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EXHIBIT 10.38
LOAN AND SECURITY AGREEMENT
BETWEEN
KTI, INC., KTI ENVIRONMENTAL GROUP, INC.,
XXXX TECHNOLOGIES INC., KTI LIMITED PARTNERS, INC.,
KTI OPERATIONS, INC. AND PERC, INC.,
BORROWERS,
AND
KEY BANK OF NEW YORK,
LENDER.
DATED: OCTOBER 29, 1996
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TABLE OF CONTENTS
ARTICLE 1. DEFINITIONS............................................ 1
ARTICLE 2. THE REVOLVING LOAN..................................... 6
2.1. Advances............................................... 6
2.2. Manner of Borrowing.................................... 6
2.3. Overadvances........................................... 6
2.4. Evidence of Borrower's Obligations..................... 6
2.5. Payments............................................... 7
2.6. Application of Payments and Collections................ 7
ARTICLE 3. LENDER'S COMPENSATION.................................. 7
3.1. Interest............................................... 7
3.2. Underwriting Fee....................................... 7
3.3. Facility Fee........................................... 7
3.4. Computation of Interest and Fees....................... 7
ARTICLE 4. APPLICATION OF PROCEEDS................................ 8
ARTICLE 5. SECURITY INTEREST IN COLLATERAL........................ 8
ARTICLE 6. RECOURSE TO SECURITY................................... 8
ARTICLE 7. INDUCING REPRESENTATIONS............................... 8
7.1. Organization and Qualifications........................ 8
7.2. Corporate Name and Address............................. 9
7.3. Subsidiaries........................................... 9
7.4. Legally Enforceable Agreement.......................... 9
7.5. Solvent Financial Condition............................ 9
7.6. Financial Statements................................... 9
7.7. Forecasts.............................................. 10
7.8. Joint Ventures......................................... 10
7.9. Patents, Trademarks, Copyrights and Licenses........... 10
7.10. Existing Business Relationship......................... 10
7.11. Broker's Fees.......................................... 10
7.12. Investment Company Act; Federal Reserve Board
Regulations................... 10
7.13. Tax Returns............................................ 11
7.14. Litigation............................................. 11
7.15. Penobscot Energy Recovery Company and Maine Energy
Recovery Company Limited Partnership................... 11
7.16. Power Purchase Contracts............................... 11
7.17. KTI Operations Operation and Maintenance Agreement..... 11
(i)
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7.18. Receivables Locations................................ 12
7.19. Existing Indebtedness................................ 12
7.20. Existing Liens....................................... 12
7.21. Material Agreements.................................. 12
7.22. Corporate Restrictions............................... 12
7.23. Survival of Representations and Warranties........... 12
ARTICLE 8. FINANCIAL STATEMENTS AND INFORMATION;
CERTAIN NOTICES TO LENDER.......................... 12
8.1. Financial Data....................................... 12
8.2. Projections.......................................... 13
8.3. Notice of Event of Default and Other Adverse Business
Developments....................................... 13
8.4. Other Information.................................... 14
ARTICLE 9. ACCOUNTING........................................... 14
ARTICLE 10. AFFIRMATIVE COVENANTS................................ 15
10.1. Business and Existence............................... 15
10.2. Transactions with Affiliates......................... 15
10.3. Taxes................................................ 15
10.4. Compliance with Laws................................. 15
10.5. Compliance with ERISA................................ 15
10.6. Business Records..................................... 15
10.7. Litigation........................................... 15
10.8. Events of Default.................................... 15
10.9. Name Change.......................................... 15
10.10. Access to Books and Records.......................... 16
10.11. Solvent.............................................. 16
10.12. Compliance with Environmental Laws................... 16
10.13. Primary Deposit Accounts............................. 16
10.13. Revolving Loan Balances.............................. 16
ARTICLE 11. NEGATIVE COVENANTS................................... 16
11.1. Indebtedness......................................... 16
11.2. Guaranties........................................... 16
11.3. Mergers; Consolidations.............................. 16
11.4. New Business......................................... 16
11.5. Sale or Disposition.................................. 16
11.6. Acquisitions......................................... 17
11.7. Defaults............................................. 17
11.8. Loans................................................ 17
11.9. Limitations on Liens................................. 17
11.11. Affiliate Transactions............................... 18
(ii)
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11.12. Borrower's Name and Offices.......................... 18
11.14. Fiscal Year.......................................... 18
11.16. Subsidiaries......................................... 18
ARTICLE 12. FINANCIAL COVENANTS.................................. 18
12.1. Minimum Current Ratio................................ 18
12.2. Maximum Leverage Ratio............................... 19
ARTICLE 13. FURTHER RIGHTS OF LENDER............................. 19
13.1. Lender's Right to Take Certain Actions............... 19
13.2. Lender's Rights to Perform Borrower's Obligations.... 19
13.3. Lender's Right to Set-Off............................ 19
13.4. Lender's Right of Inspection......................... 20
ARTICLE 14. CONDITIONS PRECEDENT; CLOSING........................ 20
ARTICLE 15. TERM................................................. 21
ARTICLE 16. EVENTS OF DEFAULT.................................... 21
16.1. Defaults............................................. 22
16.2. Obligations Immediately Due.......................... 22
16.3. Continuation of Security Interests................... 22
ARTICLE 17. REMEDIES OF LENDER................................... 22
17.1. Rights Under Uniform Commercial Code................. 22
17.2. Waiver of Rights by Borrower......................... 23
17.3. Lender's Rights...................................... 23
17.4. Borrower to Pay Costs................................ 24
ARTICLE 18. GENERAL PROVISIONS................................... 24
18.1. Rights Cumulative.................................... 24
18.2. Successors and Assigns............................... 24
18.3. Notice............................................... 24
18.4. Strict Performance................................... 25
18.5. Waiver of Right to Jury Trial........................ 26
18.6. Amendments........................................... 26
18.7. Waiver............................................... 26
18.8. Conflict of Laws..................................... 26
18.9. Expenses............................................. 27
(iii)
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LIST OF EXHIBITS
EXHIBIT A Schedule of Receivables' Records' Locations
EXHIBIT B Schedule of Litigation
EXHIBIT C Form of Revolving Loan Note
EXHIBIT D List of Subsidiaries and Affiliates of Each Borrower
EXHIBIT E List of Existing Indebtedness of Each Borrower
EXHIBIT F Form of Pledge Agreement
EXHIBIT G Partnership Agreement for Penobscot Energy Recovery
Company, L.P.
EXHIBIT H Partnership Agreement for Maine Energy Recovery
Company, L.P.
EXHIBIT I List of Existing Power Purchase, Waste Handling and
Additional Material Contracts
EXHIBIT J List of all Tradenames
EXHIBIT K List and Description of Borrowers' Joint Ventures
EXHIBIT L List of Existing Liens Affecting the Borrowers
EXHIBIT M Operation and Maintenance Agreement between Maine
Energy Recovery Company and KTI Operations, Inc.
(iv)
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LOAN AND SECURITY AGREEMENT
THIS LOAN AND SECURITY AGREEMENT made this 29th day of October, 1996,
by and between KTI, INC., a New Jersey corporation with its principal office and
place of business at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("KTI"),
KTI Environmental Group, Inc., a New Jersey corporation with its principal
office and place of business at 0000 Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000 ("KTI Environmental"), Xxxx Technologies Inc., a New Jersey corporation
with its principal office and place of business at 0000 Xxxxxxxxx Xxxx,
Xxxxxxxxxx, Xxx Xxxxxx 00000 ("Xxxx"), KTI Limited Partners, Inc., a Delaware
corporation with its principal office and place of business at 0000 Xxxxxxxxx
Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("KTI Limited"), KTI Operations, Inc., a
Delaware corporation with its principal office and place of business at 0000
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("KTI Operations") and PERC, INC.,
a Delaware corporation with its principal office and place of business at 0000
Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx 00000 ("PERC") (KTI, KTI Environmental,
Xxxx, KTI Limited, KTI Operations and PERC referred to herein individually, as
the "Borrower" and, collectively, as the "Borrowers"), and KEY BANK OF NEW YORK,
a New York banking corporation, with its principal executive office and place of
business at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx 00000 (the "Lender").
RECITALS:
A. Borrowers have requested that Lender extend a One Million Dollar
($1,000,000.00) line of credit facility to provide Borrowers with continued
working capital support.
B. Lender is willing to provide Borrowers with a line of credit
facility on the terms and conditions set forth herein.
AGREEMENT:
1. DEFINITIONS. As used herein, the following terms shall have the
following meanings (terms defined in the singular to have the same meaning when
used in the plural and vice versa):
1.1. "Account Debtor" shall mean any Person who is or may become
obligated under or on account of any Receivable.
1.2. "Advance" shall mean any loan or advance by the Lender with
respect to the Revolving Loan.
