EXHIBIT 10.63
FIFTH AMENDMENT TO CREDIT AGREEMENT AND COMPOSITE
AMENDMENT AGREEMENT
THIS FIFTH AMENDMENT TO CREDIT AGREEMENT AND COMPOSITE
AMENDMENT AGREEMENT ("Amendment") is made and entered into as of this 9th day of
December, 2000 (the "Fifth Amendment Date") by and among HI-RISE RECYCLING
SYSTEMS, INC., a Florida corporation ("Hi-Rise"), IDC ACQUISITION SUB, INC., a
New York corporation ("IDC"), ▇▇▇▇▇▇▇▇▇ COMPANY, INC., an Ohio corporation
("▇▇▇▇▇▇▇▇▇"), RECYCLTECH ENTERPRISES INC., an Ontario corporation
("Recycltech"), HESCO SALES, INC., a Florida corporation ("Hesco"), UNITED TRUCK
AND BODY CORPORATION, a Florida corporation ("United Truck"), HESCO EXPORT
CORPORATION, a Florida corporation ("Hesco Export"), BES-PAC, INC., formerly
known as BPI ACQUISITION CORP., a South Carolina corporation ("Bes-Pac
Acquisition Corp."), and DII ACQUISITION CORP., a Connecticut corporation
("▇▇▇▇▇▇ Acquisition Corp.") (Hi-Rise, IDC, ▇▇▇▇▇▇▇▇▇, Recycltech, Hesco, United
Truck, Hesco Export, Bes-Pac Acquisition Corp and ▇▇▇▇▇▇ Acquisition Corp. are
sometimes collectively referred to herein as the "Borrowers" and individually as
a "Borrower"); ACME CHUTE COMPANY, INC., a Florida corporation ("Acme Chute"),
▇▇▇▇▇▇ INDUSTRIES, INC., a Connecticut corporation ("▇▇▇▇▇▇"), ECOLOGICAL
TECHNOLOGIES, INC., a Connecticut corporation ("Eco"), KE CORPORATION, a
Delaware corporation ("▇▇▇▇▇▇▇ Acquisition Corp."), and AMERICAN GOOSENECK,
INC., an Arizona corporation ("American Gooseneck") (Acme Chute, DeVivo, Eco,
▇▇▇▇▇▇▇ Acquisition Corp. and American Gooseneck are sometimes collectively
referred to herein as the "Subsidiary Guarantors" and, together with the
Borrowers, the "Credit Parties"); GENERAL ELECTRIC CAPITAL CORPORATION, a New
York corporation (in its individual capacity, "GE Capital"), BANK OF AMERICA,
N.A., successor in interest to NATIONSBANK, N.A., a national banking association
(in its individual capacity, "NationsBank"), KEY CORPORATE CAPITAL, INC., (in
its individual capacity, "KCCI"), the other Lenders signatory hereto from time
to time, GENERAL ELECTRIC CAPITAL CORPORATION, as Administrative Agent for the
Lenders ("Administrative Agent"), and BANK OF AMERICA, N.A., successor in
interest to NATIONSBANK, N.A., as Revolver Agent for the Lenders ("Revolver
Agent" and, together with Administrative Agent, "Agents").
W I T N E S S E T H
WHEREAS, Borrowers, GE Capital, Nationsbank, KCCI and Agents
have entered into that certain Credit Agreement, dated as of October 28, 1998
(the "Credit Agreement"), as amended by that certain First Amendment to Credit
Agreement and Composite Amendment Agreement, dated as of September 17, 1999 (the
"First Amendment"), that certain Second Amendment to Credit Agreement and
Composite Amendment Agreement dated as of June 30, 2000 (the "Second
Amendment"), that certain Third Amendment to Credit Agreement and Composite
Amendment Agreement dated as of October 19, 2000 (the "Third Amendment"), and
that certain Fourth Amendment to Credit Agreement and Composite Amendment
Agreement dated as of December 4, 2000 (the "Fourth Amendment") pursuant to
which Credit Agreement the Lenders extended revolving and term credit facilities
to the Borrowers of up to Sixty-Three Million and No/100 Dollars
($63,000,000.00) in the aggregate for the purpose of funding certain
Acquisitions and refinancing certain indebtedness of the Borrowers, to provide
working capital financing for the Borrowers and to finance capital expenditures
of the Borrowers; and
WHEREAS, the parties desire to amend the Availability Covenant
provided for in the Fourth Amendment.
