Exhibit 10.13
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SECOND LIEN CREDIT AGREEMENT
DATED AS OF APRIL 28, 2005
AMONG
WCA WASTE SYSTEMS, INC.,
AS BORROWER,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT AND COLLATERAL AGENT,
AND
THE LENDERS PARTY HERETO
TERM LOAN FACILITY
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TABLE OF CONTENTS
PAGE
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ARTICLE I Definitions and Accounting Matters................. 1
Section 1.01 Certain Defined Terms.............................. 1
Section 1.02 Terms Generally.................................... 20
Section 1.03 Accounting Terms and Determinations................ 21
ARTICLE II Commitments........................................ 21
Section 2.01 Loans.............................................. 21
Section 2.02 Borrowings, Continuations and Conversions.......... 21
Section 2.03 Fees............................................... 23
Section 2.04 Several Obligations................................ 23
Section 2.05 Evidence of Debt................................... 23
Section 2.06 Prepayments........................................ 24
Section 2.07 Lending Offices.................................... 25
ARTICLE III Payments of Principal and Interest................. 25
Section 3.01 Repayment of Loans................................. 25
Section 3.02 Interest........................................... 25
ARTICLE IV Payments; Pro Rata Treatment; Computations; Etc.... 26
Section 4.01 Payments........................................... 26
Section 4.02 Pro Rata Treatment................................. 27
Section 4.03 Computations....................................... 27
Section 4.04 Non-receipt of Funds by the Administrative Agent... 27
Section 4.05 Set-off, Sharing of Payments, Etc.................. 28
ARTICLE V Yield Protection................................... 29
Section 5.01 Increased Costs.................................... 29
Section 5.02 Taxes.............................................. 30
Section 5.03 Mitigation Obligations; Replacement of Lenders..... 32
Section 5.04 Compensation....................................... 33
ARTICLE VI Conditions Precedent............................... 34
Section 6.01 Funding............................................ 34
Section 6.02 Conditions Precedent for the Benefit of Lenders.... 35
Section 6.03 Determinations Under Section 6.01.................. 35
Section 6.04 No Waiver.......................................... 36
ARTICLE VII Representations and Warranties..................... 36
Section 7.01 Corporate Existence................................ 36
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Section 7.02 Financial Condition................................ 36
Section 7.03 Litigation......................................... 37
Section 7.04 No Breach.......................................... 37
Section 7.05 Authority.......................................... 37
Section 7.06 Approvals.......................................... 37
Section 7.07 Use of Proceeds.................................... 37
Section 7.08 ERISA.............................................. 38
Section 7.09 Taxes.............................................. 39
Section 7.10 Titles, etc........................................ 39
Section 7.11 No Material Misstatements.......................... 39
Section 7.12 Investment Company Act............................. 40
Section 7.13 Public Utility Holding Company Act................. 40
Section 7.14 Subsidiaries....................................... 40
Section 7.15 Location of Business and Offices................... 40
Section 7.16 Defaults........................................... 40
Section 7.17 Environmental Matters.............................. 40
Section 7.18 Compliance with the Law............................ 42
Section 7.19 Insurance.......................................... 42
Section 7.20 Restriction on Liens............................... 42
Section 7.21 Material Agreements................................ 42
Section 7.22 Transaction Parties................................ 43
ARTICLE VIII Affirmative Covenants.............................. 43
Section 8.01 Reporting Requirements............................. 43
Section 8.02 Litigation......................................... 45
Section 8.03 Maintenance, Etc................................... 46
Section 8.04 Environmental Matters.............................. 47
Section 8.05 Further Assurances................................. 47
Section 8.06 Performance of Obligations......................... 48
Section 8.07 ERISA Information and Compliance................... 48
Section 8.08 Subsidiary Guarantors.............................. 48
ARTICLE IX Negative Covenants................................. 49
Section 9.01 Debt............................................... 49
Section 9.02 Liens.............................................. 50
Section 9.03 Investments........................................ 50
Section 9.04 Dividends, Distributions and Redemptions; Etc...... 51
Section 9.05 Sales and Leasebacks............................... 51
Section 9.06 Nature of Business; Amendments of Constitutive
Documents....................................... 51
Section 9.07 Limitation on Leases............................... 51
Section 9.08 Mergers, Etc....................................... 51
Section 9.09 Proceeds of Loans.................................. 52
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Section 9.10 ERISA Compliance................................... 52
Section 9.11 Sale or Discount of Receivables.................... 53
Section 9.12 Leverage Ratio..................................... 53
Section 9.13 Net Worth.......................................... 53
Section 9.14 Combined Secured Debt Leverage Ratio............... 53
Section 9.15 Adjusted EBIT Debt Service Ratio................... 54
Section 9.16 Capital Expenditures............................... 54
Section 9.17 Sale of Properties................................. 54
Section 9.18 Environmental Matters.............................. 54
Section 9.19 Transactions with Affiliates....................... 54
Section 9.20 Subsidiaries....................................... 55
Section 9.21 Negative Pledge Agreements......................... 55
Section 9.22 Prepayments of Debt; Amendment of Documents........ 55
ARTICLE X Events of Default; Remedies........................ 55
Section 10.01 Events of Default.................................. 55
Section 10.02 Remedies........................................... 58
ARTICLE XI The Agents......................................... 58
Section 11.01 Appointment and Authority.......................... 58
Section 11.02 Rights as a Lender................................. 58
Section 11.03 Exculpatory Provisions............................. 59
Section 11.04 Reliance by any Agent.............................. 59
Section 11.05 Delegation of Duties............................... 60
Section 11.06 Resignation of an Agent............................ 60
Section 11.07 Non-Reliance on Agents and Other Lenders........... 61
Section 11.08 [Intentionally Omitted.]........................... 61
Section 11.09 Collateral and Guaranty Matters.................... 61
Section 11.10 Intercreditor Agreement............................ 61
Section 11.11 Indemnification.................................... 61
ARTICLE XII Miscellaneous...................................... 62
Section 12.01 Waiver............................................. 62
Section 12.02 Notices............................................ 62
Section 12.03 Payment of Expenses, Indemnities, etc.............. 64
Section 12.04 Amendments, Etc.................................... 66
Section 12.05 Successors and Assigns............................. 66
Section 12.06 Invalidity......................................... 69
Section 12.07 Counterparts, etc.................................. 69
Section 12.08 Survival........................................... 70
Section 12.09 Captions........................................... 70
Section 12.10 Governing Law; Submission to Jurisdiction.......... 70
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Section 12.11 Interest Rate Limitation........................... 71
Section 12.12 WAIVER OF JURY TRIAL............................... 71
Section 12.13 Right of Setoff.................................... 71
Section 12.14 Confidentiality.................................... 72
Section 12.15 Exculpation Provisions............................. 72
Section 12.16 USA Patriot Act Notice............................. 73
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TABLE OF CONTENTS
(continued)
ANNEX:
I - List of Percentage Shares and Aggregate Commitments
SCHEDULES:
7.02 - Financial Condition
7.03 - Litigation
7.10 - Titles, Etc.
7.14 - Subsidiaries
7.17 - Environmental Matters
7.19 - Insurance
7.21 - Material Agreements
9.01 - Debt
9.02 - Liens
9.03 - Investments, Loans and Advances
EXHIBITS:
A - Form of Borrowing, Continuation and Conversion Request
B - Form of Compliance Certificate
C - Form of Assignment and Assumption
v
THIS SECOND LIEN CREDIT AGREEMENT dated as of April 28, 2005, is among WCA
WASTE SYSTEMS, INC., a Delaware corporation (the "Borrower"); each of the
lenders that is a party hereto or which becomes a party hereto as provided in
Section 12.05 (individually, together with its successors and assigns, a
"Lender" and, collectively, the "Lenders"); and XXXXX FARGO BANK, NATIONAL
ASSOCIATION, a national banking association (in its individual capacity, "Xxxxx
Fargo"), as administrative agent and collateral agent hereunder (in such
capacity, together with its successors in such capacity, the "Administrative
Agent" and the "Collateral Agent" and together, the "Agents").
RECITALS
A. The Borrower has requested and the Administrative Agent and the Lenders
have agreed to extend a term loan facility upon the terms and conditions
hereinafter set forth.
B. In consideration of the mutual covenants and agreements herein contained
and of the loans, extensions of credit and commitments hereinafter referred to,
the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING MATTERS
Section 1.01 Certain Defined Terms. As used herein, the following terms
shall have the following meanings (all terms defined in this Article I or in
other provisions of this Agreement in the singular to have equivalent meanings
when used in the plural and vice versa):
"2004 Reorganization" means (a) Waste Corporation of America, Inc., WCA
Merger Corporation, WCA Holdings Corporation and WCA Waste Corporation, a
Delaware corporation ("WCA Corp."), entered into that certain Reorganization
Agreement dated May 10, 2004, pursuant to which, among other things, Waste
Corporation of America, Inc. merged into WCA Merger Corporation with Waste
Corporation of America, Inc. as the surviving entity, (b) Waste Corporation of
America, Inc. was converted from a Delaware corporation to Waste Corporation of
America LLC, a Delaware limited liability company, (c) Waste Corporation of
America LLC distributed all of the voting stock of WCA Holdings Corporation to
WCA Corp., and (d) WCA Corp. merged into WCA Merger Corporation II with WCA
Corp. as the surviving entity.
"5% Holder" is defined in Section 7.22.
"Acquired Business" is defined in the definition of Prior Acquisition
Add-Back.
"Acquired Subsidiary" is defined in the definition of Prior Acquisition
Add-Back.
"Act" is defined in Section 12.16.
"Additional Volume" means the waste collected by an Acquired Subsidiary or
Acquired Business that (a) prior to the consummation of the acquisition of such
Acquired Subsidiary or Acquired Business, was not being delivered to a landfill
or transfer station owned or operated by the Borrower or any Consolidated
Subsidiary, and (b) subsequent to the consummation of the
SECOND LIEN CREDIT AGREEMENT
acquisition of such Acquired Subsidiary or Acquired Business, is delivered to a
landfill or transfer station owned or operated by the Borrower or any
Consolidated Subsidiary.
"Adjusted EBIT" means, for any period, the sum of (a) EBIT for such period,
plus (b) non-cash charges for accretion on closure and post-closure obligations,
plus (c) non-cash charges associated with the disposal contract between Waste
Management, Inc. and the Borrower, plus (d) non-cash charges (or minus non-cash
benefits, if applicable) reflecting the adoption of SFAS No. 123 (and all
amendments thereto), plus (e) cash compensation charges in an aggregate amount
not to exceed $5,000,000 and non-cash compensation charges, all with respect to
stock options outstanding and shares issued by Waste Corporation in connection
with the extinguishment of options and warrants as part of the 2004
Reorganization, plus (f) non-cash expense (or minus non-cash income, if
applicable) associated with FAS 133 treatment of any interest rate Hedging
Agreements, plus (g) non-cash losses on asset sales in an aggregate amount not
to exceed $500,000.
"Adjusted EBIT Debt Service Ratio" means, with respect to the Borrower and
its Consolidated Subsidiaries, the ratio of (i) Adjusted EBIT for the four
fiscal quarters ending on such date to (ii) cash interest expense, plus (x) the
current portion of capitalized leases for the following four fiscal quarters,
plus (y) the current portion of principal payments of Debt, excluding payments
made on the Revolving Credit Loans (as defined in the First Lien Credit
Agreement) and prepaid insurance premiums, required to be paid for the following
four fiscal quarters, plus (z) any Qualified Dividends paid during the four
fiscal quarters ending on such date.
"Administrative Agent" is defined in the preamble.
"Administrative Questionnaire" means an administrative questionnaire in a
form supplied by the Administrative Agent.
"Affiliate" of any Person means (a) any Person directly or indirectly
controlled by, controlling or under common control with such first Person, (b)
any director or executive officer of such first Person or of any Person referred
to in clause (a) above and (c) if any Person in clause (a) above is an
individual, any member of the immediate family (including parents, spouse and
children) of such individual and any trust whose principal beneficiary is such
individual or one or more members of such immediate family and any Person who is
controlled by any such member or trust. For purposes of this definition, any
Person which owns directly or indirectly 10% or more of the securities having
ordinary voting power for the election of directors or other governing body of a
corporation or 10% or more of the partnership or other ownership interests of
any other Person (other than as a limited partner of such other Person) will be
deemed to "control" (including, with its correlative meanings, "controlled by"
and "under common control with") such corporation or other Person.
"Agents" is defined in the preamble.
"Aggregate Commitments" at any time shall equal the sum of the Commitments
of the Lenders. The Aggregate Commitments on the Closing Date shall be
$25,000,000.
SECOND LIEN CREDIT AGREEMENT-PAGE 2
"Agreement" means this Second Lien Credit Agreement, as the same may from
time to time be amended, restated, supplemented or modified.
"Applicable Lending Office" means, for each Lender and for each Type of
Loan, the lending office of such Lender (or an Affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
offices of such Lender (or of an Affiliate of such Lender) as such Lender may
from time to time specify to the Administrative Agent and the Borrower as the
office by which its Loans of such Type are to be made and maintained.
"Applicable Margin" means, on any day, 6.00% per annum.
"Approved Fund" means any Fund that is administered or managed by (a) a
Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an
entity that administers or manages a Lender.
"ARCC" is defined in Section 7.22.
"Assignment" is defined in Section 12.05(b)(i).
"Base Rate" means, with respect to any Base Rate Loan, for any day, the
higher of (a) the Federal Funds Rate for any such day plus 1/2 of 1% or (b) the
Prime Rate for such day. Each change in any interest rate provided for herein
based upon the Base Rate resulting from a change in the Base Rate shall take
effect at the time of such change in the Base Rate.
"Base Rate Loans" means Loans that bear interest at rates based upon the
Base Rate.
"Bonds" means the Issuer's $25,000,000 Gulf Coast Waste Disposal Authority
Environmental Facilities Revenue Bonds (Waste Corporation of Texas, L.P.
Project) Series 2002.
"Borrower" is defined in the preamble.
"Business Day" means any day other than a day on which commercial banks are
authorized or required to close in the States of California, Texas and New York
and, where such term is used in the definition of "Quarterly Date" or if such
day relates to a borrowing or continuation of, a payment or prepayment of
principal of or interest on, or a conversion of or into, or the Interest Period
for, a LIBOR Loan or a notice by the Borrower with respect to any such borrowing
or continuation, payment, prepayment, conversion or Interest Period, any day
which is also a day on which dealings in Dollar deposits are carried out in the
London interbank market.
"Capital Expenditures" means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset on a consolidated balance sheet of the Borrower and its
Subsidiaries prepared in accordance with GAAP.
"Change in Law" means the occurrence, after the date of this Agreement, of
any of the following: (a) the adoption or taking effect of any Governmental
Requirement, (b) any change in
SECOND LIEN CREDIT AGREEMENT-PAGE 3
any Governmental Requirement or in the administration, interpretation or
application thereof by any Governmental Authority or (c) the making or issuance
of any request, guideline or directive (whether or not having the force of law)
by any Governmental Authority.
"Change of Control" means, with respect to any Person, an event or series
of events by which:
(a) with respect to WCA Corp., any "person" or "group" (as such terms
are used in Sections 13(d) and 14(d) of the Securities Exchange Act of
1934, but excluding any employee benefit plan of such person or its
subsidiaries, and any person or entity acting in its capacity as trustee,
agent or other fiduciary or administrator of any such plan) becomes the
"beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Securities Exchange Act of 1934, except that a person or group shall be
deemed to have "beneficial ownership" of all securities that such person or
group has the right to acquire (such right, an "option right"), whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 35% or more of the equity securities of WCA
Corp. entitled to vote for members of the board of directors or equivalent
governing body of WCA Corp. on a fully-diluted basis (and taking into
account all such securities that such person or group has the right to
acquire pursuant to any option right); or
(b) with respect to WCA Corp., during any period of 12 consecutive
months, a majority of the members of the board of directors or other
equivalent governing body of WCA Corp. cease to be composed of individuals
(i) who were members of that board or equivalent governing body on the
first day of such period, (ii) whose election or nomination to that board
or equivalent governing body was approved by individuals referred to in
clause (i) above constituting at the time of such election or nomination at
least a majority of that board or equivalent governing body or (iii) whose
election or nomination to that board or other equivalent governing body was
approved by individuals referred to in clauses (i) and (ii) above
constituting at the time of such election or nomination at least a majority
of that board or equivalent governing body (excluding, in the case of both
clause (ii) and clause (iii), any individual whose initial nomination for,
or assumption of office as, a member of that board or equivalent governing
body occurs as a result of an actual or threatened solicitation of proxies
or consents for the election or removal of one or more directors by any
person or group other than a solicitation for the election of one or more
directors by or on behalf of the board of directors); or
(c) the Borrower shall fail beneficially to own, directly or
indirectly, 100% of the outstanding Equity Interests of any of the
Guarantors on a fully-diluted basis except as permitted in Section 9.17; or
(d) the Parent shall fail beneficially to own, directly or indirectly,
100% of the outstanding Equity Interests of the Borrower on a fully-diluted
basis; or
(e) WCA Corp. shall fail to own, directly or indirectly, 100% of the
outstanding Equity Interests of the Parent on a fully-diluted basis.
"Charges" is defined in Section 12.11.
SECOND LIEN CREDIT AGREEMENT-PAGE 4
"Closing Date" means the date on which the conditions specified in Section
6.01 are satisfied.
"Closure/Post-Closure Letters of Credit" means letters of credit, surety
bonds or other instruments of similar character, the purpose of which is to
provide financial assurance to the various state agencies for closure and
post-closure obligations for the landfills and transfer stations owned or
operated by the Borrower and its Subsidiaries. For purposes of this definition,
"Financial assurance," "closure" and "post-closure" shall have the meanings set
forth in the administrative code or other comparable regulations of each state
in which such landfill and transfer station is located.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time and any successor statute.
"Collateral Agent" is defined in the preamble.
"Combined Secured Debt Leverage Ratio" means, for the Borrower and its
Consolidated Subsidiaries, calculated as of the end of each fiscal quarter, the
ratio of (a) all secured Debt (including without limitation, the First Lien
Financing and the Obligations) other than Subordinated Debt, in each case as of
the end of such fiscal quarter to (b) Pro Forma Adjusted EBITDA for the
immediately preceding four fiscal quarters.
"Commitment" means, as to each Lender, its obligation to make a Loan in the
amount set forth opposite such Lender's name under "Commitments" on Annex I
(which amounts aggregate $25,000,000 in total), as the same may be modified from
time to time to reflect any assignment permitted by Section 12.05(b).
"Communications" is defined in Section 12.02(b)(iii).
"Compliance Certificate" means a certificate substantially in the form of
Exhibit B as executed by a Responsible Officer.
"Consolidated Net Income" means with respect to the Borrower and its
Consolidated Subsidiaries, for any period, the aggregate of the net income (or
loss) of the Borrower and its Consolidated Subsidiaries from operations after
allowances for taxes for such period, determined on a consolidated basis in
accordance with GAAP; provided that there shall be excluded from such net income
(to the extent otherwise included therein) the following: (a) the net income of
any Person in which the Borrower or any Consolidated Subsidiary has an interest
(which interest does not cause the net income of such other Person to be
consolidated with the net income of the Borrower and its Consolidated
Subsidiaries in accordance with GAAP), except to the extent of the amount of
dividends or distributions actually paid in such period by such other Person to
the Borrower or to a Consolidated Subsidiary, as the case may be; (b) the net
income (but not loss) of any Consolidated Subsidiary to the extent that the
declaration or payment of dividends or similar distributions or transfers or
loans by that Consolidated Subsidiary is not at the time permitted by operation
of the terms of its charter or any agreement, instrument or Governmental
Requirement applicable to such Consolidated Subsidiary, or is otherwise
restricted or prohibited in each case determined in accordance with GAAP; (c)
the net income (or loss) of any Person acquired in a pooling-of-interests
transaction for any period prior to the date of such transaction;
SECOND LIEN CREDIT AGREEMENT-PAGE 5
(d) any extraordinary gains or losses, including gains or losses attributable to
Property sales not in the ordinary course of business; and (e) the cumulative
effect of a change in accounting principles and any gains or losses attributable
to write-ups or write downs of assets.
"Consolidated Subsidiaries" means each Subsidiary of a Person (whether now
existing or hereafter created or acquired) the financial statements of which
shall be (or should have been) consolidated with the financial statements of
such Person in accordance with GAAP. Unless otherwise expressly stated, each
reference to the term "Consolidated Subsidiary" shall mean a Subsidiary
consolidated with the Borrower.
"Debt" means, for any Person the sum of the following (without
duplication): (a) all obligations of such Person for borrowed money or evidenced
by bonds, debentures, notes or other similar instruments (including principal,
interest, fees and charges, in each case accrued but unpaid); (b) all
obligations of such Person (whether contingent or otherwise) in respect of
bankers' acceptances, letters of credit, surety or other bonds and similar
instruments; (c) all obligations of such Person to pay, in accordance with GAAP,
the deferred purchase price of Property or services (other than for borrowed
money), including securities repurchase agreements; (d) all obligations under
leases which shall have been, or should have been, in accordance with GAAP,
recorded as capital leases in respect of which such Person is liable (whether
contingent or otherwise); (e) all monetary obligations under (i) a so-called
synthetic, off-balance sheet or tax retention lease, or (ii) an agreement for
the use or possession of property creating obligations that do not appear in the
balance sheet of such Person but which, upon the insolvency or bankruptcy of
such Person, would be characterized as the indebtedness of such Person (without
regard to accounting treatment); (f) all Debt (as described in the other clauses
of this definition) and other obligations of others secured by a Lien on any
asset of such Person, whether or not such Debt is assumed by such Person; (g)
all Debt (as described in the other clauses of this definition) and other
obligations of others guaranteed by such Person or in which such Person
otherwise assures a creditor against loss of the debtor or obligations of
others; (h) all obligations or undertakings of such Person to maintain or cause
to be maintained the financial position or covenants of others or to purchase
the Debt or Property of others; (i) obligations to deliver goods or services in
consideration of advance payments, excluding prevails of customer accounts in
the ordinary course of business as customary in the business of the Borrower and
its Subsidiaries; (j) obligations to pay for goods or services whether or not
such goods or services are actually received or utilized by such Person; (k) any
obligation to purchase, redeem, retire or otherwise acquire for value any shares
of capital stock of such Person, any warrants, options or other rights to
acquire any such shares or any other rights measured by the value of such
shares, warrants, options or other rights; (l) any Debt of a Special Entity for
which such Person is liable either by agreement or because of a Governmental
Requirement; (m) all obligations of such Person under Hedging Agreements; (n)
all obligations of such Person under Equipment Leases; and (o) all earn-out
obligations of such Person payable to a seller and incurred in connection with a
Qualified Acquisition Expenditure, which obligations are deemed accrued in
accordance with GAAP. For the avoidance of doubt, the obligations under the
Installment Sale Agreement and the Reimbursement Agreement shall be included as
one obligation for purposes of determining Debt hereunder.
"Default" means an Event of Default or an event which with notice or lapse
of time or both would become an Event of Default.
SECOND LIEN CREDIT AGREEMENT-PAGE 6
"Direct Pay Letter of Credit" means that certain letter of credit issued
pursuant to the Reimbursement Agreement.
"Dissenting Lender" is defined in Section 12.05(g).
"Dollars" and "$" means lawful money of the United States of America.
"EBIT" means, for any period, the sum of Consolidated Net Income for such
period, plus the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: interest and taxes.
"EBITDA" means, for any period, the sum of Consolidated Net Income for such
period plus the following expenses or charges to the extent deducted from
Consolidated Net Income in such period: interest, taxes, depreciation and
amortization.
"Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; and (d) any other Person (other than a natural person)
approved by the Administrative Agent, such approval not to be unreasonably
withheld; provided that notwithstanding the foregoing, "Eligible Assignee" shall
not include the Borrower or any of the Borrower's Affiliates or Subsidiaries.
"Environmental Laws" means any and all Governmental Requirements pertaining
to health or the environment in effect in any and all jurisdictions in which the
Borrower or any Subsidiary is conducting or at any time has conducted business,
or where any Property of the Borrower or any Subsidiary is located, including
without limitation, the Oil Pollution Act of 1990 ("OPA"), the Clean Air Act, as
amended, the Comprehensive Environmental, Response, Compensation, and Liability
Act of 1980 ("CERCLA"), as amended, the Federal Water Pollution Control Act, as
amended, the Occupational Safety and Health Act of 1970, as amended, the
Resource Conservation and Recovery Act of 1976 ("RCRA"), as amended, the Safe
Drinking Water Act, as amended, the Toxic Substances Control Act, as amended,
the Superfund Amendments and Reauthorization Act of 1986, as amended, the
Hazardous Materials Transportation Act, as amended, and other environmental
conservation or protection laws. The term "oil" shall have the meaning specified
in OPA, the terms "hazardous substance" and "release" (or "threatened release")
have the meanings specified in CERCLA, and the terms "solid waste" and
"disposal" (or "disposed") have the meanings specified in RCRA; provided,
however, that (a) in the event either OPA, CERCLA or RCRA is amended so as to
broaden the meaning of any term defined thereby, such broader meaning shall
apply subsequent to the effective date of such amendment and (b) to the extent
the laws of the state in which any Property of the Borrower or any Subsidiary is
located establish a meaning for "oil," "hazardous substance," "release," "solid
waste" or "disposal" which is broader than that specified in either OPA, CERCLA
or RCRA, such broader meaning shall apply.
"EPA" means the United States Environmental Protection Agency and any
successor Governmental Authority.
"Equipment Leases" means operating leases for equipment or vehicles having
a term longer than 120 days and an aggregate value of more than $250,000.
SECOND LIEN CREDIT AGREEMENT-PAGE 7
"Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and any successor statute.
"ERISA Affiliate" means each trade or business (whether or not
incorporated) which together with the Borrower or any Subsidiary would be deemed
to be a "single employer" within the meaning of Section 4001(b)(1) of ERISA or
subsections (b) or (c) of Section 414 of the Code.
"ERISA Event" means (a) a "Reportable Event" described in Section 4043 of
ERISA and the regulations issued thereunder, unless the 30-day notice
requirement with respect to such event has been waived by the PBGC, (b) the
withdrawal of the Borrower or any ERISA Affiliate from a Plan during a plan year
in which it was a "substantial employer" as defined in Section 4001(a)(2) of
ERISA and immediately after such withdrawal the Plan has nonforfeitable benefits
which are not fully funded, (c) the filing of a notice of intent to terminate a
Plan or the treatment of a Plan amendment as a termination under Section 4041 of
ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC or (e)
any other event or condition which might constitute grounds under Section 4042
of ERISA for the termination of, or the appointment of a trustee to administer,
any Plan.
"Eurocurrency Liabilities" has the meaning specified in Regulation D of the
Board of Governors of the Federal Reserve System, as in effect from time to
time.
"Event of Default" is defined in Section 10.01.
"Excepted Liens" means: (a) Liens for taxes, assessments or other
governmental charges or levies not yet due or which are being contested in good
faith by appropriate action and for which adequate reserves have been
maintained; (b) Liens in connection with workmen's compensation, unemployment
insurance or other social security, old age pension or public liability
obligations not yet due or which are being contested in good faith by
appropriate action and for which adequate reserves have been maintained in
accordance with GAAP; (c) operators', vendors', carriers', warehousemen's,
repairmen's, mechanics', workmen's, materialmen's, construction or other like
Liens arising by operation of law in the ordinary course of business or
statutory landlord's liens, each of which is in respect of obligations that have
not been outstanding more than 90 days or which are being contested in good
faith by appropriate proceedings and for which adequate reserves have been
maintained in accordance with GAAP; (d) any Liens reserved in (i) that certain
Royalty Agreement dated May 2, 1996 between Central
SECOND LIEN CREDIT AGREEMENT-PAGE 8
Missouri Landfill, Inc. and Xxxx Xxxxxx for royalty obligations and (ii) leases
for rent and for compliance with the terms of such leases, to the extent that
any such Lien referred to in this clause (d) does not materially impair the use
of the Property covered by such Lien for the purposes for which such Property is
held by the Borrower or any Subsidiary or materially impair the value of such
Property subject thereto; (e) encumbrances (other than to secure the payment of
borrowed money or the deferred purchase price of Property or services),
easements, restrictions, servitudes, permits, conditions, covenants, exceptions
or reservations in any rights of way or other Property of the Borrower or any
Subsidiary for the purpose of roads, pipelines, transmission lines,
transportation lines, distribution lines for the removal of gas, oil, coal or
other minerals or timber, and other like purposes, or for the joint or common
use of real estate, rights of way, facilities and equipment, and defects,
irregularities, zoning restrictions and deficiencies in title of any rights of
way or other Property which in the aggregate do not materially impair the use of
such rights of way or other Property for the purposes of which such rights of
way and other Property are held by the Borrower or any Subsidiary or materially
impair the value of such Property subject thereto; (f) deposits of cash or
securities to secure the performance of bids, trade contracts, leases, permits,
surety bonds, appeal bonds, statutory obligations and other obligations of a
like nature incurred in the ordinary course of business; (g) Liens permitted by
the Loan Documents; (h) reservations, covenants, conditions, restrictions and
other Liens that arise or are imposed in connection with host community fee
agreements of a type customary in Borrower's or any Subsidiary's business; (i)
Liens securing judgments for the payment of money not constituting an Event of
Default or securing appeal or other surety bonds related to such judgments; and
(j) Liens created or deemed to be created in connection with the transactions
contemplated by the Installment Sale Agreement.
