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EXHIBIT 4.1
REVOLVING CREDIT AGREEMENT
dated July 10, 1998
among
KTI, Inc. and the Subsidiary Borrowers,
Jointly and Severally as the Borrower
KEYBANK NATIONAL ASSOCIATION,
and the other financial institutions
party hereto, as Lenders
and
KEYBANK NATIONAL ASSOCIATION, as Agent
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TABLE OF CONTENTS
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ARTICLE 1. DEFINITIONS........................................................1
Section 1.1 Defined Terms.............................................1
Section 1.2 Other Definitional Provisions............................19
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS...................................20
Section 2.1 Revolving Credit Commitments.............................20
Section 2.2 Revolving Credit Notes...................................20
Section 2.3 Procedure for Revolving Credit Borrowings................21
Section 2.4 Commitment Fees/Letter of Credit Fees....................22
Section 2.5 Termination or Reduction of Commitments..................23
Section 2.6 Prepayments..............................................23
Section 2.7 Conversion and Continuation Options......................24
Section 2.8 Minimum Amounts of Tranches..............................25
Section 2.9 Interest Rates and Payment Dates.........................25
Section 2.10 Inability to Determine Interest Rate.....................26
Section 2.11 Payments/Funding.........................................27
Section 2.12 Change in Legality.......................................28
Section 2.13 Increased Costs..........................................29
Section 2.14 Indemnity................................................32
Section 2.15 Letters of Credit........................................33
Section 2.16 Purpose of Loans.........................................37
ARTICLE 3 REPRESENTATIONS AND WARRANTIES.....................................37
Section 3.1 Financial Condition......................................37
Section 3.2 No Material Adverse Change...............................38
Section 3.3 Corporate Existence; Compliance with Law.................38
Section 3.4 Corporate Power; Authorization; Enforceable Obligations..39
Section 3.5 No Legal Bar.............................................40
Section 3.6 No Material Litigation...................................40
Section 3.7 No Default...............................................40
Section 3.8 Ownership of Property; Liens.............................41
Section 3.9 Intellectual Property....................................41
Section 3.10 No Burdensome Restrictions...............................41
Section 3.11 Taxes....................................................41
Section 3.12 Federal Regulations......................................42
Section 3.13 Investment Company Act; Public Utility Holding Company
Act; Other Regulations...................................42
Section 3.14 Subsidiaries.............................................42
Section 3.15 Employee Grievances......................................42
Section 3.16 ERISA....................................................42
Section 3.17 Solvency.................................................44
Section 3.18 Year 2000 Compliance.....................................44
Section 3.19 Disclosure...............................................44
ARTICLE 4 CONDITIONS PRECEDENT...............................................44
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Section 4.1 Conditions to Effective Date.............................44
Section 4.2 Conditions to Each Loan..................................46
ARTICLE 5 AFFIRMATIVE COVENANTS..............................................46
Section 5.1 Financial Statements.....................................47
Section 5.2 Certificates; Other Information..........................47
Section 5.3 Payment of Obligations...................................48
Section 5.4 Conduct of Business and Maintenance of Existence.........48
Section 5.5 Maintenance of Property; Insurance.......................49
Section 5.6 Inspection of Property; Books and Records; Discussions...49
Section 5.7 Notices..................................................50
Section 5.8 ERISA Compliance.........................................50
Section 5.9 MERC.....................................................51
ARTICLE 6 NEGATIVE COVENANTS.................................................52
Section 6.1 Limitation on Indebtedness...............................52
Section 6.2 Limitation on Liens......................................53
Section 6.3 Limitation on Contingent Obligations.....................54
Section 6.4 Limitations on Fundamental Changes.......................54
Section 6.5 Limitation on Sale of Assets.............................55
Section 6.6 Limitation on Investments, Loans and Advances............55
Section 6.7 Limitation on Optional Payments and Modifications of
Debt Instruments.........................................58
Section 6.8 Transactions with Affiliates.............................58
Section 6.9 Fiscal Year..............................................58
Section 6.10 Limitation on Conduct of Business........................59
Section 6.11 Interest Coverage Ratio..................................59
Section 6.12 Fixed Charge Coverage Ratio..............................59
Section 6.13 Total Senior Funded Debt to Consolidated Adjusted
EBITDA ..................................................59
Section 6.14 Debt to Capitalization Ratio.............................59
Section 6.15 Limitation on Dividends..................................59
Section 6.16 ERISA Obligations........................................60
Section 6.17 Negative Pledges.........................................60
ARTICLE 7 EVENTS OF DEFAULT..................................................60
Section 7.1 Events of Default........................................60
ARTICLE 8 THE AGENT..........................................................64
Section 8.1 Actions..................................................64
Section 8.2 Exculpation..............................................65
Section 8.3 Successor................................................66
Section 8.4 Credit Decisions.........................................66
Section 8.5 Notices, etc. from Agent.................................66
Section 8.6 Security Documents.......................................67
ARTICLE 9 ASSIGNMENTS/PARTICIPATIONS.........................................67
Section 9.1 Purchasing Lender........................................67
Section 9.2 Participations...........................................69
Section 9.3 Disclosure of Information................................69
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Section 9.4 Pledges to Federal Reserve Bank..........................69
ARTICLE 10 MISCELLANEOUS.....................................................69
Section 10.1 Amendments and Waivers...................................69
Section 10.2 Notices..................................................72
Section 10.3 No Waiver; Cumulative Remedies...........................73
Section 10.4 Survival of Representations and Warranties...............73
Section 10.5 Payment of Expenses and Taxes............................73
Section 10.6 Successors and Assigns...................................75
Section 10.7 Set-off/Sharing..........................................75
Section 10.8 Usury Laws...............................................76
Section 10.9 Counterparts.............................................77
Section 10.10 Severability.............................................77
Section 10.11 Integration..............................................77
Section 10.12 Governing Law............................................77
Section 10.13 Submission To Jurisdiction; Waivers......................77
Section 10.14 Headings; Table of Contents..............................78
Section 10.15 Acknowledgments..........................................78
Section 10.16 Judgement Currency/Withholding Tax.......................78
Section 10.17 Waivers of Jury Trial....................................79
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Exhibits
Exhibit A Revolving Credit Note
Exhibit B Assumption Agreement
Exhibit C Issuance Request
Exhibit D Collateral Assignment
Exhibit E Security Agreement
Exhibit F Stock Pledge Agreement
Exhibit G Form of Standby Letter of Credit
Exhibit H Compliance Certificate
Exhibit I Partnership Pledge
Schedules
Schedule I Commitments
Schedule II Property
Schedule III Consents (Section 3.4)
Schedule IV Litigation (Section 3.6)
Schedule V Intellectual Property (Section 3.9)
Schedule VI Subsidiaries (Section 3.14)
Schedule VII Collective Bargaining Agreements (Section 3.15)
Schedule VIII ERISA (Section 3.16)
Schedule IX Permitted Debt (Section 6.1)
Schedule X Permitted Liens (Section 6.2)
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WMDI01627.002
REVOLVING CREDIT AGREEMENT
REVOLVING CREDIT AGREEMENT, dated July 10, 1998 among KTI, INC.
("KTI"), a New Jersey corporation, and the Subsidiary Borrowers, jointly and
severally as co-obligors (collectively, the "Borrower"), KEYBANK NATIONAL
ASSOCIATION and the other financial institutions now or hereafter a party hereto
(each a "Lender" and, collectively, the "Lenders") and KEYBANK NATIONAL
ASSOCIATION as agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Lenders to make revolving
loans in an aggregate principal amount not exceeding One Hundred Fifty Million
U.S. Dollars (U.S. $150,000,000); and
WHEREAS, the Borrower has requested that the Issuer (as hereinafter
defined) issue standby letters of credit for the account of the Borrower from
time to time prior to the Maturity Date as part of the aggregate principal
amount of the commitment of the Lenders hereunder, but such letters of credit
shall not in any event exceed in the aggregate an available amount of Fifteen
Million U.S. Dollars (U.S. $15,000,000) at any one time outstanding; and
WHEREAS, the Lenders severally agree, upon the terms and conditions
set forth herein, to lend such amounts to, and take participations in such
letters of credit for the account of, the Borrower.
NOW, THEREFORE, in consideration of the premises, and for other good
and valuable consideration, the receipt and adequacy of which are hereby
acknowledged, the Lenders, the Agent and the Borrower hereby agree as follows:
ARTICLE 1. DEFINITIONS
Section 1.1 Defined Terms. As used in this Agreement, the following
terms shall have the following meanings:
"Acquisition" shall mean any transaction or series of transactions
by which KTI acquires, either directly or through an Affiliate or Subsidiary or
otherwise, (x) any or all of the stock or other securities of any class of any
Person or (y) a
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substantial portion of the assets, or a division or line of business of any
Person.
"Affiliate" shall mean as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For purposes of this definition, "control" of a
Person means the power, directly or indirectly, either to (a) vote 10% or more
of the securities having ordinary voting power for the election of directors of
such Person or (b) direct or cause the direction of the management and policies
of such Person whether by contract or otherwise.
"Agent" shall mean (a) KeyBank National Association; or (b) such
other bank or financial institution as shall have been subsequently appointed as
successor Agent pursuant to Section 8.3 of this Agreement.
"Agreement" shall mean this Revolving Credit Agreement, as amended,
supplemented or otherwise modified from time to time.
"Applicable Margin" shall mean a rate per annum determined in
accordance with the Pricing Schedule.
"Assignment and Acceptance" shall have the meaning ascribed thereto
in Section 9.1.
"Assumption Agreement" shall mean an agreement substantially in the
form of Exhibit B hereto (with such modifications and qualifications as are
reasonably acceptable to Agent under the circumstances) to be delivered to Agent
pursuant to Section 6.6(d)(9)
"Available Commitment" shall mean at any time with respect to
Revolving Credit Loans for each Lender, an amount equal to (i) the amount of
such Lender's Commitment at such time to make Revolving Credit Loans minus (ii)
the sum of (a) the aggregate principal amount of all then outstanding Revolving
Credit Loans made by such Lender and (b) the amount of such Lender's Percentage
of the Letter of Credit Outstandings at such time.
"Base Rate" shall mean the rate of interest per annum publicly
announced from time to time by KeyBank as its Prime or Base Rate in effect at
its principal office in Cleveland, Ohio. The Base Rate functions as a reference
rate index and is not intended to be the lowest rate of interest charged by
KeyBank in connection with extensions of credit to debtors. Changes in the rate
of interest on that portion of any Loans maintained as Base Rate Loans and on
Reimbursement Obligations shall become effective as of the opening of business
on the day on which each such change in the Base Rate is established. The Agent
shall
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give notice promptly to the Borrower and the Lenders of changes in the Base
Rate.
"Base Rate Loans" shall mean Loans whose interest rate is based on
the Base Rate.
"Board" shall mean the Board of Governors of the Federal Reserve
System of the United States.
"Borrowing Date" shall mean any Business Day specified in a notice
pursuant to Section 2.3 as a date on which a Borrower requests the Lenders to
make Loans.
"Business Day" shall mean a day other than Saturday, Sunday or other
day on which commercial banks in New York are authorized or required by law to
be closed and, in the case of Eurodollar Loans, a day which is also a Working
Day.
"CAPEX" shall mean for any period, the cost attributed in accordance
with GAAP consistent with those applied in preparation of the financial
statements referred to in Section 5.1 hereof to acquisitions during such period
by KTI and/or its consolidated Subsidiaries of any tangible asset, or
replacements or substitutes therefor or additions thereto which are treated as a
non current asset on such financial statements, including, without limitation,
the acquisition or construction of assets having a useful life of more than one
year, but excluding costs attributed to any Acquisition.
"Capital Lease Obligations" shall mean for any Person for any
period, the obligations of such Person to pay rent and other amounts under any
lease of (or other arrangement conveying the right to use) real or personal
property, or a combination thereof, for such period, which obligations are
required to be classified and accounted for as capital leases on a balance sheet
of such Person under GAAP.
"Capital Stock" shall mean any and all shares, equity interests,
participations or other equivalents (however designated) of capital stock of any
class of a corporation, any membership, partnership or other equivalent
ownership interests in a Person (other than a corporation) and any and all
warrants or options to purchase any of the foregoing.
"Cash Taxes" shall mean, for any period, actual cash expenditures
for payment of taxes by KTI and its consolidated Subsidiaries.
"Change in Control" shall mean the acquisition by any Person, or two
or more Persons acting in concert, of beneficial ownership (within the meaning
of Rule 13d-3 of the Securities and
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Exchange Commission under the Securities Exchange Act of 1934) of greater than
30% of the outstanding shares of voting stock of KTI, provided that KTI's
issuance of stock in connection with the Acquisition of FCR, Inc. shall not be
considered a Change in Control.
"Closing Date" shall mean the date on which the Lenders make the
initial Loan.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Collateral Assignment" shall mean each collateral assignment in the
form of Exhibit D hereto delivered to Agent.
"Commitment" shall mean for each Lender at any time from and
including the Effective Date to but excluding the Maturity Date the amount set
forth opposite such Lender's name in Schedule I under the heading "Commitment"
as such amount may be adjusted pursuant to Sections 2.5 or 9.1 (subject to an
aggregate sublimit for all Lenders of $15,000,000 for Letters of Credit).
"Commonly Controlled Entity" shall mean any entity which is a member
of the same controlled group (within the meaning of Section 414(b) of the Code)
or which is under common control with the Borrower (within the meaning of
Section 414(c) of the Code).
"Consolidated Adjusted EBIT" shall mean for any fiscal period the
sum of (i) Consolidated Net Income (Loss) for such period plus, (ii)
Consolidated Interest Expense, plus (iii) federal, state and local income tax
expense, plus (iv) operating lease expense plus (v) minority interest expense
and plus (vi) noncash extraordinary losses and (without duplication) noncash
losses from discontinued operations less (i) the recognized portion of deferred
revenue less (ii)one time sales of power generation capacity pursuant to
contract restructurings with existing customers, less (iii) extraordinary gains;
less (iv) income from discontinued operations and less (v) cash dividends on
Capital Stock; all computed and calculated for KTI and its Consolidated
Subsidiaries in accordance with GAAP.
"Consolidated Adjusted EBITDA" shall mean, for any fiscal period,
Consolidated Adjusted EBIT for such period plus depreciation and amortization of
intangible assets for KTI and its Consolidated Subsidiaries .
"Consolidated Equity" shall mean at a particular date all amounts
which would be included under shareholders' equity on a consolidated balance
sheet of KTI and its consolidated Subsidiaries determined in accordance with
GAAP at such date.
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"Consolidated Fixed Charges" shall mean, as of the end of any
period, scheduled payments of Indebtedness, (including, without limitation,
payments on Capital Lease Obligations and required sinking fund payments) plus
Consolidated Interest Expense, plus Cash Taxes paid, plus operating lease
expense, plus CAPEX and preferred stock dividends of KTI and its consolidated
Subsidiaries.
"Consolidated Intangibles" shall mean at a particular date, all
assets of KTI, determined on a consolidated basis at such date, that would be
classified as intangible assets in accordance with GAAP, but in any event
including, without limitation, unamortized organization and reorganization
expense, patents, trade or service marks, franchises, trade names and goodwill.
"Consolidated Interest Expense" shall mean, for any period the gross
interest expense paid or required to be paid by KTI and its Subsidiaries in
respect of Indebtedness for such period, determined on a consolidated basis, all
fees payable under credit agreements and any other fees, charges, commissions
and discounts in respect of Indebtedness, other than capitalized, accreted or
pay-in-kind interest expense. For purposes of the foregoing, gross interest
expense shall be determined after giving effect to any net payments made or
received by KTI and its Subsidiaries with respect to rate hedging obligations.
"Consolidated Net Income" shall mean for any period, the
consolidated net income (or net loss) of KTI and its consolidated Subsidiaries
for such period, determined in accordance with GAAP.
"Consolidated Tangible Assets" shall mean, at any time, (a) the
total assets of KTI and its consolidated Subsidiaries as would be shown on a
consolidated balance sheet of KTI and its Consolidated Subsidiaries as of such
time prepared in accordance with GAAP, minus (b) to the extent included in
clause (a), the net book value of all Consolidated Intangibles.
"Consolidated Tangible Net Worth" shall mean at a particular date,
Consolidated Equity minus Consolidated Intangibles as at such date.
"Contingent Obligation" shall mean as to any Person any guarantee of
payment, collection or performance by such Person of any Indebtedness or other
obligation of any other Person, or any agreement to provide financial assurance
with respect to the financial condition, or the payment of the obligations of,
such other Person (including, without limitation, purchase or repurchase
agreements, reimbursement agreements with respect to
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letters of credit or acceptances, grants of security interests to support the
obligations of another Person, keepwell agreements and take-or-pay or
through-put arrangements) which has the effect of assuring or holding harmless
any third Person against loss with respect to one or more obligations of such
other Person; provided, however, that the term Contingent Obligation shall not
include endorsements of instruments for deposit or collection in the ordinary
course of business or indemnities entered into in the ordinary course of
business in connection with the sale of inventory or licensing of intellectual
property or other proprietary information. The amount of any Contingent
Obligation of any Person shall be deemed to be the lower of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made and (b) the maximum amount for which
such contingently liable Person may be liable pursuant to the terms of the
instrument embodying such Contingent Obligation, unless such primary obligation
and the maximum amount for which such contingently liable Person may be liable
are not stated or determinable, in which case the amount of such Contingent
Obligation shall be such contingently liable Person's maximum reasonably
anticipated liability in respect thereof as determined by the contingently
liable Person in good faith.
"Contractual Obligation" shall mean as to any Person, any provision
of any security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
"Controlled Group" shall have the meaning set forth in Section
1563(a) of the Code.
"CPLTD" shall mean for any period, the sum of (i) the current
portion of Capital Lease Obligations of KTI and its consolidated Subsidiaries
and (ii) all other amounts which were, or would be, in conformity with GAAP
included under current portion of long term debt on the consolidated balance
sheet of KTI for the relevant period then ended.
"Default" shall mean any of the events specified in Section 7.1,
whether or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"Dollar" and "$" shall mean lawful currency of the United States of
America.
"Effective Date" shall have the meaning ascribed thereto in Section
4.1.
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"Environmental Liabilities" shall mean any and all claims, demands,
penalties, fines, liabilities, settlements, damages, losses, costs and expenses
(including, without limitation, reasonable attorneys' and reasonable
consultants' fees and disbursements, remedial investigation and feasibility
study costs, clean-up costs and other response costs under the Environmental and
Safety Laws, currently in existence or which may be enacted in the future,
laboratory fees, court costs and litigation expenses) of whatever kind or
nature, known or unknown, contingent or otherwise, arising out of or in any way
related to (i) the presence, disposal or release of any Hazardous Materials
which are on, from or which affect the Property or any part thereof, including,
without limitation, soil, water, vegetation, buildings, equipment, personal
property, or which affect Persons, animals or otherwise; (ii) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials or damage to wetlands whether or
not relating to Hazardous Materials; (iii) any lawsuit brought or threatened,
settlement reached, or government order or directive relating to such Hazardous
Materials; and/or (iv) any violation of any Requirement of Law or requirements
or demands of any Governmental Authority, which are based upon or in any way
related to such Hazardous Materials and which are paid or incurred by any Lender
or any other Indemnified Party.
"Environmental and Safety Laws" shall mean all Requirements of Law
relating to the environment and/or workplace safety including, without
limitation, the Clean Air Act ("CAA"), the Clean Water Act ("CWA"), the Toxic
Substances Control Act ("TSCA"), the Hazardous Materials Transportation Act
("HMTA"), the Resource Conservation and Recovery Act, as amended ("RCRA"), the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),
as modified by the Superfund Amendments and Reauthorization Act of 1986
("▇▇▇▇"), the Emergency Planning and Community Right to Know Act ("EPCRA"), the
Noise Control Act ("NCA"), the Occupational Health and Safety Act ("OSHA"), the
Safe Drinking Water Act and the Federal Insecticide, Fungicide and Rodenticide
Act, as any such Requirements of Law may be amended, supplemented or otherwise
modified from time to time.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974 (and any sections of the Code amended by it), as the same from time to time
may be amended, supplemented or modified, and all regulations promulgated
thereunder.
"ERISA Affiliate" shall mean each trade or business (whether or not
incorporated) which together with any Person constituting the Borrower would be
deemed to be a single employer under Section 414 of the Code.