NOW THEREFORE, in consideration of the premises, and in
reliance thereon, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree as
follows:
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Article 1
RECITATIONS; DEFINITIONS
Section 1.1 Recitations. Each of the Credit Parties hereby jointly and
severally confirms the truth and accuracy of each of the preambles and recitals
set forth in the introduction to this Amendment and agrees that each of the
preambles and recitals set forth in the introduction to this Amendment are
incorporated herein by reference and are and shall be deemed to be a part of
this Amendment as if fully set forth herein.
Section 1.2 Definitions. Capitalized terms not otherwise defined in
this Amendment shall have the meaning ascribed thereto in the Credit Agreement.
Article 2
AMENDMENTS TO CREDIT AGREEMENT
Article 3
Section 3.1 Availability Covenant. The definition of "Availability
Covenant" is hereby amended to read as follows:
"Availability Covenant" shall mean that commencing November 30, 2000
and on the last day of each calendar month thereafter, the sum of (i)
the positive difference, if any, of the outstanding balance of the
aggregate Revolving Loan (Revolver A) less the Borrowing Base (Revolver
A) and (ii) the positive difference, if any, of the outstanding balance
of the aggregate Revolving Loan (Revolver B) less the Borrowing Base
(Revolver B), shall be not more than $14,333,000.
Section 3.2 Certain Definitions.
3.2.1 All references in the Credit Agreement to "this
Agreement," "herein," hereof" or sections thereof shall be deemed to mean
references to the Credit Agreement as amended by this Amendment.
3.2.2 The definition of "Loan Documents" is hereby amended to
include the Credit Agreement, as amended by this Amendment, together with all
other documents and instruments heretofore, contemporaneous herewith or from
time to time hereafter executed and delivered to or in favor of the
Administrative Agent, the Revolver Agent and/or the Lenders, or any one or more
of them, in connection with the Credit Agreement, as amended by this Amendment,
and/or evidencing and/or securing all or any portion of the obligations and
indebtedness of the Borrowers, and each of them, to the
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Lenders and the Agents under the Credit Agreement, as amended by this Amendment,
together with any and all modifications, renewals and replacements therefor made
from time to time.
Article 4
COMPOSITE AMENDMENT
Section 4.1 Additional Definitions. All references in each of the Loan
Documents to the "Agreement" and the "Credit Agreement" shall mean the Credit
Agreement, as amended by this Amendment, and all modifications, amendments and
extensions thereto from time to time.
Section 4.2 Ratification. The parties hereto agree that the Collateral
Documents, and each of them, secure, in addition to all obligations presently
secured thereby, the full and timely payment performance by the Borrowers, and
each of them, of their respective obligations and indebtedness under and in
respect of the Credit Agreement, as amended by this Amendment, including,
without limitation, the repayment of the Notes, as the same may be consolidated,
amended and restated, in each case whether presently existing or hereafter
created or incurred, all of which obligations are and shall be equally secured
with and have the same priority as the obligations originally secured by the
Collateral Documents, and each of them, provided that nothing herein shall be
deemed or construed to mean that the Collateral Documents by their own terms do
not presently secure such obligations and indebtedness.
Article 5
CREDIT PARTY ACKNOWLEDGMEnts
Section 5.1 Indebtedness. The principal amount outstanding under the
Notes as of the date hereof, is as set forth on the schedule attached hereto as
Schedule "1".
Section 5.2 No Offsets or Defenses. As a material inducement to Lenders
and Agents to enter into this Agreement, each of the Borrowers and Subsidiary
Guarantors hereby acknowledges and agrees that the Indebtedness and all Loan
Documents are valid and binding liabilities and obligations of each Borrower and
Subsidiary Guarantors. Each of the Credit Parties hereby jointly and severally
ratifies and confirms each of their respective obligations and indebtedness
under the Credit Agreement and represents and warrants to the Lenders and the
Agents that none of them has or claims any defenses, offsets or counterclaims to
any of their respective obligations and indebtedness under the Credit Agreement
or any of the other Loan Documents, in each case as amended by this Amendment.
