Common use of Long-Term Debt Clause in Contracts

Long-Term Debt. As of December 31, 1999, the Company was not in compliance with several formula-based covenants in its credit facilities. As a result of this non- compliance, all debt outstanding under the credit facilities and the convertible subordinated notes as of December 31, 1999 was potentially callable and due within one year, and therefore had been reclassified from long-term debt to a current classification. On July 14, 2000, a restructuring of the credit facilities was completed, and the Company became in compliance with all of the credit facilities covenants. Long-term debt was comprised of the following: December 31, --------------------- 2000 -------- 1999 ----------- Credit facilities................................... $498,800 $ 959,610 Capital lease obligations (see Note 11)............. Less current portion and long-term debt potentially 6,053 -------- 975,682 6,799 ----------- 1,457,891 callable under covenant provisions in 1999......... (1,676) -------- $974,006 ======== (1,452,195) ----------- $ 5,696 =========== Scheduled maturities of long-term debt were as follows: 2001................................................................. 1,676 2002................................................................. 15,097 2003................................................................. 232,519 2004................................................................. 70,212 2005................................................................. 70,198 Thereafter........................................................... 585,980 Included in debt expense was interest expense, net of capitalized interest, of $112,180, $106,633 and $72,804 for 2000, 1999, and 1998, respectively. Also included in debt expense were amortization and write-off of deferred financing costs of $4,457, $4,164 and $1,376 for 2000, 1999, and 1998, respectively, and interest rate swap early termination costs of $9,823 in 1998. Credit facilities In July 2000, the major terms of the credit facilities were restructured which included the collateralization of the debt with substantially all of the Company's assets, a reduction in the revolving credit availability to $150,000 together with conversion of $299,000 of the revolving facility into a term loan, a new quarterly amortization schedule beginning September 30, 2000, and the immediate permanent pay-down of $50,000. Total outstanding debt under the credit facilities consisted of the following: December 31, ----------------- 2000 1999 -------- -------- Term loan................................................. $301,460 $392,000 Revolving credit facility................................. 567,610 Revolving credit facility--term tranche 197,340 -------- -------- $498,800 $959,610 ======== ======== In conjunction with the restructuring, the associated interest rates returned to the lower LIBOR-based rate formulas in effect prior to the non-compliance. The new financial covenants reflected the Company's financial position and projected operating results and plans at the time of the restructuring. As a result of the restructuring, related financing costs were written off. These write-offs were recorded in 2000 as an extraordinary loss of $3,490, net of tax, and pre-tax debt expenses of $1,192. In 1998, the then existing credit facilities were replaced with an aggregate of $1,350,000 in two senior bank facilities. As a result of this refinancing, remaining net deferred financing costs of $16,018 net of tax were recognized as an extraordinary loss in 1998. Several of the Company's subsidiaries, including subsidiaries owning substantially all of the Company's dialysis center assets, have guaranteed the obligations under the credit facilities. At the time of the merger, RTC also had a credit agreement which provided for a $350,000 revolving credit/term facility available to fund acquisitions and general working capital requirements. The RTC credit agreement was terminated and repaid with borrowings under the credit facilities on February 27, 1998 in connection with the completion of our merger with RTC. The remaining net unamortized deferred financing costs in the amount of $4,393 related to the RTC credit agreement were recognized as an extraordinary loss in 1998. 7% convertible subordinated notes In November 1998, $345,000 of 7% convertible subordinated notes due 2009 were issued in a private placement offering subject to subsequent registration for resale. The notes are convertible, at the option of the holder, at any time into common stock at a conversion price of $32.81 principal amount per share, and the notes may be redeemed on or after November 15, 2001. The notes are general, unsecured obligations junior to all existing and future senior debt and effectively all existing and future liabilities of the Company and its subsidiaries. Commencing May 18, 1999, the Company incurred monetary penalties on a weekly basis until the registration of the notes under the Securities Act of 1933 was declared effective. Penalties of $976 were included in debt expense for the year ended December 31, 1999. The Company's registration statement covering the resale of the notes was declared effective on February 1, 2000.