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"Eurocurrency Reserve Requirements" shall mean for any day as
applied to a Eurodollar Loan, the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves under any regulations of the Board or other Governmental Authority
having jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as "Eurocurrency
Liabilities" in Regulation D of the Board) maintained by a member bank of the
Federal Reserve System. Eurodollar Loans shall be deemed to constitute
Eurocurrency Liabilities and to be subject to such reserve requirements without
benefit of or credit for proration, exceptions or offsets which may be available
from time to time to Lender under Regulation D.
"Eurodollar Base Rate" shall mean with respect to each day during
each Interest Period pertaining to a Eurodollar Loan, the rate per annum equal
to the rate, determined by the Agent, at which prime banks are offering Dollar
deposits at or about 10:00 a.m., New York time, two Business Days prior to the
beginning of such Interest Period,
(a) in the London interbank eurodollar market
(b) for delivery on the first day of such Interest Period,
(c) for the number of days contained therein and
(d) in an amount comparable to KeyBank's Percentage of the
Eurodollar Loan to be outstanding during such Interest Period.
"Eurodollar Loans" shall mean Loans whose rate of interest is based
upon the Eurodollar Rate.
"Eurodollar Rate" shall mean with respect to each day during each
Interest Period pertaining to a Eurodollar Loan, a rate per annum for such day
(rounded upward to the nearest 1/100 of 1%) obtained by dividing (x) the
Eurodollar Base Rate by (y) 1.00 minus the then current Eurocurrency Reserve
Requirement.
"Event of Default" shall have the meaning ascribed thereto in
Section 7.1.
"Existing Loan Agreement" shall mean the Amended and Restated
Revolving and Term Loan and Security Agreement made as of November 14, 1997 as
amended by and between KTI and the Subsidiary Borrowers, as Borrower, and
KeyBank, as Lender.
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"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate per annum (based on a 360 day year) equal for each day during such
period to the average of the rates of interest charged on overnight federal
funds transactions, with member banks of the Federal Reserve System only, as
published for any day which is a Business Day by the Federal Reserve Bank of New
York (or, in the absence of such publication, as reasonably determined by the
Agent).
"Fixed Charge Coverage Ratio" shall mean, for any fiscal period, the
ratio for such period of Consolidated Adjusted EBITDA to Consolidated Fixed
Charges.
"GAAP" shall mean generally accepted accounting principles in the
United States of America consistent with those utilized in preparing the audited
financial statements referred to in Section 5.1(a).
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"Guarantee" shall mean the Guarantee to be delivered by Timber
Energy Resources, Inc. to Agent.
"Hazardous Materials" shall mean, without limitation, any flammable
material, explosives, radioactive materials, gasoline, petroleum products,
asbestos, urea formaldehyde, polychlorinated biphenyls, hazardous materials,
hazardous wastes, hazardous or toxic substances, or related materials as defined
in the Environmental and Safety Laws.
"Inactive Subsidiary" shall mean a Subsidiary of KTI or a Subsidiary
Borrower which: (i) conducts no business, (ii) owns no Property or other assets,
(iii) holds no permit or license material to the operation of any Person
constituting the Borrower, (iv) has no Indebtedness or Contingent Obligations
and (v) has no liabilities which constitute Contingent Obligations of KTI or any
Subsidiary Borrower
"Indebtedness" shall mean for any Person at any date (without
duplication):
(a) all indebtedness of such Person for borrowed money or for
the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of
business and payable in accordance with customary practices),
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(b) any other indebtedness of such Person which is evidenced
by a note, bond, debenture or similar instrument,
(c) all Capital Lease Obligations of such Person,
(d) all reimbursement and other obligations of such Person in
respect of letters of credit, acceptances and similar obligations
issued or created for the account of such Person,
(e) all liabilities secured by any Lien on any property owned
by such Person even though such Person has not assumed or otherwise
become liable for the payment thereof,
(f) net liabilities of such Person under interest rate cap
agreements, interest rate swap agreements, foreign currency exchange
agreements and other hedging agreements or arrangements,
(g) all Contingent Obligations of such Person,
(h) withdrawal liabilities of such Person or any Commonly
Controlled Entity under a Plan, and
(i) all indebtedness of any other Person in which it holds an
equity interest, and, in such capacity, is liable for the
indebtedness of the latter Person, as a partner, member, or
otherwise.
"Indemnified Liabilities" shall have the meaning ascribed thereto in
Section 10.5.
"Indemnified Party" shall have the meaning ascribed thereto in
Section 10.5.
"ING Facility" shall mean the Credit Agreement dated April 30, 1996
among MERC and ING (U.S.) Capital Corporation, Landesbank Hessen-Thuringen
Girozentrale and Meespierson N.V., New York Agency, as amended.
"Intellectual Property" shall have the meaning ascribed thereto in
Section 3.9.
"Interest Coverage Ratio" shall mean, for any fiscal period, the
ratio for such period of Consolidated Adjusted EBIT to Consolidated Interest
Expense.
"Interest Payment Date" shall mean (a) as to any Loan, the first day
of each calendar quarter to occur while such Loan
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is outstanding, beginning on the first day of the first full calendar quarter
occurring after the date of such Loan, and (b) in addition, as to any Eurodollar
Loan the last day of each Interest Period with respect thereto. Interest shall
accrue from and including the first day of an Interest Period to but excluding
the last day of such Interest Period.
"Interest Period" shall mean with respect to any Eurodollar Loan:
(a) initially, the period commencing on the borrowing or
conversion date, as the case may be, with respect to such Eurodollar
Loan and ending one, two, three or six months thereafter, as
selected by the Borrower in its notice of borrowing or notice of
conversion, given with respect thereto, subject to availability; and
(b) thereafter, each period commencing on the last day of the
next preceding Interest Period applicable to such Eurodollar Loan
and ending one, two, three or six months thereafter, as selected by
the Borrower by irrevocable notice to the Agent given not less than
three Business Days prior to the last day of the then current
Interest Period with respect thereto, subject to availability;
provided that, the foregoing provisions relating to Interest Periods are subject
to the following:
(1) if any Interest Period would end on a day other than a
Business Day such Interest Period shall be extended to the next
Business Day unless, in the case of a Eurodollar Loan, such next
succeeding Business Day would fall in the next calendar month, in
which case such Interest Period shall end on the next preceding
Business Day;
(2) in the case of a Eurodollar Loan, if an Interest Period
commences on the last day in a calendar month that is a Business
Day, such Interest Period shall end on the last day that is a
Business Day in the month that is the specified number of months
after the month in which such Interest Period commenced; and
(3) an Interest Period that otherwise would extend beyond the
Maturity Date shall end on the Maturity Date.
"Issuance Request" shall mean a certificate duly executed by a
Responsible Officer of any Person constituting the
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Borrower in substantially the form of Exhibit C hereto, and delivered to the
Issuer (with a copy to the Agent) requesting the issuance of a Letter of Credit
described therein.
"Issuer" shall mean KeyBank and any other Lender which becomes an
Issuer pursuant to Section 2.15.
"KeyBank" shall mean KeyBank National Association.
"Letter of Credit" shall have the meaning ascribed thereto in
Section 2.15(a) hereof.
"Letter of Credit Availability" shall mean at any time, the lesser
of (a) $15,000,000 and (b) the then Available Commitment.
"Letter of Credit Outstandings" shall mean at any time, an amount
equal to the sum of (a) the aggregate undrawn, available amount at such time of
all Letters of Credit then outstanding plus (b) the then aggregate amount of all
unpaid and outstanding Reimbursement Obligations.
"Lien" shall mean any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), other charge or security interest; or any preference, priority or other
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any Capital Lease Obligations having substantially the same economic
effect as any of the foregoing). A precautionary filing of a financing statement
by a lessor of property (other than with respect to a Capital Lease Obligation)
covering only such property shall not constitute a Lien.
"Loan" shall mean any loan made by the Lenders pursuant to this
Agreement (whether denominated as a Base Rate Loan, Eurodollar Loan or
otherwise).
"Loan Documents" shall mean, collectively, this Agreement, the Notes
and the Security Documents.
"Major Acquisition" shall mean any Acquisition to be consummated at
a cost in excess of $5,000,000 (or its equivalent in other currencies, as
reasonably determined by the Agent). As used in this definition, the phrase "at
a cost" shall mean the sum of (without duplication) (x) all Indebtedness
incurred, (y) all obligations assumed or incurred (including, without
limitation, obligations under non-competition agreements, obligations assumed by
operation of law pursuant to a merger or business combination but excluding
obligations with respect to earn-out payments which are contingent in nature)
and (z) all
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amounts paid and the fair market value of any securities or other property
transferred or to be transferred or services rendered or to be rendered in
payment of the purchase price to be paid in connection with the acquisition in
question; and in the case of clause (x) the proceeds of such Indebtedness
(whether incurred as debt or a Contingent Obligation) are used directly in
connection with the acquisition in question or indirectly (by way of loans or
advances to a Subsidiary or Affiliate, or capital contribution to a Subsidiary
or Affiliate, or otherwise) to fund any costs, (including, without limitation,
the payment of purchase price) incurred in connection therewith; and in the case
of clause (y) such obligations are assumed or incurred directly or indirectly
with respect to the acquisition in question.
"Material Adverse Effect" shall mean a material adverse effect on
(a) the business, operations, property or condition (financial or otherwise) of
KTI and the Subsidiary Borrowers, taken as a whole, (b) the ability of KTI and
the Subsidiary Borrowers to perform the Obligations or (c) the validity or
enforceability of (i) this Agreement, any of the Notes or the other Loan
Documents or (ii) the rights or remedies of the Lender hereunder or thereunder.
"Maturity Date" shall mean April 30, 2001.
"MERC" shall mean Maine Energy Recovery Company Limited Partnership,
a Maine limited partnership.
"MERC Lenders" shall mean, collectively, the financial institutions
party to the ING Facility and/or holding any Indebtedness outstanding
thereunder.
"Multiemployer Plan" shall mean a Plan which is a multiemployer plan
as defined in Section 4001(a)(3) of ERISA.
"Notes" shall mean, collectively the Revolving Credit Notes.
"Obligations" shall mean, collectively, all obligations (monetary or
otherwise) of the Borrower to the Lenders and/or the Agent arising under or in
connection with this Agreement (including, without limitation, the Reimbursement
Obligations and the Letters of Credit), the Notes and the other Loan Documents.
"Partnership Pledge" shall mean the Partnership Pledge Agreement in
the form of Exhibit I hereto to be delivered to the Agent by KTI Ash Recycling,
Inc., KTI Specialty Waste Services, Inc., KTI Environmental Group, Inc., PERC,
Inc. and PERC Management Company Limited Partnership.
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"Payment Office" shall have the meaning ascribed thereto in Section
2.11.
"PBGC" shall mean, the Pension Benefit Guaranty Corporation
established pursuant to Subtitle A of Title IV of ERISA, and any entity
succeeding to any or all of its functions under ERISA.
"PERC" means Penobscot Energy Recovery Company, Limited Partnership,
a Maine limited partnership.
"Percentage" of any Lender shall mean, at any time, with respect to
Revolving Credit Loans, the percentage set forth opposite such Lender's name on
Schedule I hereto under the heading "Revolving Credit Loans."
"Permitted Encumbrances" shall mean the Liens permitted by Section
6.2 and set forth on Schedule XI.
"Permitted Investments" shall mean:
(a) marketable direct obligations issued or unconditionally
guaranteed by the United States of America or issued by any agency
thereof and backed by the full faith and credit of the United States
of America, in each case maturing within six months from the date of
acquisition thereof;
(b) marketable general obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within six
months from the date of acquisition thereof and, at the time of
acquisition, having one of the two highest ratings generally
obtainable from either Standard & Poor's Corporation or ▇▇▇▇▇'▇
Investors Service, Inc.;
(c) commercial paper maturing no more than six months from the
date of acquisition thereof and, at the time of acquisition, having
a rating of A-1 (or the equivalent) or higher from Standard & Poor's
Corporation and P-1 (or the equivalent) or higher from ▇▇▇▇▇'▇
Investors Service, Inc.;
(d) domestic and Eurodollar certificates of deposit, time or
demand deposits or bankers' acceptances maturing within six months
from the date of acquisition issued or guaranteed by or placed with,
and money market deposit accounts issued or offered by:
(i) any Lender,
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(ii) any other Commercial bank organized under the laws
of the United States of America or any state thereof or
the District of Columbia having combined capital,
surplus and undivided profits (less any undivided
losses) of not less than $500 million,
(iii) any branch located in the United States of America
of a Commercial bank organized under the laws of the
United Kingdom or Canada having combined capital,
surplus and undivided profits (less any undivided
losses) of not less than $500 million or
(iv) any domestic Commercial bank the deposits of which
are guaranteed by the Federal Deposit Insurance
Corporation, provided that (A) the full amount of the
deposits of the Person making such Permitted Investment
are so guaranteed and (B) the aggregate amount of all
Permitted Investments under this clause (iv) does not
exceed $500,000; and
(f) fully collateralized repurchase agreements with a term of
not more than 30 days for underlying securities of the type
described in subsections (a) and (b) of this definition, entered
into with any institution meeting the qualifications specified in
clause (c) or subclauses (i) through (iii) of clause (d) of this
definition; provided, in each case, that such obligations are
payable in Dollars.
"Permitted Preferred Stock" shall mean preferred stock of any class
issued by KTI (x) the terms of which shall (i) not contain conversion rights
into any class of Capital Stock of KTI which if exercised in full would result
in a Change in Control, (ii) prohibit the payment of dividends (whether in cash,
Capital Stock or Subordinated Debt) after the occurrence and during the
continuance of an Event of Default or if such payment would cause an Event of
Default to occur, (iii) shall not permit optional or mandatory redemptions or
other distributions in respect thereof (other than permitted dividends pursuant
to Section 6.15 and Clause (ii) above) prior to the date the Obligations are
paid in full and the Commitments of the Lenders are irrevocably terminated
except for redemptions or other distributions paid for by the issuance of
Capital Stock or Subordinated Debt otherwise permitted by this Agreement, and
(iv) otherwise be reasonably satisfactory to the Agent and the Required Lenders
and (y) which would not (on a pro forma basis) have caused a breach of Section
6.12 for the twelve month period preceding the proposed date of
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issuance of such preferred stock or cause a breach of Section 6.12 for the
twelve month period following such proposed issuance based on a certificate from
a Responsible Officer of KTI.
"Person" shall mean, an individual, partnership, corporation,
limited liability company, business trust, joint stock company, trust,
unincorporated association, joint venture, Governmental Authority or other
entity of whatever nature.
"Plan" shall mean, any employee benefit plan which is subject to
ERISA and which covers the employees or former employees of any Person
constituting the Borrower or an ERISA Affiliate, under which any Person
constituting the Borrower or an ERISA Affiliate has any obligation or liability
or under which such Person or an ERISA Affiliate has made contributions within
the preceding five years. References herein to a Plan shall include any
Multiemployer Plan.
"Pricing Schedule" shall mean the Schedule identified as such,
attached hereto and made a part hereof.
"Property" shall mean all real property, improvements thereon and
other assets listed on Schedule II and any other real property hereafter
acquired or leased by KTI or any of its Subsidiaries.
"Purchasing Lender" shall have the meaning ascribed thereto in
Section 9.1.
"Regulation U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as in effect from time to time.
"Reimbursement Obligation" shall have the meaning ascribed thereto
in Section 2.15(h) hereof.
"Reportable Event" shall mean any event set forth in Section 4043(b)
of ERISA or the regulations thereunder.
"Required Lenders" shall mean Lenders holding 75% of the aggregate
Commitments, if no Loans are outstanding, and, otherwise, Lenders holding 75% of
outstanding Loans and Letter of Credit Outstandings.
"Requirement of Law" shall mean as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject.
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"Responsible Officer" in such Person's capacity as such, shall mean
the chief executive officer of any Person constituting the Borrower and the
president of such Person (if not the chief executive officer) and, with respect
to financial matters, the chief financial officer or corporate controller of
such Person.
"Revolving Credit Loans" shall have the meaning ascribed thereto in
Section 2.1(a).
"Revolving Credit Note" shall have the meaning ascribed thereto in
Section 2.2.
"Revolving Loan Commitment" shall mean as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the Borrower
hereunder.
"Security Agreements" shall mean, collectively, the security
agreements substantially in the form of Exhibit E hereto to be delivered to the
Agent by KTI and each of Manner Resins, Inc., Power Ship Transport, Inc., KTI
Specialty Waste Services, Inc., Total Waste Management Corporation, KTI
Transportation Services, Inc., KTI Ash Recycling of New England, Ltd., KTI
Environmental Group, Inc., PERC Inc., PERC Management Company Limited
Partnership, Multitrade Group, Inc., Multitrade of Martinsville, Inc., KTI
Recycling, Inc., KTI Recycling of Illinois, Inc., KTI Recycling of New England,
Inc., Vel-A-▇▇▇▇ Recycling, Inc., KTI Recycling of New Jersey, Inc., KTI Bio
Fuels, Inc. and KTI Operations, Inc.
"Security Documents" shall mean, collectively the Stock Pledge
Agreements, the Security Agreements, the Guarantee, each Collateral Assignment,
each Partnership Pledge and each pledge agreement, security agreement, mortgage,
deed of trust or like instrument delivered pursuant to Section 6.6 or 6.8.
"Solvent" shall mean, when used with respect to any Person, such
Person (i) owns property the fair value of which is greater than the amount
required to pay all of such Person's Indebtedness, (ii) owns property the
present fair salable value of which is greater than the amount that will be
required to pay the probable liabilities of such Person on its then existing
Indebtedness as such become absolute and matured, (iii) is able to pay all of
its Indebtedness as such Indebtedness matures, and (iv) has capital sufficient
to carry on its then existing business.
"Standard Information Package" shall mean, in the case of an
Acquisition, forecasted financial statements consisting of consolidated balance
sheets, income and cash flow statements, including a statement of underlying
assumptions, ranges and
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limitations for the acquiring entity and the target (collectively the
"Acquisition Forecasts"). The Acquisition Forecasts shall be both opening and
fiscal year end and be accompanied by an explanation detailing how such proposed
Acquisition is consistent with the KTI strategic plan and beneficial to its
business. Three years of historical financial information for the Person to be
acquired shall also be included in each set of Acquisition Forecasts.
"Stock Pledge Agreements" shall mean, collectively, the stock pledge
agreements substantially in the form of Exhibit F hereto to be delivered to the
Agent by KTI and Manner Resins, Inc., KTI Specialty Waste Services, Inc.,
Multitrade Group, Inc., KTI Recycling, Inc. and KTI Recycling of New England,
Inc.
"Subordinated Debt" shall mean, any unsecured Indebtedness of KTI or
any of its consolidated Subsidiaries (a) no part of the principal of which is
stated to be payable or is required to be paid (whether by way of mandatory
sinking fund, mandatory redemption, mandatory prepayment or otherwise) prior to
August 1, 2001, and the payment of the principal of and interest on which and
other obligations of the obligor in respect thereof are subordinated to the
prior payment in full of the principal of and interest (including post-petition
interest) on the Notes and all other Obligations hereunder on terms and
conditions approved in writing by the Agent and Required Lenders and (b)
otherwise containing terms, covenants and conditions satisfactory in form and
substance to the Agent and Required Lenders, as evidenced by their prior written
approval thereof.
"Subsidiary" shall mean, as to any Person (a "Parent") (a) any other
Person in which the Parent owns or controls, directly or indirectly, more than
50% of the Capital Stock of such Person, (b) any other Person of which such
percentage of Capital Stock shall at the time be owned or controlled by the
Parent or one or more of its Subsidiaries as defined in clause (a) or by one or
more such Subsidiaries, or (c) any other Person of which Capital Stock having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such Person are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Parent, but the
term "Subsidiary" shall not include American Ash Recycling of Tennessee, Ltd., a
Florida limited partnership, for so long as KTI or any of its Subsidiaries or
Affiliates does not own a general partnership interest therein.