1.3. "Affiliate" shall mean any Person: (i) which directly or
indirectly through one or more intermediaries controls, or is controlled by, or
is under common control with, any
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Borrower; (ii) which beneficially owns or holds 5% or more of any class of the
Voting Stock of any Borrower; or (iii) 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity interest)
of which is beneficially owned or held by any Borrower. For purposes hereof,
"control" means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of Voting Stock, by contract or otherwise.
1.4. "Base Rate" shall mean the rate of interest set, determined or
announced on a periodic basis by Lender as its "Base Rate" which rate of
interest is not necessarily the lowest rate charged by Lender on loans and other
credits which may be extended by Lender at rates both above and below the Base
Rate.
1.5. "Capital Expenditures" shall mean expenditures which are required
to be capitalized in accordance with Generally Accepted Accounting Principles
and shall include all payments in respect of Capital Leases and leasehold
improvements.
1.6. "Closing Date" shall mean the date on which all of the conditions
precedent set forth in Section 14 are satisfied and the initial Advance is made
hereunder.
1.7. "Collateral" shall mean all of the Property and interests in
Property described in Section 5 hereof, and all other personal Property of
Borrower and interests of Borrower in personal Property that now or hereafter
secures the payment and performance of any of the Obligations pursuant to any of
the Loan Documents or otherwise.
1.8. "Current Assets" shall mean at any date the amount at which all of
the current assets of KTI would be properly classified as current assets on
KTI's consolidated balance sheet at such date in accordance with Generally
Accepted Accounting Principles.
1.9. "Current Liabilities" shall mean at any date the amount at which
all of the current liabilities of KTI would be properly classified as current
liabilities on a consolidated balance sheet at such date in accordance with
Generally Accepted Accounting Principles. Obligations to Lender under this
Agreement in respect of the Revolving Loan shall be treated as Current
Liabilities.
1.10. "Current Ratio" shall mean, for any fiscal period of KTI, the
ratio of (i) Current Assets for such period to (ii) Current Liabilities for such
period.
1.11. "Default" shall mean an event or condition the occurrence of
which would, with the lapse of time or the giving of notice, or both, become an
Event of Default.
1.12. "Environment" shall mean any water or water vapor, any land
including land surface or subsurface, air, fish, wildlife, biota and all other
natural resources.
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1.13. "Environmental Laws" shall mean all federal, state and local
environmental, land use, zoning, health, chemical use, safety and sanitation
laws, statutes, ordinances and codes relating to the protection of the
Environment and/or governing use, storage, treatment, generation,
transportation, processing, handling, production or disposal of hazardous
substances and the rules, regulations, policies, guidelines, interpretations,
decisions orders and directives of federal, state and local governmental
agencies and authorities with respect thereto.
1.14. "ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
1.15. "Events of Default" shall have the meaning set forth in Article
16 of this Agreement.
1.16. "Generally Accepted Accounting Principles" shall mean generally
accepted accounting principles consistently applied and maintained throughout
the period indicated and consistent with the prior financial practice of the
Borrowers and any predecessor, except for changes mandated by the Financial
Accounting Standards Board or any similar accounting authority of comparable
standing. Whenever any accounting term is used herein which is not otherwise
defined, it shall be interpreted in accordance with Generally Accepted
Accounting Principles.
1.17. "Indebtedness" shall mean and include all obligations for
borrowed money of any kind or nature, including funded and unfunded debt,
contingent obligations under letters of credit, and all obligations for the
acquisition or use of any fixed asset, including capitalized leases, or
improvements which are payable over a period longer than one year, regardless of
the term thereof or the person or persons to whom the same is payable.
1.18. "Leverage Ratio" shall mean the ratio of Borrowers' (i) total
Liabilities to (ii) Tangible Net Worth.
1.19. "Liabilities" shall have the meaning given to that term in
accordance with Generally Accepted Accounting Principles. Liabilities to
Affiliates shall be treated as Liabilities except where excluded by
consolidation in accordance with Generally Accepted Accounting Principles.
1.20. "Lien" shall mean 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 including,
but not limited to, the security interest, security title or lien arising from a
security agreement, mortgage, deed of trust, deed to secure debt, encumbrance
pledge, 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
purpose of this Agreement, Borrowers shall be deemed to be the owners of any
Property which it has acquired or holds subject to a conditional
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sale agreement or other arrangement pursuant to which title to the Property has
been retained by or vested in some other Person for security purposes.
1.21. "Loan" shall mean the loans and Advances made by the Lender
hereunder, and shall include the Revolving Loan.
1.22. "Loan Documents" shall mean all documents and instruments to be
delivered by Borrowers under this Agreement or in connection with the Loan, as
the same may be amended, modified or supplemented from time to time.
1.23. "Maximum Amount of the Revolving Facility" shall mean One Million
Dollars ($1,000,000.00).
1.24. "Obligations" shall mean and include all loans (including the
Loans), advances, debts, liabilities, obligations, covenants and duties owing by
any Borrower to Lender (or to any entity under common control with Lender) of
any kind or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, whether arising under this Agreement, the Loan
Documents or under any other agreement or by operation of law, whether or not
for the payment of money, whether arising by reason of an extension of credit,
opening, guaranteeing or confirming of a letter of credit, loan, guaranty,
indemnification or in any other manner, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
due or hereafter arising and however acquired. The term includes, but without
limitation, all interest, charges, expenses, commitment, facility, collateral
management or other fees, attorneys' fees, and any other sum chargeable to any
Borrower under this Agreement, the Loan Documents or any other agreement with
Lender.
1.25. "Person" shall mean an individual, partnership, corporation,
limited liability company, joint venture, joint stock company, land trust,
business trust or unincorporated organization, or a government or agency or
political subdivision thereof.
1.26. "Plan" means an employee benefit plan or other plan now or
hereafter maintained for employees of any Borrower or any subsidiary and covered
by Title IV of ERISA.
1.27. "Property" shall mean any interest in any kind of property or
asset, whether real, personal or mixed, or tangible or intangible.
1.28. "Purchase Money Indebtedness" means and includes (i) any
Indebtedness (other than the Obligations) for the payment of all or any part of
the purchase price of any fixed assets, (ii) any Indebtedness (other than the
Obligations) incurred at the time of or within ten (10) days prior to or after
the acquisition of any fixed assets for the purpose of financing all or any part
of the purchase price thereof, and (iii) any renewals, extensions or
refinancings thereof and any increases not greater than ten percent (10%) in the
principal amounts thereof, outstanding at the time.
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1.29. "Receivables" shall mean and include all present and future
accounts, contract rights, promissory notes, chattel paper, instruments and
documents, bonds, certificates and policies of insurance and insurance proceeds,
investment securities, notes, instruments and deposit accounts, book accounts,
credits and reserves and all forms of obligations whatsoever owing, together
with all instruments, all documents of title representing any of the foregoing,
and all rights in any merchandise or goods which any of the same may represent,
all files and records with respect to any collateral or security given by any
Borrower to Lender, together with all right, title, security and guaranties with
respect to each Receivable, including any right of stoppage in transit, whether
now owned or hereafter created or acquired by any Borrower or in which any
Borrower now has or hereafter acquires any interest.
1.30. "Reportable Event" shall have the meaning assigned to that term
in Title IV of ERISA.
1.31. "Revolving Loan" shall mean the loan and Advances to be made by
Lender to Borrower pursuant to Article 2 of this Agreement.
1.32. "Revolving Loan Note" shall mean the promissory note
substantially in the form annexed hereto as Exhibit "C", to be given by
Borrowers to Lender to evidence the Revolving Loan.
1.33. "Solvent" shall mean when used with respect to any Person, such
Person (i) owns property the fair value of which is greater than the amount
required to pay all of such Person's Indebtedness (including contingent debts),
(ii) owns property the present fair salable value of which is greater than the
amount that will be required to pay the probable liabilities of such Person on
its then existing Indebtedness as such become absolute and matured, (iii) is
able to pay all of its Indebtedness as such Indebtedness matures, and (iv) has
capital sufficient to carry on its then existing business.
1.34. "Tangible Net Worth" shall mean at any date a sum equal to:
(i) the consolidated stockholders' equity of KTI and its
consolidated subsidiaries plus the amount reported by Maine Energy
Recovery Company as "deferred revenue" on its balance sheet (net of any
minority interests) as a result of the sale of electric power capacity
to Central Maine Power Company pursuant to a power purchase agreement
dated May 3, 1996,
MINUS
(ii) the amount (to the extent reflected in determining such
consolidated stockholders' equity) of (i) all investments in
unconsolidated subsidiaries, (ii) all unamortized debt discount and
expense, unamortized deferred charges, goodwill, patents, trademarks,
service marks, trade names, copyrights, organization or developmental
expenses of other intangible items; provided, however, that in no event
shall KTI's
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investment in PERC be treated as including an amount determined in
accordance with this paragraph.
1.35. "This Agreement" shall include all amendments, modifications and
supplements and shall refer to this Agreement as the same may be in effect at
the time such reference becomes operative.
1.36. "Voting Stock" shall mean securities of any class or classes of a
corporation the holders of which are ordinarily, in the absence of
contingencies, entitled to elect a majority of the corporate directors (or
Persons performing similar functions).