Long-Term Debt. As Long-term debt consists of December the following (in thousands): MARCH 31, DECEMBER 31, 1999 1998 Bank borrowings $ 1,281,580 Commercial paper, average interest of 5.4% in 1999 and 5.7% in 1998 1,469,492 $ 1,903,100 840,108 Senior notes and debentures, interest 6 1/8% to 8 3/4%, due through 2028 5,957,823 5,959,884 4% Convertible subordinated notes due 2002................. 535,275 535,275 4 1/2% Convertible subordinated notes due 2001............. 148,370 148,370 5% Convertible subordinated debentures due 2006............ -- 114,445 5.75% Convertible subordinated notes due 2005.............. 455,114 Tax-exempt and project bonds, principal payable in periodic installments, maturing through 2021, fixed and variable interest rates ranging from 3.05% to 9.25% at March 31, 1999..................................................... 1,219,156 453,680 1,220,634 Installment loans and notes payable, interest to 14%, maturing through 2017.................................... 440,802 491,533 Other...................................................... 30,281 30,914 11,537,893 11,697,943 Less current maturities.................................... 556,741 583,742 $10,981,152=========== $11,114,201=========== At March 31, 1999, the Company applicable interest rate on the Company's $3.0 billion syndicated loan facility (the "Syndicated Facility") was not in compliance with several formula-based covenants in its credit facilities. As a result of this non- compliance, all debt 5.29% and there were no borrowings outstanding under the Company's $2.0 billion senior revolving credit facilities facility (the "Credit Facility"). The facility fee was 0.10% and 0.125% per annum, under the convertible subordinated notes as of December 31, 1999 was potentially callable Syndicated Facility and due within one year, and therefore had been reclassified from long-term debt to a current classification. On July 14, 2000, a restructuring of the credit facilities was completed, and the Company became in compliance with all of the credit facilities covenants. Long-term debt was comprised of the following: December 31, --------------------- 2000 -------- 1999 ----------- Credit facilities................................... $498,800 $ 959,610 Capital lease obligations (see Note 11)............. Less current portion and long-term debt potentially 6,053 -------- 975,682 6,799 ----------- 1,457,891 callable under covenant provisions in 1999......... (1,676) -------- $974,006 ======== (1,452,195) ----------- $ 5,696 =========== Scheduled maturities of long-term debt were as follows: 2001................................................................. 1,676 2002................................................................. 15,097 2003................................................................. 232,519 2004................................................................. 70,212 2005................................................................. 70,198 Thereafter........................................................... 585,980 Included in debt expense was interest expense, net of capitalized interest, of $112,180, $106,633 and $72,804 for 2000, 1999, and 1998, respectively. Also included in debt expense were amortization and write-off of deferred financing costs of $4,457, $4,164 and $1,376 for 2000, 1999, and 1998Facility, respectively, and interest rate swap early termination costs of $9,823 in 1998. Credit facilities In July 2000, the major terms of the credit facilities were restructured which included the collateralization of the debt with substantially all of the Company's assets, a reduction in the revolving credit availability to $150,000 together with conversion of $299,000 of the revolving facility into a term loan, a new quarterly amortization schedule beginning September 30, 2000, and the immediate permanent pay-down of $50,000. Total outstanding debt under the credit facilities consisted of the following: December 31, ----------------- 2000 1999 -------- -------- Term loan................................................. $301,460 $392,000 Revolving credit facility................................. 