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Section 5.3 No Waiver or Estoppel. None of this Amendment or any
negotiations or other action undertaken with respect to the Loans shall
constitute a waiver of any party's rights under the Loan Documents, except to
the extent specifically stated herein or in another written agreement executed
by all of the parties to this Amendment. In addition, except as expressly
provided in this Amendment, none of this Amendment or any negotiations or other
action undertaken with respect to the Loans shall restrict, inhibit or estop
Lenders or Agents from exercising any right, remedy or power available to such
party at any time (whether or not negotiations are continuing) including all
rights, remedies and powers granted under the Loan Documents or otherwise
available at law or in equity, or require any delay in the exercise of any such
right, remedy or power, but subject to the terms and conditions of the Loan
Documents. The Credit Parties agree that no failure to exercise and no delay in
exercising any rights, remedies, and powers under the Loan Documents or
otherwise available at law or in equity shall operate as a waiver of any such
rights, remedies or powers, including the right to charge interest at the
Default Rate on all outstanding amounts from the time of the Pending Defaults or
the date of any advance of Term Loan C, as applicable.
Section 5.4 Partial Payments. The Credit Parties acknowledge that any
partial payments made, either before or after the execution of this Amendment,
may be applied to the Notes in partial satisfaction of the Obligations and that
neither the acceptance nor application by Agents or Lenders of any partial
payment shall constitute a cure or waiver of any default under any of the Loan
Documents, constitute any extension or other modification of the Loans or any
Loan Document, or prejudice any of Lenders' rights under any Loan or any Loan
Documents.
Section 5.5 Representations and Warranties. Each of the Credit Parties
hereby jointly and severally represents and warrants that, except as set forth
on Schedule 2 hereto, each of the representations and warranties of the Credit
Parties, and each of them, set forth in the Credit Agreement and in each of the
other Loan Documents, in each case as amended by this Amendment, is true and
correct as of the date hereof and other than the Pending Defaults, no Default or
Event of Default has occurred and is continuing under the Credit Agreement or
any of the other Loan Documents, in each case as amended by this Amendment.
Section 5.6 No Litigation. The Credit Parties hereby represent and
warrant to Administrative Agent and the Lenders that, except as set forth on
Schedule 2 hereto, no litigation, investigation or proceeding before or by an
arbitrator or Governmental Authority is continuing or, to the knowledge of any
Credit Party, threatened against the Credit Parties, or any of them, or any of
their officers, directors or Affiliates (i) with respect to the Credit
Agreement, as amended by this Amendment, the Notes, or any of the other Loan
Documents, in each case as amended by this Amendment, or any of the transactions
contemplated hereby or thereby, or (ii) which could have a Material Adverse
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Effect on the Business, prospects or financial condition of the Credit Parties,
or any of them.
Article 6
Additional Covenants
Section 6.1 Waiver of the Automatic Stay.
6.1.1 The Credit Parties hereby agree that, in consideration
for this Amendment in the event that any Borrower or Subsidiary Guarantor shall
(i) file with any bankruptcy court of competent jurisdiction or be the subject
of any petition under Title 11 of the U.S. Code, as amended ("Bankruptcy Code"),
(ii) be the subject of any order for relief issued under the Bankruptcy Code,
(iii) file or be the subject of any petition seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution, or similar
relief under any present or future federal or state act or law relating to
bankruptcy, insolvency, or other relief for debtors, (iv) have sought or
consented to or acquiesced in the appointment of any trustee, receiver,
conservator, or liquidator, or (v) be the subject of an order, judgment or
decree entered by any court of competent jurisdiction approving a petition filed
against Credit Parties for any reorganization, arrangement, composition,
readjustment, liquidation, dissolution, or similar relief under any present or
future federal or state act or law relating to bankruptcy, insolvency or relief
for debtors (any of the foregoing clauses (i) - (v) being a "Filing"), then,
subject to court approval, Agents and Lenders shall thereupon be entitled and
the Credit Parties hereby irrevocably consent to and agree to stipulate to
relief from any automatic stay imposed by Section 362 of the Bankruptcy Code, or
otherwise, on or against the exercise of the rights and remedies otherwise
available to Lenders as provided in the Loan Documents, and as otherwise
provided by law, and Credit Parties hereby irrevocably waive any rights to
object to such relief. This covenant is a material inducement for Lenders to
accept this Amendment.
6.1.2 Lenders, Agents and Credit Parties shall cooperate in
defending the validity of the transactions contemplated by the Credit Agreement,
this Amendment or any of the other Loan Documents in any court, administrative
or judicial proceeding.