2. THE REVOLVING LOAN.
2.1. Advances. For so long as no Default or Event of Default exists,
Lender, in its sole discretion, shall lend to Borrowers on the request of any
Borrower a sum equal up to the Maximum Amount of the Revolving Loan. A
determination of whether to make any requested Advance shall be within Lender's
sole discretion. The outstanding principal balance of the Revolving Loan shall
be payable on demand. The above provisions and certain other provisions of this
Agreement are intended to set forth the manner of computation of certain
limitations of the amounts which the Lender intends to loan or advance to
Borrower but neither the Lender's discretionary right to make additional loans
and advances to Borrower nor the security interests, liens or mortgages granted
to Lender in any collateral shall in any way be limited by any such provision or
by the type or types of collateral utilized in making any such computation.
2.2. Manner of Borrowing. The Borrowers shall give Lender telephonic
notice (promptly confirmed in writing, if Lender so requests) of each Advance
requested by it not later than 12:00 noon (prevailing time) on the date such
Advance is to be made. Providing no Event of Default has occurred, Lender shall
make such Advance on such date by transferring the amount thereof in immediately
available funds for credit to such account (other than a payroll account) at a
bank in the United States as the Borrower may specify. Lender shall not be
responsible for any failure of any amount so transferred to be credited to any
such account, unless such failure is due to Lender's gross negligence or willful
misconduct.
2.3. Overadvances. Borrowers acknowledge that Lender has advised it
that Lender does not presently intend to permit Borrowers to incur Obligations
at any time in a principal amount exceeding the Maximum Amount of the Revolving
Loan. However, it is agreed that should Obligations of Borrowers to Lender
incurred under the Revolving Loan or otherwise exceed that figure or any other
limitation herein set forth, all such obligations shall nevertheless constitute
Obligations under this Agreement and shall be entitled to the benefit of all
security and protection under this Agreement and all Loan Documents.
2.4. Evidence of Borrowers' Obligations. Borrowers' obligation to pay
the principal of, and interest on, the Revolving Loan shall be evidenced by the
Revolving Loan Note,
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executed by Borrowers and delivered to Lender on the date hereof, in the form of
Exhibit "C" hereto.
2.5. Payments. All payments with respect to the Obligations shall be
made by Borrowers to Lender in U.S. currency and without any defense, offset or
counterclaim of any kind, at 00 Xxxxx Xxxxx Xxxxxx, Xxxxxx, Xxx Xxxx by noon
(Albany, New York time) on the date when due. Whenever any payment to be made
shall otherwise be due on a day that is not a business day, such payment shall
be made on the next succeeding business day and such extension of time shall be
included in computing interest in connection with any such payment. Lender is
hereby authorized, in its sole and absolute discretion from time to time (and
without regard to whether or not a Default or Event of Default exists) to charge
any account of Borrowers maintained with Lender for each payment of any of the
Obligations as they become due.
2.6. Application of Payments and Collections. Borrowers irrevocably
waive the right to direct the application of any and all payments and
collections at any time or times hereafter received by Lender from or on behalf
of Borrowers and Borrowers do hereby irrevocably agree that Lender shall have
the continuing exclusive right to apply and reapply any and all such payments
and collections received at any time or times hereafter by Lender against the
Obligations, in such manner as Lender may deem advisable, notwithstanding any
entry by Lender upon any of its books and records. Credit will be given to
Borrowers for funds received during business hours one (1) business day after
receipt thereof by Lender conditional upon final collection.
3. LENDER'S COMPENSATION.
3.1. Interest. Borrowers shall pay interest monthly on the first day of
each month for the preceding month, commencing November 1, 1996, on the average
daily unpaid principal amount of the Revolving Loan, at a fluctuating rate which
is equal to the Base Rate plus one quarter percent (1/4%). On and after the
occurrence of an Event of Default hereunder, Borrowers shall pay interest on all
Obligations due to Lender at a fluctuating rate which is equal to the Base Rate
plus three and one-quarter percent (3 1/4%). In no event shall any interest to
be paid hereunder or under any Loan Document exceed the maximum rate permitted
by law.
3.2. Underwriting Fee. Borrowers shall pay Lender on the Closing Date
an underwriting fee in the amount of Five Thousand Dollars ($5,000.00).
3.3. Facility Fee. Borrowers shall pay Lender on the Closing Date a
facility fee in the amount of Two Thousand Five Hundred Dollars ($2,500.00).
3.4. Computation of Interest and Fees. All interest and fees hereunder
shall be computed on the basis of a year consisting of three hundred sixty (360)
days for the number of days actually elapsed and may be charged by Lender to any
account of Borrowers with Lender or any Affiliate of Lender.
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4. APPLICATION OF PROCEEDS. The proceeds of the Loan shall be used
solely by Borrowers as working capital needed in the normal operation of
Borrowers' businesses. Any advance of loan proceeds by any Borrower to any
Affiliate (other than a Borrower) shall be deemed an Event of Default hereunder.
5. SECURITY INTEREST IN COLLATERAL. To secure the prompt payment and
performance of all of Borrowers' Obligations to Lender, Borrowers jointly and
severally transfer and assign to Lender and grant Lender, subject to those Liens
specifically described on Exhibit "E" attached, a first priority Lien on and
first security interest in all of the following Property and interests in
Property of Borrowers, whether now owned or existing or hereafter created,
acquired or arising and wheresoever located:
(A) All Receivables;
(B) All monies or other Property of any kind, now or at any time
or times hereafter, in the possession or under the control of
Lender or any entity under common control with Lender or any
representative, agent or correspondent of Lender;
(C) All of the issued and outstanding capital stock, or other
equity interest, as the case may be, of any first level
subsidiary of any of the Borrowers. Such security shall be
evidenced by the execution and deliver of pledge agreements in
substantially the form of Exhibit "F" attached;
(D) All accessions to, substitutions for and all replacements,
products and cash and non-cash proceeds of (A), (B), and (C)
above, including, without limitation, proceeds of and unearned
premiums with respect to insurance policies insuring any of
the Collateral and claims against any Person for loss of,
damage to, or destruction of any or all of the Collateral; and
(E) All books and records (including, without limitation, customer
lists, credit files, computer programs, printouts and other
computer materials and records) of Borrowers pertaining to any
of (A), (B), (C) and (D) above.
6. RECOURSE TO SECURITY. Recourse to security shall not be required for
any Obligation hereunder upon the occurrence and during the continuance of any
Event of Default. The Lender shall not be required to exercise any remedy
granted hereunder with respect to the Collateral as a condition of enforcing its
rights against the Borrowers.
7. INDUCING REPRESENTATIONS. In order to induce Lender to make the
Loan, Borrowers jointly and severally make the following representations and
warranties to Lender:
7.1. Organization and Qualifications. Each of KTI, KTI Environmental,
and Xxxx is a corporation duly organized and existing under the laws of the
State of New Jersey. Each of
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KTI Limited, KTI Operations and PERC is a corporation duly organized and
existing under the laws of the State of Delaware. Each Borrower is qualified to
do business in every jurisdiction where the nature of its business requires it
to be so qualified and where failure to so qualify might materially affect its
business or assets.
7.2. Corporate Name and Address. Other than as listed on Exhibit "J",
during the preceding five (5) years, no Borrower has been known as or used any
corporate, fictitious or trade names. Borrowers' executive offices are at the
addresses set forth above.
7.3. Subsidiaries. Other than as listed on Exhibit "D" hereto, no
Borrower has any subsidiaries or Affiliates (not including individuals). Exhibit
"D" also contains, as of the date hereof, an organizational chart of the
Borrowers and their Affiliates, accurately reflecting, among other things, all
equity interests owned by each in any Borrower or their Affiliates. All
Affiliates listed on Exhibit "D" are either limited partnerships, corporations
or limited liability companies duly organized and existing under the laws of the
state designated on such chart as their respective states of incorporation or
organization, as the case may be.
7.4. Legally Enforceable Agreement. The execution, delivery and
performance of this Agreement, and each and all of the other Loan Documents and
all and any other instruments and documents to be delivered by Borrowers or
their Affiliates hereunder and the creation of all Liens, mortgages and security
interests provided for herein are within each Borrower's corporate power, have
been duly authorized by all necessary or proper corporate action (including the
consent of shareholders where required), are not in contravention of any
agreement or indenture to which any Borrower is a party or by which it is bound,
or of the Certificate of Incorporation or By-Laws of any Borrower, and to the
best of each Borrower's knowledge are not in contravention of any provision of
law and the same do not require the consent or approval of any governmental
body, agency, authority or any other person which has not been obtained and a
copy thereof furnished to Lender.