"Excluded Taxes" means, with respect to the Administrative Agent, any
Lender or any other recipient of any payment to be made by or on account of any
obligation of the Borrower hereunder, (a) taxes imposed on or measured by its
overall net income (however denominated), and franchise taxes imposed on it (in
lieu of net income taxes), by the jurisdiction (or any political subdivision
thereof) under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
Applicable Lending Office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 5.03(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party hereto (or
designates a new lending office) or is attributable to such Foreign Lender's
failure or inability (other than as a result of a Change in Law) to comply with
Section 5.02(e), except to the extent that such Foreign Lender (or its assignor,
if any) was entitled, at the time of designation of a new lending office (or
assignment), to receive additional amounts from the Borrower with respect to
such withholding tax pursuant to Section 5.02(a).
"Expansion Expenditure" means an expenditure made in connection with or in
furtherance of building a new transfer station, starting a new hauling company,
opening an inactive landfill, new municipal contracts that require additional
equipment or other property, or other growth and productivity capital
expenditures included within the Borrower's business plan so long as (a) the
Senior Funded Debt Leverage Ratio (as defined in the First Lien Credit Agreement
as in effect on the Closing Date) is less than 4.00 to 1.00 at the end of each
fiscal
SECOND LIEN CREDIT AGREEMENT-PAGE 9
quarter prior to such expenditure and immediately after giving effect thereto
and (b) after giving effect to such expenditure, the Aggregate Revolving Credit
Commitments shall exceed the sum of the outstanding aggregate principal amount
of the Revolving Credit Loans and Swing Line Loans, plus the LC Exposure, plus
the Direct Pay Letter of Credit Exposure (as each is defined in the First Lien
Credit Agreement as in effect on the Closing Date hereof or as may be modified,
amended or supplemented from time to time as permitted pursuant to the
Intercreditor Agreement) by an amount not less than $10,000,000; provided that,
in the event clause (a) above has not been satisfied and so long as (i) no
Default exists or would exist after giving effect to such expenditure (including
without limitation, no Default would exist under Sections 9.12 through and
including 9.16 after giving effect to such expenditure), (ii) the requirement in
clause (b) above has been satisfied, and (iii) such expenditure does not exceed
20% of Borrower's Net Worth as of the date of such expenditure, then such
expenditure shall be deemed an Expansion Expenditure; and "Expansion
Expenditures" shall mean all such expenditures.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight federal funds transactions with a member of the
Federal Reserve System arranged by federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the date for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if such rate is not so
published for any day, the Federal Funds Rate for such day shall be the average
rate charged to the Administrative Agent on such day on such transactions as
determined by the Administrative Agent.
"Fee Letter" means that certain letter agreement from Xxxxx Fargo to the
Borrower dated March 24, 2005 concerning certain fees in connection with this
Agreement and any agreements or instruments executed in connection therewith.
"Financial Statements" means the financial statement or statements of (a)
WCA Corp. described or referred to in the first sentence of Section 7.02 and (b)
the Borrower and its Consolidated Subsidiaries described or referred to in the
second sentence of Section 7.02.
"First Lien Administrative Agent" means Xxxxx Fargo and its successors and
assigns.
"First Lien Agents" means collectively, the First Lien Administrative Agent
and the Second Lien Collateral Agent and their successors and assigns.
"First Lien Collateral Agent" means Xxxxx Fargo and its successors and
assigns.
"First Lien Credit Agreement" means that certain First Lien Credit
Agreement dated as of the Closing Date, by and among the Borrower, the First
Lien Agents and the other lenders party thereto, as the same may be amended,
restated or modified as permitted by the Intercreditor Agreement.
"First Lien Financing" means the first lien financing incurred by the
Borrower pursuant to the First Lien Credit Agreement in an aggregate principal
amount not in excess of $200,000,000, as reduced by principal payments made on
the Term B Loans (as defined in the
SECOND LIEN CREDIT AGREEMENT-PAGE 10
First Lien Credit Agreement) and permanent reductions in the total Revolving
Credit Commitments (as defined in the First Lien Credit Agreement).
"Foreign Lender" means any Lender that is organized under the laws of a
jurisdiction other than that in which the Borrower is resident for tax purposes.
For purposes of this definition, the United States of America, each State
thereof and the District of Columbia shall be deemed to constitute a single
jurisdiction.
"Fund" means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.
"Funded Debt" means, collectively, without duplication, whether classified
as Debt, an investment or otherwise on a Person's consolidated balance sheet,
(a) all Debt described in clauses (a), (b), (d), (e) and (o) of the definition
of "Debt", but excluding Closure/Post-Closure Letters of Credit, and (b) all
guaranties and other surety obligations of the Funded Debt of others; provided,
however, that, all obligations in respect of surety bonds and similar
instruments of the nature and for the purposes described in Schedule 7.02, item
1 are not included as Funded Debt, and without duplication, Funded Debt shall be
reduced by the amount of cash to the extent such cash is greater than $1,000,000
and is maintained by the Borrower or any Guarantor.
"GAAP" means generally accepted accounting principles in the United States
of America in effect from time to time.
"Governmental Authority" means the government of the United States of
America or any other nation, or of any political subdivision thereof, whether
state or local, and any agency, authority, instrumentality, regulatory body,
court, central bank or other entity exercising executive, legislative, judicial,
taxing, regulatory or administrative powers or functions of or pertaining to
government (including any supra-national bodies such as the European Union or
the European Central Bank).
"Governmental Requirement" means any law, statute, code, ordinance, order,
determination, rule, regulation, judgment, decree, injunction, franchise,
permit, certificate, license, authorization or other directive or requirement
(whether or not having the force of law), including, without limitation,
Environmental Laws, energy regulations and occupational, safety and health
standards or controls, of any Governmental Authority.
"Guarantor" means the Parent and each of the Subsidiaries of the Borrower
now or hereafter in existence.
"Guaranty Agreement" means that certain Second Lien Guaranty Agreement
dated as of the Closing Date by and among the Guarantors and the Administrative
Agent.
"Hedging Agreements" means any forward contract, futures contract, swap,
cap, floor, collar, option or other financing agreement or arrangement, the
value of which is dependent upon interest rates, currency exchange rates,
commodities or other indices.
SECOND LIEN CREDIT AGREEMENT-PAGE 11
"Increased Use" means, with respect to an Acquired Business or Acquired
Subsidiary, for the applicable period of determination, waste disposed of in its
landfill in excess of Internalized Waste.
"Indemnified Costs" is defined in Section 11.11.
"Indemnified Parties" is defined in Section 12.03(a)(ii).
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnity Matters" means any and all actions, suits, proceedings
(including any investigations, litigation or inquiries), claims, demands and
causes of action made or threatened against a Person and, in connection
therewith, all losses, liabilities, damages (including, without limitation,
consequential damages) or reasonable costs and expenses of any kind or nature
whatsoever incurred by such Person whether caused by the sole or concurrent
negligence of such Person seeking indemnification.
"Information" is defined in Section 12.14(b).
"Installment Sale Agreement" means that certain Installment Sale Agreement
dated as of August 1, 2002, by and between the Issuer and Waste Corporation
Texas.
"Intercreditor Agreement" means that certain Intercreditor Agreement dated
as of the date hereof by and among the Agents, the First Lien Agents, the
Borrower and the Guarantors.
"Interest Period" means, with respect to any LIBOR Loan, the period
commencing on the date such LIBOR Loan is made and ending on the numerically
corresponding day in the first, second, third or sixth calendar month
thereafter, as the Borrower may select as provided in Section 2.02 (or such
longer period as may be requested by the Borrower and agreed to by the Required
Second Lien Lenders), except that each Interest Period which 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 calendar month)
shall end on the last Business Day of the appropriate subsequent calendar month.
Notwithstanding the foregoing: (a) no Interest Period may end after the
Termination Date; (b) no Interest Period for any LIBOR Loan may end after the
due date of any installment, if any, provided for in Section 3.01 to the extent
that such LIBOR Loan would need to be prepaid prior to the end of such Interest
Period in order for such installment to be paid when due; (c) each Interest
Period which would otherwise end on a day which is not a Business Day shall end
on the next succeeding Business Day (or, if such next succeeding Business Day
falls in the next succeeding calendar month, on the next preceding Business
Day); and (d) no Interest Period shall have a duration of less than one month
and, if the Interest Period for any LIBOR Loans would otherwise be for a shorter
period, such Loans shall not be available hereunder.
"Internal Control Event" means a material weakness in, or fraud that
involves management or other employees who have a significant role in, the
Borrower's internal controls over financial reporting, in each case as described
in the Securities Laws.
SECOND LIEN CREDIT AGREEMENT-PAGE 12
"Internalized Waste" means waste collected by the Borrower or an Affiliate
that is disposed of in a landfill (or other form of final disposal) owned or
operated by an Acquired Business or Acquired Subsidiary before consummation of
its acquisition by the Borrower or a Subsidiary.
"Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person.
"Issuer" means the Gulf Coast Waste Disposal Authority.
"Lender" and "Lenders" are defined in the preamble.
"Lender Party" and "Lender Parties" are defined in Section 11.11.
"Leverage Ratio" means, for WCA Corp. and its Consolidated Subsidiaries,
calculated as of the end of each fiscal quarter the ratio of (a) Funded Debt at
the end of such fiscal quarter to (b) Pro Forma Adjusted EBITDA for the
immediately preceding four fiscal quarters.
"LIBOR Loans" means Loans the interest rates on which are determined on the
basis of rates referred to in the definition of "LIBOR Rate".
"LIBOR Rate" means, for any Interest Period for all LIBOR Loans, an
interest rate per annum equal to the rate per annum obtained by dividing (a) the
rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at 11:00 A.M. (London time) two Business
Days before the first day of such Interest Period for a period equal to such
Interest Period (provided that, if for any reason such rate is not available,
the term "LIBOR Rate" shall mean, for any Interest Period for all LIBOR Loans,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 A.M. (London time) two Business Days
prior to the first day of such Interest Period for a term comparable to such
Interest Period; provided, however, if more than one rate is specified on
Reuters Screen LIBO Page, the applicable rate shall be the arithmetic mean of
all such rates) by (b) a percentage equal to 100% minus the LIBOR Rate Reserve
Percentage for such Interest Period.
"LIBOR Rate Reserve Percentage" for any Interest Period for all LIBOR Loans
means the reserve percentage applicable two Business Days before the first day
of such Interest Period under regulations issued from time to time by the Board
of Governors of the Federal Reserve System (or any successor) for determining
the maximum reserve requirement (including, without limitation, any emergency,
supplemental or other marginal reserve requirement) for a member bank of the
Federal Reserve System in New York City with respect to liabilities or assets
consisting of or including Eurocurrency Liabilities (or with respect to any
other category of liabilities that includes deposits by reference to which the
interest rate on LIBOR Loans is determined) having a term equal to such Interest
Period.
SECOND LIEN CREDIT AGREEMENT-PAGE 13
"Lien" means any interest in Property securing an obligation owed to, or a
claim by, a Person other than the owner of the Property, whether such interest
is based on the common law, statute or contract, and whether such obligation or
claim is fixed or contingent, and including but not limited to the lien or
security interest arising from a mortgage, encumbrance, pledge, security
agreement, conditional sale or trust receipt or a lease, consignment or bailment
for security purposes. The term "Lien" shall include reservations, exceptions,
encroachments, easements, rights of way, covenants, conditions, restrictions,
leases and other title exceptions and encumbrances affecting Property. For the
purposes of this Agreement, the Borrower or any Subsidiary shall be deemed to be
the owner of any Property which it has acquired or holds subject to a
conditional sale agreement, or leases under a financing lease or other
arrangement pursuant to which title to the Property has been retained by or
vested in some other Person in a transaction intended to create a financing.
"Loan Documents" means this Agreement, the Guaranty Agreement, all Security
Agreements, all deeds of trust and mortgages, the Intercreditor Agreement and
any other agreements, instruments and documents executed by the Borrower or any
of its Subsidiaries that are referred to therein as "Loan Documents" under this
Agreement.
"Loans" means the loans as provided for by Section 2.01(a).
"Material Adverse Effect" means any set of circumstances or events that (a)
has or could reasonably be expected to have any material and adverse effect
whatsoever upon, or result in or reasonably be expected to result in a material
adverse change in, (A) the assets, liabilities, financial condition, business,
operations or affairs of the Borrower and its Subsidiaries taken as a whole
different from those reflected in the Financial Statements or from the facts
represented or warranted in any Loan Document, or (B) the ability of the
Borrower and its Subsidiaries taken as a whole to carry out their business as at
the Closing Date or as proposed as of the Closing Date to be conducted or meet
their obligations under the Loan Documents on a timely basis, (b) impairs
materially or could be reasonably expected to impair materially the ability of
the Borrower and its Subsidiaries to duly and punctually pay and perform their
obligations under the Loan Documents or (c) impairs materially or could
reasonably be expected to impair materially the ability of the Administrative
Agent or any of the Lenders, to the extent permitted, to enforce its legal
remedies pursuant to the Loan Documents.
"Maximum Rate" is defined in Section 12.11.
"Multiemployer Plan" means a Plan defined as such in Section 4001(a)(3) of
ERISA to which the Borrower or any ERISA Affiliate is making or accruing an
obligation to make contributions, or has within the preceding six calendar years
made or accrued an obligation to make contributions.
"Net Worth" means, as at any date, the sum of the following for the
Borrower and its Consolidated Subsidiaries determined (without duplication) in
accordance with GAAP:
(a) the amount of preferred stock and common stock at par plus the amount
of surplus of the Borrower, plus
SECOND LIEN CREDIT AGREEMENT-PAGE 14
(b) the retained earnings (or, in the case of retained earnings deficit,
minus the amount of such deficit), minus
(c) the cost of treasury shares.
"Non-Core Asset" means real Property of the Borrower or any Guarantor which
is not used to (a) generate or produce any revenue, (b) generate or produce
revenue in excess of a de minimus amount or (c) generate revenue other than from
a source or sources that are not a part of the waste collection, transfer and
disposal business.
"Obligations" means all indebtedness, obligations and liabilities of the
Borrower to any of the Lenders, any of their Affiliates, or the Administrative
Agent, individually or collectively, existing on the date of this Agreement or
arising thereafter, direct or indirect, joint or several, absolute or
contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising or incurred under any Hedging Agreement with any Lender or
any Affiliate of any Lender, in connection with the deposit and/or cash
management products and services provided by Xxxxx Fargo or its Affiliates
related to any deposit or other accounts of the Borrower or any of its
Subsidiaries, under this Agreement or any of the other Loan Documents or in
respect of any of the Loans made or any of this Agreement or other instruments
at any time evidencing any thereof, including interest accruing subsequent to
the filing of a petition or other action concerning bankruptcy or other similar
proceedings, and all renewals, extensions, increases, refinancings and
replacements for the foregoing.
"Other Taxes" means all present or future stamp or documentary taxes or any
other excise or property taxes, charges or similar levies arising from any
payment made hereunder or under any other Loan Document or from the execution,
delivery or enforcement of, or otherwise with respect to, this Agreement or any
other Loan Document.
"Parent" means WCA Holdings Corporation, a Delaware corporation.
"Participant" is defined in Section 12.05(d).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions.
"Percentage Share" means the percentage of the Aggregate Commitments to be
provided by a Lender under this Agreement as indicated on Annex I hereto, as
modified from time to time to reflect any assignments permitted by Section
12.05(b).
"Person" means any individual, corporation, company, voluntary association,
partnership, joint venture, trust, unincorporated organization, Governmental
Authority or any agency, instrumentality or political subdivision thereof, or
any other form of entity.
"Plan" means any employee pension benefit plan, as defined in Section 3(2)
of ERISA, which (a) is currently or hereafter sponsored, maintained or
contributed to by the Borrower, an ERISA Affiliate or (b) was at any time during
the preceding six calendar years sponsored, maintained or contributed to, by the
Borrower or an ERISA Affiliate with respect to which the
SECOND LIEN CREDIT AGREEMENT-PAGE 15
Borrower, or an ERISA Affiliate could have liability under Title IV of ERISA in
the event such plan has been or were to be terminated.
"Platform" is defined in Section 12.02(b)(iii).
"Post-Default Rate" means, in respect of any principal of any Loan or any
other amount payable by the Borrower under this Agreement or any other Loan
Document, a rate per annum during the period commencing on the date of
occurrence of an Event of Default until such amount is paid in full or all
Events of Default are cured or waived equal to 2% per annum above the Base Rate
as in effect from time to time plus 5.00%, but in no event to exceed the Maximum
Rate; provided, however, for a LIBOR Loan, the "Post-Default Rate" for such
principal shall be, for the period commencing on the date of occurrence of an
Event of Default and ending on the earlier to occur of the last day of the
Interest Period therefor or the date all Events of Default are cured or waived,
2% per annum above the interest rate for such Loan as provided in Section
3.02(a), but in no event to exceed the Maximum Rate.
"Prime Rate" means the rate of interest from time to time announced
publicly by Xxxxx Fargo, in San Francisco, California, as its prime rate. Such
rate is set by Xxxxx Fargo as a general reference rate of interest, taking into
account such factors as Xxxxx Fargo may deem appropriate, it being understood
that many of Xxxxx Fargo's commercial or other loans are priced in relation to
such rate, that it is not necessarily the lowest or best rate actually charged
to any customer and that Xxxxx Fargo may make various commercial or other loans
at rates of interest having no relationship to such rate. In addition, such rate
is evidenced by the recording thereof after its announcement in such internal
publication or publications as Xxxxx Fargo may designate, and each change in the
Prime Rate will be effective on the day the change is announced within Xxxxx
Fargo; provided however, such rate shall be a rate of interest generally applied
by Xxxxx Fargo to other loan transactions to the extent such transactions
include rates based in whole or in part on the Prime Rate.
"Principal Office" means the principal office of the Administrative Agent,
presently located at 0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxx 00000.
"Prior Acquisition Add-Back" means, for any period, the EBITDA for such
period of any assets or businesses acquired by the Borrower or any of its
Consolidated Subsidiaries (the "Acquired Business") or a Consolidated Subsidiary
acquired or formed since the beginning of such period (the "Acquired
Subsidiary"), in case prior to the Closing Date, so long as (a) the acquisition
of the Acquired Business or the Acquired Subsidiary satisfied the criteria of a
Qualified Acquisition Expenditure, (b) the Borrower, the Acquired Subsidiary and
the other Subsidiaries complied with requirements of Section 8.08, (c) the
Administrative Agent (i) received the audited annual consolidated and
consolidating financial statements for such Acquired Business or Acquired
Subsidiary for the fiscal year most recently ended, accompanied by the related
opinion of a Registered Public Accounting Firm acceptable to the Administrative
Agent, which financial statements and opinion satisfied the criteria set forth
in Section 8.01(a), or (ii) if audited annual financial statements of the
Acquired Business or the Acquired Subsidiary were unavailable, received such
financial statements and other information (including the amount of EBITDA used
in determining Pro Forma Adjusted EBITDA, plus, for the purpose of computing Pro
Forma Adjusted EBITDA, the effect of Additional Volume and/or Increased Use,
SECOND LIEN CREDIT AGREEMENT-PAGE 16
as applicable, and itemized direct cost savings that will be achieved as a
result of, or in connection with, the acquisition) requested by the
Administrative Agent, in form and substance satisfactory to the Administrative
Agent, and (d) the Administrative Agent received unaudited consolidated and
consolidating financial statements (or other financial information) of the
Acquired Business or the Acquired Subsidiary for the fiscal quarter most
recently ended and for the portion of the fiscal year then ended, all
calculations and reports as described herein to be in form and substance
reasonably satisfactory to the Administrative Agent.
"Pro Forma Adjusted EBITDA" means, for any period, the sum of, without
duplication, (a) EBITDA for such period, plus (b) non-recurring non-cash
expenses or charges during such period, plus (c) for any acquisitions which are
consummated on or after the Closing Date, add-backs permitted pursuant to
Article 11, Regulation S-X of the Securities Act of 1933 for the 12-month period
then ended, plus (d) the effect of Additional Volume and/or Increased Use, as
applicable, and itemized direct cost savings that will be achieved as a result
of, or in connection with, any acquisitions consummated after the Closing Date),
plus (e) non-cash charges for accretion on closure and post-closure obligations,
plus (f) non-cash charges associated with the disposal contract between Waste
Management, Inc. and the Borrower, plus (g) for any acquisitions which have been
consummated prior to the Closing Date, the Prior Acquisition Add-Back, plus (h)
non-cash charges (or minus non-cash benefits, if applicable) reflecting the
adoption of SFAS No. 123 (and all amendments thereto), plus (i) cash
compensation charges in an aggregate amount not to exceed $5,000,000 and
non-cash compensation charges, all with respect to stock options outstanding and
shares issued by Waste Corporation in connection with the extinguishment of
options and warrants as part of the 2004 Reorganization, plus (j) non-cash
expense (or minus non-cash income, if applicable) associated with FAS 133
treatment of any interest rate Hedging Agreements, plus (k) non-cash losses on
asset sales in an aggregate amount not to exceed $500,000.
"Property" means any interest in any kind of property or asset, whether
real, personal or mixed, or tangible or intangible.
"Qualified Acquisition Expenditure" means collectively, an expenditure by
the Borrower or one of its Subsidiaries made in connection with or in
furtherance of the acquisition of a Person engaged in a similar line of business
as the Borrower and its Subsidiaries, so long as (i) the Senior Funded Debt
Leverage Ratio (as defined in the First Lien Credit Agreement) is less than 4.00
to 1.00 at the end of each fiscal quarter prior to such expenditure and
immediately after giving effect thereto and (ii) after giving effect to such
expenditure, the Aggregate Revolving Credit Commitments shall exceed the sum of
the outstanding principal amount of the Revolving Credit Loans and Swing Line
Loans, plus the LC Exposure, plus the Direct Pay Letter of Credit Exposure (as
each is defined in the First Lien Credit Agreement) by an amount not less than
$10,000,000; provided that, in the event clause (i) above has not been satisfied
and so long as (1) no Default exists or would exist after giving effect to such
expenditure (including without limitation, no Default would exist under Sections
9.12 through and including 9.16 after giving effect to such expenditure), (2)
the requirement in clause (ii) above has been satisfied, and (3) such
expenditure does not exceed 20% of the Borrower's Net Worth as of the date of
such expenditure, then such expenditure shall be deemed a Qualified Acquisition
Expenditure; and "Qualified Acquisitions Expenditures" shall mean all such
expenditures.
SECOND LIEN CREDIT AGREEMENT-PAGE 17
"Qualified Dividend" means any distribution or dividend paid or made by the
Borrower or Parent to its respective stockholders equal to the amount of any
regularly scheduled payments then due and payable on either (a) Debt of WCA
Corp. existing on the Closing Date or (b) Debt of WCA Corp. incurred after the
Closing Date so long as such Debt described in this clause (b) has a maturity
date at least six months after the scheduled Termination Date.
"Quarterly Dates" means the last day of each March, June, September and
December, in each year, the first of which shall be June 30, 2005; provided,
however, that if any such day is not a Business Day, such Quarterly Date shall
be the next succeeding Business Day.
"Register" is defined in Section 12.05(c).
"Registered Public Accounting Firm" has the meaning specified in the
Securities Laws and shall be independent of the Borrower as prescribed by the
Securities Laws.
"Regulation D" means Regulation D of the Board of Governors of the Federal
Reserve System (or any successor), as the same may be amended or supplemented
from time to time.
"Regulatory Change" means, with respect to any Lender, any change after the
Closing Date in any Governmental Requirement (including Regulation D) or the
adoption or making after such date of any interpretations, directives or
requests applying to a class of lenders (including such Lender or its Applicable
Lending Office) of or under any Governmental Requirement (whether or not having
the force of law) by any Governmental Authority charged with the interpretation
or administration thereof.
"Reimbursement Agreement" means that certain Reimbursement Agreement dated
as of August 30, 2002 among the Borrower, Waste Corporation Texas and Xxxxx
Fargo, as the Issuing Bank.
"Related Parties" means, with respect to any Person, such Person's
Affiliates and the partners, directors, officers, employees, agents, attorneys
and advisors of such Person and of such Person's Affiliates.
"Required Second Lien Lenders" means Lenders holding more than 50% of the
aggregate principal amount of the outstanding Loans (without regard to any sale
by a Lender of a participation in any Loan under Section 12.05(d)) at such time.
"Reserve Requirement" means, for any Interest Period for any LIBOR Loan,
the average maximum rate at which reserves (including any marginal, supplemental
or emergency reserves) are required to be maintained during such Interest Period
under Regulation D by member banks of the Federal Reserve System in New York
City with deposits exceeding one billion Dollars against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the Reserve Requirement shall reflect any other reserves
required to be maintained by such member banks by reason of any Regulatory
Change against (a) any category of liabilities which includes deposits by
reference to which LIBOR is to be determined as provided in the definition of
"LIBOR" or (b) any category of extensions of credit or other assets which
include a LIBOR Loan.
SECOND LIEN CREDIT AGREEMENT-PAGE 18
"Responsible Officer" means, as to any Person, the Chief Executive Officer,
the President or any Vice President of such Person and, with respect to
financial matters, the term "Responsible Officer" shall include the Chief
Financial Officer or, with respect to the Borrower, the Controller of such
Person. Unless otherwise specified, all references to a Responsible Officer
herein shall mean a Responsible Officer of the Borrower.
"Xxxxxxxx-Xxxxx" means the Xxxxxxxx-Xxxxx Act of 2002.
"SEC" means the Securities and Exchange Commission or any successor
Governmental Authority.
"Secured Parties" means the Agents, the Lenders and each Affiliate of a
Lender that is a party to a Hedging Agreement.
"Securities Laws" means the Securities Act of 1933, the Securities Exchange
Act of 1934, Xxxxxxxx-Xxxxx and the applicable accounting and auditing
principles, rules, standards and practices promulgated, approved or incorporated
by the SEC or the Public Company Accounting Oversight Board, as each of the
foregoing may be amended and in effect on any applicable date hereunder.
"Security Agreements" means, collectively, (a) that certain Second Lien
Security Agreement dated as of the Closing Date by and between the Parent and
the Collateral Agent for the benefit of the Secured Parties and (b) that certain
Second Lien Security Agreement dated as of the Closing Date by and among the
Borrower, Borrower's Subsidiaries and the Collateral Agent for the benefit of
the Secured Parties.
"Special Entity" means, with respect to any Person, any joint venture,
limited liability company or partnership, general or limited partnership or any
other type of partnership or company (other than a corporation) in which such
Person or one or more of its other Subsidiaries is a member, owner, partner or
joint venturer and owns, directly or indirectly, at least a majority of the
equity of such entity or controls such entity, but excluding any tax
partnerships that are not classified as partnerships under state law. For
purposes of this definition, any Person which owns directly or indirectly an
equity investment in another Person which allows the first Person to manage or
elect managers who manage the normal activities of such second Person will be
deemed to "control" such second Person (e.g. a sole general partner controls a
limited partnership).
"Subordinated Debt" means any Debt of the Borrower expressly subordinated
to the Obligations, on terms specifically including, without limitation, that
payments on such Debt shall be prohibited if a Default exists or would result
from such payment, and other terms and conditions and pursuant to documentation,
all in form and substance reasonably satisfactory to the Administrative Agent
and the Required Second Lien Lenders, such consents not to be unreasonably
withheld.