"Subsidiary Borrower" shall mean, each of MANNER RESINS, INC., POWER
SHIP TRANSPORT, INC., KTI SPECIALTY WASTE
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SERVICES, INC., TOTAL WASTE MANAGEMENT CORPORATION, KTI TRANSPORTATION SERVICES,
INC., KTI ASH RECYCLING, INC., KTI ASH RECYCLING OF NEW ENGLAND, LTD., KTI
ENVIRONMENTAL GROUP, INC., PERC, INC., PERC MANAGEMENT COMPANY LIMITED
PARTNERSHIP, MULTITRADE GROUP, INC., MULTITRADE OF MARTINSVILLE, INC., KTI
RECYCLING, INC., KTI RECYCLING OF ILLINOIS, INC., KTI RECYCLING OF NEW ENGLAND,
INC., VEL-A-▇▇▇▇ RECYCLING, INC., KTI RECYCLING OF NEW JERSEY, INC., DATA
DESTRUCTION SERVICES, INC., KTI BIO FUELS, INC. AND KTI OPERATIONS, INC. and
each Subsidiary which executes and delivers an Assumption Agreement pursuant to
Section 6.6(d)(10), as the case may be, and, collectively, the "Subsidiary
Borrowers."
"Taxes" shall mean for any period, the amount of taxes on income
which would, in conformity with GAAP, be set forth on the income statements of
KTI and its consolidated Subsidiaries net of the amount of any net operating
losses used in determining the amount of such Taxes.
"Total Senior Funded Debt" shall mean, at a particular date for KTI
and its consolidated Subsidiaries, the sum of (i) that portion of the
Obligations constituting Indebtedness, (ii) CPLTD plus (iii) without
duplication, all long term Indebtedness of KTI and its consolidated Subsidiaries
minus (to the extent included in clause (ii) or (iii)) the then outstanding
principal amount of Subordinated Debt.
"Tranche" shall mean, collectively Eurodollar Loans whose Interest
Periods begin on the same date and end on the same later date (whether or not
such Loans originally were made on the same day).
"Type" shall mean as to any Loan, its nature as a Base Rate Loan or
a Eurodollar Loan.
"Working Day" shall mean any Business Day on which dealings in
foreign currencies and exchange between banks may be carried on in London,
England.
Section 1.2 Other Definitional Provisions.
(a) Unless otherwise specified therein, all terms defined in
this Agreement shall have the defined meanings when used in the other Loan
Documents or any certificate or other document made or delivered pursuant
hereto.
(b) As used herein and in the Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
KTI and its Subsidiaries not defined in Section 1.1 and accounting terms partly
defined in Section
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1.1, to the extent not defined, shall have the respective meanings given to them
under GAAP.
(c) The words "hereof," "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
ARTICLE 2. AMOUNT AND TERMS OF COMMITMENTS
Section 2.1 Revolving Credit Commitments.
(a) Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make revolving credit loans ("Revolving Credit
Loans") to the Borrower from time to time from the date hereof to but excluding
the Maturity Date in an aggregate principal amount at any one time outstanding
for the Borrower not to exceed the then Available Commitment of such Lender. The
Borrower may borrow and prepay the Revolving Credit Loans in whole or in part,
and reborrow Revolving Credit Loans, all in accordance with the terms and
conditions hereof. All then outstanding Revolving Credit Loans shall be paid in
full on the Maturity Date.
(b) The Revolving Credit Loans may from time to time be
Eurodollar Loans, Base Rate Loans or a combination thereof, as determined by the
Borrower and notified to the Agent in accordance with Section 2.3 and Section
2.7, provided that no more than five Eurodollar Loans may be outstanding at any
one time and, provided further, that no Revolving Credit Loan shall be made as a
Eurodollar Loan after the day that is one month prior to the Maturity Date.
(c) Upon funding of the initial Loan hereunder, KeyBank shall
have no further commitment or other obligation to KTI or any of its Subsidiaries
under any other agreement other than this Agreement, including, without
limitation, under the Existing Loan Agreement, the Business Loan Agreement dated
November 14, 1997 between KTI Recycling of New England, Inc. (formerly ▇.
▇▇▇▇▇▇▇ & Sons, Inc.) and KeyBank, and the $500,000 Promissory Note
(representing a revolving line of credit) dated April 13, 1998 from KTI
Recycling of New England, Inc. (formerly ▇. ▇▇▇▇▇▇▇ & Sons, Inc.) to KeyBank.
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Section 2.2 Revolving Credit Notes. The Revolving Credit Loans made
by each Lender shall be evidenced by a promissory note of the Borrower,
substantially in the form of Exhibit A, with appropriate insertions as to date
and principal amount (each a "Revolving Credit Note"), payable to the order of
such Lender and in a principal amount equal to such Lender's Revolving Loan
Commitment. Each Lender is hereby authorized to record the date, Type and amount
of each Revolving Credit Loan, each continuation thereof, each conversion of all
or a portion thereof to another Type, the date and amount of each payment or
prepayment of principal thereof and, in the case of Eurodollar Loans, the length
of each Interest Period with respect thereto, on the schedule annexed to and
constituting a part of each Revolving Credit Note, and any such recordation
shall constitute prima facie evidence of the accuracy of the information so
recorded. Each Revolving Credit Note shall (x) be dated the Closing Date, (y) be
stated to mature on the Maturity Date and (z) provide for the payment of
interest in accordance with Section 2.9.
Section 2.3 Procedure for Revolving Credit Borrowings.
(a) The Borrower may borrow under the Commitment for Revolving
Credit Loans prior to the Maturity Date on any Business Day. The Borrower shall
give the Agent irrevocable notice (which notice must be received by the Agent
prior to 10:00 a.m., New York time, two Working Days prior to the requested
Borrowing Date, if all or any part of the requested Revolving Credit Loans are
to be initially Eurodollar Loans and one Business Day prior to the requested
Borrowing Date in the case of the initial Base Rate Loan and otherwise by 12:00
noon on the date of the requested Base Rate Loan), specifying (1) the amount to
be borrowed, (2) the requested Borrowing Date, (3) whether the borrowing is to
be of Eurodollar Loans or Base Rate Loans or a combination thereof and (4) if
the borrowing is to be entirely or partly of Eurodollar Loans, the amount of
such Loans and the length of the initial Interest Period therefor. Each
Revolving Credit Loan shall be in an amount equal to $3,000,000 or a whole
multiple of $500,000 in excess thereof. The Agent shall promptly notify the
Lenders of its receipt of any such irrevocable notice of borrowing from the
Borrower.
(b) On or before 12:00 noon New York time on the Business Day
specified in the Borrower's notice of borrowing, each Lender shall provide the
Agent with funds at the Payment Office in an amount equal to such Lender's
Percentage of the requested borrowing. The proceeds of each borrowing shall be
made available by the Agent to the Borrower pursuant to Section 2.11(d). No
Lender's obligation to make any Loan shall be affected by any other Lender's
failure to make any Loan. Neither
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the Agent nor any Lender shall have any liability for the failure of any Lender
(other than itself) to fund a Loan.
(c) With respect to any Loan, unless the Agent shall have been
notified in writing by any Lender prior to the date of making such Loan that
such Lender does not intend to make available to the Agent such Lender's portion
of the Loan to be made on such date, the Agent may (but shall not be obligated
to) assume that such Lender has made such amount available to the Agent on that
date and, in reliance on such assumption, the Agent may make available to the
Borrower a corresponding amount. If such amount is not made available by such
Lender to the Agent on the date of making such Loan, such Lender shall be
obligated to pay such amount to the Agent and shall pay to the Agent on demand
interest on such amount at the Federal Funds Rate for the number of days from
and including the date of making such Loan to the date on which such Lender's
portion of the Loan becomes immediately available to the Agent. The Agent shall
also be entitled to recover such amount, with interest thereon at the rate per
annum then applicable to the Loans comprising such borrowing, upon demand, from
the Borrower. A statement of the Agent submitted to any Lender with respect to
any amounts owing under this Section 2.3(c) shall be conclusive and binding in
the absence of demonstrable error. Nothing in this Section 2.3(c) shall be
deemed to relieve any Lender from its obligation to fulfill its Commitments
hereunder.
Section 2.4 Commitment Fees/Letter of Credit Fees.
(a) The Borrower agrees to pay to the Agent for the benefit of
and disbursement to the Lenders a commitment fee in respect of the Commitments
to make Revolving Credit Loans, for the period from and including the date
hereof to the Maturity Date, computed at the rate of .25% per annum, calculated
on the basis of a 360-day year for the actual days elapsed, on the average daily
amount of the aggregate Commitments (whether or not used) during the period for
which payment is made, payable quarterly in arrears on the last day of each
March, June, September and December and on the Maturity Date or such earlier
date as the Commitments shall terminate as provided herein, commencing on the
first of such dates to occur after the date hereof.
(b) The Borrower agrees to pay to the Agent for the benefit of
and disbursement to the Lenders a letter of credit fee in respect of each Letter
of Credit, for the period from and including the date of issuance of such Letter
of Credit to its Stated Expiry Date, computed at the rate of 1_% per annum,
calculated on the basis of a 360-day year for the actual days elapsed, on the
average daily amount of the available amount of such Letter of Credit during the
period for which payment is
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made, payable quarterly in advance on the date of, and as a condition precedent
to, the issuance of such Letter of Credit and thereafter on the last day of each
March, June, September and December occurring prior to the Stated Expiry Date of
such Letter of Credit
Section 2.5 Termination or Reduction of Commitments.
(a) KTI shall have the right, upon not less than three
Business Days' written notice to the Agent, to terminate the Revolving Loan
Commitments or, from time to time, to reduce the amount of such Commitments,
provided that at no time may the Revolving Loan Commitments be reduced by the
Borrower to an amount less than the sum of the outstanding principal amount of
Revolving Credit Loans and Letter of Credit Outstandings. Any such reduction
shall be in an amount equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof and shall reduce permanently the Revolving Loan Commitments then
in effect. Any such reduction in the Revolving Loan Commitment shall be binding
on the Subsidiary Borrowers whether or not they have notice thereof.
(b) Each reduction in the Revolving Loan Commitments, whether
voluntary or otherwise, shall be permanent and irrevocable. All reductions in
the Revolving Loan Commitments shall be made pro rata to the Commitments of the
Lenders. The Agent shall promptly notify each Lender of the amount of any
reduction of its Commitment.
Section 2.6 Prepayments.
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(a) From time to time the Borrower may prepay the Loans, in
whole or in part, subject to the provisions of Section 2.14 but otherwise
without premium or penalty, upon at least one Business Days' irrevocable notice
to the Agent (except in the case of prepayments required pursuant to Section
2.6(c) for which no notice is required), specifying the date and amount of
prepayment and the Loans (by Type and, if applicable, Tranche) to be prepaid. In
the event Borrower does not specify which Loans are to be prepaid, prepayments
shall be applied first to outstanding Base Rate Loans (together with accrued and
unpaid interest on the amount prepaid to the date of prepayment), second to
outstanding Reimbursement Obligations and third to outstanding Eurodollar Loans
(together with accrued and unpaid interest on the amount prepaid to the date of
prepayment). Prepayments of Eurodollar Loans shall be subject to the provisions
of Section 2.14. Partial prepayments shall be in an aggregate principal amount
of $1,000,000 or a whole multiple of $500,000 in excess thereof or if such
prepayment would reduce the principal amount of a Eurodollar Tranche below
$1,000,000, in an aggregate principal amount equal to the outstanding principal
amount of such Tranche. All prepayments shall be allocated to the Lenders based
on their respective Percentages.
(b) If any notice of prepayment is given, the amount specified
in such notice shall be due and payable on the date specified therein.
Prepayments of the Loans shall be accompanied by payment of accrued interest to
the payment date on the principal amount prepaid.
(c) In the event (i) the aggregate outstanding principal
amount of the Revolving Credit Loans and Reimbursement Obligations and (ii)
Letter of Credit Outstandings (excluding Reimbursement Obligations) exceeds the
Commitments at any time, the Borrower shall, on or before 3:00 p.m. on the first
Business Day after such excess is established by the Agent in writing, prepay
the Revolving Credit Loans and Reimbursement Obligations in an amount equal to
such excess (together with interest on the amount prepaid to the date of
prepayment). If such excess is greater than the outstanding principal amount of
Revolving Credit Loans and Reimbursement Obligations, the Borrower shall, in
addition, post cash collateral with the Agent to secure repayment of the Letter
of Credit Outstandings in an amount equal to the balance of such excess. Any
such prepayments shall be subject to the provisions of Section 2.14.
(d) The Agent shall disburse all prepayments of the Loans to
the Lenders on a pro rata basis.
Section 2.7 Conversion and Continuation Options. The Borrower shall
have the right at any time upon prior irrevocable notice to the Agent (i) not
later than 12:00 noon, New York time,
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on any Business Day, to convert any Eurodollar Loan to a Base Rate Loan, (ii)
not later than 10:00 a.m., New York time, three Business Days prior to
conversion or continuation, to convert any Base Rate Loan into a Eurodollar Loan
or to continue any Eurodollar Loan as a Eurodollar Loan for any additional
Interest Period, and (iii) not later than 10:00 a.m., New York time, three
Business Days prior to conversion, to convert the Interest Period with respect
to any Eurodollar Loan to another permissible Interest Period, subject in each
case to the following:
(a) a Eurodollar Loan may not be converted at a time other
than the last day of the Interest Period applicable thereto;
(b) any portion of a Loan maturing or required to be repaid in
less than one month may not be converted into or continued as a Eurodollar Loan;
(c) No Eurodollar Loan may be continued as such and no Base
Rate Loan may be converted to a Eurodollar Loan when any Event of Default has
occurred and is continuing;
(d) any portion of a Eurodollar Loan that cannot be converted
into or continued as a Eurodollar Loan by reason of Section 2.7(b) or 2.7(c) or
otherwise automatically shall be converted at the end of the Interest Period in
effect for such Loan to a Base Rate Loan;
(e) on the last day of any Interest Period for Eurodollar
Loans, if the Borrower has failed to give notice of conversion or continuation
as described in this subsection or if such conversion or continuation is not
permitted pursuant to Section 2.7 or otherwise, such Loans shall be converted to
Base Rate Loans on the last day of such then expiring Interest Period;
(f) accrued interest on a Loan (or portion thereof) being
converted shall be paid by the Borrower at the time of conversion.
Section 2.8 Minimum Amounts of Tranches. All borrowings, conversions
and continuations of Loans hereunder and all selections of Interest Periods
hereunder shall be in such amounts and be made pursuant to such elections that,
after giving effect thereto, the aggregate principal amount of the Loans
comprising each Eurodollar Tranche shall be equal to $1,000,000 or a whole
multiple of $500,000 in excess thereof.
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Section 2.9 Interest Rates and Payment Dates.
(a) Subject to the provisions of Section 2.9(c), each Base
Rate Loan shall bear interest at a rate per annum (computed on the basis of the
actual number of days elapsed over a year of 360 days and twelve 30-day months)
equal to the Base Rate plus the Applicable Margin.
(b) Subject to the provisions of Section 2.9(c), each
Eurodollar Loan shall bear interest (computed on the basis of the actual number
of days elapsed over a year of 360 days) at a rate per annum equal to the
Eurodollar Rate for the Interest Period in effect for such Eurodollar Loan plus
the Applicable Margin in effect for such Interest Period.
(c) If all or a portion of (A) the principal amount of any
Loan, (B) any interest payable thereon or (C) any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall, upon notice to the
Borrower from the Agent, bear interest at a rate per annum which is
(1) in the case of overdue principal, the rate that
otherwise would be applicable thereto pursuant to the
foregoing provisions of this subsection plus 4% per annum, or
(2) in the case of overdue interest or fees or other
amounts, the Base Rate plus 4%,
in each case from the date of such nonpayment until such amount is paid in full
(before and, to the extent permitted by law, after judgment).
(d) Interest shall be payable in arrears on each Interest
Payment Date, provided that interest accruing on overdue amounts pursuant to
Section 2.9(c) shall be payable on demand.
(e) As soon as practicable the Agent shall notify the Borrower
and the Lenders of (A) each determination of a Eurodollar Rate, each change in
the Base Rate and the Applicable Margin and (B) the effective date and the
amount of each change in the interest rate on a Loan. Each determination of an
interest rate by the Agent pursuant to any provision of this Agreement shall be
conclusive and binding on the Borrower and the Lenders in the absence of clearly
demonstrable error. At the request of the Borrower, the Agent shall deliver to
the Borrower a statement showing the quotations used by the Agent in determining
any interest rate pursuant to Sections 2.9(a), (b) or (c).
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Section 2.10 Inability to Determine Interest Rate. If prior to the
first day of any Interest Period:
(a) the Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that adequate and reasonable means
do not exist for ascertaining the Eurodollar Rate for such Interest Period, or
(b) a Lender notifies the Agent and Borrower that the
Eurodollar Rate determined or to be determined for such Interest Period will not
adequately and fairly reflect the cost to such Lender of making or maintaining
the Eurodollar Loans during such Interest Period, or
(c) The Agent shall have determined (which determination shall
be conclusive and binding upon the Borrower) that Dollar deposits in the
principal amounts of the Eurodollar Loans to which such Interest Period is to be
applicable are not generally available in the London Interbank Market,
the Agent shall give notice thereof to the Borrower as soon as practicable
thereafter. If such notice is given (A) any Eurodollar Loans requested to be
made on the first day of such Interest Period shall be made as Base Rate Loans,
and (B) any Loans that were to have been converted to or continued as Eurodollar
Loans on the first day of such Interest Period shall be converted to or
continued as Base Rate Loans. Until such notice has been withdrawn by the Agent,
no Loans shall be made as or converted to or continued as Eurodollar Loans.
Section 2.11 Payments/Funding.
(a) All payments (including prepayments) made by the Borrower
hereunder and under the Notes, whether on account of principal, interest, fees,
Reimbursement Obligations or otherwise, shall be made without set off or
counterclaim and shall be made prior to 12:00 noon, New York time, on the due
date thereof to the Agent, for the account of the Lenders in Dollars and in
immediately available funds to the Agent's account at such address as the Agent
shall give notice to the Borrower and the Lenders (the "Payment Office"). Except
for payments received by the Agent for the account of the Agent in its capacity
as such, or for the account of a specific Lender in accordance with the
provisions of this Agreement, the Agent shall distribute like funds relating to
the payment of principal, interest or fees pro rata to the Lenders (based on
their Percentages) to which such payment is due and payable for their accounts
and at the addresses as each such Lender shall specify in its notice to the
Agent made in accordance with Section 10.2 of this Agreement.
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Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Lenders hereunder that the
Borrower will not make such payment in full, the Agent may (but shall not be
obligated to) assume that the Borrower has made such payment in full to the
Agent on such date, and the Agent may, in reliance upon such assumption, cause
to be distributed to each Lender on such due date an amount equal to the amount
then due such Lender. If and to the extent the Borrower shall not have so made
such payment in full to the Agent, each Lender shall repay to the Agent
forthwith on demand the amount distributed to such Lender together with interest
thereon, at the rate equal to the Federal Funds Rate, for each day from the date
such amount is distributed to such Lender until the date such Lender repays such
amount to the Agent.
(b) If any principal payment hereunder (other than payments on
Eurodollar Loans) becomes due and payable on a day other than a Business Day,
such payment date shall be extended to the next succeeding Business Day, and
interest thereon shall be payable at the then applicable rate during such
extension. If any payment on a Eurodollar Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day (and interest shall accrue during such extension of
time) unless the result of such extension would be to extend such payment into
another calendar month, in which event such payment shall be made on the
immediately preceding Business Day.
(c) If on any date a payment is due hereunder, the Borrower
shall pay less than the amount stated to be due or on any date the Agent shall
receive any payment under any Security Document or pursuant to any proceeding to
enforce the Obligations of any Person constituting the Borrower, such proceeds
shall be distributed to the Lenders pro rata based on their respective
Percentages and shall be applied first to costs of collection incurred by each
Lender, second to accrued and unpaid interest, third to principal and then to
the payment of any other amounts due hereunder or the other Loan Documents.
(d) The Agent shall fund each Loan by depositing the amount
thereof in the joint account (the "Account") of KTI and the Subsidiary Borrowers
(account no. 1910-1400-1538) at KeyBank; provided that the proceeds of each Loan
shall first be applied to principal prepayments or payments due on the date of
such Loan (without derogating from the Borrower's obligation to repay) and
proceeds of any conversion or continuation of a Loan to or as a particular Type
shall be applied by the Agent solely to effect such conversion or continuation.
Each Lender is hereby authorized to debit the accounts of each Person
constituting the Borrower for all payments due hereunder; provided the foregoing
shall not derogate from the Borrower's obligation to pay or
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restrict any Lender's recourse to any particular fund or source of monies; and
provided further, each Lender agrees not to debit such accounts for amounts
payable pursuant to Sections 2.13, 2.14 or 10.5 unless an Event of Default has
occurred and is continuing. The Borrower agrees to maintain its primary
depository accounts with KeyBank's office at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇.