Section 6.2 Release. Credit Parties hereto desire to fully comprise,
release and settle any and all claims, counterclaims, liabilities, damages,
defenses, demands and causes of action that Credit Parties have or may have
against the Agents or Lenders related to or that may have arisen, may arise or
are or become assertable as a result of events occurring in connection with the
Lending Relationship (as defined below), including any claims, causes of action
or defenses based on the negligence of Agents or Lenders or on any "lender
liability" theories of, among others, bad faith, unfair dealings, duress,
coercion, control, misrepresentation, omission, misconduct, overreaching,
unconscionability, disparate bargaining position, reliance, equity
subordination, fraud,
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failure of consideration in whole or in part, or otherwise, and do hereby intend
to release, compromise and settle all such claims and matters, whether known or
unknown, whether reduced to judgment, liquidated or unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured
or unsecured and whether they arose collaterally, directly, derivately, or
otherwise between the Credit Parties on the one hand, and Agents or Lenders, on
the other hand (collectively, the "Released Claims"). The Credit Parties hereby
stipulate, agree, covenant, warrant and represent unto the Lenders and Agents
that no Borrower or Subsidiary Guarantor has any outstanding claims,
counterclaims, liabilities, damages, defenses, demands or causes of action
against any Lender or Agent and their respective successors, assigns, directors,
officers, employees, agents and/or attorneys. The Credit Parties do hereby
unconditionally forever release, acquit, settle and discharge each Agent and
Lender, and their respective successors, assigns, directors, officers,
employees, agents and attorneys of and from the Released Claims and Credit
Parties hereby declare the Released Claims forever released, acquitted, settled
and discharged. As used herein, the term "Lending Relationship" shall mean a
collective reference to the Notes, any Loan, Collateral Documents, Guaranties,
or any other Loan Documents, together with any and all negotiations,
discussions, acts, omissions, renewals, extensions, collateral documents, loan
agreements, term sheets and other agreements and actions related thereto.
Article 7
MISCELLANEOUS
Section 7.1 Free and Voluntary Act. All Borrowers and Subsidiary
Guarantors are freely and voluntarily entering into this Amendment and will
enter into any document necessary to fulfill the agreements contemplated herein
after full consultation with legal, financial and other counsel of their
choosing. Each Borrower and Subsidiary Guarantor has individually read this
Amendment and has discussed this Amendment with its respective legal, financial
and other counsel. All Borrowers and the Subsidiary Guarantors understand this
Amendment and the risk inherent in, and significance of, same.
Section 7.2 No Implied Terms. Any and all duties or obligations that
Agents and Lenders may have to any Borrower or Subsidiary Guarantor, are limited
to those expressly stated in the Loan Documents as amended hereby, and neither
the duties and obligations of Lenders and Agents nor the rights of the Credit
Parties shall be expanded beyond the express terms of the Loan Documents as so
amended.
Section 7.3 Fair Consideration. Agents' and Lenders' agreements
contained herein constitute valuable, adequate and fair consideration for the
obligations of the Credit Parties hereunder.
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Section 7.4 No Lender Control. No Lender will, nor has ever been, a
partner, joint venturer, alter ego, manager, or controlling person of any of the
Credit Parties.
Section 7.5 No Other Representation. The Credit Parties acknowledge and
agree that no Agent, Lender or any person or entity acting on their behalf has
made any representation or promise to any Borrower or Subsidiary Guarantor which
is not expressly set forth herein or in the other Loan Documents.
Section 7.6 Captions. The captions and headings used in this Amendment
are for convenience of reference only and do not in any way affect, limit,
amplify or modify the terms and provisions of this Amendment.
Section 7.7 Counterpart Execution. This Amendment may be executed in
several counterparts, each of which shall constitute an original, but together
such counterparts shall constitute one and the same instrument.
Section 7.8 Successors and Assigns. This Amendment shall inure to the
benefit of and be binding upon the parties hereto and their permitted legal
representatives, heirs, successors and assigns.
Section 7.9 Time; Construction; Exhibits. Time is of the essence of
each provision of this Amendment. All references to the singular or plural
number or masculine, feminine or neuter gender shall, as the context requires,
include all others. All exhibits attached hereto are by this reference made a
part of this Amendment for all purposes. All references to sections, paragraphs,
and exhibits are to this Amendment unless otherwise specifically noted. The use
of the words "hereof", "hereunder", "herein" and words of similar import shall
refer to this entire Agreement and not to any particular section, paragraph or
portion of this Amendment unless otherwise specifically noted. All references to
"including" shall mean "including without limited to."
