Exhibit 10.2
================================================================================
$220,000,000
CREDIT AGREEMENT
AMONG
CAPITAL ENVIRONMENTAL RESOURCE INC./RESSOURCES ENVIRONNEMENTALES CAPITAL INC.,
WASTE SERVICES, INC.,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO,
XXXXXX BROTHERS INC.,
AS ARRANGER
XXXXXX COMMERCIAL PAPER INC.,
AS SYNDICATION AGENT
AND
XXXXXX COMMERCIAL PAPER INC.,
AS ADMINISTRATIVE AGENT
DATED AS OF DECEMBER 31, 2003
================================================================================
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS............................................................................................1
1.1 Defined Terms...................................................................................1
1.2 Other Definitional Provisions..................................................................24
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS.......................................................................24
2.1 Term Loan Commitments..........................................................................24
2.2 Procedure for Term Loan Borrowing..............................................................25
2.3 Repayment of Term Loans........................................................................25
2.4 Revolving Credit Commitments...................................................................25
2.5 Procedure for Revolving Credit Borrowing.......................................................25
2.6 Swing Line Commitment..........................................................................26
2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans..............................26
2.8 Repayment of Loans; Evidence of Debt...........................................................28
2.9 Commitment Fees, etc...........................................................................29
2.10 Termination or Reduction of Revolving Credit Commitments.......................................29
2.11 Optional Prepayments...........................................................................29
2.12 Mandatory Prepayments and Commitment Reductions................................................30
2.13 Interest Rates and Payment Dates...............................................................31
2.14 Computation of Interest and Fees...............................................................31
2.15 Pro Rata Treatment and Payments................................................................31
2.16 Requirements of Law............................................................................33
2.17 Taxes..........................................................................................33
2.18 Indemnity......................................................................................36
2.19 Change of Lending Office.......................................................................36
2.20 Extension of Maturity Date.....................................................................36
SECTION 3. LETTERS OF CREDIT.....................................................................................36
3.1 L/C Commitment.................................................................................36
3.2 Procedure for Issuance of Letter of Credit.....................................................37
3.3 Fees and Other Charges.........................................................................38
3.4 L/C Participations.............................................................................38
3.5 Reimbursement Obligation of the Borrower.......................................................39
3.6 Obligations Absolute...........................................................................40
3.7 Letter of Credit Payments......................................................................40
3.8 Applications...................................................................................40
3.9 Determination of Exchange Rate.................................................................40
SECTION 4. REPRESENTATIONS AND WARRANTIES........................................................................40
4.1 Financial Condition............................................................................41
4.2 No Change......................................................................................42
i
4.3 Corporate Existence; Compliance with Law.......................................................42
4.4 Corporate Power; Authorization; Enforceable Obligations........................................42
4.5 No Legal Bar...................................................................................43
4.6 No Material Litigation.........................................................................43
4.7 No Default.....................................................................................43
4.8 Ownership of Property; Liens...................................................................43
4.9 Intellectual Property..........................................................................43
4.10 Taxes..........................................................................................44
4.11 Federal Regulations............................................................................44
4.12 Labor Matters..................................................................................44
4.13 Pensions and Benefit Plans.....................................................................44
4.14 Investment Company Act; Other Regulations......................................................45
4.15 Subsidiaries...................................................................................45
4.16 Use of Proceeds................................................................................46
4.17 Environmental Matters..........................................................................46
4.18 Accuracy of Information, etc...................................................................47
4.19 Security Documents.............................................................................47
4.20 Solvency.......................................................................................48
4.21 Regulation H...................................................................................48
4.22 Insurance......................................................................................48
4.23 Acquisition Documentation......................................................................48
4.24 Real Estate....................................................................................49
4.25 Inactive Subsidiaries..........................................................................49
4.26 Xxxxx Preferred Stock..........................................................................49
SECTION 5. CONDITIONS PRECEDENT..................................................................................49
5.1 Conditions to Initial Extension of Credit......................................................49
5.2 Conditions to Each Extension of Credit.........................................................55
5.3 Conditions to the Funding of Term Loans on the Second Acquisition Closing Date.................56
SECTION 6. AFFIRMATIVE COVENANTS.................................................................................56
6.1 Financial Statements...........................................................................56
6.2 Certificates; Other Information................................................................57
6.3 Payment of Obligations.........................................................................59
6.4 Conduct of Business and Maintenance of Existence, etc..........................................59
6.5 Maintenance of Property; Insurance.............................................................59
6.6 Inspection of Property; Books and Records; Discussions.........................................59
6.7 Notices........................................................................................60
6.8 Environmental Laws.............................................................................60
6.9 [INTENTIONALLY OMITTED]........................................................................61
6.10 Additional Collateral, etc.....................................................................61
6.11 Use of Proceeds................................................................................63
6.12 Pension and Benefits Plans.....................................................................63
6.13 Further Assurances.............................................................................64
ii
6.14 Post Closing Obligations.......................................................................64
SECTION 7. NEGATIVE COVENANTS....................................................................................67
7.1 Financial Condition Covenants..................................................................67
7.2 Limitation on Indebtedness.....................................................................68
7.3 Limitation on Liens............................................................................68
7.4 Limitation on Fundamental Changes..............................................................70
7.5 Limitation on Disposition of Property..........................................................70
7.6 Limitation on Restricted Payments..............................................................71
7.7 Limitation on Capital Expenditures.............................................................72
7.8 Limitation on Investments......................................................................72
7.9 Limitation on Optional Payments and Modifications of Debt Instruments and Other Agreements.....73
7.10 Limitation on Transactions with Affiliates.....................................................74
7.11 Limitation on Sales and Leasebacks.............................................................74
7.12 Limitation on Changes in Fiscal Periods........................................................74
7.13 Limitation on Negative Pledge Clauses..........................................................74
7.14 Limitation on Restrictions on Subsidiary Distributions.........................................74
7.15 Limitation on Lines of Business................................................................75
7.16 Limitation on Amendments to Acquisition Documentation..........................................75
7.17 Limitation on Hedge Agreements.................................................................75
7.18 Limitation on Performance Bonds................................................................75
SECTION 8. EVENTS OF DEFAULT.....................................................................................75
SECTION 9. THE AGENTS; THE ARRANGER..............................................................................79
9.1 Appointment....................................................................................79
9.2 Delegation of Duties...........................................................................80
9.3 Exculpatory Provisions.........................................................................80
9.4 Reliance by Agents.............................................................................80
9.5 Notice of Default..............................................................................81
9.6 Non-Reliance on the Arranger, the Agents and Other Lenders.....................................81
9.7 Indemnification................................................................................81
9.8 Arranger and Agent in their Individual Capacities..............................................82
9.9 Successor Administrative Agent.................................................................82
9.10 Authorization to Release Liens and Guarantees..................................................83
9.11 The Arranger; the Syndication Agent............................................................83
9.12 Withholding Tax................................................................................83
SECTION 10. MISCELLANEOUS........................................................................................83
10.1 Amendments and Waivers.........................................................................83
10.2 Notices........................................................................................85
10.3 No Waiver; Cumulative Remedies.................................................................87
10.4 Survival of Representations and Warranties.....................................................87
iii
10.5 Payment of Expenses............................................................................87
10.6 Successors and Assigns; Participations and Assignments.........................................88
10.7 Adjustments; Set-off...........................................................................92
10.8 Counterparts...................................................................................92
10.9 Severability...................................................................................92
10.10 Integration....................................................................................92
10.11 GOVERNING LAW..................................................................................93
10.12 Submission To Jurisdiction; Waivers............................................................93
10.13 Acknowledgments................................................................................93
10.14 Confidentiality................................................................................94
10.15 Release of Collateral and Guarantee Obligations................................................94
10.16 Accounting Changes.............................................................................95
10.17 Delivery of Lender Addenda.....................................................................96
10.18 WAIVERS OF JURY TRIAL..........................................................................96
10.19 Subordination of Intercompany Indebtedness.....................................................96
10.20 Judgment Currency..............................................................................96
iv
A Pricing Grid
SCHEDULES:
1.1 Cash Collateralized Letters of Credit
4.4 Consents, Authorizations, Filings and Notices
4.6 Material Litigation
4.10 Taxes
4.15(a) Subsidiaries
4.15(b) Agreements Related to Capital Stock
4.17 Environmental Matters
4.19 Filing Jurisdictions under Personal Property Security Legislation
4.23 Acquisition Documentation
4.24 Owned and Leased Property; Mortgaged Properties
5.1(b) Remaining Allied Assets
5.1(k) Environmental Assessments
6.8(c) Environmental Reports
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.10 Transactions with Affiliates
EXHIBITS:
A-1 Form of Guarantee and Collateral Agreement
A-2 Form of Canadian Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
D-1 Form of U.S. Mortgage
D-2 Form of Canadian Mortgage
E Form of Assignment and Acceptance
F-1 Form of Legal Opinion of Shearman & Sterling LLP
F-2 Form of Legal Opinion of Blake, Xxxxxxx & Xxxxxxx LLP
G-1 Form of Term Note
G-2 Form of Revolving Credit Note
G-3 Form of Swing Line Note
H Form of Exemption Certificate
I Form of Lender Addendum
J Form of Borrowing Notice
K Form of Escrow Agreement
96
CREDIT AGREEMENT, dated as of December 31, 2003 , among
CAPITAL ENVIRONMENTAL RESOURCE INC./RESSOURCES ENVIRONNEMENTALES CAPITAL INC. an
Ontario corporation ("CERI"), WASTE SERVICES, INC., a Delaware corporation (the
"BORROWER"), the several banks and other financial institutions or entities from
time to time parties to this Agreement (the "LENDERS"), XXXXXX BROTHERS INC., as
exclusive advisor, sole lead arranger and sole bookrunner (in such capacity, the
"ARRANGER"), XXXXXX COMMERCIAL PAPER INC., as syndication agent (in such
capacity, the "SYNDICATION AGENT"), and XXXXXX COMMERCIAL PAPER INC., as
administrative agent (in such capacity, the "ADMINISTRATIVE AGENT").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to the Acquisition Agreement (as defined
below), the Borrower has agreed to acquire certain collection and hauling
operations, transfer stations, landfills and recycling facilities owned by
Allied Waste Industries, Inc., a Delaware corporation (the "SELLER") and certain
affiliates thereof;
WHEREAS, the Borrower has requested that the Lenders make
credit facilities available to the Borrower in order to finance the Acquisition
(as defined below), refinance the Existing Credit Facility (as defined below)
and for the other purposes set forth herein;
WHEREAS, the Lenders are willing to make such credit
facilities available upon and subject to the terms and conditions hereinafter
set forth;
NOW, THEREFORE, in consideration of the premises and the
agreements hereinafter set forth, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed
in this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ACQUISITION": as defined in Section 5.1.
"ACQUISITION AGREEMENT": the Asset Purchase Agreement, dated
as of November 13, 2003, by and among the Borrower, certain of its Subsidiaries
named therein, the Seller and certain of its affiliates named therein, as the
same may be amended, supplemented, replaced or otherwise modified from time to
time in accordance with this Agreement.
"ACQUISITION DOCUMENTATION": as defined in Section 4.23.
"ADMINISTRATIVE AGENT": as defined in the preamble hereto.
"AFFILIATE": as to any Person, any other Person that, directly
or indirectly, is in control of, is controlled by, or is under common control
with, such Person. For purposes of this definition, "control" of a Person means
the power, directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors (or
persons
1
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Syndication Agent
and the Administrative Agent.
"AGGREGATE EXPOSURE": with respect to any Lender at any time,
an amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans plus any
unfunded, unexpired and unterminated Tranche B Term Loan Commitment of such
Lender at such time and (ii) the amount of such Lender's Revolving Credit
Commitment then in effect or, if the Revolving Credit Commitments have been
terminated, the amount of such Lender's Revolving Extensions of Credit then
outstanding.
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at
any time, the ratio (expressed as a percentage) of such Lender's Aggregate
Exposure at such time to the sum of the Aggregate Exposures of all Lenders at
such time.
"AGREEMENT": this Credit Agreement, as amended, supplemented,
replaced or otherwise modified from time to time.
"ALLIED BUSINESS": the collection and hauling operations,
transfer stations, landfills and recycling facilities owned by Seller and its
Subsidiaries which are being purchased by the Borrower and its Subsidiaries
pursuant to the Acquisition Agreement.
"APPLICATION": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing Lender to
issue a Letter of Credit.
"ARIZONA ACQUISITIONS": (1) the purchase by Waste Services of
Arizona, Inc. and CERI of the solid waste collection and portable toilet
business of Complete Waste Services, Inc., operating in and around the greater
Phoenix, Arizona, metropolitan area and substantially all of the assets of
Complete Waste Services, Inc., used in the conduct of such business, (2) the
purchase by Waste Services of Arizona, Inc. from Horizon Waste Services of
Arizona, Inc., of the solid waste collection business it owns and operates in
and around the greater Phoenix, Arizona, metropolitan area as a going concern
and substantially all of the assets of Horizon Waste Services of Arizona, Inc.,
used in the conduct of such business and (3) the purchase by Waste Services of
Arizona, Inc., of substantially all of the assets of Arizona Waste Services,
Inc., used in its solid waste collection and portable toilet business operating
in and around the greater Phoenix, Arizona, metropolitan area, in each case, on
substantially the terms and conditions contemplated by the respective Arizona
Acquisition Agreements.
"ARIZONA ACQUISITION AGREEMENTS": collectively, the (1) Asset
Purchase Agreement by and among Complete Waste Services, Inc. and Xxxxxxxxxxx
Xxxxx, Waste Services of Arizona, Inc. and CERI to be entered into in
substantially the substance and form of the certain draft with the document
footer "1418130.7", (2) Asset Purchase Agreement by and among Horizon Waste
Services of Arizona, Inc., Horizon Waste Services, Inc., Waste Services of
Arizona, Inc. and CERI to be entered into in substantially the substance and
form of the draft dated December 17, 2003 and (3) Letter Re: Proposed
Acquisition of Assets of Arizona Waste
2
Services, Inc. from Waste Services of Arizona, Inc. to Xxxxx X. Xxxxxx to be
entered into in substantially the substance and form of the draft dated December
22, 2003.
"ARIZONA SALE AND LEASEBACK": the sale and leaseback of the
transfer station located at Mountain Road/Pecos Road, Maricopa County, Arizona,
for an aggregate amount not to exceed $500,000 and on other terms and conditions
reasonably satisfactory to the Administrative Agent.
"ARRANGER": as defined in the preamble hereto.
"ASSET SALE": any Disposition of Property or series of related
Dispositions of Property (excluding any such Disposition permitted by clause
(a), (b), (c), (d) or (f) of Section 7.5) which yields gross proceeds to any
Group Member (valued at the initial principal amount thereof in the case of
non-cash proceeds consisting of notes or other debt securities and valued at
fair market value in the case of other non-cash proceeds) in excess of $500,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNMENT AND ACCEPTANCE": as defined in Section 10.6(c).
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENT": with respect to any
Revolving Credit Lender at any time, an amount equal to the excess, if any, of
(a) such Lender's Revolving Credit Commitment then in effect OVER (b) such
Lender's Revolving Extensions of Credit then outstanding; PROVIDED, that in
calculating any Lender's Revolving Extensions of Credit for the purpose of
determining such Lender's (other than the Swing Line Lender's) Available
Revolving Credit Commitment pursuant to Section 2.9(a), the aggregate principal
amount of Swing Line Loans then outstanding shall be deemed to be zero.
"BENEFITED LENDER": as defined in Section 10.7.
"BOARD": the Board of Governors of the Federal Reserve System
of the United States of America (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified by the Borrower
as a date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BORROWING NOTICE": with respect to any request for borrowing
of Loans hereunder, a notice from the Borrower, substantially in the form of,
and containing the information prescribed by, Exhibit J, delivered to the
Administrative Agent.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to close.
3
"CALCULATION DATE": with respect to each Foreign L/C, during
the period that such Foreign L/C is outstanding (or the Reimbursement Obligation
in connection therewith has not been fully satisfied) (i) the last Business Day
of a fiscal month of the Borrower, (ii) the date on which such Letter of Credit
is issued or renewed by the Issuing Lender, (iii) the date on which any draft
presented under such Letter of Credit is paid by the Issuing Lender, (iv) each
L/C Fee Payment Date (immediately prior to the payment of any fees due on such
date), (v) the date on which the Obligations are accelerated pursuant to Section
8, (vi) such other dates as the Borrower may reasonably request from time to
time, and (vii) such other dates as the Issuing Lender or the Administrative
Agent may select from time to time in their sole discretion.
"CANADIAN BENEFIT PLANS": all material employee benefit plans
maintained or contributed to by any Group Member that are not Canadian Pension
Plans including, without limitation, all profit sharing, savings, supplemental
retirement, retiring allowance, severance, pension, deferred compensation,
welfare, bonus, incentive compensation, phantom stock, supplementary
unemployment benefit plans or arrangements and all material life, health, dental
and disability plans and arrangements in which the employees or former employees
of any Group Member employed in Canada participate or are eligible to
participate, but excluding all stock option or stock purchase plans.
"CANADIAN DOLLARS and CDN. $": lawful currency of Canada.
"CANADIAN GUARANTEE AND COLLATERAL AGREEMENT": the Canadian
Guarantee and Collateral Agreement to be executed by CERI and each Canadian
Subsidiary Guarantor, substantially in the form of Exhibit A-2, as the same may
be amended, supplemented, replaced or otherwise modified from time to time.
"CANADIAN PENSION PLANS": any plan which is considered to be a
pension plan for the purposes of any applicable pension benefits standards
statute and/or regulation in Canada established, maintained or contributed to by
any Group Member, their respective employees or former employees.
"CANADIAN SUBSIDIARIES": Ram-Pak Compaction Systems Ltd, a
corporation organized under the laws of Canada, 6045341 Canada Inc., a
corporation organized under the laws of Canada and each other direct Subsidiary
of CERI organized under the laws of Canada or any province thereof.
"CANADIAN SUBSIDIARY GUARANTOR": each Canadian Subsidiary
until the Migration.
"CAPITAL EXPENDITURES": for any period, with respect to any
Person, the aggregate of all expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease) of fixed or capital assets or additions to
equipment (including replacements, capitalized repairs and improvements during
such period) to the extent required to be capitalized under GAAP on a balance
sheet of such Person.
"CAPITAL HOLDINGS COMPANY": Capital Environmental Holdings
Company, a Nova Scotia unlimited liability company.
4
"CAPITAL LEASE OBLIGATIONS": with respect to any Person, the
obligations of such Person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP;
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued
by, or unconditionally guaranteed by, the United States of America or issued by
any agency thereof and backed by the full faith and credit of the United States
of America or Canada or any agency, state, province or territory thereof, in
each case maturing within one year from the date of acquisition; (b)
certificates of deposit, time deposits or overnight bank deposits having
maturities of six months or less from the date of acquisition issued by any
Lender or by any commercial bank organized under the laws of the United States
of America or any state thereof or is a bank listed in Schedule I of the Bank
Act (Canada) and having combined capital and surplus of not less than
$500,000,000; (c) commercial paper of an issuer rated at least A-2 by Standard &
Poor's Ratings Services ("S&P") or P-2 by Xxxxx'x Investors Service, Inc.
("MOODY'S") or R-1 by Dominion Bond Rating Service Limited ("DBRS") or carrying
an equivalent rating by a nationally recognized rating agency, if all of the
three named rating agencies cease publishing ratings of commercial paper issuers
generally, and maturing within six months from the date of acquisition; (d)
repurchase obligations of any Lender or of any commercial bank satisfying the
requirements of clause (b) of this definition, having a term of not more than 30
days with respect to securities issued or fully guaranteed or insured by the
United States of America or the Government of Canada; (e) securities with
maturities of one year or less from the date of acquisition issued or fully
guaranteed by any state, province, commonwealth or territory of the United
States of America or Canada, by any political subdivision or taxing authority of
any such state, province, commonwealth or territory or by any foreign
government, the securities of which state, province, commonwealth, territory,
political subdivision, taxing authority or foreign government (as the case may
be) are rated at least A by S&P, A by Moody's, or A by DBRS; (f) securities with
maturities of six months or less from the date of acquisition backed by standby
letters of credit issued by any Lender or any commercial bank satisfying the
requirements of clause (b) of this definition; and (g) shares of money market
mutual or similar funds which invest exclusively in assets satisfying the
requirements of clauses (a) through (f) of this definition.
"CERI BOARD RECONSTITUTION": the reconstitution of the board
of directors of CERI to the extent necessary to comply with the applicable rules
and regulations of the Securities and Exchange Commission or any securities
exchange or quotation system on which its securities trade.
"CHANGE OF CONTROL": the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act")), excluding the Existing Investors and
5
the Borrower (solely as a result of the Migration), shall become, or obtain
rights (whether by means or warrants, options or otherwise) to become, the
"beneficial owner" (as defined in Rules 13(d)-3 and 13(d)-5 under the Exchange
Act), directly or indirectly, of more than 30% of the outstanding common stock
of CERI; (b) during any period of 12 consecutive months the board of directors
of CERI shall cease to consist of a majority of Continuing Directors at any time
prior to the Migration, (c) at any time after the Migration, any "person" or
"group" (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")), excluding the Existing
Investors, shall become, or obtain rights (whether by means or warrants, options
or otherwise) to become, the "beneficial owner" (as defined in Rules 13(d)-3 and
13(d)-5 under the Exchange Act), directly or indirectly, of more than 30% of the
outstanding common stock of the Borrower; (d) during any period of 12
consecutive months, at any time after the Migration, the board of directors of
the Borrower shall cease to consist of a majority of Continuing Directors; or
(e) any Specified Change of Control unless the holders of the Xxxxx Preferred
Stock have waived all required redemption of the Xxxxx Preferred Stock arising
from such Specified Change of Control. Notwithstanding the foregoing (i) the
Migration and each of the transactions and corporate actions contemplated
thereby and (ii) the CERI Board Reconstitution shall not constitute, or be
deemed to result in, a Change of Control.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 5.1 shall have been satisfied.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all Property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"COMMITMENT": with respect to any Lender, the sum of the
Tranche B Term Loan Commitment and the Revolving Credit Commitment of such
Lender.
"COMMITMENT FEE RATE": 1/2 of 1% per annum.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, that is under common control with the Borrower within the meaning
of Section 4001(b)(1) of ERISA or is part of a group that includes the Borrower
and that is treated as a single employer under Section 414(b) or 414(c) of the
Code or, solely for purposes of Section 412 of the Code to the extent required
by such section, Section 414(m) or 414(o) of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer, substantially in the form of Exhibit B.
"CONSOLIDATED EBITDA": of any Person for any period,
Consolidated Net Income of such Person and its Subsidiaries for such period
PLUS, without duplication and to the extent reflected as a charge in the
statement of such Consolidated Net Income for such period, the sum of (a) income
tax expense, (b) total cash interest expense of such Person and its
Subsidiaries, amortization or write-off of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with
Indebtedness, (c) depreciation and amortization expense, (d) amortization of
intangibles (including, but not limited to, goodwill) and
6
organization costs, (e) any extraordinary, unusual or non-recurring expenses or
losses (including, whether or not otherwise includable as a separate item in the
statement of such Consolidated Net Income for such period, losses on sales of
assets outside of the ordinary course of business) and (f) any other non-cash
charges and expenses (including any losses attributable to fluctuations in
foreign currency exchange rates), (g) one-time charges and expenses (including
costs, fees and expenses in connection with the Migration not to exceed
$1,000,000), (h) one-time severance charges, not to exceed $200,000, (i)
integration costs in connection with the Acquisition not to exceed $1,000,000,
and (j) to the extent not constituting cash interest expense, all expenses
attributable to dividends and accruals in respect of preferred stock (including
the Xxxxx Preferred Stock), and MINUS, to the extent included in the statement
of such Consolidated Net Income for such period, the sum of (a) interest income
(except to the extent deducted in determining total cash interest expense), (b)
any extraordinary, unusual or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside of
the ordinary course of business) and (c) any other non-cash income (including
any gains attributable to fluctuations in foreign currency exchange rates), all
as determined on a consolidated basis; PROVIDED that, for purposes of
calculating Consolidated EBITDA of CERI and its Subsidiaries for any period, (i)
the Consolidated EBITDA of any business unit acquired by CERI or its
Subsidiaries during such period shall be included on a pro forma basis for such
period (assuming for purposes of the calculation of Consolidated EBITDA the
consummation of such acquisition occurred on the first day of such period) if
the consolidated balance sheet of such acquired business unit as at the end of
the period preceding the acquisition of such business unit and the related
consolidated statements of income and stockholders' equity and of cash flows
(or, if no such balance sheet or statements of income and stockholder's equity
and of cash flows is available, such other financial information satisfactory to
the Administrative Agent) for the period in respect of which Consolidated EBITDA
is to be calculated (x) have been previously provided to the Administrative
Agent and the Lenders and (y) either (1) have been reported on without a
qualification arising out of the scope of the audit by independent certified
public accountants of nationally recognized standing or (2) have been found
acceptable by the Administrative Agent and (ii) the Consolidated EBITDA of any
business unit Disposed of by CERI or its Subsidiaries during such period shall
be excluded for such period (assuming for purposes of the calculation of
Consolidated EBITDA the consummation of such Disposition occurred on the first
day of such period); and PROVIDED, further, that the Consolidated EBITDA of CERI
and its Subsidiaries for the fiscal quarter ending June 30, 2003, shall be
conclusively deemed to be equal to $10,700,000 the Consolidated EBITDA of CERI
and its Subsidiaries for the fiscal quarter ending September 30, 2003, shall be
conclusively deemed to be equal to $10,100,000 and the Consolidated EBITDA of
CERI and its Subsidiaries for the fiscal quarter ending December 31, 2003, shall
be conclusively deemed to be equal to $9,300,000.
"CONSOLIDATED INTEREST COVERAGE RATIO": for any period, the
ratio of (a) Consolidated EBITDA of CERI and its Subsidiaries for such period to
(b) Consolidated Interest Expense of CERI and its Subsidiaries for such period.
"CONSOLIDATED INTEREST EXPENSE": of any Person for any period,
total cash interest expense (including that attributable to Capital Lease
Obligations) of such Person and its Subsidiaries for such period with respect to
all outstanding Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and
7
charges owed by such Person with respect to letters of credit and bankers'
acceptance financing and net costs of such Person under Hedge Agreements in
respect of interest rates to the extent such net costs are allocable to such
period in accordance with GAAP); PROVIDED that Consolidated Interest Expense of
CERI and its Subsidiaries for each of the fiscal quarters ending June 30, 2003,
September 30, 2003 and December 31, 2003 shall be conclusively deemed to be
equal to $4,600,000; and PROVIDED, further, that cash interest expense with
respect to fees payable in connection with the Existing Letters of Credit shall
be calculated on the basis of when such fee is earned.