"Subsidiary" means (a) any corporation of which at least a majority of the
outstanding shares of stock having by the terms thereof ordinary voting power to
elect a majority of the board of directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the
SECOND LIEN CREDIT AGREEMENT-PAGE 19
happening of any contingency) is at the time directly or indirectly owned or
controlled by another Person or one or more of such Person's Subsidiaries or by
such Person and one or more of its Subsidiaries and (b) any Special Entity.
Unless otherwise expressly stated herein, each reference to the term
"Subsidiary" shall mean a Subsidiary of the Borrower.
"Taxes" means all present or future taxes, levies, imposts, duties,
deductions, withholdings, assessments, fees or other charges imposed by any
Governmental Authority, including any interest, additions to tax or penalties
applicable thereto.
"Termination Date" means the earlier of (a) October 28, 2011 and (b) the
date that the Aggregate Commitments are sooner terminated pursuant to Section
10.02 and the Loans are prepaid in full pursuant to Section 2.06.
"Transaction Party" is defined in Section 7.22.
"Transfer" is defined in Section 9.17.
"Type" means, with respect to any Loan, a Base Rate Loan or a LIBOR Loan.
"Waste Corporation" means Waste Corporation of America LLC, a Delaware
limited liability company.
"Waste Corporation Texas" means Waste Corporation of Texas, L.P., a
Delaware limited partnership.
"WCA Corp." means WCA Waste Corporation, a Delaware corporation.
"Welfare Plan" means any employee welfare benefit plan, as defined in
Section 3(1) of ERISA, which (a) is currently or hereafter sponsored maintained
or contributed to by the Borrower, any Subsidiary or an ERISA Affiliate or (b)
was at any time during the preceding six calendar years sponsored, maintained or
contributed to, by the Borrower, any Subsidiary or an ERISA Affiliate.
"Xxxxx Fargo" is defined in the preamble.
Section 1.02 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include," "includes" and "including" shall
be deemed to be followed by the phrase "without limitation." The word "will"
shall be construed to have the same meaning and effect as the word "shall."
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein," "hereof" and "hereunder," and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and
SECOND LIEN CREDIT AGREEMENT-PAGE 20
Schedules shall be construed to refer to Articles and Sections of, and Exhibits
and Schedules to, this Agreement, (e) any reference to any law or regulation
herein shall, unless otherwise specified, refer to such law or regulation as
amended, modified or supplemented from time to time and (f) the words "asset"
and "property" shall be construed to have the same meaning and effect and to
refer to any and all tangible and intangible assets and properties, including
cash, securities, accounts and contract rights.
Section 1.03 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be interpreted, all
determinations with respect to accounting matters hereunder shall be made, and
all financial statements and certificates and reports as to financial matters
required to be furnished to the Administrative Agent or the Lenders hereunder
shall be prepared, in accordance with GAAP, applied on a basis consistent with
the audited financial statements of the Borrower referred to in Section 7.02
(except for changes concurred with by the Borrower's Registered Public
Accounting Firm). If at any time any change in GAAP would affect the computation
of any financial ratio or requirement set forth in any Loan Document, and either
the Administrative Agent, the Borrower or the Required Second Lien Lenders shall
so request, the Administrative Agent, the Lenders and the Borrower shall
negotiate in good faith to amend such ratio or requirement to preserve the
original intent thereof in light of such change in GAAP (subject to the approval
of the Required Second Lien Lenders); provided that, until so amended, (a) such
ratio or requirement shall continue to be computed in accordance with GAAP prior
to such change therein and (b) the Borrower shall provide to the Administrative
Agent and the Lenders financial statements and other documents required under
this Agreement or as reasonably requested hereunder setting forth a
reconciliation between calculations of such ratio or requirement made before and
after giving effect to such change in GAAP.
ARTICLE II
COMMITMENTS
Section 2.01 Loans.
(a) Loans. Each Lender severally agrees, subject to the terms and
conditions of this Agreement, to make a term loan to the Borrower not to exceed
its Commitment. Such Loan shall be made by way of a single borrowing made on the
Closing Date. Any portion of each Lender's Commitment not utilized by such
borrowing on such date shall be permanently canceled.
(b) Limitation on Types of Loans. Subject to the other terms and
provisions of this Agreement, the Loans will be LIBOR Loans; provided that,
without the prior written consent of the Required Second Lien Lenders, no more
than 10 LIBOR Loans may be outstanding at any time.
Section 2.02 Borrowings, Continuations and Conversions.
(a) Borrowings. The Borrower shall give the Administrative Agent
(which shall promptly notify the Lenders) advance notice as hereinafter provided
of the borrowing
SECOND LIEN CREDIT AGREEMENT-PAGE 21
hereunder, which shall specify (i) the aggregate amount of such borrowing and
(ii) the duration of the Interest Period therefor.
(b) Minimum Amounts. All LIBOR Loans borrowings shall be in amounts of
at least $1,000,000 or any whole multiple of $500,000 in excess thereof.
(c) Notices. All borrowings, continuations and conversions shall
require advance written notice to the Administrative Agent (which shall promptly
notify the Lenders) in the form of Exhibit A (or telephonic notice promptly
confirmed by such a written notice), which in each case shall be irrevocable,
from the Borrower to be received by the Administrative Agent not later than
11:00 a.m. (Central time) at least three Business Days prior to the date of each
LIBOR Loan borrowing, continuation or conversion. Without in any way limiting
the Borrower's obligation to confirm in writing any telephonic notice, the
Administrative Agent may act without liability upon the basis of telephonic
notice believed by the Administrative Agent in good faith to be from the
Borrower prior to receipt of written confirmation. In each such case, the
Borrower hereby waives the right to dispute the Administrative Agent's record of
the terms of such telephonic notice except in the case of gross negligence or
willful misconduct by the Administrative Agent.
(d) Continuation Options. Subject to the provisions made in this
Section 2.02(d), the Borrower may elect to continue all or any part of any LIBOR
Loan beyond the expiration of the then current Interest Period relating thereto
by giving advance notice as provided in Section 2.02(c) to the Administrative
Agent (which shall promptly notify the Lenders) of such election, specifying the
amount of such Loan to be continued and the Interest Period therefor. In the
absence of such a timely and proper election, the Borrower shall be deemed to
have elected to continue such LIBOR Loan with an Interest Period of one month.
All or any part of any LIBOR Loan may be continued as provided herein, provided
that (i) any continuation of any such Loan shall be (as to each Loan as
continued for an applicable Interest Period) in amounts of at least $1,000,000
or any whole multiple of $500,000 in excess thereof and (ii) no Default shall
have occurred and be continuing. If a Default shall have occurred and be
continuing, each LIBOR Loan shall be converted to a Base Rate Loan on the last
day of the Interest Period applicable thereto.
(e) Conversion Options. In the event a LIBOR Loan is converted to a
Base Rate Loan hereunder, so long as no Default has occurred and is continuing,
the circumstances causing such conversion no longer exist, and subject to the
provisions made in this Section 2.02(e), the Borrower may elect to convert all
or any part of any Base Rate Loan at any time and from time to time to a LIBOR
Loan by giving advance notice as provided in Section 2.02(c) to the
Administrative Agent (which shall promptly notify the Lenders) of such election.
All or any part of any outstanding Loan may be converted as provided herein,
provided that (i) any conversion of all or any part of any Base Rate Loan into a
LIBOR Loan shall be (as to each such Loan into which there is a conversion for
an applicable Interest Period) in amounts of at least $1,000,000 or any whole
multiple of $500,000 in excess thereof and (ii) no Default shall have occurred
and be continuing. If a Default shall have occurred and be continuing, no Base
Rate Loan may be converted into a LIBOR Loan.
SECOND LIEN CREDIT AGREEMENT-PAGE 22
(f) Advances. Not later than 11:00 a.m. (Central time) on the Closing
Date, each Lender shall make available the amount of the Loan to be made by it
on such date to the Administrative Agent, to an account which the Administrative
Agent shall specify, in immediately available funds, for the account of the
Borrower. The amounts so received by the Administrative Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Borrower by
depositing the same, in immediately available funds, in an account of the
Borrower, designated by the Borrower and maintained at the Principal Office.
Section 2.03 Fees. The Borrower shall pay such fees as are set forth in the
Fee Letter in the manner and on the dates specified therein to the extent not
paid prior to the Closing Date.
Section 2.04 Several Obligations. The failure of any Lender to make any
Loan to be made by it on the date specified therefor shall not relieve any other
Lender of its obligation to make its Loan on such date, but no Lender shall be
responsible for the failure of any other Lender to make a Loan to be made by
such other Lender to be provided by such other Lender.
Section 2.05 Evidence of Debt. (a) The Borrower hereby unconditionally
promises to pay (i) to the Administrative Agent for the account of each Lender
the then unpaid principal amount of each Loan on the Termination Date, and (ii)
to the Administrative Agent for the account of each Lender the then unpaid
principal amount of each LIBOR Loan on the last day of the Interest Period
applicable to such Loan.
(b) Each Lender shall maintain in accordance with its usual practice
an account or accounts evidencing the indebtedness of the Borrower to such
Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Administrative Agent shall maintain accounts in which it shall
record (i) the amount of each Loan made hereunder, the class and Type thereof
and the Interest Period applicable thereto, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) the amount of any sum received by the Administrative
Agent hereunder for the account of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to clause (b)
or (c) of this Section shall be prima facie evidence of the existence and
amounts of the obligations recorded therein; provided that the failure of any
Lender or the Administrative Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by a
promissory note. In such event, the Borrower shall prepare, execute and deliver
to such Lender a promissory note payable to the order of such Lender (or, if
requested by such Lender, to such Lender and its registered assigns) and in a
form approved by the Administrative Agent. Thereafter, the Loans evidenced by
such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 12.05) be represented by one or more promissory
SECOND LIEN CREDIT AGREEMENT-PAGE 23
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
Section 2.06 Prepayments.
(a) Voluntary Prepayments. (i) The Borrower may, upon not less than
three Business Days' notice to the Administrative Agent (which shall promptly
notify the Lenders), which notice shall specify the prepayment date (which shall
be a Business Day) and shall be irrevocable and effective only upon receipt by
the Administrative Agent, prepay the outstanding aggregate principal amount of
the Loans in whole, but not in part, provided that (A) interest on the principal
prepaid, accrued to the prepayment date, shall be paid on the prepayment date,
(B) if such prepayment is made on or prior to the second anniversary of the
Closing Date, the premiums payable pursuant to Section 2.06(a)(ii) shall be paid
on the prepayment date and (C) if any prepayment of a LIBOR Loan is made on a
date other than the last day of an Interest Period for such LIBOR Loan, the
Borrower shall also pay any amounts owing pursuant to Section 5.04.
(ii) In connection with any prepayment under clause (i) above
(other than a prepayment made after the second anniversary of the Closing Date),
the Borrower shall pay a premium of (A) 2.00% of the aggregate principal amount
of the Loans prepaid during the period beginning from the Closing Date to and
including the first anniversary of the Closing Date and (B) 1.00% of the
aggregate principal amount of the Loans prepaid during the period the day after
the first anniversary of the Closing Date to and including the second
anniversary of the Closing Date.
(b) Mandatory Prepayments.
(i) Upon Transfers and Issuances of Equity. The Borrower shall,
and shall cause any Subsidiary to, pay an amount equal to (A) 100% of the net
cash proceeds received from any Transfers of the type referred to in Sections
9.17(i), based on the greater of the net book value of the Property sold or the
net proceeds received, provided, that, with respect to net cash proceeds
received from a Transfer permitted under Section 9.17(i), Borrower is not
required to make a prepayment hereunder so long as such proceeds have been
applied to the purchase of replacement Property as described in Section 9.17(i)
or may be otherwise permitted pursuant to Section 9.17(iii), (B) 50% of the
excess net cash proceeds received from any issuance by WCA Corp. of any Debt or
by its Subsidiaries of any Subordinated Debt to the extent that during any
fiscal year of the Borrower such net cash proceeds exceed $30,000,000 in the
aggregate, (C) 50% of the excess net cash proceeds received from any issuance by
WCA Corp. or its Subsidiaries of common stock to the extent that during any
fiscal year of the Borrower such net cash proceeds exceed $65,000,000 in the
aggregate and (D) 100% of the net cash proceeds received from any issuance by
WCA Corp. or its Subsidiaries of equity securities (other than common stock).
Prepayments made pursuant to this clause (ii) shall be applied to the Loans pro
rata. Notwithstanding the foregoing, the Borrower may elect to provide cash
collateral in lieu of the prepayment required pursuant to this clause (ii) to
the extent any LIBOR Loans are outstanding until termination of the applicable
Interest Period so long as (A) the pledge of cash collateral does not affect the
tax-exempt nature of the Bonds or result in the Bonds being characterized as so
called "arbitrage bonds," and (B) no Default has occurred and is continuing.
SECOND LIEN CREDIT AGREEMENT-PAGE 24
(ii) Generally. Prepayments permitted or required under this
Section 2.06 shall be without premium or penalty, except as required under
Sections 2.06(a) and 5.04 for prepayment of LIBOR Loans. Any prepayments on the
Loans may not be reborrowed and shall be applied to the Loans pro rata. Together
with any prepayments made hereunder, the accrued interest on the principal
amount so prepaid shall be due and payable on the date of such prepayment.
(iii) Transfers of Non-Core Assets. The Borrower shall, and shall
cause any Guarantor or Subsidiary to, apply an amount equal to 100% of the net
cash proceeds received from any Transfers of the type referred to in Section
9.17(iv) to promptly prepay the Loans. Notwithstanding the foregoing, the
Borrower may elect to provide cash collateral in lieu of the prepayment required
pursuant to this clause (iii) to the extent any LIBOR Loans are outstanding
until termination of the applicable Interest Period so long as no Default has
occurred and is continuing.
(c) First Lien Payment. Notwithstanding any other provision contained
herein to the contrary, no prepayments permitted pursuant to this Section 2.06
shall be applied to the prepayment of the Loans unless and until (i) all
outstanding amounts under the First Lien Financing have been repaid in full in
cash, (ii) all outstanding letters of credit thereunder have been cash
collateralized and (iii) all outstanding commitments thereunder have been
terminated.
Section 2.07 Lending Offices. The Loans of each Type made by each Lender
shall be made and maintained at such Lender's Applicable Lending Office for
Loans of such Type.
ARTICLE III
PAYMENTS OF PRINCIPAL AND INTEREST
Section 3.01 Repayment of Loans.
(a) Loans. On the Termination Date, the Borrower shall repay the
outstanding principal amount of the Loans.
(b) Generally. The Borrower will pay to the Administrative Agent, for
the account of each Lender, the principal payments required by this Section
3.01.
Section 3.02 Interest.
(a) Interest Rates. The Borrower will pay to the Administrative Agent,
for the account of each Lender, interest on the unpaid principal amount of each
Loan made by such Lender for the period commencing on the date such Loan is made
to, but excluding, the date such Loan shall be paid in full, at a rate per annum
equal to, for each Interest Period relating thereto, the LIBOR Rate for such
Loan plus the Applicable Margin (as in effect from time to time), but in no
event to exceed the Maximum Rate; provided, however, in the event any Loan is
the Base Rate Loan, then such interest rate per annum shall be equal to the Base
Rate (as in effect from time to time) plus 5.00%, but in no event to exceed the
Maximum Rate.
SECOND LIEN CREDIT AGREEMENT-PAGE 25
(b) Post-Default Rate. Notwithstanding the foregoing, the Borrower
will pay to the Administrative Agent, for the account of each Lender interest at
the applicable Post-Default Rate on any principal of any Loan made by such
Lender, and (to the fullest extent permitted by law) on any other amounts due
and payable or that become due and payable by the Borrower hereunder or under
any Loan Document held by such Lender to or for account of such Lender, for the
period commencing on the date of an Event of Default (or the date any such other
amount becomes due and payable) until the same is paid in full or all Events of
Default are cured or waived. If an Event of Default under Section 10.01(a)
occurs, the operation of this Section 3.02(b) shall be automatic, but if the
only Events of Default are Events of Default other than under Section 10.01(a),
the operation of this Section 3.02(b) shall require the election of the Required
Second Lien Lenders to accrue interest at the Post-Default Rate.
(c) Due Dates. Accrued interest on Base Rate Loans shall be payable
monthly on the first day of each month commencing on January 1, 2005, and
accrued interest on each LIBOR Loan shall be payable on the last day of the
Interest Period therefor and, if such Interest Period is longer than three
months at three-month intervals following the first day of such Interest Period,
except that interest payable at the Post-Default Rate shall be payable from time
to time on demand and interest on any LIBOR Loan that is converted into a Base
Rate Loan (pursuant to Section 5.04) shall be payable on the date of conversion
(but only to the extent so converted). Any accrued and unpaid interest on the
Loans on the Termination Date shall be paid on such date.
(d) Determination of Rates. Promptly after the determination of any
interest rate provided for herein or any change therein, the Administrative
Agent shall notify the Lenders to which such interest is payable and the
Borrower thereof. Each determination by the Administrative Agent of an interest
rate or fee hereunder shall, except in cases of manifest error, be final,
conclusive and binding on the parties.
ARTICLE IV
PAYMENTS; PRO RATA TREATMENT; COMPUTATIONS; ETC.
Section 4.01 Payments. Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
under this Agreement shall be made in Dollars, in immediately available funds,
to the Administrative Agent at such account as the Administrative Agent shall
specify by notice to the Borrower from time to time, not later than 11:00 a.m.
(Central time) on the date on which such payments shall become due (each such
payment made after such time on such due date to be deemed to have been made on
the next succeeding Business Day). Such payments shall be made without (to the
fullest extent permitted by applicable law) defense, set-off or counterclaim.
Each payment received by the Administrative Agent under this Agreement for
account of a Lender shall be paid promptly to such Lender in immediately
available funds. Except as otherwise provided in the definition of "Interest
Period", if the due date of any payment under this Agreement would otherwise
fall on a day which is not a Business Day such date shall be extended to the
next succeeding Business Day and interest shall be payable for any principal so
extended for the period of such extension. At the time of each payment to the
Administrative Agent of any principal of or interest on any borrowing, the
Borrower shall notify the Administrative Agent of the Loans to which such
SECOND LIEN CREDIT AGREEMENT-PAGE 26
payment shall apply. In the absence of such notice the Administrative Agent may
specify the Loans to which such payment shall apply, but to the extent possible
such payment or prepayment will be applied first to the Loans comprised of Base
Rate Loans.
Section 4.02 Pro Rata Treatment. Except to the extent otherwise provided
herein each Lender agrees that: (i) each borrowing from the Lenders under
Section 2.01 and each continuation and conversion under Section 2.02 shall be
made from the Lenders pro rata in accordance with their Percentage Share; (ii)
each payment of principal of Loans by the Borrower shall be made for account of
the Lenders pro rata in accordance with the respective unpaid principal amount
of the Loans held by the Lenders; and (iii) each payment of interest on Loans by
the Borrower shall be made for account of the Lenders pro rata in accordance
with the amounts of interest due and payable to the respective Lenders.
Section 4.03 Computations. Interest on all LIBOR Loans shall be computed on
the basis of a year of 360 days and actual days elapsed (including the first day
but excluding the last day) occurring in the period for which such interest is
payable, unless such calculation would exceed the Maximum Rate, in which case
interest shall be calculated on the per annum basis of a year of 365 or 366
days, as the case may be. All computations of interest on Base Rate Loans and
fees shall be computed on the basis of a year of 365 or 366 days, as the case
may be, and actual days elapsed (including the first day but excluding the last
day).
Section 4.04 Non-receipt of Funds by the Administrative Agent.
(a) Funding by Lenders; Presumption by Administrative Agent. Unless
the Administrative Agent shall have received notice from a Lender prior to the
proposed date of any Loan that such Lender will not make available to the
Administrative Agent such Lender's share of such Loan, the Administrative Agent
may assume that such Lender has made such share available on such date in
accordance with Section 2.02(f) and may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. In such event, if a Lender has
not in fact made its share of the applicable Loan available to the
Administrative Agent, then the applicable Lender and the Borrower severally
agree to pay to the Administrative Agent forthwith on demand such corresponding
amount with interest thereon, for each day from and including the date such
amount is made available to the Borrower to but excluding the date of payment to
the Administrative Agent, at (i) in the case of a payment to be made by such
Lender, the greater of the Federal Funds Rate and a rate determined by the
Administrative Agent in accordance with banking industry rules on interbank
compensation and (ii) in the case of a payment to be made by the Borrower, the
interest rate applicable to Base Rate Loans. If the Borrower and such Lender
shall pay such interest to the Administrative Agent for the same or an
overlapping period, the Administrative Agent shall promptly remit to the
Borrower the amount of such interest paid by the Borrower for such period. If
such Lender pays its share of the applicable Loan to the Administrative Agent,
then the amount so paid shall constitute such Lender's Loan included in such
Loan. Any payment by the Borrower shall be without prejudice to any claim the
Borrower may have against a Lender that shall have failed to make such payment
to the Administrative Agent.
(b) Payments by Borrower; Presumptions by Administrative Agent. Unless
the Administrative Agent shall have received notice from the Borrower prior to
the date on
SECOND LIEN CREDIT AGREEMENT-PAGE 27
which any payment is due to the Administrative Agent for the account of the
Lenders hereunder that the Borrower will not make such payment, the
Administrative Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders the amount due. In such event, if the Borrower has not
in fact made such payment, then each of the Lenders severally agrees to repay to
the Administrative Agent forthwith on demand the amount so distributed to such
Lender, with interest thereon, for each day from and including the date such
amount is distributed to it to but excluding the date of payment to the
Administrative Agent, at the greater of the Federal Funds Rate and a rate
determined by the Administrative Agent in accordance with banking industry rules
on interbank compensation.
Section 4.05 Set-off, Sharing of Payments, Etc. (a) The Borrower agrees
that, in addition to (and without limitation of) any right of set-off, bankers'
lien or counterclaim a Lender may otherwise have, each Lender and each of its
respective Affiliates shall have the right and be entitled (after consultation
with the Agents), at its option, to set off and apply any and all deposits
(general or special, time or demand, provisional or final, in whatever currency)
at any time held and other obligations (in whatever currency) at any time owing
by such Lender or any such Affiliate to or for the credit or the account of the
Borrower against any and all of the obligations of the Borrower now or hereafter
existing under this Agreement or any other Loan Document to such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement or any other Loan Document and although such obligations of the
Borrower may be contingent or unmatured or are owed to a branch or office of
such Lender different from the branch or office holding such deposit or
obligated on such indebtedness. The rights of each Lender, and its respective
Affiliates under this Section are in addition to other rights and remedies
(including other rights of setoff) that such Lender or its respective Affiliates
may have. Each Lender agrees to notify the Borrower and the Administrative Agent
promptly after any such setoff and application, provided that the failure to
give such notice shall not affect the validity of such setoff and application.
(b) If any Lender shall, by exercising any right of setoff or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or other obligations hereunder resulting in such
Lender's receiving payment of a proportion of the aggregate amount of its Loans
and accrued interest thereon or other such obligations greater than its pro rata
share thereof as provided herein, then the Lender receiving such greater
proportion shall (i) notify the Administrative Agent of such fact, and (ii)
purchase (for cash at face value) participations in the Loans and such other
obligations of the other Lenders, or make such other adjustments as shall be
equitable, so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and other amounts owing them,
provided that:
(x) if any such participations are purchased and all or any
portion of the payment giving rise thereto is recovered, such participations
shall be rescinded and the purchase price restored to the extent of such
recovery, without interest; and
(y) the provisions of this paragraph shall not be construed to
apply to (A) any payment made by the Borrower pursuant to and in accordance with
the express terms of this Agreement or (B) any payment obtained by a Lender as
consideration for the assignment of
SECOND LIEN CREDIT AGREEMENT-PAGE 28
or sale of a participation in any of its Loans to any assignee or participant,
other than to the Borrower or any Subsidiary thereof (as to which the provisions
of this section shall apply).
The Borrower consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of setoff and counterclaim with respect to such participation as
fully as if such Lender were a direct creditor of the Borrower in the amount of
such participation.
ARTICLE V
YIELD PROTECTION
Section 5.01 Increased Costs.
(a) Increased Costs Generally. If any Change in Law shall:
(i) impose, modify or deem applicable any reserve, special
deposit, compulsory loan, insurance charge or similar requirement against assets
of, deposits with or for the account of, or credit extended or participated in
by, any Lender (except any reserve requirement reflected in the LIBOR Rate);
(ii) subject any Lender to any tax of any kind whatsoever with
respect to this Agreement or any LIBOR Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except for Indemnified
Taxes or Other Taxes covered by Section 5.02 and the imposition of, or any
change in the rate of, any Excluded Tax payable by such Lender); or
(iii) impose on any Lender or the London interbank market any
other condition, cost or expense affecting this Agreement or LIBOR Loans made by
such Lender;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any LIBOR Loan (or of maintaining its obligation
to make any such Loan), or to reduce the amount of any sum received or
receivable by such Lender hereunder (whether of principal, interest or any other
amount) then, upon request of such Lender, the Borrower will pay to such Lender
such additional amount or amounts as will compensate on an after-tax basis such
Lender for such additional costs incurred or reduction suffered.
(b) Capital Requirements. If any Lender determines that any Change in
Law affecting such Lender or any lending office of such Lender or such Lender's
holding company, if any, regarding capital requirements has or would have the
effect of reducing the rate of return on such Lender's capital or on the capital
of such Lender's holding company, if any, as a consequence of this Agreement,
the Commitments of such Lender or the Loans made by such Lender to a level below
that which such Lender or such Lender's holding company could have achieved but
for such Change in Law (taking into consideration such Lender's policies and the
policies of such Lender's holding company with respect to capital adequacy),
then from time to time the Borrower will pay to such Lender such additional
amount or amounts as will
SECOND LIEN CREDIT AGREEMENT-PAGE 29
compensate on an after-tax basis such Lender or such Lender's holding company
for any such reduction suffered.
(c) Certificates for Reimbursement. A certificate of a Lender setting
forth the amount or amounts necessary to compensate such Lender or its holding
company, as the case may be, as specified in clause (a) or (b) of this Section
and delivered to the Borrower shall be conclusive absent manifest error. The
Borrower shall pay such Lender the amount shown as due on any such certificate
within 10 days after receipt thereof.
(d) Delay in Requests. Failure or delay on the part of any Lender to
demand compensation pursuant to this Section shall not constitute a waiver of
such Lender's right to demand such compensation, provided that the Borrower
shall not be required to compensate a Lender pursuant to this Section for any
increased costs incurred or reductions suffered more than nine months prior to
the date that such Lender notifies the Borrower of the Change in Law giving rise
to such increased costs or reductions and of such Lender's intention to claim
compensation therefor (except that, if the Change in Law giving rise to such
increased costs or reductions is retroactive, then the nine-month period
referred to above shall be extended to include the period of retroactive effect
thereof).
Section 5.02 Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without reduction or withholding for any
Indemnified Taxes or Other Taxes, provided that if the Borrower shall be
required by applicable law to deduct any Indemnified Taxes (including any Other
Taxes) from such payments, then (i) the sum payable shall be increased as
necessary so that after making all required deductions (including deductions
applicable to additional sums payable under this Section) the Administrative
Agent or Lender, as the case may be, receives an amount equal to the sum it
would have received had no such deductions been made, (ii) the Borrower shall
make such deductions and (iii) the Borrower shall timely pay the full amount
deducted to the relevant Governmental Authority in accordance with applicable
law.
(b) Payment of Other Taxes by the Borrower. Without limiting the
provisions of clause (a) above, the Borrower shall timely pay any Other Taxes to
the relevant Governmental Authority in accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify the
Administrative Agent and each Lender, within 10 days after demand therefor, for
the full amount of any Indemnified Taxes or Other Taxes (including Indemnified
Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) paid by the Administrative Agent or such Lender, as the case
may be, and any penalties, interest and reasonable expenses arising therefrom or
with respect thereto, whether or not such Indemnified Taxes or Other Taxes were
correctly or legally imposed or asserted by the relevant Governmental Authority.
A certificate as to the amount of such payment or liability delivered to the
Borrower by a Lender (with a copy to the Administrative Agent), or by the
Administrative Agent on its own behalf or on behalf of a Lender shall be
conclusive absent manifest error.
