FOURTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT
Exhibit
4.5
FOURTH AMENDMENT TO CREDIT AND GUARANTY
AGREEMENT
THIS
FOURTH AMENDMENT TO CREDIT AND GUARANTY AGREEMENT (this
“Amendment”) is entered
into as of November 11, 2016 by and among HERE TO SERVE –
MISSOURI WASTE DIVISION, LLC, a Missouri limited liability company
(“HTS
MWD”), HERE TO SERVE – GEORGIA WASTE DIVISION,
LLC, a Georgia limited liability company (“HTS GWD”), BROOKLYN
CHEESECAKE & DESSERT ACQUISITION CORP., a New York corporation
(“BCDA”), MERIDIAN LAND
COMPANY, LLC, a Georgia limited liability company
(“MLC”), CHRISTIAN
DISPOSAL, LLC, a Missouri limited liability company
(“Christian
Disposal”), and FWCD, LLC, a Missouri limited
liability company (“FWCD” and together with
HTS MWD, HTS GWD, BCDA, MLC, and Christian Disposal, the
“Companies” and each, a
“Company”), MERIDIAN WASTE
SOLUTIONS, INC., a New York corporation (“Holdings”) and certain
subsidiaries of Holdings, the Lenders from time to time party
thereto and XXXXXXX XXXXX SPECIALTY LENDING GROUP, L.P., as
administrative agent for the Lenders (in such capacity, the
“Administrative
Agent”), Collateral Agent and Lead
Arranger.
RECITALS
A. The
Companies, Holdings, Lenders and Administrative Agent are parties
to that certain Credit and Guaranty Agreement, dated as of December
22, 2015 (as amended by that certain First Amendment to Credit and
Guaranty Agreement, dated as of March 9, 2016 (the
“First
Amendment”), by that certain Second Amendment to
Credit and Guaranty Agreement, dated as of July 19, 2016 (the
“Second
Amendment”), by that certain Waiver and Amendment
Letter, dated as of August 16, 2016 (the “Third Amendment”), and as
may be further amended, restated, supplemented or otherwise
modified from time to time, the “Credit Agreement”;
capitalized terms used herein and not otherwise defined shall have
the meanings assigned to such terms in the Credit Agreement),
pursuant to which the Lenders have made certain financial
accommodations available to the Companies;
B. The
Companies have requested that the Lenders amend certain provisions
of the Credit Agreement and waive certain Events of Default, and,
subject to the terms and conditions hereof, the Lenders executing
this Amendment are willing to do so; and
NOW,
THEREFORE, in consideration of the premises and the mutual
covenants hereinafter contained, and intending to be legally bound,
the parties hereto agree as follows:
A.
AMENDMENT
1. Section 1.1 of the Credit
Agreement is amended by replacing the definitions of
“Availability”, “Consolidated Corporate
Overhead” and “Leverage Ratio” and in their
entirety with the following:
“Availability”
means, on any date of determination, the lesser of (a)(i) the
aggregate principal amount of the Commitments as of such date less
(ii) the aggregate principal balance of the Loans as of such date,
and (b)(i)(A) the sum of the trailing twelve months Consolidated
Adjusted EBITDA of Holdings and its Subsidiaries as of the last day
of the most recently ended month for which financial statements
have been delivered pursuant to Section 5.1(a) multiplied by (B)
the then in effect maximum Leverage Multiple, less (ii) the sum of
(A) the aggregate principal balance of the Loans as of such date
plus (B)(x) all other Consolidated Total Debt as of such date, less
(y) the aggregate outstanding principal amount of Subordinated Debt
as of such date. Availability shall be computed giving pro forma
effect to all Credit Extensions proposed to be made on the relevant
date of determination.
1
“Consolidated
Corporate Overhead” means, for any period, the aggregate of
all expenditures of Holdings and its Subsidiaries during such
period determined on a consolidated basis in accordance with GAAP
including, without limitation, all expenditures associated with the
compensation and benefits of the corporate officers and staff of
Holdings and its Subsidiaries (including the chief executive
officers, chief financial officers and chief operating officers
thereof) and legal, audit, insurance and accounting costs and
expenses associated with the corporate compliance of Holdings and
its Subsidiaries and excluding such other expenditures that, in
accordance with GAAP, (i) are or should be included in Consolidated
Interest Expense, (ii) are taxes based on income, (iii) are
capitalized expenditures, (iv) are operating expenses, and (v) are
other non-Cash or non-recurring items consented to by
Administrative Agent in writing in its sole
discretion.