"CONSOLIDATED LEVERAGE RATIO": as at the last day of any
period of four consecutive fiscal quarters of CERI, the ratio of (a)
Consolidated Total Debt on such day to (b) Consolidated EBITDA of CERI and its
Subsidiaries for such period.
"CONSOLIDATED NET INCOME": of any Person for any period, the
consolidated net income (or loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP; PROVIDED,
that in calculating Consolidated Net Income of CERI and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or deficit)
of any Person accrued prior to the date it becomes a Subsidiary of CERI or is
merged into or consolidated with CERI or any of its Subsidiaries, (b) the income
(or deficit) of any Person (other than a Subsidiary of CERI) in which CERI or
any of its Subsidiaries has an ownership interest, except to the extent that any
such income is actually received by CERI or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of CERI to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary is not at the time permitted by the
terms of any Contractual Obligation (other than under any Loan Document) or
Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED TOTAL DEBT": at any date, the aggregate
principal amount of all Indebtedness of CERI and its Subsidiaries at such date
that would be classified as a liability on the consolidated balance sheet of
CERI and its Subsidiaries, determined on a consolidated basis in accordance with
GAAP.
"CONTINUING DIRECTORS": (a) with respect to CERI, the
directors of CERI on the Closing Date and on the date of the CERI Board
Reconstitution, and each other director of CERI, if, in each case, such other
director's nomination for election to the board of directors of CERI is
recommended by at least a majority of the then Continuing Directors, or such
other director receives the vote of the Existing Investors in his or her
election by the shareholders of CERI, or such other director is appointed or
elected, or such Director's appointment was approved, in each case by the Xxxxx
Investors and (b) with respect to the Borrower, the directors of the Borrower,
immediately after giving effect to the Migration and each other director of the
Borrower, if, in each case, such other director's nomination for election to the
board of directors of CERI is recommended by at least a majority of the then
Continuing Directors, or such other director receives the vote of the Existing
Investors in his or her election by the shareholders of the Borrower or such
other director is appointed or elected, or such Director's appointment was
approved, in each case by the Xxxxx Investors.
8
"CONTRACTUAL OBLIGATION": with respect to any Person, any
provision of any security issued by such Person or of any agreement, instrument
or other undertaking to which such Person is a party or by which it or any of
its Property is bound.
"CONTROL INVESTMENT AFFILIATE": with respect to any Person,
any other Person that (a) directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person and (b) is organized
by such Person or the manager, advisor or administrator of such Person primarily
for the purpose of making equity or debt investments in one or more companies.
For purposes of this definition, "control" of a Person means the power, directly
or indirectly, to direct or cause the direction of the management and policies
of such Person, whether by contract or otherwise.
"DEFAULT": any of the events specified in Section 8, whether
or not any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.
"DERIVATIVES COUNTERPARTY": as defined in Section 7.6.
"DISPOSITION": with respect to any Property, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other disposition
thereof; and the terms "DISPOSE" and "DISPOSED OF" shall have correlative
meanings.
"DOLLARS" and "$": lawful currency of the United States of
America.
"DOLLAR EQUIVALENT": at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in Canadian Dollars, the equivalent amount in Dollars as
determined on the basis of the Exchange Rate for the purchase of Dollars with
Canadian Dollars as of the most recent Calculation Date.
"DOMESTIC L/C": a Letter of Credit denominated in Dollars.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower
organized under the laws of any jurisdiction within the United States of
America.
"ENVIRONMENTAL LAWS": any and all laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States of America, Canada or any
state, provincial, territorial, local, municipal or other governmental
authority, regulating, relating to or imposing liability or standards of conduct
concerning protection of the environment or of human health, or employee health
and safety, as has been, is now, or hereafter becomes, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
approvals, registrations, notifications, exemptions and other authorizations
required under any applicable Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
9
"ESCROW AGREEMENT": the Escrow Agreement, dated as of December
31, 2003, among CERI, the Borrower, the Administrative Agent, and Xxxxxx
Commercial Paper Inc., as escrow agent, in the form attached as Exhibit K.
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXCHANGE RATE": on any day, with respect to Canadian Dollars,
the spot rate at which Dollars are offered on such day by the Issuing Lender in
New York, New York (or such other location selected by the Issuing Lender) for
Canadian Dollars.
"EXCHANGEABLE SHARES": equity securities issued by CERI to
certain of its security holders in connection with the Migration that are
exchangeable into common stock of the Borrower.
"EXCLUDED FOREIGN SUBSIDIARIES": any Foreign Subsidiary in
respect of which either (a) the pledge of all of the Capital Stock or any of the
assets of such Subsidiary as Collateral or (b) the guaranteeing by such
Subsidiary of the Obligations, would, in the good faith judgment of the
Borrower, result in adverse tax consequences to the Borrower.
"EXCLUDED PROCEEDS": up to $25,000,000 in the aggregate per
fiscal year of Net Cash Proceeds received by CERI or the Borrower from the
issuance of its Capital Stock (including preferred stock) to, or capital
contributions by, any of the Existing Investors to the extent such proceeds are
used to make Investments permitted by Section 7.8(h) and (k).
"EXCLUDED TAXES": as defined in Section 2.17(a).
"EXISTING CREDIT FACILITY": the Credit Agreement, dated as of
June 27, 2002, among CERI, Bank of America N.A. (Canada Branch), as
administrative agent, and Canadian Imperial Bank of Commerce, as Managing Agent,
as such agreement may have been amended, supplemented, replaced or otherwise
modified from time to time prior to the date hereof.
"EXISTING INVESTORS": the collective reference to Xxxxxxx
XxXxxxxx, the Xxxxx Investors and each manager, officer and director of CERI who
owns Capital Stock of CERI on the Closing Date and their Control Investment
Affiliates.
"EXISTING LETTERS OF CREDIT": letters of credit issued under
the Existing Credit Facility which will be cash collateralized on the Closing
Date and which are listed on SCHEDULE 1.1.
"EXTENSION FEE": as defined in Section 1(c) of the Fee Letter.
"EXTENSION PERIOD": as defined in Section 2.20.
"FRS ACQUISITION": the acquisition by the Borrower, through a
wholly-owned subsidiary of the Borrower, of all of the outstanding Capital Stock
of Florida Recycling Services, Inc., an Illinois corporation.
10
"FACILITY": each of (a) the Tranche B Term Loan Commitments
and the Tranche B Term Loans made thereunder (the "TRANCHE B TERM LOAN
FACILITY") and (b) the Revolving Credit Commitments and the extensions of credit
made thereunder (the "REVOLVING CREDIT FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted
average of the rates on overnight federal funds transactions with members of the
Federal Reserve System arranged by federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for the day of such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER": the Fee Letter dated as of December 30, 2003,
among CERI, the Borrower, Xxxxxx Brothers Inc. and Xxxxxx Commercial Paper Inc,
as amended, supplemented, replaced or otherwise modified from time to time in
accordance with the terms thereof.
"FIXED RATE": 9.00%, or such higher rate as may be applicable
upon extension of the Maturity Date pursuant to Section 2.20.
"FIXED RATE LOAN": Loans which bear interest at the Fixed
Rate.
"FOREIGN L/C": a Letter of Credit denominated in Canadian
Dollars.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is
not a Domestic Subsidiary.
"FQ1", "FQ2 ", "FQ3", and "FQ4": when used with a numerical
year designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower (e.g., FQ1 2004 means the
first fiscal quarter of the Borrower's 2004 fiscal year, which ends March 31,
2004).
"FUNDING OFFICE": the office specified from time to time by
the Administrative Agent as its funding office by notice to the Borrower and the
Lenders.
"GAAP": generally accepted accounting principles in the United
States of America as in effect from time to time.
"GENERAL ACQUISITION": the acquisition by CERI of all of the
issued and outstanding capital stock of Earth Resource Management Inc., a wholly
owned subsidiary of General Waste Corporation, on substantially the terms and
conditions set forth in the letter of intent between CERI and General Waste
Corporation, dated as of April 17, 2003.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
province, territory or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"GROUP MEMBER": each Loan Party and each of their respective
Subsidiaries.
11
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and
Collateral Agreement to be executed and delivered by the Borrower and each
Subsidiary Guarantor, substantially in the form of Exhibit A-1, as the same may
be amended, supplemented, replaced or otherwise modified from time to time.
"GUARANTEE OBLIGATION": with respect to any Person (the
"GUARANTEEING PERSON"), any obligation of (a) the guaranteeing person or (b)
another Person (including, without limitation, any bank under any letter of
credit), if to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "PRIMARY OBLIGATIONS") of any other third Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any Property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
Property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
PROVIDED, HOWEVER, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing person
may be liable pursuant to the terms of the instrument embodying such Guarantee
Obligation, unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"GUARANTORS": the collective reference to CERI, the Canadian
Subsidiary Guarantors and the Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate or currency swaps, caps
or collar agreements, foreign exchange agreements, commodity contracts or
similar arrangements entered into by any Group Member providing for protection
against fluctuations in interest rates, currency exchange rates, commodity
prices or the exchange of nominal interest obligations, either generally or
under specific contingencies.
"INACTIVE SUBSIDIARIES": each of CERI, Inc., a Delaware
corporation, CERI, L.L.C., a Delaware limited liability company, and Capital
Holdings Company, in each case, so long as they meet the requirements of Section
4.25.
"INDEBTEDNESS": of any Person at any date, without
duplication, (a) all indebtedness of such Person for borrowed money, (b) all
obligations of such Person for the deferred purchase price of Property or
services (other than trade payables incurred in the
12
ordinary course of such Person's business), (c) all obligations of such Person
evidenced by notes, debentures or other similar instruments, (d) all
indebtedness created or arising under any conditional sale or other title
retention agreement with respect to Property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such Property), (e)
all Capital Lease Obligations or Synthetic Lease Obligations of such Person, (f)
all obligations of such Person, contingent or otherwise, as an account party or
applicant under acceptance, letter of credit, surety bonds (except unmatured
reimbursement obligations in respect of surety bonds obtained in the ordinary
course of business to secure the performance of obligations that are not
Indebtedness pursuant to another clause of this definition) or similar
facilities, (g) the liquidation value of all redeemable preferred Capital Stock
of such Person, to the extent mandatorily redeemable (upon the occurrence of a
contingency or otherwise) in cash on or prior to the date which is one year
after the final maturity date of the Loans (other than in connection with change
of control events and asset sales to the extent that the terms of such Capital
Stock provide that such Person may not repurchase or redeem any such Capital
Stock in connection with such change of control or asset sale unless such
repurchase or redemption complies with the provisions of this Agreement), (h)
all obligations of such Person, contingent or otherwise, to purchase, redeem,
retire or otherwise acquire for value any Capital Stock of such Person, (i) all
Guarantee Obligations of such Person in respect of obligations of the kind
referred to in clauses (a) through (h) above, (j) all obligations of the kind
referred to in clauses (a) through (i) above secured by (or for which the holder
of such obligation has an existing right, contingent or otherwise, to be secured
by) any Lien on Property (including, without limitation, accounts and contract
rights) owned by such Person, whether or not such Person has assumed or become
liable for the payment of such obligation and (k) for the purposes of Section
8(e) only, all obligations of such Person in respect of Hedge Agreements.
"INDEMNIFIED LIABILITIES": as defined in Section 10.5.
"INDEMNITEE": as defined in Section 10.5.
"INITIAL MATURITY DATE": December 30, 2004.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section 4245 of
ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all
rights, priorities and privileges relating to intellectual property, whether
arising under United States of America, Canada, state, provincial, territorial,
multinational or foreign laws or otherwise, including, without limitation,
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, service-marks, technology, know-how and processes, recipes, formulas,
trade secrets, and all rights to xxx at law or in equity for any infringement or
other impairment thereof, including the right to receive all proceeds and
damages therefrom.
13
"INTEREST PAYMENT DATE": as to any Fixed Rate Loan, the last
day of each March, June, September and December to occur while such Loan is
outstanding, the final maturity date of such Loan, and the date of any repayment
or prepayment made in respect thereof.
"INVESTMENTS": as defined in Section 7.8.
"ISSUING LENDER": any Revolving Credit Lender from time to
time designated by the Borrower as an Issuing Lender with the consent of such
Revolving Credit Lender and the Administrative Agent.
"ISSUING LENDER AVAILABILITY DATE": the date on which the
Administrative Agent advises the Borrower that an Issuing Lender is available to
issue Letters of Credit hereunder.
"JUDGMENT CURRENCY": as defined in Section 10.20.
"XXXXX INVESTORS": Xxxxx & Company and its Control Investment
Affiliates.
"XXXXX PREFERRED STOCK": the Series A Preferred Stock of the
Borrower issued, paid-in-kind or accruing pursuant to the Xxxxx Preferred Stock
Documents.
"XXXXX PREFERRED STOCK DOCUMENTS": collectively, (a) the
Preferred Stock Subscription Agreement, dated as of May 6, 2003, among the
Borrower, CERI and certain Xxxxx Investors, (b) the Certificate of Designations
with respect to the Series A Preferred Stock of the Borrower, (c) the letter
dated December 31, 2003 from the Borrower and CERI to Xxxxx Investment
Associates VI, L.P and KEP VI, LLC, and (d) the letter agreement dated December
31, 2003 from Xxxxx Investment Associates VI, L.P and KEP VI, LLC to the
Administrative Agent, in each case as amended, supplemented, replaced, waived or
otherwise modified from time to time in accordance with this Agreement.
"L/C COMMITMENT": $25,000,000.
"L/C FEE PAYMENT DATE": the last day of each March, June,
September and December and the last day of the Revolving Credit Commitment
Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then outstanding
Letters of Credit and (b) the Dollar Equivalent of the aggregate amount of
drawings under Letters of Credit that have not then been reimbursed pursuant to
Section 3.5.
"L/C PARTICIPANTS": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the Issuing
Lender that issued such letter of Credit.
"LENDER ADDENDUM": with respect to any initial Lender, a
Lender Addendum, substantially in the form of Exhibit I, to be executed and
delivered by such Lender on the Closing Date as provided in Section 10.17.
"LENDERS": as defined in the preamble hereto.
14
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or other
security interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including, without
limitation, any conditional sale or other title retention agreement and any
capital lease having substantially the same economic effect as any of the
foregoing).
"LOAN": any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents, the
Applications and the Notes.
"LOAN PARTIES": CERI, the Borrower and each Subsidiary of CERI
that is a party to a Loan Document.
"MAJORITY FACILITY LENDERS": with respect to any Facility, the
holders of more than 50% of (i) the sum of the aggregate unpaid principal amount
of the Term Loans plus, prior to the Second Acquisition Closing Date, the
unfunded, unexpired and unterminated Tranche B Term Loan Commitments or (ii) the
Total Revolving Extensions of Credit, as the case may be, outstanding under such
Facility (or, in the case of the Revolving Credit Facility, prior to any
termination of the Revolving Credit Commitments, the holders of more than 50% of
the Total Revolving Credit Commitments).
"MAJORITY REVOLVING CREDIT FACILITY LENDERS": the Majority
Facility Lenders in respect of the Revolving Credit Facility.
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the Acquisition, (b) the business, assets, financial condition, or results of
operation of the Group Members taken as a whole or (c) the validity or
enforceability of this Agreement or any of the other Loan Documents or the
rights or remedies of the Agents or the Lenders hereunder or thereunder.
"MATERIAL ENVIRONMENTAL AMOUNT": an amount or amounts payable
by the Group Members, in the aggregate in excess of $2,000,000, for: unbudgeted
costs to comply with any Environmental Law; costs of any investigation, and any
remediation, of any Material of Environmental Concern; and compensatory damages
(including, without limitation damages to natural resources), punitive damages,
fines, and penalties pursuant to any Environmental Law.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos,
radioactivity, and any other substances, pollutants, contaminants or forces of
any kind that are defined or regulated as hazardous, dangerous or toxic under
any Environmental Law or could give rise to liability under any Environmental
Law.
"MATURITY DATE" December 30, 2004, as such date may be
extended in accordance with Section 2.20.
15
"MIGRATION": the reorganization in which CERI and its Canadian
Subsidiaries will become indirect Subsidiaries of the Borrower by way of a plan
of arrangement under the Business Corporations Act (Ontario) to be approved by
the Ontario Superior Court of Justice and certain security holders of CERI
pursuant to which (a) all common shares of CERI will be held by Capital Holdings
Company or another subsidiary of the Borrower organized in Nova Scotia, (b) the
holders of common shares of CERI will receive shares of common stock of the
Borrower or Exchangeable Shares, (c) the balance of the outstanding intercompany
Indebtedness from the Borrower to CERI will be assumed by Capital Holdings
Company, and (d) CERI and its Canadian Subsidiaries shall become Excluded
Foreign Subsidiaries; PROVIDED, however, that other than as a result of the
redemption of the common stock of the Borrower held by CERI, the Migration does
not give rise to any Canadian or United States of America income tax liability
to any Group Member; provided, further, that the redemption of the common stock
of the Borrower held by CERI does not give rise to any Canadian taxable income
that would exceed the amount of CERI's loss carryforwards available at the time
of the Migration.
"MORTGAGED PROPERTIES": the owned real properties listed on
SCHEDULE 4.24, as to which the Administrative Agent for the benefit of the
Secured Parties shall be granted a Lien pursuant to the Mortgages.
"MORTGAGES": each of the mortgages and deeds of trust made by
any Loan Party in favor of, or for the benefit of, the Administrative Agent for
the benefit of the Secured Parties, substantially in the form of Exhibit D-1
with respect to property in the United States of America, and Exhibit D-2 with
respect to property in Canada (with such changes thereto as shall be advisable
under the law of the jurisdiction in which such mortgage or deed of trust is to
be recorded), as the same may be amended, supplemented, replaced or otherwise
modified from time to time.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or a Commonly
Controlled Entity is making or accruing an obligation to make contributions, or
has within any of the preceding five plan years made or accrued an obligation to
make contributions.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and Cash
Equivalents (including any such proceeds received by way of deferred payment of
principal pursuant to a note or installment receivable or purchase price
adjustment receivable or otherwise, but only as and when received) of such Asset
Sale or Recovery Event, net of reasonable and customary attorneys' fees,
accountants' fees, investment banking fees, amounts required to be applied to
the repayment of Indebtedness secured by a Lien expressly permitted hereunder on
any asset which is the subject of such Asset Sale or Recovery Event (other than
any Lien pursuant to a Security Document) and other reasonable and customary
fees and expenses actually incurred in connection therewith and net of taxes
paid or reasonably estimated to be payable as a result thereof (after taking
into account any available tax credits or deductions and any tax sharing
arrangements), (b) in connection with any issuance or sale of equity securities
or debt securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees, investment
banking fees, accountants' fees, underwriting discounts and commissions and
other customary fees and expenses actually incurred in connection therewith
16
and (c) in connection with any Purchase Price Refund, the cash amount thereof,
net of any reasonable and customary expenses incurred in the collection thereof.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
"NON-U.S. LENDER": as defined in Section 2.17(e).
"NOTE": any promissory note evidencing any Loan.
"OBLIGATION CURRENCY": as defined in Section 10.20.
"OBLIGATIONS": the unpaid principal of and interest on
(including, without limitation, interest accruing after the maturity of the
Loans and Reimbursement Obligations and interest accruing after the filing of
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such proceeding)
the Loans, the Reimbursement Obligations and all other obligations and
liabilities of the Borrower to the Administrative Agent or to any Lender or any
Qualified Counterparty, whether direct or indirect, absolute or contingent, due
or to become due, or now existing or hereafter incurred, which may arise under,
out of, or in connection with, this Agreement, any other Loan Document, the
Letters of Credit, any Specified Hedge Agreement or any other document made,
delivered or given in connection herewith or therewith, whether on account of
principal, interest, reimbursement obligations, fees, indemnities, costs,
expenses (including, without limitation, all fees, charges and disbursements of
counsel to the Arranger, to the Agents or to any Lender that are required to be
paid by the Borrower pursuant hereto) or otherwise; PROVIDED, that (i)
obligations of any Group Member under any Specified Hedge Agreement shall be
secured and guaranteed pursuant to the Security Documents only to the extent
that, and for so long as, the other Obligations are so secured and guaranteed
and (ii) any release of Collateral or Guarantors effected in the manner
permitted by this Agreement shall not require the consent of holders of
obligations under Specified Hedge Agreements.
"OTHER TAXES": any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement or any other
Loan Document.
"PARTICIPANT": as defined in Section 10.6(b).
"PAYMENT OFFICE": the office specified from time to time by
the Administrative Agent as its payment office by notice to the Borrower and the
Lenders.
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA (or any successor).
"PERMITS": the collective reference to (i) Environmental
Permits, and (ii) any and all other franchises, licenses, leases, permits,
approvals, notifications, certifications, registrations, authorizations,
exemptions, qualifications, easements, and rights of way.
17
"PERMITTED ACQUISITION": as defined in Section 7.8(h).
"PERMITTED LIENS": the collective reference to (i) in the case
of Collateral other than Pledged Stock, Liens permitted by Section 7.3 and (ii)
in the case of Collateral consisting of Pledged Stock, non-consensual Liens
permitted by Section 7.3 to the extent arising by operation of law.
"PERSON": an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"PERSONAL PROPERTY SECURITY LEGISLATION": all applicable
personal property security legislation as all such legislation now exists or may
from time to time hereafter be amended, modified, recodified, supplemented or
replaced, together with all rules and regulations thereunder or related thereto,
including without limitation, the UCC and the PERSONAL PROPERTY SECURITY ACT
(Ontario).
"PLAN": at a particular time, any employee benefit plan that
is covered by ERISA and in respect of which the Borrower or a Commonly
Controlled Entity is (or, if such plan were terminated at such time, would under
Section 4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5)
of ERISA, but excluding, for greater certainty, Canadian Benefit Plans and
Canadian Pension Plans.
"PLEDGED STOCK": as defined in the Guarantee and Collateral
Agreement or the Canadian Guarantee and Collateral Agreement, as applicable.
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
"PROPERTY": any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible, including, without limitation, Capital Stock.
"PURCHASE PRICE REFUND": any amount received by any Group
Member as a result of a purchase price adjustment or similar event in connection
with any acquisition of Property by any Group Member.
"QUALIFIED COUNTERPARTY": with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified Hedge
Agreement was entered into, was a Lender or an affiliate of a Lender.
"REAL ESTATE": All Real Property held or used by the Group
Members, which the relevant Group Member owns in fee or in which it holds a
leasehold interest as a tenant.
"RECOVERY EVENT": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding relating
to any asset of any Group Member.
18
"REFUNDED SWING LINE LOANS": as defined in Section 2.7(b).
"REFUNDING DATE": as defined in Section 2.7(c).
"REGISTER": as defined in Section 10.6(d).
"REGULATION H": Regulation H of the Board as in effect from
time to time.
"REGULATION U": Regulation U of the Board as in effect from
time to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse each Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit issued by such Issuing Lender.
"REINVESTMENT DEFERRED AMOUNT": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by any Group Member
in connection therewith that are not applied to prepay the Term Loans or reduce
the Revolving Credit Commitments pursuant to Section 2.12(b) as a result of the
delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale, Purchase Price Refund or
Recovery Event in respect of which the Borrower has delivered a Reinvestment
Notice.
"REINVESTMENT NOTICE": a written notice executed by a
Responsible Officer stating that no Default or Event of Default has occurred and
is continuing and that the Borrower (directly or indirectly through a Wholly
Owned Subsidiary of the Borrower) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale, Purchase Price Refund or
Recovery Event to acquire assets useful in its or such Subsidiary's business.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto LESS any
amount expended on or prior to the relevant Reinvestment Prepayment Date to
acquire assets useful in the Borrower's business.
"REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the earlier of (a) the date occurring one year after such
Reinvestment Event and (b) the date on which the Borrower shall have determined
not to, or shall have otherwise ceased to, acquire assets useful in the
Borrower's business with all or any portion of the relevant Reinvestment
Deferred Amount.
"RELATED FUND": with respect to any Lender, any fund that (x)
invests in commercial loans and (y) is managed or advised by the same investment
advisor as such Lender, by such Lender or an Affiliate of such Lender.
"REMAINING ALLIED ASSETS": as defined in Section 5.1(b).
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section 4241
of ERISA.
19
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty day notice
period is waived under PBGC Xxx.xx. 4043.
"REQUIRED LENDERS": at any time, the holders of more than 50%
of (a) until the Closing Date, the Commitments and (b) thereafter, the sum of
(i) the aggregate unpaid principal amount of the Term Loans then outstanding
plus, prior to the Second Acquisition Closing Date, any unfunded, unexpired and
unterminated Tranche B Term Loan Commitments then outstanding and (ii) the Total
Revolving Credit Commitments then in effect or, if the Revolving Credit
Commitments have been terminated, the Total Revolving Extensions of Credit then
outstanding.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders
in respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its Property or to which such Person or
any of its Property is subject.
"RESPONSIBLE OFFICER": as to any Person, the chief executive
officer, president or chief financial officer of such Person, but in any event,
with respect to financial matters, the chief financial officer of such Person,
and for purposes of (i) Section 6.7, the chief legal officer of such Person and
(ii) Section 5.1(a) any Vice President or other duly authorized officer of the
applicable Loan Party. Unless otherwise qualified, all references to a
"Responsible Officer" shall refer to a Responsible Officer of CERI.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING CREDIT COMMITMENT": as to any Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Swing Line Loans and Letters of Credit, in an aggregate principal
and/or face amount not to exceed the amount set forth under the heading
"Revolving Credit Commitment" opposite such Lender's name on SCHEDULE 1 to the
Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Total Revolving Credit Commitments is
$25,000,000.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"REVOLVING CREDIT FACILITY": as defined in the definition of
"Facility" in this Section 1.1.
"REVOLVING CREDIT LENDER": each Lender that has a Revolving
Credit Commitment or that is the holder of Revolving Credit Loans.
20
"REVOLVING CREDIT LOANS": as defined in Section 2.4.
"REVOLVING CREDIT NOTE": as defined in Section 2.8.
"REVOLVING CREDIT PERCENTAGE": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the Total Revolving Credit Commitments (or, at
any time after the Revolving Credit Commitments shall have expired or
terminated, the percentage which the aggregate amount of such Lender's Revolving
Extensions of Credit then outstanding constitutes the amount of the Total
Revolving Extensions of Credit then outstanding).
"REVOLVING CREDIT TERMINATION DATE": the Maturity Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate principal
amount of all Revolving Credit Loans made by such Lender then outstanding, (b)
such Lender's Revolving Credit Percentage of the L/C Obligations then
outstanding and (c) such Lender's Revolving Credit Percentage of the aggregate
principal amount of Swing Line Loans then outstanding.
"SEC": the Securities and Exchange Commission (or successors
thereto or an analogous Governmental Authority).
"SECOND ACQUISITION CLOSING DATE": the date on which title to
the Remaining Allied Assets is transferred to the Borrower or its Subsidiaries,
which date shall in no event be later than March 31, 2004.
