat such Bank's IRS Form 1001 as no longer valid.
(c) If any Bank claiming exemption from United States withholding
tax by filing IRS Form 4224 with the Agent sells, assigns, grants a
participation in, or otherwise transfers all or part of the obligations
of the Company to such Bank hereunder, such Bank agrees to undertake
sole responsibility for complying with the withholding tax requirements
imposed by Sections 1441 and 1442 of the Code.
(d) If any Bank is entitled to a reduction in the applicable
withholding tax, the Agent may withhold from any interest payment to
such Bank an amount equivalent to the applicable withholding tax after
taking into account such reduction. If the forms or other documentation
required by SUBSECTION (A) of this Section are not delivered to the
Agent, then the Agent may withhold from any interest payment to such
Bank not providing such forms or other documentation an amount
equivalent to the applicable withholding tax.
(e) If the IRS or any other governmental authority of the United
States or any other jurisdiction asserts a claim that the Agent did not
properly withhold tax from amounts paid to or for the account of any
Bank (because the appropriate form was not delivered or was not properly
executed, or because such Bank failed to notify the Agent of a change in
circumstances which rendered the exemption from, or reduction of,
withholding tax ineffective, or for any other reason) such Bank shall
indemnify the Agent fully for all amounts paid, directly or indirectly,
by the Agent as tax or otherwise, including penalties and
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interest, and including any taxes imposed by any jurisdiction on the
amounts payable to the Agent under this Section, together with all costs
and expenses (including reasonable fees of attorneys for the Agent
(including the allocable costs of internal legal services and all
disbursements of internal counsel)). The obligation of the Banks under
this subsection shall survive the repayment of the Loans, cancellation
of the Notes, any termination of this Agreement and the resignation or
replacement of the Agent.
13.11 COLLATERAL MATTERS. The Banks irrevocably authorize the Agent, at
its option and in its discretion, to release any Lien granted to or held by the
Agent under any Collateral Document (i) upon termination of the Commitments and
payment in full of all Loans and all other obligations of the Company hereunder
and the expiration or termination of all Letters of Credit; (ii) constituting
property sold or to be sold or disposed of as part of or in connection with any
disposition permitted hereunder; or (iii) subject to SECTION 14.1, if approved,
authorized or ratified in writing by the Required Banks. Upon request by the
Agent at any time, the Banks will confirm in writing the Agent's authority to
release particular types or items of collateral pursuant to this SECTION 13.11.
13.12 CO-AGENTS. No Bank identified on the facing page or the signature
pages of this Agreement as a "Co-Agent" shall have any right, power, obligation,
liability, responsibility or duty under this Agreement other than those
applicable to all Banks as such. Without limiting the foregoing, no Bank so
identified as a "Co-Agent" shall have or be deemed to have any fiduciary
relationship with any Bank. Each Bank acknowledges that it has not relied, and
will not rely, on any Bank so identified in deciding to enter into this
Agreement or in taking or not taking action hereunder.
SECTION 14 GENERAL.
14.1 WAIVER; AMENDMENTS. No delay on the part of the Agent, any Bank or
any other holder of a Note in the exercise of any right, power or remedy shall
operate as a waiver thereof, nor shall any single or partial exercise by any of
them of any right, power or remedy preclude other or further exercise thereof,
or the exercise of any other right, power or remedy. No amendment, modification
or waiver of, or consent with respect to, any provision of this Agreement or the
Notes shall in any event be effective unless the same shall be in writing and
signed and delivered by Banks having an aggregate Percentage of not less than
the aggregate Percentage expressly designated herein with respect thereto or, in
the absence of such designation as to any provision of this Agreement or the
Notes, by the Required Banks,
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and then any such amendment, modification, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given. No
amendment, modification, waiver or consent shall change the Percentage of any
Bank without the consent of such Bank. No amendment, modification, waiver or
consent shall (i) extend or increase the amount of the Commitments, (ii) extend
the date for payment of any principal of or interest on the Loans or any fees
payable hereunder, (iii) reduce the principal amount of any Loan, the rate of
interest thereon or any fees payable hereunder, (iv) release the Guaranty (other
than with respect to a Guarantor which ceases to be a Subsidiary as a result of
a transaction permitted hereunder) or all or substantially all of the collateral
granted under the Collateral Document or (v) reduce the aggregate Percentage
required to effect an amendment, modification, waiver or consent without, in
each case, the consent of all Banks. No provisions of SECTION 13 or other
provision of this Agreement affecting the Agent in its capacity as such shall be
amended, modified or waived without the consent of the Agent. No provision of
this Agreement relating to the rights or duties of an Issuing Bank in its
capacity as such shall be amended, modified or waived without the consent of
such Issuing Bank. No provision of this Agreement affecting the Swing Line Bank
in its capacity as such shall be amended, modified or waived without the written
consent of the Swing Line Bank.
