EXHIBIT 10.50C
TERM LOAN AGREEMENT
BETWEEN
XXXXX FARGO BANK, NATIONAL ASSOCIATION
AND
AMERICAN ECOLOGY CORPORATION
dated
October 28, 2002
TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Accounting Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 2 - LOANS AND TERMS OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . 6
2.1 Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1.1 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.1.2 Repayment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.1.3 Term Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.4 Origination Fee. . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.1.5 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.2 Method of Payment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.3 Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.4 Late Charges and Default Interest . . . . . . . . . . . . . . . . . . . . . 9
2.5 Additional Interest Rate Provisions . . . . . . . . . . . . . . . . . . . . 9
2.6 LIBOR Loan Extensions and Conversions . . . . . . . . . . . . . . . . . . . 10
2.7 Minimum LIBOR Loan Requirements . . . . . . . . . . . . . . . . . . . . . . 10
2.8 Funding Loss Indemnification . . . . . . . . . . . . . . . . . . . . . . . 11
2.9 Taxes on Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2.10 Grant of Security Interest . . . . . . . . . . . . . . . . . . . . . . . . 11
2.11 Financing Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
ARTICLE 3 - CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1 Documents Required for the Closing. . . . . . . . . . . . . . . . . . . . . 12
3.1.1 Term Note. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1.2 Security Agreement . . . . . . . . . . . . . . . . . . . . . . . . 12
3.1.3 Guarantor Security Agreements. . . . . . . . . . . . . . . . . . . 12
3.1.4 Opinion of Counsel for Borrower and Guarantor. . . . . . . . . . . 12
3.1.5 Evidence of all Corporate Action by Borrower . . . . . . . . . . . 12
3.1.6 Certificates of Existence for Borrower . . . . . . . . . . . . . . 13
3.1.7 Articles of Incorporation and Bylaws of Borrower . . . . . . . . . 13
3.1.8 Evidence of all Corporate Action by Guarantors . . . . . . . . . . 13
3.1.9 Certificates of Existence for Guarantor. . . . . . . . . . . . . . 13
3.1.10 Articles of Incorporation and Bylaws of Guarantor. . . . . . . . . 13
3.1.11 Certificates of Assumed Business Name. . . . . . . . . . . . . . . 13
3.1.12 Appraisals . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.2 General Conditions Precedent. . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.1 No Material Adverse Change . . . . . . . . . . . . . . . . . . . . 13
3.2.2 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . 13
3.2.3 Representations and Warranties . . . . . . . . . . . . . . . . . . 14
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3.2.4 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . . . 14
3.2.5 Evidence of Insurance. . . . . . . . . . . . . . . . . . . . . . . 14
3.2.6 Public Record Searches . . . . . . . . . . . . . . . . . . . . . . 14
3.2.7 Payment of Origination Fee . . . . . . . . . . . . . . . . . . . . 14
3.2.8 Additional Documents . . . . . . . . . . . . . . . . . . . . . . . 14
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . 14
4.1 Organization, Good Standing, and Due Qualification . . . . . . . . . . . . 14
4.2 Power and Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.3 Legally Enforceable Agreement . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.5 Labor Disputes and Casualties . . . . . . . . . . . . . . . . . . . . . . . 16
4.6 Other Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.7 No Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.8 No Defaults on Outstanding Judgments or Orders . . . . . . . . . . . . . . 16
4.9 Ownership and Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.10 Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.11 Operation of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.12 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.13 Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
4.15 Investment Company Act . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.16 Perfection of Security Interest . . . . . . . . . . . . . . . . . . . . . . 18
4.17 Subsidiaries and Ownership of Stock . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 5 - AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.1 Maintenance of Existence . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.2 Maintenance of Records . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.3 Maintenance of Properties . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.4 Conduct of Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.5 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.6 Compliance with Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.7 Right of Inspection . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.8 Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8.1 Annual Financial Statements. . . . . . . . . . . . . . . . . . . . 20
5.8.2 Management Letters . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8.3 Notice of Litigation . . . . . . . . . . . . . . . . . . . . . . . 20
5.8.4 Notice of Defaults and Events of Default . . . . . . . . . . . . . 20
5.8.5 ERISA Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.8.6 Reports to Other Creditors . . . . . . . . . . . . . . . . . . . . 21
5.8.7 SEC Reports. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.8.8 Compliance Certificate . . . . . . . . . . . . . . . . . . . . . . 21
5.8.9 Collateral Report. . . . . . . . . . . . . . . . . . . . . . . . . 21
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5.8.10 General Information. . . . . . . . . . . . . . . . . . . . . . . . . 21
5.9 Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.10 Reimbursement of Lender Expenses. . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 6 - NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.1 Liens . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.2 Debt. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.3 Mergers or Reorganization . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.4 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.5 Sale and Leaseback. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.7 Sale of Assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.9 Guaranties. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.10 ERISA Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.11 Transactions With Affiliates. . . . . . . . . . . . . . . . . . . . . . . . 25
6.12 Change in Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
6.13 Accounting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.14 Borrower's Legal Status . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 7 - FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.1 Debt Service Coverage Ratio . . . . . . . . . . . . . . . . . . . . . . . . 26
7.2 Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.3 Current Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
7.4 Funded Debt Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 8 - EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
8.2 Cure of Event of Default. . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE 9 - BANK'S RIGHTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . 29
9.1 Specific Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.2 Set Off . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.3 Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4 Arbitration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4.1 Arbitration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4.2 Governing Rules. . . . . . . . . . . . . . . . . . . . . . . . . . 30
9.4.3 No Waiver of Provisional Remedies, Self-Help and Foreclosure . . . 31
9.4.4 Arbitrator Qualifications and Powers . . . . . . . . . . . . . . . 31
9.4.5 Discovery. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
9.4.6 Class Proceedings and Consolidations . . . . . . . . . . . . . . . 31
9.4.7 Payment Of Arbitration Costs And Fees. . . . . . . . . . . . . . . 32
9.4.8 Real Property Collateral . . . . . . . . . . . . . . . . . . . . . 32
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9.4.9 Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 10 - MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.1 Amendments, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.2 Notices, Etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.4 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
10.5 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.6 Application of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.7 Continuing Warranties, Representations and Covenants. . . . . . . . . . . . 34
10.8 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.9 Choice of Law and Venue . . . . . . . . . . . . . . . . . . . . . . . . . . 34
10.10 Severability of Provisions. . . . . . . . . . . . . . . . . . . . . . . . . 35
10.11 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.12 Jury Trial Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.13 Destruction of Borrower's Documents . . . . . . . . . . . . . . . . . . . . 35
10.14 Participations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
10.15 Effective Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
10.16 Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT is entered into as of the 28th day of
October, 2002, between XXXXX FARGO BANK, NATIONAL ASSOCIATION ("Bank") and
AMERICAN ECOLOGY CORPORATION, a Delaware corporation ("Borrower").
The parties agree as follows:
AGREEMENT
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINED TERMS.
As used in this Agreement, the following terms shall have the
following definitions (terms defined in the singular to have the same meaning
when used in the plural and vice versa):
"ADJUSTED LIBOR INTEREST RATE" means the rate per annum equal to the
quotient of (i) the London Interbank Offered Rate divided by (ii) one (1) minus
the Eurocurrency Reserve Requirement for the applicable Interest Period, rounded
upward, if necessary, to the nearest one-sixteenth of one percent. "Euro
currency Reserve Requirement" means, for any LIBOR Loan for any Interest Period
therefor, the daily average of the stated maximum rate (expressed as a decimal)
at which reserves (including any marginal, supplemental, or emergency reserves)
are required to be maintained by Bank during such Interest Period under
Regulation D of the Board of Governors of the Federal Reserve System, as amended
or supplemented from time to time, against "Eurocurrency Liabilities" (as such
term is used in Regulation D) but without benefit or credit of proration,
exemptions, or offsets that might otherwise be available to Bank from time to
time under Regulation D. Without limiting the effect of the foregoing, the
Eurocurrency Reserve Requirement shall reflect any other reserves required to be
maintained by Bank against (i) any category of liabilities that includes
deposits by reference to which the Adjusted LIBOR Interest Rate for LIBOR Loans
is to be determined; or (ii) any category of extension of credit or other assets
that include LIBOR Loans.
"AFFILIATE" means any Person (1) who directly or indirectly controls,
or is controlled by, or is under common control with the Borrower; (2) who
directly or indirectly beneficially owns or holds five percent (5%) or more of
any class of voting stock of the Borrower; or (3) five percent (5%) or more of
the voting stock of which is directly or indirectly beneficially owned or held
by the Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
TERM LOAN AGREEMENT - 1
"AGREEMENT" means this Term Loan Agreement, as amended, supplemented,
or modified from time to time.
"BANK" means Xxxxx Fargo Bank, National Association, its successors
and assigns. "BORROWER" means American Ecology Corporation, a Delaware
corporation.
"BUSINESS DAY" means a day other than Saturday or Sunday and a day on
which commercial banks are required to be open for business in Boise, Idaho,
under the laws of the state of Idaho, and, if the applicable day relates to a
LIBOR Loan, Interest Period, or notice with respect to a LIBOR Loan, a day on
which dealings in Dollar deposits are also carried on in the London Interbank
market and banks are open for business in London.
"COLLATERAL" means and includes, without limitation, all property and
assets granted as collateral security for an Obligation, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or title retention contract, lease or consignment intended as a security
device, or any other security or lien interest whatsoever, whether created
bylaw, contract, or otherwise. The Collateral includes, without limitation, all
of Borrower's now owned or hereafter acquired equipment and fixtures.
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, that is under common control with a Borrower within the meaning of
Section 414(b) or 414(c) of the Internal Revenue Code of 1986, as amended from
time to time, and the regulations and published interpretations thereof.
"ENVIRONMENTAL LAWS" shall mean and include, without limitation, the
Resource Conversation and Recovery Act of 1976 (RCRA), 42 USC 6901 et seq., the
Comprehensive Environmental Response, Compensation and Liability Act of 1980
(CERCLA) 42 USC 9601- 9657, as amended by the Superfund Amendments and
Reauthorization Act of 1986 (XXXX), the Hazardous Materials Transportation
Authorization Act, 49 USC 5101 et seq., the Federal Water Pollution Control Act,
33 USC 1251 et seq., the Clean Air Act, 42 USC 741 et seq., the Clean Water Act,
33 USC 7401, the Toxic Substances Control Act, 15 USC 2601-2629, the Safe
Drinking Water Act, 42 USC 300f-300j, and all amendments thereto, and legally
enforceable rules, regulations, orders, and decrees promulgated thereunder, and
any other local, state and/or federal laws, rules, regulations and ordinances,
whether currently in existence or hereafter enacted, that govern, to the extent
applicable to Borrower's businesses, properties and assets: (a) the existence,
cleanup and/or remedy of contamination on property, (b) the protection of the
environment from soil, air or water pollution, or from spilled, deposited or
otherwise emplaced contamination; (c) the emission or discharge of Hazardous
Substances into the environment; (d) the control of Hazardous Substances; or (e)
the use, generation, transport, treatment, removal or recovery of Hazardous
Substances.
TERM LOAN AGREEMENT - 2
"ERISA" means the Employment Retirement Income Security Act of 1974,
as the same may be amended or supplemented from time to time, including any
regulations issued in connection therewith.
"EVENT OF DEFAULT" means the occurrence of any of the events set forth
in Article 9 of this Agreement.
"GAAP" means the generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination consistently applied.
"GUARANTOR" means, jointly and severally, US Ecology, Inc., a
California corporation, Texas Ecologists, Inc., a Texas corporation, American
Ecology Recycle Center, Inc., a Delaware corporation, American Ecology
Environmental Services Corporation, a Texas corporation, American Ecology
Management Corporation, a Delaware corporation, American Ecology Services Corp.,
a Delaware corporation, and US Ecology Idaho, Inc., a Delaware corporation.
"GUARANTY" means any guaranty of the Obligations executed by a
Guarantor.
"HAZARDOUS SUBSTANCE" means (a) any oil, petroleum pro ducts,
flammable substance, explosives, radioactive materials, hazardous wastes or
substances, toxic wastes or substances or any other wastes, materials or
pollutants that (i) pose a hazard to Borrower's owned or leased real property or
to persons on or about such real property or (ii) cause Borrower's owned or
leased real property to be in violation of any Environmental Laws; (b) asbestos
in any form that is or could become friable, urea formaldehyde foam insulation,
transformers or other equipment that contain dielectric fluid containing
regulated levels of polychlorinated biphenyls, or radon gas; (c) any chemical,
material or substance defined as or included in the definition of "toxic waste,"
"hazardous substances," "hazardous wastes," "hazardous materials," "extremely
hazardous waste," "restricted hazardous waste," or "toxic substances" or words
of similar import under any Environmental Laws; (d) any other chemical, material
or substance, exposure to which is prohibited, limited or regulated by any
governmental authority or agency or may or could pose a hazard to the health and
safety of the occupants of Borrower's owned or leased real property or the
owners and/or occupants of property adjacent to or surrounding such real
property or any other person coming upon such real property or adjacent
property; and (e) any other chemical, materials or substance that may or could
pose a hazard to the environment and are or become subject to regulation by any
Environmental Laws.