SECOND LIEN CREDIT AGREEMENT-PAGE 30
(d) Evidence of Payments. As soon as practicable after any payment of
Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Status of Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is resident for tax purposes, or any treaty to which such
jurisdiction is a party, with respect to payments hereunder or under any other
Loan Document shall deliver to the Borrower (with a copy to the Administrative
Agent), at the time or times prescribed by applicable law or reasonably
requested by the Borrower or the Administrative Agent, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate of withholding. In
addition, any Lender, if requested by the Borrower or the Administrative Agent,
shall deliver such other documentation prescribed by applicable law or
reasonably requested by the Borrower or the Administrative Agent as will enable
the Borrower or the Administrative Agent to determine whether or not such Lender
is subject to backup withholding or information reporting requirements.
Without limiting the generality of the foregoing, in the event that the
Borrower is resident for tax purposes in the United States of America, any
Foreign Lender shall deliver to the Borrower and the Administrative Agent (in
such number of copies as shall be requested by the recipient) on or prior to the
date on which such Foreign Lender becomes a Lender under this Agreement (and
from time to time thereafter upon the request of the Borrower or the
Administrative Agent, but only if such Foreign Lender is legally entitled to do
so), whichever of the following is applicable:
(i) duly completed copies of Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States of America is a party,
(ii) duly completed copies of Internal Revenue Service Form
W-8ECI,
(iii) in the case of a Foreign Lender claiming the benefits of
the exemption for portfolio interest under section 881(c) of the Code, (x) a
certificate to the effect that such Foreign Lender is not (A) a "bank" within
the meaning of section 881(c)(3)(A) of the Code, (B) a "10 percent shareholder"
of the Borrower within the meaning of section 881(c)(3)(B) of the Code, or (C) a
"controlled foreign corporation" described in section 881(c)(3)(C) of the Code
and (y) duly completed copies of Internal Revenue Service Form W-8BEN, or
(iv) any other form prescribed by applicable law as a basis for
claiming exemption from or a reduction in United States Federal withholding tax
duly completed together with such supplementary documentation as may be
prescribed by applicable law to permit the Borrower to determine the withholding
or deduction required to be made.
(f) Treatment of Certain Refunds. If the Administrative Agent or a
Lender determines, in its sole judgment, that it has received a refund of any
Taxes or Other Taxes as to
SECOND LIEN CREDIT AGREEMENT-PAGE 31
which it has been indemnified by the Borrower or with respect to which the
Borrower has paid additional amounts pursuant to this Section, it shall pay to
the Borrower an amount equal to such refund (but only to the extent of indemnity
payments made, or additional amounts paid, by the Borrower under this Section
with respect to the Taxes or Other Taxes giving rise to such refund), net of all
out-of-pocket expenses of the Administrative Agent or such Lender, as the case
may be, and without interest (other than any interest paid by the relevant
Governmental Authority with respect to such refund), provided that the Borrower,
upon the request of the Administrative Agent or such Lender agrees to repay the
amount paid over to the Borrower (plus any penalties, interest or other charges
imposed by the relevant Governmental Authority) to the Administrative Agent or
such Lender in the event the Administrative Agent or such Lender is required to
repay such refund to such Governmental Authority. This Section shall not be
construed to require the Administrative Agent or any Lender to make available
its tax returns (or any other information relating to its taxes that it deems
confidential) to the Borrower or any other Person.
Section 5.03 Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If any Lender requests
compensation under Section 5.01, or requires the Borrower to pay any additional
amount to any Lender or any Governmental Authority for the account of any Lender
pursuant to Section 5.02, then such Lender shall use reasonable efforts to
designate a different lending office for funding or booking its Loans hereunder
or to assign its rights and obligations hereunder to another of its offices,
branches or affiliates, if, in the judgment of such Lender, such designation or
assignment (i) would eliminate or reduce amounts payable pursuant to Section
5.01 or 5.02, as the case may be, in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If any Lender requests compensation under
Section 5.01, or if the Borrower is required to pay any additional amount to any
Lender or any Governmental Authority for the account of any Lender pursuant to
Section 5.02, or if any Lender defaults in its obligation to fund Loans
hereunder, then the Borrower may, at its sole expense and effort, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, without recourse (in accordance with and subject to the restrictions
contained in, and consents required by, Section 12.05(b)), all of its interests,
rights and obligations under this Agreement and the related Loan Documents to an
assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment), provided that:
(i) the Borrower shall have paid to the Administrative Agent the
assignment fee specified in Section 12.05(b)(iv);
(ii) such Lender shall have received payment of an amount equal
to the outstanding principal of its Loans accrued interest thereon, accrued fees
and all other amounts payable to it hereunder and under the other Loan Documents
(including any amounts under Section 5.04) from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts);
SECOND LIEN CREDIT AGREEMENT-PAGE 32
(iii) in the case of any such assignment resulting from a claim
for compensation under Section 5.01 or payments required to be made pursuant to
Section 5.02, such assignment will result in a reduction in such compensation or
payments thereafter; and
(iv) such assignment does not conflict with applicable law.
A Lender shall not be required to make any such assignment or delegation if,
prior thereto, as a result of a waiver by such Lender or otherwise, the
circumstances entitling the Borrower to require such assignment and delegation
cease to apply.
(c) Time Limited. Notwithstanding anything to the contrary contained
in this Article V, the Borrower shall not be required to reimburse or pay any
costs or expenses to any Lender as required by such sections which have accrued
more than 180 days prior to such Lender's giving notice to the Borrower that
such Lender has suffered or incurred such costs or expenses.
(d) Non Discriminatory Basis. None of the Lenders shall be permitted
to pass through to the Borrower costs and expenses under this Article V which
are not also passed through by such Lender to other customers of such Lender
similarly situated when such customer is subject to documents containing similar
provisions as those contained in such Sections.
Section 5.04 Compensation. The Borrower shall pay to each Lender within 30
days of receipt of written request of such Lender (which request shall set
forth, in reasonable detail, the basis for requesting such amounts and which
shall be conclusive and binding for all purposes provided that such
determinations are made on a reasonable basis), such amount or amounts as shall
compensate it for any loss, cost, expense or liability which such Lender
reasonably determines are attributable to:
(a) any payment, prepayment or conversion of a LIBOR Loan for any
reason (including, without limitation, the acceleration of the Loans pursuant to
Section 10.02) on a date other than the last day of the Interest Period for such
Loan; or
(b) any failure by the Borrower for any reason (including but not
limited to, the failure of any of the conditions precedent specified in Article
V to be satisfied) to borrow, continue or convert a LIBOR Loan from such Lender
on the date for such borrowing, continuation or conversion specified in the
relevant notice given pursuant to Section 2.02(c); provided, however, that where
such failure is attributable to the circumstances set forth in Sections 5.01(b),
5.02 or 5.03 with respect to such Lender's inability or determination not to
make LIBOR Loans, no such compensation shall be required. Without limiting the
effect of the preceding sentence, such compensation shall include an amount
equal to the excess, if any, of (i) the amount of interest which would have
accrued on the principal amount so paid, prepaid or converted or not borrowed
for the period from the date of such payment, prepayment or conversion or
failure to borrow to the last day of the Interest Period for such Loan (or, in
the case of a failure to borrow, the Interest Period for such Loan which would
have commenced on the date specified for such borrowing) at the applicable rate
of interest for such Loan provided for herein over (ii) the interest component
of the amount such Lender would have bid in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such principal
SECOND LIEN CREDIT AGREEMENT-PAGE 33
amount and with maturities comparable to such period (as reasonably determined
by such Lender).
ARTICLE VI
CONDITIONS PRECEDENT
Section 6.01 Funding. The obligation of the Lenders to make the Loans is
subject to the receipt by the Agents and the Lenders of all fees payable
pursuant to Section 2.03 on or before the Closing Date and the receipt by the
Agents of the following documents (in sufficient original counterparts for each
Lender) and satisfaction of the other conditions provided in this Section 6.01,
each of which shall be satisfactory to the Administrative Agent in form and
substance:
(a) The Guaranty Agreement, the Security Agreements, the Intercreditor
Agreement and all other Loan Documents, duly executed by the appropriate parties
thereto.
(b) A certificate of the Secretary or an Assistant Secretary of the
Borrower setting forth (i) resolutions of its board of directors with respect to
the authorization of the Borrower to execute and deliver the Loan Documents to
which it is a party and to enter into the transactions contemplated in those
documents, (ii) the officers of the Borrower (y) who are authorized to sign the
Loan Documents to which the Borrower is a party and (z) who will, until replaced
by another officer or officers duly authorized for that purpose, act as its
representative for the purposes of signing documents and giving notices and
other communications in connection with this Agreement, the other Loan Documents
and the transactions contemplated hereby and thereby, (iii) specimen signatures
of the authorized officers, and (iv) the certificate of incorporation and the
bylaws of the Borrower certified to be correct and complete copies. The Agents
and the Lenders may conclusively rely on such certificate until the
Administrative Agent receives notice in writing from the Borrower to the
contrary.
(c) A certificate of the Secretary or an Assistant Secretary of each
Guarantor setting forth (i) resolutions of its board of directors or other
governing body with respect to the authorization of such Guarantor to execute
and deliver the Loan Documents to which it is a party and to enter into the
transactions contemplated in those documents, (ii) the officers of such
Guarantor (y) who are authorized to sign the Loan Documents to which such
Guarantor is a party and (z) who will, until replaced by another officer or
officers duly authorized for that purpose, act as its representative for the
purposes of signing documents and giving notices and other communications in
connection with this Agreement, the other Loan Documents and the transactions
contemplated hereby and thereby, (iii) specimen signatures of the authorized
officers, and (iv) the articles or certificate of incorporation, bylaws,
partnership agreements, or other organizational documents of such Guarantor
certified to be correct and complete copies. The Agents and the Lenders may
conclusively rely on such certificate until they receive notice in writing from
such Guarantor to the contrary.
(d) Certificates of the appropriate state agencies with respect to the
existence, qualification and good standing of the Borrower and Guarantors.
SECOND LIEN CREDIT AGREEMENT-PAGE 34
(e) A Compliance Certificate, duly and properly executed by a
Responsible Officer and dated as of the Closing Date but with all calculations
made as of March 31, 2005.
(f) Opinions of legal counsel to the Borrower and the Guarantors, in
form and substance satisfactory to the Administrative Agent, as to such matters
incident to the transactions herein contemplated as the Administrative Agent may
reasonably request.
(g) Pro forma projections prepared by the Borrower and copies of the
Financial Statements, all in form and substance satisfactory to the
Administrative Agent.
(h) Copies of the fully executed First Lien Credit Agreement and the
documents related thereto and evidence of the closing of the First Lien
Financing.
(i) Environmental review report of the real property located in Wake
County, North Carolina and Guilford County, North Carolina recently purchased by
the Borrower and certain of its Subsidiaries, such report to be satisfactory to
Administrative Agent.
(j) Mortgages and deeds of trust and any other Loan Documents related
to the real Property duly executed by the appropriate Guarantors.
(k) Evidence of receipt by the Borrower of at least a B-/B3 corporate
credit rating from Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and Xxxxx'x Investors Service, Inc.
(l) Such other documents, agreements, and instruments as the
Administrative Agent or any Lender or special counsel to the Administrative
Agent may reasonably request.
(m) No Default shall exist.
(n) No Material Adverse Effect shall have occurred and be continuing.
(o) The representations and warranties made by the Borrower in Article
VII and by the Borrower and each Guarantor in the Loan Documents shall be true
on and as of the date of the making of such Loans with the same force and effect
as if made on and as of such date and immediately after giving effect to such
new borrowing, except to the extent such representations and warranties are set
forth as being related only to a specified date (e.g. "as of the Closing Date")
and were true and correct as of such specified date or the Required Second Lien
Lenders may expressly consent in writing to the contrary.
Section 6.02 Conditions Precedent for the Benefit of Lenders. All
conditions precedent to the obligations of the Lenders to make any Loan are
imposed hereby solely for the benefit of the Lenders, and no other Person may
require satisfaction of any such condition precedent or be entitled to assume
that the Lenders will refuse to make any Loan in the absence of strict
compliance with such conditions precedent.
Section 6.03 Determinations Under Section 6.01. For purposes of determining
compliance with the conditions specified in Section 6.01, each Lender shall be
deemed to have consented to, approved or accepted or to be satisfied with each
document or other matter
SECOND LIEN CREDIT AGREEMENT-PAGE 35
required thereunder to be consented to or approved by or acceptable or
satisfactory to the Lenders unless an officer of the Administrative Agent
responsible for the transactions contemplated by the Loan Documents shall have
received notice from such Lender with respect to any Loan prior to the Closing
Date, specifying its objection thereto and such Lender shall not have made
available to the Administrative Agent such Lender's ratable portion of such
Loan.
Section 6.04 No Waiver. No waiver of any condition precedent shall preclude
the Administrative Agent or the Lenders from requiring such condition to be met
prior to making any subsequent Loan or preclude the Lenders from thereafter
declaring that the failure of the Borrower to satisfy such condition precedent
constitutes a Default.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Agents and the Lenders that
(each representation and warranty herein is given as of the Closing Date):
Section 7.01 Corporate Existence. Each of the Borrower and each Subsidiary:
(i) is a corporation, limited partnership or limited liability company duly
organized, legally existing and in good standing, if applicable, under the laws
of the jurisdiction of its organization; (ii) (x) has all requisite power
(corporate or otherwise), and (y) has all material governmental licenses,
authorizations, consents and approvals necessary to own its assets and carry on
its business as now being or as proposed to be conducted; and (iii) is qualified
to do business in all jurisdictions in which the nature of the business
conducted by it makes such qualification necessary, except in each case referred
to in clauses (ii)(y) and (iii), to the extent the failure so to do could not
reasonably be expected to have a Material Adverse Effect.
Section 7.02 Financial Condition. The audited consolidated balance sheet of
WCA Corp. as at December 31, 2004 and the related consolidated statement of
income, stockholders' equity and cash flow for the fiscal year ended on said
date, with the opinion thereon of a Registered Public Accounting Firm heretofore
furnished to each of the Lenders, are complete and correct and fairly present
the consolidated financial condition of WCA Corp. and its Consolidated
Subsidiaries as at said dates and the results of its operations for the fiscal
year, all in accordance with GAAP, as applied on a consistent basis. The
unaudited consolidated balance sheet of the Borrower as at March 31, 2005 and
the related consolidated statement of income, stockholders' equity and cash flow
for the portion of the fiscal year ended on such date are complete and correct
and fairly present the consolidated financial condition of the Borrower and its
Consolidated Subsidiaries as at said date, all in accordance with GAAP, as
applied on a consistent basis (subject to normal year-end adjustments). Neither
the Borrower nor any Subsidiary has on the Closing Date any material Debt,
contingent liabilities, liabilities for taxes, forward or long-term commitments
other than those customary in Borrower's business or unrealized or anticipated
losses from any unfavorable commitments, except as referred to or reflected or
provided for in the Financial Statements or in Schedule 7.02. Since March 31,
2005, there has been no change or event that could reasonably be expected to
have a Material Adverse Effect. Since the date of the Financial Statements,
neither the Properties of the Borrower or any Subsidiary have been affected as a
result of any fire, explosion, earthquake, flood, drought,
SECOND LIEN CREDIT AGREEMENT-PAGE 36
windstorm, accident, strike or other labor disturbance, embargo, requisition or
taking of Property or cancellation of contracts, permits or concessions by any
Governmental Authority, riot, activities of armed forces or acts of God or of
any public enemy where such event or matter could reasonably be expected to
result in a Material Adverse Effect. Since the date of the Financial Statements,
no Internal Control Event has occurred.
Section 7.03 Litigation. Except as disclosed to the Lenders in Schedule
7.03 hereto, at the Closing Date there is no litigation, legal, administrative
or arbitral proceeding, investigation or other action of any nature pending or,
to the knowledge of the Borrower threatened against or affecting the Borrower or
any Subsidiary which can reasonably be expected to result in any judgment or
liability against the Borrower or any Subsidiary not fully covered by insurance
(except for normal deductibles) and which could reasonably be expected to have a
Material Adverse Effect.
Section 7.04 No Breach. Neither the execution and delivery of the Loan
Documents, nor compliance with the terms and provisions hereof will conflict
with or result in a breach of, or require any consent which has not been
obtained as of the Closing Date under, the respective charter or bylaws,
partnership agreement, operating agreement or other organizational documents, as
the case may be, of the Borrower or any Subsidiary, or, in any material respect,
any Governmental Requirement or any material agreement or instrument to which
the Borrower or any Subsidiary is a party or by which it is bound or to which it
or its Properties are subject, or constitute a default under any such agreement
or instrument, or result in the creation or imposition of any material Lien upon
any of the revenues or assets of the Borrower or any Subsidiary pursuant to the
terms of any such agreement or instrument other than the Liens created by the
Loan Documents.
Section 7.05 Authority. The Borrower and each Subsidiary have all necessary
power (corporate or otherwise) and authority to execute, deliver and perform its
obligations under the Loan Documents to which it is a party; and the execution,
delivery and performance by the Borrower and each Subsidiary of the Loan
Documents to which it is a party, have been duly authorized by all necessary
action (corporate or otherwise) on its part; and the Loan Documents constitute
the legal, valid and binding obligations of the Borrower and each Subsidiary,
enforceable in accordance with their terms.
Section 7.06 Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any Governmental Authority are necessary for the
execution, delivery or performance by the Borrower or any Subsidiary of the Loan
Documents or for the validity or enforceability thereof, except for the
recording and filing of the Loan Documents as required by this Agreement.
Section 7.07 Use of Proceeds. The proceeds of the Loans shall be used to
(i) refinance certain existing indebtedness of the Borrower, (ii) pay fees and
expenses incurred in connection with the transactions contemplated hereby, (iii)
provide working capital and general business purpose needs of the Borrower and
the Guarantors (other than the Parent), (iv) the funding of Qualified
Acquisition Expenditures, Expansion Expenditures, and Capital Expenditures
permitted hereunder, and (v) the funding of certain other expenditures approved
by the Administrative Agent from time to time. The Borrower is not engaged
principally, or as one of
SECOND LIEN CREDIT AGREEMENT-PAGE 37
its important activities, in the business of extending credit for the purpose,
whether immediate, incidental or ultimate, of buying or carrying margin stock
(within the meaning of Regulation T, U or X of the Board of Governors of the
Federal Reserve System) and no part of the proceeds of any Loan hereunder will
be used, directly or indirectly, to purchase or carry any margin stock.
Section 7.08 ERISA.
(a) The Borrower and each ERISA Affiliate have complied in all
material respects with ERISA and, where applicable, the Code regarding each
Plan.
(b) Each Plan and each Welfare Plan is, and has been, maintained in
substantial compliance with ERISA and, where applicable, the Code.
(c) No act, omission or transaction has occurred which could
reasonably be expected to result in imposition on the Borrower or any ERISA
Affiliate (whether directly or indirectly) of (i) either a civil penalty
assessed pursuant to Section 502(c), (i), (l) or (m) of ERISA or a tax imposed
pursuant to Chapter 43 of Subtitle D of the Code or (ii) breach of fiduciary
duty liability damages under Section 409 of ERISA.
(d) No Plan (other than a defined contribution plan) or any trust
created under any such Plan has been terminated within the preceding six
calendar years. No liability to the PBGC (other than for the payment of current
premiums which are not past due) by the Borrower or any ERISA Affiliate has been
or is expected by the Borrower or any ERISA Affiliate to be incurred with
respect to any Plan. No ERISA Event with respect to any Plan (other than a
Multiemployer Plan) has occurred.
(e) Full payment when due has been made of all amounts which the
Borrower or any ERISA Affiliate is required under the terms of each Plan and
each Welfare Plan or applicable law to have paid as contributions to such Plan
or Welfare Plan, and no accumulated funding deficiency (as defined in Section
302 of ERISA and Section 412 of the Code), whether or not waived, exists with
respect to any Plan.
(f) The actuarial present value of the benefit liabilities under each
Plan which is subject to Title IV of ERISA does not, as of the end of the
Borrower's most recently ended fiscal year, exceed the current value of the
assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities. The term "actuarial
present value of the benefit liabilities" shall have the meaning specified in
Section 4041 of ERISA.
(g) None of the Borrower or any ERISA Affiliate sponsors, maintains,
or contributes to an employee welfare benefit plan, as defined in Section 3(1)
of ERISA, including, without limitation, any such plan maintained to provide
benefits to former employees of such entities, that may not be terminated by the
Borrower or any ERISA Affiliate in its sole discretion at any time without any
liability that could reasonably be expected to have a Material Adverse Affect.
SECOND LIEN CREDIT AGREEMENT-PAGE 38
(h) None of the Borrower or any ERISA Affiliate sponsors, maintains or
contributes to, or has at any time in the preceding six calendar years,
sponsored, maintained or contributed to, any Multiemployer Plan.
(i) None of the Borrower or any ERISA Affiliate is required to provide
security under Section 401(a)(29) of the Code due to a Plan amendment that
results in an increase in current liabilities of the Plan.
Section 7.09 Taxes. Each of the Borrower and its Subsidiaries has filed or
obtained extensions for filing of all United States Federal income tax returns
and all other tax returns which are required to be filed by them and have paid
all material taxes shown to be due pursuant to such returns or pursuant to any
assessment received by the Borrower or any Subsidiary, except for any taxes
which are being contested in good faith by appropriate proceedings and for which
adequate reserves are being maintained in accordance with GAAP. The charges,
accruals and reserves on the books of the Borrower and its Subsidiaries in
respect of taxes and other governmental charges are, in the opinion of the
Borrower, adequate. No tax lien has been filed and, to the knowledge of the
Borrower, no claim is being asserted with respect to any such tax, fee or other
charge.
Section 7.10 Titles, etc. Except as set forth in Schedule 7.10:
(a) Each of the Borrower and its Subsidiaries has good and defensible
title to its material (individually or in the aggregate) Properties, free and
clear of all Liens, except Liens permitted by Section 9.02. Material Property
held by the Borrower or its Subsidiaries under leases or similar arrangements
are listed in item 2 of Schedule 7.10.
(b) All material leases and agreements necessary for the conduct of
the business of the Borrower and its Subsidiaries are valid and subsisting, in
full force and effect and there exists no default or event or circumstance which
with the giving of notice or the passage of time or both would give rise to a
default under any such lease or leases, which could reasonably be expected to
result in a Material Adverse Effect.
(c) The rights, Properties and other assets presently owned, leased or
licensed by the Borrower and its Subsidiaries including, without limitation, all
easements and rights of way, include all rights, Properties and other assets
necessary to permit the Borrower and its Subsidiaries to conduct their business
in all material respects in the same manner as its business has been conducted
prior to the Closing Date.
(d) All of the assets and Properties of the Borrower and its
Subsidiaries which are material to the operation of its business are in good
working condition, ordinary wear and tear excepted, and are maintained in
accordance with prudent business standards.
Section 7.11 No Material Misstatements. No written information, statement,
exhibit, certificate, document or report, taken as a whole, furnished to the
Administrative Agent and the Lenders (or any of them) by the Borrower or any
Subsidiary in connection with the negotiation of this Agreement contained any
material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statement contained therein not materially misleading in
the light of the circumstances in which made and with respect to the Borrower
and its Subsidiaries
SECOND LIEN CREDIT AGREEMENT-PAGE 39
taken as a whole. To the best knowledge of the Borrower after due inquiry, as of
the Closing Date there is no fact peculiar to the Borrower or any Subsidiary
which has a Material Adverse Effect or in the future is reasonably likely to
have (so far as the Borrower can now foresee) a Material Adverse Effect and
which has not been set forth in this Agreement or the other documents,
certificates and statements furnished to the Administrative Agent by or on
behalf of the Borrower or any Subsidiary prior to, or on, the Closing Date in
connection with the transactions contemplated hereby.
Section 7.12 Investment Company Act. Neither the 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.
Section 7.13 Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company," or a "public utility" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
Section 7.14 Subsidiaries. Except as set forth on Schedule 7.14, the
Borrower has no Subsidiaries.
Section 7.15 Location of Business and Offices. The Borrower's principal
place of business and chief executive offices are located at the address stated
on the signature page of this Agreement. As of the Closing Date, the principal
place of business and chief executive office of each Subsidiary are located at
the addresses stated on Schedule 7.14.
Section 7.16 Defaults. Neither the Borrower nor any Subsidiary is in
default nor has any event or circumstance occurred which, but for the expiration
of any applicable grace period or the giving of notice, or both, would
constitute a default under any material agreement or instrument to which the
Borrower or any Subsidiary is a party or by which the Borrower or any Subsidiary
is bound which default would have a Material Adverse Effect. No Default
hereunder has occurred and is continuing.
Section 7.17 Environmental Matters. Except as would not reasonably be
expected to have a Material Adverse Effect (or with respect to clauses (c) and
(d) below, where the failure to take such actions would not reasonably be
expected to have a Material Adverse Effect), to the best knowledge of the
Borrower, after due inquiry:
(a) Neither any Property of the Borrower or any Subsidiary nor the
operations conducted thereon violate any order or requirement of any court or
Governmental Authority or any Environmental Laws;
(b) Without limitation of clause (a) above, no Property of the
Borrower or any Subsidiary nor the operations currently conducted thereon or, to
the best knowledge of the Borrower, by any prior owner or operator of such
Property or operation, are in violation of or subject to any existing, pending
or threatened action, suit, investigation, inquiry or proceeding by or before
any court or Governmental Authority or to any remedial obligations under
Environmental Laws;
SECOND LIEN CREDIT AGREEMENT-PAGE 40
(c) All notices, permits, licenses or similar authorizations, if any,
required to be obtained or filed in connection with the operation or use of any
and all Property of the Borrower and each Subsidiary, including without
limitation past or present treatment, storage, disposal or release of a
hazardous substance or solid waste into the environment, are set forth on
Schedule 7.17 and have been duly obtained or filed, or to the extent not
obtained or filed, will be obtained or filed in the ordinary course of business,
and the Borrower and each Subsidiary are in compliance with the terms and
conditions of all such notices, permits, licenses and similar authorizations;
(d) All hazardous substances, solid waste, and oil and gas exploration
and production wastes, if any, generated at any and all Property of the Borrower
or any Subsidiary have in the past been transported, treated and disposed of in
accordance with Environmental Laws and so as not to pose an imminent and
substantial endangerment to public health or welfare or the environment, and, to
the best knowledge of the Borrower, all such transport carriers and treatment
and disposal facilities have been and are operating in compliance with
Environmental Laws and so as not to pose an imminent and substantial
endangerment to public health or welfare or the environment, and are not the
subject of any existing, pending or threatened action, investigation or inquiry
by any Governmental Authority in connection with any Environmental Laws;
(e) The Borrower has taken all steps reasonably necessary to determine
and based on such steps and due inquiry has no reason to believe that any
hazardous substances, solid waste, or oil and gas exploration and production
wastes, have been disposed of or otherwise released or that there has been any
threatened release of any hazardous substances on or to any Property of the
Borrower or any Subsidiary, in each case except in compliance with Environmental
Laws and so as not to pose an imminent and substantial endangerment to public
health or welfare or the environment;
(f) To the extent applicable, all Property of the Borrower and each
Subsidiary currently satisfies all design, operation, and equipment requirements
imposed by the Environmental Laws applicable to the Borrower and its
Subsidiaries during the term of this Agreement, and the Borrower does not have
any reason to believe that such Property, to the extent subject to Environmental
Laws, will not be able to maintain compliance with Environmental Laws
requirements during the term of this Agreement;
(g) Neither the Borrower nor any Subsidiary has any known contingent
liability in connection with any release or threatened release of any oil,
hazardous substance or solid waste into the environment; and
(h) (i) no portion of the real Property of the Borrower or any
Subsidiary has been used for the handling, processing, storage or disposal of
hazardous substances; and no underground tank or other underground storage
receptacle for hazardous substances is located on such Properties; (ii) in the
course of any activities conducted by the Borrower, or operators of such real
Property, no hazardous substances have been generated or are being used on such
Properties; (iii) there have been no unpermitted releases or threatened releases
of hazardous substances on, upon, into or from the real Property of the Borrower
or any Subsidiary; (iv) to the best of the Borrower's knowledge, there have been
no releases on, upon, from or into any real
SECOND LIEN CREDIT AGREEMENT-PAGE 41
property in the vicinity of such real Property, which, through soil or
groundwater contamination, may have come to be located on such Properties; and
(v) in addition, when required under applicable Environmental Laws, any
hazardous substances that have been generated on such real Property have been
transported offsite only by carriers having an identification number issued by
the EPA, treated or disposed of only by treatment or disposal facilities
maintaining valid permits as required under applicable Environmental Laws, which
transporters and facilities, to the best of the Borrower's knowledge, have been
and are operating in material compliance with such permits and applicable
Environmental Laws.