"SECURED PARTIES": as defined in the Guarantee and Collateral
Agreement.
"SECURITY DOCUMENTS": the collective reference to the
Guarantee and Collateral Agreement, the Canadian Guarantee and Collateral
Agreement, the Escrow Agreement, the Mortgages, any intellectual property
security agreements or control agreements that may be required to be delivered
pursuant to the Guarantee and Collateral Agreement or any other Loan Document
and all other security documents hereafter delivered to the Administrative Agent
granting a Lien on any Property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.
"SELLER": as defined in the recitals hereto.
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOLVENT": with respect to any Person, as of any date of
determination, (a) the amount of the "present fair saleable value" of the assets
of such Person will, as of such date, exceed the amount of all "liabilities of
such Person, contingent or otherwise", as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable value
of the assets of such Person will, as of such date, be greater than the amount
that will be required to pay the liability of such Person on its debts as such
debts become absolute and matured, (c) such Person
21
will not have, as of such date, an unreasonably small amount of capital with
which to conduct its business, (d) such Person will be able to pay its debts as
they mature and (e) such Person is not insolvent within the meaning of any
applicable Requirements of Law relating to bankruptcy, insolvency or creditor's
rights. For purposes of this definition, (i) "debt" means liability on a
"claim", and (ii) "claim" means any (x) right to payment, whether or not such a
right is reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or unsecured
or (y) right to an equitable remedy for breach of performance if such breach
gives rise to a right to payment, whether or not such right to an equitable
remedy is reduced to judgment, fixed, contingent, matured or unmatured,
disputed, undisputed, secured or unsecured.
"SPECIFIED CHANGE OF CONTROL": a "change of control" or
similar event (howsoever defined) as defined in the Xxxxx Preferred Stock
Documents.
"SPECIFIED HEDGE AGREEMENT": any Hedge Agreement entered into
by the Borrower or any Guarantor and any Qualified Counterparty.
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, or the
management of which is otherwise controlled, directly or indirectly through one
or more intermediaries, or both, by such Person. Unless otherwise qualified, all
references to a "Subsidiary" or to "Subsidiaries" in this Agreement shall refer
to a Subsidiary or Subsidiaries of CERI.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower other
than (i) any Excluded Foreign Subsidiary and (ii) to the extent Capital Holdings
Company is not an Excluded Foreign Subsidiary, Capital Holdings Company until
the earlier of (x) the Migration or (y) the date on which it ceases to be an
Inactive Subsidiary.
"SWING LINE COMMITMENT": the obligation of the Swing Line
Lender to make Swing Line Loans pursuant to Section 2.6 in an aggregate
principal amount at any one time outstanding not to exceed $5,000,000.
"SWING LINE LENDER": Xxxxxx Commercial Paper Inc., in its
capacity as the lender of Swing Line Loans.
"SWING LINE LOANS": as defined in Section 2.6.
"SWING LINE NOTE": as defined in Section 2.8(e).
"SWING LINE PARTICIPATION AMOUNT": as defined in Section
2.7(c).
"SYNDICATION AGENT": as defined in the preamble hereto.
22
"SYNTHETIC LEASE OBLIGATIONS": all monetary obligations of a
Person under (a) a so-called synthetic, off-balance sheet or tax retention
lease, or (b) an agreement for the use or possession of property creating
obligations which do not appear on the balance sheet of such Person but which,
upon the insolvency or bankruptcy of such Person, would be characterized as the
Indebtedness of such Person (without regard to accounting treatment); it being
understood that obligations in respect of operating leases entered into by any
Group Member in the ordinary course of business which would not, upon the
insolvency of a Group Member be characterized as Indebtedness of a Group Member,
shall not constitute "Synthetic Lease Obligations".
"TERM LOAN LENDERS": the collective reference to the Tranche B
Term Loan Lenders.
"TERM LOANS": the collective reference to the Tranche B Term
Loans.
"TERM NOTES": as defined in Section 2.8(e).
"TITLE INSURANCE COMPANY": as defined in Section 5.1(r).
"TOTAL REVOLVING CREDIT COMMITMENTS": at any time, the
aggregate amount of the Revolving Credit Commitments then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving Credit
Lenders outstanding at such time.
"TRANCHE B TERM LOAN": as defined in Section 2.1.
"TRANCHE B TERM LOAN COMMITMENT": as to any Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the Borrower
hereunder in a principal amount not to exceed the amount set forth under the
heading "Tranche B Term Loan Commitment" opposite such Lender's name on SCHEDULE
1 to the Lender Addendum delivered by such Lender, or, as the case may be, in
the Assignment and Acceptance pursuant to which such Lender became a party
hereto, as the same may be changed from time to time pursuant to the terms
hereof. The original aggregate amount of the Tranche B Term Loan Commitments is
$195,000,000.
"TRANCHE B TERM LOAN FACILITY": as defined in the definition
of "Facility" in this Section 1.1.
"TRANCHE B TERM LOAN LENDER": each Lender that has a Tranche B
Term Loan Commitment or is the holder of a Tranche B Term Loan.
"TRANCHE B TERM LOAN PERCENTAGE": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B Term Loan
Commitment then constitutes of the aggregate Tranche B Term Loan Commitments
(or, at any time after the Closing Date, the percentage which the aggregate
principal amount of such Lender's Tranche B Term Loans then outstanding plus,
prior to the
23
Second Acquisition Closing Date, such Lender's unfunded, unexpired and
unterminated Tranche B Term Loan Commitment constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding plus, prior to the
Second Acquisition Closing Date, all unfunded, unexpired and unterminated
Tranche B Term Loan Commitments then outstanding).
"TRANSFEREE": as defined in Section 10.14.
"UCC": the Uniform Commercial Code, as in effect from time to
time in any jurisdiction.
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person
all of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
"WHOLLY OWNED SUBSIDIARY GUARANTOR": any Subsidiary Guarantor
that is a Wholly Owned Subsidiary of the Borrower.
1.2 OTHER DEFINITIONAL PROVISIONS. (a)Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in the other Loan Documents or any certificate or other
document made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
accounting terms relating to any Group Member not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined, shall
have the respective meanings given to them under GAAP.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
(e) All calculations of financial ratios set forth in Section
7.1 shall be calculated to the same number of decimal places as the relevant
ratios are expressed in and shall be rounded upward if the number in the decimal
place immediately following the last calculated decimal place is five or
greater. For example, if the relevant ratio is to be calculated to the hundredth
decimal place and the calculation of the ratio is 5.126, the ratio will be
rounded up to 5.13.
(f) The expressions "payment in full," "paid in full" and any
other similar terms or phrases when used herein with respect to the Obligations
shall mean the payment in full, in immediately available funds, of all of the
Obligations.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM LOAN COMMITMENTS. Subject to the terms and conditions
hereof, the Tranche B Term Loan Lenders severally agree to make term loans
(each, a "TRANCHE B TERM LOAN") to the Borrower (a) on the Closing Date in an
amount for each Tranche B Term Loan Lender not to exceed the amount of the
Tranche B Term Loan Commitment of such Lender and
24
(b) on the Second Acquisition Closing Date in an amount for
each Tranche B Term Loan Lender not to exceed the amount of its Tranche B Term
Loan Commitment remaining after giving effect to the Term Loans made on the
Closing Date. Any unfunded and unexpired Tranche B Term Loan Commitments shall
terminate on the earlier of (x) the Second Acquisition Closing Date and (y)
March 31, 2004, if not borrowed by such date. The Term Loans made on the Closing
Date and on the Second Acquisition Closing Date will be Fixed Rate Loans and
shall remain as such for the term of this Agreement.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall
deliver to the Administrative Agent a Borrowing Notice (which Borrowing Notice
must be received by the Administrative Agent prior to 10:00 A.M., New York City
time, one Business Day prior to the anticipated Closing Date or the Second
Acquisition Closing Date, as applicable) requesting that the Term Loan Lenders
make the Term Loans on the Closing Date or the Second Acquisition Closing Date,
as applicable, and specifying the amount to be borrowed. Upon receipt of such
Borrowing Notice the Administrative Agent shall promptly notify each Term Loan
Lender thereof. Not later than 12:00 Noon, New York City time, on the Closing
Date or the Second Acquisition Closing Date, as applicable, each Term Loan
Lender shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the Term Loan or Term Loans to be
made by such Lender. The Administrative Agent shall make available to the
Borrower the aggregate of the amounts made available to the Administrative Agent
by the Term Loan Lenders, in like funds as received by the Administrative Agent.
2.3 REPAYMENT OF TERM LOANS. The Borrower shall repay all
outstanding Tranche B Term Loans on the Maturity Date.
2.4 REVOLVING CREDIT COMMITMENTS. (a) Subject to the terms
and conditions hereof, the Revolving Credit Lenders severally agree to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Borrower from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount at any one time outstanding for each Revolving Credit Lender which, when
added to such Lender's Revolving Credit Percentage of the sum of (i) the L/C
Obligations then outstanding and (ii) the aggregate principal amount of the
Swing Line Loans then outstanding, does not exceed the amount of such Lender's
Revolving Credit Commitment. During the Revolving Credit Commitment Period the
Borrower may use the Revolving Credit Commitments by borrowing, prepaying the
Revolving Credit Loans in whole or in part, and reborrowing, all in accordance
with the terms and conditions hereof.
(b) The Borrower shall repay all outstanding Revolving Credit
Loans on the Revolving Credit Termination Date.
2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Borrower may
borrow under the Revolving Credit Commitments on any Business Day during the
Revolving Credit Commitment Period, PROVIDED that the Borrower shall deliver to
the Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City time,
one Business Day prior to the requested Borrowing Date). All Revolving Credit
Loans will be Fixed Rate Loans and all Revolving Credit Loans will be made as
such. Each borrowing of Revolving Credit Loans under the Revolving Credit
Commitments shall be in an amount equal to $1,000,000 or a whole multiple
thereof (or, if the
25
then aggregate Available Revolving Credit Commitments are less than $1,000,000,
such lesser amount); PROVIDED, that the Swing Line Lender may request, on behalf
of the Borrower, borrowings of Fixed Rate Loans under the Revolving Credit
Commitments in other amounts pursuant to Section 2.7. Upon receipt of any such
Borrowing Notice from the Borrower, the Administrative Agent shall promptly
notify each Revolving Credit Lender thereof. Each Revolving Credit Lender will
make its Revolving Credit Percentage of the amount of each borrowing of
Revolving Credit Loans available to the Administrative Agent for the account of
the Borrower at the Funding Office prior to 12:00 Noon, New York City time, on
the Borrowing Date requested by the Borrower in funds immediately available to
the Administrative Agent. Such borrowing will then be made available to the
Borrower by the Administrative Agent in like funds as received by the
Administrative Agent.
2.6 SWING LINE COMMITMENT. (a) Subject to the terms and
conditions hereof, the Swing Line Lender agrees that, during the Revolving
Credit Commitment Period, it will make available to the Borrower in the form of
swing line loans ("SWING LINE LOANS") a portion of the credit otherwise
available to the Borrower under the Revolving Credit Commitments; PROVIDED that
(i) the aggregate principal amount of Swing Line Loans outstanding at any time
shall not exceed the Swing Line Commitment then in effect (notwithstanding that
the Swing Line Loans outstanding at any time, when aggregated with the Swing
Line Lender's other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender's Revolving
Credit Commitment then in effect) and (ii) the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swing Line Loans shall be Fixed Rate Loans only.
(b) The Borrower shall repay all outstanding Swing Line Loans
on the Revolving Credit Termination Date.
2.7 PROCEDURE FOR SWING LINE BORROWING; REFUNDING OF SWING
LINE LOANS. (a) (a) The Borrower may borrow under the Swing Line Commitment on
any Business Day during the Revolving Credit Commitment Period, PROVIDED, the
Borrower shall give the Swing Line Lender irrevocable telephonic notice
confirmed promptly in writing (which telephonic notice must be received by the
Swing Line Lender not later than 1:00 P.M., New York City time, on the proposed
Borrowing Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date. Each borrowing under the Swing Line Commitment shall be in an
amount equal to $500,000 or a whole multiple of $100,000 in excess thereof. Not
later than 3:00 P.M., New York City time, on the Borrowing Date specified in the
borrowing notice in respect of any Swing Line Loan, the Swing Line Lender shall
make available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the amount of such Swing Line Loan. The
Administrative Agent shall make the proceeds of such Swing Line Loan available
to the Borrower on such Borrowing Date in like funds as received by the
Administrative Agent.
26
(b) The Swing Line Lender, at any time and from time to time
in its sole and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one Business
Day's notice given by the Swing Line Lender no later than 12:00 Noon, New York
City time, request each Revolving Credit Lender to make, and each Revolving
Credit Lender hereby agrees to make, a Revolving Credit Loan (which shall be a
Fixed Rate Loan), in an amount equal to such Revolving Credit Lender's Revolving
Credit Percentage of the aggregate amount of the Swing Line Loans (the "REFUNDED
SWING LINE LOANS") outstanding on the date of such notice, to repay the Swing
Line Lender. Each Revolving Credit Lender shall make the amount of such
Revolving Credit Loan available to the Administrative Agent at the Funding
Office in immediately available funds, not later than 10:00 A.M., New York City
time, one Business Day after the date of such notice. The proceeds of such
Revolving Credit Loans shall be made immediately available by the Administrative
Agent to the Swing Line Lender for application by the Swing Line Lender to the
repayment of the Refunded Swing Line Loans. The Borrower irrevocably authorizes
the Swing Line Lender to charge the Borrower's accounts with the Administrative
Agent (up to the amount available in each such account) in order to immediately
pay the amount of such Refunded Swing Line Loans to the extent amounts received
from the Revolving Credit Lenders are not sufficient to repay in full such
Refunded Swing Line Loans.
(c) If prior to the time a Revolving Credit Loan would have
otherwise been made pursuant to Section 2.7(b), one of the events described in
Section 8(f) shall have occurred and be continuing with respect to the Borrower,
or if for any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the "REFUNDING DATE"), purchase for cash an undivided participating interest in
the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the "SWING LINE PARTICIPATION AMOUNT") equal to (i) such Revolving
Credit Lender's Revolving Credit Percentage TIMES (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.
(d) Whenever, at any time after the Swing Line Lender has
received from any Revolving Credit Lender such Lender's Swing Line Participation
Amount, the Swing Line Lender receives any payment on account of the Swing Line
Loans, the Swing Line Lender will distribute to such Lender its Swing Line
Participation Amount (appropriately adjusted, in the case of interest payments,
to reflect the period of time during which such Lender's participating interest
was outstanding and funded and, in the case of principal and interest payments,
to reflect such Lender's PRO RATA portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); PROVIDED, HOWEVER, that in the event that such payment received by the
Swing Line Lender is required to be returned, such Revolving Credit Lender will
return to the Swing Line Lender any portion thereof previously distributed to it
by the Swing Line Lender.
(e) Each Revolving Credit Lender's obligation to make the
Loans referred to in Section 2.7(b) and to purchase participating interests
pursuant to Section 2.7(c) shall be absolute and unconditional and shall not be
affected by any circumstance, including, without limitation, (i) any setoff,
counterclaim, recoupment, defense or other right which such Revolving Credit
27
Lender or the Borrower may have against the Swing Line Lender, the Borrower or
any other Person for any reason whatsoever; (ii) the occurrence or continuance
of a Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
2.8 REPAYMENT OF LOANS; EVIDENCE OF DEBT. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of the appropriate Revolving Credit Lender or Term Loan Lender, as the
case may be, (i) the then unpaid principal amount of each Revolving Credit Loan
of such Revolving Credit Lender on the Revolving Credit Termination Date (or on
such earlier date on which the Loans become due and payable pursuant to Section
8), (ii) the then unpaid principal amount of each Swing Line Loan of such Swing
Line Lender on the Revolving Credit Termination Date (or on such earlier date on
which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender on the Maturity Date
(or on such earlier date on which the Loans become due and payable pursuant to
Section 8). The Borrower hereby further agrees to pay interest on the unpaid
principal amount of the Loans from time to time outstanding from the date hereof
until payment in full thereof at the rates per annum, and on the dates, set
forth in Section 2.13.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent, on behalf of the Borrower, shall
maintain the Register pursuant to Section 10.6(d), and a subaccount therein for
each Lender, in which shall be recorded (i) the amount of each Loan made
hereunder and any Note evidencing such Loan, (ii) the amount of any principal or
interest due and payable or to become due and payable from the Borrower to each
Lender hereunder and (iii) both the amount of any sum received by the
Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the Register and the accounts of each
Lender maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Borrower therein recorded; PROVIDED, HOWEVER, that the
failure of any Lender or the Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Borrower to repay (with applicable interest) the Loans made to
the Borrower by such Lender in accordance with the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will promptly execute and
deliver to such Lender a promissory note of the Borrower evidencing any Term
Loans, Revolving Credit Loans or Swing Line Loans, as the case may be, of such
Lender, substantially in the forms of Exhibit G-1, G-2 or G-3, respectively (a
"TERM NOTE", "REVOLVING CREDIT NOTE" or "SWING LINE NOTE", respectively), with
appropriate
28
insertions as to date and principal amount; PROVIDED, that delivery of Notes
shall not be a condition precedent to the occurrence of the Closing Date or the
making of the Loans on the Closing Date.
2.9 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to
the Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each March, June, September and December and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Borrower agrees to pay to the Administrative Agent the
fees in the amounts and on the dates from time to time agreed to in writing by
the Borrower and the Administrative Agent.
(c) The Borrower agrees to pay to the Administrative Agent for
the account of each Tranche B Term Loan Lender a commitment fee for the period
from and including the Closing Date to the Second Acquisition Closing Date (or,
if earlier, March 31, 2004) computed at the Commitment Fee Rate on the amount of
unfunded Tranche B Term Loan Commitments of such Lender, payable on the Second
Acquisition Closing Date (or, if earlier, March 31, 2004).
2.10 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENTS.
The Borrower shall have the right, upon not less than three Business Days'
notice to the Administrative Agent, to terminate the Revolving Credit
Commitments or, from time to time, to reduce the aggregate amount of the
Revolving Credit Commitments; PROVIDED that no such termination or reduction of
Revolving Credit Commitments shall be permitted if, after giving effect thereto
and to any prepayments of the Revolving Credit Loans and Swing Line Loans made
on the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $1,000,000, or a whole multiple thereof, and shall reduce
permanently the Revolving Credit Commitments then in effect.
2.11 OPTIONAL PREPAYMENTS. (a) The Borrower may at any time
and from time to time prepay the Loans, in whole or in part, without premium or
penalty (except as otherwise provided herein), upon irrevocable notice delivered
to the Administrative Agent at least one Business Day prior thereto, which
notice shall specify the date and amount of such prepayment and whether such
prepayment is of Term Loans or Revolving Credit Loans; PROVIDED, that no prior
notice is required for the prepayment of Swing Line Loans. Upon receipt of any
such notice the Administrative Agent shall promptly notify each relevant Lender
thereof. If any such notice is given, the amount specified in such notice shall
be due and payable on the date specified therein, together with accrued interest
to such date on the amount prepaid. Partial prepayments of Term Loans and
Revolving Credit Loans shall be in an aggregate principal amount of $1,000,000
or a whole multiple thereof. Partial prepayments of Swing Line Loans shall be in
an aggregate principal amount of $100,000 or a whole multiple thereof.
29
2.12 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a)
Unless the Required Prepayment Lenders shall otherwise agree, if any Capital
Stock shall be issued, or Indebtedness incurred, by any Group Member (excluding
any Indebtedness incurred in accordance with Section 7.2 as in effect on the
date of this Agreement), then on the date of such issuance or incurrence, the
Term Loans shall be prepaid, and/or the Revolving Credit Commitments shall be
reduced, by an amount equal to the amount of the Net Cash Proceeds, other than
any Excluded Proceeds, of such issuance or incurrence, as set forth in Section
2.12(d). The provisions of this Section do not constitute a consent to the
issuance of any equity securities by any entity whose equity securities are
pledged pursuant to the Guarantee and Collateral Agreement or the Canadian
Guarantee and Collateral Agreement, or a consent to the incurrence of any
Indebtedness by CERI, the Borrower or any of its Subsidiaries.
(b) Unless the Required Prepayment Lenders shall otherwise
agree, if on any date any Group Member shall receive Net Cash Proceeds from any
Asset Sale, Purchase Price Refund or Recovery Event then, unless a Reinvestment
Notice shall be delivered in respect thereof, on the date of receipt by CERI,
the Borrower of such Net Cash Proceeds, the Term Loans shall be prepaid, and/or
the Revolving Credit Commitments shall be reduced, by an amount equal to the
amount of such Net Cash Proceeds, as set forth in Section 2.12(d); PROVIDED,
that, notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of
Asset Sales and Recovery Events that may be excluded from the foregoing
requirement pursuant to one or more Reinvestment Notices shall not exceed
$7,500,000 in any fiscal year of the Borrower and (ii) on each Reinvestment
Prepayment Date the Term Loans shall be prepaid, and/or the Revolving Credit
Commitments shall be reduced, by an amount equal to the Reinvestment Prepayment
Amount with respect to the relevant Reinvestment Event, as set forth in Section
2.12(d). The provisions of this Section do not constitute a consent to the
consummation of any Disposition not permitted by Section 7.5.
(c) Unless the Required Prepayment Lenders shall otherwise
agree, if the Borrower determines that any of the Remaining Allied Assets set
forth on Annex I to the Escrow Agreement will not be acquired on or prior to
January 31, 2004 or if any such Remaining Allied Assets are not acquired on or
prior to January 31, 2004, then on such date of determination, or February 1,
2004, as applicable, the Term Loans shall be prepaid and/or the Revolving Credit
Commitments shall be reduced, by an amount equal to the purchase price allocated
to such Remaining Allied Assets on Annex I to the Escrow Agreement; it being
understood that such prepayment shall be made from the proceeds of amounts
entitled to be released pursuant to the terms of the Escrow Agreement.
(d) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to this Section 2.12 shall be applied,
FIRST, to the prepayment of the Term Loans, SECOND, to reduce permanently the
Revolving Credit Commitments and, THIRD, to reduce permanently any unfunded,
unexpired and unterminated Tranche B Term Loan Commitments. Any such reduction
of the Revolving Credit Commitments shall be accompanied by prepayment of the
Revolving Credit Loans and/or Swing Line Loans to the extent, if any, that the
Total Revolving Extensions of Credit exceed the amount of the Total Revolving
Credit Commitments as so reduced, PROVIDED that if the aggregate principal
amount of Revolving Credit Loans and Swing Line Loans then outstanding is less
than the amount of such excess (because L/C Obligations constitute a portion
thereof), the Borrower shall, to the extent of the balance of
30
such excess, replace outstanding Letters of Credit and/or deposit an amount in
cash in a cash collateral account established with the Administrative Agent for
the benefit of the Secured Parties on terms and conditions satisfactory to the
Administrative Agent.
2.13 INTEREST RATES AND PAYMENT DATES(a). (a) Each Fixed Rate
Loan shall bear interest for each day on which it is outstanding at a rate per
annum equal to the Fixed Rate in effect for such day.
(b) (i) If all or a portion of the principal amount of any
Loan or Reimbursement Obligation shall not be paid when due (whether at the
stated maturity, by acceleration or otherwise), all outstanding Loans and
Reimbursement Obligations (whether or not overdue) (to the extent legally
permitted) shall bear interest at a rate per annum that is equal to the Fixed
Rate plus 2.0%, and (ii) if all or a portion of any interest payable on any Loan
or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Fixed Rate Loans plus 2.0%, in
each case, with respect to clauses (i) and (ii) above, from the date of such
non-payment until such amount is paid in full (after as well as before
judgment).
(c) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (b) of this
Section shall be payable from time to time on demand.
2.14 COMPUTATION OF INTEREST AND FEES. Interest, fees,
commissions payable pursuant hereto shall be calculated on the basis of a 365-
(or 366-, as the case may be) day year for the actual days elapsed. Each
determination of an interest rate by the Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrower and
the Lenders in the absence of manifest error.
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by
the Borrower from the Lenders hereunder, each payment by the Borrower on account
of any commitment fee or Letter of Credit fee, and any reduction of the
Commitments of the Lenders, shall be made PRO RATA according to the respective
Tranche B Term Loan Percentages or Revolving Credit Percentages, as the case may
be, of the relevant Lenders. Each payment (other than prepayments) in respect of
principal or interest in respect of the Term Loans and each payment in respect
of fees or expenses payable hereunder shall be applied to the amounts of such
obligations owing to the Lenders PRO RATA according to the respective amounts
then due and owing to the Lenders.
(b) Each payment (including each prepayment) of the Term Loans
outstanding under the Tranche B Term Loan Facility shall be allocated among the
Term Loan Lenders holding such Term Loans PRO RATA based on the principal amount
of such Term Loans held by such Term Loan Lenders, and shall be applied to the
installment of such Term Loans payable on the Maturity Date. Amounts prepaid on
account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower
on account of principal of and interest on the Revolving Credit Loans shall be
made PRO RATA according to the
31
respective outstanding principal amounts of the Revolving Credit Loans then held
by the Revolving Credit Lenders. Each payment in respect of Reimbursement
Obligations in respect of any Letter of Credit shall be made to the Issuing
Lender that issued such Letters of Credit.
(d) Each payment of the Loans shall be accompanied by accrued
interest to the date of such payment on the amount paid.
(e) All payments (including prepayments) to be made by the
Borrower hereunder, whether on account of principal, interest, fees or
otherwise, shall be made without setoff or counterclaim and shall be made prior
to 12:00 Noon, New York City time, on the due date thereof to the Administrative
Agent, for the account of the relevant Lenders, at the Payment Office, in
Dollars and in immediately available funds. Any payment made by the Borrower
after 12:00 Noon, New York City time, on any Business Day shall be deemed to
have been made on the next following Business Day. The Administrative Agent
shall distribute such payments to the Lenders promptly upon receipt in like
funds as received. If any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. In the case of any extension of any payment of principal pursuant
to the preceding sentence, interest thereon shall be payable at the then
applicable rate during such extension.
(f) Unless the Administrative Agent shall have been notified
in writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the Administrative
Agent by the required time on the Borrowing Date therefor, such Lender shall pay
to the Administrative Agent, on demand, such amount with interest thereon at a
rate equal to the daily average Federal Funds Effective Rate for the period
until such Lender makes such amount immediately available to the Administrative
Agent. A certificate of the Administrative Agent submitted to any Lender with
respect to any amounts owing under this paragraph shall be conclusive in the
absence of manifest error. If such Lender's share of such borrowing is not made
available to the Administrative Agent by such Lender within three Business Days
after such Borrowing Date, the Administrative Agent shall also be entitled to
recover such amount with interest thereon at the rate per annum applicable to
Fixed Rate Loans under the relevant Facility, on demand, from the Borrower.