Section 2.12 Change in Legality. Notwithstanding any other provision
herein, if any change in any Requirement of Law or in the interpretation or
application thereof by a Governmental Authority shall make it unlawful for a
Lender to make or maintain Eurodollar Loans as contemplated by this Agreement,
(a) the Commitment of such Lender hereunder to make Eurodollar Loans, continue
Eurodollar Loans as such and convert Loans to Eurodollar Loans shall be canceled
forthwith and (b) such Loans then outstanding as Eurodollar Loans, if any,
automatically shall be converted to Base Rate Loans on the respective last days
of the then current Interest Periods with respect to such Loans or within such
earlier period as required by law. If any such conversion of a Eurodollar Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Borrower shall pay to such Lender such amounts, if
any, as may be required pursuant to Section 2.14.
Section 2.13 Increased Costs.
(a) If the adoption of, or any change in, any Requirement of
Law or in the interpretation or application thereof by a Governmental Authority
or compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(1) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note or any
Eurodollar Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for the
imposition of and changes in the rate of tax on the overall
net income of the Lender);
(2) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement
against assets held by, deposits or other liabilities in or
for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of
a Lender which is not otherwise included in the determination
of the Eurodollar Rate hereunder, including, without
limitation, the
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imposition of any reserves with respect to Eurocurrency
Liabilities under Regulation D of the Board; or
(3) shall impose on a Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans hereunder or to reduce any amount
receivable hereunder in respect thereof then, in any such case, the Borrower
shall promptly pay such Lender, upon its demand, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If a Lender becomes entitled to claim any additional amounts
pursuant to this subsection, it shall promptly notify the Agent and the Borrower
of the event by reason of which it has become so entitled. A certificate as to
any additional amounts payable pursuant to this subsection submitted by a Lender
to the Borrower and Agent shall be conclusive in the absence of clearly
demonstrable error. This covenant shall survive the termination of this
Agreement and the payment of the Notes and all other amounts payable hereunder.
(b) In the event that a Lender shall have determined that any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof does or shall have the effect of
reducing the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder to a level below that which such Lender
or such corporation could have achieved but for such change or compliance
(taking into consideration Lender's or such corporation's policies with respect
to capital adequacy) by an amount deemed by such Lender to be material, then
from time to time, after submission by such Lender to the Borrower (with a copy
to the Agent) of a written request therefore, the Borrower shall pay to such
Lender such additional amount or amounts as will compensate such Lender for such
reduction.
(c) In the event that by reason of any change in any
Requirement of Law (including, without limitation, the lapse or termination of
any treaty) or in the interpretation thereof, or the adoption of any new law,
regulation or requirement by any Governmental Authority, or the imposition of
any requirement of any central bank whether or not having the force of law, (i)
the Agent or any Lender shall, with respect to this Agreement, the Loans, the
Letters of Credit (or risk participations therein),
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the Reimbursement Obligations (or risk participations therein), the Notes or its
obligation to make Loans or issue and/or own risk participations in Letters of
Credit under this Agreement, be subjected to any withholding or other tax, levy,
impost, charge, fee, duty or deduction of any kind whatsoever (other than
franchise taxes imposed by the jurisdiction in which the Agent or such Lender is
domiciled and other than any tax generally imposed or based upon the net income
or branch profits of the Agent or such Lender) (collectively, "Taxes") or (ii)
any change shall occur in the taxation of the Agent or such Lender with respect
to any Loan, any Reimbursement Obligation (or any risk participation therein),
the interest payable thereon or any fees payable hereunder or referred to herein
(other than franchise taxes imposed by the jurisdiction in which the Agent or
such Lender is domiciled and other than any change which affects, and to the
extent that it affects, the taxation of the net income or branch profits of the
Agent or such Lender), and if any such measures or any other similar measure
shall result in an increase in the cost to the Agent or such Lender of making or
maintaining any Loan or any Letter of Credit or a reduction in the amount of
principal, interest or fees receivable by the Agent or such Lender in respect
thereof, the Agent or such Lender promptly after learning of the imposition of
such cost or reduction in any amount shall notify the Borrower and the Agent (if
applicable) stating the reasons therefor. The Borrower shall thereafter pay to
the Agent or such Lender, upon demand from time to time, as additional
consideration hereunder, such additional amounts as will fully compensate the
Agent or such Lender for such increased costs or reduced amounts and shall
promptly provide the Agent or such Lender, as the case may be, with official tax
receipts or other evidence of the payment of any taxes paid by the Borrower. A
certificate as to the increased costs or reduced amounts setting forth the
calculations therefor, shall be submitted promptly by the Agent or such Lender
to the Borrower and the Agent (if applicable) and, in the absence of
demonstrable error, shall be conclusive and binding as to the amount thereof. If
the Agent or Lender receives any additional amounts from the Borrower pursuant
to this subsection (c) if requested by Borrower, the Agent or such Lender shall
(at the Borrower's expense) use its best efforts to obtain a refund, reduction,
deduction or credit for any Taxes with respect to the additional amounts paid
under this subsection (c). If the Agent or such Lender actually receives or
enjoys the benefit of any such refund, reduction, deduction or credit for any
such Taxes, the Agent or such Lender shall reimburse the Borrower if and to the
extent, but only the extent, that the Agent or such Lender determines that it
has actually received (i) a refund of taxes or other amounts (together with any
interest actually received thereon from the respective Governmental Authority)
which refund is attributable to the Taxes with respect to which such additional
amounts were paid; or (ii) an effective net reduction (through a reduction,
deduction,
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credit or otherwise) in any taxes or other amounts otherwise payable by the
Agent or such Lender (including any taxes imposed on or measured by the net
income of the Agent or such Lender), which reduction is attributable to the
Taxes with respect to such additional amounts were paid. If, at any time after
the Agent or such Lender makes a payment to the Borrower pursuant to the
preceding sentence, the Agent or such Lender determines that it was not entitled
to the full amount of any refund (together with the interest thereon) reimbursed
to the Borrower as aforesaid or that its taxes are not reduced by a credit or
deduction for the full amount of Taxes reimbursed to the Borrower as aforesaid,
the Borrower upon the demand of the Agent or such Lender will promptly pay to
the Agent or such Lender the amounts so refunded to which the Agent or such
Lender was not so entitled, or the amount by which the taxes of the Agent or
such Lender were not so reduced, as the case may be.
(d) Notwithstanding any other provision of this Section 2.13,
no Lender shall demand compensation for any increased cost or reduction referred
to in this Section 2.13 if it shall not at the time be the general policy of
such Lender to demand such compensation in similar circumstances under
comparable provisions of other credit agreements, and each Lender shall in good
faith endeavor to allocate increased costs or reductions fairly among all of its
affected commitments and credit extensions (whether or not it seeks compensation
from all affected borrowers). The protection of this Section 2.13 shall be
available to each Lender regardless of any possible contention of the invalidity
or inapplicability of the law, rule, regulation, guideline or other change or
condition which shall have occurred or been imposed.
(e) If Borrower is required to pay additional amounts under
this Section 2.13, the Borrower may, at its own expense, require such Lender to
transfer and assign in whole or in part, without recourse all or part of its
interests, rights and obligations under this Agreement to an assignee (which may
be another Lender, if a Lender accepts such assignment) which shall assume such
assigned obligations in a writing in form and substance reasonably acceptable to
the Agent; provided that (i) such assignment shall not conflict with any law,
rule or regulation or order of any court or other Governmental Authority, (ii)
the Borrower shall have received a written consent of the Agent in the case of
any entity that is not a Lender, which consent shall not be unreasonably
withheld, and (iii) the Borrower or such assignee shall have paid to the
assigning Lender in immediately available funds the principal of, and interest
accrued to the date of such payment on, the Loans made by it hereunder and all
other amounts (including without limitation, Reimbursement Obligations) owed to
it hereunder as of such date.
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Section 2.14 Indemnity.
(a The Borrower agrees to indemnify each Lender and to hold
each Lender harmless from any loss or expense which such Lender may sustain or
incur as a consequence of
(10 default by the Borrower in payment when due of any
portion of the principal amount of or interest on any
Eurodollar Loan,
(20 default by Borrower in making a borrowing of,
conversion into or continuation of Eurodollar Loans after
Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement,
(30 default by Borrower in making any prepayment after
Borrower has given a notice thereof in accordance with the
provisions of this Agreement, or
(40 the making of a payment (other than scheduled
repayments) or a prepayment of Eurodollar Loans on a day which
is not the last day of an Interest Period with respect
thereto,
including, without limitation, in each case, any such loss or expense arising
from the reemployment of funds obtained by such Lender or from fees payable to
terminate the deposits from which such funds were obtained. If the Borrower
prepays all or any part of any advance which is accruing interest at a fixed
rate on other than the last day of the applicable interest period, the Borrower
shall also pay to the Lender, on demand therefor, the Cost of Prepayment. "Cost
of Prepayment" means an amount equal to the present value, if positive, of the
product of (a) the difference between (i) the yield, on the beginning date of
the applicable interest period minus (ii) the yield, on the prepayment date, of
a U.S. Treasury obligation with a maturity similar to the remaining maturity of
the applicable interest period, and (b) the principal amount to be prepaid, and
(c) the number of years, including fractional years from the prepayment date to
the end of the applicable interest period. The yield on any U.S. Treasury
obligation shall be determined by reference to Federal Reserve Statistical
Release H.15(519) "Selected Interest Rates." For purposes of making present
value calculations, the yield to maturity of a similar maturity U.S. Treasury
obligation on the prepayment date shall be deemed the discount rate. The Cost of
Prepayment shall also apply to any payments made after acceleration of the
maturity of any Note.
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(b For the purpose of calculation of all amounts payable to a
Lender under this subsection such Lender shall be deemed to have actually funded
its relevant Eurodollar Loan through the purchase of a deposit bearing interest
at the Eurodollar Rate in an amount equal to the amount of that Eurodollar Loan
and having a maturity comparable to the relevant Interest Period; provided,
however, that each Lender may fund each of its Eurodollar Loans in any manner it
sees fit, and the foregoing assumption shall be utilized only for the
calculation of amounts payable under this subsection.
(c The covenants in this Section 2.14 shall survive the
termination of this Agreement and the payment of the Notes and all other amounts
payable hereunder.
Section 2.15 Letters of Credit.
(a By delivering to the Agent an Issuance Request on a
Business Day, prior to the Maturity Date and not less than three Business Days
prior to the requested date of issuance, Borrower may request that the Issuer
issue an irrevocable standby letter of credit in substantially the form of
Exhibit G, with such insertions with respect to required presentation of
documentation or certifications upon a draw as may be requested by the Borrower
and approved by the Issuer, or in such other form as may be requested by the
Borrower and approved by the Issuer and the Required Lenders (each a "Letter of
Credit"), in support of financial obligations of the Borrower incurred in the
ordinary course of business and which are described in such Issuance Request.
Upon receipt of each Issuance Request, the Agent shall promptly notify the
Lenders thereof. The stated amount of any Letter of Credit requested to be
issued pursuant to an Issuance Request shall be denominated in Dollars.
(b Each Letter of Credit shall by its terms: (i) be issued in
a stated amount which (A) is at least $20,000, and (B) when added to the Letter
of Credit Outstandings does not exceed (or would not exceed) the then Letter of
Credit Availability and (C) when added to all Revolving Credit Loans and Letter
of Credit Outstandings does not exceed the amount of the then Revolving Loan
Commitment; (ii) be stated to expire on a date (its "Stated Expiry Date") no
later than the earlier of 12 months from its date of issuance or March 30, 2001,
whichever occurs first; and (iii) on or prior to its Stated Expiry Date (A)
terminate immediately upon notice to the Issuer from the beneficiary thereunder
that all obligations covered thereby have been terminated, paid, or otherwise
satisfied in full, or (B) reduce in part immediately and to the extent the
beneficiary thereunder has notified the Issuer that the obligations covered
thereby have been paid or otherwise satisfied in part.
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(c Subject to the terms and conditions of this Agreement, the
Issuer shall issue Letters of Credit in accordance with the Issuance Requests
made therefor. The Issuer will make available the original of each Letter of
Credit which it issues in accordance with the Issuance Request therefor to the
beneficiary thereof.
(d The Borrower agrees to pay to the Agent for the account of
the Issuer, with respect to each Letter of Credit, the following fees: (i) an
issuance fee of $150; (ii) $50 for each amendment to a Letter of Credit; (iii)
an amount equal to 1/4 of 1% ($200 minimum) of the amount of each draw under a
Letter of Credit; and (iv) a fronting fee equal to _ of 1% of the face amount of
such Letter of Credit. It is understood that the foregoing charges may be
changed by the Issuer from time to time. Any changes in such fees and charges
shall be binding on the Borrower on the date each change therein is established
by the Issuer. The fees payable pursuant to clause (i) and (iv) of this
paragraph (d) shall be paid upon issuance of the Letter of Credit. The fees
described in clause (ii) and (iii) shall be paid at the time of the relevant
amendment or draw, as the case may be.
(e To the extent of its Percentage, each Lender agrees to and
shall be deemed to have irrevocably purchased a participation in each Letter of
Credit on the date of issuance thereof. Each Lender shall make available to the
Issuer, regardless of whether any Default or Event of Default shall have
occurred and is continuing, an amount equal to its respective Percentage of each
drawing on each Letter of Credit in same day or immediately available funds not
later than 4:00 p.m. New York time on each Disbursement Date (as hereinafter
defined) for each such drawing provided such Lender has received notice pursuant
to Section 2.15(g) by 11:00 a.m. New York time; and by 10:00 a.m. on the next
Business Day if such notice is not received by 11:00 a.m. In the event that any
Lender fails to make available to the Issuer the amount of such Lender's
Percentage of any drawing on a Letter of Credit as provided herein, the Issuer
shall be entitled to recover such amount on demand from such Lender together
with interest at the daily average Federal Funds Rate for the first three
Business Days after the Disbursement Date and thereafter at the Base Rate.
(f The Agent shall distribute to each Lender that has paid all
amounts payable by it under this Section 2.15 with respect to any Letter of
Credit issued by Issuer such Lender's Percentage of all payments received by the
Agent from the Borrower in reimbursement of drawings honored by Issuer under
such Letter of Credit promptly after such payments are received.
(g The Issuer will notify the Borrower and the Agent promptly
of the presentment for payment of any Letter of
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Credit (on the date of presentment, if possible, and otherwise on the next
Business Day, it being agreed that such notice may be made by phone), together
with notice of the date (the "Disbursement Date") such payment shall be made and
the Agent will promptly notify the Lenders of such matters. Subject to the terms
and provisions of such Letter of Credit, the Issuer shall make such payment to
the beneficiary (or its designee) of such Letter of Credit. Prior to 3:00 p.m.
New York time on the Disbursement Date, the Borrower shall (by payment to the
Payment Office for distribution by the Agent) reimburse the Issuer for all
amounts which have been disbursed under such Letter of Credit. To the extent the
Issuer and the Lenders are not reimbursed in full in accordance with this
Section 2.15(g), the Reimbursement Obligation shall accrue interest at a rate
per annum equal to the Base Rate plus 4%, payable on demand.
(h The Borrower's obligation (a "Reimbursement Obligation")
under Section 2.15(g) to reimburse the Lenders with respect to each drawing
under each Letter of Credit (including interest thereon), and each Lender's
obligation to fund each drawing, shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which any Person constituting the Borrower or any Lender may have or
have had against any Lender or any beneficiary of a Letter of Credit, including,
without limitation, any defense based upon the occurrence of any Default or
Event of Default, any draft, demand or certificate or other document presented
under a Letter of Credit proving to be forged, fraudulent, invalid or
insufficient, or any failure to apply or misapplication by the beneficiary of
the proceeds of any disbursement, or the legality, validity, form, regularity,
or enforceability of such Letter of Credit.
(i The Borrower assumes all risks of the acts, omissions or
misuse of any Letter of Credit by the beneficiary thereof. Except to the extent
of its own gross negligence or willful misconduct, the Issuer shall not be
responsible for:
(10 the form, validity, sufficiency, accuracy,
genuineness, or legal effect of any Letter of Credit or any
document submitted by any party in connection with the
application for and issuance of a Letter of Credit, even if it
should in fact prove to be in any or all respects invalid,
insufficient, inaccurate, fraudulent or forged;
(20 the form, validity, sufficiency, accuracy,
genuineness or legal effect of any instrument transferring or
assigning or purporting to transfer or assign a Letter of
Credit or the rights or
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benefits thereunder or proceeds thereof in whole or in part;
(30 errors, omissions, interruptions or delays in
transmission or delivery of any information or messages, by
mail, cable, telegraph, telex or otherwise;
(40 any loss or delay in the transmission or otherwise
of any document or draft required in order to make a
disbursement under a Letter of Credit or of the proceeds
thereof;
(50 errors in interpretation of technical terms;
(60 any misapplication by a beneficiary of the proceeds
of any disbursement under any Letter of Credit; and
(70 any consequences arising from causes beyond the
control of the Issuer including, without limitation, acts of
any Governmental Authority.
None of the foregoing shall affect, impair or prevent the
vesting of any of the rights or powers granted to the Issuer hereunder.
(j In addition to amounts payable as elsewhere provided in
this Section 2.15, the Borrower hereby agrees to protect, indemnify, pay and
save the Issuer harmless from and against any and all claims, demands,
liabilities, damages, losses, costs, charges and expenses (including reasonable
attorneys' fees) which the Issuer may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of the Letters of Credit, other than as
a result of the gross negligence or wilful misconduct of the Issuer as
determined by a court of competent jurisdiction, or (ii) the failure of the
Issuer to honor a drawing under any Letter of Credit as a result of any act or
omission, whether rightful or wrongful, of any present or future de jure or de
facto Governmental Authority.
(k KeyBank or any successor Issuer may resign as such at any
time upon at least ten days' prior notice to the Borrower, the Agent and all
Lenders. If the Issuer at any time shall resign, KTI may appoint another Lender
as a successor Issuer provided such appointment is accepted by such Lender. Upon
the acceptance of any appointment as Issuer by a successor Issuer, such
successor Issuer shall thereupon become the Issuer hereunder and the resigning
or removed Issuer shall (i) be discharged from its duties and obligations as
such under this
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Agreement and the other related instruments except with respect to outstanding
and unexpired Letters of Credit issued by it and (ii) entitled to the continued
benefit of this Section 2.15 with respect to all Letters of Credit issued and
actions taken by it prior to its resignation.
Section 2.16 Purpose of Loans. The proceeds of the Revolving Credit
Loans shall be used first to repay all amounts outstanding under the Existing
Loan Agreement and all outstanding Indebtedness of KTI Recycling of New England,
Inc. (formerly ▇. ▇▇▇▇▇▇▇ & Sons) owing to KeyBank. After repayment of all such
amounts, proceeds of Revolving Credit Loans may be used to finance working
capital needs of the Borrower (including, without limitation, payment of
Reimbursement Obligations) and for general corporate purposes including, without
limitation, the financing of Acquisitions permitted by the terms hereof.
ARTICLE 3 REPRESENTATIONS AND WARRANTIES
To induce the Agent and the Lenders to enter into this Agreement and
to make the Loans, the Borrower hereby represents and warrants to the Agent and
the Lenders that as of the Effective Date:
Section 3.1 Financial Condition.
(a The consolidated balance sheets of KTI and its consolidated
Subsidiaries as at December 31, 1997 and March 31, 1998 and the related
consolidated statements of income and of cash flows for the fiscal period ended
on each such date, copies of which have heretofore been furnished to the Agent
and the Lenders, present fairly in all material respects the consolidated
financial condition of KTI and its consolidated Subsidiaries as at such dates,
and the consolidated results of their operations and their consolidated cash
flows for the fiscal year and quarter, as the case may be, then ended.
(b All such financial statements, including the related
schedules, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by such accountants and as
disclosed therein).
(c Neither KTI nor any of its consolidated Subsidiaries had,
at the date of the most recent balance sheet delivered to the Agent pursuant to
Section 5.1 hereof, any material Contingent Obligation, material contingent
liability (other than with respect to performance bond obligations entered into
the ordinary course of business) or material liability for taxes, or any
material long-term lease or material unusual forward or long-term commitment,
including, without limitation, any interest rate or foreign currency swap or
exchange
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transaction or other financial derivative, except as reflected in the foregoing
statements or in the notes thereto or would not reasonably be expected to have a
Material Adverse Effect.