14.2 CONFIRMATIONS. The Company and each holder of a Note agree from
time to time, upon written request received by it from the other, to confirm to
the other in writing (with a copy of each such confirmation to the Agent) the
aggregate unpaid principal amount of the Loans then outstanding under such Note.
14.3 NOTICES. Except as otherwise provided in SECTIONS 2.2, 2.4 and 4.3,
all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on SCHEDULE 14.3 or
at such other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by registered or certified mail, postage prepaid; and notices
sent by hand delivery or overnight courier service shall be deemed to have been
given when received. For purposes of SECTIONS 2.2, 2.4 and 4.3, the Agent and
the Swing Line Bank shall be entitled to rely on telephonic instructions from
any person that the Agent or the Swing Line Bank in good faith believes is an
authorized officer or employee of the Company, and the Company shall hold the
Agent, the Swing Line Bank and each other Bank harmless from any loss, cost or
expense resulting from any such reliance.
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14.4 COMPUTATIONS. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for the
purpose of this Agreement, such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be made
in accordance with GAAP, consistently applied; PROVIDED that if the Company
notifies the Agent that the Company wishes to amend any covenant in SECTION 10
to eliminate or to take into account the effect of any change in GAAP on the
operation of such covenant (or if the Agent notifies the Company that the
Required Banks wish to amend SECTION 10 for such purpose), then the Company's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant is amended in a manner satisfactory to
the Company and the Required Banks.
14.5 REGULATION U. Each Bank represents that it in good faith is not
relying, either directly or indirectly, upon any Margin Stock as collateral
security for the extension or maintenance by it of any credit provided for in
this Agreement.
14.6 COSTS, EXPENSES AND TAXES. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Agent (including the
reasonable fees and charges of counsel for the Agent and of local counsel, if
any, who may be retained by said counsel) in connection with the preparation,
execution, delivery and administration of this Agreement, the other Loan
Documents and all other documents provided for herein or delivered or to be
delivered hereunder or in connection herewith (including any amendments,
supplements or waivers to any Loan Documents), and all reasonable out-of-pocket
costs and expenses (including reasonable attorneys' fees, court costs and other
legal expenses and allocated costs of staff counsel) incurred by the Agent and
each Bank after an Event of Default in connection with the enforcement of this
Agreement, the other Loan Documents or any such other documents. Each Bank
agrees to reimburse the Agent for such Bank's pro rata share (based on its
respective Percentage) of any such costs and expenses of the Agent not paid by
the Company. In addition, the Company agrees to pay, and to save the Agent and
the Banks harmless from all liability for, (a) any stamp or other taxes
(excluding income taxes and franchise taxes based on net income) which may be
payable in connection with the execution and delivery of this Agreement, the
borrowings hereunder, the issuance of the Notes or the execution and delivery of
any other Loan Document or any other document provided for herein or delivered
or to be delivered hereunder or in connection herewith and (b) any fees of the
Company's auditors in connection with any reasonable exercise by the Agent and
the
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Banks of their rights pursuant to SECTION 10.2. All obligations provided for
in this SECTION 14.6 shall survive repayment of the Loans, cancellation of the
Notes and any termination of this Agreement.
14.7 SUBSIDIARY REFERENCES. The provisions of this Agreement relating to
Subsidiaries shall apply only during such times as the Company has one or more
Subsidiaries.