567,610 Revolving credit facility--term tranche 197,340 -------- -------- $498,800 $959,610 ======== ======== In conjunction with the restructuring, the associated interest rates returned to the lower LIBOR-based rate formulas in effect prior to the non-compliance. The new financial covenants reflected the Company's financial position and projected operating results and plans at the time of the restructuring. As a result of the restructuring, related financing costs were written off. These write-offs were recorded in 2000 as an extraordinary loss of $3,490, net of tax, and pre-tax debt expenses of $1,192. In 1998, the then existing credit facilities were replaced with an aggregate of $1,350,000 in two senior bank facilities. As a result of this refinancing, remaining net deferred financing costs of $16,018 net of tax were recognized as an extraordinary loss in 1998. Several of the Company's subsidiaries, including subsidiaries owning substantially all of the Company's dialysis center assets, have guaranteed the obligations under the credit facilities. At the time of the merger, RTC also had a credit agreement which provided for a $350,000 revolving credit/term facility available to fund acquisitions and general working capital requirements. The RTC credit agreement was terminated and repaid with borrowings under the credit facilities on February 27, 1998 in connection with the completion of our merger with RTC. The remaining net unamortized deferred financing costs in the amount of $4,393 related to the RTC credit agreement were recognized as an extraordinary loss in 1998. 7% convertible subordinated notes In November 1998, $345,000 of 7% convertible subordinated notes due 2009 were issued in a private placement offering subject to subsequent registration for resale. The notes are convertible, at the option of the holder, at any time into common stock at a conversion price of $32.81 principal amount per share, and the notes may be redeemed on or after November 15, 2001. The notes are general, unsecured obligations junior to all existing and future senior debt and effectively all existing and future liabilities of the Company and its subsidiaries. Commencing May 18, 1999, the Company incurred monetary penalties on a weekly basis until the registration of the notes under the Securities Act of 1933 was declared effective. Penalties of $976 were included in debt expense for the year ended December March 31, 1999. The Company had borrowed $1.025 billion and had issued letters of credit of $1.09 billion in aggregate under the Syndicated Facility and Credit Facility at March 31, 1999. The outstanding balance of the Company's registration statement covering two multi-currency credit facilities as of March 31, 1999, was euro 238.2 million (equivalent to approximately $256.6 million). The interest rates on the resale two outstanding loans under the multi-currency credit facilities at March 31, 1999, were 5.9% and 3.5%. On March 4, 1996, the Company issued $115.0 million of 5% convertible subordinated debentures, due on March 1, 2006. In March 1999, these debentures were called by the Company and subsequently converted into equity by the debenture holders. Approximately 4.0 million shares of the notes was declared effective on February 1Company's common stock were issued upon conversion. WASTE MANAGEMENT, 2000.INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

Long-Term Debt. As Long-term debt consists of the following (in thousands): DECEMBER 31, 1999 1998 Bank credit facilities..................................... $ 2,250,000 $ 1,903,100 Commercial paper, average interest of 5.5% in 1999 and 5.7% in 1998.................................................. 21,899 840,108 Senior notes and debentures, interest of 6% to 8 3/4% through 2029............................................. 6,749,785 5,959,884 4% Convertible subordinated notes due 2002................. 535,275 535,275 4 1/2% Convertible subordinated notes due 2001............. -- 148,370 5% Convertible subordinated debentures due 2006............ -- 114,445 5.75% Convertible subordinated notes due 2005.............. 426,726 453,680 Tax-exempt and project bonds, principal payable in periodic installments, maturing through 2021, fixed and variable interest rates ranging from 4.75% to 9.25% at December 31, 1999................................................. 1,234,668 1,220,634 Installment loans, the Company was not in compliance with several formula-based covenants in its credit facilities. As a result of this non- compliance, all debt outstanding under the credit facilities and the convertible subordinated notes as of December 31, 1999 was potentially callable and due within one yearpayable, and therefore had been reclassified from long-term debt other, interest to a current classification. On July 14, 2000, a restructuring of the credit facilities was completed, and the Company became in compliance with all of the credit facilities covenants. Long-term debt was comprised of the following: December 31, --------------------- 2000 -------- 1999 ----------- Credit facilities................................... $498,800 $ 959,610 Capital lease obligations (see Note 11)............. Less current portion and long-term debt potentially 6,053 -------- 975,682 6,799 ----------- 1,457,891 callable under covenant provisions in 1999......... (1,676) -------- maturities.................................... 