“Leverage
Ratio” means as of any date of determination, the ratio of
(a) (i) Consolidated Total Debt as of such date, less (ii) the
aggregate outstanding principal amount of Subordinated Debt as of
such date, to (b) Consolidated Adjusted EBITDA for the twelve month
period ending on such date (or if such date of determination is not
the last day of a fiscal month, for the twelve fiscal month period
ending as of the most recently concluded for which financial
statements are required to have been delivered
hereunder).
2. Section 2.13 of the Credit
Agreement is amended by replacing subsection (c)(iv) of such
Section in its entirety with the following:
(iv) to
pay Consolidated Corporate Overhead in an aggregate amount (x) not
to exceed $2,100,000 in any period of twelve consecutive fiscal
months ending on or prior to December 31, 2017 and (y) not to
exceed $1,350,000 in any period of twelve consecutive fiscal months
ending after December 31, 2017;
2. Section
6.8 of the Credit Agreement is amended by replacing
subsection (e) of such Section in its entirety with the
following:
(e)
Maximum Consolidated
Corporate Overhead. Holdings shall not permit Consolidated
Corporate Overhead to exceed (x) $2,100,000 in any period of twelve
consecutive fiscal months ending on or prior to December 31, 2017
and (y) $1,350,000 in any period of twelve consecutive fiscal
months ending after December 31, 2017.
2
3. Section
6.8 of the Credit Agreement is further amended by replacing
subsection (d) of such Section in its entirety with the
following:
(d)
Maximum Consolidated
Growth Capital Expenditures.
Holdings shall not, and shall not permit its Subsidiaries to, make
or incur Consolidated Growth Capital Expenditures, in any Fiscal
Year indicated below, in an aggregate amount for Holdings and its
Subsidiaries in excess of the corresponding amount set forth below
opposite such Fiscal Year; provided, such amount for any Fiscal
Year shall be increased by an amount equal to the excess, if any,
(but in no event more than 50% of the aggregate amount for such
Fiscal Year) of such amount for the previous Fiscal Year (as
adjusted in accordance with this proviso) over the actual amount of
Consolidated Growth Capital Expenditures for such previous Fiscal
Year; provided further, that for the Fiscal Year ending December
31, 2015, Consolidated Growth Capital Expenditures shall be
measured only for the period from the Closing Date through December
31, 2015:
|
Fiscal
Year
|
Consolidated Growth Capital Expenditures
|
|
December 31,
2015
|
$250,000
|
|
December 31,
2016
|
$4,375,000
|
|
December 31,
2017
|
$750,000
|
|
December 31,
2018
|
$750,000
|
|
December 31,
2019
|
$1,750,000
|
|
December 31, 2020
and each Fiscal Year ending thereafter
|
$750,000
|
B. LIMITED WAIVER
The
Lenders hereby waive the Events of Default that have occurred and
are continuing
(a) under Section 8.1(c) of the Credit
Agreement due to Holdings permitting the Leverage Ratio, as of the
last day of the Fiscal Quarter ending September 30, 2016, to be
greater than 5.25:1.00;
(b) under
Section 8.1(c) of
the Credit Agreement due to the failure of Holdings to have
Consolidated Corporate Overhead less than or equal to $1,350,000 in
the twelve consecutive fiscal months ending September 30, 2016, as
required by Section 6.8(e) of the Credit Agreement;
and
(c) under
Section 8.1(c) of
the Credit Agreement due to Holdings permitting Consolidated Growth
Capital Expenditures, as of September 30, 2016, to exceed the level
permitted under Section 6.8(d) of the Credit
Agreement.
The
waivers set forth in this Section B are limited to the specified
Events of Default set forth herein and nothing herein, nor any
communications among Administrative Agent, any Lender or any Credit
Party shall be deemed a waiver with respect to any other Default or
Event of Default, or any future failure of any Credit Party to
comply fully with any provision of the Credit Agreement or any
provision of any other Credit Document (including, but not limited
to, any possible future Default or Event of Default of which the
Administrative Agent or any Lender may have been
advised).
3
C. CONSENT
Notwithstanding the
failure of the Credit Parties to satisfy the requirements of
Section 3.2(a)(v)
and Section
3.2(a)(vi) of the Credit Agreement due to the failure of the
Credit Parties to be in pro forma compliance with the Leverage
Ratio, the Administrative Agent and Lenders signatory hereto
consent to the disbursement of a Revolving Loan in the amount of
$1,045,000, in accordance with the terms and provisions of the
Credit Agreement, pursuant to that certain Funding Notice dated as
of the date hereof and delivered Administrative Agent.