(d During the period from December 31, 1997, to and including
the Effective Date hereof there has been no sale, transfer or other disposition
by KTI or any of its consolidated Subsidiaries of any material part of its
business or property (other than in the ordinary course of business) and no
purchase or other acquisition of any business or property (including any Capital
Stock of any other Person, in any case, other than in the ordinary course of
business) material in relation to the consolidated financial condition of KTI
and its consolidated Subsidiaries at December 31, 1997 except the Acquisition of
all of the issued and outstanding stock of all classes of Multitrade Group,
Inc., Vel-A-▇▇▇▇ Recycling Inc. and Total Waste Management Corporation.
Section 3.2 No Material Adverse Change. Since December 31, 1997,
there has been no development or event which has had or could reasonably be
expected to have a Material Adverse Effect.
Section 3.3 Corporate Existence; Compliance with Law. Each of KTI
and its Subsidiaries (other than Inactive Subsidiaries)(a) is duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (b has the power and authority, and the legal right, to own and
operate its property, to lease the property it operates as lessee and to conduct
the business in which it is currently engaged, (c) is duly qualified as a
foreign Person and in good standing under the laws of each jurisdiction where
its ownership, lease or operation of property or the conduct of its business
requires such qualification except where the failure to so qualify or be in good
standing therewith would not have a Material Adverse Effect and (d) is in
compliance with all Requirements of Law except where the failure to comply
therewith would not, in the aggregate, have a Material Adverse Effect. Without
limiting the generality of the foregoing, KTI and each of its Subsidiaries has
obtained and currently maintains all necessary and material licenses, building
permits, environmental permits, utility permits, land use permits and any other
permits, approvals or licenses and governmental authorizations from all
applicable federal, state, district and local Persons and other Governmental
Authorities and all necessary and material easements, access rights and other
rights, in each case, required for the occupancy, use and enjoyment of the
Property by KTI or any such Subsidiary, as the case may be, for the uses to
which the Property is currently or proposed to be put; and KTI and each of its
Subsidiaries has all necessary and material licenses, permits and other consents
from Governmental Authorities otherwise
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required for the conduct of their respective business; provided that, in the
case of Total Waste Management Corporation, certain of its permits are held on a
temporary or interim basis as described in the letter of Sheehan, Phinney, Bass
& Green, dated July 1, 1998 and addressed to ▇▇▇▇▇▇ ▇▇▇▇▇▇, Esq. at KTI (a copy
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of which has been delivered to the Agent). KTI Environmental Group, Inc.,
formerly known as ▇▇▇▇ Technologies, Inc. is the surviving entity of the
merger between KTI Environmental Group, Inc. and ▇▇▇▇ Technologies, Inc.
Section 3.4 Corporate Power; Authorization; Enforceable Obligations.
(a Each Person constituting the Borrower has the power and
authority, and the legal right, to make, deliver and perform this Agreement, the
Notes and each other Loan Document to which it is a party and to borrow
hereunder and has taken all necessary corporate or partnership action to
authorize the borrowings on the terms and conditions of this Agreement, the
Notes and each other Loan Document to which it is a party and to authorize the
execution, delivery and performance of this Agreement, the Notes and each other
Loan Document to which it is a party.
(b Except for consents, authorizations, approvals, notices and
filings described on Schedule III, all of which have been obtained, made or
waived, no consent or authorization of, approval by, notice to, filing with or
other act by or in respect of, any Governmental Authority or any other Person is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or the Notes
or any other Loan Document.
(c This Agreement has been, and each Note and each other Loan
Document to which it is a party will be, duly executed and delivered on behalf
of each Person constituting the Borrower.
(d This Agreement constitutes, and each Note and each other
Loan Document when executed and delivered will constitute, a legal, valid and
binding obligation of each Person constituting the Borrower enforceable against
each such Person in accordance with its terms, except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforcement of creditors' rights generally and by
general equitable principles (whether enforcement is sought by proceedings in
equity or at law).
Section 3.5 No Legal Bar. The execution, delivery and performance of
this Agreement and the Notes, the borrowings hereunder and the use of the
proceeds thereof will not violate any Requirement of Law or Contractual
Obligation of any Person constituting the Borrower or of any of their respective
Subsidiaries and, except as required by the Loan Documents, will
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not result in, or require, the creation or imposition of any Lien on any of its
or their respective properties or revenues pursuant to any such Requirement of
Law or Contractual Obligation.
Section 3.6 No Material Litigation. Except as set forth on Schedule
IV, no litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the any Person
constituting the Borrower, threatened by or against any Person constituting the
Borrower or any of their respective Subsidiaries or against any of its or their
respective properties or revenues (a) with respect to this Agreement or the
Notes or any of the transactions contemplated hereby, or (b) which if adversely
determined would have a Material Adverse Effect.
Section 3.7 No Default. No Person constituting the Borrower nor any
of their respective Subsidiaries is in default under or with respect to any of
their respective Contractual Obligations in any respect which would reasonably
be expected to have a Material Adverse Effect. No Default or Event of Default
has occurred and is continuing.
Section 3.8 Ownership of Property; Liens. Each Person constituting
the Borrower and their respective Subsidiaries has good record and marketable
title in fee simple to, or a valid leasehold interest in, all its real property
(and no part thereof is subject to a lease, concession or like agreement between
KTI or any Subsidiary Borrower, as lessor or owner, and a third party, as
lessee), and good title to, or a valid leasehold interest in, all its other
property, and none of such property is subject to any Lien except as permitted
by Section 6.2. All such property is set forth on Schedule II.
Section 3.9 Intellectual Property. Each Person constituting the
Borrower and each of their respective Subsidiaries owns, or is licensed to use,
all trademarks, tradenames, copyrights, patents, technology, know-how and
processes necessary for the conduct of its business as currently conducted
(collectively, the "Intellectual Property") except where the failure to own or
license any such Intellectual Property would not have a Material Adverse Effect.
Except as set forth on Schedule V, no claim has been asserted in writing or is
pending by any Person challenging or questioning the use of any such
Intellectual Property or the validity or effectiveness of any such Intellectual
Property which would have a Material Adverse Effect, nor does any Person
constituting the Borrower know of any valid basis for any such claim which, if
asserted, would have a Material Adverse Effect. To the best of the knowledge of
the Borrower, the use of such Intellectual Property by each Person constituting
the Borrower and their respective Subsidiaries does not infringe the rights of
any Person.
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Section 3.10 No Burdensome Restrictions. No Requirement of Law or
Contractual Obligation of any Person constituting the Borrower or any of their
respective Subsidiaries has a Material Adverse Effect.
Section 3.11 Taxes. Each Person constituting the Borrower and their
respective Subsidiaries has filed or caused to be filed all tax returns which
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes (including, without limitation, withholding taxes), fees or
other charges imposed on it or any of its property by any Governmental Authority
(other than any the amount or validity of which are currently being contested in
good faith by appropriate proceedings and with respect to which reserves in
conformity with GAAP have been provided on the books of such Person constituting
the Borrower or its respective Subsidiaries, as the case may be); no tax Lien
has been filed, and, to the knowledge of such Person, no claim is being
asserted, with respect to any such tax, fee or other charge in any case which
would have a Material Adverse Effect.
Section 3.12 Federal Regulations. No part of the proceeds of any
Loans will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U of the Board
as now and from time to time hereafter in effect or for any purpose which
violates the provisions of any Regulations of the Board. If requested by any
Lender at any time, each Person constituting the Borrower will furnish to such
Lender a statement in conformity with the requirements of FR Form U-1 referred
to in Regulation U.
Section 3.13 Investment Company Act; Public Utility Holding Company
Act; Other Regulations. No Person constituting the Borrower is (a) an
"investment company," or a company "controlled" by an "investment company,"
within the meaning of the Investment Company Act of 1940, as amended, or (b) a
"holding company" as defined in, or otherwise subject to regulation under, the
Public Utility Holding Company Act of 1935. No Person constituting the Borrower
is subject to regulation under any federal or state statute or regulation which
limits its ability to incur Indebtedness.
Section 3.14 Subsidiaries. Except for Inactive Subsidiaries, all the
Subsidiaries of KTI and each Subsidiary Borrower as of the Effective Date are
listed on Schedule VI to this Agreement. Except as shown on Schedule VI, KTI
owns all of the issued and outstanding Capital Stock of each Subsidiary listed
on Schedule VI. None of the Capital Stock of any such
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Subsidiary is subject to a Lien in favor of any Person other than the Agent
pursuant to the Loan Documents.
Section 3.15 Employee Grievances. Except as set forth on Schedule
VII hereof, as of the Effective Date no Person constituting the Borrower nor any
of their Subsidiaries is a party to any collective bargaining agreement or, to
the best knowledge of such Person, subject to any current effort to organize,
and there are no actions or proceedings pending or, to the best of the knowledge
of such Person, threatened against it or its Subsidiaries, by or on behalf of,
or with, its employees, other than employee grievances arising in the ordinary
course of business which are not, in the aggregate, material.
Section 3.16 ERISA.
(a Except as set forth in Schedule VIII hereof, as of the
Effective Date no Person constituting the Borrower nor any of their Subsidiaries
have any Plan (including without limitation any Multiemployer Plan) or have made
or make any payments to any Plan.
(b Each Person constituting the Borrower and each Subsidiary
of such Person is and has at all times been in substantial compliance with all
applicable provisions of ERISA, except where a failure to be in such compliance
would not have a Material Adverse Effect.
(c No Person constituting the Borrower has engaged in a
transaction in connection with which such Person or any ERISA Affiliate could be
subject to a material liability for either a civil penalty assessed pursuant to
Section 502(i) of ERISA or a tax imposed by Section 4975 of the Code.
(d There has been no termination of a Plan or trust created
under any Plan that would give rise to a material liability to the PBGC on the
part of any Person constituting the Borrower or any ERISA Affiliate. No material
liability to the PBGC has been or is expected to be incurred with respect to any
Plan by any Person constituting the Borrower or any ERISA Affiliate. The PBGC
has not instituted proceedings to terminate any Plan. There exists no condition
or set of circumstances which presents a material risk of termination or partial
termination of any Plan by the PBGC. Each Person constituting the Borrower and
each ERISA Affiliate have paid all premiums to the PBGC when due.
(e Full payment has been made of all amounts which are
required under the terms of each Plan to have been paid as contributions to such
Plan as of the last day of the most recent fiscal year of such Plan ended on or
before the date of
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this Agreement, and no accumulated funding deficiency (as defined in Section 302
of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any Plan. No Person constituting the Borrower nor any ERISA Affiliate
has failed to make a required installment under Section 412(m) of the Code or
any other payment required under Section 412 of the Code on or before the due
date.
(f The value of the benefit liabilities (as defined in Section
4001(a)(16) of ERISA) of each Plan (based on the actuarial assumptions contained
in Title IV of ERISA) does not exceed the fair market value of the assets of
such Plan. No Person constituting the Borrower nor any ERISA Affiliate is
required to provide security to a Plan under Section 401(a)(29) of the Code.
(g No Person constituting the Borrower nor any ERISA Affiliate
has made a complete or partial withdrawal from a Multiemployer Plan. To the best
knowledge of each Person constituting the Borrower the liability to which such
Person or any ERISA Affiliate would become subject under ERISA if such Person
and all ERISA Affiliates were to withdraw completely from all Multiemployer
Plans as of the most recent valuation date, together with any secondary
liability for withdrawal liability such Person and any ERISA Affiliate may have
as of the date hereof, would not have a Material Adverse Effect. To the best
knowledge of each Person constituting the Borrower no such Multiemployer Plan is
in reorganization (as such term is defined in Section 4241 of ERISA) or is
insolvent (as such term is defined in Section 4245 of ERISA).
Section 3.17 Solvency. KTI and each Subsidiary Borrower is Solvent.
Section 3.18 Year 2000 Compliance. Each Person constituting the
Borrower has conducted a comprehensive review and assessment of its computer
applications with respect to the "year 2000 problem" (that is, the risk that
computer applications may not be able to properly perform data-sensitive
functions after December 31, 1999) and, based on that review, Borrower
represents that the year 2000 problem will not have a Material Adverse Effect.
To the best of Borrower's knowledge, no failure to address the year 2000 problem
on the part of any supplier, vendor or other Person with whom any Person
constituting the Borrower does business with have a Material Adverse Effect.
Section 3.19 Disclosure. There is no fact known to the Borrower
which materially adversely affects or in the future (so far as the Borrower can
now foresee) materially adversely affect the business, property, assets or
financial condition of KTI or any of its Subsidiaries which has not been set
forth in this
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Agreement or in the other documents, certificates and statements furnished to
the Agent or the Lenders by or on behalf of the Borrower prior to the date
hereof in connection with the transactions contemplated hereby.
ARTICLE 4 CONDITIONS PRECEDENT
Section 4.1 Conditions to Effective Date. This Agreement shall
become effective on the date (the "Effective Date") on which each condition
listed in Section 4.2 is satisfied and each of the following shall have
occurred:
(a The Agent shall have received counterparts of this
Agreement, executed and delivered by a duly authorized officer of each Person
constituting the Borrower and each Lender, together with fully executed
counterparts of the other Loan Documents. Each Lender shall have received a
Revolving Credit Note conforming to the requirements hereof and executed by a
duly authorized officer of each Person constituting the Borrower.
(b The Agent shall have received a certificate of the
Secretary or an Assistant Secretary of each Person constituting the Borrower
dated as of the Effective Date and certifying (1)that attached thereto is a
true, complete and correct copy of the Certificate of Incorporation and By-laws
of such Person as modified through the date of said certificate together with
good standing certificates from the jurisdiction of such Person's incorporation
and each jurisdiction where it is required to be qualified to do business is a
foreign corporation, (20 that attached thereto is a true, complete and correct
copy of resolutions duly adopted by the Board of Directors of such Person
authorizing (x) the execution, delivery and performance of this Agreement and
the Notes and the other Loan Documents and (y) the borrowings contemplated
hereunder and that such resolutions have not been amended, modified, revoked or
rescinded and (3) as to the incumbency and specimen signature of each officer
executing any Loan Documents on behalf of such Person constituting the Borrower;
and such certificate and the resolutions attached thereto shall be in form and
substance satisfactory to the Agent.
(c The Agent shall have received the executed legal opinion of
counsel to the Persons constituting the Borrower, in form and substance
satisfactory to the Agent.
(d The Borrower shall have paid to the Agent, for its account,
the underwriting fee payable to the Agent pursuant to the letter agreement (the
"Fee Letter") between the Agent and the Borrower dated May 21, 1998.
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(e The Borrower shall have paid all fees of counsel to the
Agent submitted on the date hereof. This condition precedent does not derogate
from the Borrower's continuing obligations under Section 10.5.
(f Agent shall have received such Uniform Commercial Code,
bankruptcy, judgment, federal tax Lien, building code violation and other
searches of public records as Agent may require with respect to the Property and
Borrower and the results of such searches shall be satisfactory in all respects
to Agent.
(g The Agent shall have received such other materials,
documents and papers regarding the Property and Borrower as the Agent may
require in its reasonable discretion.
(h The Agent shall have received all UCC financing/assignment
and continuation statements and other documents as Agent reasonably deems
necessary in order to perfect the Liens granted in favor of the Agent and the
Lenders pursuant to the Security Documents.
(i The Agent shall have received and approved all insurance
policies or certificates required to be delivered pursuant to the Loan
Documents.
(j All corporate and other proceedings, and all documents,
instruments and other legal matters in connection with the transactions
contemplated by this Agreement and the other Loan Documents shall be reasonably
satisfactory in form and substance to the Agent and the Lenders, and the Agent
and the Lenders shall have received such other documents and legal opinions in
respect of any aspect or consequence of the transactions contemplated hereby or
thereby as they may reasonably request.
Section 4.2 Conditions to Each Loan. The obligation of the Lenders
to make any Loan requested to be made on any date (including, without
limitation, the initial Loan) or to issue any Letter of Credit (including,
without limitation, the initial Letter of Credit) is subject to the satisfaction
of the following conditions precedent:
(a Each of the representations and warranties made by each
Person constituting the Borrower in or pursuant to the Loan Documents shall be
true and correct in all material respects on and as of such date as if made on
and as of such date.
(b No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to
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the Loans or Letters of Credit requested to be made or issued on such date.
(c The Lenders shall have received all fees due and owing
pursuant to Section 2.4 and the Agent shall have received all fees due and owing
to it pursuant to the Fee Letter.
(d No notice of, or any other document or instrument creating,
any federal tax Lien or Lien under Section 412 of the Code or Section 4068 of
ERISA shall have been issued, recorded or filed with respect to the assets of
the Borrower or any of its Subsidiaries and no Lender shall have informed the
Agent or the Borrower that such Lender has processed any such Lien or has notice
thereof.
Each borrowing hereunder shall constitute a representation and
warranty by the Borrower as of the date of such Loan that the conditions
contained in this Section 4.2 have been satisfied.
ARTICLE 5 AFFIRMATIVE COVENANTS
Each Person constituting the Borrower hereby agrees that, so long as
the Commitments remain in effect, any Note remains outstanding and unpaid or any
other amount is owing to the Agent or any Lender hereunder, each Person
constituting the Borrower shall and shall cause each of its Subsidiaries
to(except the Subsidiary Borrowers in the case of delivery of financial
information, reports and notices):
Section 5.1 Financial Statements. Furnish to the Agent (with
sufficient copies for each Lender):
(a as soon as available, but in any event within 105 days
after the end of each fiscal year of KTI, a copy of the consolidated balance
sheet of KTI and its consolidated Subsidiaries as at the end of such year and
the related consolidated statements of income and retained earnings and of cash
flows for such year, setting forth in each case in comparative form the figures
for the previous year, certified by and reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope of
the audit, by Ernst & Young LLP or other independent certified public
accountants of nationally recognized standing reasonably acceptable to the
Required Lenders together with the consolidating balance sheet of KTI and its
consolidated Subsidiaries as at the end of such year, setting forth in
comparative form the figures for the previous year, certified by a Responsible
Officer as being fairly stated in all material respects when considered in
relation to the consolidated financial statements of KTI and its consolidated
Subsidiaries; and
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(b as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of KTI, the unaudited consolidated and consolidating balance sheet of KTI
and its consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and retained earnings and of cash
flows of KTI and its consolidated Subsidiaries for such quarter and the portion
of the fiscal year through the end of such quarter, setting forth in each case
in comparative form the figures for the previous year, certified by a
Responsible Officer as being fairly stated in all material respects when
considered in relation to the consolidated financial statements of KTI and its
consolidated Subsidiaries (subject to normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
Section 5.2 Certificates; Other Information. Furnish to the Agent
(with sufficient copies for each Lender):
(a concurrently with the delivery of the financial statements
referred to in Sections 5.1(a) and(b), the following: (i) a certificate of a
Responsible Officer of KTI stating that, to the best of such Officer's
knowledge, each Person constituting the Borrower during such period have
observed or performed all of their respective covenants and other agreements,
and satisfied every condition, contained in this Agreement and in the Notes and
the other Loan Documents to which they are a party to be observed, performed or
satisfied by them, and that such Officer has obtained no knowledge of any
Default or Event of Default, except as specified in such certificate, and (ii) a
certificate in the form of Exhibit H hereto showing Borrower's compliance with
the covenants set forth in Section 6.11, 6.12, 6.13 and 6.14.
(b concurrently with the delivery of the financial statements
referred to in Section 5.1(a), a copy of the projections by KTI of the operating
budget and cash flow budget of KTI and its Subsidiaries for the three
immediately succeeding, consecutive, fiscal years such projections to be
accompanied by a certificate of a Responsible Officer of KTI to the effect that
such projections have been prepared on the basis of assumptions deemed
reasonable at the time of preparation and that such Officer has no reason to
believe they are incorrect or misleading in any material respect;
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(c within five days after the same are sent, copies of all
financial statements and reports which KTI sends to its stockholders generally,
and within five days after the same are filed, copies of all financial
statements and reports which KTI may make to, or file with, the Securities and
Exchange Commission or any successor or analogous Governmental Authority [other
regulators];
(d promptly, such additional financial and other information
as the Agent from time to time reasonably may request.
Section 5.3 Payment of Obligations. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the relevant Person constituting the Borrower or its Subsidiaries,
as the case may be or except for immaterial amounts incurred in the ordinary
course of business.
Section 5.4 Conduct of Business and Maintenance of Existence.