Section 7.10 Severability. If for any reason any provision of this
Amendment shall be held to be invalid, illegal or unenforceable, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 7.11 Authority. Each individual executing this Amendment on
behalf of any party to this Amendment represents and warrants that he or she is
authorized to enter into this Amendment on behalf of that party and that this
Amendment binds that party.
Section 7.12 Parties in Interest. Nothing in this Amendment is intended
to confer any rights or remedies under or by reason of this Amendment on any
person other than the parties hereto and their respective permitted successors
and assigns, nor is anything in this Amendment intended to relieve or discharge
any obligation of any third
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person or any party hereto or to give any third person any right to subrogation
or action over or against any party to this Amendment.
Section 7.13 Further Assurances. The Credit Parties shall, at their own
expense, execute, acknowledge and deliver any further assignments, conveyances,
transfers or other assurances, documents or instruments reasonably requested by
any Agent and will take any other action consistent with the terms of this
Amendment or which may reasonably be requested by any Agent in order to
accomplish and effectuate the intent hereof.
Section 7.14 Expenses; Documentary Stamp Taxes. The Credit Parties
shall pay all costs and expenses incurred by Lenders or Agents in connection
with the execution and delivery of this Amendment. This Amendment has been
executed and delivered outside the State of Florida and are not intended to be
brought into the State of Florida except for collection purposes. It is the
parties understanding that no Florida documentary stamp tax levied pursuant to
Chapter 201 of the Florida statutes is due with respect to this Amendment.
However, the Credit Parties agree to indemnify the Lenders and Agents and hold
them harmless from and against any losses, costs or expense, and hereby agree to
pay any and all stamps, duties and taxes, together with any penalty that any
Lender or Agent may be called upon to pay in the event the Florida Department of
Revenue or any other governmental agency should in the future determine that any
such amounts have been, are or will at any time in the future become due and
payable.
Section 7.15 Law Governing; Consent to Jurisdiction. EXCEPT AS
OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS,
INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THE LOAN
DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS
MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE LAWS OF THE UNITED STATES OF
AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL
COURTS LOCATED IN ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ SHALL HAVE
EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THE
CREDIT PARTIES, AGENTS AND LENDERS PERTAINING TO THIS AMENDMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS
AMENDMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENTS, LENDERS AND
THE CREDIT PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE
HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK COUNTY, CITY OF NEW YORK, NEW YORK
AND, PROVIDED, FURTHER, NOTHING IN THIS AMENDMENT SHALL BE DEEMED OR OPERATE TO
PRECLUDE ADMINISTRATIVE AGENT
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FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO
REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO
ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF ADMINISTRATIVE AGENT. EACH
CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN
ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
WAIVES ANY OBJECTION WHICH SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF
PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY
CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED
APPROPRIATE BY SUCH COURT. EACH CREDIT PARTY HEREBY WAIVES PERSONAL SERVICE OF
THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND
AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY
REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET
FORTH IN THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED
UPON THE EARLIER OF SUCH CREDIT PARTY'S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS
AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.
Section 7.16 WAIVER OF JURY TRIAL. AGENTS, LENDERS, BORROWERS AND
SUBSIDIARY GUARANTORS DO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
THE RIGHT WHICH THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AMENDMENT, THE
EXHIBITS, ANY TRANSACTION CONTEMPLATED HEREIN, OR ANY COURSE OF DEALING,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY ARISING OUT OF OR
RELATED IN ANY MANNER WITH THIS AMENDMENT, ANY NOTE, ANY LOAN OR THE COLLATERAL
(INCLUDING, WITHOUT LIMITATION, ANY ACTION TO RESCIND OR CANCEL THIS AMENDMENT
AND ANY CLAIMS OR DEFENSES ASSERTING THAT THIS AMENDMENT WAS FRAUDULENTLY
INDUCED OR IS OTHERWISE VOID OR VOIDABLE). THIS WAIVER BY LENDERS, BORROWERS AND
SUBSIDIARY GUARANTORS IS A MATERIAL INDUCEMENT FOR AGENTS AND LENDERS TO ENTER
INTO THIS AMENDMENT.
[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY]
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IN WITNESS WHEREOF, this Amendment was made and executed as of the date
first above written.