3,098,742 597,742 $ 8,399,346 $974,006 11,134,619 ======== (1,452,195) ----------- $ 5,696 =========== Scheduled maturities of long-term debt were as follows: 2001................................................................. 1,676 2002................................................................. 15,097 2003................................................................. 232,519 2004................................................................. 70,212 2005................................................................. 70,198 Thereafter........................................................... 585,980 Included in debt expense was interest expense, net of capitalized interest, of $112,180, $106,633 and $72,804 for 2000, 1999, and 1998, respectively. Also included in debt expense were amortization and write-off of deferred financing costs of $4,457, $4,164 and $1,376 for 2000, 1999, and 1998, respectively, and interest rate swap early termination costs of $9,823 in 1998. Credit facilities In July 2000, the major terms of the credit facilities were restructured which included the collateralization of the debt with substantially all of the Company's assets, a reduction in the revolving credit availability to $150,000 together with conversion of $299,000 of the revolving facility into a term loan, a new quarterly amortization schedule beginning September 30, 2000, and the immediate permanent pay-down of $50,000. Total outstanding debt under the credit facilities consisted of the following: December 31, ----------------- 2000 1999 -------- -------- Term loan................................................. $301,460 $392,000 Revolving credit facility................................. 567,610 Revolving credit facility--term tranche 197,340 -------- -------- $498,800 $959,610 ======== =========== In conjunction with the restructuring, the associated interest rates returned to the lower LIBOR-based rate formulas in effect prior to the non-compliance. The new financial covenants reflected the Company's financial position and projected operating results and plans at the time of the restructuring. As a result of the restructuring, related financing costs were written off. These write-offs were recorded in 2000 as an extraordinary loss of $3,490, net of tax, and pre-tax debt expenses of $1,192. In 1998, the then existing credit facilities were replaced with an aggregate of $1,350,000 in two senior bank facilities. As a result of this refinancing, remaining net deferred financing costs of $16,018 net of tax were recognized as an extraordinary loss in 1998. Several of the Company's subsidiariesestimated payments, including subsidiaries owning substantially all scheduled minimum maturities, of the Company's dialysis center assets, have guaranteed the obligations under the credit facilities. At the time of the merger, RTC also had a credit agreement which provided for a $350,000 revolving credit/long-term facility available to fund acquisitions and general working capital requirements. The RTC credit agreement was terminated and repaid with borrowings under the credit facilities on February 27, 1998 in connection with the completion of our merger with RTC. The remaining net unamortized deferred financing costs in the amount of $4,393 related to the RTC credit agreement were recognized as an extraordinary loss in 1998. 7% convertible subordinated notes In November 1998, $345,000 of 7% convertible subordinated notes due 2009 were issued in a private placement offering subject to subsequent registration for resale. The notes are convertible, debt outstanding at the option of the holder, at any time into common stock at a conversion price of $32.81 principal amount per share, and the notes may be redeemed on or after November 15, 2001. The notes are general, unsecured obligations junior to all existing and future senior debt and effectively all existing and future liabilities of the Company and its subsidiaries. Commencing May 18, 1999, the Company incurred monetary penalties on a weekly basis until the registration of the notes under the Securities Act of 1933 was declared effective. Penalties of $976 were included in debt expense for the year ended December 31, 1999, are as follows (in thousands). 2000................................................... $ 3,098,742(a) 2001................................................... 755,925 2002................................................... 1,552,351 2003................................................... 587,966 2004................................................... 725,197 Thereafter............................................. 