Continue to engage in businesses related to the businesses now conducted by it
and preserve, renew and keep in full force and effect its corporate existence
and take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 6.4; comply with all Contractual Obligations and
Requirements of Law except (without derogating from the immediately succeeding
two sentences) to the extent that failure to comply therewith would not, in the
aggregate, have a Material Adverse Effect. Conduct and complete all
investigations, studies, sampling and testing and all remedial, removal and
other actions necessary to clean up and remove any Hazardous Materials on, from,
or affecting the Property (i) in accordance with all Requirements of Law, and
(ii) in accordance with the orders and directives of all Governmental
Authorities having or claiming jurisdiction, except where the failure to so
comply could not be expected to have or would not have a Material Adverse
Effect. Not cause or permit (or allow any tenant or subtenant to cause or
permit) the Property, or any part thereof, to be used to generate, manufacture,
refine, transport, treat, store, handle, dispose, transfer, produce or process
Hazardous Materials, other than in the ordinary course of their respective
businesses in compliance with the Environmental and Safety Laws.
Section 5.5 Maintenance of Property; Insurance. Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted; maintain
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with financially sound and reputable insurance companies (rated A or better by
A.M. Best & Co.) insurance on all its property in at least such amounts and
against at least such risks (but including in any event general liability,
product liability and business interruption) as is maintained by the Borrower on
the date hereof; and furnish to the Agent proof reasonably satisfactory to the
Agent of the annual renewal thereof (within 30 days of such renewal) and, upon
written request, such other information as to the insurance carried as Agent may
reasonably request.
Section 5.6 Inspection of Property; Books and Records; Discussions.
Keep proper books of record and account in which full, true and correct entries
in conformity with prudent business practices and all Requirements of Law shall
be made of all dealings and transactions in relation to its business and
activities; and permit representatives of the Agent and each Lender during
normal business hours and upon reasonable notice (unless an Event of Default has
occurred and is continuing, in which case no such notice from the Agent or any
Lender shall be required) to visit and inspect any of its properties, examine
and make abstracts from any of its books and records and conduct asset/system
reviews and/or appraisals (such asset/system reviews and appraisals to be at the
Lenders' expense if no Default or Event of Default exists and otherwise at the
Borrower's sole cost and expense; at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of any Person constituting the Borrower and its
Subsidiaries with officers and employees of such Person and its Subsidiaries and
with its independent certified public accountants.
Section 5.7 Notices. Promptly give notice to the Agent of:
(a the occurrence of any Default or Event of Default of which
the Borrower has knowledge;
(b any (i) default or event of default under any Contractual
Obligation of any Person constituting the Borrower or any of its Subsidiaries or
(ii) litigation, investigation or proceeding which may exist at any time between
any Person constituting the Borrower or any of its Subsidiaries and any
Governmental Authority, which in either case, if not cured or if adversely
determined, as the case may be, would have a Material Adverse Effect;
(c any litigation or proceeding affecting any Person
constituting the Borrower or any of its Subsidiaries in which the amount
involved is $1,000,000 or more and not covered by insurance or in which
injunctive or similar relief is sought; and
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(d the occurrence of any event having a Material Adverse
Effect.
Each notice pursuant to this subsection shall be accompanied by a
statement of a Responsible Officer of the relevant Person constituting the
Borrower setting forth details of the occurrence referred to therein and stating
what action such Person proposes to take with respect thereto.
Section 5.8 ERISA Compliance. Comply with all the applicable
provisions of ERISA now or hereafter in effect with respect to each of its Plans
except where the failure to comply would not have a Material Adverse Effect.
Notify the Lender of the following events, as soon as possible and in any event
within thirty days after the Borrower knows or has reason to know thereof: (i)
the occurrence of any Reportable Event with respect to any Plan; (ii) the
occurrence of a prohibited transaction (as defined in Section 406 of ERISA or
Section 4975 of the Code) with respect to any Plan, (iii) the institution of
proceedings or the taking or expected taking of any other action by the PBGC or
any Person constituting the Borrower or any ERISA Affiliate to terminate or
withdraw or partially withdraw from any Plan and, with respect to a
Multiemployer Plan, the Reorganization or Insolvency of such Plan (as such terms
are defined in ERISA), (iv) the failure of any Person constituting the Borrower
or any ERISA Affiliate to make a required installment under Section 412 (m) of
the Code or any other payment required under Section 412 of the Code on or
before the due date or (v) the adoption of an amendment with respect to a Plan
so that any Person constituting the Borrower or any ERISA Affiliate is required
to provide security to the Plan under Section 401(a)(29) of the Code, and in
addition to such notice, deliver to the Lender a certificate signed by a
Responsible Officer setting forth the details relating thereto, and the action
that such Person and the ERISA Affiliate propose to take with respect thereto
and when known, any action taken or threatened by the Internal Revenue Service
or the PBGC, together wit a copy of any notice to the PBGC or the Internal
Revenue Service or any notice delivered by the PBGC or the Internal Revenue
Service.
Section 5.9 MERC.
(a Unless, on or before December 31, 1998, either (x) (i) the
Agent shall have received a written consent from the MERC Lenders under the Ing
Facility in form and substance satisfactory to Agent and the Required Lenders
and containing the Required Consent; together with a Partnership Pledge and
Stock Pledge (collectively the "MERC Pledges") in form and substance
satisfactory to Agent giving effect to a pledge by KTI Environmental Group Inc.
(or any successor or successors to its
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interests as a limited and/or general partner in MERC) (KTI Environmental Group
Inc. and/or such successor, hereinafter "KEG") of the limited and general
partnership interests in MERC owned by KEG and a pledge of all the issued and
outstanding Capital Stock of KEG, respectively and an opinion of counsel to the
pledgors addressed to the Agent and Lenders addressing such issues with respect
to such pledge as Agent may reasonably request, and (ii) the partnership
agreement of MERC shall have been amended (the "MERC Amendment") on terms and
conditions satisfactory to Agent and Required Lenders to permit Agent or any
purchaser of partnership interests in MERC (pursuant to the MERC Pledges) to
become a partner of MERC; or (y) the outstanding obligations of MERC to the MERC
Lenders shall have been satisfied in full (and the commitment of the MERC
Lenders and the letter of credit issued to Central Maine thereunder terminated)
or refinanced on terms and conditions (including, without limitation, the
Required Consent)satisfactory to the Agent and Required Lenders, the Agent shall
have received the MERC Pledges (and related opinion) and the MERC Amendment
shall have been effected; KTI shall within ninety (90) days after written demand
of the Required Lenders, cause MERC to satisfy and terminate the Ing Facility
and related letter of credit and refinance the same on terms and conditions
(including, without limitation, the Required Consent (provided that references
to MERC Lenders and Ing Facility therein shall be deemed to refer to the
refinancing lenders) satisfactory to Agent and the Required Lenders; cause the
MERC Pledges to be delivered and effect the MERC Amendment. As used herein
"Required Consent" shall mean that (i) all of the Capital Stock of KEG may be
pledged to the Agent for the benefit of the Lenders; (ii) the limited and
general partnership interests of MERC may be pledged to Agent for the benefit of
the Lenders, (iii) upon and during the continuance of an Event of Default, the
Agent may foreclose upon and sell the limited partnership interests of MERC,(iv)
upon and during the continuance of an Event of Default, with the prior written
consent of the MERC Lenders which shall not be unreasonably withheld, the Agent
may foreclose upon and sell the general partnership interests of MERC.
(b) It is agreed that, without affecting their obligations
hereof, any one or more of the Lenders may (but shall not be required to) be a
party to any refinancing referred to in Section 5.9(a).
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ARTICLE 6 NEGATIVE COVENANTS
Each Person constituting the Borrower hereby agrees that, so long as
the Commitments remain in effect, any Note remains outstanding and unpaid or any
other amount is owing to the Agent or any Lender hereunder, it shall not, and
shall not permit any of its Subsidiaries to, directly or indirectly (except as
to the Subsidiary Borrowers, the covenants set forth in Sections 6.11, 6.12,
6.13 and 6.14):
Section 6.1 Limitation on Indebtedness. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness in respect of the Loans, the Notes and other
obligations of such Person constituting the Borrower under this Agreement;
(b) The Indebtedness listed on Schedule IX hereto, and
renewals and refinancings thereof provided that such renewals or refinancings do
not increase the outstanding principal amount of such Indebtedness and provided
further that there is not at the time of such renewal or refinancing a
continuing Event of Default;
(c) Indebtedness of any Person constituting the Borrower owing
to another Person constituting the Borrower and Indebtedness of Timber Energy
Resources, Inc. to any Person constituting the Borrower;
(d) Subordinated Debt;
(e) Indebtedness of a Person which becomes a Subsidiary after
the date hereof, provided that such Indebtedness existed at the time such Person
became a Subsidiary and was not created in anticipation thereof;
(f) Indebtedness not otherwise permitted by the terms hereof
in an aggregate principal amount outstanding not exceeding $5,000,000 at any
time for the period ending December 31, 1998 and not exceeding at any time in
any subsequent calendar year the amount of Indebtedness outstanding at the end
of the immediately preceding calendar year by more than $5,000,000; and
(g) Contingent Obligations in accordance with Section 6.3 of
this Agreement.
Section 6.2 Limitation on Liens. Create, incur, assume or suffer to
exist any Lien upon any of its Property, personal property, assets or revenues,
whether now owned or hereafter acquired, except for:
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(a) Liens securing Indebtedness permitted by Section 6.1(a),
(e) and (f); provided, that, in the case of Liens securing Indebtedness
permitted by Section 6.1(f) such Liens shall not encumber any property not
financed by such Indebtedness, and in the case of any Liens permitted by Section
6.1(e), such Liens shall not encumber any property not encumbered by such Lien
at the time it was created, such Liens existed at the time such Person became a
Subsidiary and were not created in anticipation of the acquisition, and any such
Lien does not by its terms secure any Indebtedness other than Indebtedness
existing immediately prior to the time such Person becomes a Subsidiary;
(b) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, provided that adequate reserves with
respect thereto are maintained on the books of the relevant Person constituting
the Borrower or its Subsidiaries, as the case may be, in conformity with GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
repairmen's, landlords' or other like Liens arising in the ordinary course of
business which secure amounts not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(d) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation and
deposits securing liability to insurance carriers under insurance or
self-insurance arrangements;
(e) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory obligations, surety
and appeal bonds, performance bonds and other obligations of a like nature
incurred in the ordinary course of business;
(f) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case materially
detract from the value of the property subject thereto or materially interfere
with the ordinary conduct of the business of the relevant Person constituting
the Borrower or such Subsidiary; and
(g) Liens listed on Schedule X, provided that no such Lien is
amended after the date of this Agreement to cover any additional property (real
or personal) or to secure additional Indebtedness, and, provided further that
within 30 days after the date any Lien which prohibits a Lien in favor of the
Agent for the benefit of the Lenders is released, satisfied or otherwise
discharged, in whole or in part, KTI or the relevant
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Subsidiary Borrower or Timber Energy Resources, Inc., as the case may be, shall
cause such Lien or partial release or discharge to be discharged of record or
recorded, as the case may be, and shall ▇▇▇▇▇ ▇ ▇▇▇▇ to the Agent (for the
benefit of the Agent and the Lenders) on the assets (other than Property)
formerly subject to such released or discharged Lien pursuant to a Stock Pledge
Agreement, Security Agreement or other instrument in each case in form and
substance satisfactory to the Agent.
Section 6.3 Limitation on Contingent Obligations. Create, incur,
assume or suffer to exist any Contingent Obligation, except guarantees made in
the ordinary course of its business by any Person constituting the Borrower of
obligations of a Borrower or any of its Subsidiaries, performance bonds issued
in the ordinary course of business and except Letter of Credit Reimbursement
Obligations, provided, in any case those obligations are not otherwise
prohibited under this Agreement.
Section 6.4 Limitations on Fundamental Changes. Except as permitted
by Section 6.6, enter into any merger, consolidation or amalgamation, or
liquidate, wind up or dissolve itself (or suffer any liquidation or
dissolution), or convey, sell, lease, assign, transfer or otherwise dispose of,
all or substantially all of its property, business or assets, or make any
material change in its present method of conducting business, except:
(a) any Subsidiary of KTI may be merged or consolidated with
or into KTI (provided that KTI shall be the continuing or surviving corporation)
or with or into any wholly owned Subsidiary of KTI which is a Subsidiary
Borrower (provided that the Subsidiary Borrower shall be the continuing or
surviving corporation) and after giving effect to any of such transactions, no
Default or Event of Default shall exist; and
(b) any wholly owned Subsidiary of KTI may sell, lease,
transfer or otherwise dispose of any or all of its assets (upon voluntary
liquidation or otherwise) to KTI or any wholly-owned Subsidiary of KTI which is
a Subsidiary Borrower; and
(c) sales of assets in accordance with Section 6.5 of this
Agreement.
Section 6.5 Limitation on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, Capital Stock of any Person constituting the
Borrower (other than KTI), receivables and leasehold interests), whether now
owned or hereafter acquired, except:
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(a) obsolete or worn out property disposed of in the ordinary
course of business;
(b) the sale or other disposition of any property (other than
inventory) provided, that, the aggregate book value of all assets so sold or
disposed of in any period of twelve consecutive months shall not exceed 3% of
Consolidated Tangible Assets of KTI as at the beginning of such twelve-month
period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable only in connection with the compromise thereof or the assignment of
past-due accounts receivable for collection; and
(e) as otherwise contemplated by Section 6.4 of this
Agreement.
Section 6.6 Limitation on Investments, Loans and Advances. Make any
Acquisition or otherwise purchase, hold or acquire beneficially any Capital
Stock, other securities or evidences of indebtedness of, make or permit to exist
any loans or advances to, or make or permit to exist any investment or acquire
any interest whatsoever in, any other Person, except:
(a) extensions of trade credit to customers in the ordinary
course of business;
(b) Permitted Investments;
(c) capital contributions, loans and advances by any Person
constituting the Borrower to Timber Energy Resources, Inc. or a Subsidiary
Borrower which is organized under the laws of a State of the United States of
America;
(d) in the case of any Acquisition where the following
conditions are met at or prior to the time such Acquisition is made:
(1) In the Case of an Acquisition of Capital Stock, (a) the
Borrower or its Subsidiary, as the case may be, shall acquire,
through a tender offer or otherwise, a sufficient number of
shares of stock of the target (free and clear of all liens,
encumbrances and restrictions) entitled to vote on a merger or
other business combination to enable the Borrower or its
Subsidiary, as the case may be, to consummate a merger of the
target with or into the Borrower or a Subsidiary of Borrower;
and (b)
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the Board of Directors of the target company shall have
adopted (and not revoked) a resolution approving the proposed
transaction;
(2) In the case of an Acquisition of assets, the Borrower or its
Subsidiary shall acquire, as a going concern, sufficient
assets to conduct the business being acquired;
(3) The transactions contemplated shall be in compliance with all
regulations of the Board of Governors of the Federal Reserve
System (including, without limitation Regulation U thereof),
and in material compliance with all other laws and regulations
of the United States of America (including, without
limitation, the ▇▇▇▇-▇▇▇▇▇-▇▇▇▇▇▇ Act), any State thereof or
subdivision of any such State and any other Governmental
Authority (domestic or foreign);
(4) There shall be no action, suit or proceeding challenging or
seeking to enjoin the Acquisition;
(5) The target shall be organized under the laws of the United
States of America, any State thereof the District of Columbia,
or Canada or if assets are acquired, the principal assets
acquired shall be located in the continental United States of
America, the States of Alaska or Hawaii or Canada.
(6) No Default or Event of Default shall occur in giving effect to
such Acquisition;
(7) The Agent shall have received reliance letters from counsel to
the acquiring Person with respect to any opinions issued in
connection with such Acquisition permitting the Agent and
Lenders to rely thereon as well as opinions of such counsel
addressed to the Agent and Lenders with respect to the due
authorization, execution and delivery by the acquiring Person
of the documents related to the Acquisition, the
enforceability thereof and such other matters (including,
without limitation, those referred to in clause (4) above) as
the Agent may reasonably request, and all such opinions shall
be in form and substance satisfactory to the Agent;
(8) The Capital Stock or assets acquired (and, in the case of the
acquisition of Capital Stock, stock and other assets owned by
the target or acquired indirectly in Subsidiaries of the
target) and all
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rights of KTI or its Subsidiary under the documents related
thereto are, simultaneously with the consummation of such
Acquisition, pledged to the Agent (for the benefit of the
Lenders) to secure repayment of the Obligations pursuant to
one or more Pledge Agreements, Security Agreements or like
instruments and, at the option of the Required Lenders,
mortgages, deeds of trust or like instruments, in each case in
form and substance reasonably satisfactory to the Agent;
(9) Each Subsidiary consummating or resulting from an Acquisition
shall (if not already a Subsidiary Borrower) become a party
hereto by executing and delivering an Assumption Agreement to
the Agent;
(10) Plus, in the case of any Major Acquisition to be consummated
at a cost equal to or greater than $10,000,000 (or its
equivalent in other currencies, as reasonably determined by
the Agent), the consent of the Required Lenders to such
Acquisition has been obtained; and
(11) Plus, in the case of each Major Acquisition, the Agent shall
have received the Standard Information Package together with a
valuation of the operating segments by business group of the
target, in each case in form and substance acceptable to the
Agent and a certificate from a Responsible Officer of KTI
confirming, as of the date of such Acquisition compliance with
Section 6.11, 6.12, 6.13 and 6.14 on a pro forma basis for the
twelve month period preceding such Acquisition and the twelve
month period following (and after giving effect to) such
Acquisition.
(e) loans and advances to employees or directors of any Person
constituting the Borrower not to exceed $500,000 in aggregate principal amount
outstanding at any time or $250,000 to any individual.
Section 6.7 Limitation on Optional Payments and Modifications of
Debt Instruments. Make any optional payment or prepayment on or optional
redemption, defeasance or purchase of any Subordinated Debt or other
Indebtedness other than the Obligations, or amend, modify or change, or consent
or agree to any amendment, modification or change to any of the terms relating
to the payment or prepayment or principal of or interest on, any such
Indebtedness, other than any amendment, modification
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or change which would extend the maturity or reduce the amount of any payment of
principal thereof or which would reduce the rate or extend the date for payment
of interest thereon. It is agreed that partial retirement of the indebtedness of
PERC owed with respect to the Fame Bond Indebtedness required to be made by PERC
with respect to performance credits payable to local municipalities under
certain waste disposal agreements, and elected to be applied to the acquisition
of limited partnership interests in PERC through the retirement of Fame Bonds
(whether by redemption, defeasance or purchase and cancellation) shall not be
deemed to be "optional prepayments," "defeasance or purchase" of Indebtedness
under this Section 6.7. As used in the preceding sentence "Fame Bond
Indebtedness" shall mean all Indebtedness of PERC owing to the Finance Authority
of Maine relating to the $30,040,000 Electric Rate Stabilization Revenue
Refunding Bonds Series, 1998 A (Penobscot Energy Recovery Company, L.P.) and
$14,950,000 Electric Rate Stabilization Revenue Refunding Bonds Series, 1998 B
(Penobscot Energy Recovery Company, L.P.).
Section 6.8 Transactions with Affiliates. Enter into any transaction
following the Closing Date, including, without limitation, any purchase, sale,
lease or exchange of property or the rendering of any service, with any
Affiliate unless such transaction is (a) not otherwise prohibited under this
Agreement, and (b) upon fair and reasonable terms no less favorable to the
relevant Person constituting the Borrower, than it would obtain in a comparable
arm's length transaction with a Person which is not an Affiliate. Permit any
Inactive Subsidiary to engage in any business activity unless all of the Capital
Stock of such Subsidiary has been pledged to the Agent for the benefit of the
Lenders and such Subsidiary has executed and delivered a Security Agreement.
Section 6.9 Fiscal Year. Permit the fiscal year of the Borrower to
end on a day other than December 31.
Section 6.10 Limitation on Conduct of Business. Enter into any
business either directly or through any Subsidiary except for businesses in
which KTI and its Subsidiaries are engaged on the date of this Agreement and
business related to such existing businesses.
Section 6.11 Interest Coverage Ratio. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters preceding any date of
determination to be less than 2.40 to 1.00.
Section 6.12 Fixed Charge Coverage Ratio. Permit the Fixed Charge
Coverage Ratio for the period of four consecutive fiscal quarters preceding any
date of determination to be less
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than 1.25 prior to December 31, 1998 or less than 2.00 thereafter.