"INTEREST PERIOD" means with respect to any LIBOR Loan, the period
commencing on the date such loan is made and ending, as the Borrower may select,
pursuant to this Agreement, on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, except that each such Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent
TERM LOAN AGREEMENT - 3
calendar month) shall end on the last Business Day of the appropriate subsequent
calendar month; provided that if an Interest Period would end on a day that is
not a Business Day, such Interest Period shall be extended to the next Business
Day unless such Business Day would fall in the next calendar month, in which
event such Interest Period shall end on the immediately preceding Business Day.
"LENDER EXPENSES" means all costs and expenses reasonably incurred by
Bank in connection with the preparation, negotiation, execution, delivery,
filing, and administration of the Loan Documents, and of any amendment,
modification, extension, renewal or supplement to the Loan Documents, including,
without limitation, the fees and out-of-pocket expenses of counsel for Bank,
incurred in connection with advising Bank as to its rights and responsibilities
hereunder and structuring, drafting, reviewing, amending, or otherwise involving
the Loan Documents, and all costs and expenses, including court costs, incurred
in connection with enforcement of the Loan Documents, or any amendment,
modification, or supplement thereto, whether by negotiation, legal proceedings,
or otherwise.
"LIBOR LOAN" means any loan under this Agreement bearing interest at a
rate based upon Adjusted LIBOR Interest Rate.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"Loan" means the Term Loan.
"LOAN DOCUMENTS" means collectively this Agreement, any note executed
by Borrower to the order of Bank and any other agreements or documents, whether
now or hereafter existing, executed or delivered in connection with this
Agreement or any amendment thereto, and any amendments, supplements,
modifications, renewals, extensions, or refundings of any of the foregoing
documents.
"LONDON INTERBANK OFFERED RATE" means for any Interest Period for a
LIBOR Loan the rate per annum quoted at approximately 11:00 a.m. London time by
Bank two Business Days prior to the first day of such Interest Period for the
offering to leading banks in the London interbank market of dollar deposits for
a period and an amount comparable to the Interest Period and principal amount of
the LIBOR Loan that shall be made by Bank and outstanding during the Interest
Period.
"MULTIEMPLOYER PLAN" means a Plan described in Section 4001 (a)(3) of
ERISA.
TERM LOAN AGREEMENT - 4
"OBLIGATIONS" means any and all loans, lines of credit, advances,
letter of credit obligations, debts, overdrafts, liabilities, indebtedness,
lease payments, guaranties, covenants, and duties owing by Borrower to Bank of
any kind and description (whether advanced pursuant to or evidenced by the Loan
Documents or any other instrument or agreement between Bank and Borrower), any
debt, liability, or obligation owing by Borrower to others that Bank may have
obtained by assignment or otherwise, any interest not paid when due, all Lender
Expenses, and all renewals, extensions, and modifications of the foregoing, or
any part thereof, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERIS A.
"PERMITTED LIENS" shall have the meaning assigned to such term in
Section 6.1 o f this Agreement.
"PERSON" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"PLAN" means any pension plan that is covered by Title IV of ERISA and
in respect of which any Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"PRIME LOAN" means any loan under this Agreement bearing interest at a
rate based upon the Prime Rate.
"PRIME RATE" means the Bank's announced rate of interest referred to
as its prime rate used as a reference point from which the cost of credit to
customers may be calculated. The Prime Rate is subject to change from time to
time. The Prime Rate is not intended to be the lowest rate of interest charge by
the Bank to its borrowers, and Bank may make loans to other Persons bearing
interest at, above, or below the Prime Rate.
"PROHIBITED TRANSACTION" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Internal Revenue Code of 1986, as amended
from time to time, and the regulations and published interpretations thereof.
"REPORTABLE EVENT" means any of the events set forth in Section 4043
of ERISA.
"SECURITY AGREEMENT" MEANS THE Security Agreement to be delivered to
Bank by the Borrower pursuant to Subsection 3.1.2 of this Agreement.
"SUBSIDIARY" means, as to the Borrower, a corporation of which shares
of stock having ordinary voting power (other than stock having such power only
by reason of the happening
TERM LOAN AGREEMENT - 5
of a contingency) to elect a majority of the board of directors or other
managers of such corporation are at the time owned, or the management of which
is otherwise controlled, directly, or indirectly through one or more
intermediaries, or both, by the Borrower.
"TERM LOAN" shall have the meaning assigned to such term in Section
2.1 of this Agreement.
"TERM LOAN MATURITY DATE" means November 1,2007, or such other date as
Bank and Borrower may agree upon in writing from time to time.
"TERM NOTE" means the promissory note described in Subsection 2.1.3.
1.2 ACCOUNTING TERMS.
All accounting terms not specifically defined in this Agreement shall
be construed in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 4.4, and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with GAAP.
ARTICLE 2 - LOANS AND TERMS OF PAYMENT
2.1 TERM LOAN. Bank shall, on the terms and conditions of this
Agreement and as long as no Event of Default has occurred, make a term loan to
Borrower in the principal amount not to exceed Seven Million Dollars
($7,000,000) (the "Term Loan").
2.1.1 INTEREST. The Term Loan shall be a Prime Loan or a LIBOR
Loan, or a combination thereof, as selected by Borrower in accordance with the
terms of this Agreement.
2.1.1.1 That portion of the Term Loan that is a Prime Loan
shall bear interest at a fluctuating per annum rate equal to the Prime Rate
increased by the applicable Prime Margin set forth below. Bank's Prime Rate may
change from time to time, and the interest payable will continue to fluctuate at
the rate as stated herein. Any changes to the Prime Rate shall become effective
without prior notice to Borrower on the date on which the Prime Rate changes.
2.1.1.2 That portion of the Term Loan that is a LIBOR Loan
shall bear interest at a fluctuating per annum rate equal to the Adjusted LIBOR
Interest Rate for the applicable Interest Period, as quotes are available,
increased by the applicable LIBOR Margin set forth below. For any portion of the
Term Loan that is to be a LIBOR Loan, the Borrower shall request such a LIBOR
Loan by delivering a LIBOR Loan Request to Bank no later than 11:00 a.m. (Boise,
Idaho time) at least two (2) Business days prior to the requested date of the
LIBOR Loan. A LIBOR Loan Request shall specify (a) the date of the requested
LIBOR Loan, (b) the amount of such LIBOR Loan, and (c) the requested duration of
the Interest Period for the LIBOR Loan, and shall be in substantially the form
of the attached EXHIBIT 2.1.1.2.
TERM LOAN AGREEMENT - 6
2.1.1.3 The Prime Margins and the LIBOR Margins are as
follows:
Funded Debt Ratio Prime LIBOR
----------------------------------------- ------ -----
less than 1.00:1.00 0.0% 2.00%
----------------------------------------- ------ -----
less than 2.00: 1.00 but greater than
or equal to 1.00:1.00 0.125% 2.25%
----------------------------------------- ------ -----
less than 3.00:1.00 but greater than
or equal to 2.00:1.00 0.25% 2.50%
----------------------------------------- ------ -----
less than 3.50:1 .00 but greater than
or equal to 3.00:1.00 0.50% 2.75%
----------------------------------------- ------ -----
less than or equal to 4.00: 1.00 but
greater than or greater than or equal
to 3.50:1.00 1.00% 3.25%
----------------------------------------- ------ -----
greater than 4.00: 1.00 1.00%* 3.25%*
----------------------------------------- ------ -----
*Plus increase for an Event of Default pursuant to Section 2.5, if
applicable.
2.1.1.4 The Prime Margin and LIBOR Margin shall be based
upon the Borrower's Funded Debt Ratio (defined in paragraph 2.1.1.5) determined
on a rolling four quarter basis from the Borrower's financial statements
delivered to Bank and adjusted, if necessary, on the first day of the second
month after Bank's receipt of financial statements that show an adjustment is
necessary.
2.1.1.5 Borrower's Funded Debt Ratio shall be the ratio of
Borrower's Funded Debt to EBITDA. The term "Funded Debt" shall mean, as of the
date of determination as applied to Borrower, the sum of (i) all indebtedness of
Borrower owing to third parties for money borrowed, including capitalized leases
of Borrower having a final maturity of one (1) year or more from the date of
creation (including that portion of the principal of such indebtedness due
within one (1) year from the date of such determination), (ii) any indebtedness
of the Borrower having a final maturity within one (1) year from such date which
may be renewed or extended at the option of the Borrower for more than one (1)
year from such date, (iii) the outstanding balance of the Revolving Loans (as
defined in the Credit Agreement between Borrower and Bank, dated August 17,
2000), (iv) all obligations for the deferred purchase price of any property or
assets, including, without limitation, operating leases for such purpose
(excluding trade payables), (v) all obligations for deferred closure/post
closure, and (vi) all obligations of Borrower created or arising with respect to
property or assets acquired under any conditional sales contract or other title
retention agreement or incurred as financing, less the amount of Borrower's
short term investments as of the date of determination. The term "EBITDA" shall
mean, for any period, as applied to Borrower, the sum of Borrower's earnings,
excluding any extraordinary and nonoperating income, before (a) interest
expense, (b) depreciation, (c) dividends, (d) taxes, (e) amortization, and (f)
other noncash charges.
2.1.2 REPAYMENT. Borrower shall pay the Term Loan in 60 regular
principal payments in the amount of $116,666.67 each. Borrower's first principal
payment is due December 1, 2002, and all subsequent payments are due on the same
day of each month after that. In addition, interest accrued on Prime Loans shall
be paid on or before the 10th day of each month
TERM LOAN AGREEMENT - 7
in an amount equal to the interest accrued as of the last day of the immediately
preceding month, beginning December 10, 2002. Interest accrued on LIBOR Loans
shall be paid on the last day of the Interest Period with respect thereto and,
in the case of an Interest Period greater than three months (if such an Interest
Period is permitted under this Agreement), at three month intervals after the
first day of such Interest Period. All outstanding principal and accrued
interest of the Term Loan shall be paid in full on the Term Loan Maturity Date.
2.1.3 TERM NOTE. The Term Loan shall be evidenced by a promissory
note of the Borrower in the stated principal amount of the Term Loan executed by
Borrower substantially in the form OF EXHIBIT 2.1.3 (the "Term Note").
2.1.4 ORIGINATION FEE. Borrower shall pay Bank an origination fee
for the Term Loan in the amount of Thirty-five Thousand Dollars ($35,000). The
origination fee shall be paid on the date of this Agreement. The origination fee
is an unconditional payment to Bank in consideration of Bank's agreement to
extend financial accommodations to Borrower pursuant to this Agreement.
2.1.5 USE OF PROCEEDS. The proceeds of the Term Loan shall be
used by the Borrower to refinance a portion of the Industrial Development
Corporation of Owyhee County, Idaho Industrial Development Revenue Bonds, Series
1994 (Envirosafe Services of Idaho, Inc. Project) $8,500,000. The Borrower shall
not, directly or indirectly, use any part of such proceeds for the purpose of
purchasing or carrying any margin stock within the meaning of Regulation U of
the Board of Governors of the Federal Reserve System or to extend credit to any
person for the purpose of purchasing or carrying any such margin stock, or for
any purpose that violates, or is inconsistent with, Regulation X of such Board
of Governors.
2.2 METHOD OF PAYMENT. All payments shall be made to Bank at its
Regional Corporate Banking office in Boise, Idaho in lawful money of the United
States in immediately available funds. Bank shall send Borrower a monthly
statement of the amount of interest accrued during the preceding month. No
checks, drafts, or other instruments received by Bank purportedly in
satisfaction of any of the Obligations shall constitute payment thereof unless
and until such instruments have actually been collected. All payments received
after 11:00 a.m. Boise, Idaho time shall be considered to have been received the
next Business Day. The Borrower authorizes the Bank, if and to the extent
payment is not made when due under any Loan Document, to charge from time to
time against any account of the Borrower with the Bank any amount so due. In
case the due date of any payment falls on a day that is not a Business Day, such
payment shall instead be due the next succeeding Business Day, and interest
shall continue to accrue. Bank may note the date, amount and interest rate (and
Interest Period with respect to LIBOR Loans) of each Prime and LIBOR Loan and
each payment of principal and interest with respect hereto in Bank's books and
records (either manually or by electronic entry), which notation shall be
conclusive evidence of the information noted, absent manifest error. Unless
otherwise agreed or required by applicable law, payments will be applied first
to any unpaid collection costs and any late charges, then to any unpaid
interest, and any remaining amount to principal.
TERM LOAN AGREEMENT - 8
2.3 PREPAYMENTS. The Borrower may prepay any or all Prime Loans
without penalty or premium. A LIBOR Loan may be prepaid in whole or in part only
on the last day of the Interest Period for such LIBOR Loan, unless Borrower pays
to Bank the prepayment funding loss indemnification pursuant to Section 2.8.
Each partial prepayment shall be applied to the Term Loan payment installments
in the inverse order of their due date.
2.4 LATE CHARGES AND DEFAULT INTEREST. If Bank has not received the
full amount of any payment by the end of fifteen (15) calendar days after the
date due, including the balance due at maturity, Borrower shall pay a late
charge to Bank in the amount of five percent (5%) of the overdue payment of
principal and/or interest. Borrower shall pay the late charge promptly, but only
once on each late payment. In addition to any late charges that may be assessed
as herein provided, the outstanding balance of the Term Loan after the
occurrence of an Event of Default shall accrue interest from the date of the
Event of Default at the rate equal to four (4) percentage points per annum in
excess of the interest rate that would otherwise be charged if no Event of
Default existed. If Bank shall waive in writing or Borrower shall cure such
Event of Default, the interest rate shall revert to the non-default rate from
and after such waiver or completion of such cure, until another such Event of
Default.