(g) Unless the Administrative Agent shall have been notified
in writing by the Borrower prior to the date of any payment due to be made by
the Borrower hereunder that the Borrower will not make such payment to the
Administrative Agent, the Administrative Agent may assume that the Borrower is
making such payment, and the Administrative Agent may, but shall not be required
to, in reliance upon such assumption, make available to the Lenders their
respective PRO RATA shares of a corresponding amount. If such payment is not
made to the Administrative Agent by the Borrower within three Business Days
after such due date, the Administrative Agent shall be entitled to recover, on
demand, from each Lender to which any amount which was made available pursuant
to the preceding sentence, such amount with interest thereon at the rate per
annum equal to the daily average Federal Funds Effective Rate. Nothing
32
herein shall be deemed to limit the rights of the Administrative Agent or any
Lender against the Borrower.
2.16 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof, other than with respect to taxes, which shall be
governed exclusively by Section 2.17, shall impose on such Lender any condition,
and the result of the foregoing is to increase the cost to such Lender, by an
amount which such Lender deems to be material, of issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender on
an after-tax basis for such increased cost or reduced amount receivable. If any
Lender becomes entitled to claim any additional amounts pursuant to this
Section, it shall promptly notify the Borrower (with a copy to the
Administrative Agent) of the event by reason of which it has become so entitled.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority made subsequent to the date hereof shall have the effect of reducing
the rate of return on such Lender's or such corporation's capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or such corporation
for such reduction on an after-tax basis.
(c) A certificate as to any additional amounts payable
pursuant to this Section submitted by any Lender to the Borrower (with a copy to
the Administrative Agent) shall be conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 TAXES. (a) All payments made by the Borrower under this
Agreement or any other Loan Documents shall be made free and clear of, and
without deduction or withholding for or on account of, any present or future
income, stamp or other taxes, levies, imposts, duties, charges, fees, deductions
or withholdings, now or hereafter imposed, levied, collected, withheld or
assessed by any Governmental Authority, excluding (i) net income taxes, and
gross income taxes, gross receipts taxes, capital taxes and franchise taxes (in
each case, imposed in lieu of net income taxes) imposed on the Arranger, any
Agent or any Lender as a result of a present or former connection between the
Arranger, such Agent or such Lender and the jurisdiction of the Governmental
Authority imposing such tax or any political subdivision or taxing authority
thereof or therein (other than any such connection arising solely from the
Arranger's, such
33
Agent's or such Lender's having executed, delivered or performed its obligations
or received a payment under, or enforced, this Agreement or any other Loan
Document), (ii) any branch profit taxes imposed by the United States of America
(or any similar tax imposed by any other jurisdiction described in clause (i)
above), and (iii) any taxes that are imposed as a result of any voluntary action
taken by the Arranger, any Agent or any Lender occurring after the Arranger,
such Agent or such Lender becomes a party to this Agreement other than any taxes
resulting from a change in law or regulation or a change in interpretation or
administration of any law or regulation (collectively, "EXCLUDED TAXES"). If any
such non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or any Other Taxes are required to be
withheld from any amounts payable to the Arranger, any Agent or any Lender
hereunder, the amounts so payable to the Arranger, such Agent or such Lender
shall be increased to the extent necessary to yield to the Arranger, such Agent
or such Lender (after payment of all Non-Excluded Taxes and Other Taxes)
interest or any such other amounts payable hereunder at the rates or in the
amounts specified in this Agreement; provided, HOWEVER, that the Borrower or any
Guarantor shall not be required to increase any such amounts payable to the
Arranger, any Agent or any Lender with respect to (x) any Excluded Taxes or (y)
any Non-Excluded Taxes (i) that are attributable to the Arranger's, such Agent's
or such Lender's failure to comply with the requirements of paragraph (e) of
this Section or (ii) in the case of any Non-U.S. Lender, that are United States
of America withholding taxes imposed on amounts payable to the Arranger, such
Agent or such Lender at the time the Arranger, such Agent or such Lender becomes
a party to this Agreement, except to the extent that the Arranger's such Agent's
or such Lender's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such Non-Excluded
Taxes pursuant to this paragraph (a). The Borrower or the applicable Guarantor
shall make any required withholding and pay the full amount withheld to the
relevant tax authority or other Governmental Authority in accordance with
applicable Requirements of Law.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable
by the Borrower, as promptly as possible thereafter the Borrower shall send to
the Administrative Agent for the account of the relevant Arranger, Agent or
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof or other written proof of
payment thereof that is reasonably satisfactory to the Administrative Agent. If
the Borrower fails to pay any Non-Excluded Taxes or Other Taxes when due to the
appropriate taxing authority or fails to remit to the Administrative Agent the
required receipts or other required documentary evidence, the Borrower shall
indemnify the Arranger, the Agents and the Lenders for any incremental taxes,
interest or penalties that may become payable by the Arranger, any Agent or any
Lender as a result of any such failure.
(d) The agreements in this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
(e) Any Lender that is entitled to an exemption from or
reduction of withholding tax with respect to payments under this Agreement shall
deliver to the Borrower and the Administrative Agent, at the time or times
reasonably requested in writing by the Borrower, such
34
properly completed and executed documentation prescribed by Requirements of Law
as will permit such payments to be made without withholding or at a reduced
rate.
In addition, and without limiting the generality of the
foregoing, each Lender (or Transferee) that is not a citizen or resident of the
United States of America, a corporation, partnership or other entity created or
organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "NON-U.S. LENDER") shall
deliver to the Borrower and the Administrative Agent two copies of either U.S.
Internal Revenue Service Form W-8BEN or Form W-8ECI, or, in the case of a
Non-U.S. Lender claiming exemption from U.S. federal withholding tax under
Section 871(h) or 881(c) of the Code with respect to payments of "portfolio
interest" a statement substantially in the form of Exhibit H to the effect that
such Lender is eligible for a complete exemption from withholding of U.S. taxes
under Section 871(h) or 881(c) of the Code and a Form W-8BEN, or any subsequent
versions thereof or successors thereto properly completed and duly executed by
such Non-U.S. Lender claiming complete exemption from, or a reduced rate of,
U.S. federal withholding tax on all payments by the Borrower under this
Agreement and the other Loan Documents. Such forms shall be delivered by each
Non-U.S. Lender on or before the date it becomes a party to this Agreement. In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
(f) If a Lender receives a refund in respect of any Taxes or
Other Taxes as to which it has been indemnified by the Borrower or with respect
to which the Borrower has paid additional amounts pursuant to this Section 2.17,
it shall within 180 days from the date of such receipt pay over the amount of
such refund (but only to the extent of indemnity payments made, or additional
amounts paid, by the Borrower under this Section 2.17 with respect to the
Non-Excluded Taxes or Other Taxes giving rise to such refund) to the Borrower,
net of all reasonable out-of-pocket expenses of such Lender (including any taxes
imposed with respect to such refund) as determined by such Lender in good faith
and in its sole discretion, and without interest (other than interest paid by
the relevant taxation authority with respect to such refund); PROVIDED, HOWEVER,
that the Borrower, upon the request of such Lender, agrees to repay as soon as
reasonably practicable the amount paid over to the Borrower (plus applicable
interest imposed by the relevant Governmental Authority) to such Lender in the
event such lender is required to repay such refund to such Governmental
Authority.
(g) Each Lender that is a "United States person" within the
meaning of Section 7701(a)(30) of the Code shall deliver to the Borrower and the
Administrative Agent, on or before the date such Lender becomes a party to this
Agreement, two copies of Internal Revenue Service Form W-9 or any successor or
other form prescribed by the Internal Revenue Service. If any Lender fails to
deliver Internal Revenue Service Form W-9 (or any subsequent versions thereof or
successors thereto) as required herein, then the Borrower may withhold from any
payment to such Lender the applicable backup withholding tax imposed by the Code
and remit such amount
35
to the relevant tax authority or other Governmental Authority in accordance with
the applicable Requirements of Law, without reduction, and such Lender shall not
be entitled to any additional amounts under this Section 2.17 with respect to
Non-Excluded Taxes imposed by the United States by reason of such failure.
2.18 INDEMNITY. The Borrower agrees to indemnify each Lender
for, and to hold each Lender harmless from, any loss or expense that such Lender
may sustain or incur as a consequence of (a) default by the Borrower in making a
borrowing of Loans after the Borrower has given a notice requesting the same in
accordance with the provisions of this Agreement or (b) default by the Borrower
in making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon
the occurrence of any event giving rise to the operation of Section 2.16 or 2.17
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or regulatory
disadvantage, and PROVIDED, FURTHER, that nothing in this Section shall affect
or postpone any of the obligations of any Borrower or the rights of any Lender
pursuant to Section 2.16 or 2.17.
2.20 EXTENSION OF MATURITY DATE. The Borrower shall have the
option to extend the Maturity Date to July 5, 2005 (the period from the Initial
Maturity Date to and including July 5, 2005, being referred to herein as the
"EXTENSION PERIOD") upon the satisfaction conditions set forth in this Section
2.20. The Borrower shall exercise such option by giving the Administrative Agent
and the Lenders prior written notice of its election no earlier than 60 days and
no later than 30 days prior to the Initial Maturity Date. Each Lender agrees
that after receipt of such notice, if on the Initial Maturity Date (a) no
Default or Event of Default has occurred and is continuing and (b) the Borrower
has paid the Extension Fee in accordance with the Fee Letter, then the Maturity
Date shall be extended to July 5, 2005 and, from and after the Initial Maturity
Date, the Fixed Rate shall be increased from 9.00% to 11.00%.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions
hereof, each Issuing Lender, in reliance on the agreements of the other
Revolving Credit Lenders set forth in Section 3.4(a), agrees to issue letters of
credit ("LETTERS OF CREDIT") for the account of the Borrower or any other Group
Member on any Business Day during the Revolving Credit Commitment Period
commencing on the Issuing Lender Availability Date and in such form as may be
approved from time to time by such Issuing Lender; PROVIDED, that no Issuing
Lender shall have any obligation to issue any Letter of Credit if, after giving
effect to such issuance, (i) the L/C Obligations would exceed the L/C Commitment
or (ii) the aggregate amount of the Available Revolving Credit Commitments would
be less than zero. Each Domestic L/C shall (i) be denominated in Dollars and
(ii) expire no later than the earlier of (x) the first anniversary of its date
of issuance and (y) the date which is five Business Days prior to the Revolving
Credit Termination Date; PROVIDED that any Letter of Credit with a one-year term
may provide for the
36
renewal thereof for additional one-year periods (which shall in no event extend
beyond the date referred to in clause (y) above). Each Foreign L/C shall (i) be
denominated in Canadian Dollars and (ii) expire no later than the earlier of (x)
the first anniversary of its date of issuance and (y) the date which is five
Business Days prior to the Revolving Credit Termination Date; PROVIDED that any
Foreign L/C with a one-year term may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above). In addition, the Issuing Lender agrees to
issue Letters of Credit with an expiration date later than the date specified in
the two immediately preceding sentences (but no later than one year from the
date of issuance thereof) in reliance upon the Borrower's agreement to cash
collateralize such Letters of Credit by the date which is 30 days prior to the
Maturity Date in the amount that would be required by the Issuing Lender
pursuant to Section 10.15(c) to deem such Letter of Credit not outstanding, and
the Borrower so agrees to cash collateralize such Letters of Credit by such
date, it being understood that until the Loans, the Reimbursement Obligations
and the other Obligations under the Loan Documents are paid in full, the
Commitments have been terminated and no other Letters of Credit shall be
outstanding such cash collateral shall be subject to the rights of each other
Lender under Section 10.7. For purposes of this Agreement, except as otherwise
provided herein, at any time, the amount deemed outstanding under each Foreign
L/C, and the amount of the Reimbursement Obligations under Section 3.5 for any
amounts paid by the Issuing Lender in connection with such Foreign L/C, shall be
the Dollar Equivalent, as determined on the most recent Calculation Date, of (x)
such Letter of Credit or (y) the Payment Amount (as defined in Section 3.5), as
applicable.
(b) No Issuing Lender shall at any time be obligated to issue
any Letter of Credit hereunder if (i) such issuance would conflict with, or
cause such Issuing Lender or any L/C Participant to exceed any limits imposed
by, any applicable Requirement of Law or (ii) in the case of any Foreign L/C, it
has determined that it cannot provide such Letter of Credit in Canadian Dollars.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender, with a copy to the Administrative Agent, at
their addresses for notices specified herein an Application therefor, completed
to the satisfaction of such Issuing Lender, and such other certificates,
documents and other papers and information as such Issuing Lender may request.
Upon receipt of any Application, an Issuing Lender will process such Application
and the certificates, documents and other papers and information delivered to it
in connection therewith in accordance with its customary procedures and shall
promptly issue the Letter of Credit requested thereby by issuing the original of
such Letter of Credit to the beneficiary thereof or as otherwise may be agreed
to by such Issuing Lender and the Borrower (but in no event shall any Issuing
Lender be required to issue any Letter of Credit earlier than three Business
Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such Issuing
Lender shall furnish a copy of such Letter of Credit to the Borrower and the
Administrative Agent. Each Issuing Lender shall promptly give notice to the
Administrative Agent of the issuance of each Letter of Credit issued by such
Issuing Lender (including the amount thereof and, in the case of each Foreign
L/C, the Dollar Equivalent thereof determined as of the date of issuance
thereof).
37
3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay a fee on
the Dollar Equivalent aggregate drawable amount of all outstanding Letters of
Credit at a per annum rate equal to (i) 7.50% from the Closing Date to the
Initial Maturity Date and (ii) 9.50% during the Extension Period, shared ratably
among the Revolving Credit Lenders in accordance with their respective Revolving
Credit Percentages and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date of such Letter of Credit. In addition, the Borrower
shall pay to the relevant Issuing Lender for its own account a fronting fee on
the Dollar Equivalent of the aggregate drawable amount of all outstanding
Letters of Credit issued by it of 1/4 of 1% per annum, payable quarterly in
arrears on each L/C Fee Payment Date after the issuance of date of such Letter
of Credit.
(b) In addition to the foregoing fees, the Borrower shall pay
or reimburse each Issuing Lender for such normal and customary costs and
expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) Each Issuing Lender irrevocably
agrees to grant and hereby grants to each L/C Participant, and, to induce each
Issuing Lender to issue Letters of Credit hereunder, each L/C Participant
irrevocably agrees to accept and purchase and hereby accepts and purchases from
each Issuing Lender, on the terms and conditions hereinafter stated, for such
L/C Participant's own account and risk, an undivided interest equal to such L/C
Participant's Revolving Credit Percentage in each Issuing Lender's obligations
and rights under each Letter of Credit issued by such Issuing Lender hereunder
and the Dollar Equivalent amount of each draft paid by such Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
each Issuing Lender that, if a draft is paid under any Letter of Credit issued
by such Issuing Lender for which such Issuing Lender is not reimbursed in full
by the Borrower in accordance with the terms of this Agreement, such L/C
Participant shall pay to such Issuing Lender, regardless of the occurrence or
continuance of a Default or Event of Default or the failure to satisfy any of
the other conditions specified in Section 5, upon demand at the Administrative
Agent's address for notices specified herein (and thereafter, the Administrative
Agent shall promptly pay to the Issuing Lender) an amount in Dollars equal to
such L/C Participant's Revolving Credit Percentage of the Dollar Equivalent
amount of such draft, or any part thereof, that is not so reimbursed.
(b) If any amount required to be paid by any L/C Participant
to an Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit is
paid to such Issuing Lender within three Business Days after the date such
payment is due, the Issuing Lender shall so notify the Administrative Agent, who
shall promptly notify the L/C Participants and each such L/C Participant shall
pay to the Administrative Agent, for the account of the Issuing Lender on demand
(and thereafter the Administrative Agent shall promptly pay to the Issuing
Lender) an amount equal to the product of (i) such amount, times (ii) the daily
average Federal Funds Effective Rate during the period from and including the
date such payment is required to the date on which such payment is immediately
available to such Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. If any such amount required to be paid by any L/C Participant
pursuant to Section 3.4(a) is not made available to the Administrative Agent,
for the account of such Issuing Lender by such L/C
38
Participant within three Business Days after the date such payment is due, the
Administrative Agent, on behalf of such Issuing Lender shall be entitled to
recover from such L/C Participant, on demand, such amount with interest thereon
calculated from such due date at the rate per annum applicable to Fixed Rate
Loans. A certificate of the Administrative Agent on behalf of such Issuing
Lender submitted to any L/C Participant with respect to any such amounts owing
under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after an Issuing Lender has made
payment under any Letter of Credit and has received from the Administrative
Agent any L/C Participant's PRO RATA share of such payment in accordance with
Section 3.4(a), such Issuing Lender receives any payment related to such Letter
of Credit (whether directly from the Borrower or otherwise, including proceeds
of collateral applied thereto by such Issuing Lender), or any payment of
interest on account thereof, such Issuing Lender will distribute to the
Administrative Agent for the account of such L/C Participant (and thereafter,
the Administrative Agent will promptly distribute to such L/C Participant) its
PRO RATA share thereof; PROVIDED, HOWEVER, that in the event that any such
payment received by such Issuing Lender shall be required to be returned by such
Issuing Lender, such L/C Participant shall return to the Administrative Agent
for the account of such Issuing Lender the portion thereof previously
distributed by such Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower
agrees to reimburse each Issuing Lender, on each date on which such Issuing
Lender notifies the Borrower of the date and amount of a draft presented under
any Letter of Credit and paid by such Issuing Lender, for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment (the amounts
described in the foregoing clauses (a) and (b) in respect of any drawing,
collectively, the "PAYMENT AMOUNT"). The Issuing Lender shall provide notice to
the Borrower on each Business Day on which a draft is presented and paid by the
Issuing Lender indicating the Dollar Equivalent (determined as of such payment
date) of the Payment Amount and, in the case of a Foreign L/C, the Payment
Amount stated in Canadian Dollars. Each such payment shall be made to such
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest shall
be payable on the Dollar Equivalent of each Payment Amount from the date of the
applicable drawing until payment in full at the rate set forth in (i) until the
second Business Day following the date of the applicable drawing, Section
2.13(a) and (ii) thereafter, Section 2.13(b). Each drawing under any Letter of
Credit shall (unless an event of the type described in clause (i) or (ii) of
Section 8(f) shall have occurred and be continuing with respect to the Borrower,
in which case the procedures specified in Section 3.4 for funding by L/C
Participants shall apply) constitute a request by the Borrower to the
Administrative Agent for a borrowing pursuant to Section 2.5 of Fixed Rate Loans
(or, at the option of the Administrative Agent and the Swing Line Lender in
their sole discretion, a borrowing pursuant to Section 2.7 of Swing Line Loans)
in the Dollar Equivalent of the amount of such drawing. The Borrowing Date with
respect to such borrowing shall be the first date on which a borrowing of
Revolving Credit Loans (or, if applicable, Swing Line Loans) could be made,
pursuant to Section 2.5 (or, if applicable, Section 2.7), if the Administrative
Agent had received a notice of such borrowing at the time the Administrative
Agent receives notice from the relevant Issuing Lender of such drawing under
such Letter of Credit. All payments due from the Borrower hereunder in respect
of Letters of Credit (and Reimbursement Obligations in connection therewith)
shall be made in Dollars.
39
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under
this Section 3 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
that the Borrower may have or have had against any Issuing Lender, any
beneficiary of a Letter of Credit or any other Person. The Borrower also agrees
with each Issuing Lender that such Issuing Lender shall not be responsible for,
and the Borrower's Reimbursement Obligations under Section 3.5 shall not be
affected by, among other things, the validity or genuineness of documents or of
any endorsements thereon, even though such documents shall in fact prove to be
invalid, fraudulent or forged, or any dispute between or among the Borrower and
any beneficiary of any Letter of Credit or any other party to which such Letter
of Credit may be transferred or any claims whatsoever of the Borrower against
any beneficiary of such Letter of Credit or any such transferee. No Issuing
Lender shall be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a court of competent jurisdiction to have resulted directly
from the gross negligence or willful misconduct of such Issuing Lender. The
Borrower agrees that any action taken or omitted by an Issuing Lender under or
in connection with any Letter of Credit issued by it or the related drafts or
documents, if done in the absence of gross negligence or willful misconduct and
in accordance with the standards of care specified in the UCC of the State of
New York, shall be binding on the Borrower and shall not result in any liability
of such Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any Letter of Credit, the relevant Issuing Lender shall
promptly notify the Administrative Agent and the Borrower of the date and the
Dollar Equivalent of the amount thereof and in the case of a Foreign L/C, the
amount thereof stated in Canadian Dollars. The responsibility of the relevant
Issuing Lender to the Borrower in connection with any draft presented for
payment under any Letter of Credit, in addition to any payment obligation
expressly provided for in such Letter of Credit issued by such Issuing Lender,
shall be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment appear
on their face to be in conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3, the provisions of this Section 3 shall apply.
3.9 DETERMINATION OF EXCHANGE RATE. On each Calculation Date,
with respect to each outstanding L/C Obligation in respect of a Foreign L/C, the
Issuing Lender shall determine the Exchange Rate as of such Calculation Date
with respect to Canadian Dollars and shall promptly notify the Administrative
Agent and the Borrower thereof and of the Dollar Equivalent of all L/C
Obligations outstanding on such Calculation Date in respect of Foreign L/Cs. The
Exchange Rate so determined shall become effective on each Calculation Date and
shall remain effective until the next succeeding Calculation Date.
SECTION 4. REPRESENTATIONS AND WARRANTIES
40
To induce the Arranger, the Agents and the Lenders to enter
into this Agreement and to make the Loans and issue or participate in the
Letters of Credit, CERI and the Borrower hereby jointly and severally represent
and warrant to the Arranger, each Agent and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA
consolidated balance sheet of CERI and its consolidated Subsidiaries as at
September 30, 2003 (including the notes thereto) (the "PRO FORMA BALANCE
SHEET"), copies of which have heretofore been furnished to each Lender, has been
prepared giving effect (as if such events had occurred on such date) to (i) the
consummation of the Acquisition, (ii) the Loans to be made on the Closing Date
and the use of proceeds thereof and (iii) the payment of fees and expenses in
connection with the foregoing. The Pro Forma Balance Sheet has been prepared
based on the best information available to the Borrower as of the date of
delivery thereof, and presents fairly on a PRO FORMA basis the estimated
financial position of CERI and its consolidated Subsidiaries as at September 30,
2003, assuming that the events specified in the preceding sentence had actually
occurred at such date.
(b) The audited consolidated balance sheets of CERI and its
Subsidiaries as at December 31, 2000, December 31, 2001 and December 31, 2002
(as restated) and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by and accompanied
by an unqualified report from PricewaterhouseCoopers LLP, present fairly the
consolidated financial condition of CERI and its Subsidiaries as at such date,
and the consolidated results of its operations and its consolidated cash flows
for the respective fiscal years then ended. The audited consolidated balance
sheets of the Allied Business as at December 31, 2000, December 31, 2001 and
December 31, 2002 and the related consolidated statements of income and of cash
flows for the fiscal years ended on such dates, reported on by and accompanied
by an unqualified report from PricewaterhouseCoopers LLP, to the best knowledge
of CERI and the Borrower, present fairly the consolidated financial condition of
the Allied Business as at such date, and the consolidated results of its
operations and its consolidated cash flows for the respective fiscal years then
ended. The unaudited consolidated balance sheet of CERI and its Subsidiaries as
at September 30, 2003, and the related unaudited consolidated statements of
income and cash flows for the 9-month period ended on such date, present fairly
the consolidated financial condition of CERI and its Subsidiaries as at such
date, and the consolidated results of its operations and its consolidated cash
flows for the 9-month period then ended (subject to normal year-end audit
adjustments). The unaudited consolidated balance sheet of the Allied Business as
at September 30, 2003, and the related unaudited consolidated statements of
income and cash flows for the 9-month period ended on such date, to the best
knowledge of CERI and the Borrower, present fairly the consolidated financial
condition of the Allied Business as at such date, and the consolidated results
of its operations and its consolidated cash flows for the 9-month period then
ended (subject to normal year-end audit adjustments). All such financial
statements of CERI and its Subsidiaries, and to the knowledge of CERI and the
Borrower, of the Allied Business, including the related schedules and notes
thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the aforementioned firm
of accountants and disclosed therein). As of the date hereof, no Loan Party has
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, or any long-term leases or unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction
41
or other obligation in respect of derivatives, that are not reflected in the
most recent financial statements referred to in this paragraph; PROVIDED, that
such statement as to the assets and liabilities of the Allied Business is made
to the best knowledge of CERI and the Borrower. During the period from December
31, 2002, to and including the date hereof there has been no Disposition by any
Loan Party or its Subsidiaries of any material part of its business or Property.
4.2 NO CHANGE. Since December 31, 2002, there has been no
development or event that has had or could reasonably be expected to have a
Material Adverse Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each Group
Member (a) is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, (b) has the corporate power and
authority, and the legal right, to own and operate its Property, to lease the
Property it operates as lessee and to conduct the business in which it is
currently engaged, (c) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of Property or the conduct of its business requires such qualification
and (d) is in compliance with all Requirements of Law except with respect to
clause (c) and (d), to the extent that the failure to comply therewith could
not, in the aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents and Acquisition Documentation to
which it is a party and, in the case of the Borrower, to borrow hereunder. Each
Loan Party has taken all necessary corporate or other organizational action to
authorize the execution, delivery and performance of the Loan Documents and
Acquisition Documentation to which it is a party and, in the case of the
Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or material consent or
authorization of, filing with, notice to or other act by or in respect of any
other Person is required in connection with the Acquisition, the borrowings
hereunder or the execution, delivery, performance, validity or enforceability of
this Agreement or any of the other Loan Documents or the Acquisition
Documentation except (i) consents, authorizations, filings and notices described
in SCHEDULE 4.4, which consents, authorizations, filings and notices have been
obtained or made (in each case, to the extent the related assets have been
acquired by a Group Member) and are in full force and effect or, to the extent
contemplated by the Acquisition Agreement, a managing, operating or
sub-contracting arrangement or other relationship has been established in lieu
thereof with respect to that portion of the business of the Group Members to
which such consent, authorization, filing or notice relates, (ii) the filings
referred to in Section 4.19, (iii) with respect to the Acquisition only (A),
immaterial consents, authorizations or filings with Governmental Authorities and
(B) consents, authorizations of or filings with or notices to Governmental
Authorities with respect to Environmental Permits which pursuant to applicable
law may be made after the transfer of the assets or operations to which such
Environmental Permits relate (which consents, authorizations of, filings with or
notices to will be obtained in accordance with Section 6.14(a)). Each Loan
Document and each item of Acquisition Documentation has been duly executed and
delivered on behalf of each Loan Party that is a party thereto. This Agreement
constitutes, and each other Loan Document upon execution will constitute, a
legal, valid and binding obligation of each Loan Party that is a party thereto,
enforceable against each such Loan Party in accordance with
42
its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. (a) The execution, delivery and performance
of (i) this Agreement and the other Loan Documents, the issuance of Letters of
Credit, the borrowings hereunder and the use of the proceeds thereof will not
violate any Requirement of Law or any Contractual Obligation of any Group Member
and (ii) the Acquisition Documentation will not violate any material Requirement
of Law or material Contractual Obligation of any Group Member.