Section 6.13 Total Senior Funded Debt to Consolidated Adjusted
EBITDA. Permit the ratio of Total Senior Funded Debt to Consolidated Adjusted
EBITDA for the period of four consecutive fiscal quarters preceding any date of
determination to be greater than:
(i) 4.5 to 1 through December 31, 1998;
(ii) 4.25 to 1.00 for the period from and including January 1,
1999 through June 30, 1999;
(iii) 4.00 to 1.00 for the period from and including July 1,
1999 through December 31, 1999;
(iv) 3.75 to 1.0 for periods ending on or after January 1,
2000.
Section 6.14 Debt to Capitalization Ratio. Permit the ratio of (x)
the sum of Total Senior Funded Debt plus Subordinated Debt (excluding, only for
purposes of the calculation in this clause (x), up to $24,100,000 in aggregate
principal amount of Subordinated Debt issued by KTI in redemption or conversion
of its Series B Preferred Stock) to (y) the sum of Consolidated Equity plus
Total Senior Funded Debt plus Subordinated Debt for the period of four
consecutive fiscal quarters preceding any date of determination to be greater
than:
(i) .60 for the period through June 30, 1999; or
(ii) .55 for periods ending on or after July 1, 1999.
Section 6.15 Limitation on Dividends. Declare any dividends (other
than dividends payable solely in common stock) on, or make any payment on
account of, any shares of any class of stock, whether now or hereafter
outstanding, or make any other distribution in respect thereof either directly
or indirectly, whether in cash or property or in obligations, or make any
payment on account of, or purchase or otherwise acquire, any securities of KTI
from any Person, except KTI may issue Subordinated Debt in exchange for its
outstanding Series B Preferred Stock pursuant to the terms thereof and prior to
such exchange, Borrower may pay dividends on its currently outstanding Series B
Preferred Stock, Borrower may pay dividends on Permitted Preferred Stock issued
after the Closing Date so long as no Event of Default has occurred and is
continuing or will be caused thereby; and except that Subsidiaries may pay
dividends to and make other distributions to their immediate parents and/or KTI.
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Section 6.16 ERISA Obligations. Be or become obligated to the PBGC,
in any material respect, other than in respect of annual premium payments.
Section 6.17 Negative Pledges. Enter into any agreement or covenant
with any Person which would prohibit the creation, granting or permitting to
exist of any Lien on any asset; except pursuant to this Agreement or the other
Loan Documents and except for contracts with municipalities and other
Governmental Authorities that prohibit Liens on rights arising thereunder.
ARTICLE 7 EVENTS OF DEFAULT
Section 7.1 Events of Default. If any of the following events (each,
an "Event of Default") shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Note
or Reimbursement Obligation when due in accordance with the terms thereof or
hereof; or the Borrower shall fail to pay any interest on any Note or
Reimbursement Obligation, or any other amount payable hereunder, within 5 days
after any such interest or other amount becomes due in accordance with the terms
thereof or hereof; or
(b) Any representation or warranty made or deemed made by any
Person constituting the Borrower or any other party to a Loan Document herein or
in any other Loan Document or which is contained in any certificate, document or
financial or other statement furnished at any time under or in connection with
this Agreement shall prove to have been incorrect in any material respect on or
as of the date made or deemed made; or
(c) Any Person constituting the Borrower shall default in the
observance or performance of any agreement contained in Article 6 (except, in
the case of any such Person as to which MERC or PERC is a Subsidiary, where
causing such compliance by MERC or PERC with any covenants in Article 6 would,
based on the opinion of counsel to such Person, constitute a breach of its
obligations to the other partners in MERC or PERC, as the case may be); or
(d) Any Person constituting the Borrower or any other Person
party to a Loan Document shall default in the observance or performance of any
other agreement contained in this Agreement (other than as provided in Sections
7.1(a), (b) or (c)) or any other Loan Document, and such default shall continue
unremedied for a period of 30 days or any Event of Default (as defined therein)
shall occur under any other Loan Document; or
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(e) KTI or any of its Subsidiaries shall:
(1) default in any payment of principal of or interest
on any Indebtedness (other than the Notes or Reimbursement
Obligations) or in the payment of any Contingent Obligation in
either case in excess of $250,000, beyond the period of grace,
if any, provided in the instrument or agreement under which
such Indebtedness or Contingent Obligation was created; or
(2) default in the observance or performance of any
other agreement or condition relating to any such Indebtedness
or Contingent Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of
which default or other event or condition is to cause, or to
permit the holder or holders of such Indebtedness or
beneficiary or beneficiaries of such Contingent Obligation (or
a trustee or agent on behalf of such holder or holders or
beneficiary or beneficiaries) to cause, with the giving of
notice if required, such Indebtedness to become due prior to
its stated maturity or such Contingent Obligation to become
payable; or
(f) (1) KTI or any of its Subsidiaries shall commence any
case, proceeding or other action (A) under any existing or future law of any
jurisdiction, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, conservatorship or relief of debtors, seeking to have an order
for relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or seeking reorganization, arrangement, adjustment, winding-up,
liquidation, dissolution, composition or other relief with respect to it or its
debts, or (B) seeking appointment of a receiver, trustee, custodian, conservator
or other similar official for it or for all or any substantial part of its
assets, or KTI or any of its Subsidiaries shall make a general assignment for
the benefit of its creditors; or (2) there shall be commenced against KTI or any
of its Subsidiaries any case, proceeding or other action of a nature referred to
in clause (1) above which (A) results in the entry of an order for relief or any
such adjudication or appointment or (B) remains undismissed, undischarged or
unbonded for a period of 60 days; or (3) there shall be commenced against KTI or
any of its Subsidiaries any case, proceeding or other action seeking issuance of
a warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which
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shall not have been vacated, discharged, or stayed or bonded pending appeal
within 60 days from the entry thereof; or (4) KTI or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the acts set forth in clause (1), (2) or (3)
above; or (5) KTI or any of its Subsidiaries shall generally not, or shall be
unable to, or shall admit in writing its inability to, pay its debts as they
become due; or
(g) One or more judgments or decrees shall be entered against
KTI or any of its Subsidiaries involving in the aggregate a liability (not paid
or fully covered by insurance) of $1,000,000 or more and all such judgments or
decrees shall not have been vacated, discharged, stayed or bonded pending appeal
within 60 days from the entry thereof; or
(h) (i) Any Reportable Event, which the Required Lenders
determine in good faith (which determination shall be final and conclusive)
constitutes grounds for the termination of any Plan or Plans by PBGC or for the
appointment by the appropriate United States District Court of a trustee to
administer or liquidate any Plan or Plans, shall have occurred and be continuing
thirty (30) days after written or telegraphic or telephonic notice to such
effect shall have been given to the Borrower by the Lender; or (ii) a decision
shall have been made by the Board of Directors (or any committee thereof), any
authorized officer or other employee of any Person constituting the Borrower, or
any trustee or trustees of any Plan or Plans to terminate any Plan or Plans or
to file a termination notice with respect to any Plan or Plans; or (iii) a
trustee shall be appointed by the appropriate United States District Court to
administer any Plan or Plans, or any Plan or Plans shall be terminated; or (iv)
PBGC shall institute proceedings to terminate any Plan or Plans or to appoint a
trustee to administer any Plan or Plans; or (v) any Person constituting the
Borrower or any ERISA Affiliate shall fail with respect to any Plan or Plans to
meet the minimum funding standards established in the Code, or shall obtain a
waiver of such minimum funding standards; or (vi) any Person constituting the
Borrower or any ERISA Affiliate shall completely or partially withdraw from a
Plan; or (vii) any Person constituting the Borrower or any ERISA Affiliate shall
make a decision to cease operations at a facility or facilities where such
cessation would result in a separation from employment of more than 20% of the
total number of employees who are participants under a Plan; where in the case
of any one or more of the events described in the preceding clauses (i) through
(vii) the aggregate outstanding amount of unfunded vested liabilities under such
Plan if a single employer plan (including unfunded vested liabilities which
arise or might arise as a result of the termination of or withdrawal from such
Plan) or the allocable portion of such outstanding unfunded vested liabilities
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under a Multiemployer Plan shall exceed (either singly or in the aggregate in
the case of any such liability arising out of one or more of the events
described in the preceding clauses (i) through (vii) under more than one such
Plan)one percent (1%) of the Consolidated Tangible Net Worth of KTI and shall in
good faith be determined by the Required Lenders (which determination shall be
final and conclusive) to have a Material Adverse Effect; or
(i) a Change in Control shall occur; or
(j) ▇▇▇▇▇▇ ▇▇▇▇▇ shall cease to be an officer and member of
the senior management of KTI unless such event shall occur as a result of his
death or disability;
(k) Any Subsidiary of any Person constituting the Borrower
(other than a Subsidiary which is a Subsidiary Borrower) shall fail to take any
action which such Person has covenanted to cause such Subsidiary to take or
shall take any action which such Person has covenanted to cause such Subsidiary
not to take (without, for purposes of this subparagraph 7.1(k), giving effect to
the parenthetical exception to Section 7.1(c));
then, and in any such event, (A) if such event is an Event of Default specified
in clause (1) or (2) of Section 7.1(f) above with respect to any Person
constituting the Borrower, automatically the Commitments shall immediately
terminate and the Loans hereunder (with accrued interest thereon) and all other
amounts owing under this Agreement and the Notes shall immediately become due
and payable, and (B) if such event is any other Event of Default, any one or
more of the following actions may be taken: (i) the Agent may (with the consent
of the Required Lenders) and shall (upon the request of the Required Lenders),
by written notice to the Borrower, declare the Commitments to be terminated
forthwith, whereupon the Commitments shall immediately terminate; (ii) the Agent
may (with the consent of the Required Lenders) and shall (upon the request of
the Required Lenders), by written notice to the Borrower, declare the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the Notes to be due and payable forthwith, whereupon the same
shall immediately become due and payable and (iii) the Agent may (with the
consent of the Required Lenders) and shall (upon the request of the Required
Lenders but subject to the provisions of Article 8), proceed to enforce the
rights and remedies of the Secured Party under the Security Documents.
After the occurrence of an Event of Default, the Borrower shall, on
demand of the Agent, post cash collateral with the Agent to secure repayment of
the Letter of Credit Outstandings in an amount equal to the outstanding amount
thereof.
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Except as expressly provided above in this Section, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
ARTICLE 8 THE AGENT
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Section 8.1 Actions. Each Lender authorizes the Agent to act on
behalf of such Lender under this Agreement, the other Loan Documents and any
other related instruments and, in the absence of other written instructions from
the Lenders received from time to time by the Agent (with respect to which the
Agent agrees that it will, subject to the provisions of this Section 8.1, comply
in good faith except as otherwise advised by counsel), to exercise such powers
hereunder and thereunder as are specifically delegated to or required of the
Agent by the terms hereof and thereof, together with such powers as may be
reasonably incidental thereto. Each Lender agrees (which agreement shall survive
any termination of this Agreement) to indemnify the Agent, pro rata according to
such Lender's Percentage, from and against any and all liabilities, obligations,
damages, penalties, actions, judgements, suits, costs, expenses or disbursements
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against the Agent in any way relating to or arising out of this
Agreement, the Revolving Credit Notes, the Letters of Credit, any of the other
Loan Documents and any other related instruments, including, without limitation,
the reimbursement of the Agent for all reasonable out-of-pocket expenses
(including, without limitation, syndication costs and attorneys' fees) incurred
by the Agent hereunder or in connection herewith or in enforcing the obligations
of the Borrower or any Lender under this Agreement, under any of the other Loan
Documents or any other related instruments, in all cases as to which the Agent
is not reimbursed by the Borrower; provided that no Lender shall be liable for
the payment of any portion of such liabilities, obligations, damages, penalties,
actions, judgements, suits, costs, expenses or disbursements determined by a
court of competent jurisdiction in a final proceeding to have resulted solely
from the Agent's gross negligence or willful misconduct. The Agent shall not be
required to take any action hereunder or under any other related instruments, or
to prosecute or defend any suit in respect of this Agreement or any such
instrument, unless indemnified to its satisfaction by the Lenders against costs,
liability, and expense. If any indemnity in favor of the Agent shall become
impaired, it may call for additional indemnity and cease to do the acts
indemnified against until such additional indemnity is given. The Agent may
delegate its duties hereunder to affiliates, agents or attorneys-in-fact
selected in good faith by the Agent. Each Lender's obligation to indemnify the
Agent as set forth above shall be unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which such
Lender may have or have had against the Agent, any other Lender, the Borrower,
any Subsidiary or any other Person.
Section 8.2 Exculpation. The Agent shall have no duties or
responsibilities except those expressly set forth in
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this Agreement. Neither the Agent nor any of its directors, officers, employees,
or agents (collectively, the "Related Parties") shall be liable to any Lender
for any action taken or omitted to be taken by it under this Agreement, the
other Loan Documents or any other related instrument, or in connection herewith
or therewith, except for its own willful misconduct or gross negligence, nor
shall the Agent or any Related Parties be responsible for any recitals or
representations or warranties herein or therein, or for the effectiveness,
enforceability, validity or due execution of this Agreement, the other Loan
Documents or any other related instruments, nor shall the Agent or any Related
Parties be obligated to make any inquiry respecting the performance by the
Borrower of its obligations hereunder or thereunder. The Agent shall be entitled
to rely upon advice of counsel concerning legal matters and upon any notice,
consent, certificate, statement or writing which it believes to be genuine and
to have been presented by a proper Person. The Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which, by
the terms of this Agreement, the Agent is permitted or required to take or
grant, and the Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from taking any action or withholding
any approval under this Agreement or any of the other Loan Documents until it
has received instructions from the Required Lenders. No Lender shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder or under any of the other Loan Documents in
accordance with instructions from the (i) Required Lenders, or (ii) all of the
Lenders to the extent required hereunder.
Section 8.3 Successor. The Agent may resign as such at any time upon
at least ten days' prior notice to the Borrower and all Lenders, and the Agent
may be removed at any time by written notice from the Required Lenders. If the
Agent at any time shall resign or be removed, the Required Lenders may appoint
another Lender as a successor Agent provided such appointment is consented to by
KTI (which consent shall not be unreasonably withheld). If the Required Lenders
do not make such appointment within thirty days, the resigning or removed Agent
shall appoint a new Agent from among the Lenders or, if no Lender accepts such
appointment, from among commercial banking institutions or trust institutions
generally; provided such successor agent shall be a domestic commercial bank
having a combined capital and surplus in excess of $500,000,000. Upon the
acceptance of any appointment as Agent by a successor Agent, such successor
Agent shall thereupon become the Agent hereunder and shall be entitled to
receive from the prior Agent such documents of transfer and assignment as such
successor Agent may reasonably request, and the resigning or removed Agent shall
(i) be discharged from its
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duties and obligations under this Agreement and the other related instruments
and (ii) entitled to the continued benefit of this Article 8 with respect to all
actions taken by it prior to its removal or resignation.
Section 8.4 Credit Decisions. Each Lender represents and
acknowledges to the Agent that it has, independently of the Agent and each other
Lender, and based on the financial information referred to in this Agreement and
the other Loan Documents and such other documents, information and
investigations as it has deemed appropriate, made its own credit decision to
enter into this Agreement. Each Lender also acknowledges that it will,
independently of the Agent and each Lender, and based on such documents,
information and investigations as it shall deem appropriate at any time,
continue to make its own credit decisions as to exercising or not exercising
from time to time any rights and privileges available to it under this
Agreement, the Loan Documents or any other related instruments.
Section 8.5 Notices, etc. from Agent. The Agent shall give prompt
notice to each Lender of each notice or request given to the Agent by the
Borrower or by the Agent to the Borrower pursuant to the terms of this
Agreement. The Agent will promptly distribute to each Lender each instrument
received for its account and copies of all other communications received by the
Agent from the Borrower for distribution to the Lenders by the Agent in
accordance with the terms of this Agreement.
Section 8.6 Security Documents. Each Lender hereby authorizes the
Agent to enter into the Security Documents and to take all action contemplated
thereby. Each Lender agrees that no Lender shall have any right individually to
seek to realize upon the collateral granted for the benefit of the Lenders
pursuant to any of the Security Documents, it being understood and agreed that
such rights and remedies may be exercised by the Agent for the benefit of the
Agent and the Lenders upon the terms of the Security Documents.
ARTICLE 9 ASSIGNMENTS/PARTICIPATIONS
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Section 9.1 Purchasing Lender. (a) Each Lender, in the ordinary
course of its commercial banking business and in accordance with applicable law,
at any time may sell, assign and delegate to any Affiliate of such Lender
and/or, with the consent of the Agent and KTI (which in each case shall not be
unreasonably withheld or delayed and provided that KeyBank shall not require
KTI's consent with respect to any Purchasing Lender previously acknowledged by
KTI to KeyBank to be acceptable to it), to one or more additional banks or
financial institutions (each, a "Purchasing Lender"), subject to minimum holding
level for each Lender of $10,000,000, such Lender's rights and obligations under
this Agreement, the Notes and the other Loan Documents (provided, that any such
sale, assignment and delegation shall be made with respect to each Loan,
participation in Letter of Credit Outstandings and Commitment of such Lender
hereunder) pursuant to an agreement ("Assignment and Acceptance"), executed by
the Purchasing Lender, and such Lender. Such Assignment and Acceptance shall
specify an effective date which is not less than five Business Days after the
date of execution thereof. Upon such execution, delivery, and acceptance, from
and after the effective date determined pursuant to such Assignment and
Acceptance and payment by the assigning Lender of a $2,500 administration fee to
the Agent with respect to each Purchasing Lender party to such Assignment and
Acceptance, (A) the Purchasing Lender thereunder shall be a party hereto and, to
the extent of the Commitments assigned and Loans sold pursuant to such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment as set forth therein (including, without limitation, (x) the
right to approve or disapprove of actions which, in accordance with the terms
hereof, require the approval of the Required Lenders or all Lenders, as the case
may be, and (y) the obligation to make Loans and purchase participations in each
Letter of Credit), and (B) the assigning Lender thereunder shall, to the extent
of the Commitments assigned pursuant to such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of an assigning
Lender's rights and obligations under this Agreement, such assigning Lender
shall cease to be a party hereto). Such Assignment and Acceptance shall be
deemed to amend this Agreement to the extent, and only to the extent, necessary
to reflect the addition of such Purchasing Lender as a Lender and the resulting
adjustment of Commitments arising from the purchase by such Purchasing Lender of
all or a portion of the rights and obligations of such assigning Lender under
this Agreement and the Notes. On or prior to the effective date determined
pursuant to such Assignment and Acceptance, the Borrower, at its own expense,
shall execute and deliver to the assigning Lender and Purchasing Lender in
exchange for the surrendered Revolving Credit Note, a new Revolving Credit Note
to the order of such Purchasing Lender in an amount equal to the
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Commitment assumed by it pursuant to such Assignment and Acceptance and, if the
assigning Lender has retained a Commitment hereunder, a new Revolving Credit
Note to the order of the assigning Lender in an amount equal to the Commitment
retained by it hereunder. Such new Note or Notes shall be dated the Closing Date
and otherwise shall be in the form of the Note or Notes replaced thereby. The
Note or Notes surrendered by the assigning Lender shall be returned to the
Borrower marked "replaced." The assigning Lender shall provide the Agent with a
copy of each Assignment and Acceptance.
(b) If, pursuant to this Agreement, any interest in this
Agreement or any other Loan Documents is assigned to any transferee which is
organized under the laws of any jurisdiction other than the United States or any
State thereof, the transferor Lender shall cause such transferee, concurrently
with the effectiveness of such transfer, (i) to represent to the transferor
Lender (for the benefit of the transferor Lender, the Agent and the Borrower)
that under applicable law and treaties no taxes will be required to be withheld
by the Agent, the Borrower or the transferor Lender with respect to any payments
to be made to such transferee in respect of the Loans, (ii) to furnish to the
transferor Lender, the Agent and the Borrower either Form 4224 or Form 1001
(Ownership Exemption or Reduced Rate Certificate) or any successor forms
(wherein such transferee claims entitlement to complete exemption from U.S.
federal withholding tax on all interest payments hereunder) and (iii) to agree
(for the benefit of the transferor Lender, the Agent and the Borrower) to
provide (so long as it may lawfully do so) the transferor Lender, the Agent and
the Borrower a new Form 4224 or Form 1001 or any successor forms upon the
expiration or obsolescence of any previously delivered form and comparable
statements in accordance with applicable U.S. laws and regulations and
amendments duly executed and completed by such transferee, and to comply from
time to time with all applicable U.S. laws and regulations with regard to such
withholding tax exemption. Any foreign lender that fails to comply may not claim
any recovery from Borrower for withholding taxes.