2.5 ADDITIONAL INTEREST RATE PROVISIONS.
2.5.1 If Bank shall have determined (which determination shall be
conclusive and binding) that for any reason adequate and reasonable means do not
exist for ascertaining the Adjusted LIBOR Interest Rate for any or all Interest
Periods, Bank shall give notice of such determination to the Borrower. If such
notice is given, and until such notice has been withdrawn by Bank, no additional
LIBOR Loans for such Interest Periods shall be made and no additional
conversions of Prime Loans to LIBOR Loans for such Interest Periods shall be
permitted, and at the end of the Interest Period relating to any outstanding
LIBOR Loans such loans shall become Prime Loans.
2.5.2 Notwithstanding any other provisions herein, if any law,
treaty, rule or regulation, or determination of a court or other governmental
authority, or any change therein or in the interpretation or application
thereof, shall make it unlawful for Bank to make or maintain LIBOR Loans as
contemplated by this Agreement, the obligation of Bank hereunder to make LIBOR
Loans shall forthwith be canceled, and, if required, each LIBOR Loan then
outstanding shall immediately become a Prime Loan.
2.5.3 In the event that any adoption or modification of any law,
treaty, rule, or regulation, or determination of a court or other governmental
authority, or that any change in the interpretation or application thereof,
which adoption, modification or change becomes effective after the date hereof,
or in the event that compliance by Bank with and request or directive issued
after the date hereof (whether or not having the force of law) from any
governmental authority:
TERM LOAN AGREEMENT - 9
(A) does or shall subject Bank or any of its foreign offices to
any tax of any kind whatsoever with respect to the Loan Documents, or changes
the basis of taxation of payments to Bank of principal, interest, fees, or any
other amount payable hereunder (except for changes in the rate of tax on the
overall net income of Bank); or
(B) does or shall impose, modify, or hold applicable any reserve,
special deposit, compulsory loan, FDIC insurance, or similar requirement against
assets held by, deposits or other liabilities in or for the account of, advances
or loans by, other credit extended by or any other acquisition of funds by any
office of Bank (other than to the extent previously taken into account in
determining the Prime Rate or statutory reserves); or
(C) does or shall impose on Bank any other condition; and the
result of any of the foregoing is to increase the cost to Bank of making,
renewing, or maintaining the loans hereunder, or to reduce any amount receivable
thereunder or under any of the Loan Documents; then, in any such case, the
Borrower shall promptly pay to Bank, upon demand, such amount or amounts as may
be necessary to compensate Bank for any additional cost or reduced amount
received. Bank shall deliver to the Borrower a written statement of the losses
or expenses sustained or incurred, and any reasonable allocation made by Bank of
such losses and expenses shall be conclusive, absent manifest error. Bank shall
promptly notify the Borrower of any event of which it has knowledge, occurring
after the Closing Date, which event will entitle Bank to compensation under this
Section.
2.5.4 The actual interest to be charged on the Term Loan
shall be calculated daily on the outstanding balance for the actual number of
days elapsed on the basis of a year consisting of 360 days. Should the rate of
interest exceed that allowed by law, the applicable rate of interest will be the
maximum rate of interest lawfully allowed. The principal amount outstanding on
which the interest rate(s) shall be charged shall be determined from the Bank's
records, which shall at all times be conclusive, absent manifest error.
2.6 LIBOR LOAN EXTENSIONS AND CONVERSIONS. So long as no Event of
Default has occurred and is continuing and subject to the terms and conditions
hereof, the Borrower may extend a LIBOR Loan beyond its current Interest Period
by giving Bank a LIBOR Loan Request for the extension. The Borrower may also
convert any Prime Loan into a LIBOR Loan by giving Bank a LIBOR Loan Request for
the conversion. Unless Bank receives notice of a proposed extension or
conversion as and when required hereunder, then at the end of an Interest Period
for a LIBOR Loan such LIBOR Loan shall automatically convert to a Prime Loan.
2.7 MINIMUM LIBOR LOAN REQUIREMENTS. Each LIBOR Loan shall be in a
minimum amount of One Million Dollars ($1,000,000). No part of the Term Loan
shall be made as, extended as, or converted into, a LIBOR Loan with an Interest
Period that ends after the Term Loan Maturity Date. No more than four (4) LIBOR
Loans shall be outstanding at one time.
TERM LOAN AGREEMENT - 10
2.8 FUNDING LOSS INDEMNIFICATION. The Borrower shall indemnify and
hold Bank free and harmless from any loss or expense (including without
limitation any loss or expense incurred by reason of the liquidation or
redeployment of deposits or other funds acquired by Bank to fund or maintain any
LIBOR Loan) that Bank may incur as a result of (i) the Borrower's failure to
make a borrowing, conversion, or extension with respect to a LIBOR Loan after
making a request therefor; (ii) a prepayment (whether optional or mandatory) of
a LIBOR Loan prior to the expiration of a related Interest Period, and (iii) the
conversion of a LIBOR Loan as a result of any of the events indicated in
paragraph 2.5.2. At the election of Bank such losses shall be conclusively
deemed to consist of an amount equal to:
(i) The interest that would have been received from the Borrower
on the amounts during the Interest Period (or remaining portion thereof in
question) had the Borrower not prepaid, repaid, or failed to borrow, convert, or
extend, such funds, as the case may be, minus
(ii) The return that Bank could have obtained had it placed such
funds on deposit in the interbank dollar market selected by Bank in its sole
discretion on the date of such prepayment, repayment or failure to borrow,
convert, or extend as the case may be, and such funds had remained on deposit
until the end of the applicable Interest period.
2.9 TAXES ON PAYMENTS. All payments made by Borrower under this
Agreement and the other Loan Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings ("Taxes"), now or hereafter imposed, levied, collected, withheld
or assessed by any governmental authority (except net income taxes and franchise
taxes in lieu of net income taxes imposed on Bank as a result of a present or
former connection between the jurisdiction of the governmental authority
imposing such tax on Bank, excluding a connection arising solely from Bank
having executed, delivered, or performed its obligations or received a payment
under, or enforced, this Agreement or the other Loan Documents). If any Taxes
are required to be withheld from any amounts payable to Bank under any Loan
Document, the amounts so payable to Bank shall be increased to the extent
necessary to yield to Bank (after payment of all Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the other Loan Documents.
2.10 GRANT OF SECURITY INTEREST. Borrower grants to Bank a continuing
security interest in the Collateral, including all proceeds and products
thereof, in order to secure prompt repayment of the Obligations and prompt
performance by Borrower of each and all of its covenants and obligations under
this Agreement and the other Loan Documents. Bank's security interest in the
Collateral shall be further evidenced by the Security Agreement and such other
security documents as Bank may at any time require.
2.11 FINANCING STATEMENTS. Borrower authorizes Bank to file in any
jurisdiction any initial financing statements and amendments thereto describing
the Collateral and containing any other information required for the sufficiency
or filing office acceptance of any financing statement
TERM LOAN AGREEMENT - 11
or amendment. Borrower shall from time to time, at the expense of Borrower,
promptly execute, if applicable, and deliver all further instruments and
documents, and take all further action, that maybe necessary or desirable, or
that Bank may reasonably request, in order to perfect and protect any pledge,
assignment, or security interest granted or purported to be granted by any Loan
Document or to enable Bank to exercise and enforce its rights and remedies under
any Loan Document with respect to any Collateral. Without limiting the
generality of the foregoing, the Borrower shall execute, if applicable, and file
such financing or continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as Bank may
request, in order to perfect and preserve the pledge, assignment, and security
interest granted or purported to be granted by any Loan Document. Borrower
irrevocably makes, constitutes, and appoints Bank (and any of Bank's officers,
employees, or agents designated by Bank) as Borrower's true and lawful attorney
with power, upon Borrower's failure or refusal to comply with their undertakings
contained in this paragraph, to sign the name of Borrower on any of the
above-described documents or on any other similar documents that need to be
executed, recorded, and/or filed in order to perfect or continue Bank's
perfected security interest in the Collateral
ARTICLE 3 - CONDITIONS PRECEDENT
3.1 DOCUMENTS REQUIRED FOR THE CLOSING. The obligation of Bank to make
the Term Loan to the Borrower under this Agreement is subject to the condition
precedent that Bank shall have received on or before the disbursement of the
Term Loan each of the following documents in form and substance satisfactory to
Bank and its legal counsel:
3.1.1 TERM NOTE. The Term Note executed by the Borrower.
3.1.2 SECURITY AGREEMENT. The Security Agreement in substantially
the form of Exhibit 3.1.2 executed by Borrower, together with allUCC-1 financing
statements desirable in the opinion of Bank to perfect the security interest
created by the Security Agreement.
3.1.3 GUARANTOR SECURITY AGREEMENTS. A security agreement in
substantially the form of EXHIBIT 3.1.3 executed by each of US Ecology Idaho,
Inc., Texas Ecologists, Inc., and US Ecology, Inc. together with all UCC-1
financing statements desirable in the opinion of Bank to perfect the security
interest created by the security agreements.
3.1.4 OPINION OF COUNSEL FOR BORROWER AND GUARANTOR. A favorable
opinion of counsel for Borrower and Guarantor, in substantially the form OF
EXHIBIT 3.1.4 and as to such other matters as Bank may reasonably request.
3.1.5 EVIDENCEOF ALL CORPORATE ACTION BY BORROWER. Certified
copies of all corporate action taken by Borrower authorizing its execution and
delivery of the Loan Documents and each other document to be delivered pursuant
to this Agreement and its performance of its agreements thereunder.
TERM LOAN AGREEMENT - 12
3.1.6 CERTIFICATES OF EXISTENCE FOR BORROWER. Certificates of
existence or good standing showing that the Borrower is in good standing under
the laws of the state of its incorporation.
3.1.7 ARTICLES OF INCORPORATION AND BYLAWS OF BORROWER. Copies of
the articles of incorporation and bylaws of Borrower certified by an officer of
Borrower to be true and correct.
3.1.8 EVIDENCE OF ALL CORPORATE ACTION BY GUARANTORS. Certified
copies of all corporate action taken by each of US Ecology Idaho, Inc., Texas
Ecologists, Inc., and US Ecology, Inc. authorizing its execution and delivery of
its new Security Agreement and the performance of its agreements thereunder.
3.1.9 CERTIFICATES OF EXISTENCE FOR GUARANTOR. Certificates of
existence or good standing showing that each Guarantor is in good standing under
the laws of the state of its incorporation.
3.1.10 ARTICLES OF INCORPORATION AND BYLAWS OF GUARANTOR. Copies
of the articles of incorporation and bylaws of each Guarantor certified by an
officer of the Guarantor to be true and correct.
3.1.11 CERTIFICATES OF ASSUMED BUSINESS NAME. Copies of all
certificates of assumed business name, if any, filed by Borrower or any
Guarantor.
3.1.12 APPRAISALS. An appraisal or appraisals of the equipment
and fixtures pledged to Bank by US Ecology Idaho, Inc. and Texas Ecologists,
Inc. issued by an appraiser acceptable to Bank.
3.2 GENERAL CONDITIONS PRECEDENT. The obligation of Bank to make the
Term Loan to the Borrower under this Agreement is subject to the following
additional conditions precedent:
3.2.1 NO MATERIAL ADVERSE CHANGE. No material adverse change
shall have occurred in the financial condition of Borrower or the assets of
Borrower or any Guarantor since the date of the most recent financial statements
submitted to Bank by Borrower. No material decline, as determined by Bank, shall
have occurred in the market value of any Collateral covered by the appraisals
required by Subsection 3.1.13.
3.2.2 FINANCIAL STATEMENTS. Borrower has submitted to Bank when
required by this Agreement all financial statements required to be submitted
hereunder and such financial statements were at the time they were submitted to
Bank and at the time of the Closing a true and correct reflection of the
financial condition of Borrower.
TERM LOAN AGREEMENT - 13
3.2.3 REPRESENTATIONS AND WARRANTIES. All of Borrower's and each
Guarantor's representations and warranties in this Agreement and the Loan
Documents are true and correct as of the date of disbursement of the Term Loan.
3.2.4 FINANCIAL COVENANTS. Borrower is in Ml compliance with all
financial covenants contained in this Agreement.
3.2.5 EVIDENCE OF INSURANCE. Bank receives evidence of the
insurance Borrower must maintain in accordance with the Loan Documents.
3.2.6 PUBLIC RECORD SEARCHES. Bank receives Uniform Commercial
Code financing statement searches, federal and state income tax lien searches,
judgment searches, or other similar searches on Borrower and any other Persons
that Bank may require and in such form as Bank may require.
3.2.7 PAYMENT OF ORIGINATION FEE. Bank receives payment of the
origination fee as required by Section 2.1.6 of this Agreement.