14.8 CAPTIONS. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
14.9 ASSIGNMENTS; PARTICIPATIONS.
14.9.1 ASSIGNMENTS. Any Bank may, with the prior written consents of the
Company and the Agent (which consents shall not be unreasonably delayed or
withheld), at any time assign and delegate to one or more commercial banks or
other Persons (any Person to whom such an assignment and delegation is to be
made being herein called an "ASSIGNEE"), all or any fraction of such Bank's
Revolving Loans and Commitment (which assignment and delegation shall be of a
constant, and not a varying, percentage of all the assigning Bank's Revolving
Loans and Commitment) in a minimum aggregate amount equal to the lesser of (i)
the amount of the assigning Bank's remaining Commitment and (ii) $5,000,000;
PROVIDED, HOWEVER, that (a) no assignment and delegation may be made to any
Person if, at the time of such assignment and delegation, the Company would be
obligated to pay any greater amount under SECTION 7.6 or SECTION 8 to the
Assignee than the Company is then obligated to pay to the assigning Bank under
such Sections (and if any assignment is made in violation of the foregoing, the
Company will not be required to pay the incremental amounts) and (b) the Company
and the Agent shall be entitled to continue to deal solely and directly with
such Bank in connection with the interests so assigned and delegated to an
Assignee until the date when all of the following conditions shall have been
met:
(x) five Business Days (or such lesser period of time as the
Agent and the assigning Bank shall agree) shall have passed after
written notice of such assignment and delegation, together with payment
instructions, addresses and related information with respect to such
Assignee, shall have been given to the Company and the Agent by such
assigning Bank and the Assignee,
(y) the assigning Bank and the Assignee shall have executed and
delivered to the Company and the Agent an assignment agreement
substantially in the form of EXHIBIT G (an "ASSIGNMENT AGREEMENT"),
together with any documents required to be delivered thereunder, which
Assignment
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Agreement shall have been accepted by the Agent, and
(z) the assigning Bank or the Assignee shall have paid the Agent
a processing fee of $3,500.
From and after the date on which the conditions described above have been met,
(x) such Assignee shall be deemed automatically to have become a party hereto
and, to the extent that rights and obligations hereunder have been assigned and
delegated to such Assignee pursuant to such Assignment Agreement, shall have the
rights and obligations of a Bank hereunder, and (y) the assigning Bank, to the
extent that rights and obligations hereunder have been assigned and delegated by
it pursuant to such Assignment Agreement, shall be released from its obligations
hereunder. Within five Business Days after effectiveness of any assignment and
delegation, the Company shall execute and deliver to the Agent (for delivery to
the Assignee and the Assignor, as applicable) a new Note in the principal amount
of the Assignee's Percentage of the Commitment Amount and, if the assigning Bank
has retained a Commitment hereunder, a replacement Note in the principal amount
of the Percentage of the Commitment Amount retained by the assigning Bank (such
Note to be in exchange for, but not in payment of, the predecessor Note held by
such assigning Bank). Each such Note shall be dated the effective date of such
assignment. The assigning Bank shall ▇▇▇▇ the predecessor Note "exchanged" and
deliver it to the Company. Accrued interest on that part of the predecessor Note
being assigned shall be paid as provided in the Assignment Agreement. Accrued
interest and fees on that part of the predecessor Note not being assigned shall
be paid to the assigning Bank. Accrued interest and accrued fees shall be paid
at the same time or times provided in the predecessor Note and in this
Agreement. Any attempted assignment and delegation not made in accordance with
this SECTION 14.9.1 shall be null and void.
Notwithstanding the foregoing provisions of this SECTION 14.9.1 or any
other provision of this Agreement, any Bank may at any time assign all or any
portion of its Loans and its Note to a Federal Reserve Bank (but no such
assignment shall release any Bank from any of its obligations hereunder).
14.9.2 PARTICIPATIONS. Any Bank may at any time sell to one or more
commercial banks or other Persons participating interests in any Loan owing to
such Bank, the Note held by such Bank, the Commitment of such Bank, the direct
or participation interest of such Bank in any Letter of Credit or any other
interest of such Bank hereunder (any Person purchasing any such participating
interest being herein called a "PARTICIPANT"); PROVIDED that any Bank selling
any such participating interest shall give notice thereof to the Company. In the
event of a sale by a Bank of a participating interest to a Participant, (x) such
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Bank shall remain the holder of its Note for all purposes of this Agreement, (y)
the Company and the Agent shall continue to deal solely and directly with such
Bank in connection with such Bank's rights and obligations hereunder and (z) all
amounts payable by the Company shall be determined as if such Bank had not sold
such participation and shall be paid directly to such Bank. No Participant shall
have any direct or indirect voting rights hereunder except with respect to any
of the events (excluding the events described in CLAUSE (V) thereof) described
in the fourth sentence of SECTION 14.1. Each Bank agrees to incorporate the
requirements of the preceding sentence into each participation agreement which
such Bank enters into with any Participant. The Company agrees that if amounts
outstanding under this Agreement and the Notes are due and payable (as a result
of acceleration or otherwise), each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement, any Note and with respect to any Letter of Credit to the same
extent as if the amount of its participating interest were owing directly to it
as a Bank under this Agreement or such Note; PROVIDED that such right of setoff
shall be subject to the obligation of each Participant to share with the Banks,
and the Banks agree to share with each Participant, as provided in SECTION 7.5.