D. CONDITIONS TO EFFECTIVENESS
Notwithstanding any
other provision of this Amendment and without affecting in any
manner the rights of the Lenders hereunder, it is understood and
agreed that this Amendment shall not become effective, the Credit
Parties shall have no rights under this Amendment, until
Administrative Agent shall have received each of the
following:
(i) reimbursement
or payment of its costs and expenses incurred in connection with
this Amendment or the Credit Agreement (including reasonable fees,
charges and disbursements of counsel to Administrative Agent) to
the extent invoiced prior to the date hereof; and
(ii) executed counterparts to this
Amendment from each Company, each other Credit Party, and each of
the Lenders.
E.
REPRESENTATIONS
To
induce the Lenders and Administrative Agent to enter into this
Amendment, each Credit Party hereby represents and warrants to the
Lenders and the Administrative Agent that:
1. The
execution, delivery and performance by such Credit Party of this
Amendment (a) are within each Credit Party’s corporate
or limited liability company power; (b) have been duly
authorized by all necessary corporate, limited liability company
and/or shareholder action, as applicable; (c) are not in
contravention of any provision of any Credit Party’s
certificate of incorporation or formation, or bylaws or other
organizational documents; (d) do not violate any law or
regulation, or any order or decree of any Governmental Authority;
(e) do not conflict with or result in the breach or
termination of, constitute a default under or accelerate any
performance required by, any indenture, mortgage, deed of trust,
lease, agreement or other instrument to which any Credit Party or
any of its Subsidiaries is a party or by which any Credit Party or
any such Subsidiary or any of their respective property is bound;
(f) do not result in the creation or imposition of any Lien upon
any of the property of any Credit Party or any of its Subsidiaries;
and (g) do not require the consent or approval of any
Governmental Authority or any other person;
4
2. This
Amendment has been duly executed and delivered for the benefit of
or on behalf of each Credit Party and constitutes a legal, valid
and binding obligation of each Credit Party, enforceable against
such Credit Party in accordance with its terms except as the
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization, moratorium and other laws affecting
creditors’ rights and remedies in general; and
3. After
giving effect to this Amendment, the representations and warranties
contained in the Credit Agreement and the other Credit Documents
are true and correct in all material respects, and no Default or
Event of Default has occurred and is continuing as of the date
hereof.
F.
OTHER
AGREEMENTS
1. Continuing Effectiveness of Credit
Documents. As amended hereby, all terms of the Credit
Agreement and the other Credit Documents shall be and remain in
full force and effect and shall constitute the legal, valid,
binding and enforceable obligations of the Credit Parties party
thereto and each Credit Party reaffirms and ratifies all terms of
the Credit Agreement, as amended hereby, and other Credit
Documents. To the extent any terms and conditions in any of the
other Credit Documents shall contradict or be in conflict with any
terms or conditions of the Credit Agreement, after giving effect to
this Amendment, such terms and conditions are hereby deemed
modified and amended accordingly to reflect the terms and
conditions of the Credit Agreement as modified and amended hereby.
Upon the effectiveness of this Amendment such terms and conditions
are hereby deemed modified and amended accordingly to reflect the
terms and conditions of the Credit Agreement as modified and
amended hereby.
2. Reaffirmation of Guaranty. Each
Guarantor consents to the execution and delivery by the Companies
of this Amendment and the consummation of the transactions
described herein, and ratifies and confirms the terms of the
Guaranty to which such Guarantor is a party with respect to the
indebtedness now or hereafter outstanding under the Credit
Agreement as amended hereby and all promissory notes issued
thereunder. Each Guarantor acknowledges that, notwithstanding
anything to the contrary contained herein or in any other document
evidencing any indebtedness of any Company to the Lenders or any
other obligation of any Company, or any actions now or hereafter
taken by the Lenders with respect to any obligation of any Company,
the Guaranty to which such Guarantor is a party (i) is and shall
continue to be a primary obligation of such Guarantor, (ii) is and
shall continue to be an absolute, unconditional, continuing and
irrevocable guaranty of payment, and (iii) is and shall continue to
be in full force and effect in accordance with its terms. Nothing
contained herein to the contrary shall release, discharge, modify,
change or affect the original liability of any Guarantor under the
Guaranty to which such Guarantor is a party.
3. Acknowledgment of Perfection of
Security Interest. Each Credit Party hereby acknowledges
that, as of the date hereof, the security interests and liens
granted to Administrative Agent and the Lenders under the Credit
Agreement and the other Credit Documents are in full force and
effect, are properly perfected to the extent required under the
Collateral Documents and are enforceable in accordance with the
terms of the Credit Agreement and the other Credit
Documents.