7.5. Solvent Financial Condition. Each Borrower is Solvent.
7.6. Financial Statements. The consolidated balance sheet and income
statements of KTI as of December 31, 1995, certified by KTI's regularly retained
certified public accountants, and the internally prepared consolidated balance
sheet as of June 30, 1996 of KTI, and consolidated income statement for the
period ending June 30, 1996 of KTI, copies of which have been delivered to
Lender, fairly present its financial condition and results of operations as
relevant and as of such dates and there have been no material adverse changes
since such dates. To the best of KTI's knowledge, after due investigation by
KTI, as of December 31, 1995, KTI had no contingent liabilities, liabilities for
taxes, unusual forward or long-term commitments, or unrealized or unanticipated
losses from any unfavorable commitments which were not disclosed in such
December 31, 1995 financial statements or the notes thereto which either
individually or in the aggregate would be material.
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7.7. Forecasts. Prior to the Closing Date, KTI shall deliver to Lender
forecasted financial statements consisting of consolidated balance sheets, cash
flow statements and income statements together with appropriate supporting
details and a statement of the underlying assumptions, ranges and limitations
(the "Forecasts"). Such Forecasts shall cover the one-year period commencing on
January 1, 1997 and be prepared on a monthly basis. Such shall be prepared in
good faith and, subject to the limitations and uncertainties inherent in trying
to project future economic and business trends or results, shall represent the
good faith opinion of KTI and its senior management and have a reasonable basis.
The Forecasts shall indicate all material assumptions used in preparing such
Forecasts, including the issuance of preferred or common stock, the disposition
of Datafocus, and the acquisition of other entities or additional ownership in
existing subsidiaries or Affiliates.
7.8. Joint Ventures. Other than as listed and described on Exhibit "K",
no Borrower is engaged in any joint venture or partnership with any other
person.
7.9. Patents, Trademarks, Copyrights and Licenses. Each Borrower owns
or possesses all the patents, trademarks, service marks, trade names, copyrights
and licenses necessary for the present and planned future conduct of its
business without any known material conflict with the rights of others.
7.10. Existing Business Relationship. There exists no actual or
threatened termination, cancellation or limitation of, or any materially adverse
modification or change in, the business relationship of any Borrower with any
customer or group of customers whose purchases individually or in the aggregate
are material to the operations of any Borrower, or with any material supplier
(other than in the ordinary course of business where one supplier is replaced by
another offering terms not materially different to Borrower).
7.11. Broker's Fees. No broker's or finder's fees or commissions will
be payable by Borrower to any person in connection with the transactions
contemplated by this Agreement.
7.12. Investment Company Act: Federal Reserve Board Regulations. No
Borrower is an "investment company", or an "affiliated person" of, or "promoter"
or "principal underwriter" for, an "investment company", as such terms are
defined in the Investment Company Act of 1940, as amended (15 U.S.C.
Sections 80(a)(1), et seq.). The makings of the Loan hereunder by Lender,
the application of the proceeds and repayment thereof by the Borrowers and the
performance of the transactions contemplated by this Agreement will not violate
any provision of said Act, or any rule, regulation or order issued by the
Securities and Exchange Commission thereunder. No Borrower owns any margin
security as that term is defined in Regulation U of the Board of Governors of
the Federal Reserve System and the proceeds of the borrowings made pursuant to
this Agreement will be used only for the purposes contemplated hereunder. None
of the proceeds will be used, directly or indirectly, for the purpose of
purchasing or carrying any margin security or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase or carry
margin security or for any other purpose which might constitute any of the loans
under this Agreement a "purpose credit" within the meaning of said
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Regulation U or Regulations G or X of the Federal Reserve Board. No Borrower
will take, or permit any agent acting on its behalf to take, any action which
might cause this Agreement or any document or instrument delivered pursuant
hereto to violate any regulation of the Federal Reserve Board.
7.13. Tax Returns. Borrowers have filed all tax returns (Federal, State
or local) required to be filed to date and paid all taxes shown thereon to be
due including interest and penalties or has provided adequate reserves therefor.
No assessments have been made against any Borrower by any taxing authority nor
has any penalty or deficiency been made by any such authority. No Federal income
tax return of any Borrower is presently being examined by the Internal Revenue
Service nor are the results of any prior examination by the Internal Revenue
Service or any State or local tax authority being contested by any Borrower.
7.14. Litigation. Other than as described on Exhibit "B" attached
hereto, no action or proceeding which, if adversely decided, would materially
affect or impair any Borrower's business or financial condition, is now pending
or, to the knowledge of any Borrower, is threatened against any Borrower at law,
in equity or otherwise, before any court, board, commission, agency or
instrumentality of the Federal or State government or of any municipal
government or any agency or subdivision thereof, or before any arbitrator or
panel of arbitrators and no Borrower has accepted liability for any such action
or proceeding. There is no proceeding pending before any governmental agency
(Federal, State or local) and, to the best of each Borrower's knowledge, no
investigation has been commenced before any such government agency the effect of
which, if adversely decided, would materially affect or impair any Borrower's
business or financial condition.
7.15. Penobscot Energy Recovery Company, L.P. and Maine Energy Recovery
Company, L.P. Exhibit "G" and "H" contain, respectively, the limited partnership
agreements of Penobscot Energy Recovery Company ("Penobscot Energy") and Maine
Energy Recovery Company Limited Partnership ("Maine Energy"), including all
amendments thereto. Both Penobscot Energy and Maine Energy are limited
partnerships duly organized and existing under the laws of Maine, and each are
qualified to do business in every jurisdiction where the nature of their
businesses require them to be so qualified and where failure to so qualify might
materially affect their respective businesses or assets.
7.16. Power Purchase Contracts. Exhibit "I" contains a list of all
existing power purchase, waste handling and similar contracts entered into by
Penobscot Energy and Maine Energy, providing information regarding such
contracts in such form as may be required by Lender.
7.17. KTI Operations Operation and Maintenance Agreement. Exhibit "M"
contains a copy of the current Operation and Maintenance Agreement between Maine
Energy Recovery Company and KTI Operations, including all amendments thereto.
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7.18. Receivables Locations. Annexed hereto as Exhibit "A" is a list
showing all places at which the Borrowers maintain, or will maintain, records
relating to Receivables.
7.19. Existing Indebtedness. No Borrower has any existing Indebtedness
other than described on Exhibit "E."
7.20. Existing Liens. No Borrower is subject to any Lien other than
those described on Exhibit "L."
7.21. Material Agreement. No Borrower is in default under any contract,
lease, loan, indenture, mortgage, security agreement or other material agreement
or obligation to which it is a party or by which any of its properties are
bound.
7.22. Corporate Restrictions. No Borrower is a party to any indenture,
agreement, instrument or lease or subject to any charter by-law or other
corporate restriction materially and adversely affecting the business,
operations, properties or assets of any Borrower.
7.23. Survival of Representations and Warranties. Borrowers jointly and
severally covenant, warrant and represent to Lender that all representations and
warranties of Borrowers contained in this Agreement or any of the other Loan
Documents shall be true at the time of each Borrower's execution of this
Agreement and the other Loan Documents, and Lender's right to bring an action
for breach of any such representation or warranty or to exercise any remedy
hereunder based upon the breach of such representation or warranty shall survive
the execution, delivery and acceptance hereof by the Lender and the closing of
the transactions described herein or related hereto.
8. FINANCIAL STATEMENTS AND INFORMATION; CERTAIN NOTICES TO LENDER. So
long as Borrowers shall have any Obligation to Lender under this Agreement, they
shall deliver or cause to be delivered to Lender:
8.1. Financial Data.
(i) Quarterly Financial Data. As soon as practicable and in
any event within forty-five (45) days after the end of the first three
quarters of each fiscal year, commencing with the fiscal quarter ending
September 30, 1996, an unaudited consolidated and consolidating balance
sheet of KTI and unaudited consolidated and consolidating statement of
operations and cash flow for KTI reflecting results of operations from
the beginning of KTI's fiscal year to the end of such quarter and for
such quarter, fairly presenting the financial condition and results of
operations of KTI as of the applicable dates and for the applicable
periods and prepared in accordance with GAAP applied on a consistent
basis with prior practices (except as otherwise stated therein and
except that such statements need not contain all footnotes), subject to
changes resulting from normal year-end and audit adjustments, setting
forth in each case in comparative form consolidated and consolidating
figures for such periods and for the
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corresponding periods in the preceding fiscal year and certified by the
chief financial officer of KTI, subject to changes for year-end and
audit adjustments; (ii) as soon as practicable, and in any event upon
the earlier of (A) the filing by KTI of its report on Form 10-K with
the Securities and Exchange Commission or (B) one hundred five (105)
days after the end of each fiscal year, audited consolidated and
unaudited consolidating balance sheets of KTI as at the end of such
year, setting forth in each case in comparative form corresponding
figures from the budget referred to in clause (iii) hereof and from the
preceding annual audit, all in reasonable detail, and, in the case of
such consolidated financial statements, examined by independent public
accountants of recognized national standing selected by KTI, whose
report shall state that the scope of the examination was made in
accordance with GAAP; (iii) not later than 30 days prior to the
commencement of each upcoming fiscal year of KTI, beginning with the
fiscal year commencing January 1, 1997, the annual budget of KTI
presenting monthly and annual information on a consolidated and
consolidating basis; (iv) at the time of the delivery of the financial
statements required by clauses (i) and (ii) of this Section 8.1, a
certificate of the chief financial officer of KTI (A) to the effect
that to the best knowledge of KTI there exists no Event of Default, or
if such Event of Default exists, specifying the nature thereof, the
period of existence thereof and the action KTI proposes to take with
respect thereto, and (B) also setting forth the calculations required
to establish whether KTI is in compliance with Section 12; (v) as soon
as available, any written report pertaining to material deficiencies in
respect of KTI's internal control matters submitted to KTI by KTI's
independent accountants in connection with each annual or interim
special audit of the financial condition of KTI made by such
independent public accountants and, upon a request by Lender, a written
statement prepared by the chief financial officer of KTI summarizing
the actions that KTI proposes to take in response thereto; (vi) with
reasonable promptness, such other financial information, or information
respecting results of operations, business or prospects of KTI, as
Lender may reasonably request.