(b) The execution, delivery and performance of this Agreement,
the other Loan Documentation and the Acquisition Documentation, the issuance of
the Letters of Credit, the borrowings hereunder and the use of proceeds thereof
will not result in, or require, the creation or imposition of any Lien on any of
their respective properties or revenues pursuant to any Requirement of Law or
any such Contractual Obligation (other than the Liens created by the Security
Documents and the Liens on the cash collateral securing the Existing Letters of
Credit permitted under SECTION 7.3(F)). No Requirement of Law or Contractual
Obligation applicable to any Group Member could reasonably be expected to have a
Material Adverse Effect.
4.6 NO MATERIAL LITIGATION. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of CERI or the Borrower, threatened by or against any Group
Member or against any of their properties or revenues (a) with respect to any of
the Loan Documents, the Acquisition Documentation or any of the transactions
contemplated hereby or thereby, or (b) except as set forth on SCHEDULE 4.6, that
could reasonably be expected to have a Material Adverse Effect.
4.7 NO DEFAULT. No Group Member is in default under or with
respect to any of its Contractual Obligations in any respect that could
reasonably be expected to have a Material Adverse Effect. No Default or Event of
Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each Group Member is the
sole owner of, legally and beneficially, and has good marketable and insurable
title in fee simple to, or a valid leasehold interest in, all its real property,
and good title to, or a valid leasehold interest in, all its other material
Property, and none of such Property is subject to any claims, liabilities,
obligations, charges or restrictions of any kind, nature or description or to
any Lien except for Permitted Liens. None of the Pledged Stock is subject to any
Lien except for Permitted Liens.
4.9 INTELLECTUAL PROPERTY. Except as could not reasonably be
expected to have a Material Adverse Effect (a) each Group Member owns, or is
licensed to use, all Intellectual Property necessary for the conduct of its
business as currently conducted, (b) no claim has been asserted and is pending
by any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does CERI or the
Borrower know of any valid basis for any such claim and (c) the use of
Intellectual Property by the Group Members does not infringe on the rights of
any Person in any material respect.
43
4.10 TAXES. Except as set forth on SCHEDULE 4.10, each Group
Member has filed or caused to be filed all Federal, material state and
provincial and other material tax returns that are required to be filed and has
paid all taxes shown to be due and payable on said returns or on any material
assessments made against it or any of its Property and all other material taxes,
fees or other charges imposed on it or any of its Property by any Governmental
Authority (other than the amount or validity of which is currently being
contested in good faith by appropriate proceedings and with respect to which
reserves in conformity with GAAP have been provided on the books of such Group
Member) and no tax Lien has been filed (other than a Permitted Lien), and, to
the knowledge of CERI and the Borrower, no material claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used for "purchasing" or "carrying" any "margin stock" within the
respective meanings of each of the quoted terms under Regulation U as now and
from time to time hereafter in effect or for any purpose that violates the
provisions of the Regulations of the Board. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative Agent and
each Lender a statement to the foregoing effect in conformity with the
requirements of FR Form G-3 or FR Form U-1 referred to in Regulation U.
4.12 LABOR MATTERS. There are no strikes, stoppages or
slowdowns or other labor disputes against any Group Member pending or, to the
knowledge of CERI or the Borrower, threatened that (individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect. Hours
worked by and payment made to employees of any Group Member have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement of
Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due from
any Group Member on account of employee health and welfare insurance that
(individually or in the aggregate) could reasonably be expected to have a
Material Adverse Effect if not paid have been paid or accrued as a liability on
the books of the relevant Group Member.
4.13 PENSIONS AND BENEFIT PLANS. (a) ERISA. Except as could
not reasonably be expected to result in a Material Adverse Effect, (i) neither a
Reportable Event nor an "accumulated funding deficiency" (within the meaning of
Section 412 of the Code or Section 302 of ERISA) has occurred during the
five-year period prior to the date on which this representation is made or
deemed made with respect to any Single Employer Plan, (ii) each Plan (other than
a Multiemployer Plan) has complied in all material respects with the applicable
provisions of ERISA and the Code, (iii) no termination of a Single Employer Plan
has occurred, (iv) no Lien in favor of a Single Employer Plan or in favor of the
PBGC with respect to a Single Employer Plan has arisen during the five-year
period prior to the date on which this representation is made or deemed made,
(v) the present value of all accrued benefits under each Single Employer Plan
(based on those assumptions used to fund such plans) did not, as of the last
annual valuation date prior to the date on which this representation is made or
deemed made, exceed the value of the assets of such plan allocable to such
accrued benefits by a material amount, (vi) neither the Borrower nor any
Commonly Controlled Entity has had a complete or partial withdrawal from any
Multiemployer Plan, and (vii) no Multiemployer Plan is in Reorganization or
Insolvent.
44
(b) CANADIAN PENSION PLANS AND CANADIAN BENEFIT PLANS. CERI
and the Borrower will cause to be delivered to the Administrative Agent,
promptly upon the Administrative Agent's request, a copy of each Canadian
Benefit Plan and Canadian Pension Plan (or, where any such Canadian Benefit Plan
or Canadian Pension Plan is not in writing, a complete description of all
material terms thereof) and, if applicable, related trust agreements or other
funding instruments and all amendments thereto, and all written interpretations
thereof and written descriptions thereof that have been distributed to employees
or former employees of the Group Members. The Canadian Pension Plans are duly
registered under the INCOME TAX ACT (Canada) and any other Requirement of Law
which to the knowledge of CERI or the Borrower require registration and no event
has occurred which is reasonably likely to cause the loss of such registered
status. As of the date hereof, all material, if any, obligations of each Group
Member (including fiduciary, funding, investment and administration obligations)
required to be performed pursuant to a Requirement of Law in connection with the
Canadian Pension Plans and the funding agreements therefor have been performed
in a timely fashion. There have been no improper withdrawals or applications of
the assets of the Canadian Pension Plans or the Canadian Benefit Plans. Except
as could not reasonably be expected to result in a Material Adverse Effect, (i)
there are no outstanding disputes concerning the assets held under the funding
agreements for the Canadian Pension Plans or the Canadian Benefit Plans and (ii)
each Canadian Pension Plan is fully funded both on an ongoing basis and on a
solvency basis (using actuarial methods and assumptions which are consistent
with the valuations last filed with the applicable Governmental Authorities and
which are consistent with generally accepted actuarial principles). No promises
of benefit improvements under the Canadian Pension Plans or the Canadian Benefit
Plans have been made except where such improvement could not have a Material
Adverse Effect. All contributions or premiums required to be made or paid by
each Group Member, if any, to the Canadian Pension Plans or the Canadian Benefit
Plans have been made or paid in a timely fashion in accordance with the terms of
such plans and all Requirements of Law. All employee contributions to the
Canadian Pension Plans or the Canadian Benefit Plans by way of authorized
payroll deduction or otherwise have been properly withheld or collected and
fully paid into such plans in a timely manner. All material reports and
disclosures relating to the Canadian Pension Plans required by such plans and
any Requirement of Law to be filed or distributed have been filed or distributed
in a timely manner. Each Group Member has withheld all employee withholdings and
has made all employer contributions to be withheld and made by it pursuant to
applicable law on account of Canadian Pension Plans employment insurance and
employee income taxes.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) which limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. (a) The Subsidiaries listed on SCHEDULE
4.15(A) constitute all the Subsidiaries of CERI as of the Closing Date. SCHEDULE
4.15(A) sets forth as of the Closing Date and after giving effect to the
Acquisition, the exact legal name as reflected on the certificate of
incorporation (or formation) and jurisdiction of incorporation (or formation) of
each Subsidiary of CERI and, as to each such Subsidiary, the percentage and
number of each class of Capital Stock owned by each Group Member.
45
(b) As of the date hereof, there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to employees or directors and
directors' qualifying shares) of any nature relating to any Capital Stock of
CERI or any Group Member, except as set forth on SCHEDULE 4.15(B).
4.16 USE OF PROCEEDS. The proceeds of the Term Loans shall be
used to finance the Acquisition and to pay related fees and expenses and to
repay in full or cash collateralize the Existing Credit Facility. The proceeds
of the Revolving Credit Loans and the Swing Line Loans, and the Letters of
Credit, shall be used for general corporate purposes and, on or prior to March
31, 2004, up to $5,000,000 of proceeds of Revolving Credit Loans may be used to
make an Investment pursuant to Section 7.8(e), but such proceeds may not be used
to make Investments permitted by Section 7.8(h) or, after March 31, 2004,
Investments permitted by Section 7.8(e).
4.17 ENVIRONMENTAL MATTERS. Except as disclosed on SCHEDULE
4.17, and other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to result in the
payment of a Material Environmental Amount:
(a) The Group Members: (i) are, and since September 10, 2001,
have been, in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect) required for
any of their operations or for any property owned, leased, or otherwise operated
by any of them; (iii) are, and since September 10, 2001, have been, in
compliance with all of their Environmental Permits; and (iv) have no knowledge
that any of their Environmental Permits will not be timely renewed and complied
with; any additional Environmental Permits that may be required of any of them
will not be timely obtained and complied with; and compliance with any
Environmental Law that is applicable to any of them will not be maintained.
(b) Materials of Environmental Concern are not present at, on,
under, in, or about any real property now owned, leased or operated by any Group
Member that requires investigation or remediation under any applicable
Environmental Law, (ii) were, to the best knowledge of any Group Member,
released at any property formerly owned, leased or operated by any Group Member
during the period of such Group Member's ownership, lease or operation thereof,
that requires investigation or remediation under any applicable Environmental
Law, (iii) to the best knowledge of any Group Member, have not been sent for
re-use or recycling or for treatment, storage, or disposal at any other location
which could reasonably be expected to give rise to liability of any Group Member
under any applicable Environmental Law or (iv) are not present at, on, under,
in, or about any real property now owned, leased or operated by any Group Member
such that the Group Member is precluded from the normal conduct of its business
at any such property.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation) under or
relating to any Environmental Law to which any Group Member is, or to the
knowledge of any Group Member will be, named as a party that is pending or, to
the knowledge of any Group Member, threatened.
(d) No Group Member has received any written request for
information, or been notified in writing that it is a potentially responsible
party under or relating to the federal
46
Comprehensive Environmental Response, Compensation, and Liability Act or any
analogous Environmental Law with respect to any Materials of Environmental
Concern that require, or allegedly require, investigation or remediation under
applicable Environmental Law.
(e) No Group Member has entered into or agreed to any consent
decree, order, or settlement or other agreement, or is subject to any judgment,
decree, or order or other agreement, in any judicial, administrative or arbitral
forum for dispute resolution, relating to compliance with or liability under any
Environmental Law.
(f) No Group Member has received written notice that it is
responsible under any contract to which it is a party for liability arising
under any Environmental Law or with respect to any Material of Environmental
Concern.
4.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, or any other document,
certificate or statement furnished to the Administrative Agent, the Arranger,
the Agents or the Lenders or any of them, by or on behalf of any Loan Party for
use in connection with the transactions contemplated by this Agreement or the
other Loan Documents, taken as a whole, contained as of the date of such
statement, information, document or certificate was so furnished, any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements contained herein or therein not misleading in light
of the circumstances under which such statements were made. The projections and
PRO FORMA financial information contained in the materials referenced above are
based upon good faith estimates and assumptions believed by management of CERI
and the Borrower to be reasonable at the time made, it being recognized by the
Lenders that such financial information as it relates to future events is not to
be viewed as fact and that actual results during the period or periods covered
by such financial information may differ from the projected results set forth
therein by a material amount. As of the Closing Date, the representations and
warranties (to the best knowledge of CERI and the Borrower with respect to
representations and warranties of Allied) contained in the Acquisition
Documentation are true and correct in all material respects. There is no fact
known to any Loan Party that could reasonably be expected to have a Material
Adverse Effect that has not been expressly disclosed herein, in the other Loan
Documents or in any other documents, certificates and statements furnished to
the Arranger, the Agents and the Lenders for use in connection with the
transactions contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for the
benefit of the Secured Parties, a legal, valid, binding and enforceable security
interest in the Collateral described therein and proceeds and products thereof.
The Canadian Guarantee and Collateral Agreement is effective to create in favor
of the Administrative Agent, for the benefit of the Secured Parties, a legal,
valid, binding and enforceable security interest in the Collateral described
therein and proceeds and products thereof. In the case of the Pledged Stock
described in the Guarantee and Collateral Agreement, and the Canadian Guarantee
and Collateral Agreement, when any stock certificates representing such Pledged
Stock are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement (except Vehicles
and Deposit Accounts, each as defined therein) and other Collateral described in
the Canadian Guarantee and Collateral Agreement (except insurance and patents),
when financing statements
47
in appropriate form are filed in the offices specified on SCHEDULE 4.19 (which
financing statements may be filed by the Administrative Agent) at any time and
such other filings as are specified on SCHEDULE 3 to the Guarantee and
Collateral Agreement and SCHEDULE 3 to the Canadian Guarantee and Collateral
Agreement have been completed (all of which filings may be filed by the
Administrative Agent at any time), the Guarantee and Collateral Agreement and
the Canadian Guarantee and Collateral Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds and products thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement or the Canadian Guarantee and Collateral Agreement, as applicable), in
each case prior and superior in right to any other Person (except, Permitted
Liens). SCHEDULE 7.3(F) lists each financing statement under all applicable
Personal Property Security Legislation that (i) names any Loan Party as debtor
and (ii) will remain on file after the Closing Date. On or prior to the Closing
Date, the Borrower will have delivered to the Administrative Agent, or caused to
be filed, duly completed UCC or other applicable termination statements under
Personal Property Security Legislation, signed by the relevant secured party, in
respect of each financing statement filed in respect of Liens other than
Permitted Liens.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to
the Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.
4.21 REGULATION H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).
4.22 INSURANCE. Each Group Member is insured, in accordance
with Section 5.3 of the Guarantee and Collateral Agreement and with respect to
CERI and each Canadian Subsidiary, Section 5.3 of the Canadian Guarantee and
Collateral Agreement, by insurers of recognized financial responsibility against
such losses and risks and in such amounts as are prudent and customary in the
businesses in which it is engaged, and no Group Member (i) has received notice
from any insurer or agent of such insurer that substantial capital improvements
or other material expenditures will have to be made in order to continue such
insurance or (ii) has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers at a cost that could not reasonably be
expected to have a Material Adverse Effect.
4.23 ACQUISITION DOCUMENTATION. The documentation listed on
SCHEDULE 4.23 attached hereto constitute all of the material agreements,
instruments and undertakings to which any Group Member is bound or by which such
Person or any of its property or assets is bound or affected relating to, or
arising out of, the Acquisition (including, without limitation, any agreements,
instruments or undertakings assumed pursuant to the Acquisition Agreement and
the schedules, exhibits, annexes and amendments thereto), in each case, as
amended, supplemented, replaced or otherwise modified from time to time in
accordance with this Agreement (collectively, the "ACQUISITION DOCUMENTATION").
None of such material agreements, instruments
48
or undertakings have been amended, supplemented or otherwise modified except,
after the Closing Date, as permitted by Section 7.16, and all such material
agreements, instruments and undertakings are in full force and effect. No party
to any Acquisition Documentation is currently in default thereunder and no party
thereto, or any other Person, has the right to terminate any Acquisition
Documentation except in accordance with its terms.
4.24 REAL ESTATE. As of the Closing Date, SCHEDULE 4.24 sets
forth a true, complete and correct list of all real property owned or leased by
any Group Member and indicates which such properties are Mortgaged Properties.
4.25 INACTIVE SUBSIDIARIES. No Inactive Subsidiary owns any
assets (other than shares of Capital Stock in any other Inactive Subsidiary),
conducts any business or is the obligor under any Indebtedness or other
liabilities.
4.26 XXXXX PREFERRED STOCK. The incurrence of the Loans and
the issuance of each Letter of Credit has been consented to under the Xxxxx
Preferred Stock Documents, including with respect to Section 5(b)(iii) of the
Certificate of Designations with respect thereto and the incurrence of the Loans
and the issuance of the Letters of Credit will not result in an increase in the
Liquidation Preference per share (as such term is defined in the Certificate of
Designations) pursuant to Section 5(d)(ii) of the Certificate of Designation or
otherwise.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement
of each Lender to make the initial extension of credit requested to be made by
it hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) LOAN DOCUMENTS. The Administrative Agent shall have
received (i) this Agreement, executed and delivered by a duly authorized officer
of CERI and the Borrower, (ii) the Guarantee and Collateral Agreement, executed
and delivered by a duly authorized officer of the Borrower and each Subsidiary
Guarantor, the Canadian Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of CERI and each of the Canadian
Subsidiaries, except the Inactive Subsidiaries, (iii) to the extent required by
the Administrative Agent, a Mortgage covering each of the Mortgaged Properties,
executed and delivered by a duly authorized officer of each party thereto, (iv)
a Lender Addendum executed and delivered by each Lender and accepted by the
Borrower and (v) the Escrow Agreement, executed and delivered by a duly
authorized officer of CERI, the Borrower and the Escrow Agent named therein.
(b) ACQUISITION, ETC. The Borrower, Waste Services of Florida,
Inc. and Jacksonville Florida Landfill, Inc. shall have acquired all of the
material assets, properties and contractual rights used in connection with the
Allied Business other than certain assets, properties and contractual rights of
the Allied Businesses set forth on SCHEDULE 5.1(B) (the "REMAINING ALLIED
ASSETS") for a purchase price not to exceed $120,000,000 in the aggregate (less
any amounts allocated to the Remaining Allied Assets, plus the amount of any
working capital adjustment as required by the Acquisition Agreement), as more
particularly set forth in
49
the Acquisition Agreement and in accordance with the terms thereof (the
"ACQUISITION") and no material provision of the Acquisition Agreement shall have
been waived, amended, supplemented or otherwise modified without the prior
written consent of the Arranger, which shall not be unreasonably withheld or
delayed.
(c) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) audited consolidated
financial statements of CERI and its Subsidiaries for the 2000, 2001 and 2002
fiscal years, (iii) audited consolidated financial statements of the Allied
Business for the 2000, 2001 and 2002 fiscal years, and (iv) unaudited interim
consolidated financial statements of each of (a) CERI and its Subsidiaries and
(b) the Allied Business, in each case, for each quarterly period ended
subsequent to the date of the latest applicable financial statements delivered
pursuant to clause (ii) or (iii) of this paragraph, as applicable, as to which
such financial statements are available; and such financial statements shall
not, in the reasonable judgment of the Lenders, reflect any material adverse
change in the consolidated financial condition of CERI and its Subsidiaries and
the Allied Business taken as a whole, as reflected in the financial statements
or projections previously provided to the Administrative Agent and the Lenders.
Adjusted Consolidated EBITDA of CERI based upon the Consolidated EBITDA for the
twelve-month operating period ending September 30, 2003 and calculated in
accordance with Regulation S-X of the Securities Act of 1933, as amended, or
with only those adjustments that the Arranger agrees are appropriate in its
reasonable discretion, and excluding results of operations from Omni Waste of
Osceola County LLC, shall be not less than $39,600,000 and such Pro Forma
Balance Sheet shall show a Consolidated Leverage Ratio of CERI no greater than
5.20:1.00 based upon such Adjusted Consolidated EBITDA.
(d) APPROVALS. All material governmental and third party
approvals and consents necessary in connection with the acquisition of the
assets, properties and contractual rights used in connection with the Allied
Business which are to be acquired on the Closing Date, the continuing operations
of the Group Members and the transactions contemplated hereby shall have been
obtained and be in full force and effect or, to the extent contemplated by the
Acquisition Agreement, a managing, operating or sub-contracting arrangement or
other relationship has been established in lieu thereof with respect to that
portion of the business of the Group Members to which such consent,
authorization, filing or notice relates, and all applicable waiting periods
shall have expired without any action being taken or threatened by any competent
authority which would restrain, prevent or otherwise impose adverse conditions
on the Acquisition or the financing contemplated hereby.
(e) RELATED AGREEMENTS. The Administrative Agent shall have
received (in a form reasonably satisfactory to the Administrative Agent), true
and correct copies, certified as to authenticity by the Borrower, of (i) the
Acquisition Documentation and (ii) such other material documents or instruments
as may be reasonably requested by the Administrative Agent, including, without
limitation, a copy of any material debt instrument, security agreement or other
material contract to which the Loan Parties may be a party.
(f) TERMINATION OF EXISTING CREDIT FACILITY. The
Administrative Agent shall have received evidence satisfactory to the
Administrative Agent that the Existing Credit Facility shall be simultaneously
terminated, all amounts thereunder shall be simultaneously paid in full (or cash
collateralized in the case of the Existing Letters of Credit) and arrangements
satisfactory to
50
the Administrative Agent shall have been made for the termination of Liens and
security interests granted in connection therewith.
(g) FEES. The Lenders, the Arranger and the Agents shall have
received all fees required to be paid, and all expenses for which invoices have
been presented (including reasonable fees, disbursements and other charges of
counsel to the Agents), on or before the Closing Date. All such amounts will be
paid with proceeds of Loans made on the Closing Date and will be reflected in
the funding instructions given by the Borrower to the Administrative Agent on or
before the Closing Date.
(h) PROJECTIONS. The Lenders shall have received satisfactory
projections for CERI and its Subsidiaries for fiscal years 2004 through 2008.
(i) SOLVENCY ANALYSIS. The Lenders shall have received a
reasonably satisfactory solvency certificate by the chief financial officer of
CERI which shall document the solvency of each of CERI and its Subsidiaries
after giving effect to the transactions contemplated hereby.
(j) LIEN SEARCHES. The Administrative Agent shall have
received the results of a recent lien, tax lien, bankruptcy, judgment and (other
than in Canada) litigation search in each of the jurisdictions (including the
United States of America and Canada) or offices (including, without limitation,
in the United States Patent and Trademark Office, the United States Copyright
Office and the Canadian Intellectual Property Office) in which financing
statements under the UCC or other Personal Property Security Legislation or
other filings or recordations should be made to evidence or perfect (with the
priority required under the Loan Documents) security interests in all assets of
the Loan Parties (or would have been made at any time during the five years
immediately preceding the Closing Date to perfect Liens on any assets of CERI or
its subsidiaries), and such search shall reveal no Liens on any of the assets of
the Loan Parties, except for Permitted Liens or Liens set forth on SCHEDULE
7.3(F).
(k) ENVIRONMENTAL MATTERS. The Administrative Agent shall have
received all of the existing current written environmental assessments regarding
CERI and its Subsidiaries, which environmental assessments are listed on
Schedule 5.1(k).
(l) CLOSING CERTIFICATE. The Administrative Agent shall have
received a certificate of each Loan Party, dated the Closing Date, substantially
in the form of Exhibit C, with appropriate insertions and attachments.
(m) OTHER CERTIFICATIONS. The Administrative Agent shall have
received the following:
(i) a copy of the charter of each Loan Party and each
amendment thereto, certified (as of a date reasonably near the date of
the initial extension of credit to the extent such certification is
obtainable in the relevant jurisdiction) as being a true and correct
copy thereof by the Secretary of State or other applicable Governmental
Authority of the jurisdiction in which each such Loan Party is
organized;
(ii) a copy of a certificate of the Secretary of
State or other applicable Governmental Authority, to the extent such
certification is obtainable, of the jurisdiction
51
in which each such Loan Party is organized, dated reasonably near the
date of the initial extension of credit, listing the charter of such
Loan Party and each amendment thereto on file in such office and
certifying that (A) such amendments are the only amendments to such
Loan Party's charter on file in such office, (B) such Loan Party has
paid all franchise taxes to the date of such certificate (if obtainable
in such jurisdiction) and (C) such Loan Party is duly organized and in
good standing under the laws of such jurisdiction;
(iii) to the extent obtainable, an electronic or
facsimile confirmation from the Secretary of State or other applicable
Governmental Authority of each jurisdiction in which each Loan Party is
organized certifying that such Loan Party is duly organized and in good
standing under the laws of such jurisdiction on the date of the initial
extension of credit; together with a written confirmatory report in
respect thereof prepared by, or on behalf of, a filing service
acceptable to the Administrative Agent; and
(iv) to the extent obtainable, a copy of a
certificate of the Secretary of State or other applicable Governmental
Authority of each state or province where any Loan Party is required to
be qualified as a foreign corporation or entity, other than any state
or province where the failure to be so qualified could not reasonably
be expected to have a Material Adverse Effect, dated reasonably near
the date of the initial extension of credit, stating that such Loan
Party is duly qualified and in good standing as a foreign corporation
or entity in each such jurisdiction and has filed all annual reports
required to be filed to the date of such certificate; and an electronic
confirmation, prepared by or on behalf of, a filing service acceptable
to the Administrative Agent, stating that the Secretary of State or
other applicable Governmental Authority of each such jurisdiction on
the date of the initial extension of credit has confirmed the due
qualification and continued good standing of each such Person as a
foreign corporation or entity in each such jurisdiction on or about
such date.
(n) LEGAL OPINIONS. The Administrative Agent shall have
received the following executed legal opinions:
(i) the legal opinion of Shearman & Sterling LLP,
counsel of the Group Members, substantially in the form of Exhibit F-1;
(ii) the legal opinion of Blake, Xxxxxxx & Xxxxxxx
LLP, Canadian counsel of the Group Members, substantially in the form
of Exhibit F-2; and
(iii) the legal opinion of local counsel in each of
Florida, Arizona and Ohio and of such other special and local counsel
as may be reasonably required by the Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(o) PLEDGED STOCK; STOCK POWERS; ACKNOWLEDGMENT AND CONSENT;
PLEDGED NOTES . The Administrative Agent shall have received (i) the
certificates, if any, representing all of the shares of Capital Stock pledged
pursuant to the Guarantee and Collateral Agreement and the
52
Canadian Guarantee and Collateral Agreement, together with an undated stock
power and irrevocable proxy for each such certificate executed in blank by a
duly authorized officer of the pledgor thereof, (ii) an Acknowledgment and
Consent, substantially in the form of Annex II to the Guarantee and Collateral
Agreement, duly executed by any issuer of Capital Stock pledged pursuant to the
Guarantee and Collateral Agreement or the Canadian Guarantee and Collateral
Agreement that is not itself a party to the Guarantee and Collateral Agreement
or the Canadian Guarantee and Collateral Agreement and (iii) each promissory
note pledged pursuant to the Guarantee and Collateral Agreement or the Canadian
Guarantee and Collateral Agreement endorsed (without recourse) in blank (or
accompanied by an executed transfer form in blank satisfactory to the
Administrative Agent) by the pledgor thereof.