4,777,907 ----------- $11,498,088 =========== --------------- (a) Consists of $848.7 million that will be repaid in 2000 under the terms of the respective credit agreements and $2.25 billion of debt, which is classified as current based on the likelihood that the Company will be in non-compliance with certain of the financial requirements under its credit agreements in the year 2000. The Company has a $3 billion syndicated loan facility (the "Syndicated Facility") and a $2 billion senior revolving credit facility (the "Credit Facility"). The Syndicated Facility requires annual renewal by the lender and provides for a one-year term option at the Company's registration statement covering request in the resale event of non-renewal. The Syndicated Facility is available for borrowings, including letters of credit, and for supporting the notes was declared effective issuance of commercial paper. The covenant restrictions for the Syndicated Facility and Credit Facility include, among others, interest coverage and debt capitalization ratios, limitations on February 1dividends, 2000.additional indebtedness and liens. The 77 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) Syndicated Facility and Credit Facility are used to refinance existing bank loans and letters of credit, to fund acquisitions, and for working capital

Long-Term Debt. As Long-term debt consists of the following at December 31 (dollars in thousands): 2000 1999 -------- -------- Credit Agreement due December 31, 19992001...................... $164,000 $114,000 9% Senior Notes due February 15, 2006, unsecured............ 180,000 180,000 Notes and mortgages, less imputed interest: 2000 -- $46, 1999 -- $67; due in installments through the Company was not in compliance year 2031, at effective interest rates of 7.00% to 12.50%, a portion of which is secured by property, equipment and other assets with several formula-based covenants in its credit facilities. As a result net book value of this non- compliance, all debt outstanding under the credit facilities and the convertible subordinated notes as of $229,064 at December 31, 2000.... 183,416 199,831 Industrial development revenue bonds, less imputed interest: 1999 was potentially callable -- $9; due in installments through the year 2013, at effective interest rates of 4.88% to 10.71%, a portion of which is secured by property and other assets with a net book value of $187,668 at December 31, 2000............... 134,015 145,896 7% A.I. Credit Corp. Note due in installments through January 2002, secured by a surety bond.................... 65,000 65,000 8 3/4% First Mortgage Bonds due July 1, 2008, secured by first mortgages on eight nursing facilities with an aggregate net book value of $15,094 at December 31, 2000...................................................... 12,238 12,841 8 5/8% First Mortgage Bonds due October 1, 2008, secured by first mortgages on 10 nursing facilities with an aggregate net book value of $24,799 at December 31, 2000............ 19,700 20,640 7.24% Series 1995 Bonds due June 2005, secured by a letter of credit................................................. 18,000 25,000 Term Loan under the GE Capital Facility..................... -- 735 -------- -------- 776,369 763,943 Present value of capital lease obligations, less imputed interest: 2000 -- $349, 1999 -- $384, at effective interest rates of 6.04% to 16.49%......................... 14,989 16,273 -------- -------- 791,358 780,216 Less amounts due within one year, and therefore had been reclassified from long-term debt to a current classification. On July 14, 2000, a restructuring of the credit facilities was completed, and the Company became in compliance with all of the credit facilities covenants. Long-term debt was comprised of the following: December 31, --------------------- 2000 -------- 1999 ----------- Credit facilities................................... $498,800 $ 959,610 Capital lease obligations (see Note 11)............. Less current portion and long-term debt potentially 6,053 -------- 975,682 6,799 ----------- 1,457,891 callable under covenant provisions in 1999......... (1,676) -------- $974,006 ======== (1,452,195) ----------- $ 5,696 =========== Scheduled maturities of long-term debt were as follows: 2001................................................................. 1,676 2002................................................................. 15,097 2003................................................................. 232,519 2004................................................................. 70,212 2005................................................................. 70,198 Thereafter........................................................... 