Section 9.2 Participations. The Lenders may grant participations in
any part of the Loans or Revolving Credit Notes or their obligations with
respect to Letters of Credit to any of their affiliates or to any other
commercial bank or other financial institution; provided, however, that (1) such
Lender's obligations under this Agreement shall remain unchanged, (2) such
selling Lender shall remain solely responsible for the performance of such
obligations and (3) the Borrower, the Agent and the other Lenders shall continue
to deal solely and directly with such selling Lender in connection with all
rights and obligations under this Agreement. Any agreement pursuant to which a
selling Lender may grant a participation may provide that
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such Lender will not agree to any amendment or waiver expressed in clause A
through D or G of Section 10.1(a) of this Agreement without the consent of the
participant, but shall not require any Lender to take or omit to take any other
action hereunder.
Section 9.3 Disclosure of Information. Each Person constituting the
Borrower authorizes the Lenders to disclose to any Purchasing Lender, any
prospective Purchasing Lender and any participant or prospective participant any
and all information relating to each Person constituting the Borrower and its
Affiliates which has been furnished to the Agent and the Lenders by or on behalf
of each Person constituting the Borrower; provided that any such recipient
agrees to keep any information relating to any Person constituting the Borrower
received hereunder confidential except as may be required by any Requirement of
Law.
Section 9.4 Pledges to Federal Reserve Bank. Nothing herein shall
prohibit any Lender from pledging or assigning any Note to any Federal Reserve
Bank in accordance with applicable law.
ARTICLE 10 MISCELLANEOUS
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Section 10.1 Amendments and Waivers. (a) No amendment or waiver of
any provision of this Agreement, or any of the other Loan Documents, nor consent
to any departure by the Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Lenders, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that no amendment,
waiver or consent, unless in writing and signed by all the Lenders, shall do any
of the following: (A) waive any of the conditions specified in Section 4.1
(though the Agent alone may defer the fulfillment of such conditions until the
date of the applicable borrowing), (B) increase the amount or extend the term of
the Commitments of the Lenders or subject the Lenders to any additional
obligations, (C) reduce the principal of, or interest on, the Loans, the
Reimbursement Obligations or any of the Notes, or reduce any fees payable
hereunder, (D) postpone any date fixed for any payment in respect of principal
of, or interest on, the Loans, the Reimbursement Obligations or any of the
Notes, as the case may be, or fees payable hereunder, (E) change any of the
components which shall be required for the Lenders or any Lender to take any
action hereunder, (i.e., the Percentage of the Commitments, or the aggregate
unpaid principal amount of the Loans, or the number of Lenders), (F) amend or
terminate any Security Document, or (G) amend this Section 10.1; and provided,
further, that no amendment, waiver or consent shall, unless in writing and
signed by the Agent in addition to the Lenders hereinabove required to take such
action, affect the rights or duties of the Agent under this Agreement. Without
derogating from the foregoing, no amendment to this Agreement shall be effective
unless signed by each Person constituting the Borrower.
(b) The liability of each Person constituting the Borrower
hereunder shall be absolute and unconditional irrespective of:
(1) any change in the time, manner, or place of payment
or in any other term of, or any other amendment or waiver of, or any consent to
departure from any of the Loan Agreement, any of the Loan Documents or any
Obligations;
(2) any change in the name, capital stock, Certificate
of Incorporation or by-laws, as the case may be, of any Person constituting the
Borrower;
(3) the insolvency of, or the voluntary or involuntary
bankruptcy, assignment for the benefit of creditors, reorganization or other
similar proceedings affecting any Person constituting the Borrower or any of
their respective assets; or
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(4) any other circumstance or claim which might
otherwise constitute a defense available to, or a discharge of, any Person
constituting the Borrower in respect of the Obligations.
(c) No payment made by any Person constituting the Borrower,
or received or collected by the Agent or any of the Lenders, from any Person
constituting the Borrower by virtue of any action or proceeding or set-off or
application at any time in reduction of or in payment of the Obligations shall
be deemed to modify, release or otherwise affect the liability of any Person
constituting the Borrower under the Loan Documents. Notwithstanding any such
payments received or collected by the Agent or any of the Lenders in connection
with the Obligations, each Person constituting the Borrower shall remain liable
for the Obligations until all Obligations are paid in full. The joint and
several obligation of each Person constituting the Borrower shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Obligations is rescinded or must otherwise be returned by the Agent
or the Lenders upon the insolvency, bankruptcy or reorganization of any Person
constituting the Borrower or otherwise, all as though such payment had not been
made.
(d) The obligations and liabilities of each Person
constituting the Borrower hereunder shall not be released, discharged, limited
or in any way affected by anything done, suffered or permitted by the Agent or
Lenders in connection with any monies or credit advanced by the Agent or Lenders
to any Person constituting the Borrower or any security therefor, including,
without limitation, any loss of, or in respect of, any security received by the
Agent or any of the Lenders from any Person constituting the Borrower. It is
agreed that the Lenders and/or the Agent, without releasing, discharging,
limiting or otherwise affecting in whole or in part the obligations and
liabilities of any Person constituting the Borrower hereunder, may, without
limiting the generality of the foregoing:
(A) grant time, renewals, extensions, indulgences, releases
and discharges to any Person constituting the Borrower;
(B) take or abstain from taking security or collateral for the
Obligations or from perfecting security or collateral for the
Obligations;
(C) release, discharge, compromise or otherwise deal with
(with or without consideration) any and all collateral, mortgages,
indemnities, guaranties or other security given by any Person
constituting the Borrower with respect to the Obligations;
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(D) accept compromises from any Person constituting the
Borrower;
(E) after an Event of Default, apply all monies at any time
received from any Person constituting the Borrower or from any
guaranties, indemnities or any collateral upon such part of the
Obligations as the Lenders and/or Agent may see fit or change any
such application in whole or in part from time to time as the Agent
or such Lenders may see fit; or
(F) otherwise deal with each Person constituting the Borrower
and all other Persons and collateral as the Lenders and/or Agent may
see fit;
(e) neither the Agent nor any of the Lenders shall be bound or
obligated to exhaust recourse against any Person constituting the
Borrower or other Persons or any security, guarantee, indemnity,
mortgage or collateral it may hold or take any other action before
being entitled to payment from each Person constituting the Borrower
hereunder and each Person constituting the Borrower hereby waives
any requirement that would otherwise compel the Agent or the Lenders
to do any of the foregoing.
Section 10.2 Notices. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing (or by telex,
fax or similar electronic transfer confirmed in writing), and, unless otherwise
expressly provided herein, shall be deemed to have been duly given or made (a)
when delivered by hand or (b) if given by mail, three Business Days after
deposited in the mails by certified mail, return receipt requested, postage
prepaid, or (c) if by telex, fax or similar electronic transfer, when sent and
receipt has been confirmed, addressed as follows:
If to the Borrower:
KTI, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Agent:
KeyBank National Association
▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Phone: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
If to any Lender: to its address and telephone and telecopy numbers as such
Lender shall specify to the Agent, the Borrower and the other Lenders in
accordance with the provisions of this Section 10.2
provided that any notice, demand or request to or upon the Agent pursuant to
Section 2.3 or Section 2.7 may be given to the Agent by telephone, provided that
the Borrower immediately follows such telephone instructions with a delivery of
written notice received by the Agent prior to the extension of Credit requested
by one of the methods of delivery otherwise authorized herein; and provided
further any notice, request or demand to or upon the Agent pursuant to Section
2.3, Section 2.5, Section 2.7 or Section 2.15 shall not be effective until
received. Any party may change its address for notices by notice to the other
parties hereto in the manner provided in this subsection. Any notice to the
Borrower or given by the Borrower shall be binding upon, and deemed received or
given by, all Persons constituting the Borrower if given by any Person
constituting the Borrower (in the case of notices from the Borrower) or
delivered to any Person constituting the Borrower at the address set forth
herein (or such other address noticed to the Lender as provided herein) and no
separate notice to or by any other Person constituting the Borrower shall be
necessary for the binding effect or deemed receipt of a notice to or by the
Borrower.
Section 10.3 No Waiver; Cumulative Remedies.
Each party hereto agrees that, except as instructed by the Required
Lenders, the Agent (on behalf of the Lenders) shall have no obligation to
proceed against any Person constituting the Borrower or under any of the
Security Documents in any particular order. Each party hereto further agrees:
(a) No failure to exercise and no delay in exercising, on the
part of the Agent or any Lender, any right, remedy, power or privilege hereunder
shall operate as a waiver thereof.
(b) No single or partial exercise of any right, remedy, power
or privilege hereunder shall preclude any other or
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further exercise thereof or the exercise of any other right, remedy, power or
privilege.
(c) The rights, remedies, powers and privileges herein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by law.
Section 10.4 Survival of Representations and Warranties. All
representations and warranties made hereunder and in any document, certificate
or statement delivered pursuant hereto or in connection herewith shall survive
the execution and delivery of this Agreement and the Notes.
Section 10.5 Payment of Expenses and Taxes. The Borrower agrees
jointly and severally:
(a) to pay or reimburse the Agent for all its reasonable
out-of-pocket costs and expenses incurred in connection with the negotiation,
preparation and execution of, and any proposed or effective amendment,
supplement or modification to, this Agreement and the Notes and the other Loan
Documents and any other documents prepared in connection herewith or therewith,
and the consummation of the transactions contemplated hereby and thereby,
including, without limitation, the reasonable fees and disbursements of counsel
to the Agent;
(b) to pay or reimburse the Agent and each Lender for all
reasonable out-of-pocket costs and expenses incurred by each of them in
connection with the enforcement or preservation of any rights under this
Agreement, the Notes or the other Loan Documents including, without limitation,
reasonable fees and disbursements of counsel to the Agent and each Lender;
(c) to pay, indemnify, and hold the Agent and each Lender
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
similar taxes, if any, which may be payable or determined to be payable in
connection with the execution and delivery of, or consummation of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the Notes or
the other Loan Documents; and
(d) to indemnify, exonerate and hold the Agent, each Lender,
each Affiliate of the Agent, each Affiliate of each Lender, and each of their
respective officers, directors, employees, and agents (herein collectively
called the "Indemnified Parties" and individually called an "Indemnified Party")
free and harmless from and against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses actually incurred in
connection therewith
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(irrespective of whether such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including, without limitation,
reasonable attorneys' fees and disbursements and allocated costs of staff
counsel (collectively, the "Indemnified Liabilities"), incurred by the
Indemnified Parties or any of them as a result of, or arising out of, or
relating to
(i) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Loan;
(ii) any investigation, litigation, or proceeding related to
any acquisition (or Acquisition) or proposed acquisition (or
proposed Acquisition) by KTI or any of its Subsidiaries of all
or any portion of the stock (or other equity interests in) or
the assets of any Person, regardless of whether any
Indemnified Party is a party thereto; or
(iii) any Environmental Liabilities;
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party which a court of competent jurisdiction shall have
determined in a final proceeding to have arisen by reason of the relevant
Indemnified Party's gross negligence or willful misconduct, and if and to the
extent that the foregoing undertaking may be unenforceable for any reason, the
Borrower hereby agrees to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is permissible under
applicable law.
The agreements in this Section shall survive repayment of the Notes
and Obligations and all other amounts payable hereunder.
Section 10.6 Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the Borrower, the Agent, the Lenders, all
future holders of the Notes and their respective successors and assigns, except
that no Person constituting the Borrower may assign, transfer or delegate any of
their rights or obligations under this Agreement without the prior written
consent of the Lenders.
Section 10.7 Set-off/Sharing.
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(a) In addition to any rights and remedies of the Agent and
Lenders provided by law, each Lender shall have the right, without prior notice
to any Person constituting the Borrower, any such notice being expressly waived
by each Person constituting the Borrower to the extent permitted by applicable
law, upon any amount becoming due and payable by any Person constituting the
Borrower hereunder or under the Notes or the other Loan Documents (whether at
the stated maturity, by acceleration or otherwise) to set-off and appropriate
and apply against such amount any and all deposits (general or special, time or
demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by such Lender or any branch or agency of such Lender to or for the credit
or the account of any Person constituting the Borrower. Each Lender agrees
promptly to notify the Borrower and Agent after any such set-off and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such set-off and application.
(b) Each of the Lenders agree among themselves that with
respect to all amounts received by them which are applicable to the payment or
satisfaction of all or part of the Loans or Reimbursement Obligations, interest
thereon, any fees or any other amount payable hereunder or under the other Loan
Documents, equitable adjustment will be made so that, in effect, all such
amounts will be shared among the Lenders in proportion to their respective
Percentages, whether received by voluntary payment, by the exercise of the right
of setoff or banker's lien, by counterclaim or by the enforcement of their
rights hereunder or under the other Loan Documents.
(c) If any Lender shall, through the exercise of any right of
counterclaim, setoff, banker's lien or otherwise, receive payment or reduction
of a proportion of the aggregate amount of the Loans or interest thereon due to
such Lender, or any other amount payable hereunder, as the case may be, which is
greater than the proportion received by any other Lender or Lenders in respect
to the aggregate amount of any Loan or Reimbursement Obligation and interest
thereon due such Lender, or with respect to any other amount payable hereunder,
that Lender receiving such proportionately greater payment shall notify the
other Lenders and the Agent of such receipt and purchase participations (which
it shall be deemed to have done simultaneously upon the receipt of such excess
payment) in the Loans and Reimbursement Obligations held by the other Lender or
Lenders so that all such recoveries of principal and interest with respect to
the Loans shall be proportionate to each Lender's respective Percentage;
provided that if all or part of such proportionately greater payment received by
such purchasing
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Lender is thereafter recovered from such Lender, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to the purchasing Lender to the extent of such recovery, but without interest.
(d) The Borrower expressly consents to the arrangements
described in this Section 10.7.
Section 10.8 Usury Laws. This Agreement and the other Loan Documents
are each subject to the express condition that at no time shall Borrower be
obligated or required to pay interest on the principal balance due under any of
the Loan Documents at a rate which could subject the obligee under any Loan
Documents to either civil or criminal liability as a result of being in excess
of the maximum interest rate which Borrower is permitted by the law of the
jurisdiction stated to govern such Contractual Obligation to contract or agree
to pay. If by the terms of this Loan Agreement or any of the Loan Documents, the
Borrower is at any time required or obligated to pay interest on any amounts due
on any of the Loan Documents at a rate in excess of such maximum rate, the rate
of interest under such Loan Document shall be deemed to be immediately reduced
to such maximum rate and the interest payable shall be computed at such maximum
rate (provided, however, that the total amount of such interest shall be
amortized, prorated and allocated over the period commencing from the date
hereof until payment in full of all of the Obligations). Notwithstanding the
foregoing, it is agreed the fees and interest to be paid pursuant hereto were
set with reference to New York General Obligations Law Section 5501.6.b.
Section 10.9 Counterparts. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument.
Section 10.10 Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 10.11 Integration. This Agreement represents the agreement
of the Borrower, the Agent and the Lenders with respect to the subject matter
hereof, and there are no promises, undertakings, representations or warranties
by the Agent or any Lender relative to subject matter hereof not expressly set
forth or referred to herein or in the other Loan Documents, except as
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between the Agent and KTI, the Fee Letter and those provisions of the Commitment
Letter dated May 21, 1998 relating to syndication which are stated to survive
the execution of the Loan Documents.
Section 10.12 Governing Law. This Agreement and the Notes and the
rights and obligations of the parties under this Agreement and the Notes shall
be governed by, and construed and interpreted in accordance with, the law of the
State of New York. This choice of law is made pursuant to General Obligations
Law Section 5-1401.
Section 10.13 Submission To Jurisdiction; Waivers. Each Person
constituting the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to or arising out of this Agreement and the other Loan
Documents to which it is a party, or the conduct of any party with respect
thereto, or for recognition and enforcement of any judgement in respect thereof,
to the nonexclusive jurisdiction of any court of the State of New York or any
federal court sitting in the City and State of New York;
(b) consents that any such action or proceeding may be brought
in such courts and waives to the fullest extent permitted by law any objection
that it may now or hereafter have to the venue of any such action or proceeding
in any such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to the
Borrower at the address set forth in Section 10.2 or at such other address of
which the Lender shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to ▇▇▇ in any other jurisdiction;
(e) waives, to the maximum extent permitted by law, any right
it may have to claim or recover in any legal action or proceeding referred to in
this subsection and waives any claim to, and agrees that neither the Agent nor
any Lender shall have any liability for, any special, indirect, consequential or
punitive damages in any action or proceeding arising out of or related to this
Agreement or any other Loan Document.
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This consent to jurisdiction is made pursuant to New York General Obligations
Law Section 5-1402.
Section 10.14 Headings; Table of Contents. The Section and other
headings contained in this Agreement and the Table of Contents which precedes
this Agreement are for reference purposes only and shall not control or affect
the construction of this Agreement or the interpretation hereof in any respect.
Section 10.15 Acknowledgments. Each Person constituting the Borrower
hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the Notes and the other Loan
Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship to any Person constituting the Borrower, and the relationship
between the Agent and the Lenders, on one hand, and each Person constituting the
Borrower, on the other hand, is solely that of debtor and creditor; and
(c) no joint venture exists among any Person constituting the
Borrower, the Agent or any Lender.
Section 10.16 Judgement Currency/Withholding Tax.
(a) If for the purposes of obtaining a judgment in any court
with respect to any obligation of any Person constituting the Borrower under
this Agreement, the Notes or any other instrument or agreement executed and
delivered by the Borrower in connection therewith it becomes necessary to
convert into any other currency any amount in Dollars due thereunder, then such
conversion shall be made at the buying spot rate of exchange for freely
transferable Dollars at the close of business on the day before the day on which
the judgment is given at the place where such court is located. If there is a
change in such rate of exchange prevailing between the day before the day on
which the judgment is given and the date of the payment thereof, the Borrower
agrees to pay such additional amounts (if any) as may be necessary to insure
that the amount paid on such date is the amount in such other currency which,
when converted at such rate of exchange in effect on the date of payment, is the
amount then due in Dollars. Any amount due under this Section 10.16 will be due
as a separate debt and shall not be affected by or merged into any judgment
being obtained for any other sums due under or in respect of this Agreement, the
Notes or any other instrument or agreement executed and delivered by the
Borrower in connection therewith. In no event, however, shall the Borrower be
required to pay more Dollars at such rate of exchange when payment is made than
the amount of Dollars stated to be due.
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(b) If any payment of the Obligations by any Subsidiary
Borrower which is organized or located in a jurisdiction outside the United
States of America is subject in such jurisdiction to any withholding or other
tax, levy, impost, charge fee, duty or deduction of any kind whatsoever (each, a
"Foreign Tax"), the Borrower shall pay to the Agent or Lender, as the case may
be, such additional amounts as will result in a net payment to the Agent or such
Lender equal to the amount such payee would have received had no such Foreign
Tax been imposed.
Section 10.17 Waivers of Jury Trial. EACH PERSON CONSTITUTING THE
BORROWER, THE AGENT AND EACH LENDER HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE
TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR
THE NOTES OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
Borrowers:
----------
KTI, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
MANNER RESINS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
POWER SHIP TRANSPORT, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
KTI SPECIALTY WASTE SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
TOTAL WASTE MANAGEMENT
CORPORATION
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By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
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KTI TRANSPORTATION SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI ASH RECYCLING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI ASH RECYCLING OF NEW ENGLAND,
LTD.
By: KTI Specialty Waste Services,
Inc., general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI ENVIRONMENTAL GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
PERC, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
PERC MANAGEMENT COMPANY LIMITED
PARTNERSHIP
By: PERC, Inc., sole general partner
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
MULTITRADE GROUP, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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MULTITRADE OF MARTINSVILLE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI RECYCLING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI RECYCLING OF ILLINOIS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI RECYCLING OF NEW ENGLAND, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
VEL-A-▇▇▇▇ RECYCLING, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
KTI RECYCLING OF NEW JERSEY, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
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DATA DESTRUCTION SERVICES, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President
KTI BIO FUELS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
KTI OPERATIONS, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: President
Lenders:
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: Senior Banker
Agent:
KEYBANK NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇
Title: Senior Banker