5
4. Effect of Agreement. Except as
set forth expressly herein, all terms of the Credit Agreement, as
amended hereby, and the other Credit Documents shall be and remain
in full force and effect and shall constitute the legal, valid,
binding and enforceable obligations of the Credit Parties to the
Lenders and Administrative Agent. Except as expressly provided
herein, the execution, delivery and effectiveness of this Amendment
shall not operate as a waiver of any right, power or remedy of the
Lenders under the Credit Agreement, nor constitute a waiver of any
provision of the Credit Agreement. This Amendment shall constitute
a Credit Document for all purposes of the Credit
Agreement.
5. Governing Law. This Amendment
shall be governed by, and construed in accordance with, the
internal laws of the State of New York and all applicable federal
laws of the United States of America.
6. No Novation. This Amendment is not intended by the
parties to be, and shall not be construed to be, a novation of the
Credit Agreement and the other Credit Documents or an accord and
satisfaction in regard thereto.
7. Costs and Expenses. The
Companies agree to pay on demand all costs and expenses of
Administrative Agent in connection with the preparation, execution
and delivery of this Amendment, including, without limitation, the
reasonable fees and out-of-pocket expenses of outside counsel for
Administrative Agent with respect thereto.
8. Counterparts. This Amendment
may be executed by one or more of the parties hereto in any number
of separate counterparts, each of which shall be deemed an original
and all of which, taken together, shall be deemed to constitute one
and the same instrument. Delivery of an executed counterpart of
this Amendment by facsimile transmission, electronic transmission
(including delivery of an executed counterpart in .pdf format)
shall be as effective as delivery of a manually executed
counterpart hereof.
9. Binding Nature. This Amendment
shall be binding upon and inure to the benefit of the parties
hereto, their respective successors, successors-in-titles, and
assigns. No third party beneficiaries are intended in connection
with this Amendment.
10. Entire Understanding. This
Amendment sets forth the entire understanding of the parties with
respect to the matters set forth herein, and shall supersede any
prior negotiations or agreements, whether written or oral, with
respect thereto.
11. Release. Each Credit Party
hereby releases, acquits, and forever discharges Administrative
Agent and each of the Lenders, and each and every past and present
subsidiary, affiliate, stockholder, officer, director, agent,
servant, employee, representative, and attorney of Administrative
Agent and the Lenders, from any and all claims, causes of action,
suits, debts, liens, obligations, liabilities, demands, losses,
costs and expenses (including reasonable attorneys' fees) of any
kind, character, or nature whatsoever, known or unknown, fixed or
contingent, which such Credit Party may have or claim to have now
or which may hereafter arise out of or connected with any act of
commission or omission of Administrative Agent or the Lenders
existing or occurring prior to the date of this Amendment or any
instrument executed prior to the date of this Amendment including,
without limitation, any claims, liabilities or obligations arising
with respect to the Credit Agreement or the other of the Credit
Documents, other than claims, liabilities or obligations caused by
Administrative Agent’s or any Lender’s own gross
negligence or willful misconduct. The provisions of this paragraph
shall be binding upon each Credit Party and shall inure to the
benefit of Administrative Agent, the Lenders, and their respective
heirs, executors, administrators, successors and
assigns.
[remainder
of page intentionally left blank]
6
IN
WITNESS WHEREOF, this Amendment has been duly executed as of the
date first written above.
HERE
TO SERVE – MISSOURI WASTE DIVISION, LLC
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Manager
MERIDIAN
WASTE SOLUTIONS, INC., as Holdings
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Chief Executive Officer
HERE
TO SERVE – GEORGIA WASTE DIVISION, LLC
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Manager
BROOKLYN
CHEESECAKE & DESSERT ACQUISITION CORP.
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
President
MERIDIAN
LAND COMPANY, LLC
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Manager
CHRISTIAN
DISPOSAL, LLC
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Manager
FWCD,
LLC
By: /s/ Xxxxxxx
Xxxxxx
Name:
Xxxxxxx Xxxxxx
Title:
Manager
XXXXXXX XXXXX SPECIALTY LENDING GROUP,
LP, as Administrative Agent
By: /s/ Xxxxxxx
Xxxx
Name:
Xxxxxxx Xxxx
Title:
Senior Vice President
XXXXXXX SACHS SPECIALTY LENDING HOLDINGS,
INC., as a Lender
By: /s/ Xxxxxxx
Xxxx
Name:
Xxxxxxx Xxxx
Title:
Senior Vice President
[Signature Page to Fourth Amendment to Credit and Guaranty
Agreement]
8