8.2. Projections. Not more than thirty (30) days following the end of
each fiscal year of Borrowers, projections prepared by Borrowers consisting of
projected balance sheets, cash flow statements, and profit and loss statements,
on a monthly basis for each of the forthcoming twelve months, together with such
appropriate supporting details and statements of assumptions as Lender may
reasonably request;
8.3. Notice of Event of Default and Other Adverse Business
Developments. Within five (5) days after becoming aware of the existence of a
Default or any Event of Default under this Agreement or after becoming aware of
any developments or other information which more likely than not would
materially or adversely affect its properties, business, prospects, profits or
condition (financial or otherwise) or its ability to perform this Agreement,
including, without limitation, the following:
(i) any substantial dispute that may arise between any Borrower and any
governmental regulatory body or law enforcement authority, including
any action by the
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United States Securities and Exchange Commission and any action
relating to any tax liability of any Borrower;
(ii) all litigation commenced against any Borrower where the amount
claimed in any one suit or action is $100,000.00 or more and all
litigation where the amount claimed in the aggregate is $100,000.00 or
more except when the same is fully covered by insurance and the insurer
accepts liability therefor;
(iii) any labor controversy resulting in or threatening to result in a
strike or work stoppage against any Borrower;
(iv) any proposal by any public authority to acquire the assets or
business of any Borrower;
(v) any proposed or actual change of any Borrower's name, identity or
corporate structure; and
(vi) any other matter which has resulted or may result in a material
adverse change in any Borrower's financial condition or operations.
In each case, such Borrower will provide Lender with telephonic or
telegraphic notice specifying and describing the nature of such Event of Default
or development or information, and such anticipated effect, which telephonic or
telegraphic notice shall be promptly confirmed in writing within five (5) days;
and
8.4. Other Information. Such other information respecting the financial
condition of any Borrower or any property of any Borrower in which Lender may
have a Lien as Lender may, from time to time, reasonably request. Each Borrower
authorizes Lender, upon the occurrence and during the continuance of an Event of
Default and upon reasonable notice to Borrowers, to communicate directly with
the Borrowers' independent certified public accountants and authorizes those
accountants to disclose to Lender any and all financial statements and other
information of any kind that they may have with respect to the Borrowers and
their business and financial and other affairs. Lender shall treat information
so obtained as confidential. Borrowers shall deliver a letter addressed to such
accountants instructing them to comply with the provisions of this Section .
9. ACCOUNTING. Lender will account monthly to Borrowers. Each and every
account shall be deemed final, binding and conclusive upon the Borrower in all
respects, as to all matters reflected therein, unless Borrowers, within thirty
(30) business days after the date the account was rendered, delivers to Lender
written notice of any objections which it may have to any such account and in
that event only those items expressly objected to in such notice shall be deemed
to be disputed by Borrowers.
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10. AFFIRMATIVE COVENANTS. Borrowers jointly and severally represent
and warrant that, so long as any Borrower shall have any Obligation to Lender
hereunder, it will:
10.1. Business and Existence. Preserve and maintain its separate
corporate existence and rights, privileges and franchises in connection
herewith. Each Borrower will transact business in its own name and will invoice
all Receivables in its own name;
10.2. Transactions with Affiliates. Wherever it engages in transactions
with any of its Affiliates conduct the same on an arms-length basis or other
basis more favorable to Borrowers;
10.3. Taxes. Pay and discharge all taxes, assessments, government
charges and levies imposed upon it, its income or its profits or upon any
property belonging to it prior to the date on which penalties attach thereto,
except where the same may be contested in good faith by appropriate proceedings;
10.4. Compliance With Laws. Comply with all Federal, State or local
laws and regulations regarding the collection, payment and deposit of employees'
income, unemployment and Social Security taxes;
10.5. Compliance With ERISA. Comply with all applicable provisions of
ERISA and the Internal Revenue Code of 1986, as amended (the "Code"). No
Borrower will engage in any transaction which would subject it to tax, penalty
or liability for prohibited transactions imposed by ERISA or the Code;
10.6. Business Records. Keep adequate records and books of account with
respect to its business activities in which proper entries are made in
accordance with sound bookkeeping practices reflecting all financial
transactions of each Borrower;
10.7. Litigation. Give Lender prompt notice of any suit at law or in
equity against itself involving money or property valued in excess of One
Hundred Thousand Dollars ($100,000.00) except where the same is fully covered by
insurance and the insurer accepts liability therefor, or any investigation or
proceeding before or by any administrative or governmental agency the effect of
which would be to limit materially, prohibit or restrict the manner in which the
Borrower presently conducts its business or to declare any substance contained
in any product manufactured or distributed by any Borrower to be dangerous; and
10.8. Events of Default. Borrower shall provide Lender within five (5)
days after Borrower becomes aware of the existence of an Event of Default with
telephonic or telegraphic notice specifying the nature of such default.
10.9. Name Change. Provide Lender with written notice of any change of
name or the creation of any subsidiary.
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10.10. Access to Books and Records. Provide Lender with such reports
and with such access to each Borrower's books and records as Lender deems
reasonably necessary to enable Lender to monitor this credit facility.
10.11. Solvent. Borrower shall continue to be Solvent.
10.12. Compliance With Environmental Laws. Comply in all material
respects with all applicable Environmental Laws.
10.13. Primary Deposit Accounts. Unless otherwise approved by Lender,
in writing, maintain each Borrower's primary depository accounts, if any, with
Lender.
10.14. Revolving Loan Balances. Cause the outstanding principal balance
of the Revolving Loan to be zero for a period of not less than thirty (30)
consecutive days each year.
11. NEGATIVE COVENANTS. So long as any Borrower shall have any
Obligation to Lender hereunder and unless Lender has first consented thereto in
writing, no Borrower will:
11.1. Indebtedness. Create, incur, assume or suffer to exist any
Indebtedness, except Obligations to Lender, Indebtedness for Capital
Expenditures, trade debt incurred in the ordinary course of Borrowers' business,
and existing Indebtedness described on Exhibit "E" (as well as any renewals,
extensions or refinancings of such Indebtedness and any increases not greater
than ten percent (10%) in the principal amounts thereof, outstanding at the
time).