(p) FILINGS, REGISTRATIONS AND RECORDINGS. Except as otherwise
agreed by the Administrative Agent, each document (including, without
limitation, any financing statement filed pursuant to the UCC or other
applicable Personal Property Security Legislation) required by the Security
Documents or under law or reasonably requested by the Administrative Agent to be
filed, registered or recorded in order to create in favor of the Administrative
Agent, for the benefit of the Secured Parties, a perfected Lien on the
Collateral except Vehicles located in the United States of America and insurance
and patents located in Canada described therein, prior and superior in right to
any other Person (other than with respect to Permitted Liens), shall have been
filed, registered or recorded or shall have been delivered to the Administrative
Agent in proper form for filing, registration or recordation.
(q) SURVEYS. The Administrative Agent shall have received, and
the title insurance company issuing the policy referred to in SECTION 5.1(R)
below (the "TITLE INSURANCE COMPANY") shall have received, maps or plats of an
as-built survey of the sites of the Mortgaged Properties that are used in
connection with the Allied Business located in the United States of America,
certified to the Administrative Agent and the Title Insurance Company in a
manner satisfactory to them, dated not more than 30 days prior to the Closing
Date unless the Title Insurance Company has agreed to delete its survey
disclosure exception on the basis of an earlier survey and such survey is, in
any event, dated not more than 2 years prior to the Closing Date by an
independent professional licensed land surveyor satisfactory to the
Administrative Agent and the Title Insurance Company, which maps or plats and
the surveys on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress on
Surveying and Mapping in 1997 or 1999 and meeting the accuracy requirements as
defined therein, and, without limiting the generality of the foregoing, there
shall be surveyed and shown on such maps, plats or surveys the following: each
survey shall (a) be a current "as-built" survey showing the location of any
adjoining streets (including their widths and any pavement or other
improvements), easements (including the recorded information with respect to all
recorded instruments), the mean high water base line or other legal boundary
lines of any adjoining bodies of water, fences, zoning or restriction setback
lines, rights-of-way, utility lines to the points of connection and any
encroachments; (b) locate all means of ingress and egress, certifying the amount
of acreage and square footage, indicate the address of the property, contain the
legal description of the property, and also contain a location sketch of the
property; (c) show the location of all improvements as constructed on the
property, all of which shall be within the boundary lines of the property and
conform to all applicable zoning ordinances, set-back lines and restrictions and
the surveyor shall certify compliance with the foregoing; (d) indicate the
53
location of any improvements on the property with the dimensions in relations to
the lot and building lines; (e) show measured distances from the improvements to
be set back and specified distances from street or property lines in the event
that deed restrictions, recorded plats or zoning ordinances require same; (f)
designate all courses and distances referred to in the legal description, and
indicate the names of all adjoining owners on all sides of the property, to the
extent available; and (g) indicate the flood zone designation, if any, in which
the property is located. The legal description of the applicable property shall
be shown on the face of each survey, and the same shall conform to the legal
description contained in the title policy described below.
(r) TITLE INSURANCE.
(i) The Administrative Agent shall have received in
respect of each Mortgaged Property that is used in connection with the
Allied Business located in the United States of America a mortgagee's
title insurance policy (or policies) or marked up unconditional binder
for such insurance. Each such policy shall (A) be in an amount
reasonably satisfactory to the Administrative Agent; (B) be issued at
ordinary rates; (C) insure that the Mortgage insured thereby creates a
valid first Lien on, and security interest in, such Mortgaged Property
free and clear of all defects and encumbrances, except for Permitted
Liens disclosed therein; (D) name the Administrative Agent for the
benefit of the Secured Parties as the insured thereunder; (E) be in the
form of ALTA Loan Policy - 1970 form B (Amended 10/17/70 and 10/17/84)
to the extent available in the particular jurisdiction of each
Mortgaged Property (or equivalent policies); (F) contain such
endorsements and affirmative coverage as the Administrative Agent may
reasonably request in form and substance acceptable to the
Administrative Agent, including, without limitation (to the extent
applicable with respect to such Mortgaged Property and available in the
jurisdiction in which such Mortgaged Property is located), the
following: variable rate endorsement; survey endorsement; comprehensive
endorsement; zoning (ALTA 3.1 with parking added) endorsement; first
loss, last dollar and tie-in endorsement; access coverage; separate tax
parcel coverage; contiguity coverage; usury; doing business;
subdivision; environmental protection lien; CLTA 119.2 and CLTA 119.3
(for leased Real Estate, only); and such other endorsements as the
Administrative Agent shall reasonably require in order to provide
insurance against specific risks identified by the Administrative Agent
in connection with such Mortgaged Property, and (G) be issued by title
companies satisfactory to the Administrative Agent (including any such
title companies acting as co-insurers or reinsurers, at the option of
the Administrative Agent). The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such
policy, all charges for mortgage recording tax, and all related
expenses, if any, have been paid.
(ii) The Administrative Agent shall have received a
copy of all recorded documents referred to, or listed as exceptions to
title in, the title policy or policies referred to in clause (i) above
and a copy of all other material documents affecting the Mortgaged
Properties.
(s) FLOOD INSURANCE. If requested by the Administrative Agent,
the Administrative Agent shall have received (A) a policy of flood insurance for
Mortgaged
54
Properties located in a flood hazard zone as designated by the Federal Emergency
Management Agency that (1) covers any parcel of improved material real property
located in the United States of America that is encumbered by any Mortgage (2)
is written in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage that is reasonably allocable to such real
property or the maximum limit of coverage made available with respect to the
particular type of property under the National Flood Insurance Act of 1968,
whichever is less, and (3) has a term ending not later than the maturity of the
indebtedness secured by such Mortgage or that may be extended to such Maturity
Date and (B) confirmation that the Borrower has received the notice required
pursuant to Section 208(e)(3) of Regulation H of the Board.
(t) INSURANCE. The Administrative Agent shall have received
insurance certificates satisfying the requirements of Section 5.3 of the
Guarantee and Collateral Agreement and Section 5.3 of the Canadian Guarantee and
Collateral Agreement.
(u) ACQUISITION LIEN RELEASES. The Administrative Agent shall
have received evidence reasonably satisfactory to the Administrative Agent that
the Seller has provided to XX Xxxxxx Xxxxx Bank an executed copy of the
Acquisition Agreement and a certificate confirming that the applicable portion
of the Acquisition has been consummated and that all Liens on the assets of the
Allied Business transferred to the Group Members on the Closing Date shall be
terminated and released as of the Closing Date.
(v) PATRIOT ACT. The Administrative Agent shall have received
all documentation and other information required by bank regulatory authorities
under applicable "know your customer" and Anti-Money Laundering rules and
regulations, including, without limitation, the USA Patriot Act as it shall have
reasonably requested.
(w) ESCROW FUNDS. The Borrower shall have irrevocably directed
the Administrative Agent to wire $[14,433,000] into the Escrow Account (as
defined in the Escrow Agreement).
(x) XXXXX PREFERRED STOCK. The Administrative Agent shall have
received copies of the letter agreements described in clauses (c) and (d) of the
definition of Xxxxx Preferred Stock Documentation and the terms of such letters
shall be reasonably satisfactory to the Administrative Agent.
(y) MISCELLANEOUS. The Administrative Agent shall have
received such other documents, agreements, certificates and information as it
shall reasonably request.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of
each Lender to make any extension of credit requested to be made by it hereunder
on any date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to the Loan
Documents shall be true and correct in all material respects on and as of such
date as if made on and as of such date, except for representations and
warranties expressly stated to relate to a specific earlier date, in which case
such representations and warranties shall be true and correct as of such earlier
date.
55
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the extensions
of credit requested to be made on such date.
(c) Each borrowing by and issuance of a Letter of Credit on
behalf of the Borrower hereunder shall constitute a representation and warranty
by CERI, the Borrower as of the date of such extension of credit that the
conditions contained in this Section 5.2 have been satisfied.
5.3 CONDITIONS TO THE FUNDING OF TERM LOANS ON THE SECOND
ACQUISITION CLOSING DATE
The agreement of each Tranche B Term Loan Lender to make a
Term Loan on the Second Acquisition Closing Date is subject to (a) the delivery
of a certificate by the Borrower on such date stating that each of the
conditions set forth in Section 5.2. are satisfied and the Remaining Allied
Assets shall be acquired on such date in accordance with the terms of the
Acquisition Agreement, and no material provision of the Acquisition Agreement
shall have been waived, amended, supplemented or otherwise modified without the
prior written consent of the Arranger and (b) the Administrative Agent's receipt
of evidence reasonably satisfactory to the Administrative Agent that the Seller
has provided to XX Xxxxxx Chase Bank a certificate confirming that the
applicable portion of the Acquisition has been consummated and that all Liens on
the assets of the Allied Business transferred to the Group Members on the Second
Acquisition Closing Date shall be terminated and released as of the Second
Acquisition Closing Date.
SECTION 6. AFFIRMATIVE COVENANTS
CERI and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender, any Agent or the
Arranger hereunder, each of CERI and the Borrower shall and shall cause each of
its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to each Agent and each
Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of CERI, a copy of the audited consolidated
balance sheet of CERI and its consolidated Subsidiaries as at the end of such
year and the related audited consolidated statements of income and of cash flows
for such year, setting forth in each case in comparative form the figures as of
the end of and for the previous year, reported on without a "going concern" or
like qualification or exception, or qualification arising out of the scope of
the audit, by BDO Dunwoody LLP/ BDO Xxxxxxx LLP or other independent certified
public accountants of nationally recognized standing;
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each fiscal
year of CERI, the unaudited consolidated balance sheet of CERI and its
consolidated Subsidiaries as at the end of such quarter and the related
unaudited consolidated statements of income and of cash flows for such quarter
and the portion of the fiscal year through the end of such quarter, setting
forth in each case in
56
comparative form the figures as of the end of and for the corresponding period
in the previous year, certified by a Responsible Officer as being fairly stated
in all material respects (subject to normal year-end audit adjustments); and
(c) as soon as available, but in any event not later than 45
days after the end of each month occurring during each fiscal year of CERI
(other than the third, sixth, ninth and twelfth such month), the unaudited
consolidated balance sheets of CERI and its Subsidiaries as at the end of such
month and the related unaudited consolidated statements of income and of cash
flows for such month and the portion of the fiscal year through the end of such
month, setting forth in each case in comparative form the figures as of the end
of and for the corresponding period in the previous year, certified by a
Responsible Officer as being fairly stated in all material respects (subject to
normal year-end audit adjustments);
all such financial statements to be complete and correct in all material
respects and to be prepared in reasonable detail and, except with respect to the
statement of cash flows delivered pursuant to Section 6.1(c), in accordance with
GAAP applied consistently throughout the periods reflected therein and with
prior periods (except as approved by such accountants or officer, as the case
may be, and disclosed therein); it being understood that at the Administrative
Agent's reasonable request, such statements of cash flow will also be prepared
in accordance with GAAP.
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Agent and
each Lender, or, in the case of clause (i), to the relevant Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or Event
of Default, except as specified in such certificate (it being understood that
such certificate shall be limited to the items that independent certified public
accountants are permitted to cover in such certificates pursuant to their
professional standards and customs of the profession);
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of such Responsible Officer's knowledge, each Loan Party
during such period has observed or performed all of its covenants and other
agreements contained in this Agreement and the other Loan Documents to which it
is a party to be observed, performed or satisfied by it on or before such date,
and that such Responsible Officer has obtained no knowledge of any Default or
Event of Default except as specified in such certificate and (ii) in the case of
quarterly or annual financial statements, (x) a Compliance Certificate
containing all information and calculations necessary for determining compliance
by the Group Members with the provisions of this Agreement referred to therein
as of the last day of the fiscal quarter or fiscal year of the Borrower, as the
case may be, (y) to the extent not previously disclosed to the Administrative
Agent, in writing, a listing of any county, state, territory, province, region
or any other jurisdiction, or any political subdivision thereof within the
United States of America, Canada or otherwise where any Loan Party keeps
material inventory or equipment and of any registered Intellectual Property
acquired by any Loan Party since the date of the most recent list delivered
pursuant to this clause (y) (or, in the case of
57
the first such list so delivered, since the Closing Date) and (z) any financing
statements under the UCC or applicable Personal Property Security Legislation or
other filings specified in such Compliance Certificate as being required to be
delivered therewith;
(c) as soon as available, and in any event no later than 45
days after the end of each fiscal year of CERI, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance sheet
of CERI and its Subsidiaries as of the end of the following fiscal year, and the
related consolidated statements of projected cash flow and projected income),
and, as soon as available, significant revisions, if any, of such budget and
projections with respect to such fiscal year (collectively, the "PROJECTIONS"),
which Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer has no
reason to believe that such Projections are incorrect or misleading in any
material respect;
(d) within 45 days after the end of each fiscal quarter of
CERI, a narrative discussion and analysis of the financial condition and results
of operations of CERI and its Subsidiaries for such fiscal quarter and for the
period from the beginning of the then current fiscal year to the end of such
fiscal quarter, as compared to the portion of the Projections covering such
periods and to the comparable periods of the previous year;
(e) no later than 5 Business Days, or such shorter period as
the Administrative Agent shall reasonably agree to, prior to the effectiveness
thereof, copies of substantially final drafts of any proposed amendment,
supplement, waiver or other modification with respect to the Acquisition
Agreement after the Closing Date, the governing documents of any Loan Party or
the Xxxxx Preferred Stock Documents;
(f) within five days after the same are sent, copies of all
financial statements and reports that any Group Member sends to the holders of
any class of its debt securities or public equity securities and, within five
days after the same are filed, copies of all financial statements and reports
that any Group Member may make to, or file with, the SEC;
(g) as soon as reasonably possible and in any event within 5
Business Days of obtaining knowledge thereof: (i) notice of any development,
event, or condition that, individually or in the aggregate with other
developments, events or conditions that, individually or in the aggregate, could
reasonably be expected to result in the payment by any Group Member, in the
aggregate, of a Material Environmental Amount; and (ii) any notice that any
Governmental Authority will deny any application for an Environmental Permit
sought by, or revoke or refuse to renew any Environmental Permit or any other
material Permit held by the Borrower or condition approval of any such material
Permit on terms and conditions that are materially more burdensome than the
current terms and conditions of such material Permits to the operation of any of
the Group Members' businesses (both before and after giving effect to the
Acquisition) or any property owned, leased or operated by such Person, where
such denial, revocation, refusal or condition would preclude the normal conduct
of the Group Members' business in respect of the operation to which such
Environmental Permit or material Permit applies;
58
(h) to the extent not included in clauses (a) through (g)
above, no later than the date the same are required to be delivered thereunder,
copies of all agreements, documents or other instruments (including, without
limitation, (i) audited and unaudited, pro forma and other financial statements,
reports, forecasts, and projections, together with any required certifications
thereon by independent public auditors or officers of any Group Member or
otherwise, (ii) press releases and (iii) statements or reports furnished to any
other holder of the securities of any Group Member);
(i) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a report of a reputable insurance broker with
respect to the insurance required by Section 6.5, and, from time to time, such
supplemental reports thereto as the Administrative Agent may reasonably request.
(j) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of the applicable Group Member.
6.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE, ETC. (a)
(i) Preserve, renew and keep in full force and effect its corporate or other
existence and (ii) take all reasonable action to maintain all rights,
privileges, franchises, Permits and licenses necessary or desirable in the
normal conduct of its business, except, in each case, as otherwise permitted by
Section 7.4 and except, in the case of clause (ii) above, to the extent that
failure to do so could not reasonably be expected to have a Material Adverse
Effect; and (b) to the extent not in conflict with this Agreement or the other
Loan Documents, comply with all Contractual Obligations and Requirements of Law,
except to the extent that failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all Property
and systems useful and necessary in its business in reasonably good working
order and condition, ordinary wear and tear excepted and (b) (i) maintain with
financially sound and reputable insurance companies insurance on all its
Property meeting the requirements of Section 5.3 of the Guarantee and Collateral
Agreement and Section 5.3 of the Canadian Guarantee and Collateral Agreement and
in at in at least such amounts and against at least such risks (but including in
any event public liability, product liability and business interruption) as are
usually insured against in the same general area by similarly situated companies
engaged in the same or a similar business and consistent with past practices.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
(a) Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender to visit and inspect any of its properties
and examine and, at the Borrower's expense, make abstracts from any of its books
and
59
records at any reasonable time and as often as may reasonably be desired and to
discuss the business, operations, properties and financial and other condition
of the Group Members with officers and employees of the Group Members and with
their respective independent certified public accountants.
6.7 NOTICES. Promptly give notice to the Administrative Agent
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default (or alleged default)
under any Contractual Obligation of any Group Member or (ii) litigation,
investigation or proceeding which may exist at any time between any Group Member
and any Governmental Authority, that in either case, if not cured or if
adversely determined, as the case may be, could reasonably be expected to have a
Material Adverse Effect;
(c) any litigation or proceeding affecting any Group Member in
which the amount involved is $2,000,000 or more and not covered by insurance or
in which injunctive or similar relief is sought;
(d) the following events if, individually or in the aggregate,
they could reasonably be expected to result in a Material Adverse Effect, as
soon as possible and in any event within 30 days after CERI or the Borrower
knows or has reason to know thereof: (i) the occurrence of any Reportable Event
with respect to any Single Employer Plan, a failure to make any required
contribution to a Single Employer Plan, the creation of any Lien in favor of a
Single Employer Plan or in favor of the PBGC with respect to a Single Employer
Plan or any withdrawal from, or the termination, Reorganization or Insolvency
of, any Multiemployer Plan or (ii) the institution of proceedings or the taking
of any other action by the PBGC or the Borrower or any Commonly Controlled
Entity with respect to the withdrawal from, or the termination of, any Single
Employer Plan; and
(e) any development or event that has had or could reasonably
be expected to have a Material Adverse Effect.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action CERI, the Borrower or the relevant Subsidiary proposes
to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. (a) Comply in all material respects
with, and ensure compliance in all material respects by all tenants and
subtenants, if any, with, all applicable Environmental Laws and Environmental
Permits, and obtain, maintain and comply in all material respects with, and
ensure that all tenants and subtenants obtain, maintain and comply in all
material respects with any and all licenses, approvals, notifications,
registrations or permits required by applicable Environmental Laws.
(b) Comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws,
including, without limitation, such
60
orders and directives to conduct and complete all investigations, studies,
sampling and testing, and all remedial, removal and other actions required under
Environmental Laws.
(c) Within 30 days of the acquisition of the related Real
Estate, provide a letter from an environmental consultant, which consultant
shall be reasonably acceptable to the Administrative Agent, identifying any
measures which have been undertaken or which are planned with respect to the
recommendations set forth in Section 5 of the reports listed on Schedule 6.8(c)
hereof.
6.9 [INTENTIONALLY OMITTED].
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any
Property acquired after the Closing Date by any Group Member (other than (x) any
Property described in paragraph (b) or paragraph (c) of this Section, (y) any
Property subject to a Lien expressly permitted by Section 7.3(g) and (z) any
Property acquired by an Excluded Foreign Subsidiary or Inactive Subsidiary) as
to which the Administrative Agent, for the benefit of the Secured Parties, does
not have a perfected Lien, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral Agreement,
the Canadian Guarantee and Collateral Agreement or such other documents as the
Administrative Agent deems necessary or advisable to grant to the Administrative
Agent, for the benefit of the Secured Parties, a security interest in such
Property and (ii) take all actions necessary or advisable to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in such Property (other than Vehicles located in the
United States and insurance located in Canada), including without limitation,
the filing of financing statements under the UCC and other applicable Personal
Property Security Legislation in such jurisdictions as may be required by the
Guarantee and Collateral Agreement, the Canadian Guarantee and Collateral
Agreement or by law or as may be requested by the Administrative Agent.
(b) With respect to any fee interest (or leasehold interest,
to the extent such leasehold is created under a triple net ground lease or
similar transaction) in any real property having a value (together with
improvements thereof) of at least $250,000 acquired after the Closing Date by
any Group Member (other than any such real property owned by an Excluded Foreign
Subsidiary or subject to a Lien expressly permitted by Section 7.3(g)), promptly
(i) execute and deliver a first priority Mortgage (except for Permitted Liens
and Liens otherwise allowed under the Mortgages) in favor of the Administrative
Agent, for the benefit of the Secured Parties, covering such real property, (ii)
if requested by the Administrative Agent, provide the Lenders with (x) title and
extended coverage insurance, complying with the provisions of Section 5.1(r),
covering such real property in an amount at least equal to the purchase price of
such real property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof complying with
the provisions of Section 5.1(q), together with a surveyor's certificate and (y)
any consents or estoppels reasonably deemed necessary or advisable by the
Administrative Agent in connection with such Mortgage to the extent that such
consents or estoppels may be obtained using reasonable efforts without payment
of money and without obligation to commence litigation, each of the foregoing in
form and substance reasonably satisfactory to the Administrative Agent and (iii)
if requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the
61
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Administrative Agent.
(c) With respect to any new Subsidiary of CERI or the Borrower
(other than an Excluded Foreign Subsidiary) created or acquired after the
Closing Date (which, for the purposes of this paragraph, shall include any
existing Subsidiary of the Borrower that ceases to be an Excluded Foreign
Subsidiary or Inactive Subsidiary), by any Group Member, promptly (i) execute
and deliver to the Administrative Agent such amendments to the Security
Documents as the Administrative Agent deems necessary or advisable to grant to
the Administrative Agent, for the benefit of the Secured Parties, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by any Group Member, (ii) deliver to the Administrative Agent the
certificates representing such Capital Stock, together with undated stock
powers, in blank, executed and delivered by a duly authorized officer of the
applicable Group Member, (iii) cause such new Subsidiary (A) to become a party
to the applicable Security Documents and (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Secured
Parties a perfected first priority security interest in the Collateral described
in the Security Documents with respect to such new Subsidiary, including,
without limitation, the recording of instruments in the United States Patent and
Trademark Office, the United States Copyright Offices and the Canadian
Intellectual Property Office, the execution and delivery by all necessary
persons of control agreements, and the filing of financing statements under
applicable Personal Property Security Legislation in such jurisdictions as may
be required by the Security Documents or by law or as may be requested by the
Administrative Agent, and (iv) if requested by the Administrative Agent, deliver
to the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the Administrative Agent.
(d) With respect to any Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than any Excluded Foreign Subsidiaries), promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement or such other documents as the Administrative Agent deems necessary or
advisable in order to grant to the Administrative Agent, for the benefit of the
Secured Parties, a perfected first priority security interest in the Capital
Stock of such new Subsidiary that is owned by the Borrower or any of its
Subsidiaries (other than any Excluded Foreign Subsidiaries), (provided that in
no event shall more than 65% of the total outstanding Capital Stock of any such
Excluded Foreign Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates representing such Capital Stock, together
with irrevocable proxies, undated stock powers, in blank, executed and delivered
by a duly authorized officer of the applicable Group Member, and take such other
action as may be necessary or, in the opinion of the Administrative Agent,
desirable to perfect the Lien of the Administrative Agent thereon, and (iii) if
requested by the Administrative Agent, deliver to the Administrative Agent legal
opinions relating to the matters described above, which opinions shall be in
form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(e) Notwithstanding anything to the contrary in this Section
6.10, paragraphs (a), (b), (c) and (d) of this Section 6.10 shall not apply to
any Property, new Subsidiary of CERI or the Borrower or new Excluded Foreign
Subsidiary created or acquired after the Closing Date, as applicable, as to
which the Administrative Agent has determined in its sole discretion that the
62
collateral value thereof is insufficient to justify the difficulty, time and/or
expense of obtaining a perfected security interest therein.
6.11 USE OF PROCEEDS. Use the proceeds of the Loans only for
the purposes specified in Section 4.16.
6.12 PENSION AND BENEFITS PLANS.
(a) ERISA DOCUMENTS. The Borrower will cause to be delivered
to the Administrative Agent, promptly upon the Administrative Agent's request,
any or all of the following: (i) a copy of each Single Employer Plan; (ii) the
most recent determination letter issued by the Internal Revenue Service with
respect to each Plan (other than any Plan of a Commonly Controlled Entity);
(iii) for the most recent plan year preceding the Administrative Agent's
request, Annual Reports on Form 5500 Series required to be filed with any
governmental agency for each Single Employer Plan; (iv) a listing of all
Multiemployer Plans, with the aggregate amount of the most recent annual
contributions required to be made by the Borrower or any Commonly Controlled
Entity to each such Plan and copies of the collective bargaining agreements
requiring such contributions; (v) any information that has been provided to the
Borrower or any Commonly Controlled Entity regarding withdrawal liability under
any Multiemployer Plan; (vi) the aggregate amount of payments made under any
employee welfare benefit plan (as defined in Section 3(1) of ERISA) to any
retired employees of the Borrower or any of its Subsidiaries (or any dependents
thereof) during the most recently completed fiscal year; and (vii) documents
reflecting any agreements between the PBGC and the Borrower or any Commonly
Controlled Entity with respect to any Plan.
(b) CANADIAN PENSION PLANS AND CANADIAN BENEFIT PLANS.
(i) Each Group Member shall use its commercially
reasonable efforts to obtain and to provide the Administrative Agent
with written confirmation from the applicable Governmental Authorities
that each Canadian Pension Plan adopted by any Group Member which is
required to be registered under the INCOME TAX ACT (Canada) or any
other Requirement of Law has been registered. From and after the
adoption and registration of any Canadian Pension Plan and subject to
any power or right to terminate a Canadian Pension Plan in whole or in
part, each Group Member shall use commercially reasonable efforts to
ensure that the plan retains its registered status under and is
administered in all material respects in accordance with the applicable
pension plan text, funding agreement, the INCOME TAX ACT (Canada) and
all other Requirements of Law
(ii) Each Group Member shall cause all reports and
disclosures relating to any Canadian Pension Plan that are required by
the plan or any Requirement of Law to be filed or distributed in a
timely manner.
(iii) Each Group Member shall perform in all material
respects all obligations (including (if applicable), funding,
investment and administration obligations) required to be performed by
it in connection with each Canadian Pension Plan and Canadian Benefit
Plan and the funding media therefor; make all contributions and pay all
premiums required to be made or paid by it in accordance with the terms
of the plan and all Requirements of Law and withhold by way of
authorized payroll deductions or otherwise collect and pay into the
plan all employee contributions required to be withheld or collected by
it in accordance with the terms of the plan and
63
all Requirements of Law; and ensure that, except as could not
reasonably be expected to result in a Material Adverse Effect, to the
extent that the Group Member has a Canadian Pension Plan which is a
defined benefit pension plan, that such plan is fully funded, both on
an ongoing basis and on a solvency basis (using actuarial methods and
assumptions which are consistent with the valuations last filed with
the applicable Governmental Authorities and which are consistent with
generally accepted actuarial principles);
(iv) CERI and the Borrower shall deliver to the
Administrative Agent, (A) promptly on request, copies of each annual
and other return, report or valuation with respect to each Canadian
Pension Plan filed by any Group Member with any applicable Governmental
Authority; (B) promptly on request, a copy of any material direction,
order or notice that any Group Member may receive from any applicable
Governmental Authority with respect to any Canadian Pension Plan; and
(C) notification within 30 days of any material increases in the
benefits of any existing Canadian Pension Plan or Canadian Benefit
Plan, or the establishment of any new Canadian Pension Plan or Canadian
Benefit Plan, or the commencement of contributions to any Canadian
Pension Plan or Canadian Benefit Plan to which it was not previously
contributing.