BORROWERS: HI-RISE RECYCLING SYSTEMS,
INC., a Florida corporation
IDC ACQUISITION SUB, INC., a New
York corporation
▇▇▇▇▇▇▇▇▇ COMPANY, INC., an
Ohio corporation
RECYCLTECH ENTERPRISES INC.,
an Ontario corporation
HESCO SALES, INC., a Florida
corporation
BES-PAC, INC., formerly known as BPI
ACQUISITION CORP., a South Carolina
corporation
DII ACQUISITION CORP., a
Connecticut corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO and Chairman of the
Board
ACME CHUTE COMPANY, INC., a
Florida corporation
▇▇▇▇▇▇ INDUSTRIES, INC., a
Connecticut corporation
ECOLOGICAL TECHNOLOGIES,
INC., a Connecticut corporation
KE CORPORATION, a Delaware
corporation
AMERICAN GOOSENECK, INC., an
Arizona corporation
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇
Title: CEO and Chairman of the Board
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LENDERS: GENERAL ELECTRIC CAPITAL
CORPORATION, as Administrative
Agent and as Lender
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇
Title: Risk Manager
BANK OF AMERICA, N.A., successor in
interest to NATIONSBANK, N.A., as
Revolver Agent and as Lender
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Vice President
KEY CORPORATE CAPITAL, INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title: Designated Signer
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SCHEDULE 1
CURRENT OUTSTANDING BALANCES
(as of November 30, 2000)
Revolving Notes (Revolver A) including $18,469,423.28
Swing Line Notes (Revolver A)
Revolving Notes (Revolver B) including $7,248,298.95
Swing Line Notes (Revolver B)
Term Notes A $4,333,333.35
Term Notes B $9,000,000.00
Term Note C $0.00
Acquisition Loan Notes $14,372,005.70
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SCHEDULE 2
POTENTIAL DEFAULTS
CREDIT PARTIES DISCLOSURE SCHEDULE
Dated as of December 14, 2000
In connection with the Fifth Amendment to Credit Agreement and
Composite Amendment Agreement, dated as of December 9, 2000, by and among the
Credit Parties, the Lenders and the Agents, attached hereto are certain sections
of the disclosure schedule (the "Disclosure Schedule") to the Fifth Amendment
prepared by the Credit Parties. Capitalized terms not otherwise defined herein
but defined in the Fifth Amendment shall have the meaning set forth in the Fifth
Amendment.
Any fact or item stated in any section of the Disclosure Schedule shall
be deemed to be disclosed on any other section or sections of the Disclosure
Schedule, notwithstanding the omission of a reference or cross-reference
thereto.
The inclusion of any information in the Disclosure Schedule shall not
be deemed an admission or acknowledgment, in and of itself, that such
information is required to be listed in the Disclosure Schedule or that any such
items are material to the Credit Parties.
The headings of the sections of the Disclosure Schedule are inserted
for convenience only and shall not be deemed to constitute a part thereof or a
part of the Fifth Amendment.
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Schedule 2
Representations and Warranties and Litigation
The representations and warranties contained in Sections 3.13, 3.17 and 3.21 of
the Credit Agreement are qualified by the following exceptions:
▇▇▇▇▇▇ Environmental Matters
In February 1999, Hi-Rise acquired all of the outstanding capital stock of
▇▇▇▇▇▇. ▇▇▇▇▇▇ had been operating four paint spray booths to paint its products
since 1985. Two Notices of Violation were issued by the Connecticut Department
of Environmental Protection (the "DEP"), one for construction of the booths and
one for their operation. In addition, a third Notice of Violation was issued by
the DEP for ▇▇▇▇▇▇'▇ failure to have submitted an application permit under Title
V of the Clean Air Act.
On or about July 31, 2000, the Commissioner of Environmental Protection for the
State of Connecticut (the "Plaintiff") brought an action in Superior Court,
Judicial District of Hartford, State of Connecticut, against ▇▇▇▇▇▇ alleging
that ▇▇▇▇▇▇ violated several provisions of Connecticut law by its failure to
obtain the permits relating to its construction, installation and operation in
1986 and 1994 of those paint spray booths used in its manufacturing processes.
The Plaintiff is seeking civil penalties not to exceed $25,000 per day for each
day of violation on or after October 1, 1990 and civil penalties not to exceed
$1,000 per day for each day of violation prior to October 1, 1990. The Credit
Parties believe that they are entitled to be indemnified for substantially all
liability for this action by the former shareholders of ▇▇▇▇▇▇ pursuant to the
terms and conditions of the Stock Purchase Agreement dated as of February 23,
1999, by and among Hi-Rise Recycling Systems, Inc., DII Acquisition Corp.,
▇▇▇▇▇▇, Ecological Technologies and the shareholders of ▇▇▇▇▇▇.