Section 7.18 Compliance with the Law. Neither the Borrower nor any
Subsidiary has violated any Governmental Requirement or failed to obtain any
license, permit, franchise or other governmental authorization necessary for the
ownership of any of its Properties or the conduct of its business, which
violation or failure could reasonably be expected to have (in the event such
violation or failure were asserted by any Person through appropriate action) a
Material Adverse Effect.
Section 7.19 Insurance. Schedule 7.19 attached hereto contains an accurate
and complete description of all material policies of fire, liability, workmen's
compensation and other forms of insurance owned or held by the Borrower and each
Subsidiary as of the Closing Date. As of such date, all such policies are in
full force and effect, all premiums with respect thereto covering all periods up
to and including the date of the closing have been paid, and no notice of
cancellation or termination has been received with respect to any such policy.
Such policies are sufficient for compliance with all requirements of law and of
all agreements to which the Borrower or any Subsidiary is a party; are valid,
outstanding and enforceable policies; provide adequate insurance coverage in at
least such amounts and against at least such risks (but including in any event
public liability) as are usually insured against in the same general area by
companies engaged in the same or a similar business for the assets and
operations of the Borrower and each Subsidiary; will remain in full force and
effect through the respective dates set forth in Schedule 7.19 without the
payment of additional premiums; and will not in any way be affected by, or
terminate or lapse by reason of, the transactions contemplated by this
Agreement. Schedule 7.19 identifies all material risks, if any, as to which the
Borrower and its Subsidiaries and their respective Board of Directors or
officers have designated themselves as being self insured as of the Closing
Date. Neither the Borrower nor any Subsidiary has been unable to obtain any
insurance with respect to its assets or operations, nor has its coverage been
limited below usual and customary policy limits, by an insurance carrier to
which it has applied for any such insurance or with which it has carried
insurance during the last three years.
Section 7.20 Restriction on Liens. Neither the Borrower nor any of its
Subsidiaries is a party to any agreement or arrangement (other than this
Agreement and the other Loan Documents, and any contracts or agreements in
respect of liens permitted under Section 9.02), or subject to any order,
judgment, writ or decree, which either restricts or purports to restrict its
ability to grant Liens to other Persons on or in respect of their respective
assets or Properties.
Section 7.21 Material Agreements. Set forth on Schedule 7.21 hereto is a
complete and correct list of all material agreements, indentures, purchase
agreements, obligations in respect of letters of credit, guarantees, joint
venture agreements, and other instruments in effect or to be in effect as of the
Closing Date providing for, evidencing, securing or otherwise relating to any
SECOND LIEN CREDIT AGREEMENT-PAGE 42
Debt of the Borrower or any of its Subsidiaries, and all material obligations of
the Borrower or any of its Subsidiaries to issuers of material surety or appeal
bonds issued for account of the Borrower or any such Subsidiary, and subject to
Schedule 7.21 such list correctly sets forth the names of the debtor and
creditor with respect to the Debt obligations outstanding or to be outstanding
and the Property subject to any Lien securing such Debt obligation. The Borrower
has heretofore delivered to the Administrative Agent and the Lenders a complete
and correct copy of all such material credit agreements, indentures, purchase
agreements, contracts, letters of credit, guarantees, joint venture agreements,
or other instruments, including any modifications or supplements thereto, as in
effect on the Closing Date.
Section 7.22 Transaction Parties. To the Borrower's actual knowledge
without investigation, no Transaction Party (as defined below) is (a) the
president, secretary, treasurer or any vice president in charge of a principal
business function of, any other person who performs similar policymaking
functions for, or director, or general partner in a known 5% Holder of ARCC or
(b) an Affiliate of a known 5% Holder of ARCC. For purposes of this Section
7.22, (i) "Transaction Party" means any Person (other than ARCC) who, in
connection with the transactions contemplated by this Agreement and the other
Loan Documents, (1) sells any securities or other property to ARCC, (2)
purchases any securities or other property from ARCC, (3) borrows money or other
property from ARCC or (4) is a joint or a joint and several participant with
ARCC, (ii) "5% Holder" means, with respect to any Person, any other Person
directly or indirectly owning, controlling or holding with power to vote, 5% or
more of the outstanding voting securities of such Person and (iii) "ARCC" means
Ares Capital Corporation.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that, so long as this Agreement is in
effect and until payment in full of all Obligations:
Section 8.01 Reporting Requirements. The Borrower shall deliver, or shall
cause to be delivered, to the Administrative Agent with sufficient copies of
each for the Lenders:
(a) Annual Financial Statements of WCA Corp. As soon as available and
in any event within 90 days after the end of each fiscal year of WCA Corp., the
audited consolidated statements of income, stockholders' equity, and cash flows
of WCA Corp. and its Consolidated Subsidiaries (including the Borrower) for such
fiscal year, and the related audited consolidated balance sheets of WCA Corp.
and its Consolidated Subsidiaries (including the Borrower) as at the end of such
fiscal year, and setting forth in each case in comparative form the
corresponding figures for the preceding fiscal year, and accompanied by the
related opinion of a Registered Public Accounting Firm of recognized national
standing acceptable to the Administrative Agent which opinion shall state that
said financial statements fairly present the consolidated financial condition
and results of operations of WCA Corp. and its Consolidated Subsidiaries
(including the Borrower) as at the end of, and for, such fiscal year and that
such financial statements have been prepared in accordance with GAAP, except for
such changes in such principles with which such Registered Public Accounting
Firm shall have concurred and such opinion shall not contain a "going concern"
or like qualification or exception or other
SECOND LIEN CREDIT AGREEMENT-PAGE 43
material exception, and a certificate of such Registered Public Accounting Firm
stating that, in making the examination necessary for their opinion, they
obtained no knowledge, except as specifically stated, of any Default.
(b) Annual Financial Statements of Borrower. If WCA Corp. has any
Subsidiary not a party to the Loan Documents, then, as soon as available and in
any event within 90 days after the end of each fiscal year of the Borrower,
unaudited consolidating, statements of income, stockholders equity, and cash
flows of the Borrower and its Consolidated Subsidiaries for such fiscal year,
and the related unaudited consolidating balance sheets of the Borrower and its
Consolidated Subsidiaries as at the end of such fiscal year, and setting forth
in each case in comparative form the corresponding figures for the preceding
fiscal year, and accompanied by the certificate of a Responsible Officer, which
certificate shall state that said financial statements fairly present the
consolidating financial condition and results of operations of the Borrower and
its Consolidated Subsidiaries as at the end of, and for, such fiscal year, and
that such financial statements have been prepared in accordance with GAAP.
(c) Quarterly Financial Statements. As soon as available and in any
event within 45 days after the end of each fiscal quarterly period of each
fiscal year of the Borrower, consolidated and consolidating statements of
income, retained earnings, and cash flows of the Borrower and its Consolidated
Subsidiaries for such period and for the period from the beginning of the
respective fiscal year to the end of such period, and the related consolidated
and consolidating balance sheets as at the end of such period, and setting forth
in each case in comparative form the corresponding figures for the corresponding
period in the preceding fiscal year, accompanied by the certificate of a
Responsible Officer, which certificate shall state that said financial
statements fairly present the consolidated and consolidating financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries in
accordance with GAAP, as at the end of, and for, such period (subject to normal
year-end audit adjustments).
(d) Annual Projections. As soon as available and in any event not
later than 60 days after the end of each fiscal year of the Borrower, beginning
with the fiscal year beginning January 1, 2006, an annual budget of the Borrower
and its Consolidated Subsidiaries for the succeeding fiscal year, setting forth
in reasonable detail, the projected revenues and expenses of the Borrower and
its Consolidated Subsidiaries, all in form satisfactory to the Lenders;
provided, however, that Borrower may include in any projections customary
explanations and disclaimers regarding any such projections, and provided
further, such projections are based on the good faith determinations of such
information believed by the Borrower to be reasonable at the time.
(e) Notice of Default, Etc. Promptly after the Borrower knows that any
Default or any Material Adverse Effect has occurred, a notice of such Default or
Material Adverse Effect, describing the same in reasonable detail and the action
the Borrower proposes to take with respect thereto.
(f) Other Accounting Reports. Promptly upon receipt thereof, a copy of
each management letter submitted to the Borrower or any Subsidiary by
independent accountants in connection with any annual audit made by them of the
books of the Borrower and its
SECOND LIEN CREDIT AGREEMENT-PAGE 44
Subsidiaries, and a copy of any response by the Borrower or any Subsidiary of
the Borrower, or the Board of Directors of the Borrower or any Subsidiary of the
Borrower, to such letter.
(g) SEC Filings, Etc. From and after such time, if any, as Borrower
files a registration statement with the SEC or otherwise becomes subject to
public company reporting obligations under the Securities Exchange Act of 1934,
as amended, promptly upon its becoming available, each financial statement,
report, notice or proxy statement sent by the Borrower to stockholders generally
and each regular or periodic report and any registration statement, prospectus
or written communication (other than transmittal letters) in respect thereof
filed by the Borrower with or received by the Borrower in connection therewith
from any securities exchange or the SEC, including without limitation, annual
airspace estimates; provided, however, that the requirement to deliver the
Borrower's quarterly reports (Form 10-Q) and annual reports (Form 10-K) to be
filed with the SEC may be satisfied by notifying the Administrative Agent and
the Lenders that (i) such documents have been posted on the Borrower's website
on the Internet at the website address listed on Schedule 7.14 or (ii) a link
thereto can be found on the aforementioned website address and further provided
that paper copies will be provided upon request of the Administrative Agent.
(h) Notices Under Other Loan Agreements. Concurrent with the
furnishing thereof, copies of any statement or notice furnished to any Person
relating to any default or event of default or the waiver thereof under any
other indenture, loan or credit or other similar agreement.
(i) Acquisition Target Financial Statements. In connection with the
acquisition of either a controlling interest in a Person or a controlling
interest in all or substantially all of a Person's assets, Borrower shall
provide Administrative Agent with current financial information and the
Borrower's financial and operational analysis regarding the Person and the
Person's assets as Lenders shall request. Prior to delivery of such Person's
information to the Administrative Agent, the Administrative Agent shall agree in
writing to keep all such information confidential on the same terms as agreed to
between the Borrower and such Person.
(j) Other Matters. From time to time such other information regarding
the business, affairs or financial condition of the Borrower or any Subsidiary
(including, without limitation, any Plan or Multiemployer Plan and any reports
or other information required to be filed under ERISA) as any Lender or the
Administrative Agent may reasonably request.
The Borrower will furnish to the Administrative Agent, at the time it furnishes
each set of financial statements pursuant to clause (a) or (b) above, a
Compliance Certificate executed by a Responsible Officer on behalf of the
Borrower (i) certifying as to the matters set forth therein and stating that no
Default has occurred and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail), and (ii) setting forth in
reasonable detail the computations necessary to determine whether the Borrower
is in compliance with Sections 9.12, 9.13, 9.14, 9.15, 9.16 and 9.17 as of the
end of the most recently completed fiscal quarter or fiscal year.
Section 8.02 Litigation. The Borrower shall promptly give to the
Administrative Agent notice of: (a) all legal or arbitral proceedings, and of
all proceedings before any Governmental
SECOND LIEN CREDIT AGREEMENT-PAGE 45
Authority materially affecting the Borrower or any Subsidiary, except
proceedings in respect of operating permits that are a normal part of Borrower's
and its Subsidiaries' business, and (b) any litigation or proceeding against or
adversely affecting the Borrower or any Subsidiary in which the amount involved
is not covered in full by insurance (subject to normal and customary deductibles
and for which the insurer has not assumed the defense), or in which injunctive
or similar relief is sought, except in each case proceedings or other matters
which would not reasonably be expected to have a Material Adverse Effect,
provided, however Borrower need not give notice of any proceedings as to which
it is not a party and that affects the Borrower's and its Subsidiaries' industry
generally. The Borrower will, and will cause each of its Subsidiaries to,
promptly notify the Administrative Agent and each of the Lenders of any claim
not fully covered by insurance (subject to normal deductibles), judgment, Lien
or other encumbrance resulting from any litigation or other proceeding and
affecting any Property of the Borrower or any Subsidiary (other than Liens
permitted under Section 9.02) if the value of such claim, judgment, Lien, or
other encumbrance affecting such Property shall exceed $500,000.
Section 8.03 Maintenance, Etc.
(a) Generally. The Borrower shall and shall cause each Subsidiary to:
(except for mergers of Subsidiaries permitted under Section 9.08 and Transfers
permitted under Section 9.17) preserve and maintain its corporate existence and
all of its material rights, permits, licenses, privileges and franchises
necessary or desirable in the normal conduct of its business, except to the
extent that failure to do so could not reasonably be expected to have a Material
Adverse Effect; keep books of record and account in which full, true and correct
entries will be made of all dealings or transactions in relation to its business
and activities; comply with all Governmental Requirements if failure to comply
with such requirements is reasonably expected to have a Material Adverse Effect;
file all federal income tax returns and pay all amounts shown thereon to be due,
and pay and discharge all other material taxes, assessments and governmental
charges or levies imposed on it or on its income or profits or on any of its
Property prior to the date on which penalties attach thereto, except for any
such tax, assessment, charge or levy the payment of which is being contested in
good faith and by proper proceedings and against which adequate reserves are
being maintained; upon reasonable notice and under conditions that do not
unreasonably interfere with the Borrower's or any Subsidiaries' business, permit
representatives of the Administrative Agent or any Lender, during normal
business hours, to examine, copy and make extracts from its books and records,
to inspect its Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by such Lender or the
Administrative Agent (as the case may be); and keep, or cause to be kept,
insured by financially sound and reputable insurers all Property of a character
usually insured by Persons engaged in the same or similar business similarly
situated against loss or damage of the kinds and otherwise as customarily
insured against by such Persons and carry such other insurance as is usually
carried by such Persons including, without limitation, environmental risk
insurance to the extent reasonably available. The Borrower shall promptly obtain
endorsements to such casualty insurance policies naming "Xxxxx Fargo Bank,
National Association, as Administrative Agent for the Secured Parties" as joint
loss payee and containing provisions that such policies will not be canceled
without 30 days prior written notice having been given by the insurance company
to the Administrative Agent. The proceeds received under any casualty insurance
policy shall be used for restoration, repair or replacement of the damaged
Property; provided, however, if (i) an Event of Default exists, (ii) the
insurance proceeds are not used by the Borrower or its Subsidiary for
SECOND LIEN CREDIT AGREEMENT-PAGE 46
restoration, repair or replacement of the damaged Property or (iii) upon
completion of such restoration, repair or replacement, there remains any portion
of the insurance proceeds, such proceeds shall be paid to the Administrative
Agent to apply to the payment of the Obligations in the manner set forth in
Section 10.02(c).
(b) Proof of Insurance. Contemporaneously with the delivery of the
financial statements required by Section 8.01(a) to be delivered for each year,
the Borrower will furnish or cause to be furnished to the Administrative Agent a
sufficient number of copies for each Lender of certificate of insurance coverage
from the insurer in form and substance satisfactory to the Administrative Agent
and, if requested, will furnish the Administrative Agent and the Lenders copies
of the applicable policies.
(c) Operation of Properties. The Borrower will and will cause each
Subsidiary to operate its Properties or cause such Properties to be operated in
accordance with the usual and customary practices of the industry and in
compliance in all material respects with all applicable contracts and agreements
and all Governmental Requirements.
Section 8.04 Environmental Matters.
(a) Establishment of Procedures. The Borrower will and will cause each
Subsidiary to establish and implement such procedures as may be reasonably
necessary to continuously determine and assure that any failure of the following
does not have a Material Adverse Effect: (i) all Property of the Borrower and
its Subsidiaries and the operations conducted thereon and other activities of
the Borrower and its Subsidiaries are in compliance with and do not violate the
requirements of any Environmental Laws, (ii) no oil, hazardous substances or
solid wastes are disposed of or otherwise released on or to any Property owned
by any such party except in compliance with Environmental Laws, (iii) no
hazardous substance will be released on or to any such Property in a quantity
equal to or exceeding that quantity which requires reporting pursuant to Section
103 of CERCLA, and (iv) no oil, oil and gas exploration and production wastes or
hazardous substance is released on or to any such Property so as to pose an
imminent and substantial endangerment to public health or welfare or the
environment.
(b) Notice of Action. The Borrower will promptly notify the
Administrative Agent and the Lenders in writing of any threatened action,
investigation or inquiry by any Governmental Authority of which the Borrower has
knowledge in connection with any Environmental Laws, excluding action in respect
of permit applications in the ordinary course of business and routine testing
and corrective action.
(c) Future Acquisitions. The Borrower will and will cause each
Subsidiary to provide environmental audits and tests as are usual and customary
to be obtained for Properties of similar use and purpose as reasonably requested
by the Administrative Agent and the Required Second Lien Lenders (or as
otherwise required to be obtained by the Administrative Agent or the Required
Second Lien Lenders by any Governmental Authority) in connection with any future
acquisitions of real Properties.
Section 8.05 Further Assurances. Upon the request of the Administrative
Agent, the Borrower will and will cause each Subsidiary to cure promptly any
defects in the creation and
SECOND LIEN CREDIT AGREEMENT-PAGE 47
issuance of the Obligations and the execution and delivery of the Loan Documents
and this Agreement. The Borrower at its expense will and will cause each
Subsidiary to promptly execute and deliver to the Administrative Agent upon
reasonable request all such other documents, agreements and instruments to
comply with the covenants and agreements of the Borrower or any Subsidiary, as
the case may be, in the Loan Documents and this Agreement, or to further
evidence and more fully describe the collateral intended as security for the
Obligations, or to correct any omissions in the Loan Documents, or to state more
fully the security obligations set out herein or in any of the Loan Documents,
or to perfect, protect or preserve any Liens created pursuant to any of the Loan
Documents, or to make any recordings, to file any notices or obtain any
consents, all as may be necessary or appropriate in connection therewith.
Section 8.06 Performance of Obligations. The Borrower will pay the
Obligations according to the reading, tenor and effect thereof; and the Borrower
will and will cause each Subsidiary to do and perform every act and discharge
all of the obligations to be performed and discharged by them under the Loan
Documents and this Agreement, at the time or times and in the manner specified.
Section 8.07 ERISA Information and Compliance. The Borrower will furnish
and will cause any ERISA Affiliate to furnish to the Administrative Agent with
sufficient copies to the Lenders (i) promptly and in any event within 30 days
after the receipt thereof by the Borrower or any ERISA Affiliate, a copy of the
annual actuarial report for each Plan the funded current liability percentage
(as defined in Section 302(d)(8) of ERISA) of which is less than 90% or the
unfunded current liability of which exceeds $1,000,000, (ii) immediately upon
becoming aware of the occurrence of any ERISA Event or of any "prohibited
transaction," as described in Section 406 of ERISA or in Section 4975 of the
Code, in connection with any Plan or any trust created thereunder, a written
notice signed by a Responsible Officer specifying the nature thereof, what
action the Borrower or the ERISA Affiliate is taking or proposes to take with
respect thereto, and, when known, any action taken or proposed by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto, and
(iii) immediately upon receipt thereof, copies of any notice of the PBGC's
intention to terminate or to have a trustee appointed to administer any Plan.
With respect to each Plan (other than a Multiemployer Plan), the Borrower will,
and will cause each ERISA Affiliate to, (i) satisfy in full and in a timely
manner, without incurring any late payment or underpayment charge or penalty and
without giving rise to any lien, all of the contribution and funding
requirements of Section 412 of the Code (determined without regard to
subsections (d), (e), (f) and (k) thereof) and of section 302 of ERISA
(determined without regard to sections 303, 304 and 306 of ERISA), and (ii) pay,
or cause to be paid, to the PBGC in a timely manner, without incurring any late
payment or underpayment charge or penalty, all premiums required pursuant to
sections 4006 and 4007 of ERISA.
Section 8.08 Subsidiary Guarantors. The Borrower will, and will cause each
Subsidiary to, execute and deliver such further agreements and instruments and
take such further action as may be reasonably requested by the Administrative
Agent to carry out the provisions and purposes of this Agreement and the other
Loan Documents. Without limiting the foregoing, upon the creation or acquisition
of any Subsidiary, the Borrower shall (a) provide written notice of such event
to the Administrative Agent within five Business Days following the date the
Borrower has knowledge thereof, and (b) cause each such Subsidiary to execute
and deliver a Guaranty Agreement (or written joinder to existing Guaranty
Agreements), other Loan
SECOND LIEN CREDIT AGREEMENT-PAGE 48
Documents and such other documents required by this Agreement, each in form and
substance satisfactory to the Administrative Agent, within 30 calendar days
following the date the Borrower has knowledge thereof. If any Subsidiary is
created or acquired after the date hereof, the Borrower shall execute and
deliver to the Administrative Agent (i) an amendment to this Agreement to amend
Schedule 7.14 (which only needs the signature of the Administrative Agent to be
effective if the only change is the addition of the new Subsidiary) and (ii) any
other documents, instruments, or agreements required by the Administrative
Agent. This Section 8.08 shall not be construed as permitting the creation or
acquisition of any Subsidiary not otherwise permitted by Section 9.20.
ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as this Agreement is in
effect and until payment in full of the Obligations:
Section 9.01 Debt. Neither the Borrower nor any Subsidiary will incur,
create, assume or permit to exist any Debt, except:
(a) The Loans or other Obligations or any guaranty of or suretyship
arrangement for the Loans or other Obligations;
(b) Debt of the Borrower or any Subsidiary existing on the Closing
Date which is reflected in the Financial Statements or is disclosed in Schedule
9.01, and any renewals or extensions (but not increases) thereof;
(c) accounts payable (for the deferred purchase price of Property or
services) from time to time incurred in the ordinary course of business which,
if greater than 90 days past the invoice or billing date, are being contested in
good faith by appropriate proceedings if reserves adequate under GAAP shall have
been established therefor;
(d) (i) capital leases, (ii) Equipment Leases, and (iii) purchase
money Debt which in each purchase money Debt case shall not exceed 100% of the
lesser of the total purchase price and the fair market value of the Property
acquired as determined at the time of acquisition, provided all Debt incurred
pursuant to this clause (d) shall not exceed $18,000,000 per fiscal year;
(e) Subordinated Debt so long as the Borrower has delivered a
Compliance Certificate concurrently with the issuance thereof demonstrating pro
forma compliance with Article IX;
(f) prepayments for services rendered in the ordinary course of
business provided that no default exists in delivery of the service for which
any such prepayments were made.
(g) Debt between and among the Borrower and/or any Guarantors (other
than the Parent);
SECOND LIEN CREDIT AGREEMENT-PAGE 49
(h) surety bonds and similar instruments of the nature and for the
purposes described in Schedule 7.02, item 1;
(i) obligations of Waste Corporation Texas under the Installment Sale
Agreement and the documents related thereto;
(j) Debt incurred in connection with the First Lien Financing; and
(k) so long as no Default has occurred and continuing, unsecured
earn-out obligations of the Borrower or any Guarantor payable to a seller and
incurred in connection with a Qualified Acquisition Expenditure.
Section 9.02 Liens. Neither the Borrower nor any Subsidiary will create,
incur, assume or permit to exist any Lien on any of its Properties (now owned or
hereafter acquired), except:
(a) Liens securing the payment of any Obligations;
(b) Excepted Liens;
(c) Liens disclosed on Schedule 9.02 and not otherwise permitted in
this Section 9.02;
(d) Liens securing Debt permitted under Section 9.01(d), but only on
the Property that is the subject of or acquired with such Debt;
(e) Liens in respect of operating leases that do not constitute Debt
and that are otherwise permitted under Section 9.07; and
(f) Liens securing the payment of the First Lien Financing.
Section 9.03 Investments. Neither the Borrower nor any Subsidiary will
make, hold or permit to remain outstanding any Investments in any Person, except
that the foregoing restriction shall not apply to:
(a) Investments reflected in the Financial Statements or which are
disclosed to the Lenders in Schedule 9.03;
(b) accounts receivable arising in the ordinary course of business or
notes or other obligations or Property received in settlement thereof;
(c) direct obligations of the United States or any agency thereof, or
obligations guaranteed by the United States or any agency thereof, in each case
maturing within one year from the date of creation thereof;
(d) commercial paper maturing within one year from the date of
creation thereof rated in the highest grade by Standard & Poor's, a division of
The XxXxxx-Xxxx Companies, Inc. or Xxxxx'x Investors Service, Inc.;
SECOND LIEN CREDIT AGREEMENT-PAGE 50
(e) deposits maturing within one year from the date of creation
thereof with, including certificates of deposit issued by, any Lender or any
office located in the United States of any other bank or trust company which is
organized under the laws of the United States or any state thereof, has capital,
surplus and undivided profits aggregating at least $500,000,000 (as of the date
of such Lender's or bank or trust company's most recent financial reports) and
has a short term deposit rating of no lower than A2 or P2, as such rating is set
forth from time to time, by Standard & Poor's, a division of The XxXxxx-Xxxx
Companies, Inc. or Xxxxx'x Investors Service, Inc., respectively;
(f) deposits in money market funds investing substantially in
investments described in Section 9.03(c), 9.03(d) or 9.03(e);
(g) Investments made by the Borrower in or to the Guarantors (other
than the Parent); and
(h) Qualified Acquisition Expenditures and Expansion Expenditures.
Section 9.04 Dividends, Distributions and Redemptions; Etc. The Borrower
will not declare or pay any dividend, purchase, redeem or otherwise acquire for
value any of its Equity Interests now or hereafter outstanding, return any
capital to its stockholders or make any distribution of its assets to its
stockholders; provided however, the Parent and the Borrower may make Qualified
Dividends so long as no Event of Default has occurred and is continuing or would
exist after giving effect to the payment of such Qualified Dividend (including
without limitation, no Default would exist under Sections 9.12 through and
including 9.16 after giving effect to the payment of such Qualified Dividend).
The Borrower will not make any investments in, or make any loans or advances to,
the Parent.
Section 9.05 Sales and Leasebacks. Neither the Borrower nor any Subsidiary
will enter into any arrangement, directly or indirectly, with any Person whereby
the Borrower or any Subsidiary shall sell or transfer any of its Property,
whether now owned or hereafter acquired, and whereby the Borrower or any
Subsidiary shall then or thereafter rent or lease as lessee such Property or any
part thereof or other Property which the Borrower or any Subsidiary intends to
use for substantially the same purpose or purposes as the Property sold or
transferred.
Section 9.06 Nature of Business; Amendments of Constitutive Documents.
Neither the Borrower nor any Subsidiary will allow (a) any material change to be
made in the character of its business as an operator of non-hazardous solid
waste collection, recycling, transfer and disposal services or (b) any
amendments to their respective constitutive documents in any manner adverse to
the Lenders.
Section 9.07 Limitation on Leases. Neither the Borrower nor any Subsidiary
will create, incur, assume or permit to exist any obligation for the payment of
rent or hire of Property of any kind whatsoever (real or personal including
operating or capital leases), under leases or lease agreements except for leases
(a) in the ordinary course of business and which do not constitute Debt and (b)
permitted under Section 9.01(d) hereof.
Section 9.08 Mergers, Etc. Except as permitted by Section 9.20, neither the
Borrower nor any Subsidiary will merge into or with or consolidate with any
other Person, or sell, lease or
SECOND LIEN CREDIT AGREEMENT-PAGE 51
otherwise dispose of (whether in one transaction or in a series of transactions)
all or substantially all of its Property or assets to any other Person;
provided, however, so long as no Default exists or would result therefrom, (a)
any Subsidiary may merge into or transfer its assets to another Subsidiary that
is a party to the Loan Documents or into the Borrower, and (b) the Borrower or a
Subsidiary may transfer the stock of a Subsidiary to a Guarantor; and provided
further, that the sale and repurchase of any Property contemplated by Waste
Corporation Texas pursuant to the Installment Sale Agreement shall be permitted
hereunder.