11.2. Guaranties. Assume, guarantee or endorse or otherwise become
directly or contingently liable in connection with any other liability of any
other person, firm or corporation without Lender's prior written consent, which
shall not be unreasonably withheld, provided, however, that the foregoing shall
not prohibit the endorsement of negotiable instruments for deposit or collection
and similar transactions in the ordinary course of business;
11.3. Mergers; Consolidations. Except for the transactions expressly
provided in Section 6.1(c) in the Note Purchase Agreement dated as of October
23, 1996 between KTI and Wexford KTI LLC by Wexford, merge into or consolidate
with any other entity nor acquire all or any substantial part of the properties
of any Person without Lender's prior written consent, which shall not be
unreasonably withheld;
11.4. New Business. Enter into any new business other than its present
business without Lender's prior written consent, which shall not be unreasonably
withheld;
11.5. Sale or Disposition. Sell or dispose of any assets (as that term
is defined in accordance with Generally Accepted Accounting Principles) in
excess of a total amount of Fifty Thousand Dollars ($50,000.00) in any calendar
year or grant any Person an option to acquire any such assets;
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11.6. Acquisitions. Acquire or commit or agree to acquire all or any
material portion of the stock, securities or assets of any other Person without
Lender's prior written consent, which shall not be unreasonably withheld;
11.7. Defaults. Permit any landlord, mortgagee, trustee under deed of
trust or lienholder to declare a default under any lease, mortgage, deed of
trust or lien on real estate owned or leased by any Borrower, which default
remains uncured for a period in excess of thirty (30) days from its occurrence
or if such default is of a nature that it cannot with due diligence be cured
within thirty (30) days, if any Borrower shall fail to commence to cure such
default within such thirty (30) days period and thereafter prosecute to such
cure diligently;
11.8. Loans. Make any loan or advance or extend any credit in amounts
exceeding, individually, or in the aggregate, one hundred thousand dollars
($100,000.00) (except in the ordinary course of business) to any Person (whether
or not an Affiliate of any Borrower) or make any investment in any Person or its
securities; or enter into any management agreement with any Person other than
employment contracts entered into in the regular course of its business;
11.9. Limitations on Liens. Suffer any Lien, encumbrance, mortgage or
security interest on any of its property, except:
(a) Liens at any time granted in favor of Lender;
(b) Liens for taxes (excluding any Lien imposed pursuant to
any of the provisions of ERISA) not yet due or being contested, but
only if such Lien does not affect adversely Lender's rights or the
priority of Lender's Liens in any of the collateral;
(c) Liens securing the claims or demands of materialmen,
mechanics, carriers, warehousemen, landlords and other like Persons for
labor, materials, supplies or rentals incurred in the ordinary course
of Borrowers' business, but only if the payment thereof is not at the
time required and only if such Liens are junior in priority to the
Liens in favor of Lender;
(d) Liens resulting from deposits made in the ordinary course
of business in connection with workmen's compensation, unemployment
insurance, social security and other like laws;
(e) attachment, judgment and other similar non-tax Liens
(excluding liens in favor of any governmental entity arising under or
in connection with any environmental law or regulation) arising in
connection with court proceedings, but only if and for so long as the
execution or other enforcement of such Liens is and continues to be
effectively stayed and bonded on appeal in a manner satisfactory to
Lender for the full amount thereof, the validity and amount of the
claims secured thereby are being actively contested in good faith and
by appropriate lawful proceedings, such Liens do not, in the
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aggregate, materially detract from the value of the property of any
Borrower or materially impair the use thereof in the operation of
Borrowers' business and such Liens are and remain junior in priority to
the Liens in favor of Lender;
(f) reservations, exceptions, easements, rights of way, and
other similar consensual encumbrances affecting real Property, provided
that, in Lender's reasonable judgment, they do not in the aggregate
materially detract from the value of said Properties or materially
interfere with their use in the ordinary conduct of Borrower's
business;
(g) such other Liens as appear on Exhibit "L" attached hereto;
(h) Liens in respect of Purchase Money Indebtedness granted to
the vendor or person financing the vendor of Equipment so long as the
Lien granted is limited to the specific Equipment so acquired and the
debt secured by the Lien is the unpaid balance of the acquisition cost
of the specific Equipment on which the Lien is granted and the
transaction does not violate any other provision of this Agreement; and
(i) such other Liens as Lender may hereafter approve in
writing.
11.10. Affiliate Transactions. (i) Divest itself of any material assets
by (x) transferring them to any existing subsidiary or any future subsidiary to
whose existence Lender may hereafter have consented or (y) by entering into a
partnership, joint venture, or similar arrangement, or (ii) make any material
change in its capital structure or enter into any management contract permitting
a third party management rights with respect to any Borrower's business;
11.11. Borrowers' Name and Offices. Transfer its executive offices or
change its corporate name or maintain records (including computer printouts and
programs) with respect to Receivables or keep Inventory or Equipment at any
locations other than those at which the same are presently kept or maintained,
except with Lender's prior written consent and after the delivery to Lender of
financing statements in form satisfactory to Lender. If such financing
statements shall be delivered, Lender will not unreasonably withhold its
consent;
11.12. Fiscal Year. Change its fiscal year.
11.13. Subsidiaries. Create any subsidiary or permit itself to become a
subsidiary of any other Person without Lender's prior written consent, which
shall not be unreasonably withheld.
12. FINANCIAL COVENANTS. KTI covenants that it shall for the fiscal
year ending December 31, 1996:
12.1. Minimum Current Ratio. Maintain a Current Ratio of not less than
2.0 to 1.0.
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12.2. Maximum Leverage Ratio. Maintain a Leverage Ratio not greater
than 2.0 to 1.0.
13. FURTHER RIGHTS OF LENDER.
13.1. Lender's Right to Take Certain Actions. Each Borrower shall do
all reasonable things and shall deliver all reasonable instruments requested by
Lender to protect or perfect any security interest, mortgage or lien given
hereunder including, without limitation, financing statements under the Uniform
Commercial Code and all documents and instruments necessary under the Federal
Assignment of Claims Act. Lender may examine, inspect and copy or make extracts
from all property and all books and records of Borrowers at any time during
regular business hours. Borrower authorizes Lender to execute alone any
financing statement or other documents or instruments that Lender may require to
perfect, protect or establish any Lien or security interest hereunder and
further authorizes Lender to sign each Borrower's name on the same. Upon the
occurrence and during the continuation of any Event of Default, each Borrower
appoints such person or persons as Lender may designate as its attorney-in-fact
to endorse the name of Borrower on any checks, notes, drafts or other forms of
payment or security that may come into the possession of either Lender or any
Affiliate of Lender, to sign each Borrower's name on invoices or bills of
lading, drafts against customers, notice of assignment, verifications and
schedules and, generally, to do all things necessary to carry out this
Agreement. The powers granted herein, being coupled with an interest, are
irrevocable, and each Borrower approves and ratifies all acts of the
attorney-in-fact. Neither the Lender nor the attorney-in-fact shall be liable
for any act or omission, error in judgment or mistake of law so long as the same
is not malicious or grossly negligent.
13.2. Lender's Right to Perform Borrowers' Obligations. In the event
that any Borrower shall fail to pay any tax, assessment, government charge or
levy (unless any Borrower has contested and is diligently prosecuting a claim
with respect to any such tax, assessment, government charge of levy), except as
the same may be otherwise permitted hereunder, or in the event that any lien,
encumbrance or security interest prohibited hereby shall not be paid in full or
discharged, or in the event that any Borrower shall fail to perform or comply
with any other covenant, promise or Obligation to Lender hereunder or under any
Loan Document, Lender may, but shall not be required to, perform, pay, satisfy,
discharge or bond the same for the account of Borrowers, and all monies so paid
by Lender, including reasonable attorneys' fees, shall be treated as an advance
hereunder to Borrowers.
13.3. Lender's Right of Set-Off. Lender may, at any time upon the
occurrence and during the continuance of an Event of Default hereunder which
Lender, in its reasonable judgment, deems material and without any further
notice to Borrowers (such notice being expressly waived), set-off or apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, or any other indebtedness at any time owing by Lender or any
Affiliate of Lender or any participant in Lender's loans to Borrowers to or for
the credit or the account of Borrowers against any Obligation irrespective of
whether any demand has been made hereunder or whether such Obligation is mature.
The rights given hereunder are cumulative with all of the other rights and
remedies of Lender, including other rights of set-off,
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under this or any Agreement or by operation of law or otherwise and shall also
constitute a security interest in such deposits. Lender shall promptly notify
Borrowers of any such set-off and application but failure so to do shall not
affect the validity of such set-off.
13.4. Lender's Right of Inspection. At any time and from time to time,
(a) after the occurrence of any Event of Default or (b) with Borrower's consent,
which shall not be unreasonably withheld, Lender or any agents or
representatives of Lender, upon reasonable notice to Borrowers (unless an Event
of Default shall have occurred hereunder, in which event no notice to Borrowers
shall be required) may examine and make copies of and abstracts from the records
and books of account of, and visit and inspect the properties (including, but
without limitation, the locations of the Equipment) of, Borrowers and discuss
the affairs, finances and accounts of Borrowers with any of its officers,
employees, directors and accountants.
14. CONDITIONS PRECEDENT; CLOSING. As conditions precedent to the
making of any loan or Advance hereunder, Borrowers shall deliver to Lender, or
shall cause to be delivered to Lender, the following documents duly executed and
in form satisfactory to Lender and its counsel;
(a) the Revolving Loan Note and each of the other Loan
Documents duly executed and delivered by the appropriate parties
thereto;
(b) Copies of all filing receipts or acknowledgements issued
by any governmental authority to evidence any filing or recordation
necessary to perfect the Liens of Lender in the Collateral and evidence
in a form acceptable to Lender that such Liens constitute valid and
perfected first priority security interests and Liens;
(c) Appropriate corporate resolutions of the Board of
Directors of each Borrower;
(d) A closing certificate executed by the Chief Executive
Officer and Chief Financial Officer of KTI certifying that (i) the
representations and warranties set forth in this Agreement are true and
correct in all material respects on and as of such date, (ii) there has
been no material adverse change in the financial conditions of KTI
since September 30, 1996, and (iii) on such date no Event of Default
has occurred or is continuing.
(e) The letter to accountants required by Section 8.5 of this
Agreement;
(f) The favorable written opinion of XxXxxxxxx, Will & Xxxxx,
counsel to the Borrowers, in form and substance satisfactory to Lender;
(g) The favorable written opinion of Xxxxxx X. Xxxxxx,
in-house counsel to the Borrowers, in form and substance satisfactory
to Lender;
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(h) A copy of each Borrower's Certificate of Incorporation and
By-Laws, and all amendments thereto;
(i) A Good Standing Certificate issued by the Secretary of
State of each jurisdiction where the conduct of any Borrower's business
activities or the ownership of its Properties necessitates
qualification; and
(j) Such other documents, instruments, agreements, and
information as Lender or its counsel shall reasonably request.