▇▇▇▇▇▇ has submitted applications for the necessary permits.
▇▇▇▇▇ Diesel International, Inc. v. Mirage on the Gulf, Ltd., et. al, Case No.
00-36-3061CA, ▇▇▇▇▇▇▇ County, Florida Circuit Court
Hi-Rise is named as a defendant in this case. ▇▇▇▇▇ Diesel, the general
contractor, is suing the owner, Mirage, for non-payment of the sums due under
the general contract. Hi-Rise has filed a claim of lien against the subject
property. ▇▇▇▇▇ Diesel alleges that ▇▇▇▇▇ Diesel's interests are superior to the
lien held by Hi-Rise and seeks to foreclose the Hi-Rise lien. An amended
complaint was served on Hi-Rise on November 14, 2000.
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▇▇▇▇▇▇ Steel, Inc. v. Hi-Rise Recycling Systems, Inc. and ▇▇▇▇▇▇ Industries,
Case No. 00-29876 CA24, Miami-Dade County, Florida Circuit Court
▇▇▇▇▇▇ Steel filed suit on November 14, 2000 alleging non-payment of $58,396.87.
[Note: The previous suit filed by ▇▇▇▇▇▇ Steel in federal court was voluntarily
dismissed without prejudice. ▇▇▇▇▇▇ Steel then re-filed in state court.]
Reliance MetalCenter v. Hi-Rise Recycling Systems, Inc., United States District
Court, Southern District of Florida, Case No. 00-14293-CIV-▇▇▇▇▇/▇▇▇▇▇
Reliance filed suit on October 2, 2000 alleging non-payment of $364,536.05 for
metal products previously delivered to Hi-Rise and AG Products, Inc.
The Permite Corporation v. Hesco Sales, Inc., Case ▇▇. ▇▇-▇▇▇▇▇ ▇▇ ▇▇,
▇▇▇▇▇-▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ Circuit Court
The Permite Corporation filed suit on or about November 20, 2000 alleging
non-payment of $48,844.41 for goods and merchandise.
The representations and warranties set forth in Section 3.5 are qualified by the
following exceptions:
The Pending Defaults, the litigation and environmental matters described above
could have a Material Adverse Effect.
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Covenants
The Credit Parties may be in breach of certain covenants set forth in Sections
5.8 and 6.11 of the Credit Agreement due to the ▇▇▇▇▇▇ Environmental Matters
referenced above.
In addition, the Credit Parties may be in breach of the following covenants:
Section 5.2 - Payment of Obligations
Hi-Rise files its income tax returns on a consolidated basis that
includes the other Credit Parties. Hi-Rise has not made any payments
with respect to its outstanding consolidated income tax liability
incurred for the fiscal year ended December 31, 1999 because it
anticipates that it will receive a refund for fiscal year ending
December 31, 2000 due to losses incurred during that fiscal year.
Hi-Rise intends to accrue penalties and interest up until the date on
which the refund is paid to it and allow a portion of that refund to be
used to pay the outstanding income tax liability and the accompanying
penalties and interest.
The Credit Parties owe payment for lawful claims for labor, materials,
supplies and services which have been provided by certain vendors of
the Credit Parties and are past due.
Section 5.6 - Supplemental Disclosure
The Credit Parties have not timely supplemented each Disclosure
Schedule to the Credit Agreement to disclose matters which, if existing
or occurring at the date of the Credit Agreement, would have been
required to be set forth or described in such Disclosure Schedule to
the Credit Agreement or which was necessary to correct any information
in such Disclosure Schedule or representation to the Credit Agreement.
The Credit Parties have now supplied to Lenders the information that
would have been required to have been so disclosed.
Section 5.9 - Landlords' Agreements, Mortgage Agreements and Bailee
Letters
The Credit Parties have not yet obtained landlord agreements with
respect to certain parcels of land which are leased by the Credit
Parties which would contain a waiver or subordination of all Liens or
claims that the landlord may assert against the Inventory or Collateral
at that location.
Section 6.10 - Financial Covenants
The Credit Parties are not in compliance with any of the financial
covenants.
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