3.2.8 ADDITIONAL DOCUMENTS. Bank receives such additional
approvals, opinions, or documents as Bank may reasonably request.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the loans as provided in this Agreement, the Borrower makes the following
representations and warranties to the Bank, which shall survive execution of
this Agreement:
4.1 ORGANIZATION, GOOD STANDING, AND DUE QUALIFICATION. Borrower was
organized under the Delaware General Corporation Law and exists in good standing
under the laws of the jurisdiction of its organization with power under the
Delaware General Corporation Law to own or lease its assets and to transact the
business in which it is now engaged or proposed to be engaged. Borrower is
qualified to transact business as a foreign corporation in good standing under
the laws of each other jurisdiction in which such qualification is required.
Each of Borrower's Subsidiaries and each Guarantor was organized under the
general business corporation law of the jurisdiction of its organization and
exists in good standing under the laws of the jurisdiction of its organization
with power under the general business corporation law of such jurisdiction to
own or lease its assets and to transact the business in which it is now engaged
or proposed to be engaged. Each of Borrower's Subsidiaries and each Guarantor is
qualified to transact business as a foreign corporation in good standing under
the laws of each other jurisdiction in which such qualification is required.
TERM LOAN AGREEMENT - 14
4.2 POWER AND AUTHORITY. Borrower has authorized the execution and
delivery of the Loan Documents to which it is a party and the performance of its
agreements thereunder by all necessary corporate action under the Delaware
General Corporation Law. Each Guarantor has authorized the execution and
delivery of the Loan Documents to which it is a party and the performance o fits
agreements thereunder by all necessary corporate action under the general
business corporation law of the jurisdiction of its organization. Borrower's and
each Guarantor's execution and delivery of the Loan Documents to which it is a
party and the performance of its respective obligations thereunder will not (1)
require any consent or approval of the shareholders of Borrower or the Guarantor
that has not been obtained; (2) violate Borrower's or the Guarantor's
certificate or articles of incorporation (however denominated); (3) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award presently in effect having applicability to
Borrower or the Guarantor; (4) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease,
or instrument to which Borrower or a Guarantor is a party or by which it or its
properties may be bound or affected; or (5) cause Borrower or a Guarantor to
violate any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award or be in default under any such indenture,
agreement, lease, or instrument.
4.3 LEGALLY ENFORCEABLE AGREEMENT. This Agreement is, and each of the
other Loan Documents to which Borrower is a party when delivered under this
Agreement will be, legal, valid, and binding obligations of the Borrower,
enforceable against the Borrower, in accordance with their respective terms,
except to the extent that such enforcement may be limited by applicable
bankruptcy, insolvency, and other similar laws affecting creditors' rights
generally. Each Guaranty and other Loan Document to which a Guarantor is a party
when delivered under this Agreement will be the legal, valid, and binding
obligation of the applicable Guarantor, enforceable against the Guarantor in
accordance with their terms, except to the extent that such enforcement maybe
limited by applicable bankruptcy, insolvency, and other similar laws affecting
creditors' rights generally.
4.4 FINANCIAL STATEMENTS. All financial statements and information
relating to Borrower, any Subsidiary, any Affiliate of Borrower, and any
Guarantor that have been delivered by Borrower or a Guarantor to Bank are
complete and correctly and fairly present the financial condition of the
Borrower, the Subsidiary, the Affiliate of Borrower, or the Guarantor, as
applicable, as of the date of such statements and information and the results of
the operations of the Borrower and the affiliates of Borrower for the periods
covered by such statements, all in accordance with GAAP (subject to year-end
adjustments in the case of the interim financial statements). There has been no
material adverse change in the financial condition of Borrower, an Affiliate of
Borrower, or a Guarantor since the date of the most recent o f such applicable
financial statements submitted to Bank. There are no liabilities of Borrower, a
Subsidiary, or a Guarantor, fixed or contingent, that are material but are not
reflected in the financial statements or in the notes thereto, other than
liabilities arising in the ordinary course of business since the date of the
most recent of such applicable financial statements submitted to Bank. No
information, exhibit, or report furnished by the Borrower to the Bank in
connection with the negotiation of this Agreement contained any material
misstatement of
TERM LOAN AGREEMENT - 15
fact or omitted to state a material fact or any fact necessary to make the
statement contained therein not materially misleading.
4.5 LABOR DISPUTES AND CASUALTIES. Except as disclosed in Borrower's
Forms 10K and 10Q filed with the Securities and Exchange Commission and copies
of which have been delivered to Bank, neither the businesses nor the properties
of the Borrower or any Subsidiary or any Guarantor are affected by any fire,
explosion, accident, strike, lockout, or other labor dispute, drought, storm,
hail, earthquake, embargo, act of God, or other casualty (whether or not covered
by insurance), materially and adversely affecting such businesses or properties
or the operation of the Borrower or the Subsidiary or the Guarantor.
4.6 OTHER AGREEMENTS. No event has occurred and is continuing that
constitutes or that, with the giving of notice or the lapse of time or both,
could constitute, an event of default or a default under any agreement or
guaranty to which the Borrower or any Subsidiary or any Guarantor is a party,
and no such event will occur upon the making of the loans hereunder.
4.7 NO LITIGATION. Except as disclosed in Borrower's Forms 10K and 10Q
filed with the Securities and Exchange Commission and copies of which have been
delivered to Bank, there is no pending action or proceeding against or affecting
the Borrower or any Subsidiary or any Guarantor before any court, governmental
agency, or arbitrator, that would have a reasonable possibility to, in any one
case or in the aggregate, materially adversely affect the financial condition,
operations, properties, or business of the Borrower or the ability of the
Borrower or any Subsidiary or any Guarantor to perform its obligations under the
Loan Documents to which it is a party.
4.8 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS. Except as
disclosed in Borrower's Forms 10K and 10Q filed with the Securities and Exchange
Commission and copies of which have been delivered to Bank, the Borrower, each
Subsidiary, and each Guarantor have satisfied all judgments against it, and
neither the Borrower nor any Subsidiary nor any Guarantor is in default with
respect to any judgment, writ, injunction, decree, rule, or regulation of any
court, arbitrator, or federal, state, municipal, or other governmental
authority, commission, board, bureau, agency, or instrumentality, domestic or
foreign.
4.9 OWNERSHIP AND LIENS. The Borrower and each Subsidiary has title
to, or valid leasehold interests in, all of its properties and assets, real and
personal, including, without limitation, the Collateral, and none of such
properties and assets owned by the Borrower or a Subsidiary and none of their
leasehold interests are subject to any Lien, except Permitted Liens.
4.10 EMPLOYEE BENEFITS. The Borrower and each Subsidiary is in
compliance in all material respects with all applicable provisions of ERISA.
Neither a Reportable Event nor a Prohibited Transaction has occurred and is
continuing with respect to any Plan; no notice of intent to terminate a Plan has
been filed nor has any Plan been terminated; no circumstances exist that
constitute grounds entitling the PBGC to institute proceedings to terminate, or
appoint a trustee to administer, a Plan, nor has the PBGC instituted any such
proceedings; neither Borrower nor any
TERM LOAN AGREEMENT - 16
Commonly Controlled Entity has completely or partially withdrawn from a
Multiemployer Plan; the Borrower and each Commonly Controlled Entity have met
their minimum funding requirements under ERISA with respect to all of their
Plans and the present value of all vested benefits under each Plan does not
exceed the fair market value of all Plan assets allocable to such benefits, as
determined on the most recent valuation date of the Plan and in accordance with
the provisions of ERISA; and neither the Borrower nor any Commonly Controlled
Entity has incurred any liability to the PBGC under ERISA.
4.11 OPERATION OF BUSINESS. To the best of Borrower's knowledge,
Borrower, each Subsidiary, and each Guarantor possesses all licenses, permits,
franchises, patents, copyrights, trademarks, and trade names, or rights thereto,
to conduct its businesses substantially as now conducted and as presently
proposed to be conducted, and the Borrower, each Subsidiary, and each Guarantor
is not in violation of any valid rights of others with respect to any of the
foregoing. Borrower, each Subsidiary, and each Guarantor has filed, and will
file in the future, with the appropriate governmental entities all assumed
business name certificates necessary or required to conduct its businesses.
4.12 TAXES. The Borrower, each Subsidiary, and each Guarantor have
filed all tax returns (federal, state, and local) required to be filed and have
paid all taxes, assessments, and governmental charges and levies thereon to be
due, including interest and penalties, except those presently being or to be
contested by Borrower, a Subsidiary, or a Guarantor in good faith in the
ordinary course of business and for which adequate reserves have been provided
in Bank's reasonable judgment.
4.13 DEBT. EXHIBIT 4.13 is a complete and correct list of all credit
agreements, indentures, purchase agreements, guaranties, capital leases, and
other investments, agreements, and arrangements presently in effect providing
for or relating to extensions o f credit (including agreements and arrangements
for the issuance of letters of credit or for acceptance financing) in respect of
which the Borrower or any Subsidiary is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the credit in question,
which are outstanding and which can be outstanding, are correctly stated, and
all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Exhibit.
4.14 ENVIRONMENTAL MATTERS. To the best of its knowledge and except as
disclosed in Borrower's Forms 1 OK and 1OQ filed with the Securities and
Exchange Commission and copies of which have been delivered to Bank, the
Borrower and each Subsidiary has materially complied with, and its businesses,
operations, assets, equipment, property, leaseholds or other facilities are in
compliance with, the provisions of the Environmental Laws and all other federal,
state, and local environmental, health and safety laws, codes and ordinances,
and all rules and regulations promulgated thereunder. The Borrower and each
Subsidiary has been issued and will maintain all required federal, state, and
local permits, licenses, certificates, and approvals relating to (1) air
emissions; (2) discharges to surface water or groundwater; (3) noise emissions;
(4) solid or liquid waste disposal; (5) the use, generation, storage,
transportation, or disposal of Hazardous Substances;
TERM LOAN AGREEMENT - 17
or (6) other environmental, health, or safety matters. Except as disclosed in
Borrower's Forms 10K and 1OQ filed with the Securities and Exchange Commission
and copies of which have been delivered to Bank, neither Borrower nor any
Subsidiary has received notice of, nor knows of, or suspects facts that might
constitute any material violations of an Environmental Law or any other federal,
state, or local environmental, health, noise emission, or safety laws, codes, or
ordinances and any rules or regulations promulgated thereunder with respect to
its businesses, operations, assets, equipment, property, leaseholds, or other
facilities. To the best of Borrower's knowledge, except in accordance with a
valid governmental regulation, permit, license, certificate, or approval, and
except as previously disclosed, there has been no emission, spill, release, or
discharge into or upon (1) the air; (2) soils, or any improvements located
thereon; (3) surface water or groundwater; or (4) the sewer, septic system or
waste treatment, storage, or disposal system servicing the premises of any
Hazardous Substances or from the premises.
4.15 INVESTMENT COMPANY ACT. Neither Borrower nor any Subsidiary is an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.16 PERFECTION OF SECURITY INTEREST. The Security Agreement and the
pledge of the Collateral pursuant thereto creates a valid and perfected first
priority security interest in the Collateral (except for Permitted Liens),
securing the payment of the obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest have been
taken.
4.17 SUBSIDIARIES AND OWNERSHIP OF STOCK. Set forth in Exhibit 4.17 is
a 4.20 complete and accurate list of the Subsidiaries of the Borrower, showing
the jurisdiction of incorporation of each and showing the percentage of the
Borrower's ownership of the outstanding stock of each Subsidiary. All of the
outstanding capital stock of each such Subsidiary has been validly issued, is
fully paid and nonassessable, and is owned by the Borrower free and clear of all
Liens.
ARTICLE 5 - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Obligation is
outstanding it will comply with the following provisions:
5.1 MAINTENANCE OF EXISTENCE. Borrower shall preserve and maintain,
and cause each Subsidiary to preserve and maintain, its existence and good
standing in the jurisdiction of its organization, and qualify and remain
qualified, as a foreign corporation in each jurisdiction in which such
qualification is required.
5.2 MAINTENANCE OF RECORDS. Borrower shall keep, and cause each
Subsidiary to keep, adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied, reflecting
all financial transactions of the Borrower.
TERM LOAN AGREEMENT - 18
5.3 MAINTENANCE OF PROPERTIES. Borrower shall maintain, keep, and
preserve, and cause each Subsidiary to maintain, keep, and preserve, all of its
properties (tangible and intangible) necessary or useful in the proper conduct
of its business in good working order and condition, ordinary wear and tear
excepted.
5.4 CONDUCT OF BUSINESS. Borrower shall continue, and cause each
Subsidiary to continue, to engage in a commercially reasonable and efficient and
economical manner in businesses of the same general type as conducted by it on
the date of this Agreement.
5.5 MAINTENANCE OF INSURANCE. Borrower shall, at its expense,
maintain, and cause each Subsidiary to maintain, insurance with financially
sound and reputable insurance companies or associations in such amounts,
covering such risks, and in such form as shall be consistent with the industry
practices and satisfactory to Bank. Without limiting the foregoing sentence,
Borrower shall procure and maintain all risks insurance, including without
limitation fire, theft, and liability coverage together with such other
insurance as Bank may require with respect to the Collateral, inform, amounts
coverages and basis consistent with industry practices and reasonably acceptable
to Bank and issued by a company or companies reasonably acceptable to Bank.