The Company also agrees that each Participant shall be entitled to the benefits
of SECTION 7.6 and SECTION 8 as if it were a Bank (provided that no Participant
shall receive any greater compensation pursuant to SECTION 7.6 or SECTION 8 than
would have been paid to the participating Bank if no participation had been
sold).
14.10 GOVERNING LAW. This Agreement and each Note shall be a contract
made under and governed by the internal laws of the State of Illinois. Whenever
possible each provision of this Agreement shall be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this
Agreement shall be prohibited by or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or the remaining provisions of this
Agreement. All obligations of the Company and rights of the Agent, the Banks and
any other holder of a Note expressed herein or in any other Loan Document shall
be in addition to and not in limitation of those provided by applicable law.
14.11 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement.
14.12 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Company, the Banks and the Agent and their
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respective successors and assigns, and shall inure to the benefit of the
Company, the Banks and the Agent and the successors and assigns of the Banks and
the Agent.
14.13 INDEMNIFICATION BY THE COMPANY.
(a) In consideration of the execution and delivery of this Agreement by
the Agent and the Banks and the agreement to extend the Commitments provided
hereunder, the Company hereby agrees to indemnify, exonerate and hold the Agent,
each Bank and each of the officers, directors, employees, Affiliates and agents
of the Agent and each Bank (each a "BANK PARTY") free and harmless from and
against any and all actions, causes of action, suits, losses, liabilities,
damages and expenses, including reasonable attorneys' fees and charges and
allocated costs of staff counsel (collectively, for purposes of this SECTION
14.13, called the "INDEMNIFIED LIABILITIES"), incurred by the Bank Parties or
any of them as a result of, or arising out of, or relating to (i) any tender
offer, merger, purchase of stock, purchase of assets or other similar
transaction financed or proposed to be financed in whole or in part, directly or
indirectly, with the proceeds of any of the Loans, (ii) the use, handling,
release, emission, discharge, transportation, storage, treatment or disposal of
any hazardous substance at any property owned or leased by the Company or any
Subsidiary, (iii) any violation of any Environmental Laws with respect to
conditions at any property owned or leased by the Company or any Subsidiary or
the operations conducted thereon, (iv) the investigation, cleanup or remediation
of offsite locations at which the Company or any Subsidiary or their respective
predecessors are alleged to have directly or indirectly disposed of hazardous
substances or (v) the execution, delivery, performance or enforcement of this
Agreement or any other Loan Document by any of the Bank Parties, except for any
such Indemnified Liabilities arising on account of any such Bank Party's gross
negligence or willful misconduct. If and to the extent that the foregoing
undertaking may be unenforceable for any reason, the Company hereby agrees to
make the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. Nothing set
forth above shall be construed to relieve any Bank Party from any obligation it
may have under this Agreement.
(b) All obligations provided for in this SECTION 14.13 shall survive
repayment of the Loans, cancellation of the Notes, any foreclosure under, or any
modification, release or discharge of any or all of the Collateral Documents and
any termination of this Agreement.
14.14 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN
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CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF ILLINOIS OR IN THE UNITED
STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS; PROVIDED, HOWEVER,
THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY
BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE COMPANY HEREBY EXPRESSLY AND
IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE STATE OF ILLINOIS
AND OF THE UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS
FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY FURTHER
IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF ILLINOIS. THE
COMPANY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT THE COMPANY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR
NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR
OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, THE COMPANY HEREBY
IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS.
14.15 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE AGENT AND EACH BANK
HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO
ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT, ANY NOTE, ANY OTHER LOAN
DOCUMENT AND ANY AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH
MAY IN THE FUTURE BE DELIVERED IN CONNECTION HEREWITH OR THEREWITH OR ARISING
FROM ANY BANKING RELATIONSHIP EXISTING IN CONNECTION WITH ANY OF THE FOREGOING,
AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND
NOT BEFORE A JURY.
77
Delivered at Chicago, Illinois, as of the day and year first above written.
U S LIQUIDS INC.
By
Title
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, as Agent
By
Title
BANK OF AMERICA NATIONAL TRUST AND
SAVING ASSOCIATION, as Issuing Bank,
as Swing Line Bank and as a Bank
By
Title
▇▇▇▇▇ FARGO BANK, N.A., individually and
as Co-Agent
By
Title
78
BANKBOSTON, N.A., individually and
as Co-Agent
By
Title
79