15. TERM. This Agreement shall terminate on June 30, 1997.
16. EVENTS OF DEFAULT.
16.1. Defaults. Upon the happening of any of the following Events of
Default:
(a) if any of the Borrowers shall fail to make payment when
due of any Obligation under this Agreement or any Loan Document; or
(b) if any of the Borrowers shall fail to comply with any
term, condition, covenant, warranty or representation of or in this
Agreement, any other Loan Document or any other agreement between
Lender and the Borrower and such failure continues for a period in
excess of thirty (30) days after notice thereof is given by Lender to
Borrower; or
(c) if any Borrower shall cease to be Solvent, make an
assignment for the benefit of its creditors, call a meeting of its
creditors to obtain any general financial accommodation, suspend
business or if any case under any provision of the Bankruptcy Code,
including provisions for reorganizations, shall be commenced by or
against Borrower, unless such case is dismissed within thirty (30) days
of the date of its commencement; or
(d) if any statement or representation contained in any
financial statement or certificate delivered by any Borrower to Lender
shall be willfully and materially false when made and Lender reasonably
believes that such statement or representation affects the
creditworthiness of any Borrower; or
(e) if any federal tax lien of more than Twenty-Five Thousand
Dollars ($25,000.00) is filed of record against any Borrower and is not
bonded or discharged within ten (10) days; or
(f) if Borrowers' independent public accountants shall refuse
to deliver any opinion required by this Agreement; or
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(g) if a receiver shall be appointed for all or any material
portion of the assets of any Borrower and the same shall not have been
discharged within sixty (60) days; or
(h) if a judgment for more than Fifty Thousand Dollars
($50,000.00) shall be entered against any Borrower and shall not be
stayed, vacated, bonded, paid or discharged within sixty (60) days
except a judgment where the claim is covered by insurance and the
insurance company has accepted liability therefor; or
(i) upon the happening of any Reportable Event which Lender in
good faith determines might constitute grounds for the termination of
any Plan, or if a trustee shall be appointed by an appropriate United
States District Court or other court of administrative tribunal to
administer any Plan, or if the Pension Benefit Guaranty Corporation
shall institute proceedings to terminate any Plan or to appoint a
trustee to administer any Plan; or
(j) upon the occurrence and continuance of any condition
which, in the Lender's reasonable opinion, has or may have a material
adverse effect on the business, prospects or financial condition of any
Borrower,
then and in any such event, Lender may terminate this Agreement without prior
notice or demand to Borrowers or may demand payment of all Obligations (whether
otherwise then payable on demand or not) without terminating this Agreement and
shall, in any event, be under no further responsibility to extend any credit or
afford any financial accommodation to Borrowers, whether under this Agreement or
otherwise.
16.2. Obligations Immediately Due. Upon the effective date of
termination for any reason, all of Borrowers' Obligations to Lender, including
but not limited to the Revolving Loan, shall immediately become due and payable
without further notice or demand.
16.3. Continuation of Security Interests. Notwithstanding any
termination, until all Obligations of Borrower shall have been fully paid and
satisfied, Lender shall retain all security in and title to all existing and
future Receivables, and other collateral held by it hereunder or under any other
agreement and Borrowers shall continue to assign Receivables to Lender and
continue to turn over collections to it.
17. REMEDIES OF LENDER.
17.1. Rights Under Uniform Commercial Code. Upon the occurrence of any
Event of Default which Lender, in its judgment, deems to be material or upon any
termination of this Agreement following an Event of Default which Lender, in its
reasonable judgment, deems to be material, then Lender shall have, in addition
to all of its other rights under this Agreement or otherwise (which rights shall
be cumulative), all of the rights and remedies of a secured party under the
Uniform Commercial Code and shall have the right to enter upon any premises
where the Collateral is kept and peacefully retake possession thereof. Lender
may, without demand,
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advertising or notice all of which Borrowers hereby waive (except as the same
may be required by law), sell, lease, dispose of, deliver and grant options to a
third party to purchase, lease or otherwise dispose of any and all Receivables
or other security or Collateral held by it or for its account at any time or
times in one or more public or private sales or other dispositions, for cash, on
credit or otherwise, as such prices and upon such terms as Lender, in its sole
reasonable discretion, deems advisable. Notice of any public sale shall be
sufficient if it describes the security or Collateral to be sold in general
terms, stating the amounts thereof, the nature of the business in which such
Collateral was created and the location and nature of the properties covered by
the other security interests or mortgages and the prior liens thereon, and is
published at least once in The Times Union or The Wall Street Journal, not less
than five (5) business days prior to the date of sale. If The Times Union or The
Wall Street Journal are not then being published, publication may be made in
lieu thereof in any newspaper then being circulated in the City of Albany, New
York which the Lender may elect. All requirements of reasonable notice under
this Article shall be met if such notice is mailed via certified or registered,
postage prepaid, to Borrowers at their address set forth above or such other
address as they may have, in writing, provided to Lender, at least five (5) days
before the time of such sale or disposition. Lender may, if it deems it
reasonable, postpone or adjourn any sale of any Collateral from time to time by
an announcement at the time and place of the sale to be so postponed or
adjourned without being required to give a new notice of sale, provided,
however, that Lender shall provide Borrowers with written notice of the time and
place of such postponed or adjourned sale. Lender may be the purchaser at any
such sale if it is public, and payment may be made, in whole or in part, in
respect of such purchase price by the application of Obligations due from
Borrowers to Lender. Borrowers shall be obligated for, and the proceeds of sale
shall be applied first to, the costs of retaking, refurbishing, storing,
guarding, insuring, preparing for sale, and selling the collateral, including
the fees and disbursements of attorneys, auctioneers, appraisers and accountants
employed by Lender. Proceeds shall then be applied to the payment in whatever
order Lender may elect, of all Obligations of the Borrowers. Lender shall
immediately return any excess to the Borrowers and Borrowers shall remain liable
for any deficiency.
17.2. Waiver of Rights by Borrowers. Except as may be otherwise
specifically provided herein or in any other agreement between Lender and
Borrowers which may be applicable, Borrowers waive, to the extent permitted by
law, any bonds, security or sureties required by any statute, rule or otherwise
by law as an incident to any taking of possession by Lender of Property subject
to Lender's Lien. Upon the occurrence and during the continuance of an Event of
Default, Borrowers also consent that Lender may enter upon any premises owned by
or leased to it without obligation to pay rent or for use and occupancy, through
self help, without judicial process and without having first given notice to
Borrowers or obtained an order of any court. These waivers and all other waivers
provided for in this Agreement and any other agreements or instruments executed
in connection herewith have been negotiated by the parties.
17.3. Lender's Rights. Borrowers agree that Lender shall not have any
obligation to preserve rights to any Collateral against prior parties or to
xxxxxxxx any Collateral of any kind for the benefit of any other creditor of
Borrowers or any other person. Upon the occurrence and
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during the continuance of any Event of Default which Lender, in its reasonable
judgment, deems material, Lender is hereby granted a license or other right to
use, without charge, Borrowers' labels, patents, copyrights, rights of use of
any name, trade secrets, trade names, trademarks and advertising matter, or any
property of a similar nature, as it pertains to the Collateral, in completing
production of, advertising for sale, and selling any Collateral and Borrowers'
rights under all licenses and any franchise, sales or distribution agreements
shall inure to Lender's benefit for such purpose.
17.4. Borrowers to Pay Costs. Borrowers agree that (a) after the
occurrence of an Event of Default or (b) in the event that Borrowers request
that Lender take, consider taking or forbear from taking any action, whether
under this Agreement or otherwise, it shall pay all reasonable costs and
expenses which may be incurred by Lender, including but not limited to the costs
and expenses of amending, implementing, perfecting, collecting, defending,
declaring, monitoring and enforcing Lender's rights, security interests and
Collateral hereunder or under any instrument or agreement delivered in
connection herewith, including, but not limited to, searches and filings at all
times, and Lender's reasonable attorneys' fees (regardless of whether any
litigation is commenced, whether default is declared hereunder, and regardless
of tribunal or jurisdiction).
18. GENERAL PROVISIONS.
18.1. Rights Cumulative. Lender's rights and remedies under this
Agreement shall be cumulative and non-exclusive of any other rights or remedies
which it may have under any other agreement or instrument, by operation of law
or otherwise.
18.2. Successors and Assigns. This Agreement is entered into for the
benefit of the parties hereto and their successors and assigns. It shall be
binding upon and shall inure to the benefit of the said parties, their
successors and assigns.
18.3. Notice. Wherever this Agreement provides for notice to either
party (except as expressly provided to the contrary), it shall be given by
messenger, electronic transmission, telegram or certified or registered mail,
return receipt requested, effective when received by the corporate party to whom
addressed, and shall be addressed as follows, or to such other address as the
party affected may hereafter designate.