Borrower, upon request of Bank, shall deliver to Bank from time to time the
policies or certificates of insurance in form satisfactory to Bank, including
stipulations that coverages will not be canceled or diminished without at least
thirty (30) days' prior written notice to Bank and not including any disclaimer
of the insurer's liability for failure to give such a notice. In connection with
all policies covering the Collateral, Borrower shall pro vide Bank with such
lender loss payable or other endorsements as Bank may require. If Borrower at
any time fails to obtain or maintain any insurance required under the Loan
Documents, Bank may, but shall not be obligated to, obtain such insurance as
Bank deems appropriate, including if it so chooses, "single interest insurance"
that will cover only Bank's interest in the Collateral.
5.6 COMPLIANCE WITH LAWS. Borrower shall comply, and cause each
Subsidiary to comply, in all material respects with all applicable laws, rules,
regulations, and orders, such compliance to include, without limitation, paying
before the same become delinquent all taxes, assessments, and governmental
charges imposed upon it or upon its property, except for such taxes, assessments
or charges that are contested by Borrower or a Subsidiary in good faith in the
ordinary course of business and for which adequate reserves have been provided
in Bank's reasonable judgment.
5.7 RIGHT OF INSPECTION. Borrower shall, at any reasonable time and
from time to time with reasonable notice, permit the Bank or any agent or
representative thereof to inspect the Collateral, examine and make copies of and
abstracts from the records and books of account of, and visit the properties of,
the Borrower and any Subsidiary, and to discuss the affairs, finances, and
accounts of the Borrower and any Subsidiary with any of its employees, officers,
and directors and the Borrower's independent accountants. Without limiting the
foregoing, at least once every year, and more often if Bank reasonably deems it
necessary, Bank's auditors may audit and examine Borrower's books and records.
Borrower shall reimburse Bank at the rate of Three Hundred Fifty
TERM LOAN AGREEMENT - 19
Dollars ($350) per day for each auditor plus travel expenses, not to exceed Two
Thousand Five Hundred Dollars ($2,500) per year as long as no Event of Default
occurs.
5.8 REPORTING REQUIREMENTS.
5.8.1 ANNUAL FINANCIAL STATEMENTS. Borrower shall furnish to Bank
within one hundred twenty (120) days after the end of each fiscal year of the
Borrower, consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such fiscal year, and consolidated and
consolidating statements of income and retained earnings of the Borrower and its
Subsidiaries for such fiscal year, and consolidated and consolidating statements
of cash flows of the Borrower and its Subsidiaries for such fiscal year, all in
reasonable detail and stating in comparative form the respective figures for the
corresponding date and period in the prior fiscal year and all prepared in
accordance with GAAP consistently applied and audited by independent certified
public accountants selected by the Borrower and acceptable to the Bank.
5.8.2 MANAGEMENT LETTERS. Borrower shall furnish to Bank promptly
upon receipt thereof, copies of any reports submitted to the Borrower by
independent certified public accountants in connection with examination of the
financial statements of the Borrower made by such accountants.
5.8.3 NOTICE OF LITIGATION. Borrower shall furnish to Bank
promptly after the commencement thereof, notice of all actions, suits, and
proceedings before any court or governmental department, commission, board,
bureau, agency, or instrumentality, domestic or foreign, affecting the Borrower
that, if determined adversely to the Borrower, could have a material adverse
effect on the financial condition, properties, or operations of the Borrower.
5.8.4 NOTICE OF DEFAULTS AND EVENTS OF DEFAULT. Borrower shall
furnish to Bank as soon as possible and in any event within five Business Days
after the occurrence of each Event of Default, a written notice setting forth
the details of such Event of Default and the action that is proposed to be taken
by the Borrower with respect thereto.
5.8.5 ERISA REPORTS. Borrower shall furnish to Bank as soon as
possible, and in any event within thirty (30) days after the Borrower knows or
has reason to know that any circumstances exist that constitute grounds
entitling the PBGC to institute proceedings to terminate a Plan subject to ERISA
with respect to the Borrower or any Commonly Controlled Entity, and promptly but
in any event within ten(10) Business Days of receipt by the Borrower or any
Commonly Controlled Entity of notice that the PBGC intends to terminate a Plan
or appoint a trustee to administer the same, and promptly but in any event
within ten (10) Business Days of the receipt of notice concerning the imposition
of withdrawal liability with respect to the Borrower or any Commonly Controlled
Entity, a certificate of an authorized officer of the Borrower setting forth all
relevant details and the action that the Borrower proposes to take with respect
thereto.
TERM LOAN AGREEMENT - 20
5.8.6 REPORTS TO OTHER CREDITORS. Borrower shall furnish to Bank
promptly after the furnishing thereof, copies of any statement or report
furnished to any party pursuant to the terms of any indenture, loan, credit, or
similar agreement and not otherwise required to be furnished to the Bank
pursuant to any other clause of this Section.
5.8.7 SEC REPORTS. Borrower shall furnish to Bank as soon as
possible and in any event within five (5) Business Days after the filing
thereof, copies of all regular, periodic, and special reports, and all
registration statements that the Borrower or any Subsidiary files with the
Securities and Exchange Commission or any governmental authority that maybe
substituted therefor, or with any national securities exchange, including,
without limitation, 10Q, 10K, and 8K reports. Notwithstanding anything in this
Agreement to the contrary, Borrower furnish Bank with a copy of Borrower's 10Q
report no later than 45 days after the end of each fiscal quarter.
5.8.8 COMPLIANCE CERTIFICATE. Borrower shall furnish Bank within
45 days after the end of each fiscal quarter and 90 days after each fiscal year
(in the case of the 4th fiscal quarter) a certificate of the chief executive
officer or the chief financial officer or other officer approved by Bank in
writing stating that he or she has individually reviewed the provisions of this
Agreement and that review of the activities of Borrower during such quarter
period has been made by him or her or under his or her supervision, with a view
to determining whether Borrower had fulfilled all its obligations under this
Agreement, and that Borrower has observed and performed each undertaking
contained in the Loan Documents and is not in default in the observance or
performance of any of the provisions of the Loan Documents or, if Borrower shall
be so in default, specifying all such defaults and events of which he or she may
have knowledge.
5.8.9 COLLATERAL REPORT. Upon Bank's written request, Borrower
shall furnish to Bank on or before the 20th day of each month reporting for
Borrower and each Subsidiary as of the end of the last Business Day of the prior
month statements of (i) an aged listing accounts receivable, (ii) an aged
listing of accounts payable, (iii) a reconciliation of accounts, and (iv) a list
of the names and addresses of all account debtors.
5.8.10 GENERAL INFORMATION. Borrower shall furnish to Bank such
other information respecting the condition or operations, financial or
otherwise, of the Borrower as the Bank may from time to time reasonably request.
5.9 ENVIRONMENT. Borrower shall, and shall cause each Subsidiary to,
(i) be and remain in substantial compliance with Environmental Laws and with the
provisions of all other federal, state, and local environmental, health, and
safety laws, codes, and ordinances, and all rules and regulations issued
thereunder; (ii) notify the Bank immediately of any notice of a Hazardous
Substance discharge or environmental complaint received by Borrower from any
governmental agency or other party; (iii) notify the Bank immediately of any
material Hazardous Substance discharge from or affecting its premises; (iv)
immediately comply with all applicable laws regarding the same; (v) promptly pay
any fine or penalty assessed in connection therewith after exhausting all
recourse; (vi) permit the Bank to inspect the premises, to conduct tests
thereon, and to inspect all
TERM LOAN AGREEMENT - 21
books, correspondence, and records pertaining thereto; and (vii) at the Bank's
request, and at the Borrower's expense, provide a report of a qualified
environmental engineer, satisfactory in scope, form, and content to the Bank,
and such other and further assurances reasonably satisfactory to the Bank that
the condition has been corrected.
5.10 REIMBURSEMENT OF LENDER EXPENSES. Borrower shall promptly on
demand reimburse Bank for sums expended by Bank that constitute Lender Expenses,
and Borrower authorizes and approves all advances and payments by Bank for items
constituting Lender Expenses after written notice to Borrower. In addition, the
Borrower shall pay any and all stamp and other taxes and fees payable or
determined to be payable in connection with the execution, delivery, filing, and
recording of any of the Loan Documents and the other documents to be delivered
under any such Loan Documents, and agrees to hold the Bank harmless from and
against any and all liabilities with respect to or resulting from any delay in
paying or omission to pay such taxes and fees. This provision shall survive
termination of this Agreement.
ARTICLE 6 - NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Obligation is
outstanding it will comply with the following provisions:
6.1 LIENS. Without Bank's prior written consent, Borrower shall not
create, incur, assume, or suffer to exist, or permit any Subsidiary to create,
incur, assume, or suffer to exist, any Lien upon any of its property or assets,
now owned or hereafter acquired, except for the following ("Permitted Liens"):
(i) Liens (if any) granted to Bank to secure the Obligations,
(ii) Liens described in the attached EXHIBIT 6.1,
(iii) pledges or deposits made to secure payment of worker's
compensation insurance (or to participate in any fund in connection with
worker's compensation insurance), unemployment insurance, pensions, or social
security programs,
(iv) Liens imposed by mandatory provisions of law such as for
materialmen, mechanics, warehousemen, and other like Liens arising in the
ordinary course of business, securing indebtedness whose payment is not yet due,
or that is being contested by Borrower in good faith and for which adequate
reserves have been provided,
(v) Liens for taxes, assessments, and governmental charges or levies
imposed upon a person or upon such person's income or profits or property, if
the same are not yet due and payable or if the same are being contested in good
faith and as to which adequate cash reserves have been provided,
TERM LOAN AGREEMENT - 22
(vi) Liens arising from good faith deposits in connection with
tenders, leases, real estate bids, or contracts (other than contracts involving
the borrowing of money), pledges or deposits to secure public or statutory
obligations and deposits to secure (or in lieu of) surety, stay, appeal, or
customs bonds and deposits to secure the payment of taxes, assessments, customs
duties, or other similar charges,
(vii) encumbrances consisting of zoning restrictions, easements, or
other restrictions on the use of real property, provided that such items do not
impair the use of such property for the purposes intended, and none of which is
violated by existing or proposed structures or land use, or
(viii) purchase-money Liens on any property hereafter acquired or the
assumption of any Lien on property existing at the time of such acquisition (and
not created in contemplation of such acquisition), or a Lien incurred in
connection with any conditional sale or other title retention agreement or a
capital lease, provided that (a) any property subject to any of the foregoing
is acquired by the Borrower in the ordinary course of its business and the Lien
on any such property attaches to such asset concurrently or within ninety (90)
days after the acquisition thereof; (b) the obligation secured by any Lien so
created, assumed, or existing shall not exceed the lesser of the cost or the
fair market value as of the time of acquisition of the property covered thereby
to the Borrower, (c) each such Lien shall attach only to the property so
acquired, (d) the debt secured by all such Liens shall not exceed Twenty-five
Thousand Dollars ($25,000) at any time outstanding in the aggregate, and (e) the
debt secured by such Lien is permitted by the provisions of Section 6.2, and the
related expenditure is permitted under Section 7.1.
6.2 DEBT. Without Bank's prior written consent, Borrower shall not
incur, assume, or suffer to exist, or permit any Subsidiary to incur, assume, or
suffer to exist, any debt other than (i) the Obligations; (ii) indebtedness and
liabilities of Borrower identified in EXHIBIT 4.13; (iii) indebtedness and
liabilities o f Borrower that have been subordinated to the Obligations by
written agreement in form and substance acceptable to Bank; (iv) accounts
payable to trade creditors for goods or services that are incurred in the
ordinary course of business, as presently conducted, and paid within a
reasonable time, unless contested in good faith and by appropriate proceedings;
and (vi) debt of the Borrower secured by purchase-money liens that are Permitted
Liens.
6.3 MERGERS OR REORGANIZATION. Borrower shall not, without Bank's
prior written consent, which consent shall not be unreasonably withheld, wind
up, liquidate or dissolve itself, reorganize, merge or consolidate with or into,
or convey, sell, assign, transfer, lease, or otherwise dispose of (whether in
one transactions or in a series of transactions) all or substantially all of its
assets (whether now owned or hereafter acquired) to any Person, or acquire all
or substantially all of the assets or the business of any Person, or permit any
Subsidiary to do so, except that (1) any Subsidiary may merge into or transfer
assets to the Borrower, (2) any Subsidiary may merge into or consolidate with or
transfer assets to any other Subsidiary, (3) acquire or merge with any entity
whose assets are valued at ten percent (10%) or less of the Borrower's net
worth.
TERM LOAN AGREEMENT - 23
6.4 LEASES. Without Bank's prior written consent, Borrower shall not
create, incur, assume, or surfer to exist, or permit any Subsidiary to create,
incur, assume, or suffer to exist, any obligation as lessee for the rental or
hire of any real or personal property, except: (1) leases existing on the date
of this Agreement and any extensions or renewals thereof; (2) leases with Bank
or an affiliate of Bank; and (3) leases (other than capital leases) that do not
in the aggregate require the Borrower and its Subsidiaries on a consolidated
basis to make payments (including taxes, insurance, maintenance, and similar
expenses that the Borrower or any Subsidiary is required to pay under the terms
of any lease) in any fiscal year of the Borrower in excess of One Hundred
Thousand Dollars ($100,000).