6.13 FURTHER ASSURANCES. (a) From time to time execute and
deliver, or cause to be executed and delivered, such additional instruments,
certificates or documents, and take all such actions, as the Administrative
Agent may reasonably request for the purposes of implementing or effectuating
the provisions of this Agreement and the other Loan Documents, or of more fully
perfecting or renewing the rights of the Administrative Agent and the Lenders
with respect to the Collateral (or with respect to any additions thereto or
replacements or proceeds or products thereof or with respect to any other
property or assets hereafter acquired by any Group Member which may be deemed to
be part of the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent or any Lender of any power, right, privilege or remedy
pursuant to this Agreement or the other Loan Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental
Authority, the Borrower will execute and deliver, or will cause the execution
and delivery of, all applications, certifications, instruments and other
documents and papers that the Administrative Agent or such Lender may be
required to obtain from the Borrower or any of its Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.
(b) Preserve and protect the Lien status of each respective
Mortgage and, if any Lien (other than unrecorded Liens permitted under Section
7.3 that arise by operation of law and other Liens permitted under Section
7.3(f)) is asserted against a Mortgaged Property, promptly and at its expense,
give the Administrative Agent a detailed written notice of such Lien and pay the
underlying claim in full or take such other action so as to cause it to be
released or bonded over in a manner satisfactory to the Administrative Agent.
6.14 POST CLOSING OBLIGATIONS.
64
(a) Within 30 days from the acquisition of any division of the
Allied Business, or such later date as may reasonably be agreed to by the
Administrative Agent, file all notices required in connection with the transfer
of Permits related to such division of the Allied Business with the applicable
Governmental Authority and send the Administrative Agent copies thereof;
(b) As soon as reasonably practicable after the Closing Date
and, in any event, no later than five Business days prior to the Migration if
Capital Holdings Company is not an Excluded Foreign Subsidiary, deliver to the
Administrative Agent an opinion of counsel with respect to Capital Holdings
Company, in form and substance reasonably satisfactory to the Administrative
Agent;
(c) (i) Ensure that none of the Inactive Subsidiaries acquires
any assets (other than the Capital Stock of another Inactive Subsidiary),
conducts any business or incurs any Indebtedness or other liabilities and (ii)
by June 30, 2004, or such later date as may be reasonably agreed to by the
Administrative Agent, file with the applicable Governmental Authorities all
documents necessary to dissolve duly and validly each of the Inactive
Subsidiaries;
(d) Within 30 days of the Closing Date, or such later date as
may reasonably be agreed to by the Administrative Agent, deliver to the
Administrative Agent title and extended coverage insurance, complying with the
provisions of Section 5.1(r), covering the Mortgage Properties in the United
States of America (to the extent not previously delivered on the Closing Date),
in an amount as shall be reasonably specified by the Administrative Agent, as
well as a current ALTA survey thereof complying with the provisions of Section
5.1(q), together with a surveyor's certificate (to the extent not previously
delivered on the Closing Date);
(e) Promptly obtain and file such termination statements and
Lien releases from JPMorgan Chase Bank as the Administrative Agent may require
with respect to the assets acquired as part of the Allied Business;
(f) Within two Business Days after the Closing Date, deliver
written confirmation to the Administrative Agent of registration of the
Mortgages with respect to each of the Mortgaged Properties in Canada subject to
such delay as may be caused by the Administrative Agent or its agent or nominee
being extra-provincially registered in Alberta and British Columbia and the
administrative delay of the land titles office for registration of the Mortgage
in Alberta;
(g) On or before January 19, 2004, or such later date as may
reasonably be agreed to by the Administrative Agent, deliver a registration and
title opinion or a title insurance policy, in either case in form and substance
satisfactory to the Administrative Agent respecting the Mortgaged Properties in
Canada, subject to such delay as may be caused by the Administrative Agent or
its agent or nominee being extra-provincially registered in Alberta and British
Columbia and the administrative delay of the land titles office for registration
of the Mortgage in Alberta. Such title insurance shall substantially comply with
the provisions of Section 5.1(r) as applicable and as available in the
jurisdiction of the Mortgaged Property;
65
(h) Within 30 days after the Closing Date, or such later date
as may reasonably be agreed to by the Administrative Agent, deliver to the
Administrative Agent an acknowledgement from the applicable secured party in
form and substance satisfactory to the Administrative Agent for each lien
registration listed in Schedule 7.3(f) for which an "Acknowledgement requested
not yet received" or a "discharge to be obtained pursuant to section 6.14"
notation appears;
(i) Within 30 days after the Closing Date, or such later date
as may reasonably be agreed to by the Administrative Agent, deliver to the
Administrative Agent copies of a hypothec, debenture, and pledge of debenture,
each executed by CERI and evidence of registration thereof in the Province of
Quebec, together with an opinion of Quebec counsel to CERI, all in form and
substance satisfactory to the Administrative Agent;
(j) Within 10 Business Days after the Closing Date, or such
later date as may reasonably be agreed to by the Administrative Agent, deliver
to the Administrative Agent evidence that the necessary corporate action has
been taken by the Canadian Subsidiaries whose shares are being pledged to
authorize the pledge of such Canadian Subsidiaries shares and subsequent
transfers of such shares, together with an opinion of Ontario counsel to such
Canadian Subsidiaries whose shares are being pledged pursuant to the Canadian
Guarantee and Collateral Agreement;
(k) Within 30 days after the Closing Date, or such later date
as may be reasonably agreed to by the Administrative Agent, deliver to the
Administrative Agent fully executed deposit account control agreements and
securities account control agreements in form and substance reasonably
satisfactory to the Administrative Agent with respect to each Deposit Account
and Securities Account maintained by any Loan Party in the United States of
America;
(l) Within 30 days after the Closing Date, or such later date
as may be reasonably agreed to by the Administrative Agent, take such actions as
are reasonably required by the Administrative Agent under the Assignment of
Claims Act and similar applicable state and local statutes to fully perfect,
protect and effect its Lien on Receivables (as defined in the Guarantee and
Collateral Agreement) of the Loan Parties to the extent such Receivables are
above the thresholds set forth in Section 4.8 of the Guarantee and Collateral
Agreement;
(m) Within 15 Business Days after the Closing Date, amend the
Governing Documents of each of Omni Waste of Osceola County LLC and Cactus Waste
Systems, LLC, so as to provide that the Capital Stock thereof is to be treated
as a security for purposes of the UCC; and
(n) Within 15 Business Days after the Closing Date, or such
later date as may reasonably be agreed to by the Administrative Agent, deliver
to the Administrative Agent a letter from the applicable Environmental
consultant or consultants permitting the Agent and Lenders to rely on each
environmental assessment listed on Schedule 5.1(k), to the extent not previously
delivered as of the Closing Date; provided that, with respect to environmental
assessments on properties other than those related to the Allied Business, the
Borrower shall only be required to use commercially reasonable efforts to obtain
such reliance letters.
66
SECTION 7. NEGATIVE COVENANTS
CERI and the Borrower hereby jointly and severally agree that,
so long as the Commitments remain in effect, any Letter of Credit remains
outstanding or any Loan or other amount is owing to any Lender, any Agent or the
Arranger hereunder, each of CERI and the Borrower shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated
Leverage Ratio as at the last day of any period of four consecutive fiscal
quarters of the Borrower ending with the last day of any fiscal quarter set
forth below to exceed the ratio set forth below opposite the last day of such
fiscal quarter:
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
FQ1 2004 5.60 : 1.00
FQ2 2004 5.60 : 1.00
FQ3 2004 5.45 : 1.00
FQ4 2004 5.25 : 1.00
FQ1 2005 4.75 : 1.00
(b) CONSOLIDATED INTEREST COVERAGE RATIO. Permit the
Consolidated Interest Coverage Ratio for any period of four consecutive fiscal
quarters of the Borrower ending with the last day of any fiscal quarter set
forth below to be less than the ratio set forth below opposite such fiscal
quarter:
Consolidated
Fiscal Quarter Interest Coverage Ratio
-------------- -----------------------
FQ1 2004 1.75 : 1.00
FQ2 2004 1.90 : 1.00
FQ3 2004 2.00 : 1.00
FQ4 2004 2.00 : 1.00
FQ1 2005 2.15 : 1.00
(c) MINIMUM CONSOLIDATED EBITDA. Permit Consolidated EBITDA
for any period of four consecutive fiscal quarters of the Borrower ending with
the last day of any fiscal quarter set forth below to be less than the amount
set forth below opposite such fiscal quarter:
Minimum Consolidated
Fiscal Quarter EBITDA
-------------- --------------------
FQ1 2004 $35,000,000
FQ2 2004 $36,000,000
67
FQ3 2004 $37,500,000
FQ4 2004 $39,000,000
FQ1 2005 $41,000,000
; PROVIDED, that each of the above dollar amounts shall be
increased (and CERI shall be required to comply with such increased amounts)
with respect to any business acquired by any Group Member (other than as part of
the Acquisition) by 85% of the amount of pro forma Consolidated EBITDA
attributable to such businesses to the extent such pro forma Consolidated EBITDA
was included in the calculation of Consolidated EBITDA for the period in which
such business was acquired pursuant to the first proviso in the definition of
Consolidated EBITDA.
7.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan
Document;
(b) Indebtedness of (i) any Loan Party to any Group Member,
(ii) to the extent constituting an Investment permitted under Section 7.8, any
Subsidiary that is not a Loan Party to any Loan Party, and (iii) any Subsidiary
that is not a Loan Party to any other Subsidiary that is not a Loan Party;
(c) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $15,000,000 at any one time outstanding;
(d) Indebtedness outstanding on the date hereof and listed on
SCHEDULE 7.2(D) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof (other than by fees and expenses
incurred in connection with such refinancing));
(e) Guarantee Obligations made in the ordinary course of
business by CERI or any of its Subsidiaries of Indebtedness of any Loan Party;
(f) letters of credit issued prior to the Issuing Lender
Availability Date in an aggregate amount not to exceed $5,000,000; and
(g) additional Indebtedness of CERI or any of its Subsidiaries
in an aggregate principal amount (for the Borrower and all Subsidiaries) not to
exceed $5,000,000 at any one time outstanding.
7.3 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its Property, whether now owned or hereafter
acquired, except for:
(a) Liens for taxes, assessments and governmental charges not
yet due or which are being contested in good faith by appropriate proceedings,
PROVIDED that adequate reserves with respect thereto are maintained on the books
of the applicable Group Member in conformity with GAAP;
68
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of business which
are not overdue for a period of more than 30 days or that are being contested in
good faith by appropriate proceedings; provided that adequate reserves with
respect thereto are maintained in the books of the applicable Group Member, in
conformity with GAAP;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security legislation;
(d) deposits by or on behalf of any Group Member and security
interests on assets related to a particular performance bond granted to the
surety providing such performance bond, in each case, to secure the performance
of bids, trade contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other obligations of
a like nature incurred in the ordinary course of business, so long as the
aggregate amount of deposits at any one time securing appeal bonds does not
exceed $2,000,000;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business and any Liens permitted
or excepted in the Mortgages that, in the aggregate, do not in any case
materially detract from the value of the Property subject thereto or materially
interfere with the ordinary conduct of the business of the Group Members;
(f) Liens in existence on the date hereof listed on SCHEDULE
7.3(F); PROVIDED that no such Lien is spread to cover any additional Property
after the Closing Date and that the amount secured thereby is not increased;
(g) Liens securing Indebtedness of any Group Member incurred
pursuant to Section 7.2(c) to finance the acquisition of fixed or capital
assets, PROVIDED that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets, (ii) such
Liens do not at any time encumber any Property other than the Property financed
by such Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the amount of Indebtedness initially secured thereby is not
more than 100% of the purchase price of such fixed or capital asset;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered
into by any Group Member in the ordinary course of its business and covering
only the assets so leased;
(j) advance deposits (including extension payments) (i)
arising after the date hereof in connection with any Investment permitted by
Sections 7.8(h) or (k) (ii) existing on the date hereof or payable in connection
with the Arizona Acquisition Agreements and previously disclosed in writing to
the Administrative Agent or (iii) in an amount not to exceed $3,000,000 with
respect to the FRS Acquisition or the General Acquisition;
(k) Liens on cash securing letters of credit (in an amount up
to 105% of the undrawn amount thereof) incurred pursuant to Section 7.2(f); and
69
(l) Liens not otherwise permitted by this Section 7.3 so long
as neither (i) the aggregate outstanding principal amount of the obligations
secured thereby nor (ii) the aggregate fair market value (determined, in the
case of each such Lien, as of the date such Lien is incurred) of the assets
subject thereto exceeds (as to all Group Members) $2,500,000 at any one time.
7.4 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:
(a) any Solvent Subsidiary of the Borrower may be merged or
consolidated with or into the Borrower (PROVIDED that the Borrower shall be the
continuing or surviving corporation) or with or into any Wholly Owned Subsidiary
Guarantor (PROVIDED that (i) such Subsidiary Guarantor shall be the continuing
or surviving corporation or (ii) simultaneously with such transaction, the
continuing or surviving corporation shall become a Subsidiary Guarantor and the
Borrower shall comply with Section 6.10 in connection therewith);
(b) any Subsidiary of the Borrower may Dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor;
(c) provided that (i) no Default or Event of Default has
occurred and is continuing and (ii) the Administrative Agent and the Lenders
have received opinions of Canadian and United States of America tax counsel to
CERI and the Borrower to the effect that other than as a result of the
redemption of the common stock of the Borrower held by CERI, the Migration shall
not give rise to any Canadian or United States of America income tax liability
to any Group Member, CERI may consummate the Migration, and provided that no
Default or Event of Default has occurred and is continuing, notwithstanding the
provisions of Section 10.1, the Administrative Agent and the Loan Parties may
enter into such amendments and supplements to the Loan Documents as are
necessary to reflect the Migration, including, without limitation, the release
from its guarantee obligations and the Security Documents any Loan Party which
becomes an Excluded Foreign Subsidiary by virtue of the Migration, the release
of any Collateral owned by Excluded Foreign Subsidiaries and the release from
any pledge under the Security Documents of 35% of the voting Capital Stock of
any such Excluded Foreign Subsidiary owned by a Loan Party and all of the voting
Capital Stock of any such Excluded Foreign Subsidiary owned by any other such
Excluded Foreign Subsidiary;
(d) the Borrower or any Subsidiary of the Borrower may merge
with any Person in connection with an acquisition permitted by Section 7.8(h),
so long as (i) if such transaction involves the Borrower, the Borrower is the
continuing or surviving corporation and (ii) if such transaction involves any
Subsidiary of the Borrower, the surviving corporation must be or become a
Subsidiary Guarantor; and
(e) any Subsidiary may Dispose of its assets (by merger,
consolidation or otherwise) in a transaction permitted, in its entirety, by
Section 7.5.
7.5 LIMITATION ON DISPOSITION OF PROPERTY. Dispose of any of
its Property (including, without limitation, receivables and leasehold
interests), whether now owned or
70
hereafter acquired, or, in the case of any Subsidiary of CERI or the Borrower,
issue or sell any shares of such Subsidiary's Capital Stock to any Person,
except:
(a) the Disposition of obsolete or worn out property in the
ordinary course of business;
(b) Dispositions permitted by Section 7.4(b);
(c) the sale or issuance of any Subsidiary's Capital Stock to
the Borrower or any Subsidiary Guarantor;
(d) the sale or issuance of any Canadian Subsidiary's Capital
Stock to CERI or any Canadian Subsidiary;
(e) the Disposition of other assets having a fair market value
not to exceed $7,500,000 in the aggregate for any fiscal year of the Borrower;
(f) the issuance and exchange of shares of the Capital Stock
of CERI and the Borrower as part of the Migration (including, without
limitation, issuances of Capital Stock of the Borrower from time to time in
exchange for the Exchangeable Shares); and
(g) as a result of any Recovery Event.
7.6 LIMITATION ON RESTRICTED PAYMENTS. Declare or pay any
dividend on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any Capital Stock of CERI, the Borrower or
any of its Subsidiaries, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of CERI or any other Group Member, or enter into
any derivatives or other transaction with any financial institution, commodities
or stock exchange or clearinghouse (a "DERIVATIVES COUNTERPARTY") obligating
CERI or any other Group Member to make payments to such Derivatives Counterparty
as a result of any change in market value of any such Capital Stock
(collectively, "RESTRICTED PAYMENTS"), except that:
(a) any Subsidiary of the Borrower may make Restricted
Payments to the Borrower or any Subsidiary Guarantor;
(b) any Canadian Subsidiary may make Restricted Payments to
CERI or any Canadian Guarantor;
(c) CERI may make Restricted Payments in the form of Capital
Stock of CERI;
(d) so long as no Default or Event of Default shall have
occurred and be continuing, the Borrower and any Canadian Subsidiary may pay
dividends to CERI to permit CERI to purchase its common stock or common stock
options from present or former officers or employees of any Group Member upon
the death, disability or termination of employment of such officer or employee,
PROVIDED, that the aggregate amount of payments under this clause (c) subsequent
to the date hereof (net of any proceeds received by CERI and contributed to the
71
Borrower subsequent to the date hereof in connection with resales of any common
stock or common stock options so purchased) shall not exceed $100,000;
(e) the Borrower and any Canadian Subsidiary may pay dividends
to CERI to permit CERI to (i) pay corporate expenses incurred in the ordinary
course of business not to exceed $10,000,000 in any fiscal year and (ii) pay any
taxes which are due and payable by CERI and the Borrower as part of a
consolidated group; and
(f) the Borrower may make Restricted Payments in kind to the
holders of the Xxxxx Preferred Stock as required by the Xxxxx Preferred Stock
Documents.
7.7 LIMITATION ON CAPITAL EXPENDITURES. Make or commit to make
any Capital Expenditure, except (a) Capital Expenditures of CERI and its
Subsidiaries in the ordinary course of business not exceeding $35,000,000 for
fiscal year 2004 and $20,000,000 for fiscal year 2005; PROVIDED, that up to 50%
of any such amount referred to above, if not so expended in the fiscal year for
which it is permitted, may be carried over for expenditure in the next
succeeding fiscal year, (b) Capital Expenditures made with the proceeds of any
Reinvestment Deferred Amount and (c) the acquisition of capital assets pursuant
to the Acquisition Documentation.
7.8 LIMITATION ON INVESTMENTS. Make any advance, loan,
extension of credit (by way of guaranty or otherwise) or capital contribution
to, or purchase any Capital Stock, bonds, notes, debentures or other debt
securities of, or any assets constituting an ongoing business from, or make any
other investment in, any other Person (all of the foregoing, "INVESTMENTS"),
except:
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) Investments arising in connection with the incurrence of
Indebtedness permitted by Section 7.2(b)(i) and (iii) and 7.2(e);
(d) loans and advances to employees of any Group Member in the
ordinary course of business (including, without limitation, for travel,
entertainment and relocation expenses) in an aggregate amount for all Group
Members not to exceed $100,000 at any one time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the Borrower's or the
applicable Subsidiary's business made by the Borrower or any of its Subsidiaries
with the proceeds of any Reinvestment Deferred Amount;
(g) Investments (other than those relating to the incurrence
of Indebtedness permitted by Section 7.8(c)) by any Group Member in the Borrower
or any Person that, prior to such Investment, is a Subsidiary Guarantor;
(h) in addition to Investments otherwise expressly permitted
by this Section, Investments by CERI, the Borrower or any Guarantor constituting
acquisitions of other Persons
72
in the same or similar line of business as the Group Members (a "PERMITTED
ACQUISITION"); provided that
(i) immediately prior to and after giving effect to
any such Permitted Acquisition, (x) no Default or Event of Default has
occurred and is continuing and (y) CERI shall be in pro forma
compliance with the financial covenants set forth in Section 7.1 and
CERI shall have certified each of the same to the Administrative Agent
in writing;
(ii) if such Permitted Acquisition is structured as a
stock acquisition, or a merger or consolidation, then either (A) the
Person so acquired becomes a Wholly Owned Subsidiary of the Borrower or
of CERI or (B) such Person is merged with and into either the Borrower
or a Wholly Owned Subsidiary of the Borrower or of CERI (with the
Borrower or such Subsidiary of the Borrower or of CERI being the
surviving corporation in such merger);
(iii) all of the provisions of Section 6.10 have been
or will be complied with in respect of such Permitted Acquisition; and
(iv) (A) with respect to the Arizona Acquisitions,
the purchase price for such Permitted Acquisitions shall not exceed
$11,000,000 in the aggregate in cash, and no more than 1,450,000 shares
of Capital Stock of CERI and (B) with respect to all other Permitted
Acquisitions, the purchase price for such Permitted Acquisitions shall
not exceed $25,000,000 in the aggregate per fiscal year and any
consideration shall be limited to cash from Excluded Proceeds and,
prior to the Migration, Capital Stock of CERI and thereafter, of the
Borrower;
(i) Investments by CERI or the Borrower in any Canadian
Subsidiary Guarantors, including Investments arising in connection with
Indebtedness permitted under Section 7.2(b) in an aggregate amount (valued at
cost) not to exceed $5,000,000 during the term of this Agreement;
(j) Investments in Specified Hedge Agreements permitted by
Section 7.17; and
(k) in addition to Investments otherwise expressly permitted
by this Section, Investments by CERI or any of its Subsidiaries in an aggregate
amount (valued at cost) not to exceed $3,500,000 during the term of this
Agreement.
7.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OTHER AGREEMENTS.(a) (a) Make or offer to make any optional or
voluntary payment, prepayment, repurchase or redemption of, or otherwise
voluntarily or optionally defease, any Indebtedness (other than Indebtedness
permitted by Section 7.2(b), (c), (d) (solely to the extent permitted thereby)
and (e) (to the extent consisting of customary overdrafts in connection with
deposit accounts), or segregate funds for any such payment, prepayment,
repurchase, redemption or defeasance, or enter into any derivative or other
transaction with any Derivatives Counterparty obligating any Group Member to
make payments to such Derivatives Counterparty as a result of any change in
market value of such Indebtedness, (b) amend, modify or otherwise change, or
consent or agree to any amendment, modification, waiver or other change to, any
of the terms of
73
any Indebtedness (other than any such amendment, modification, waiver or other
change which (i) would extend the maturity or reduce the amount of any payment
of principal thereof, reduce the rate or extend the date for payment of interest
thereon or relax any covenant or other restriction applicable to the Group
Members and (ii) does not involve the payment of a consent fee), or (c) amend
the Xxxxx Preferred Stock Documents or its certificate of incorporation, by-laws
or other governing documents in any manner determined by the Administrative
Agent to be adverse to the Lenders.
7.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Except as set
forth on SCHEDULE 7.10, enter into any transaction, including, without
limitation, any purchase, sale, lease or exchange of Property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than a Loan Party) unless such transaction is (a) otherwise not
prohibited by this Agreement, (b) in the ordinary course of business of CERI,
the Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to CERI, the Borrower or the Subsidiary, as
the case may be, than it would obtain in a comparable arm's length transaction
with a Person that is not an Affiliate.
7.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by any Group Member of
real or personal property which has been or is to be sold or transferred by such
Group Member to such Person or to any other Person to whom funds have been or
are to be advanced by such Person on the security of such property or rental
obligations of such Group Member, except for the Arizona Sale and Leaseback.
7.12 LIMITATION ON CHANGES IN FISCAL PERIODS. Permit the
fiscal year of the Borrower to end on a day other than December 31 or change the
Borrower's method of determining fiscal quarters.
7.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into or
suffer to exist or become effective any agreement that prohibits or limits the
ability of any Group Member to create, incur, assume or suffer to exist any Lien
upon any of its Property or revenues, whether now owned or hereafter acquired,
to secure the Obligations or, in the case of any Guarantor, its obligations
under the Guarantee and Collateral Agreement or the Canadian Guarantee and
Collateral Agreement, other than (a) this Agreement and the other Loan
Documents, (b) any agreements governing any purchase money Liens or Capital
Lease Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby), (c) any
agreements governing Indebtedness permitted by Section 7.2(d) (in which case any
such prohibition shall only be effective against the assets permitted to be
subject to Liens permitted by Section 7.3(f)), and (d) provisions in leases that
restrict the transfer of such lease by the lessee.
7.14 LIMITATION ON RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS.
Enter into or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay or subordinate
any Indebtedness owed to CERI, the Borrower or any other Subsidiary, (b) make
Investments in CERI, the Borrower or any Subsidiary or (c) transfer any of its
assets to CERI, the Borrower or any other Subsidiary, except for such
encumbrances or restrictions existing under or by reason of (i) any restrictions
existing under the Loan
74
Documents, (ii) any restrictions with respect to a Subsidiary of the Borrower or
any Canadian Subsidiary imposed pursuant to an agreement that has been entered
into in connection with the Disposition of all or substantially all of the
Capital Stock or assets of such Subsidiary, (iii) customary net worth provisions
contained in real property leases entered into by any Loan Party so long as such
net worth provisions could not reasonably be expected to impair materially the
ability of the Loan Parties to meet their ongoing obligations under this
Agreement or any of the other Loan Documents, and (iv) with respect to clause
(c) only, (A) agreements described in clauses (b)-(d) of Section 7.13, to the
extent set forth in such clauses and (B) restrictions with respect to the
transfer of any asset contained in an agreement that has been entered into in
connection with a disposition of such asset permitted hereunder.
7.15 LIMITATION ON LINES OF BUSINESS. Enter into any business,
either directly or through any Subsidiary, except for those businesses in which
the Group Members are engaged on the date of this Agreement or that are
reasonably related thereto.
7.16 LIMITATION ON AMENDMENTS TO ACQUISITION DOCUMENTATION.
(a) Amend, supplement or otherwise modify (whether pursuant to a waiver granted
by or to such Person or otherwise) or fail to enforce the terms and conditions
of the indemnities furnished to any Group Member pursuant to the Acquisition
Documentation such that after giving effect thereto such indemnities shall be
materially less favorable to the interests of the Loan Parties or the Lenders
with respect thereto or (b) otherwise amend, supplement or otherwise modify or
fail to enforce the terms and conditions of the Acquisition Documentation except
to the extent that any such amendment, supplement or modification or failure to
enforce could not reasonably be expected to have a Material Adverse Effect.
7.17 LIMITATION ON HEDGE AGREEMENTS. Enter into any Hedge
Agreement other than Hedge Agreements entered into in the ordinary course of
business, and not for speculative purposes, to protect against changes in
interest rates, commodity prices or foreign exchange rates.