If to Lender: Key Bank of New York
00 Xxxxx Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxxx, Vice President
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Crane, Kelley, Xxxxxx & Parente
00 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxx Xxxx 00000
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If to Borrower: KTI, INC.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
KTI Environmental Group, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
Xxxx Technologies Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
KTI Limited Partners, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
KTI Operations, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
PERC, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxx X. Xxxxxx, Esq.
With a copy to: Xxxxx Xxxxxxx, Esq.
XxXxxxxxx, Will & Xxxxx
00 Xxxxxxxxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
18.4. Strict Performance. The failure, at any time or times hereafter,
to require strict performance by Borrowers of any provision of this Agreement
shall not waive, affect or diminish any right of Lender thereafter to demand
strict compliance and performance therewith. Any suspension or waiver by Lender
of any Event of Default by Borrowers under this Agreement or any of the other
Loan Documents shall not suspend, waive or affect any other Event of Default by
Borrowers under this Agreement or any of the other Loan Documents, whether the
same is prior or subsequent thereto and whether of the same or a different type.
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18.5. WAIVER OF RIGHT TO JURY TRIAL. BORROWERS JOINTLY AND SEVERALLY
WAIVE THE RIGHT TO TRIAL BY JURY IN THE EVENT OF ANY ACTION, SUIT, PROCEEDING,
COUNTERCLAIM OR OTHER LITIGATION TO WHICH THE LENDER AND ANY BORROWER ARE
PARTIES IN RESPECT OF ANY MATTER ARISING UNDER THIS AGREEMENT OR ANY OTHER
MATTER INVOLVING BORROWERS AND LENDER, WHETHER OR NOT OTHER PERSONS ARE ALSO
PARTIES THERETO. BORROWERS ACKNOWLEDGE THAT THE FOREGOING WAIVER IS A MATERIAL
INDUCEMENT TO LENDER'S ENTERING INTO THIS AGREEMENT AND THAT LENDER IS RELYING
ON THE FOREGOING WAIVER IN ITS FUTURE DEALINGS WITH BORROWERS. BORROWERS
REPRESENT AND WARRANT THAT THEY HAVE REVIEWED THIS JURY WAIVER PROVISION WITH
THEIR LEGAL COUNSEL, AND HAS MADE THIS WAIVER KNOWINGLY AND VOLUNTARILY.
18.6. Amendments. This Agreement and the other agreements to which it
refers constitute the complete agreement between the parties with respect to the
subject matter and may not be changed, modified, waived, amended or terminated
orally, but only by a writing signed by the party to be charged.
18.7. Waiver. Upon the occurrence and during the continuance of any
Event of Default, Borrowers waive presentment, protest, notice of dishonor and
notice of protest upon any instrument on which it may be liable to Lender as
maker, endorser, guarantor or otherwise.
18.8. Conflict of Laws. This Agreement shall be deemed to have been
made in Albany, New York, and shall be governed by and construed in accordance
with the internal laws of the State of New York; provided, however, that if any
of the Collateral shall be located in any jurisdiction other than New York, the
laws of such jurisdiction shall govern the method, manner and procedure for
foreclosure of Lenders' lien upon such Collateral and the enforcement of
Lenders' other remedies in respect of such Collateral to the extent that the
laws of such jurisdiction are different from or inconsistent with the laws of
New York. As part of the consideration for new value received, and regardless of
any present or future domicile or principal place of business of any Borrower or
Lender, Borrowers hereby consent and agree that any court in Albany County, New
York, or at Lender's option, the United States District Court for the Northern
District of New York, shall have jurisdiction to hear and determine any claims
or disputes between Borrowers and Lender pertaining to this Agreement or to any
matter arising out of or related to this Agreement; provided, however, Lender
may, at its option, commence any action, suit or proceeding in any other
appropriate forum or jurisdiction to obtain possession of or foreclose upon any
Collateral, to obtain equitable relief or to enforce any judgment or order
obtained by Lender against Borrowers or with respect to any Collateral, to
enforce any other right or remedy under this Agreement or to obtain any other
relief deemed appropriate by Lender. Borrowers expressly submit and consent in
advance to such jurisdiction in any action or suit commenced in any such court,
and Borrowers hereby waive any objection which Borrowers may have based upon
lack of personal jurisdiction, improper venue or forum non conveniens and hereby
consents to the granting of such legal or equitable relief as is deemed
appropriate by such court.
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18.9. Expenses. If, at any time or times prior or subsequent to the
date hereof, regardless of whether or not an Event of Default then exists or any
of the transactions contemplated hereunder are concluded, Lender employs counsel
for advice or other representation, or incurs legal expenses or other costs or
out-of-pocket expenses in connection with: (A) the negotiation and preparation
of this Agreement or any of the other Loan Documents, any amendment of or
modification of this Agreement or any of the other Loan Documents; (B) the
administration of this Agreement or any of the other Loan Documents and the
transactions contemplated hereby and thereby; (C) periodic audits and appraisals
performed by Lender; (D) any litigation, contest, dispute, suit, proceeding or
action (whether instituted by Lender, Borrowers or any other Person) in any way
relating to the Collateral, this Agreement or any of the other Loan Documents or
Borrowers' affairs; (E) any attempt to enforce any rights or remedies of Lender
against any Borrower or any other Person which may be obligated to Lender by
virtue of this Agreement or any of the other Loan Documents, including, without
limitation, the Account Debtors; or (F) any attempt to inspect, verify, protect,
preserve, restore, collect, sell, liquidate or otherwise dispose of or realize
upon the Collateral; then, in any such event, the reasonable attorneys' fees
arising from such services and all reasonable expenses, costs, charges and other
reasonable fees of such counsel of Lender or relating to any of the events or
actions described in this Section shall be payable by Borrowers to Lender, and
shall be additional Obligations hereunder secured by the Collateral.
Additionally, if any taxes (excluding taxes imposed upon or measured by the net
income of Lender, but including any intangibles tax, stamp tax or recording tax)
shall be payable on account of the execution or delivery of this Agreement, or
the execution, delivery, issuance or recording of any of the other Loan
Documents, or the creation of any of the Obligations hereunder, by reason of any
existing or hereafter enacted federal or state statute, Borrowers will pay (or
will promptly reimburse Lender for the payment of) all such taxes, including,
but not limited to, any interest and penalties thereon, and will indemnify and
hold Lender harmless from and against liability in connection therewith.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their officers thereunto duly authorized on the day and year first
above written.
KTI, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
KTI ENVIRONMENTAL GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
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XXXX TECHNOLOGIES INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
KTI LIMITED PARTNERS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
KTI OPERATIONS, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
PERC, INC.
By: /s/ Xxxxxx X. Xxxxx
------------------------
Name: Xxxxxx X. Xxxxx
Title: President
KEY BANK OF NEW YORK
By: /s/ Xxxx Xxxxxxx
------------------------
Name: Xxxx Xxxxxxx
Title: Vice President
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STATE OF NEW JERSEY )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of KTI,
Inc., the corporation described in, and which executed the above instrument; and
that he signed his name thereto by like order of the Board of Directors of said
corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 0000
XXXXX XX XXX XXXXXX )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of KTI
Environmental Group, Inc., the corporation described in, and which executed the
above instrument; and that he signed his name thereto by like order of the Board
of Directors of said corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 0000
XXXXX XX XXX XXXXXX )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of Xxxx
Technologies Inc., the corporation described in, and which executed the above
instrument; and that he signed his name thereto by like order of the Board of
Directors of said corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 2000
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35
STATE OF NEW JERSEY )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of KTI
Limited Partners, Inc., the corporation described in, and which executed the
above instrument; and that he signed his name thereto by like order of the Board
of Directors of said corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 0000
XXXXX XX XXX XXXXXX )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of KTI
Operations, Inc., the corporation described in, and which executed the above
instrument; and that he signed his name thereto by like order of the Board of
Directors of said corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 0000
XXXXX XX XXX XXXXXX )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxxxx X.
Xxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at 00 Xxxxx Xxxx, Xxxxxxxx, X.X., that he is the President of
PERC, Inc., the corporation described in, and which executed the above
instrument; and that he signed his name thereto by like order of the Board of
Directors of said corporation.
/s/ Xxxxxxx X. Xxxxxx
---------------------
Notary Public
XXXXXXX X. XXXXXX
NOTARY PUBLIC OF NEW JERSEY
My Commission Expires Sept. 25, 2000
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STATE OF NEW JERSEY )ss.:
COUNTY OF XXXXXX )
On this 29th day of October, 1996, before me personally came Xxxx
Xxxxxxx, to me known, who being by me duly sworn, did depose and say that he
resides at _________________, New York, that he is the Vice President of Key
Bank of New York, the corporation described in, and which executed the above
instrument; and that he signed his name thereto by like order of the Board of
Directors of said corporation.
--------------------
Notary Public
31