6.5 SALE AND LEASEBACK. Without Bank's prior written consent, Borrower
shall not sell, transfer, or otherwise dispose of, or permit any Subsidiary to
sell, transfer, or otherwise dispose of, any real or personal property to any
Person other than Bank or an affiliate of Bank and thereafter directly or
indirectly lease back the same or similar property.
6.6 DIVIDENDS. Without Bank's prior written consent, Borrower shall
not declare or pay any dividends; or purchase, redeem, retire, or otherwise
acquire for value any of its capital stock now or hereafter outstanding; or make
any distribution of assets to its shareholders as such whether in cash, assets,
or in obligations of the Borrower; or allocate or otherwise set apart any sum
for the payment of any dividend or distribution on, or for the purchase,
redemption, or retirement of any shares of its capital stock; or make any other
distribution by reduction of capital or otherwise in respect of any shares of
its capital stock, except that the Borrower (1) may declare and deliver
dividends and make distributions payable solely in common stock of the Borrower;
and (2) may purchase or otherwise acquire shares of its capital stock by
exchange for or out of the proceeds received from a substantially concurrent
issue of new shares of its capital stock.
6.7 SALE OF ASSETS. Without Bank's prior written consent, Borrower
shall not sell, lease, assign, transfer, or otherwise dispose of, or permit any
subsidiary to sell, lease, assign, transfer, or otherwise dispose of, any of its
now owned or hereafter acquired material operating assets (including, without
limitation, receivables), except: (1) inventory disposed of in the ordinary
course of business; and (2) the sale or other disposition of assets no longer
used or useful in the conduct of its business.
TERM LOAN AGREEMENT - 24
6.8 INVESTMENTS. Without Bank's Prior written consent, Borrower shall
not make, or permit any subsidiary to make, any loan or advance to any Person,
or purchase or otherwise acquire any capital stock, assets, obligations, or
other securities of, make any capital contribution to, or otherwise invest in or
acquire any interest in any Person, or participate as a partner or joint
venturer with any other Person, except: (1) direct obligations of the United
States or any agency thereof with maturities of one year or less from the date
of acquisition; (2) commercial paper of a domestic issuer rated at least "A-l"
by Standard & Poor's Corporation or "P-l" by Xxxxx'x Investors Service, Inc.;
(3) certificates of deposit with maturities of one year or less from the date of
acquisition; (4) stock, obligations, or securities received in settlement of
debts (created in the ordinary course of business) owing to the Borrower; (5)
investments made through Bank or one of its affiliates, and (6) as provided for
in Section 6.3
6.9 GUARANTIES. Without Bank's prior written consent, Borrower shall
not assume, guarantee, endorse, or otherwise be or become directly or
contingently responsible or liable (including, but not limited to, an agreement
to purchase any obligation, stock, assets, goods, or services, or to supply or
advance any funds, assets, goods, or services, or an agreement to maintain or
cause such Person to maintain a minimum working capital or net worth, or to
otherwise assure the creditors of any Person against loss) for obligations of
any Person, or permit any subsidiary to do so, except guaranties by endorsement
of negotiable instruments for deposit or collection or similar transactions in
the ordinary course of business.
6.10 ERISA PLANS. Borrower shall not, without the Bank's prior written
consent, enter into, contribute to, or become a party to, or permit any
subsidiary to enter into, contribute to, or become a party to, any Plan, other
than those Plans listed in EXHIBIT 6.10.
6.11 TRANSACTIONS WITH AFFILIATES. Without Bank's prior written
consent, Borrower shall not enter into, or permit any subsidiary to enter into,
any transaction, including, without limitation, the purchase, sale, or exchange
of property or the rendering of any service, with any Affiliate except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
business and upon fair and reasonable terms no less favorable to the Borrower
than would obtain in a comparable arm's-length transaction with a Person not an
Affiliate; except that Borrower may repay Affiliate Debt, as listed on Exhibit
4.13 at anytime.
6.12 CHANGE IN MANAGEMENT. Borrower shall not materially and adversely
alter the executive management positions of Chief Executive Officer and/or Chief
Financial Officer without giving Bank written notice of such alteration at least
sixty (60) days prior to the effective date of such alteration in executive
management. If such advance notice is not possible, Borrower shall notify Bank
of such change as soon as is possible.
TERM LOAN AGREEMENT - 25
6.13 ACCOUNTING. Borrower shall not (i) modify or change its method of
accounting without advising Bank of such change, or (ii) enter into, modify, or
terminate any agreement presently existing or at anytime hereafter entered into
with any third party accounting firm and/or service bureau for the preparation
and/or storage of Borrower's accounting records without Borrower instructing
said accounting firm and/or service bureau to provide to Bank information
regarding the Collateral and Borrower's financial condition.
6.14 BORROWER'S LEGAL STATUS. Without providing at least 30 days prior
written notice to the Bank, the Borrower shall not change its name, its place of
business or, if more than one, chief executive office, or its mailing address or
organizational identification number if it has one. If the Borrower does not
have an organizational identification number and later obtains one, the Borrower
shall immediately notify the Bank of such organizational identification number.
The Borrower shall not change its type of organization, jurisdiction of
organization, or other legal structure.
ARTICLE 7 - FINANCIAL COVENANTS
So long as any Obligation is outstanding or the Bank shall have any
commitment under this Agreement, Borrower shall maintain the following financial
covenants:
7.1 DEBT SERVICE COVERAGE RATIO. Borrower shall maintain on a rolling
four quarter basis a ratio of EBITDA to Debt Service of not less than 1.50 to
1.00. The term "EBITDA" shall mean, for any period, as applied to Borrower, the
sum of Borrower's earnings, excluding any extraordinary and nonoperating income,
before (a) interest expense, (b) depreciation, (c) dividends, (d) taxes, (e)
amortization, and (f) other noncash charges. The term "Debt Service" shall mean
for any fiscal period cash interest expense plus the scheduled amortization of
any outstanding Funded Debt (as defined in paragraph 2.1.2.5) for such period
plus required payments on operating leases.
7.2 LEVERAGE RATIO. Borrower shall maintain at the end of each fiscal
quarter and each fiscal year a ratio of Borrower's total liabilities to
Borrower's shareholder's equity of not greater than 2.00 to 1.00.
7.3 CURRENT RATIO. Borrower shall maintain at the end of each fiscal
quarter and each fiscal year a ratio of current assets to Adjusted Current
Liabilities less current maturities of Deferred Site Maintenance of at least
1.20 to 1.00 thereafter. The term "Adjusted Current Liabilities" means
Borrower's current liabilities less Deferred Closure/Post Closure Obligations.
The term "Deferred Closure/Post Closure Obligations" shall be as reported by the
Borrower in accordance with GAAP in its periodic reports to the Securities and
Exchange Commission.
7.4 FUNDED DEBT RATIO. Borrower shall maintain at the end of each
fiscal quarter and each fiscal year a Funded Debt Ratio (as defined in Paragraph
2.1.2.5) of not greater than 4.00 to 1.00.
TERM LOAN AGREEMENT - 26
ARTICLE 8 - EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT. Each of the following events, at the option of
Bank, shall constitute an event of default (each an "Event of Default"):
8.1.1 The Borrower shall fail to pay the principal of, or
interest on, the Term Note, or any Obligation within fifteen (15) days of when
due and payable.
8.1.2 Any representation or warranty made or deemed made by
Borrower in this Agreement, the Security Agreements, or other Loan Document or
that is contained in any certificate, document, opinion, or financial or other
statement furnished at any time under or in connection with any Loan Document
shall prove to have been incorrect, incomplete, or misleading in any material
respect on or as of the date made or deemed made.
8.1.3 Borrower shall fail to perform or observe any term,
covenant, or condition contained in this Agreement or other Loan Document, or
Borrower shall be in default under any other agreement with Bank or an affiliate
of Bank.
8.1.4 Borrower shall (a) fail to pay any indebtedness for
borrowed money (other than the Loan) of the Borrower in excess of an aggregate
principal amount of $25,000, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise); or (b) fail to perform or observe any term, covenant, or condition
on its part to be performed or observed under any agreement or instrument
relating to any such indebtedness, when required to be performed or observed, if
the effect of such failure to perform or observe is to accelerate, or to permit
the acceleration of after the giving of notice or passage of time, or both, the
maturity of such indebtedness, whether or not such failure to perform or observe
shall be waived by the holder of such indebtedness, or any such indebtedness
shall be declared to be due and payable, or required to be prepaid (other than
by a regularly scheduled required prepayment), prior to the stated maturity
thereof.
8.1.5 Borrower (a) shall generally not pay, or shall be unable to
pay, or shall admit in writing its inability to pay its debts as such debts
become due; or (b) shall make an assignment for the benefit of creditors, or
petition or apply to any tribunal for the appointment of a custodian, receiver,
or trustee for it or a substantial part of its assets; or (c) shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (d) shall have had any such petition or
application filed or any such proceeding commenced against it in which an order
for relief is entered or an adjudication or appointment is made, and that
remains undismissed for a period of sixty (60) days or more; or (e) shall take
any corporate action indicating its consent to, approval of, or acquiescence in
any such petition, application, proceeding, or order for relief or the
appointment of a custodian, receiver, or trustee for all or any substantial part
of its properties; or (f) shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of sixty (60) days or more.
TERM LOAN AGREEMENT - 27
8.1.6 One or more judgments, decrees, or orders for the payment
of money in excess of One Hundred Twenty-five Thousand Dollars ($125,000) in the
aggregate shall be rendered against the Borrower, and such judgments, decrees,
or orders shall continue unsatisfied and in effect for a period of sixty (60)
consecutive days without being vacated, discharged, satisfied, or stayed or
bonded pending appeal.
8.1.7 The Security Agreement shall at any time after its
execution and delivery and for any reason cease (a) to create a valid and
perfected first priority security interest in and to the property purported to
be subject to such Security Agreement; or (b) to be in full force and effect or
shall be declared null and void, or the validity or enforceability thereof shall
be contested by the Borrower, or the Borrower shall deny it has any further
liability or obligation under the Security Agreement, or the Borrower shall fail
to perform any of its obligations under the Security Agreement.
8.1.8 Any Guaranty shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Guarantor, or the Guarantor shall deny he has any further
liability under, or shall fail to perform its obligations under, the Guaranty,
or the Guarantor, if a natural person, shall die.
8.1.9 Any of the following events shall occur or exist with
respect to Borrower and any Commonly Controlled Entity under ERISA: any
Reportable Event shall occur; complete or partial withdrawal from any
Multiemployer Plan shall take place; any Prohibited transaction shall occur; a
notice of intent to terminate a Plan shall be filed, or a Plan shall be
terminated; or circumstances shall exist that constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute
such proceedings; and in each case above, such event or condition, together with
all other events or conditions, if any, could subject the Borrower to any tax,
penalty, or other liability that in the aggregate may exceed Fifty Thousand
Dollars ($50,000).
8.1.10 If any federal, state, or local agency asserts or creates
a Lien upon any or all of the assets, equipment, property, leaseholds, or other
facilities of Borrower by reason of the occurrence of a hazardous discharge or
an environmental complaint; or if any federal, state, or local agency asserts a
claim against the Borrower and/or its assets, equipment, property, leaseholds or
other facilities for damages or cleanup costs relating to a hazardous discharge
or an environmental complaint; provided, however, that such claim shall not
constitute a default if, within ten (10) Business Days of the occurrence giving
rise to the claim, (a) the Borrower can prove to the Bank's reasonable
satisfaction that the Borrower has commenced and is diligently pursuing an
investigation of the claim to be followed promptly by either: (i) a cure or plan
for correction of the event that constitutes the basis for the claim, and
continues diligently to pursue such cure or correction to completion, or (ii)
proceedings for an injunction, a restraining order, or other appropriate
emergent relief preventing such agency or agencies from asserting such claim,
that relief is granted within ten (10) Business Days of the occurrence giving
rise to the claim and the injunction, order, or relief is not thereafter
resolved or reversed on appeal; and (b) in either of the foregoing events, the
Borrower has
TERM LOAN AGREEMENT - 28
posted a bond, letter of credit, or other security satisfactory in form,
substance and amount to both the Bank and the agency or entity asserting the
claim to secure the proper and complete cure or correction of the event that
constitutes the basis for the claim.
8.1.11 Any material misrepresentation exists now or hereafter in
any warranty or representation made to Bank by any officer or director of
Borrower, or if any such warranty or representation is withdrawn by any officer
or director.
8.1.12 This Agreement shall at any time after its execution and
delivery and for any reason cease to be in fall force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by Borrower, or Borrower shall deny it has any further liability or
obligation under this Agreement.
8.2 CURE OF EVENT OF DEFAULT. If any Event of Default, other than a
payment default, is curable and if Borrower has not been given a notice of a
similar default within the preceding twelve (12) months, it may be cured (and no
Event of Default will have occurred) if Borrower, after receiving written notice
from Bank demanding cure of such default: (a) cures the default within fifteen
(15) days; or (b) if the cure requires more than fifteen (15) days, immediately
initiates steps that Bank deems in Bank's sole, but reasonable, discretion to be
sufficient to cure the default and thereafter continues and completes all
reasonable and necessary steps sufficient to produce compliance as soon as
reasonably practical. Bank at its sole discretion may elect to give Borrower
additional cure opportunities.