Section 9.09 Proceeds of Loans. The Borrower will not permit the proceeds
of the Loans to be used for any purpose other than those permitted by Section
7.07. Neither the Borrower nor any Person acting on behalf of the Borrower has
taken or will take any action which might cause any of the Loan Documents to
violate Regulation T, U or X or any other regulation of the Board of Governors
of the Federal Reserve System or to violate Section 8 of the Securities Exchange
Act of 1934 or any rule or regulation thereunder, in each case as now in effect
or as the same may hereinafter be in effect.
Section 9.10 ERISA Compliance. The Borrower will not at any time:
(a) Engage in, or permit any ERISA Affiliate to engage in, any
transaction in connection with which the Borrower or any ERISA Affiliate could
be subjected to either a civil penalty assessed pursuant to Section 502(c), (i),
(l) or (m) of ERISA or a tax imposed by Chapter 43 of Subtitle D of the Code;
(b) Terminate, or permit any ERISA Affiliate to terminate, any Plan in
a manner, or take any other action with respect to any Plan, which could result
in any liability to the Borrower or any ERISA Affiliate to the PBGC;
(c) Fail to make, or permit any ERISA Affiliate to fail to make, full
payment when due of all amounts which, under the provisions of any Plan,
agreement relating thereto or applicable law, the Borrower or any ERISA
Affiliate is required to pay as contributions thereto;
(d) Permit to exist, or allow any ERISA Affiliate to permit to exist,
any accumulated funding deficiency within the meaning of Section 302 of ERISA or
Section 412 of the Code, whether or not waived, with respect to any Plan;
(e) Voluntarily permit, or allow any ERISA Affiliate to permit, the
actuarial present value of the benefit liabilities under any Plan maintained by
the Borrower or any ERISA Affiliate which is regulated under Title IV of ERISA
to exceed the current value of the assets (computed on a plan termination basis
in accordance with Title IV of ERISA) of such Plan allocable to such benefit
liabilities. The term "actuarial present value of the benefit liabilities" shall
have the meaning specified in Section 4041 of ERISA;
(f) Contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any Multiemployer Plan;
(g) Acquire, or permit any ERISA Affiliate to acquire, an interest in
any Person that causes such Person to become an ERISA Affiliate with respect to
the Borrower or
SECOND LIEN CREDIT AGREEMENT-PAGE 52
any ERISA Affiliate if such Person sponsors, maintains or contributes to, or at
any time in the six-year period preceding such acquisition has sponsored,
maintained, or contributed to, (i) any Multiemployer Plan, or (ii) any other
Plan that is subject to Title IV of ERISA under which the actuarial present
value of the benefit liabilities under such Plan exceeds the current value of
the assets (computed on a plan termination basis in accordance with Title IV of
ERISA) of such Plan allocable to such benefit liabilities;
(h) Incur, or permit any ERISA Affiliate to incur, a liability to or
on account of a Plan under sections 515, 4062, 4063, 4064, 4069, 4201 or 4204 of
ERISA;
(i) Contribute to or assume an obligation to contribute to, or permit
any ERISA Affiliate to contribute to or assume an obligation to contribute to,
any employee welfare benefit plan, as defined in section 3(1) of ERISA,
including, without limitation, any such plan maintained to provide benefits to
former employees of such entities, that may not be terminated by such entities
in their sole discretion at any time without any liability that could reasonably
be expected to have a Material Adverse Affect; or
(j) Amend or permit any ERISA Affiliate to amend, a Plan resulting in
an increase in current liability such that the Borrower or any ERISA Affiliate
is required to provide security to such Plan under Section 401(a)(29) of the
Code.
Section 9.11 Sale or Discount of Receivables. Neither the Borrower nor any
Subsidiary will discount or sell (with or without recourse) any of its notes
receivable or accounts receivable (excluding any discounts of gate rates
provided in the ordinary course of business and settlement of past due amounts
in the ordinary course of business and in accordance with prudent commercial
practice).
Section 9.12 Leverage Ratio. The Borrower will not permit the Leverage
Ratio at any time (calculated quarterly at the end of each fiscal quarter) to be
greater than (a) 5.25 to 1.00 for the period beginning as of the Closing Date
through and including March 31, 2007 and (b) thereafter, 5.00 to 1.00.
Section 9.13 Net Worth. The Borrower will not permit its Net Worth at any
time (calculated quarterly at the end of each fiscal quarter) to be less than
70% of its Net Worth on June 30, 2004 (for the avoidance of doubt, Borrower's
Net Worth on June 30, 2004 is $67,770,000.00), plus 50% of the sum of the
Borrower's after-tax Consolidated Net Income for each fiscal quarter for which
Consolidated Net Income is greater than $0 beginning with the fiscal quarter
ending June 30, 2004, plus 100% of the increase to Net Worth resulting from the
net cash proceeds from the equity offerings after June 23, 2004.
Section 9.14 Combined Secured Debt Leverage Ratio. The Borrower will not
permit the Combined Secured Debt Leverage Ratio at any time (calculated at the
end of each fiscal quarter) to be greater than the ratio corresponding to the
applicable period set forth below:
SECOND LIEN CREDIT AGREEMENT-PAGE 53
FISCAL QUARTER ENDING: RATIO:
---------------------- ------
Closing Date through and including March 31,
2007 5.25 to 1.00
June 30, 2007 through and including
September 30, 2007 5.00 to 1.00
December 31, 2007 through and including
March 31, 2008 4.75 to 1.00
June 30, 2008 through and including
September 30, 2008 4.50 to 1.00
At all times thereafter 4.25 to 1.00
Section 9.15 Adjusted EBIT Debt Service Ratio. The Borrower will not permit
the Adjusted EBIT Debt Service Ratio at any time (calculated quarterly at the
end of each fiscal quarter) to be less than the ratio corresponding to the
applicable period set forth below:
FISCAL QUARTER ENDING: RATIO:
---------------------- ------
Closing Date through and including September
30, 2007 1.00 to 1.00
At all times thereafter 1.25 to 1.00
Section 9.16 Capital Expenditures. The Borrower will not, and will not
permit any Subsidiary to make any Capital Expenditures except Capital
Expenditures made in the ordinary course of business, Expansion Expenditures and
Qualified Acquisition Expenditures.
Section 9.17 Sale of Properties. The Borrower will not, and will not permit
any Subsidiary to, sell, assign, convey or otherwise transfer any Property or
any interest in any Property (a "Transfer"), except for (i) any Transfers in the
ordinary course of business to the extent that within 180 days of such Transfer,
either (a) such Property is exchanged for credit against the purchase price of
similar replacement Property or (b) the proceeds of such Transfer are applied to
the purchase price of such replacement Property; (ii) intercompany Transfers
between and among Borrower and its Subsidiaries; (iii) other sales of Property
(other than Transfers described in clause (iv)) where the aggregate sales price
therefor does not exceed $5,000,000 in the aggregate in any fiscal year; (iv)
Transfers of Non-Core Assets to the extent the aggregate sales price therefor
does not exceed $1,000,000 in the aggregate at any time beginning on the Closing
Date. Each Transfer shall be for fair value.
Section 9.18 Environmental Matters. Neither the Borrower nor any Subsidiary
will cause or permit any of its Property to be in violation of, or do anything
or permit anything to be done which will subject any such Property to any
remedial obligations under any Environmental Laws, assuming disclosure to the
applicable Governmental Authority of all relevant facts, conditions and
circumstances, if any, pertaining to such Property, in each case where such
violations or remedial obligations could reasonably be expected to have a
Material Adverse Effect.
Section 9.19 Transactions with Affiliates. Except as permitted by Section
9.08, neither the Borrower nor any Subsidiary will enter into any transaction,
including, without limitation, any purchase, sale, lease or exchange of Property
or the rendering of any service, with any Affiliate unless such transactions are
otherwise permitted under this Agreement, are in the
SECOND LIEN CREDIT AGREEMENT-PAGE 54
ordinary course of its business and are upon fair and reasonable terms no less
favorable to it than it would obtain in a comparable arm's length transaction
with a Person not an Affiliate; provided, however, that the Borrower and its
Subsidiaries may provide general and administrative services to its Affiliates
and to Waste Corporation and any of its Subsidiaries, with or without
reimbursement or compensation, all pursuant to service agreements in form and
substance reasonably satisfactory to the Administrative Agent, and that nothing
set forth in this Agreement shall prohibit Borrower and its Subsidiaries from
paying their proportionate share of any liabilities of the consolidated group of
which they are a member that are imposed by any Governmental Requirement.
Section 9.20 Subsidiaries. The Borrower shall not, and shall not permit any
Subsidiary to, create any additional Subsidiaries unless (a) such Subsidiaries
either acquire some or all of the assets (whether through merger, contribution
or otherwise) of the Borrower or other Subsidiaries as part of a corporate
restructuring or reorganization, are used to effect an acquisition as permitted
by this Agreement, or are created to provide services or functions, or hold
assets of the type now performed, furnished or used by the Borrower and its
Subsidiaries and (b) the Borrower and its Subsidiaries have complied with
Section 8.08. The Borrower shall not and shall not permit any Subsidiary to sell
or to issue any stock or ownership interest of a Subsidiary, except to the
Borrower or a Guarantor and except in compliance with Section 9.03 or Section
9.08.
Section 9.21 Negative Pledge Agreements. Neither the Borrower nor any
Subsidiary will create, incur, assume or permit to exist any contract, agreement
or understanding (other than this Agreement, the other Loan Documents and any
agreement creating the Liens allowed under Sections 9.02(d), (e) and (f)) which
in any way prohibits or restricts the granting, conveying, creation or
imposition of any Lien on any of its Property or restricts any Subsidiary from
paying dividends to the Borrower, or which requires the consent of or notice to
other Persons in connection therewith.
Section 9.22 Prepayments of Debt; Amendment of Documents. Neither the
Borrower nor any Subsidiary will (a) prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Debt other than (i)
to prepay any Debt payable to the Borrower, (ii) the prepayment of the Loans (as
such term is defined in the First Lien Credit Agreement) in accordance with the
terms of the First Lien Credit Agreement and (iii) to prepay the Loans so long
as all outstanding amounts under the First Lien Financing have been repaid in
full in cash, all outstanding letters of credit thereunder have been cash
collateralized and all outstanding commitments thereunder have been terminated,
or (b) amend, supplement or otherwise modify the terms of any of the
Subordinated Debt or any of the documents evidencing such Subordinated Debt.
ARTICLE X
EVENTS OF DEFAULT; REMEDIES
Section 10.01 Events of Default. One or more of the following events shall
constitute an "Event of Default":
SECOND LIEN CREDIT AGREEMENT-PAGE 55
(a) the Borrower shall default in the payment or prepayment when due
of any principal of or interest on any Loan or any fees or other amount payable
by it hereunder, or any Guarantor shall default in the payment of any guaranty
obligation, and such default, other than a default of a payment or prepayment of
principal, interest, any reimbursement obligation, or guaranty obligation (each
of which shall have no cure period), shall continue unremedied for a period of
five Business Days; or
(b) the Borrower or any Subsidiary shall default in the payment when
due of any principal of or interest on any of its other Debt aggregating
$600,000 or more, or any event specified in any note, agreement, indenture or
other document evidencing or relating to any such Debt shall occur if the effect
of such event is to cause, or (with the giving of any notice or the lapse of
time or both) to permit the holder or holders of such Debt (or a trustee or
agent on behalf of such holder or holders) to cause, such Debt to become due
prior to its stated maturity; or
(c) any representation, warranty or certification made or deemed made
herein or in any Loan Document by the Borrower or any Subsidiary, or any
certificate furnished to any Lender or the Administrative Agent pursuant to the
provisions hereof or any Loan Document, shall prove to have been false or
misleading as of the time made or furnished in any material respect; or
(d) the Borrower shall default in the performance of any of its
obligations under Article IX (other than Sections 9.10 and 9.18) or Section
8.01(e); or the Borrower shall default in the performance of any of its
obligations under Section 8.01(a), 8.01(b), 8.01(c) or 8.01(d) or delivery of
any Compliance Certificate and such default shall continue unremedied for a
period of five days after the earlier to occur of (i) notice thereof to the
Borrower by the Administrative Agent or any Lender (through the Administrative
Agent) or (ii) the Borrower otherwise becoming aware of such default; or the
Borrower shall default in the performance of any of its obligations under
Section 9.10 or 9.18 and such default shall continue unremedied for a period of
10 days after the earlier to occur of (i) notice thereof to the Borrower by the
Administrative Agent or any Lender (through the Administrative Agent) or (ii)
the Borrower otherwise becoming aware of such default; or the Borrower shall
default in the performance of any of its obligations under Article VIII (other
than Section 8.01(a), 8.01(b), 8.01(c) or 8.01(d) or to deliver Compliance
Certificates), any other Article of this Agreement other than Article IX, or any
other Loan Documents to which it is a party (other than the payment of amounts
due which shall be governed by Section 10.01(a)) and such default shall continue
unremedied for a period of 30 days after the earlier to occur of (i) notice
thereof to the Borrower by the Administrative Agent or any Lender (through the
Administrative Agent) or (ii) the Borrower otherwise becoming aware of such
default; or a Guarantor shall default in the performance of any of its
obligations under any Loan Document to which it is a party (other than the
payment of amounts due which shall be governed by Section 10.01(a)) and such
default shall continue unremedied for a period of 30 days after the earlier to
occur of (i) notice thereof to the Borrower by the Administrative Agent or any
Lender (through the Administrative Agent), or (ii) the Borrower or such
Guarantor otherwise becoming aware of such default; or
(e) the Borrower shall admit in writing its inability to, or be
generally unable to, pay its debts as such debts become due; or
SECOND LIEN CREDIT AGREEMENT-PAGE 56
(f) the Borrower shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
itself or of all or a substantial part of its property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a voluntary case
under the Federal Bankruptcy Code (as now or hereafter in effect), (iv) file a
petition seeking to take advantage of any other law relating to bankruptcy,
insolvency, reorganization, winding-up, liquidation or composition or
readjustment of debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against it in an
involuntary case under the Federal Bankruptcy Code, or (vi) take any corporate
action for the purpose of effecting any of the foregoing; or
(g) a proceeding or case shall be commenced, without the application
or consent of the Borrower, in any court of competent jurisdiction, seeking (i)
its liquidation, reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a trustee, receiver,
custodian, liquidator or the like of the Borrower of all or any substantial part
of its assets, or (iii) similar relief in respect of the Borrower under any law
relating to bankruptcy, insolvency, reorganization, winding-up, or composition
or adjustment of debts, and such proceeding or case shall continue undismissed,
or an order, judgment or decree approving or ordering any of the foregoing shall
be entered and continue unstayed and in effect, for a period of 60 days; or (iv)
an order for relief against the Borrower shall be entered in an involuntary case
under the Federal Bankruptcy Code; or
(h) a judgment or judgments for the payment of money in excess of
$2,400,000 in the aggregate shall be rendered by a court against the Borrower or
any Subsidiary and the same shall not be discharged (or provision shall not be
made for such discharge), or a stay of execution thereof shall not be procured,
within 30 days from the date of entry thereof and the Borrower or such
Subsidiary shall not, within said period of 30 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom and
cause the execution thereof to be stayed during such appeal; or
(i) the Loan Documents shall for any reason, except to the extent
permitted by the terms thereof, cease to be in full force and effect and valid,
binding and enforceable in accordance with their terms, or the Loan Documents
after delivery thereof cease to create a valid and perfected Lien of the
priority required thereby on any material portion of the collateral purported to
be covered thereby, except to the extent permitted by the terms of this
Agreement, or the Borrower shall so state in writing; or
(j) a Material Adverse Effect shall have occurred; or
(k) any Guarantor takes, suffers or permits to exist any of the events
or conditions referred to in clauses (e), (f), (g) or (h) or if any provision of
any guaranty agreement related thereto shall, in any material respect, for any
reason cease to be valid and binding on such Guarantor or if such Guarantor
shall so state in writing; or
(l) a Change of Control shall occur; or
(m) an Event of Default (as defined in the First Lien Credit
Agreement) shall have occurred.
SECOND LIEN CREDIT AGREEMENT-PAGE 57
Section 10.02 Remedies.
(a) In the case of an Event of Default other than one referred to in
clauses (e), (f), (g) or (l) of Section 10.01, the Administrative Agent, upon
request of the Required Second Lien Lenders, shall, by notice to the Borrower,
cancel the Commitments (in whole or part) and/or declare the principal amount
then outstanding of, and the accrued interest on, the Loans and all other
amounts payable by the Borrower hereunder and under the Obligations to be
forthwith due and payable, whereupon such amounts shall be immediately due and
payable without presentment, demand, protest, notice of intent to accelerate,
notice of acceleration or other formalities of any kind, all of which are hereby
expressly waived by the Borrower.
(b) In the case of the occurrence of an Event of Default referred to
in clauses (e), (f), (g) or (l) of Section 10.01, the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Borrower hereunder and under the Obligations shall become
automatically immediately due and payable without presentment, demand, protest,
notice of intent to accelerate, notice of acceleration or other formalities of
any kind, all of which are hereby expressly waived by the Borrower.
(c) All proceeds received after maturity of the Loans, whether by
acceleration or otherwise shall be applied first to reimbursement of expenses
and indemnities provided for in this Agreement and the other Loan Documents;
second to accrued interest on the Obligations; third to fees; fourth pro rata to
principal outstanding on the Loans and other Obligations; and any excess shall
be paid to the Borrower or as otherwise required by any Governmental
Requirement.
ARTICLE XI
THE AGENTS
Section 11.01 Appointment and Authority. Each of the Lenders hereby
irrevocably appoints Xxxxx Fargo to act on its behalf as the Administrative
Agent and the Collateral Agent hereunder and under the other Loan Documents and
authorizes the Agents to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto. The provisions of this Article are solely for the benefit of the
Administrative Agent and the Lenders and neither the Borrower nor any Guarantor
shall have rights as a third party beneficiary of any of such provisions.
Section 11.02 Rights as a Lender. The Person serving as the Administrative
Agent hereunder shall have the same rights and powers in its capacity as a
Lender as any other Lender and may exercise the same as though it were not the
Administrative Agent and the term "Lender" or "Lenders" shall, unless otherwise
expressly indicated or unless the context otherwise requires, include the Person
serving as the Administrative Agent hereunder in its individual capacity. Such
Person and its Affiliates may accept deposits from, lend money to, act as the
financial advisor or in any other advisory capacity for and generally engage in
any kind of business with the Borrower or any Subsidiary or other Affiliate
thereof as if such Person were not the Administrative Agent hereunder and
without any duty to account therefor to the Lenders.
SECOND LIEN CREDIT AGREEMENT-PAGE 58
Section 11.03 Exculpatory Provisions. No Agent shall have any duties or
obligations except those expressly set forth herein and in the other Loan
Documents. Without limiting the generality of the foregoing, each Agent:
(a) shall not be subject to any fiduciary or other implied duties,
regardless of whether a Default has occurred and is continuing;
(b) shall not have any duty to take any discretionary action or
exercise any discretionary powers, except discretionary rights and powers
expressly contemplated hereby or by the other Loan Documents that such Agent is
required to exercise as directed in writing by the Required Second Lien Lenders
(or such other number or percentage of the Lenders as shall be expressly
provided for herein or in the other Loan Documents), but shall be required to
act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the written instructions of the Required Second
Lien Lenders, and such instructions shall be binding upon all Lenders, provided
that no Agent shall be required to take any action that, in its opinion or the
opinion of its counsel, may expose such Agent to liability or that is contrary
to any Loan Document or applicable law; and
(c) shall not, except as expressly set forth herein and in the other
Loan Documents, have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to the Borrower or any of its
Affiliates that is communicated to or obtained by the Person serving as an Agent
or any of its Affiliates in any capacity.
No Agent shall be liable for any action taken or not taken by it (i) with the
consent or at the request of the Required Second Lien Lenders (or such other
number or percentage of the Lenders as shall be necessary, or as such Agent
shall believe in good faith shall be necessary, under the circumstances as
provided in Sections 10.02 and 12.04) or (ii) in the absence of its own gross
negligence or willful misconduct. No Agent shall be deemed to have knowledge of
any Default unless and until notice describing such Default is given to such
Agent by the Borrower or a Lender.
No Agent shall be responsible for or have any duty to ascertain or inquire
into (i) any statement, warranty or representation made in or in connection with
this Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein
or the occurrence of any Default, (iv) the validity, enforceability,
effectiveness or genuineness of this Agreement, any other Loan Document or any
other agreement, instrument or document or (v) the satisfaction of any condition
set forth in Article VI or elsewhere herein, other than to confirm receipt of
items expressly required to be delivered to such Agent.
Section 11.04 Reliance by any Agent. Each Agent shall be entitled to rely
upon, and shall not incur any liability for relying upon, any notice, request,
certificate, consent, statement, instrument, document or other writing
(including any electronic message, Internet or intranet website posting or other
distribution) believed by it to be genuine and to have been signed, sent or
otherwise authenticated by the proper Person. Each Agent also may rely upon any
statement made to it orally or by telephone and believed by it to have been made
by the proper Person, and
SECOND LIEN CREDIT AGREEMENT-PAGE 59
shall not incur any liability for relying thereon. In determining compliance
with any condition hereunder to the making of a Loan that by its terms must be
fulfilled to the satisfaction of a Lender, each Agent may presume that such
condition is satisfactory to such Lender unless such Agent shall have received
notice to the contrary from such Lender prior to the making of such Loan. Each
Agent may consult with legal counsel (who may be counsel for the Borrower),
independent accountants and other experts selected by it, and shall not be
liable for any action taken or not taken by it in accordance with the advice of
any such counsel, accountants or experts.
Section 11.05 Delegation of Duties. Each Agent may perform any and all of
its duties and exercise its rights and powers hereunder or under any other Loan
Document by or through any one or more sub agents appointed by such Agent. Each
Agent and any such sub agent may perform any and all of its duties and exercise
its rights and powers by or through their respective Related Parties. The
exculpatory provisions of this Article shall apply to any such sub agent and to
the Related Parties of any Agent and any such sub agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as an Agent.
Section 11.06 Resignation of an Agent. An Agent may at any time give notice
of its resignation to the Lenders and the Borrower. Upon receipt of any such
notice of resignation, the Required Second Lien Lenders shall have the right, in
consultation with the Borrower, to appoint a successor, which shall be a bank
with an office in the United States of America, or an Affiliate of any such bank
with an office in the United States of America. If no such successor shall have
been so appointed by the Required Second Lien Lenders and shall have accepted
such appointment within 30 days after the retiring Agent gives notice of its
resignation, then the retiring Agent may on behalf of the Lenders appoint a
successor Agent meeting the qualifications set forth above provided that if such
Agent shall notify the Borrower and the Lenders that no qualifying Person has
accepted such appointment, then such resignation shall nonetheless become
effective in accordance with such notice and (1) the retiring Agent shall be
discharged from its duties and obligations hereunder and under the other Loan
Documents (except that in the case of any collateral security held by the
Collateral Agent on behalf of the Lenders under any of the Loan Documents, the
retiring Collateral Agent shall continue to hold such collateral security until
such time as a successor Collateral Agent is appointed) and (2) all payments,
communications and determinations provided to be made by, to or through such
Agent shall instead be made by or to each Lender directly, until such time as
the Required Second Lien Lenders appoint a successor Agent as provided for above
in this paragraph. Upon the acceptance of a successor's appointment as such
Agent hereunder, such successor shall succeed to and become vested with all of
the rights, powers, privileges and duties of the retiring (or retired) Agent,
and the retiring Agent shall be discharged from all of its duties and
obligations hereunder or under the other Loan Documents (if not already
discharged therefrom as provided above in this paragraph). The fees payable by
the Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the retiring Agent's resignation hereunder and under the other Loan
Documents, the provisions of this Article and Section 12.03 shall continue in
effect for the benefit of such retiring Agent, its sub agents and their
respective Related Parties in respect of any actions taken or omitted to be
taken by any of them while the retiring Agent was acting as Agent.
SECOND LIEN CREDIT AGREEMENT-PAGE 60
Section 11.07 Non-Reliance on Agents and Other Lenders. Each Lender
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender or any of their Related Parties and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon any Agent or any other Lender or
any of their Related Parties and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking action under or based upon this Agreement, any other Loan
Document or any related agreement or any document furnished hereunder or
thereunder.
Section 11.08 [Intentionally Omitted.]
Section 11.09 Collateral and Guaranty Matters. The Lenders irrevocably
authorize the Collateral Agent, at its option and in its discretion:
(a) to release any Lien on any Property granted to or held by the
Collateral Agent under any Loan Document (i) upon termination of the Commitments
and payment in full of all Obligations (other than contingent indemnification
obligations), (ii) that is sold or to be sold as part of or in connection with
any sale permitted hereunder or under any other Loan Document, or (iii) subject
to Section 12.04, if approved, authorized or ratified in writing by the Required
Second Lien Lenders; and
(b) to release any Guarantor from its obligations under the Guaranty
Agreement if such Person ceases to be a Subsidiary as a result of a transaction
permitted hereunder.
Upon request by the Collateral Agent at any time, the Required Second Lien
Lenders will confirm in writing the Collateral Agent's authority to release its
interest in particular types or items of property, or to release any Guarantor
from its obligations under the Guaranty Agreement pursuant to this Section
11.09.
Section 11.10 Intercreditor Agreement. Each Lender hereby authorizes the
Agents to execute the Intercreditor Agreement and hereby agrees to be bound by
the Intercreditor Agreement as if it were a party thereto. No Lender may assign
any of its rights or obligations under this Agreement to any other Person unless
such other Person shall have agreed in writing to be bound by the terms of the
Intercreditor Agreement as if such Person were a party thereto.
Section 11.11 Indemnification. Each of the Lenders and the Agents
(collectively, the "Lender Parties" and individually, a "Lender Party")
severally agrees to indemnify each Agent (to the extent not promptly reimbursed
by the Borrowers) from and against such Lender Party's ratable share (determined
as provided below) of any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind or nature whatsoever that may be imposed on, incurred by, or asserted
against such Agent in any way relating to or arising out of the Loan Documents
or any action taken or omitted by such Agent under the Loan Documents
(collectively, the "Indemnified Costs"); provided, however, that no Lender Party
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from
SECOND LIEN CREDIT AGREEMENT-PAGE 61
such Agent's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, reasonable fees and expenses of counsel) payable by the Borrowers
under Section 12.03, to the extent that such Agent is not promptly reimbursed
for such costs and expenses by the Borrowers. In the case of any investigation,
litigation or proceeding giving rise to any Indemnified Costs, this Section
11.11 applies whether any such investigation, litigation or proceeding is
brought by any Lender Party or any other Person.
ARTICLE XII
MISCELLANEOUS
Section 12.01 Waiver. No failure on the part of any Agent or any Lender to
exercise and no delay in exercising, and no course of dealing with respect to,
any right, power or privilege under any of the Loan Documents shall operate as a
waiver thereof, nor shall any single or partial exercise of any right, power or
privilege under any of the Loan Documents preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The remedies
provided herein are cumulative and not exclusive of any remedies provided by
law.
Section 12.02 Notices.
(a) Notices Generally. Except in the case of notices and other
communications expressly permitted to be given by telephone (and except as
provided in clause (b) below), all notices and other communications provided for
herein shall be in writing and shall be delivered by hand or overnight courier
service, mailed by certified or registered mail or sent by telecopier as
follows:
(i) if to the Borrower or any Guarantor, to it at the address
specified below the Borrower's name on the signature pages hereof;
(ii) if to an Agent, to it at the address specified below its
name on the signature page hereof; and
(iii) if to a Lender, to it at its address (or telecopier number)
set forth in its Administrative Questionnaire.
Notices sent by hand or overnight courier service, or mailed by certified or
registered mail, shall be deemed to have been given when received; notices sent
by telecopier shall be deemed to have been given when sent (except that, if not
given during normal business hours for the recipient, shall be deemed to have
been given at the opening of business on the next business day for the
recipient). Notices delivered through electronic communications to the extent
provided in clause (b) below, shall be effective as provided in said clause (b).
(b) Electronic Communications. (i) Notices and other communications to
the Lenders hereunder may be delivered or furnished by electronic communication
(including e-mail and Internet or intranet websites) pursuant to procedures
approved by the Administrative Agent, provided that the foregoing shall not
apply to notices to any Lender pursuant to Article II if such
SECOND LIEN CREDIT AGREEMENT-PAGE 62
Lender has notified the Administrative Agent that it is incapable of receiving
notices under such Article by electronic communication. The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be
limited to particular notices or communications.