585,980 Included in debt expense was interest expense, net of capitalized interest, of $112,180, $106,633 and $72,804 for 2000, 1999, and 1998, respectively. Also included in debt expense were amortization and write-off of deferred financing costs of $4,457, $4,164 and $1,376 for 2000, 1999, and 1998, respectively, and interest rate swap early termination costs of $9,823 in 1998. Credit facilities In July 2000, the major terms of the credit facilities were restructured which included the collateralization of the debt with substantially all of the Company's assets, a reduction in the revolving credit availability to $150,000 together with conversion of $299,000 of the revolving facility into a term loan, a new quarterly amortization schedule beginning September 30, 2000, and the immediate permanent pay-down of $50,000. Total outstanding debt under the credit facilities consisted of the following: December 31, ----------------- 2000 1999 -------- -------- Term loan................................................. $301,460 $392,000 Revolving credit facility................................. 567,610 Revolving credit facility--term tranche 197,340 ............................ 227,111 34,052 -------- -------- $498,800 564,247 $959,610 746,164 ======== ======== In conjunction with The $375,000,000 Credit Agreement (the restructuring"Credit Agreement") provides for a Revolver/Letter of Credit Facility (the "Revolver/LOC Facility"). At December 31, 2000, we had approximately $164,000,000 of outstanding borrowings and approximately $32,800,000 of outstanding letters of credit under the Revolver/ LOC Facility. Borrowings under the Credit Agreement bear interest at adjusted LIBOR plus 2.25%, the associated Base Rate, as defined, plus 1.25% or the adjusted CD rate, as defined, plus 2.375%, at our option. Such interest rates returned may be adjusted quarterly based on certain financial ratio calculations. We pay certain commitment fees and commissions with respect to the lower LIBOR-based rate formulas in effect prior to the non-complianceRevolver/LOC Facility and had approximately $178,200,000 of unused commitments under such facility at December 31, 2000. The new financial covenants reflected the Company's financial position Credit Agreement is secured by property, equipment and projected operating results and plans at the time of the restructuring. As a result of the restructuring, related financing costs were written off. These write-offs were recorded in 2000 as an extraordinary loss of $3,490, net of tax, and pre-tax debt expenses of $1,192. In 1998, the then existing credit other assets associated with nine nursing facilities were replaced with an aggregate net book value of approximately $1,350,000 in two senior bank facilities. As a result of this refinancing14,100,000 at December 31, remaining net deferred financing costs of $16,018 net of tax were recognized as an extraordinary loss in 1998. Several of the Company's subsidiaries2000, including subsidiaries owning is guaranteed by substantially all of the Company's dialysis center assets, have guaranteed the obligations under the credit facilities. At the time of the merger, RTC also had a credit agreement which provided for a $350,000 revolving credit/term facility available to fund acquisitions and general working capital requirements. The RTC credit agreement was terminated and repaid with borrowings under the credit facilities on February 27, 1998 in connection with the completion of our merger with RTC. The remaining net unamortized deferred financing costs in the amount of $4,393 related to the RTC credit agreement were recognized as an extraordinary loss in 1998. 7% convertible subordinated notes In November 1998, $345,000 of 7% convertible subordinated notes due 2009 were issued in a private placement offering subject to subsequent registration for resale. The notes are convertible, at the option of the holder, at any time into common stock at a conversion price of $32.81 principal amount per share, and the notes may be redeemed on or after November 15, 2001. The notes are general, unsecured obligations junior to all existing present and future senior debt subsidiaries (collectively, the "Subsidiary Guarantors") and effectively all existing imposes on us certain financial tests and future liabilities of the Company and its subsidiariesrestrictive covenants. Commencing May 18Effective September 30, 1999, we executed an amendment to our Credit Agreement, as well as amendments with certain of our other lenders covering debt of approximately $199,000,000 (collectively, the Company incurred monetary penalties on a weekly basis until "Amendments"), which modified certain financial covenant levels and increased the registration of the notes under the Securities Act of 1933 was declared effectiveannual interest rates for 47 49 BEVEXXX XXXERPRISES, INC. Penalties of $976 were included in debt expense for the year ended December NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED) YEARS ENDED DECEMBER 31, 1999. The Company's registration statement covering the resale of the notes was declared effective on February 12000, 2000.1999 AND 1998