ARTICLE 9 - BANK'S RIGHTS AND REMEDIES
9.1 SPECIFIC REMEDIES. Upon the occurrence of an Event of Default by
Borrower under this Agreement, Bank may, at its election and without notice of
its election and without demand, do any one or more of the following, all of
which are authorized by Borrower:
9.1.1 Declare all Obligations, whether evidenced by this
Agreement or the Loan Documents, due and payable immediately.
9.1.2 Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Bank, but without
affecting Bank's rights and security interest in the Collateral and without
affecting the Obligations.
TERM LOAN AGREEMENT - 29
9.2 Set Off. Upon the occurrence and during the continuance of any
Event of Default the Bank is hereby authorized at any time and from time to
time, without notice to the Borrower (any such notice being expressly waived by
the Borrower), to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by the Bank to or for the credit or the account of Borrower
against any and all of the obligations of the Borrower now or hereafter existing
under this Agreement or the Term Note or any other Loan Document, irrespective
of whether or not the Bank shall have made any demand under this Agreement or
the Term Note or such other Loan Document and although such obligations may be
unmatured. The Bank agrees promptly to notify the Borrower after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that the Bank may have.
9.3 CUMULATIVE REMEDIES. The rights and remedies provided herein are
cumulative, and are not exclusive of any other rights, powers, privileges, or
remedies, now or hereafter existing, at law or in equity or otherwise.
9.4 ARBITRATION.
9.4.1 ARBITRATION. The parties shall, upon demand by any party,
submit to binding arbitration all claims, disputes and controversies between or
among them (and their respective employees, officers, directors, attorneys, and
other agents), whether in tort, contract or otherwise arising out of or relating
to in any way (i) the Loan and the Loan Documents and their negotiation,
execution, collateralization, administration, repayment, modification,
extension, substitution, formation, inducement, enforcement, default or
termination; or (ii) requests for additional credit.
9.4.2 GOVERNING RULES. Any arbitration proceeding will (i)
proceed in a location in Idaho selected by the American Arbitration Association
("AAA"); (ii) be governed by the Federal Arbitration Act (Title 9 of the United
States Code), notwithstanding any conflicting choice of law provision in any of
the documents between the parties; and (iii) be conducted by the AAA, or such
other administrator as the parties shall mutually agree upon, in accordance with
the AAA's commercial dispute resolution procedures, unless the claim or
counterclaim is at least $ 1,000,000.00 exclusive of claimed interest,
arbitration fees and costs in which case the arbitration shall be conducted in
accordance with the AAA's optional procedures for large, complex commercial
disputes (the commercial dispute resolution procedures or the optional
procedures for large, complex commercial disputes to be referred to, as
applicable, as the "Rules"). If there is any inconsistency between the terms
hereof and the Rules, the terms and procedures set forth herein shall control.
Any party who fails or refuses to submit to arbitration following a demand by
any other party shall bear all costs and expenses incurred by such other party
in compelling arbitration of any dispute. Nothing contained herein shall be
deemed to be a waiver by any party that is a bank of the protections afforded to
it under 12 U.S.C. 91 or any similar applicable state law.
TERM LOAN AGREEMENT - 30
9.4.3 NO WAIVER OF PROVISIONAL REMEDIES, SELF-HELP AND
FORECLOSURE. The arbitration requirement does not limit the right of any party
to (i) foreclose against real or personal property collateral; (ii) exercise
self-help remedies relating to collateral or proceeds of collateral such as
setoff or repossession; or (iii) obtain provisional or ancillary remedies such
as replevin, injunctive relief, attachment or the appointment of a receiver,
before during or after the pendency of any arbitration proceeding. This
exclusion does not constitute a waiver of the right or obligation of any party
to submit any dispute to arbitration or reference hereunder, including those
arising from the exercise of the actions detailed in sections (i), (ii) and
(iii) of this paragraph.
9.4.4 ARBITRATOR QUALIFICATIONS AND POWERS. Any arbitration
proceeding in which the amount in controversy is $5,000,000.00 or less will be
decided by a single arbitrator selected according to the Rules, and who shall
not render an award of greater than $5,000,000.00. Any dispute in which the
amount in controversy exceeds $5,000,000.00 shall be decided by majority vote of
a panel of three arbitrators; provided however, that all three arbitrators must
actively participate in all hearings and deliberations. The arbitrator will be a
neutral attorney licensed in the State of Idaho or a neutral retired judge of
the state or federal judiciary of Idaho, in either case with a minimum often
years experience in the substantive law applicable to the subject matter of the
dispute to be arbitrated. The arbitrator will determine whether or not an issue
is arbitratable and will give effect to the statutes of limitation in
determining any claim. In any arbitration proceeding the arbitrator will decide
(by documents only or with a hearing at the arbitrator's discretion) any
pre-hearing motions which are similar to motions to dismiss for failure to state
a claim or motions for summary adjudication. The arbitrator shall resolve all
disputes in accordance with the substantive law of Idaho and may grant any
remedy or relief that a court of such state could order or grant within the
scope hereof and such ancillary relief as is necessary to make effective any
award. The arbitrator shall also have the power to award recovery of all costs
and fees, to impose sanctions and to take such other action as the arbitrator
deems necessary to the same extent a judge could pursuant to the Federal Rules
of Civil Procedure, the Idaho Rules of Civil Procedure or other applicable law.
Judgment upon the award rendered by the arbitrator may be entered in any court
having jurisdiction. The institution and maintenance of an action for judicial
relief or pursuit of a provisional or ancillary remedy shall not constitute a
waiver of the right of any party, including the plaintiff, to submit the
controversy or claim to arbitration if any other party contests such action for
judicial relief.
9.4.5 DISCOVERY. In any arbitration proceeding discovery will be
permitted in accordance with the Rules. All discovery shall be expressly limited
to matters directly relevant to the dispute being arbitrated and must be
completed no later than 20 days before the hearing date and within 180 days of
the filing of the dispute with the AAA. Any requests for an extension of the
discovery periods, or any discovery disputes, will be subject to final
determination by the arbitrator upon a showing that the request for discovery is
essential for the party's presentation and that no alternative means for
obtaining information is available.
9.4.6 CLASS PROCEEDINGS AND CONSOLIDATIONS. The resolution of any
dispute arising pursuant to the terms of this Agreement shall be determined by a
separate arbitration
TERM LOAN AGREEMENT - 31
proceeding and such dispute shall not be consolidated with other disputes or
included in any class proceeding.
9.4.7 PAYMENT OF ARBITRATION COSTS AND FEES. The arbitrator shall
award all costs and expenses of the arbitration proceeding.
9.4.8 REAL PROPERTY COLLATERAL. Notwithstanding anything herein
to the contrary, no dispute shall be submitted to arbitration if the dispute
concerns indebtedness secured directly or indirectly, in whole or in part, by
any real property unless (i) the holder of the mortgage, lien or security
interest specifically elects in writing to proceed with the arbitration, or (ii)
all parties to the arbitration waive any rights or benefits that might accrue to
them by virtue of the single action rule statute of Idaho, thereby agreeing that
all indebtedness and obligations of the parties, and all mortgages, liens and
security interests securing such indebtedness and obligations, shall remain
fully valid and enforceable.
9.4.9 MISCELLANEOUS. To the maximum extent practicable, the AAA,
the arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business or by applicable law or
regulation. If more than one agreement for arbitration by or between the parties
potentially applies to a dispute, the arbitration provision most directly
related to the Loan Documents or the subject matter of the dispute shall
control. This arbitration provision shall survive termination, amendment or
expiration of any of the Loan Documents or any relationship between the parties.
ARTICLE 10 - MISCELLANEOUS
10.1 AMENDMENTS, ETC. No amendment, modification, termination, or
waiver of any provision of any Loan Document to which the Borrower is a party,
nor consent to any departure by the Borrower from any Loan Document to which it
is a party, shall in any event be effective unless the same shall be in writing
and signed by the Bank and Borrower, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
10.2 NOTICES, ETC. Unless otherwise provided in this Agreement, All
notices and other communications provided for under this Agreement and under the
other Loan Documents to which the Borrower is a party shall be in writing and
either personally served or sent by verified facsimile transmission, overnight
delivery service, or regular United States mail, postage prepaid, to Borrower or
to Bank as the case may be at the addresses set forth below:
TERM LOAN AGREEMENT - 32
If to Borrower: American Ecology Corporation
000 X. Xxxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxx Xxxxxxxxxxx
Fax: 208/000-0000
With a copy to: Stoel Rives
000 Xxxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxx, Esq.
Fax: 208/000-0000
If to Bank: Xxxxx Fargo Bank, National Association
Xxxx Xxxxxx Xxx 0000
Xxxxx, Xxxxx 00000
Attention: Regional Corporate Banking Office
Fax: 208/000-0000
With a copy to: Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields,
Chartered
000 X. Xxxxxxx Xxxx., 00xx Xxxxx
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax: 208/000-0000
The parties may change the address at which they are to receive notices and
other communications hereunder by notice in writing in the foregoing manner
given to the other. All notices or demands sent in accordance with this Section
shall be deemed received on the earlier of the date of confirmed actual receipt
or three (3) Business Days after the deposit thereof in the mail.
10.3 NO WAIVER. No failure or delay on the part of the Bank in
exercising any right, power, or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power, or
remedy preclude any other or further exercise thereof or the exercise of any
other right, power, or remedy hereunder.
10.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Borrower and the Bank and their respective
successors and assigns, except that the Borrower may not assign or transfer any
of its rights under any Loan Document to which the Borrower is a party without
the prior written consent of the Bank.
TERM LOAN AGREEMENT - 33
10.5 INTEGRATION. This Agreement and the Loan Documents contain the
entire agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto.
10.6 APPLICATION OF PAYMENTS. Borrower waives the right to direct the
application of any and all payments at any time or times hereafter received by
Bank on account of the Obligations, and Borrower agrees that Bank shall have the
continuing exclusive right to apply and reapply such payments in any manner as
Bank may deem advisable, notwithstanding any entry by Bank upon its books.
10.7 CONTINUING WARRANTIES, REPRESENTATIONS AND COVENANTS. Each
warranty, representation, and covenant contained in this Agreement shall
continue until the Agreement is terminated and all Obligations have been paid or
satisfied in full and shall be conclusively presumed to have been relied upon by
Bank regardless of any investigation made or information possessed by Bank. The
warranties, representations, and covenants set forth herein shall be cumulative
and in addition to any and all other warranties, representations, and covenants
that Borrower shall give or cause to be given to Bank, either now or hereafter.
10.8 INDEMNITY. The Borrower shall defend, indemnify, and hold the
Bank harmless from and against any and all claims, damages, judgments,
penalties, costs, and expenses (including attorney fees and court costs now or
hereafter arising from the aforesaid enforcement of this clause) arising
directly or indirectly from the activities of the Borrower and its Subsidiaries,
its predecessors in interest, or third parties with whom it has a contractual
relationship, or arising directly or indirectly from the violation of any
environmental protection, health, or safety law, whether such claims are
asserted by any governmental agency or any other person. This indemnity shall
survive termination of this Agreement for a period of five years.
10.9 CHOICE OF LAW AND VENUE. This Agreement is made in the state of
Idaho, which state the parties agree has a substantial relationship to the
parties and to the underlying transaction embodied hereby. Accordingly, in all
respects, this Agreement and the Loan Documents and the obligations arising
hereunder and thereunder shall be governed by, and construed in accordance with,
the laws of the state of Idaho applicable to contracts made and performed in
such state and any applicable law of the United States of America. Each party
hereby unconditionally and irrevocably waives, to the fullest extent permitted
by law, any claim to assert that the law of any jurisdiction other than the
state of Idaho governs this Agreement. All disputes, controversies, or claims
arising out of, or in connection with, this Agreement or any Loan Document shall
be litigated in any court of competent jurisdiction within the state of Idaho.
Each party hereby accepts jurisdiction of such state and agrees to accept
service of process as if it were personally served within such state. Each party
irrevocably waives, to the fullest extent permitted by law, any objection that
the party may now or hereafter have to the jurisdiction of the courts of such
state and any claim that any such litigation brought in any such court has been
brought in an inconvenient forum.
TERM LOAN AGREEMENT - 34
10.10 SEVERABILITY OF PROVISIONS. Any provision of any Loan Document
that 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 of such Loan
Document or affecting the validity or enforceability of such provision in any
other jurisdiction.
10.11 HEADINGS. Article and Section headings in the Loan Documents are
included in such Loan Documents for the convenience of reference only and shall
not constitute a part of the applicable Loan Documents for any other purpose.
10.12 JURY TRIAL WAIVER. THE BANK AND THE BORROWER HEREBY WAIVE TRIAL
BY JURY IN ANY ACTION, PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT
OR TORT, AT LAW OR IN EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS
AGREEMENT OR THE LOAN DOCUMENTS.
10.13 DESTRUCTION OF BORROWER'S DOCUMENTS. After notice to Borrower,
any documents, schedules, invoices, or other papers delivered to Bank may be
destroyed or otherwise disposed of by Bank at any time six (6) months after they
are delivered to or received by Bank, unless Borrower requests in writing the
return of the said documents, schedules, invoices, or other papers and makes
arrangements at Borrower's expense for their return.