(ii) Unless the Administrative Agent otherwise prescribes, (A)
notices and other communications sent to an e-mail address shall be deemed
received upon the sender's receipt of an acknowledgement from the intended
recipient (such as by the "return receipt requested" function, as available,
return e-mail or other written acknowledgement), provided that if such notice or
other communication is not sent during the normal business hours of the
recipient, such notice or communication shall be deemed to have been sent at the
opening of business on the next business day for the recipient, and (B) notices
or communications posted to an Internet or intranet website shall be deemed
received upon the deemed receipt by the intended recipient at its e-mail address
as described in the foregoing clause (A) of notification that such notice or
communication is available and identifying the website address therefor.
(iii) The Borrower agrees that any Agent may make any material
delivered by the Borrower to such Agent, as well as any amendments, waivers,
consents, and other written information, documents, instruments and other
materials relating to the Parent, the Borrower, any of its Subsidiaries, or any
other materials or matters relating to this Agreement, the other Loan Documents
or any of the transactions contemplated hereby (collectively, the
"Communications") available to the Lenders by posting such notices on an
electronic delivery system (which may be provided by an Agent, an Affiliate of
an Agent, or any Person that is not an Affiliate of an Agent), such as
IntraLinks, or a substantially similar electronic system (the "Platform"). The
Borrower acknowledges that (A) the distribution of material through an
electronic medium is not necessarily secure and that there are confidentiality
and other risks associated with such distribution, (B) the Platform is provided
"as is" and "as available" and (C) neither any Agent nor any of its Affiliates
warrants the accuracy, completeness, timeliness, sufficiency, or sequencing of
the Communications posted on the Platform. Each Agent and its Affiliates
expressly disclaim with respect to the Platform any liability for errors in
transmission, incorrect or incomplete downloading, delays in posting or
delivery, or problems accessing the Communications posted on the Platform and
any liability for any losses, costs, expenses or liabilities that may be
suffered or incurred in connection with the Platform. No warranty of any kind,
express, implied or statutory, including, without limitation, any warranty of
merchantability, fitness for a particular purpose, non-infringement of third
party rights or freedom from viruses or other code defects, is made by any Agent
or any of its Affiliates in connection with the Platform.
(iv) Each Lender agrees that notice to it specifying that any
Communication has been posted to the Platform shall for purposes of this
Agreement constitute effective delivery to such Lender of such information,
documents or other materials comprising such Communication. Each Lender agrees
(A) to notify, on or before the date such Lender becomes a party to this
Agreement, each Agent in writing of such Lender's e-mail address to which a
notice may be sent (and from time to time thereafter to ensure that each Agent
has on record an effective e-mail address for such Lender) and (B) that any
notice may be sent to such e-mail address.
SECOND LIEN CREDIT AGREEMENT-PAGE 63
(c) Change of Address, Etc. Any party hereto may change its address or
telecopier number for notices and other communications hereunder by notice to
the other parties hereto.
Section 12.03 Payment of Expenses, Indemnities, etc.
(a) The Borrower agrees:
(i) whether or not the transactions hereby contemplated are
consummated, to pay all reasonable expenses of each Agent in the administration
(both before and after the execution hereof and including reasonable fees and
related expenses for advice of counsel for each Agent as to the rights and
duties of the Agents and the Lenders with respect thereto) of, and in connection
with the negotiation, syndication, investigation, preparation, execution and
delivery of, recording or filing of, preservation of rights under, enforcement
of, and refinancing, renegotiation or restructuring of, the Loan Documents and
any amendment, waiver or consent relating thereto (including, without
limitation, travel, photocopy, mailing, courier, telephone and other similar
expenses of the Agents, the cost of environmental audits (including those
conducted in connection with the First Lien Financing) not to exceed $50,000 per
fiscal year unless any audit discloses environmental problems that in any
Agent's reasonable determination requires additional study, in which case the
$50,000 cap shall not apply, surveys and appraisals at reasonable intervals, the
reasonable fees and disbursements of counsel and other outside consultants for
any Agent and, in the case of workout or enforcement after an Event of Default,
the reasonable fees and disbursements of counsel for any Agent and any of the
Lenders); and promptly reimburse each Agent for all amounts expended, advanced
or incurred by the Agents or the Lenders to satisfy any obligation of the
Borrower under this Agreement or any other Loan Document, including without
limitation, all costs and expenses of foreclosure;
(ii) to indemnify each Agent and each Lender and each of their
Affiliates and each of their Related Parties ("Indemnified Parties") from, hold
each of them harmless against and promptly upon demand pay or reimburse each of
them for, the Indemnity Matters which may be incurred by or asserted against or
involve any of them (whether or not any of them is designated a party thereto)
as a result of, arising out of or in any way related to (i) any actual or
proposed use by the Borrower of the proceeds of any of the Loans, (ii) the
execution, delivery and performance of the Loan Documents, (iii) the operations
of the business of the Borrower and its Subsidiaries, (iv) the failure of the
Borrower or any Subsidiary to comply with the terms of any Loan Document or this
Agreement, or with any Governmental Requirement, (v) any inaccuracy of any
representation or any breach of any warranty of the Borrower or any Guarantor
set forth in any of the Loan Documents, (vi) any assertion that the Lenders were
not entitled to receive the proceeds received pursuant to the Loan Documents or
(vii) any other aspect of the Loan Documents, including, without limitation, the
reasonable fees and disbursements of counsel and all other reasonable expenses
incurred in connection with investigating, defending or preparing to defend any
such action, suit, proceeding (including any investigations, litigation or
inquiries) or claim and including all Indemnity Matters arising by reason of the
ordinary negligence of any Indemnified Party, but excluding all Indemnity
Matters arising solely by reason of claims between the Lenders or any Lender and
any Agent or a Lender's shareholders against an Agent or Lender or by reason of
the gross negligence or willful misconduct on the part of any Indemnified Party;
and
SECOND LIEN CREDIT AGREEMENT-PAGE 64
(iii) to indemnify and hold harmless from time to time the
Indemnified Parties from and against any and all losses, claims, cost recovery
actions, administrative orders or proceedings, damages and liabilities to which
any such Person may become subject (i) under any Environmental Law applicable to
the Borrower or any Subsidiary or any of their Properties, including without
limitation, the treatment or disposal of hazardous substances on any of their
Properties, (ii) as a result of the breach or non-compliance by the Borrower or
any Subsidiary with any Environmental Law applicable to the Borrower or any
Subsidiary, (iii) due to past ownership by the Borrower or any Subsidiary of any
of their Properties or past activity on any of their Properties which, though
lawful and fully permissible at the time, could result in present liability,
(iv) the presence, use, release, storage, treatment or disposal of hazardous
substances on or at any of the Properties owned or operated by the Borrower or
any Subsidiary, or (v) any other environmental, health or safety condition in
connection with the Loan Documents; provided, however, no indemnity or hold
harmless protection shall be afforded under this Section 12.03(a)(iii) in
respect of any Property for any occurrence arising from the acts or omissions of
any Agent or any Lender during the period after which such Person, its
successors or assigns shall have obtained possession of such Property (whether
by foreclosure or deed in lieu of foreclosure, as mortgagee-in-possession or
otherwise).
(b) No Indemnified Party may settle any claim to be indemnified
without the consent of the indemnitor, such consent not to be unreasonably
withheld; provided, that the indemnitor may not reasonably withhold consent to
any settlement that an Indemnified Party proposes, if the indemnitor does not
have the financial ability to pay all its obligations outstanding and asserted
against the indemnitor at that time, including the maximum potential claims
against the Indemnified Party to be indemnified pursuant to this Section 12.03.
(c) In the case of any indemnification hereunder, any Agent or Lender,
as appropriate shall give notice to the Borrower of any such claim or demand
being made against the Indemnified Party and the Borrower shall have the
non-exclusive right to join in the defense against any such claim or demand
provided that if the Borrower provides a defense, the Indemnified Party shall
bear its own cost of defense unless there is a conflict between the Borrower and
such Indemnified Party.
(d) Except as expressly provided in the proviso to Section
12.03(a)(iii) above, the foregoing indemnities shall extend to the Indemnified
Parties notwithstanding the sole or concurrent negligence of every kind or
character whatsoever, whether active or passive, whether an affirmative act or
an omission, including without limitation, all types of negligent conduct
identified in the restatement (second) of torts of one or more of the
Indemnified Parties or by reason of strict liability imposed without fault on
any one or more of the Indemnified Parties. To the extent that an Indemnified
Party is found to have committed an act of gross negligence or willful
misconduct, this contractual obligation of indemnification shall continue but
shall only extend to the portion of the claim that is deemed to have occurred by
reason of events other than the gross negligence or willful misconduct of the
Indemnified Party.
(e) The Borrower's obligations under this Section 12.03 shall survive
any termination of this Agreement and the payment of the Obligations and shall
continue thereafter in full force and effect.
SECOND LIEN CREDIT AGREEMENT-PAGE 65
(f) The Borrower shall pay any amounts due under this Section 12.03
within 30 days of the receipt by the Borrower of notice of the amount due.
Section 12.04 Amendments, Etc. No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by any
of the Borrower or any Guarantor therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Second Lien
Lenders, the Borrower, the Guarantors (if applicable) and the Agents, and then
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given; provided, however, that (a) no amendment,
waiver or consent shall, unless in writing and signed by all of the Lenders, do
any of the following at any time: (i) waive any of the conditions specified in
Section 6.01, (ii) change the number of Lenders or the percentage of (y) the
Commitment or (z) the aggregate unpaid principal amount of the Loans, (iii)
release all or substantially all of the Borrower's liabilities with respect to
the Obligations owing to the Agents and the Lenders or release any Guarantor
from its obligations under the Guaranty Agreement (except in connection with a
transaction permitted by Section 9.17), (iv) release all or a material portion
of the collateral in any transaction or series of related transactions, (v)
amend Section 4.05 or this Section 12.04 or the definition of "Required Second
Lien Lenders" or (vi) limit the liability of the Borrower or any Guarantor under
any of the Loan Documents and (b) no amendment, waiver or consent shall, unless
in writing and signed by the Required Second Lien Lenders and each Lender
directly affected by such amendment, waiver or consent, (i) increase the
Commitments of such Lender, (ii) reduce or forgive the principal of, or interest
on, any Loan made by such Lender or any fees or other amounts payable hereunder
to such Lender, or (iii) other than Section 2.06, postpone any date (including
the Termination Date) fixed for any payment of principal of, or interest on, any
Loan made by such Lender or any fees or other amounts payable hereunder to such
Lender; provided further that no amendment, waiver or consent shall, unless in
writing and signed by the respective Agent in addition to the Lenders required
above to take such action, affect the rights or duties of such Agent under this
Agreement or the other Loan Documents.
Section 12.05 Successors and Assigns.
(a) Successors and Assigns Generally. The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of the Administrative Agent and each Lender
and no Lender may assign or otherwise transfer any of its rights or obligations
hereunder except (i) to an Eligible Assignee in accordance with the provisions
of clause (b) of this Section, (ii) by way of participation in accordance with
the provisions of clause (d) of this Section or (iii) by way of pledge or
assignment of a security interest subject to the restrictions of clause (f) of
this Section (and any other attempted assignment or transfer by any party hereto
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby, Participants to the extent
provided in clause (d) of this Section and, to the extent expressly contemplated
hereby, the Related Parties of each of the Administrative Agent and the Lenders)
any legal or equitable right, remedy or claim under or by reason of this
Agreement.
SECOND LIEN CREDIT AGREEMENT-PAGE 66
(b) Assignments by Lenders. Any Lender may at any time assign to one
or more Eligible Assignees all or a portion of its rights and obligations under
this Agreement (including all or a portion of its Commitment and the Loans at
the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining
amount of the assigning Lender's Commitment and the Loans at the time owing to
it or in the case of an assignment to a Lender or an Affiliate of a Lender or an
Approved Fund with respect to a Lender, the aggregate amount of the Commitment
(which for this purpose includes Loans outstanding thereunder) or, if the
applicable Commitment is not then in effect, the principal outstanding balance
of the Loans of the assigning Lender subject to each such assignment (determined
as of the date the Assignment and Assumption substantially in the form of
Exhibit C attached hereto (the "Assignment") with respect to such assignment is
delivered to the Administrative Agent or, if "Trade Date" is specified in the
Assignment, as of the Trade Date) shall not be less than $1,000,000, unless each
of the Administrative Agent and, so long as no Default has occurred and is
continuing, the Borrower otherwise consent (each such consent not to be
unreasonably withheld or delayed);
(ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations under
this Agreement with respect to the Loan or the Commitment assigned, except that
this clause (ii) shall not prohibit any Lender from assigning all or a portion
of its rights and obligations among separate tranches on a non-pro rata basis;
(iii) any assignment of a Commitment must be approved by the
Administrative Agent unless the Person that is the proposed assignee is itself a
Lender with a Commitment (whether or not the proposed assignee would otherwise
qualify as an Eligible Assignee); and
(iv) the parties to each assignment shall execute and deliver to
the Administrative Agent an Assignment, together with a processing and
recordation fee of $3,500, and the Eligible Assignee, if it shall not be a
Lender, shall deliver to the Administrative Agent an Administrative
Questionnaire; provided however, that no such processing and recordation fee
described in this clause (iv) shall be due if the Eligible Assignee is either an
Affiliate of the assigning Lender or is a Lender prior to such assignment.
Subject to acceptance and recording thereof by the Administrative Agent pursuant
to clause (c) of this Section, from and after the effective date specified in
each Assignment, the Eligible Assignee thereunder shall be a party to this
Agreement and, to the extent of the interest assigned by such Assignment, have
the rights and obligations of a Lender under this Agreement, and the assigning
Lender thereunder shall, to the extent of the interest assigned by such
Assignment, be released from its obligations under this Agreement (and, in the
case of an Assignment covering all of the assigning Lender's rights and
obligations under this Agreement, such Lender shall cease to be a party hereto)
but shall continue to be entitled to the benefits of Article V and Section 12.03
with respect to facts and circumstances occurring prior to the effective date of
such assignment. Any assignment or transfer by a Lender of rights or obligations
under this Agreement that does not comply with this paragraph shall be treated
for purposes of this
SECOND LIEN CREDIT AGREEMENT-PAGE 67
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with clause (d) of this Section.
(c) Register. The Administrative Agent, acting solely for this purpose
as an agent of the Borrower, shall maintain at one of its offices in Denver,
Colorado a copy of each Assignment delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitments of,
and principal amounts of the Loans owing to, each Lender pursuant to the terms
hereof from time to time (the "Register"). The entries in the Register shall be
conclusive, and the Borrower, the Administrative Agent and the Lenders may treat
each Person whose name is recorded in the Register pursuant to the terms hereof
as a Lender hereunder for all purposes of this Agreement, notwithstanding notice
to the contrary.
(d) Participations. Any Lender may at any time, without the consent
of, or notice to, the Borrower or the Administrative Agent, sell participations
to any Person (other than a natural person or the Borrower or any of the
Borrower's Affiliates or Subsidiaries ) (each, a "Participant") in all or a
portion of such Lender's rights and/or obligations under this Agreement
(including all or a portion of its Commitment and/or the Loans owing to it);
provided that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other parties
hereto for the performance of such obligations and (iii) the Borrower, the
Administrative Agent and the Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement.
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any provision of this Agreement; provided that such agreement or instrument may
provide that such Lender will not, without the consent of the Participant, agree
to any amendment, modification or waiver with respect to the following:
extending the final maturity of the Loans, forgives the principal amount of any
Loans outstanding under this Agreement, releases any guarantor of the
Obligations or releases all or substantially all of the collateral, or reduces
the interest rate applicable to the Loans or the fees payable to the Lenders
generally, described in Section 12.04(i) that affects such Participant. Subject
to clause (e) of this Section, the Borrower agrees that each Participant shall
be entitled to the benefits of Article V to the same extent as if it were a
Lender and had acquired its interest by assignment pursuant to clause (b) of
this Section. To the extent permitted by law, each Participant also shall be
entitled to the benefits of Section 12.13 as though it were a Lender, provided
such Participant agrees to be subject to Section 4.05 as though it were a
Lender.
(e) Limitations upon Participant Rights. A Participant shall not be
entitled to receive any greater payment under Section 5.01 and 5.02 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 5.02 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 5.02(e) as though it were a
Lender.
SECOND LIEN CREDIT AGREEMENT-PAGE 68
(f) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from any of its obligations hereunder or
substitute any such pledgee or assignee for such Lender as a party hereto.
(g) Dissenting Lenders. In the event that the Borrower shall request
that the Lender Parties enter into any amendment, modification, consent or
waiver with respect to this Agreement or any other Loan Document, and any Lender
Party elects not to enter into such amendment, modification, consent or waiver
(each such Lender Party being a "Dissenting Lender"), then the Borrower shall
have the right upon 10 days' written notice to the Administrative Agent and such
Dissenting Lender, to require (so long as the Administrative Agent consents
thereto) each such Dissenting Lender to assign 100% of the rights and
obligations of the Dissenting Lender at par to any Lender Party or any other
financial institution which satisfies the requirements of Section 12.05(b) and
has been consented to by the Administrative Agent. Each such assignment shall be
made pursuant to an Assignment and shall comply with the other terms of this
Section 12.05. The Borrower shall pay, and/or cause such relevant assignee to
pay, to such Dissenting Lender, concurrently with the effectiveness of each such
assignment, any amounts payable under this Agreement that would have been
payable if the Borrower had voluntarily prepaid such Loans. The Dissenting
Lender shall not be required to pay any fee relating to such assignment.
Section 12.06 Invalidity. In the event that any one or more of the
provisions contained in any of the Loan Documents shall, for any reason, be held
invalid, illegal or unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provision of this Agreement or any
other Loan Document.
Section 12.07 Counterparts, etc.
(a) Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts (and by different parties hereto in different
counterparts), each of which shall constitute an original, but all of which when
taken together shall constitute a single contract. This Agreement and the other
Loan Documents, and any separate letter agreements with respect to fees payable
to the Administrative Agent, constitute the entire contract among the parties
relating to the subject matter hereof and supersede any and all previous
agreements and understandings, oral or written, relating to the subject matter
hereof. Except as provided in Section 6.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof that, when
taken together, bear the signatures of each of the other parties hereto.
Delivery of an executed counterpart of a signature page of this Agreement by
telecopy shall be effective as delivery of a manually executed counterpart of
this Agreement.
(b) Electronic Execution of Assignments. The words "execution,"
"signed," "signature," and words of like import in any Assignment shall be
deemed to include electronic signatures or the keeping of records in electronic
form, each of which shall be of the same legal effect, validity or
enforceability as a manually executed signature or the use of a paper-based
recordkeeping system, as the case may be, to the extent and as provided for in
any applicable
SECOND LIEN CREDIT AGREEMENT-PAGE 69
law, including the Federal Electronic Signatures in Global and National Commerce
Act, the New York State Electronic Signatures and Records Act, or any other
similar state laws based on the Uniform Electronic Transactions Act.
Section 12.08 Survival. The obligations of the parties under Article V and
Section 12.03 shall survive the repayment of the Loans. To the extent that any
payments on the Obligations or proceeds of any collateral are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, debtor in possession, receiver or other Person under any
bankruptcy law, common law or equitable cause, then to such extent, the
Obligations so satisfied shall be revived and continue as if such payment or
proceeds had not been received and the Agents' and the Lenders' Liens, security
interests, rights, powers and remedies under this Agreement and each other Loan
Document effective immediately prior thereto shall continue in full force and
effect. In such event, each such Loan Document shall be automatically reinstated
and the Borrower shall take such action as may be reasonably requested by the
Agents and the Lenders to effect such reinstatement.
Section 12.09 Captions. Captions and section headings appearing herein are
included solely for convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
Section 12.10 Governing Law; Submission to Jurisdiction.
(a) Governing Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York.
(b) Submission to Jurisdiction. The Borrower irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the courts of the State of New York or Federal Court of the
United States of America sitting in the Borough of Manhattan, New York City, and
any appellate court from any thereof, in any action or proceeding arising out of
or relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State court or, to the
fullest extent permitted by applicable law, in such Federal court. Each of the
parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement or in
any other Loan Document shall affect any right that any Agent or any Lender may
otherwise have to bring any action or proceeding relating to this Agreement or
any other Loan Document against the Borrower or its properties in the courts of
any jurisdiction.
(c) Waiver of Venue. The Borrower irrevocably and unconditionally
waives, to the fullest extent permitted by applicable law, any objection that it
may now or hereafter have to the laying of venue of any action or proceeding
arising out of or relating to this Agreement or any other Loan Document in any
court referred to in clause (b) of this Section. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by applicable law,
the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
SECOND LIEN CREDIT AGREEMENT-PAGE 70
(d) Service of Process. Each party hereto irrevocably consents to
service of process in the manner provided for notices in Section 12.02. Nothing
in this Agreement will affect the right of any party hereto to serve process in
any other manner permitted by applicable law.
Section 12.11 Interest Rate Limitation. Notwithstanding anything herein to
the contrary, if at any time the interest rate applicable to any Loan, together
with all fees, charges and other amounts which are treated as interest on such
Loan under applicable law (collectively the "Charges"), shall exceed the maximum
lawful rate (the "Maximum Rate") which may be contracted for, charged, taken,
received or reserved by the Lender holding such Loan in accordance with
applicable law, the rate of interest payable in respect of such Loan hereunder,
together with all Charges payable in respect thereof, shall be limited to the
Maximum Rate and, to the extent lawful, the interest and Charges that would have
been payable in respect of such Loan but were not payable as a result of the
operation of this Section 12.11 shall be cumulated and the interest and Charges
payable to such Lender in respect of other Loans or periods shall be increased
(but not above the Maximum Rate therefor) until such cumulated amount, together
with interest thereon at the Federal Funds Rate to the date of repayment, shall
have been received by such Lender.
Section 12.12 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY IRREVOCABLY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER
THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO RELATED PARTY OF ANY OTHER
PERSON HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PERSON WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS BY, AMONG OTHER THINGS, THE
MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
Section 12.13 Right of Setoff. If an Event of Default shall have occurred
and be continuing, each Lender and each of its respective Affiliates is hereby
authorized at any time and from time to time, to the fullest extent permitted by
applicable law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final, in whatever currency) at any time held and
other obligations (in whatever currency) at any time owing by such Lender or any
such Affiliate to or for the credit or the account of the Borrower against any
and all of the obligations of the Borrower now or hereafter existing under this
Agreement or any other Loan Document to such Lender, irrespective of whether or
not such Lender shall have made any demand under this Agreement or any other
Loan Document and although such obligations of the Borrower may be contingent or
unmatured or are owed to a branch or office of such Lender different from the
branch or office holding such deposit or obligated on such indebtedness. The
rights of each Lender and its respective Affiliates under this Section are in
addition to other rights and remedies (including other rights of setoff) that
such Lender or its respective Affiliates
SECOND LIEN CREDIT AGREEMENT-PAGE 71
may have. Each Lender agrees to notify the Borrower and the Agents promptly
after any such setoff and application, provided that the failure to give such
notice shall not affect the validity of such setoff and application.
Section 12.14 Confidentiality.
(a) Each of the Agents and the Lenders agrees to maintain the
confidentiality of the Information (as defined below), except that Information
may be disclosed (a) to its Affiliates and to its and its Affiliates' Related
Parties (it being understood that the Persons to whom such disclosure is made
will be informed of the confidential nature of such Information and instructed
to keep such Information confidential), (b) to the extent requested by any
regulatory authority purporting to have jurisdiction over it (including any
self-regulatory authority, such as the National Association of Insurance
Commissioners), (c) to the extent required by applicable laws or regulations or
by any subpoena or similar legal process, (d) to any other party hereto, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any action or proceeding relating to this Agreement or any other
Loan Document or the enforcement of rights hereunder or thereunder, (f) subject
to an agreement containing provisions substantially the same as those of this
Section, to (i) any pledgee under Section 12.05(f) or any assignee of or
Participant in, or any prospective assignee of or Participant in, any of its
rights or obligations under this Agreement or (ii) any actual or prospective
counterparty (or its advisors) to any swap or derivative transaction relating to
the Borrower and its obligations, (g) with the consent of the Borrower, (h) to a
Person that is an investor or prospective investor in a securitization that
agrees that its access to Information is solely for purposes of evaluating an
investment in such permitted securitization and who agrees to treat such
information as confidential, (i) to a person that is a trustee, collateral
manager, servicer, backup servicer, noteholder or other security holder, secured
party or other participant in a securitization in connection with the
administration, servicing and reporting on the assets serving as collateral for
a securitization and who agrees to treat such information as confidential, (j)
to a nationally recognized rating agency that requires access to information
regarding the Borrower or any of its Subsidiaries and the Loans for the purpose
of issuing ratings in connection with a securitization or (k) to the extent such
Information (x) becomes publicly available other than as a result of a breach of
this Section or (y) becomes available to any Agent, any Lender, or any of their
respective Affiliates on a nonconfidential basis from a source other than the
Borrower.
(b) For purposes of this Section, "Information" means all information
received from the Borrower or any of its Subsidiaries relating to the Borrower
or any of its Subsidiaries or any of their respective businesses, other than any
such information that is available to any Agent or any Lender on a
nonconfidential basis prior to disclosure by the Borrower or any of its
Subsidiaries, provided that, in the case of information received from the
Borrower or any of its Subsidiaries after the date hereof, such information is
clearly identified at the time of delivery as confidential. Any Person required
to maintain the confidentiality of Information as provided in this Section shall
be considered to have complied with its obligation to do so if such Person has
exercised the same degree of care to maintain the confidentiality of such
Information as such Person would accord to its own confidential information.
Section 12.15 Exculpation Provisions. Each of the parties hereto
specifically agrees that it has a duty to read this Agreement and the other Loan
Documents and agrees that it is charged
SECOND LIEN CREDIT AGREEMENT-PAGE 72
with notice and knowledge of the terms of this Agreement and the other Loan
Documents; that it has in fact read this Agreement and is fully informed and has
full notice and knowledge of the terms, conditions and effects of this
Agreement; that it has been represented by independent legal counsel of its
choice throughout the negotiations preceding its execution of this Agreement and
the other Loan Documents; and has received the advice of its attorney in
entering into this Agreement and the other Loan Documents; and that it
recognizes that certain of the terms of this Agreement and the other Loan
Documents result in one party assuming the liability inherent in some aspects of
the transaction and relieving the other party of its responsibility for such
liability. Each party hereto agrees and covenants that it will not contest the
validity or enforceability of any exculpatory provision of this Agreement and
the other Loan Documents on the basis that the party had no notice or knowledge
of such provision or that the provision is not "conspicuous."
Section 12.16 USA Patriot Act Notice. Each Lender and the Agents (for
itself and not on behalf of any Lender) hereby notifies the Borrower that
pursuant to the requirements of The Uniting and Strengthening America by
Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of
2001 (Title III of Pub. L. 107-56 (signed into law October 26, 2001)) (the
"Act"), it is required to obtain, verify and record information that identifies
the Borrower, which information includes the name and address of the Borrower
and other information that will allow such Lender or the Agents, as applicable,
to identify the Borrower in accordance with the Act.
[Remainder of Page Intentionally Left Blank. Signature Pages Follow.]
SECOND LIEN CREDIT AGREEMENT-PAGE 73
The parties hereto have caused this Agreement to be duly executed as of the
day and year first above written.
BORROWER:
WCA WASTE SYSTEMS, INC.
By: /s/ Xxxxxx X. Xxxxxxx, Xx.
------------------------------------
Name: Xxxxxx X. Xxxxxxx, Xx.