10.14 PARTICIPATIONS. With Borrower's consent, which consent shall not
be unreasonably withheld, Bank may, at any time, sell to one or more banks,
financial institutions or other Persons (each a "Participant") participating
interests in the Loan or any other interest of Bank under the Loan Documents. In
the event of any such sale by Bank, Bank's obligations to Borrower under this
Agreement shall remain unchanged, Bank shall remain solely responsible for the
performance thereof, Bank shall remain the holder of the Loan for all purposes
under the Loan Documents, and Borrower shall continue to deal solely and
directly with Bank in connection with the Bank's rights and obligations under
the Loan Documents. If Obligations are due or unpaid, or shall have been
declared or shall have become due or unpaid, upon the occurrence of an Event of
Default, each Participant shall, to the maximum extent permitted by applicable
law, be deemed to have the right of setoff in respect of its participating
interest in amounts owing under the Loan Documents to the same extent as if the
amount of its participating interest were owing directly to it as Bank under
this Agreement.
10.14.1 With Borrower's consent, which consent shall not be
unreasonably withheld, Borrower authorizes Bank to disclose to any actual or
prospective Participant and/or assignee, any and all financial information in
Bank's possession or known to Bank concerning Borrower, its affiliates, and the
Collateral that has been delivered to Bank by or on behalf of Borrower pursuant
to the Loan Documents or in connection with Bank's credit evaluation of
Borrower.
10.14.2 Notwithstanding any contrary provision of this Section,
Bank shall at all times be the lead lender (i.e., the sole party with whom
Borrower needs to communicate) with
TERM LOAN AGREEMENT - 35
respect to the Loan, and Borrower shall only be required to communicate with
Bank. Each Participant that receives confidential information regarding Borrower
or the Collateral must agree to use reasonable efforts to keep all information
acquired by it in connection with the Loan or Loan Documents and relating to
Borrower and/or the collateral confidential; provided, however, that such
information may be distributed by any Participant (i) pursuant to a court order
or a demand made by any governmental agency or authority, or otherwise in
connection with litigation or as otherwise required by law, (ii) after the
occurrence of an Event of Default, but only with respect to the Collateral,
(iii) to such person's consultants or professionals, as necessary, (iv) in
connection with a sale or participation of such person's interest in the Loan,
and (v) to regulators in connection with audits.
10.15 EFFECTIVE DATE. This Agreement shall be binding and deemed
effective as of the date first written above when executed by Borrower and
accepted and executed by Bank.
10.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and delivered by facsimile transmission. Each counterpart when so
executed shall be deemed to be an original and all of which taken together shall
constitute one and the same Agreement.
[Signature Page Follows]
TERM LOAN AGREEMENT - 36
IN WITNESS WHEREOF, Borrower has executed this Agreement.
AMERICAN ECOLOGY CORPORATION
By_______________________________
Xxxxx X. Xxxxxxxxxxx
Xx. Vice President and CFO
GUARANTOR'S CONSENT
Each Guarantor consents to, acknowledges, and accepts the forgoing
Agreement. Each Guarantor affirms and ratifies its Continuing and Unconditional
Guaranty made by Guarantor for the benefit of Bank (the "Guaranty"), and
confirms that the Guaranty remains in full force and effect and binding upon the
Guarantor without any setoffs, defenses, or counterclaims of any kind
whatsoever. Each Guarantor also acknowledges and reaffirms all existing security
agreements, financing statements, and any other documents the Guarantor executed
in connection with the Guaranty.
Dated as of October 28, 2002.
GUARANTORS:
AMERICAN ECOLOGY SERVICES CORPORATION
By_______________________________
Xxxxx X Xxxxxxxxxxx
Vice President and Treasurer
AMERICAN ECOLOGY MANAGEMENT CORPORATION
By_______________________________
Xxxxx X Xxxxxxxxxxx
Vice President and Treasurer
TERM LOAN AGREEMENT - 37
TEXAS ECOLOGISTS, INC
By_______________________________
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
AMERICAN ECOLOGY RECYCLE CENTER, INC.
By_______________________________
Xxxxx R, Xxxxxxxxxxx
Vice President and Treasurer
AMERICAN ECOLOGY ENVIRONMENTAL SERVICES
CORPORATION
By_______________________________
Xxxxx R, Xxxxxxxxxxx
Vice President and Treasurer
US ECOLOGY, INC.
By_______________________________
Xxxxx R, Xxxxxxxxxxx
Vice President and Treasurer
US ECOLOGY IDAHO, INC.
By_______________________________
Xxxxx R, Xxxxxxxxxxx
Vice President and Treasurer
TERM LOAN AGREEMENT - 38
ACCEPTED AND EFFECTIVE as of the 28th day of October, 2002, in the
state of Idaho.
BANK: XXXXX FARGO BANK, NATIONAL ASSOCIATION
By_______________________________
Xxxxxx X. Xxxxxxx, Vice President
TERM LOAN AGREEMENT - 39
EXHIBIT 2.1.1.2
LIBOR LOAN REQUEST FORM
[DATE]
Xxxxx Fargo Bank, National Association
X.X. Xxx 0000
Xxxxx, XX 00000
Attention: Regional Corporate Banking Office
Ladies & Gentlemen:
We refer to the Term Loan Agreement (the "Agreement"), dated October 28, 2002,
between Xxxxx Fargo Bank, National Association ("Bank") and American Ecology
Corporation ("Borrower"). Borrower requests that Bank make a LIBOR Loan pursuant
to the Agreement and specifies as follows:
1. The date of the requested Loan is to be _____________________.
2. The amount of the requested Loan is to be $_________________.
3. The requested Interest Period for the Loan is ________________.
Borrower certifies to Bank, as of the date of this letter, that the warranties
and representations set forth in the Agreement and the other Loan Documents are
true and correct, and that no Event of Default, as defined in the Agreement, has
occurred and is continuing or would result from the requested Loan.
Very truly yours,
AMERICAN ECOLOGY CORPORATION
By_______________________________
Name____________________________
Title___________________________
EXHIBIT 2.1.1.2
EXHIBIT 2.1.3
FORM OF TERM NOTE
See attached.
EXHIBIT 2.1.3
TERM NOTE
BORROWER: AMERICAN ECOLOGY CORPORATION OCTOBER 28,2002
BOISE, IDAHO
ADDRESS: 000 X. XXXXXXX, XXXXX 000
XXXXX, XXXXX 00000
PRINCIPAL AMOUNT: SEVEN MILLION DOLLARS ($7,000,000)
FOR VALUE RECEIVED, AMERICAN ECOLOGY CORPORATION, a Delaware
corporation ("Borrower"), promises to pay to the order of XXXXX FARGO BANK,
NATIONAL ASSOCIATION ("Bank") the total principal amount outstanding on this
note (the "Note") together with interest thereon as stated below, in lawful
money of the United States of America.
This Note is executed pursuant to and is the Term Note referred to in
that certain Term Loan Agreement, dated October 28, 2002, between Borrower and
Bank (as amended, modified, or supplemented from time to time, the "Credit
Agreement"). Capitalized terms used but not defined in this Note shall have the
same definitions as are ascribed to such terms in the Credit Agreement. This
Note is governed by the provisions of the Credit Agreement.
The outstanding unpaid balance of this Note shall bear interest at a
fluctuating per annum rate as set forth in the Credit Agreement. This Note shall
be repaid in the manner set forth in the Credit Agreement.
This Note is secured, in part, by a Security Agreement covering
equipment and other collateral as provided therein and in the Credit Agreement.
This Note is made in the state of Idaho, which state the parties agree
has a substantial relationship to the parties and to the underlying transaction
embodied hereby. Accordingly, in all respects, this Note and the obligations
arising hereunder shall be governed by, and construed in accordance with, the
laws of the state of Idaho applicable to contracts made and performed in such
state and any applicable law of the United States of America. Each party hereby
unconditionally and irrevocably waives, to the fullest extent permitted by law,
any claim to assert that the law of any jurisdiction other than the state of
Idaho governs this Note. All disputes, controversies, or claims arising out of,
or in connection with, this Note shall be litigated in any court of competent
jurisdiction within the state of Idaho. Each party hereby accepts jurisdiction
of such state and agrees to accept service of process as if it were personally
served within such state. Each party irrevocably waives, to the fullest extent
permitted by law, any objection that the party may now or hereafter have to the
jurisdiction of the courts of such state and any claim that any such litigation
brought in any such court has been brought in an inconvenient forum.
Except as expressly provided in the Credit Agreement, the makers,
sureties, guarantors and endorsers of this Note jointly and severally waive
presentment for payment, protest, notice of
TERM NOTE - 1
protest and notice of nonpayment of this Note, and consent that this Note or any
payment due under this Note may be extended or renewed without demand or notice,
and further consent to the release of any collateral or part thereof, with or
without substitution.
AMERICAN ECOLOGY CORPORATION
By_______________________________
Xxxxx X. Xxxxxxxxxxx
Xx. Vice President and CFO
TERM NOTE - 2
EXHIBIT 3.1.2
FORM OF SECURITY AGREEMENT
See attached.
EXHIBIT 3.1.2- FORM OF SECURITY AGREEMENT
EXHIBIT 3.1.3
FORM OF GUARANTOR SECURITY AGREEMENTS
See attached.
EXHIBIT 3.1.3- FORM OF GUARANTOR SECURITY AGREEMENTS
EXHIBIT 3.1.4
FORM OF OPINION OF COUNSEL FOR BORROWER AND GUARANTORS
See attached.
EXHIBIT 3.1.4 - FORM OF OPINION OF COUNSEL FOR BORROWER AND GUARANTORS
EXHIBIT 4.13
DEBT
EXHIBIT 4.13
EXHIBIT 4.17
AMERICAN ECOLOGY CORPORATION AND SUBSIDIARIES
(AS OF 10/15/02)
PERCENTAGE
OF STOCK
PARENT OWNED BY
COMPANY NAME/ADDRESSES CORP PARENT INCORP.
--------------------------------------- ------ ---------- ------------------
American Ecology Corporation (AEC) N/A N/A Delaware
000 X. Xxxxxxx, Xxxxx 000 0/00/00
Xxxxx XX 00000
EIN 00-0000000
--------------------------------------- ------ ---------- ------------------
American Ecology Environmental Services AEC 100% Texas
Corporation (AEESC) 6/12/80
00000 Xxxxxxx 000 Xxxxx
Xxxxx XX 00000 f/k/a
X.X. Xxx 000 Xxxxxxxxx
Xxxxxx XX 00000 Chemical
EIN 00-0000000 Resources, Inc.
(name change
1/4/95)
--------------------------------------- ------ ---------- ------------------
American Ecology Management Corporation AEC 100% Delaware
(AEMC) 9/22/94
000 X. Xxxxx
Xxxxx 000
Xxxxx XX 00000
Inactive Pending
--------------------------------------- ------ ---------- ------------------
American Ecology Recycle Center, Inc. AEC 100% Delaware
(AERC) 3/31/94
000 Xxxxx Xxxx
Xxx Xxxxx XX 00000 d/b/a US Ecology
EIN 00-0000000 Nuclear
Equipment Service
Center (4/8/96)
d/b/a US Ecology
Nuclear Materials
Management
Center (4/8/96)
--------------------------------------- ------ ---------- ------------------
American Ecology Services Corporation AEC 100% Delaware
(AESC) 2/24/93
13 IN. Xxxxxx Xxxx
Xxxxxxxx XX 00000
EIN 00-0000000
--------------------------------------- ------ ---------- ------------------
Texas Ecologists, Inc. (TECO) USE 100% Texas
X.X. Xxx 000 11/22/71
Xxxxxxxx XX 00000
EIN 94-2 1643 12
EXHIBIT 4.17
PERCENTAGE
OF STOCK
PARENT OWNED BY
COMPANY NAME/ADDRESSES CORP PARENT INCORP.
--------------------------------------- ------ ---------- ------------------
US Ecology, Inc. (USE) AEC 100% California
000 X. Xxxxxxx Xxxxx, Xxxxx 000 0/00/00
Xxxxx XX 00000
f/k/a
Nuclear
Engineering
EIN 00-0000000 Company, Inc.
(name change
12/11/80)
--------------------------------------- ------ ---------- ------------------
US Ecology Idaho, Inc. (USEI) AEC 100% Delaware
X.X. Xxx 000 00/00/00
Xxxxxx Xxxx
Xxxxx Xxxx, XX 00000 f/k/a
BIN 00-0000000 Envirosafe
Services of Idaho,
Inc.
(name change
5/1/01)
EXHIBIT 4.17
EXHIBIT 6.1
PERMITTED LIENS
Liens existing as of the date of this Agreement that secure any of the
debts described in the attached Exhibit 4.13.
EXHIBIT 6.1 - PERMITTED LIENS
EXHIBIT 6.10
ERISA PLANS
Pension Benefit Plans
American Ecology Corporation 401(k) Savings and Retirement Plan #003
Welfare Benefit Plans
American Ecology Corporation Flexible Benefit Plan #501, #502, #503
American Ecology Corporation Long-Term Disability Plan #501
American Ecology Life and Accident Plan #502
American Ecology Corporation Group Insurance Plan #712
American Ecology Corporation Short-Term Disability Plan
EXHIBIT 6.10 - EMPLOYEE BENEFIT PLANS