Title: Vice President
Address for Notices:
Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
SECOND LIEN CREDIT AGREEMENT-SIGNATURE PAGE
ADMINISTRATIVE AGENT, COLLATERAL AGENT
AND LENDERS:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
individually, as Administrative Agent
and as Collateral Agent
By: /s/ Xxxxxxx Xxxx
------------------------------------
Xxxxxxx Xxxx
Vice President
Lending Office for Base Rate Loans
and LIBOR Loans:
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Address for Notices:
0000 Xxxx Xxxxxx, Xxxxx 000
MAC # T5303-031
Xxxxxx, Xxxxx 00000
Facsimile No.: 000-000-0000
Telephone No.: 000-000-0000
Attention: Xxxxxxx Xxxx
SECOND LIEN CREDIT AGREEMENT-SIGNATURE PAGE
ARES CAPITAL CP FUNDING LLC,
as a Lender
By: /s/ Xxxxxxx Xxxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: President
Lending Office for Base Rate Loans
and LIBOR Loans:
----------------------------------------
----------------------------------------
SECOND LIEN CREDIT AGREEMENT-SIGNATURE PAGE
ANNEX I
LIST OF PERCENTAGE SHARES AND COMMITMENTS
NAME OF LENDER COMMITMENTS PERCENTAGE SHARE OF COMMITMENTS
-------------- -------------- -------------------------------
Ares Capital CP Funding LLC $25,000,000.00 100%
TOTAL $25,000,000.00 100.00%
SECOND LIEN CREDIT AGREEMENT-SCHEDULE 1.2
SCHEDULE 7.02
FINANCIAL CONDITION
1. The Borrower and its Subsidiaries are obligors in respect of (a) bonds,
surety agreements and suretyship obligations imposed by regulatory
authorities in connection with closure and post-closure obligations with
regard to landfills owned or operated by them; (b) performance bonds under
municipal hauling contracts; and (c) other similar suretyship and bonding
arrangements customary in their business.
2. The Borrower and its Subsidiaries from time to time enter into contracts
and arrangements in which they agree to perform services at rates that are
less than the normal rates they receive for such services, and may from
time to time result in operations losses, in connection with other
activities as to which they expect to receive a compensating benefit. For
example, they may enter into hauling contracts at a low margin in the
expectation that performance on the hauling contract will result in
increased amounts of waste being disposed of at favorable disposal rates at
landfills owned by the Borrower or its Subsidiaries; the Borrower and its
Subsidiaries may also from time to time grant favorable landfill disposal
rates to haulers in exchange for reciprocal privileges at other landfills
not owned by the Borrower or its Subsidiaries. The Borrower makes no
representation herein as to whether any particular contract or commitment,
viewed in isolation, would not result in an unanticipated loss or would
not, standing alone, constitute an "unfavorable commitment." In addition,
the Borrower and its Subsidiaries also are parties to hauling and
collection agreements that do not provide for escalation of fees in the
event fuel costs or other operating costs increase over the term of the
agreement.
SCHEDULE 7.03
LITIGATION
There are no lawsuits pending against Borrower or, to the knowledge of the
Borrower, threatened against the Borrower.
There are no lawsuits pending or threatened against any Subsidiary that the
Borrower believes will have a Material Adverse Effect on either the Borrower or
any Subsidiary, based upon the posture of such lawsuits at this time.
SCHEDULE 7.10
TITLES, ETC.
None.
SCHEDULE 7.14
SUBSIDIARIES
SUBSIDIARY CHIEF EXECUTIVE OFFICE PRINCIPAL LOCATION
---------- ---------------------- ------------------
Waste Corporation of Arkansas, Inc. Xxx Xxxxxxxx, Xxxxx 0000 Xxxxxxx Xxxxxxx Xxxxxxxx
Xxxxxxx, Xxxxx 00000 XX. 0 Xxx 000X Xxxxxx Xx.
Xxxxx, Xxxxxxxx 00000
Waste Corporation of Kansas, Inc. One Riverway, Suite 1400 1150 East 000 Xxxxxx
(xxxxxxxx Xxx Xxxxx Landfill, Inc.) Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxxx 00000
Waste Corporation of Missouri, Inc. One Riverway, Suite 1400 0000 X. Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxxxxxx, Xxxxxxxx 00000
Waste Corporation of Texas, L.P. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Capital, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA of Alabama, L.L.C. One Riverway, Suite 1400 00000 Xxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxx, Xxxxxxx 00000
Waste Corporation of Tennessee, Inc. One Riverway, Suite 1400 0000 Xxxxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxxxx, Xxxxxxxxx 00000
WCA Texas Management General, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Management Limited, Inc. 00000 Xxxxx Xxxx 00000 Xxxxx Xxxx
Xxxxxx, Xxxxxxx 00000 Xxxxxx, Xxxxxxx 00000
WCA Management Company, LP One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Management General, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Shiloh Landfill, L.L.C. One Riverway, Suite 1400 000 Xxxx Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxxx'x Xxxx, XX 00000
Translift, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Texas Environmental Waste Services LLC One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
Eagle Ridge Landfill, LLC One Riverway, Suite 1400 00000 Xxx X X
Xxxxxxx, Xxxxx 00000 Xxxxxxx Xxxxx, Xxxxxxxx 00000
WCA Wake County Management General, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Wake County Management Limited, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
XXX XX Management General, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
XXX XX Management Limited, Inc. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA of Wake County, L.P. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA of North Carolina, L.P. One Riverway, Suite 0000 Xxx Xxxxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx 00000
WCA Wake Transfer Station, LLC One Riverway, Suite 1400 0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx Xxxxxxxx 00000
WCA of High Point, LLC One Riverway, Suite 1400 0000 Xxxxxxxxx Xxxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Material Reclamation, LLC One Riverway, Suite 1400 000 Xxxxxxx Xxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx Xxxxxxxx 00000
Material Recovery, LLC One Riverway, Suite 1400 0000 Xxxxxxxxxx Xxxx
Xxxxxxx, Xxxxx 00000 Xxxxxxx, Xxxxx Xxxxxxxx 00000
SCHEDULE 7.17
ENVIRONMENTAL MATTERS
Following is a list of all material operating permits for the landfills and
transfer stations operated by the Borrower's operating subsidiaries (the
"Operating Permits"). In addition to the Operating Permits, the operating
subsidiaries have numerous other permits, licenses, consents and approvals for
the operation of the businesses of such operating subsidiaries, including NPDES
permits, air permits, local business licenses, and transport permits. In
addition, many of the permits, licenses, consents and approvals expire over
time, and application for renewal must occur. Neither Borrower nor any
subsidiary lacks any permit, license, consent or approval wherein such failure
to obtain or maintain such permit, license, consent or approval would have a
Material Adverse Effect on the business of the Borrower or any such subsidiary.
SITE PERMIT# STATE ISSUING AUTHORITY
---- ------- ----- -----------------
Fines Landfill 61-16 Alabama Alabama Department of Environmental
Management
Union County Landfill 248-S1-R3 Arkansas Arkansas Department of Environmental
Quality
Xxxxxx County Landfill 05-08 Alabama Alabama Department of Environmental
Management
Rolling Xxxxxxx Landfill 253-S1-R3 Arkansas Arkansas Department of Environmental
Quality
Wynne Transfer Station 22-SG-TSWA Arkansas Arkansas Department of Environmental
Quality
Oak Grove Landfill 819 Kansas Kansas Department of Health and
Environment
Black Oak Landfill 122905 Missouri Missouri Department of Natural Resources
Central Missouri Landfill 115906 Missouri Missouri Department of Natural Resources
Chillicothe Transfer Station 411701 Missouri Missouri Department of Natural Resources
El Dorado Springs Transfer 403902 Missouri Missouri Department of Natural Resources
Station
Lebanon Transfer Station 410502 Missouri Missouri Department of Natural Resources
Neosho Transfer Station 414501 Missouri Missouri Department of Natural Resources
Springfield Transfer Station 407705 Missouri Missouri Department of Natural Resources
Eagle Ridge Landfill 116304 Missouri Missouri Department of Natural Resources
WCA of High Point 41-16 North Carolina North Carolina Department of the
Environment and Natural Resources
WCA Wake Transfer Station 92-34T North Carolina North Carolina Department of the
Environment and Natural Resources
Material Reclamation 92-24 North Carolina North Carolina Department of the
Environment and Natural Resources
Material Recovery 92-31 North Carolina North Carolina Department of the
Environment and Natural Resources
Shiloh Landfill 232644-1201 South Carolina South Carolina of Health and
Environmental Control
Waste Reduction of South 232687-2001 South Carolina South Carolina of Health and
Carolina Environmental Control
Xxxxxxx Xxxxxxxx XXX 00 0000 Xxxxxxxxx Xxxxxxxxx Department of Environment and
Conservation
Tall Pines Landfill 0000 Xxxxx Xxxxx Natural Resource Conservation
Commission
Xxxxxxx Road Landfill 0000 Xxxxx Xxxxx Natural Resource Conservation
Commission
Greenbelt Landfill 1586A/1389 Texas Texas Natural Resource Conservation
Commission
Xxxxxxx Xxxxxx Landfill 0000 Xxxxx Xxxxx Natural Resource Conservation
Commission
SCHEDULE 7.19
INSURANCE
INSURANCE COVERAGE 12-01-2004/2005
POLICY TYPE POLICY NUMBER INSURANCE COMPANY LIMITS
----------- ------------- ----------------- ------
WORKERS' COMPENSATION 834327 American Home $1,000,000 Bodily Injury by Accident Each Accident
Assurance Co. $1,000,000 Each Employee Bodily Injury by Disease
$1,000,000 Policy Limit Bodily Injury by Disease
TEXAS AUTOMOBILE 1469170 American Home $1,000,000 Combined Single Limit
LIABILITY Assurance Co.
OTHER STATES AUTOMOBILE 1469171 American Home $1,000,000 Combined Single Limit
LIABILITY Assurance Co.
GENERAL LIABILITY EG5844302 American Intentional $2,000,000 General Aggregate
Specialty Lines Ins. $2,000,000 Products/Completed Operations
Co. $1,000,000 Personal & Advertising Injury
$1,000,000 Each Occurrence
$10,000,000 Pollution Legal Liability Aggregate Limit
$10,000,000 Pollution Legal Liability Each Loss Limit
$100,000 Fire Damage
$5,000 Medical Payments
CPP (Property, Mobile 2159087 Lexington Ins. Co. $8,000,000 primary per occurrence
Equip. and Auto Physical
Damage)
AUTO BUFFER 2241785 Lexington Ins. Co. $4,000,000 Any One Occurrence
UMBRELLA 7410233 American International $25,000,000 Each Occurrence
Specialty Lines Ins. $25,000,000 General Aggregate
Co. $25,000,000 Products/Completed Operations Aggregate
$250,00 CrisisResponse Sublimit
$50,000 Excess Casualty CrisisFund Limit
NAMED INSUREDS
WCA Waste Corporation
WCA Holdings Corporation
WCA Waste Systems, Inc.
Waste Corporation of Texas, L.P.
WCA of Shiloh Landfill, L.L.C.
WCA of Alabama, L.L.C.
Waste Corporation of Missouri, Inc.
Waste Corporation of Arkansas, Inc.
Waste Corporation of Kansas, Inc.
WCA Capital, Inc.
WCA Management Company, LP
WCA Management Limited, Inc.
WCA Management General, Inc.
WCA Texas Management General, Inc.
Waste Corporation of Tennessee, Inc.
Translift, Inc.
Texas Environmental Waste Services LLc
Eagle Ridge Landfill, LLC
WCA Wake County Management General, Inc.
WCA Wake County Management Limited, Inc.
WCA NC Management General, Inc.
WCA NC Management Limited, Inc.
WCA of Wake County, L.P.
WCA of North Carolina, L.P.
WCA Wake Transfer Station, LLC
WCA of High Point, LLC
Material Reclamation, LLC
Material Recovery, LLC
SCHEDULE 7.21
MATERIAL AGREEMENTS
1. Many customer contracts require surety bonds to be in place to assure
performance under the contract. Material surety bonds are set forth on
pages 2 and 3 of this Schedule 7.21.
2. Page 4 of this Schedule 7.21 is a Summary of the long-term debt of the
Borrower and the Subsidiaries incurred in connection with (a) the purchase
of specific pieces of equipment, and (b) notes payable incurred in
connection with the payment of insurance premiums. This summary excludes
all Obligations.
SURETY BONDS
BOND NUMBER EFF. DATE EXP. DATE OBLIGEE BOND PENALTY
----------- --------- --------- ------- ------------
XXXXXXX
000000 11/16/2004 11/16/2005 City of Birmingham, AL $ 15,000
XXXXXXXX
000000 01/01/2004 01/01/2005 State of Arkansas $ 244,560
Department of
Environmental Qlty.
551335 01/01/2004 01/01/2005 State of Arkansas $ 584,355
Department of
Environmental Qlty.
551336 01/01/2004 01/01/2005 State of Arkansas $ 285,917
Department of
Environmental Qlty.
850150 01/01/2004 01/01/2005 State of Arkansas $1,644,540
Department of
Environmental Qlty.
KANSAS
551346 01/01/2004 01/01/2005 Kansas Dept. of Health & $1,850,076
Environment
MISSOURI
551347 01/01/2004 01/01/2005 City of Kansas City MO $ 841,710
Dept. of Environmental
Mgmt.
850151 01/01/2004 01/01/2005 State of Missouri Dept. $3,207,676
of Natural Resources
850152 01/01/2004 01/01/2005 State of Missouri Dept. $2,571,000
of Natural Resources
850153 01/01/2004 01/01/2005 State of Missouri Dept. $1,292,255
of Natural Resources
850154 01/01/2004 01/01/2005 State of Missouri Dept. $1,888,770
of Natural Resources
552338 06/04/2004 06/04/2005 City of Concordia, MO $ 45,000
552337 07/01/2004 07/01/2005 City of Bolivar, MO $ 10,000
552520 03/01/2004 00/00/0000 Xxxx xx Xxxxxxx, XX $ 10,000
554233 09/08/2004 09/08/2005 State of Missouri Dept. $ 635,368
of Natural Resources
850771 02/15/2005 02/15/2006 State of Missouri Dept. $1,825,437
of Natural Resources
553296 01/01/2005 00/00/0000 Xxxxxxx xx Xxxxx, XX $ 10,000
553506 02/15/2005 02/15/2006 Xxxxxx County Landfill $ 50,000
Xxxxx, XX
000000 05/01/2004 05/01/2005 City of El Dorado $ 100,000
Xxxxxxx, XX
000000 08/20/2004 00/00/0000 Xxxx xx Xxxxxxxxxxx, XX $ 18,000
554801 03/23/2005 06/23/2005 City of Hermann, MO $ 11,713
Schedule 7.21 - page 2
XXXXX XXXXXXXX
000000 02/15/2005 02/15/2006 County of Greenville, SC $ 28,000
552998 10/01/2004 10/01/2005 SC Dep't of Health & $ 140,000
Environmental Control
554726 03/01/2005 03/01/2006 SC Dep't of Health & $ 89,449
Environmental Control
TENNESSEE
554118 08/03/2004 08/03/2005 Tennessee Department of $ 87,661
Environment &
Conservation
TEXAS
551352 01/01/2004 01/01/2005 Texas Commission of $ 994,412
Environmental Quality
(TCEQ)
551353 01/01/2004 01/01/2005 Texas Commission of $ 146,188
Environmental Quality
(TCEQ)
551354 01/01/2004 01/01/2005 Texas Commission of $ 42,289
Environmental Quality
(TCEQ)
300112 03/25/2005 03/25/2006 Texas Commission of $1,835,887
Environmental Quality
(TCEQ)
553404 01/28/2005 01/28/2006 Texas Commission of $ 70,000
Environmental Quality
(TCEQ)
850560 10/14/2004 10/14/2005 Texas Commission of $2,046,987
Environmental Quality
(TCEQ)
554695 02/15/2005 02/15/2006 County of Greenville, SC $ 28,000
552998 10/01/2004 10/01/2005 SC Dep't of Health & $ 140,000
Environmental Control
554726 03/01/2005 03/01/2006 SC Dep't of Health & $ 89,449
Environmental Control
Schedule 7.21 - page 3
WCA WASTE SYSTEMS, INC.
DEBT SUMMARY
BALANCE
@ 03/31/05
----------
WCA OF ALABAMA
Associates #00-0000-0 18,849
Associates #00-0000-0 26,070
SHILOH LANDFILL
Associates #00-0000-0 (211-0130072-000) 18,291
WCA WASTE SYSTEMS, INC.
GE Capital #4145321-002 (WCAL) 78,498
CitiCapital #211-0203032 (WCMO) 84,623
CitiCapital #211-0202677 (WTX) 139,529
Center Capital #34798-01 (Shiloh) 5,043
--------
Total $370,003
========
Schedule 7.21 - page 4
SCHEDULE 9.01
DEBT
See Debt listing in Schedule 7.21. All such Debt described herein represents
only Debt existing on the Closing Date as permitted under Sections 9.01 (c)
through (i) of this Agreement or as permitted under the Existing Credit
Agreement. To the extent any such Debt is subject to any aggregate dollar
limitation within any subsection of Section 9.01 of this Agreement, such Debt
shall be deemed usage of amounts permitted under such respective dollar
limitation with respect to the time period such limitation is applicable. (For
purpose of clarification and by way of example, to the extent any such Debt is
subject to the limitations set forth in Section 9.01 (d), only such Debt
incurred in fiscal year 2005 shall be deemed usage of such Debt within such
limitation during fiscal year 2005).
SCHEDULE 9.02
LIENS
1. To Borrower's knowledge, no Liens (as defined in Section 9.02) have been
placed on any of the properties of the Borrower or any Subsidiary that are
not Liens set forth in Sections 9.02 (a), (b), (d) and (e) of this
Agreement.
2. Each of the Debt obligations identified on page 4 of Schedule 7.21 is
subject to a purchase-money security interest.
3. Borrower has received no notice, and has no reason to believe, that any
Liens other than those set forth above, have been placed on any Properties.
SCHEDULE 9.03
INVESTMENTS, LOANS AND ADVANCES
None.
Xxxxxxxx Draft
Dated: April 21, 2005
EXHIBIT A
FORM OF BORROWING, CONTINUATION AND CONVERSION REQUEST
____________, 200_
WCA Waste Systems, Inc., a Delaware corporation (the "Borrower"), pursuant
to the Second Lien Credit Agreement dated as of April ___, 2005 among the
Borrower, the Lenders which are or become parties thereto, and Xxxxx Fargo Bank,
National Association, as Administrative Agent and Collateral Agent for the
Lenders (the "Administrative Agent") (together with all amendments,
restatements, supplements, or other modifications thereto, the "Credit
Agreement"), hereby makes the requests indicated below (unless otherwise defined
herein, capitalized terms are defined in the Credit Agreement):
1. LOANS:
(a) Aggregate amount of new LIBOR Loans to be $_____________;
(b) Requested funding date is _______________, 200_ ;
(c) Length of Interest Period for LIBOR Loans is: _____________.
2. LIBOR LOAN CONTINUATION FOR LOANS THAT ARE LIBOR LOANS MATURING ON
_________________:
(a) Aggregate amount to be continued as LIBOR Loans is $_____________;
(b) Length of Interest Period for continued LIBOR Loans is _____________.
3. CONVERSION OF OUTSTANDING LOANS THAT ARE BASE RATE LOANS TO LIBOR
LOANS:
Convert $__________________ of the outstanding Base Rate Loans to
LIBOR Loans on _________________ with an Interest Period of
___________________.
The undersigned certifies that he is the _____________________ of the
Borrower, and that as such he is authorized to execute this certificate on
behalf of the Borrower. The undersigned further certifies, represents and
warrants on behalf of the Borrower that the Borrower is entitled to receive the
requested borrowing, continuation or conversion under the terms and conditions
of the Credit Agreement.
WCA WASTE SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
Xxxxxxxx Draft
Dated: April 21, 2005
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he is the ________________ of WCA
Waste Systems, Inc., a Delaware corporation (the "Borrower"), and that as such
he is authorized to execute this certificate on behalf of the Borrower. With
reference to the Second Lien Credit Agreement dated as of April ___, 2005 among
the Borrower, the Lenders which are or become parties thereto, and Xxxxx Fargo
Bank, National Association, as Administrative Agent and Collateral Agent for the
Lenders (the "Administrative Agent") (together with all amendments,
restatements, supplements or other modifications thereto being the "Credit
Agreement"), the undersigned represents and warrants as follows (each
capitalized term used herein having the same meaning given to it in the Credit
Agreement unless otherwise specified):
(a) The representations and warranties of the Borrower contained in
Article VII of the Credit Agreement and in the other Loan Documents and
otherwise made in writing by or on behalf of the Borrower pursuant to the
Credit Agreement and the other Loan Documents are true and correct on and
as of the date hereof, except to the extent such representations and
warranties specifically refer to an earlier date (e.g. "as of the Closing
Date"), and except that for the purpose of this Compliance Certificate, the
representations and warranties contained in Section 7.02 of the Credit
Agreement shall be deemed to refer to the most recent statements furnished
pursuant to clauses (a) and (b) of Section 8.01 of the Credit Agreement,
including statements in connection with which this Compliance Certificate
is delivered.
(b) There exists, and, after giving effect to the Loan or Loans with
respect to which this certificate is being delivered, will exist, no
Default under the Credit Agreement or any default under any material
agreement or instrument to which the Borrower or any Subsidiary is a party
or by which the Borrower or any Subsidiary is bound.
(c) There have been no changes to Borrower's or any Subsidiary's name,
jurisdiction of organization or corporate structure since the date of
delivery of the prior Compliance Certificate.
(d) The financial statements furnished to the Administrative Agent
with this certificate fairly present the consolidated financial condition
and results of operations of the Borrower and its Consolidated Subsidiaries
as at the end of, and for, the [FISCAL QUARTER] [FISCAL YEAR] ending
_________________________ and such financial statements have been prepared
in accordance with the accounting procedures specified in the Credit
Agreement.
(e) Attached hereto are the detailed computations necessary to
determine whether the Borrower and its Consolidated Subsidiaries are in
compliance with financial covenants described in Sections 9.12, 9.13, 9.14,
and 9.15 of Article IX of the Credit Agreement as of the end of the [FISCAL
QUARTER] [FISCAL YEAR] ending _____________________.
EXECUTED AND DELIVERED this ____ day of ________________, 200___.
WCA WASTE SYSTEMS, INC.
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
EXHIBIT C
FORM OF ASSIGNMENT AND ASSUMPTION
This Assignment and Assumption (this "Assignment and Assumption") is dated
as of the Effective Date set forth below and is entered into by and between
[INSERT NAME OF ASSIGNOR] (the "Assignor") and [INSERT NAME OF ASSIGNEE] (the
"Assignee"). Capitalized terms used but not defined herein shall have the
meanings given to them in the Credit Agreement identified below (as the same has
been or may be amended, supplemented, restated or otherwise modified from time
to time, the "Credit Agreement"), receipt of a copy of which is hereby
acknowledged by the Assignee. The Standard Terms and Conditions set forth in
Annex 1 attached hereto are hereby agreed to and incorporated herein by
reference and made a part of this Assignment and Assumption as if set forth
herein in full.
For an agreed consideration, the Assignor hereby irrevocably sells and
assigns to the Assignee, and the Assignee hereby irrevocably purchases and
assumes from the Assignor, subject to and in accordance with the Standard Terms
and Conditions and the Credit Agreement, as of the Effective Date inserted by
the Administrative Agent as contemplated below (i) all of the Assignor's rights
and obligations in its capacity as a Lender under the Credit Agreement and any
other documents or instruments delivered pursuant thereto to the extent related
to the amount and percentage interest identified below of all of such
outstanding rights and obligations of the Assignor under the respective
facilities identified below (including any letters of credit, guarantees, and
swingline loans included in such facilities) and (ii) to the extent permitted to
be assigned under applicable law, all claims, suits, causes of action and any
other right of the Assignor (in its capacity as a Lender) against any Person,
whether known or unknown, arising under or in connection with the Credit
Agreement, any other Loan Document, or any other documents or instruments
delivered pursuant thereto or the loan transactions governed thereby or in any
way based on or related to any of the foregoing, including, but not limited to,
contract claims, tort claims, malpractice claims, statutory claims and all other
claims at law or in equity related to the rights and obligations sold and
assigned pursuant to clause (i) above (the rights and obligations sold and
assigned pursuant to clauses (i) and (ii) above being referred to herein
collectively as, the "Assigned Interest"). Such sale and assignment is without
recourse to the Assignor and, except as expressly provided in this Assignment
and Assumption, without representation or warranty by the Assignor.
1. Assignor: ___________________________________________________________________
2. Assignee: ___________________________________________________________________
[and is an Affiliate/Approved Fund of [IDENTIFY LENDER](1)]
3. Borrower: WCA Waste Systems, Inc., a Delaware corporation
----------
(1) Select as applicable.
-2-
4. Administrative Agent and Collateral Agent:Xxxxx Fargo Bank, National
Association, as the administrative agent and collateral agent under the Credit
Agreement
5. Credit Agreement: The Second Lien Credit Agreement dated as of April ___,
2005 among WCA Waste Systems, Inc., a Delaware corporation, the Lenders parties
thereto, Xxxxx Fargo Bank, National Association, as Administrative Agent and
Collateral Agent
6. Assigned Interest:
Amount of
Aggregate Amount of Commitment/Loans Percentage Assigned
Commitment/Loans for all Lenders $ Assigned of Commitment/Loans CUSIP Number
-------------------------------- ---------------- ------------------- -------------
$ $ %
$ $ %
$ $ %
7. Trade Date: __________________________________________________________
Effective Date: _____________ ___, 20__ [TO BE INSERTED BY ADMINISTRATIVE
AGENT AND WHICH SHALL BE THE EFFECTIVE DATE OF RECORDATION OF TRANSFER IN THE
REGISTER THEREFOR.]
The terms set forth in this Assignment and Assumption are hereby agreed to:
ASSIGNOR
[NAME OF ASSIGNOR]
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
ASSIGNEE
[NAME OF ASSIGNEE]
By:
------------------------------------
Name:
------------------------------
Title:
-----------------------------
-3-
[Consented to and] Accepted:
[NAME OF ADMINISTRATIVE AGENT],
as Administrative Agent
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
[Consented to:]
[NAME OF RELEVANT PARTY]
By:
---------------------------------
Name:
---------------------------
Title:
--------------------------
ANNEX 1 to Assignment and Assumption
STANDARD TERMS AND CONDITIONS FOR
ASSIGNMENT AND ASSUMPTION
1. Representations and Warranties.
1.1. Assignor. The Assignor (a) represents and warrants that (i) it is the
legal and beneficial owner of the Assigned Interest, (ii) the Assigned Interest
is free and clear of any lien, encumbrance or other adverse claim and (iii) it
has full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby; and (b) assumes no responsibility with respect to (i) any
statements, warranties or representations made in or in connection with the
Credit Agreement or any other Loan Document, (ii) the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Loan
Documents or any collateral thereunder, (iii) the financial condition of the
Borrower, any of its Subsidiaries or Affiliates or any other Person obligated in
respect of any Loan Document or (iv) the performance or observance by the
Borrower, any of its Subsidiaries or Affiliates or any other Person of any of
their respective obligations under any Loan Document.
1.2. Assignee. The Assignee (a) represents and warrants that (i) it has
full power and authority, and has taken all action necessary, to execute and
deliver this Assignment and Assumption and to consummate the transactions
contemplated hereby and to become a Lender under the Credit Agreement, (ii) it
meets all requirements of an Eligible Assignee under the Agreement (subject to
receipt of such consents as may be required under the Credit Agreement), (iii)
from and after the Effective Date, it shall be bound by the provisions of the
Credit Agreement as a Lender thereunder and, to the extent of the Assigned
Interest, shall have the obligations of a Lender thereunder, (iv) it has
received a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 8.01(a), (b) and (c) thereof,
as applicable, and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Assumption and to purchase the Assigned Interest on the basis of
which it has made such analysis and decision independently and without reliance
on the Administrative Agent or any other Lender, and (v) if it is a Foreign
Lender, attached to the Assignment and Assumption is any documentation required
to be delivered by it pursuant to the terms of the Credit Agreement, duly
completed and executed by the Assignee; and (b) agrees that (i) it will,
independently and without reliance on the Administrative Agent, the Assignor or
any other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, and (ii) it will perform in
accordance with their terms all of the obligations that by the terms of the Loan
Documents are required to be performed by it as a Lender.
2. Payments. From and after the Effective Date, the Administrative Agent
shall make all payments in respect of the Assigned Interest (including payments
of principal, interest, fees and other amounts) to the Assignor for amounts that
have accrued to but excluding the Effective Date and to the Assignee for amounts
that have accrued from and after the Effective Date.
3. General Provisions. This Assignment and Assumption shall be binding
upon, and inure to the benefit of, the parties hereto and their respective
successors and assigns. This Assignment and Assumption may be executed in any
number of counterparts, which together shall constitute one instrument. Delivery
of an executed counterpart of a signature page of this Assignment and Assumption
by telecopy shall be effective as delivery of a manually executed counterpart of
this Assignment and Assumption. This Assignment and Assumption shall be governed
by, and construed in accordance with, the law of the State of New York.