7.18 LIMITATION ON PERFORMANCE BONDS. Create, incur, assume or
suffer to exist any obligations in respect of performance and surety bonds and
other obligations of a like nature for all Group Members in excess of
$35,000,000 in the aggregate at any one time outstanding.
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) The Borrower shall fail to pay any principal of any Loan
or Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement Obligation,
or any Loan Party shall fail to pay any other amount payable hereunder or under
any other Loan Document, within five days after any such interest or other
amount becomes due in accordance with the terms hereof or thereof; or
(b) Any representation or warranty made or deemed made by any
Loan Party herein or in any other Loan Document or that is contained in any
certificate, document or
75
financial or other statement furnished by it at any time under or in connection
with this Agreement or any such other Loan Document shall prove to have been
inaccurate in any material respect on or as of the date made or deemed made or
furnished; or
(c) (i) Any Loan Party shall default in the observance or
performance of any agreement contained in Section 3.1(a), clause (i) or (ii) of
Section 6.4(a) (with respect to CERI and the Borrower only), Section 6.7(a) or
Section 7 of this Agreement, or in Sections 5.2(a) and (d), 5.3(b)(iii) and (v),
5.5(a) and (c), 5.6(ii) and (iii), 5.7 and 5.8(b) of the Guarantee and
Collateral Agreement, or (ii) Sections 5.2(a) and (d), 5.3(b)(iii) and (v),
5.5(a) and (c), 5.6(ii) and (iii), 5.7 and 5.8(b) of the Canadian Guarantee and
Collateral Agreement;
(d) Any Loan Party shall default in the observance or
performance of any other agreement contained in this Agreement or any other Loan
Document (other than as provided in paragraphs (a) through (c) of this Section),
and such default shall continue unremedied for a period of 30 days; or
(e) any Group Member shall (i) default in making any payment
of any principal of any Indebtedness (including, without limitation, any
Guarantee Obligation, but excluding the Loans and Reimbursement Obligations) on
the scheduled or original due date with respect thereto beyond the period of
grace, if any, provided in the instrument or agreement under which such
Indebtedness was created; or (ii) default in making any payment of any interest
on any such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or condition
relating to any such Indebtedness or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or beneficiary of such Indebtedness (or a trustee
or agent on behalf of such holder or beneficiary) to cause, with the giving of
notice if required, such Indebtedness to become due prior to its stated maturity
or to become subject to a mandatory offer to purchase by the obligor thereunder
or (in the case of any such Indebtedness constituting a Guarantee Obligation) to
become payable; PROVIDED, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute an
Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $2,000,000;
or
(f) (i) any Group Member shall commence any case, proceeding
or other action (A) under any existing or future law of any jurisdiction,
domestic or foreign, relating to bankruptcy, insolvency, reorganization or
relief of debtors, seeking to have an order for relief entered with respect to
it, or seeking to adjudicate it a bankrupt or insolvent, or seeking
reorganization, arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B) seeking
appointment of a receiver, interim receiver, receiver-manager, trustee,
custodian, conservator or other similar official for it or for all or any
substantial part of its assets, or any Group Member shall make a general
assignment for the benefit of its creditors; or (ii) there shall be commenced
against any Group Member any case, proceeding or other action of a nature
referred to in clause (i) above that (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains undismissed,
76
undischarged or unbonded for a period of 60 days; or (iii) there shall be
commenced against any Group Member any case, proceeding or other action seeking
issuance of a warrant of attachment, execution, distraint, possession,
foreclosure or similar process against all or any substantial part of its assets
that results in the entry of an order for any such relief that shall not have
been vacated, discharged, or stayed or bonded pending appeal within 60 days from
the entry thereof; or (iv) any Group Member shall take any action in furtherance
of, or indicating its consent to, approval of, or acquiescence in, any of the
acts set forth in clause (i), (ii), or (iii) above; or (v) any Group Member
shall generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the Code)
involving any Single Employer Plan, (ii) any "accumulated funding deficiency"
(as defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Single Employer Plan, or any Lien in favor of a Single Employer
Plan or in favor of the PBGC with respect to a Single Employer Plan shall arise
on the assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence to
have a trustee appointed, or a trustee shall be appointed, to administer or to
terminate, any Single Employer Plan, which Reportable Event or commencement of
proceedings or appointment of a trustee is, in the reasonable opinion of the
Required Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for purposes
of Title IV of ERISA, or (v) the Borrower or any Commonly Controlled Entity
shall incur any liability in connection with a withdrawal from, or the
Insolvency or Reorganization of, a Multiemployer Plan; and in each case in
clauses (i) through (v) above, such event or condition, together with all other
such events or conditions, if any, could, in the sole judgment of the Required
Lenders, reasonably be expected to have a Material Adverse Effect; or
(h) One or more judgments or decrees shall be entered against
any Group Member involving for all Group Members taken as a whole a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $2,000,000 or more, and all such judgments
or decrees shall not have been vacated, discharged, stayed or bonded pending
appeal within 30 days from the entry thereof; or
(i) Any of the Security Documents shall cease, for any reason
(other than by reason of the express release thereof pursuant to Section 10.15),
to be in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported to
be created thereby; or
(j) The guarantee contained in Section 2 of the Guarantee and
Collateral Agreement or in Section 2 of the Canadian Guarantee and Collateral
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 10.15), to be in full force and effect or
any Loan Party or any Affiliate of any Loan Party shall so assert; or
(k) Any Change of Control shall occur; or
77
(l) CERI or the Borrower shall fail to perform any of its
obligations under the Fee Letter; or
(m) the Omni landfill shall fail to commence commercial
operations by February 15, 2004;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and (ii)
with the consent of the Required Lenders, the Administrative Agent may, or upon
the request of the Required Lenders, the Administrative Agent shall, by notice
to the Borrower, declare the Loans hereunder (with accrued interest thereon) and
all other amounts owing under this Agreement and the other Loan Documents
(including, without limitation, all amounts of L/C Obligations, whether or not
the beneficiaries of the then outstanding Letters of Credit shall have presented
the documents required thereunder) to be due and payable forthwith, whereupon
the same shall immediately become due and payable. In the case of all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount in immediately available funds equal to the aggregate then
undrawn and unexpired amount of such Letters of Credit (and the Borrower hereby
grants to the Administrative Agent, for the ratable benefit of the Secured
Parties, a continuing security interest in all amounts at any time on deposit in
such cash collateral account to secure the undrawn and unexpired amount of such
Letters of Credit and all other Obligations). If at any time the Administrative
Agent determines that any funds held in such cash collateral account are subject
to any right or claim of any Person other than the Administrative Agent and the
Secured Parties or that the total amount of such funds is less than the
aggregate undrawn and unexpired amount of outstanding Letters of Credit, the
Borrower shall, forthwith upon demand by the Administrative Agent, pay to the
Administrative Agent, as additional funds to be deposited and held in such cash
collateral account, an amount equal to the excess of (a) such aggregate undrawn
and unexpired amount over (b) the total amount of funds, if any, then held in
such cash collateral account that the Administrative Agent determines to be free
and clear of any such right and claim. Amounts held in such cash collateral
account shall be applied by the Administrative Agent to the payment of drafts
drawn under such Letters of Credit, and the unused portion thereof after all
such Letters of Credit shall have expired or been fully drawn upon, if any,
shall be applied to repay other obligations of the Borrower hereunder and under
the other Loan Documents. After all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been satisfied
and all other obligations of the Borrower hereunder and under the other Loan
Documents shall have been paid in full, the balance, if any,
78
in such cash collateral account shall be returned to the Borrower (or such other
Person as may be lawfully entitled thereto).
SECTION 9. THE AGENTS; THE ARRANGER
9.1 APPOINTMENT. (a) Each Lender hereby irrevocably designates
and appoints the Agents as the agents of such Lender under this Agreement and
the other Loan Documents, and each Lender irrevocably authorizes each Agent, in
such capacity, to take such action on its behalf under the provisions of this
Agreement and the other Loan Documents and to exercise such powers and perform
such duties as are expressly delegated to such Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, no Agent shall have any duties or responsibilities,
except those expressly set forth herein, or any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other Loan
Document or otherwise exist against any Agent.
(b) For greater certainty, and without limiting the powers of
the Agents or any other Person acting as an agent, attorney-in-fact or mandatary
for the Agents under this Credit Agreement or under any of the Loan Documents,
each Secured Party, hereby (a) irrevocably constitutes, to the extent necessary,
the Administrative Agent as the holder of an irrevocable power of attorney
(FONDE DE POUVOIR within the meaning of Article 2692 of the CIVIL CODE OF
QUEBEC) for the purposes of holding on their behalf, and for their benefit, any
Liens, including hypothecs ("HYPOTHECS"), granted or to be granted by the
Borrower or any Guarantor on movable or immovable property pursuant to the laws
of the Province of Quebec to secure obligations of the Borrower or any Guarantor
under any bond issued by the Borrower or any Guarantor and exercising such
powers and duties which are conferred upon the Administrative Agent in its
capacity as FONDE DE POUVOIR under any of the Hypothecs; and (b) appoints and
agrees that the Administrative Agent, acting as agent for the Secured Parties,
may act as the bondholder and mandatary with respect to any bond that may be
issued and pledged from time to time for the benefit of the Secured Parties.
(c) The said constitution of the fonde de pouvoir (within the
meaning of Article 2692 of the Civil Code of Quebec) as the holder of such
irrevocable power of attorney and of the Administrative Agent as bondholder and
mandatary with respect to any bond that may be issued and pledged from time to
time for the benefit of the Secured Parties shall be deemed to have been
ratified and confirmed by any Assignee by the execution of an Assignment and
Acceptance;
(d) Notwithstanding the provisions of Section 32 of An Act
respecting the special powers of legal persons (Quebec), the Administrative
Agent may purchase, acquire and be the holder of any bond issued by the Borrower
or any Guarantor. Each of the Borrower and CERI hereby acknowledges that any
such bond shall constitute a title of indebtedness, as such term is used in
Article 2692 of the Civil Code of Quebec.
(e) The Administrative Agent herein appointed as fonde de
pouvoir shall have the same rights, powers and immunities as the Agents as
stipulated in this Section 9 of the Credit Agreement, which shall apply mutatis
mutandis. Without limitation, the provisions of Section
79
9.9 shall apply mutatis mutandis to the resignation and appointment of a
successor to the Administrative Agent acting as fonde de pouvoir.
9.2 DELEGATION OF DUTIES. Each Agent may execute any of its
duties under this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither the Arranger, any Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a court of competent jurisdiction to have resulted directly from its or such
Person's own gross negligence or willful misconduct) or (ii) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by any Loan Party or any officer thereof contained in this
Agreement or any other Loan Document or in any certificate, report, statement or
other document referred to or provided for in, or received by the Arranger, the
Agents under or in connection with, this Agreement or any other Loan Document or
for the value, validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Loan Document or for any failure of
any Loan Party to perform its obligations hereunder or thereunder. The Agents
shall not be under any obligation to any Lender to ascertain or to inquire as to
the observance or performance of any of the agreements contained in, or
conditions of, this Agreement or any other Loan Document, or to inspect the
properties, books or records of any Loan Party.
9.4 RELIANCE BY AGENTS. Each Agent shall be entitled to rely,
and shall be fully protected in relying, upon any instrument, writing,
resolution, notice, consent, certificate, affidavit, letter, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 10.6 and all actions required by such
Section in connection with such transfer shall have been taken. Each Agent shall
be fully justified in failing or refusing to take any action under this
Agreement or any other Loan Document unless it shall first receive such advice
or concurrence of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
Each Agent shall in all cases be fully protected in acting, or in refraining
from acting, under this Agreement and the other Loan Documents in accordance
with a request of the Required Lenders (or, if so specified by this Agreement,
all Lenders or any other instructing group of Lenders specified by this
Agreement), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Loans.
80
9.5 NOTICE OF DEFAULT. No Agent shall be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless such Agent shall have received notice from a Lender, CERI or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event that
the Administrative Agent shall receive such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders or any other instructing group of Lenders specified by
this Agreement); PROVIDED that unless and until the Administrative Agent shall
have received such directions, the Administrative Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
9.6 NON-RELIANCE ON THE ARRANGER, THE AGENTS AND OTHER
LENDERS. Each Lender expressly acknowledges that neither the Arranger, any of
the Agents nor any of their respective officers, directors, employees, agents,
attorneys and other advisors, partners, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by any Agent
hereafter taken, including any review of the affairs of a Loan Party or any
affiliate of a Loan Party, shall be deemed to constitute any representation or
warranty by the Arranger, any Agent to any Lender. Each Lender represents to the
Agents and the Arranger that it has, independently and without reliance upon the
Arranger, any Agent or any other Lender, and based on such documents and
information as it has deemed appropriate, made its own appraisal of and
investigation into the business, operations, property, financial and other
condition and creditworthiness of the Loan Parties and their affiliates and made
its own decision to make its Loans (and in the case of any Issuing Lender, to
issue its Letters of Credit) hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon the
Arranger, any Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Administrative Agent hereunder, no
Arranger and no Agent shall have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, condition (financial or otherwise), prospects or creditworthiness of
any Loan Party or any affiliate of a Loan Party that may come into the
possession of the Arranger or Agent or any of its officers, directors,
employees, agents, attorneys and other advisors, partners, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify the
Arranger and each Agent in its capacity as such (to the extent not reimbursed by
CERI or the Borrower and without limiting the obligation of CERI or the Borrower
to do so), ratably according to their respective Aggregate Exposure Percentages
in effect on the date on which indemnification is sought under this Section (or,
if indemnification is sought after the date upon which the Commitments shall
have terminated and the Loans shall have been paid in full, ratably in
accordance with such Aggregate Exposure Percentages immediately prior to such
date), for, and to save the Arranger and each Agent harmless from and against,
any and all liabilities, obligations, losses, damages,
81
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever that may at any time (including, without limitation, at any time
following the payment of the Loans) be imposed on, incurred by or asserted
against the Arranger or such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents, the Acquisition
Documentation, or any documents contemplated by or referred to herein or therein
or the transactions contemplated hereby or thereby or any action taken or
omitted by the Arranger or such Agent under or in connection with any of the
foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements that are found by a court of
competent jurisdiction to have resulted directly from the Arranger's or such
Agent's gross negligence or willful misconduct. The agreements in this Section
shall survive the payment of the Loans and all other amounts payable hereunder.
9.8 ARRANGER AND AGENT IN THEIR INDIVIDUAL CAPACITIES. The
Arranger and each Agent and its affiliates may make loans to, accept deposits
from and generally engage in any kind of business with any Loan Party as though
the Arranger or such Agent were not an Arranger or an Agent. With respect to its
Loans made or renewed by it and with respect to any Letter of Credit issued or
participated in by it, the Arranger and each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Arranger or an Agent, and the
terms "Lender" and "Lenders" shall include the Arranger and the Agent in their
individual capacities.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent
may resign as Administrative Agent upon 10 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent under
this Agreement and the other Loan Documents, then the Required Lenders shall
appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans or issuers of Letters
of Credit. If no successor agent has accepted appointment as Administrative
Agent by the date that is 10 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective, and the Lenders shall assume and
perform all of the duties of the Administrative Agent hereunder until such time,
if any, as the Required Lenders appoint a successor agent as provided for above.
The Syndication Agent may, at any time, by notice to the Lenders and the
Administrative Agent, resign as Syndication Agent hereunder, whereupon the
duties, rights, obligations and responsibilities of the Syndication Agent
hereunder shall automatically be assumed by, and inure to the benefit of, the
Administrative Agent, without any further act by the Arranger, any Agent or any
Lender. After any retiring Agent's resignation as Agent, the provisions of this
Section 9 shall inure to its benefit as to any actions taken or omitted to be
taken by it while it was Agent under this Agreement and the other Loan
Documents.
82
9.10 AUTHORIZATION TO RELEASE LIENS AND GUARANTEES. The
Administrative Agent is hereby irrevocably authorized by each of the Lenders to
effect any release of Liens or guarantee obligations contemplated by Section
10.15.
9.11 THE ARRANGER; THE SYNDICATION AGENT. The Arranger and the
Syndication Agent, in their respective capacities as such, shall have no duties
or responsibilities, and shall incur no liability, under this Agreement and the
other Loan Documents.
9.12 WITHHOLDING TAX. (a) (a) To the extent required by any
applicable law, the Administrative Agent may withhold from any interest payment
to any Lender an amount equivalent to any applicable withholding tax. If the
forms or other documentation required by Section 2.17(f) are not delivered to
the Administrative Agent, then the Administrative Agent may withhold from any
interest payment to any Lender not providing such forms or other documentation,
a maximum amount of the applicable withholding tax.
(b) If the Internal Revenue Service, Canada Customs and
Revenue Agency or any authority of the United States of America, Canada or other
jurisdiction asserts a claim that the Administrative Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered, was not properly executed, or because such
Lender failed to notify the Administrative Agent of a change in circumstances
which rendered the exemption from, or reduction of, withholding tax ineffective,
or for any other reason), such Lender shall indemnify the Administrative Agent
fully for all amounts paid, directly or indirectly, by the Administrative Agent
as tax or otherwise, including penalties and interest, together with all
expenses incurred, including legal expenses, allocated staff costs and any out
of pocket expenses.
(c) If any Lender sells, assigns, grants a participation in,
or otherwise transfers its rights under this Agreement, the purchaser, assignee,
participant or transferee, as applicable, shall comply and be bound by the terms
of Sections 2.17(e) and 9.12; provided that with respect to any Participant, as
set forth in Section 10.6(b), such Participant shall only be required to comply
with the requirements of Sections 2.17(e) if such Participant seeks to obtain
the benefits of Section 2.17.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. (a) Neither this Agreement or any
other Loan Document, nor any terms hereof or thereof may be amended,
supplemented or modified except in accordance with the provisions of this
Section 10.1. The Required Lenders and each Loan Party party to the relevant
Loan Document may, or (with the written consent of the Required Lenders) the
Administrative Agent and each Loan Party party to the relevant Loan Document
may, from time to time, (1) enter into written amendments, supplements or
modifications hereto and to the other Loan Documents (including amendments and
restatements hereof or thereof) for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (2) waive, on such
terms and conditions as may be specified in the instrument of waiver, any of the
requirements of this Agreement or the other Loan Documents or any Default or
Event of
83
Default and its consequences; PROVIDED, HOWEVER, that no such waiver and no such
amendment, supplement or modification shall:
(i) forgive the principal amount or extend the final
scheduled date of maturity of any Loan or Reimbursement Obligation,
extend the scheduled date of any amortization payment in respect of any
Term Loan, reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof, or
increase the amount or extend the expiration date of any Commitment of
any Lender, in each case without the consent of each Lender directly
affected thereby;
(ii) amend, modify or waive any provision of this
Section or reduce any percentage specified in the definition of
Required Lenders or Required Prepayment Lenders, consent to the
assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement and the other Loan Documents, release
all or substantially all of the Collateral or release all or
substantially all of the Subsidiary Guarantors from their guarantee
obligations under the Guarantee and Collateral Agreement, in each case
without the consent of all Lenders;
(iii) (A) amend, modify or waive any condition
precedent to any extension of credit under the Revolving Credit
Facility set forth in Section 5.2 (including, without limitation, the
waiver of an existing Default or Event of Default required to be waived
in order for such extension of credit to be made) without the consent
of the Majority Revolving Credit Facility Lenders or (B) amend, modify
or waive any condition precedent to the funding of Term Loans on the
Second Acquisition Closing Date set forth in Section 5.3 (including,
without limitation, the waiver of an existing Default or Event of
Default required to be waived in order for such extension of credit to
be made) without the consent of the Majority Facility Lenders in
respect of the Tranche B Term Loan Facility;
(iv) reduce the percentage specified in the
definition of Majority Facility Lenders with respect to any Facility
without the written consent of all Lenders under such Facility;
(v) amend, modify or waive any provision of Section 9
or any other provision affecting the rights, duties and obligations of
the Arranger or any Agent without the consent of the Arranger or Agent
directly affected thereby;
(vi) amend, modify or waive any provision of Section
2.6 or 2.7 without the written consent of the Swing Line Lender;
(vii) amend, modify or waive the pro rata provisions
of Section 2.15 without the consent of each Lender directly affected
thereby;
(viii) amend, modify or waive any provision of
Section 3 without the consent of each Issuing Lender; or
(ix) impose restrictions on assignments and
participations that are more restrictive than, or additional to, those
set forth in Section 10.6.
84
Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Arranger, the Agents and all future holders of the Loans. In the
case of any waiver, the Loan Parties, the Lenders, the Arranger and the Agents
shall be restored to their former position and rights hereunder and under the
other Loan Documents, and any Default or Event of Default waived shall be deemed
to be cured and not continuing; but no such waiver shall extend to any
subsequent or other Default or Event of Default, or impair any right consequent
thereon. Any such waiver, amendment, supplement or modification shall be
effected by a written instrument signed by the parties required to sign pursuant
to the foregoing provisions of this Section; PROVIDED, that delivery of an
executed signature page of any such instrument by facsimile transmission shall
be effective as delivery of a manually executed counterpart thereof.
Notwithstanding the foregoing, this Agreement and any other
Loan Document may be amended (or amended and restated) with the written consent
of the Required Lenders, the Administrative Agent and each Loan Party to each
relevant Loan Document (x) to add one or more additional credit facilities to
this Agreement and to permit the extensions of credit from time to time
outstanding thereunder and the accrued interest and fees in respect thereof
(collectively, the "ADDITIONAL EXTENSIONS OF CREDIT") to share ratably in the
benefits of this Agreement and the other Loan Documents with the Term Loans and
Revolving Extensions of Credit and the accrued interest and fees in respect
thereof and (y) to include appropriately the Lenders holding such credit
facilities in any determination of the Required Lenders, Required Prepayment
Lenders and Majority Revolving Facility Lenders; PROVIDED, HOWEVER, that no such
amendment shall permit the Additional Extensions of Credit to share ratably with
or with preference to the Loans in the application of mandatory prepayments
without the consent of the applicable Required Prepayment Lenders.
(b) In addition to the foregoing and notwithstanding the
provisions set forth in Section 10.1(a), this Agreement and any other Loan
Document may be amended or amended and restated by the Administrative Agent and
the Loan Parties without the payment of any structuring, arrangement or
amendment fee with respect thereto (other than the fees and expenses set forth
in Section 10.5) at the time of the Migration (as defined in Section 7.4(c) as
of the Closing Date).
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of CERI, the Borrower, the Arranger and the
Agents, as follows and (b) in the case of the Lenders, as set forth in an
administrative questionnaire delivered to the Administrative Agent or on
SCHEDULE I to the Lender Addendum to which such Lender is a party or, in the
case of a Lender which becomes a party to this Agreement pursuant to an
Assignment and Acceptance, in such Assignment and Acceptance or (c) in the case
of any party, to such other address as such party may hereafter notify to the
other parties hereto:
CERI: Capital Environmental Resources Inc.
0000 Xxxxxxx Xxxxx
00
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Borrower: Waste Systems, Inc.
0000 Xxxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx X0X 0X0
Attention: General Counsel
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to:
Shearman & Sterling LLP
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Syndication Agent:
Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
The Administrative Agent:
Xxxxxx Commercial Paper Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
with a copy to
Xxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxx
Telecopy: (000) 000-0000
Telephone: (000) 000-0000
86
Issuing Lender:
As notified by such Issuing Lender
to the Administrative Agent and the
Borrower
PROVIDED that any notice, request or demand to or upon the Arranger, any Agent,
the Issuing Lender or any Lender shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of any Agent or any Lender, any right,
remedy, power or privilege hereunder or under the other Loan Documents shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights, remedies, powers and privileges herein provided are cumulative and
not exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made herein, in the other Loan Documents and in
any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES. The Borrower agrees (a) to pay or
reimburse the Arranger and the Agents for all their reasonable out-of-pocket
costs and expenses incurred in connection with the syndication of the Facilities
(other than fees payable to syndicate members) and the development, preparation
and execution of, and any amendment, supplement or modification to, this
Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements and other charges of counsel to the
Administrative Agent and the charges of Intralinks, (b) to pay or reimburse each
Lender, the Arranger and the Agents for all their costs and expenses incurred in
connection with the enforcement or preservation of any rights under this
Agreement, the other Loan Documents and any other documents prepared in
connection herewith or therewith, including, without limitation, the fees and
disbursements of counsel (including the allocated fees and disbursements and
other charges of in-house counsel) to each Lender and of counsel to the Agents,
(c) to pay, indemnify, or reimburse each Lender, the Arranger and the Agents
for, and hold each Lender, the Arranger and the Agents harmless from, any and
all recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and similar taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse
each Lender, the Arranger, each Agent, their respective affiliates, and their
respective officers, directors, trustees, employees, affiliates, shareholders,
attorneys and other advisors, agents and controlling persons (each, an
"INDEMNITEE") for, and hold each Indemnitee harmless from and against any and
all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution,
87
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans or
the violation of, noncompliance with or liability under, any Environmental Law
applicable to the operations of any Group Member or any of the Properties or the
use by unauthorized persons of information or other materials sent through
electronic, telecommunications or other information transmission systems that
are intercepted by such persons and the fees and disbursements and other charges
of legal counsel in connection with claims, actions or proceedings by any
Indemnitee against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a court of
competent jurisdiction to have resulted directly from the gross negligence or
willful misconduct of such Indemnitee or any Affiliate thereof. No Indemnitee
shall be liable for any damages arising from the use by unauthorized persons of
Information or other materials sent through electronic, telecommunications or
other information transmission systems that are intercepted by such persons or
for any special, indirect, consequential or punitive damages in connection with
the Facilities. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries so to
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines, liabilities, settlements, damages,
costs and expenses of whatever kind or nature, under or related to Environmental
Laws, that any of them might have by statute or otherwise against any
Indemnitee, except to the extent such claim, demand, penalty, fine, liability,
settlement, damage, cost or expense is found by a court of competent
jurisdiction to have resulted directly from the gross negligence or willful
misconduct of such Indemnitee. All amounts due under this Section shall be
payable not later than 30 days after written demand therefor. Statements payable
by the Borrower pursuant to this Section shall be submitted to the address of
the Borrower set forth in Section 10.2, or to such other Person or address as
may be hereafter designated by the Borrower in a notice to the Administrative
Agent. The agreements in this Section shall survive repayment of the Loans and
all other amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) (a) This Agreement shall be binding upon and inure to the benefit of CERI,
the Borrower, the Lenders, the Arranger, the Agents, all future holders of the
Loans and their respective successors and assigns, except that neither CERI nor
the Borrower may assign or transfer any of their respective rights or
obligations under this Agreement without the prior written consent of the
Arranger, the Agents and each Lender.
(b) Any Lender may, without the consent of the Borrower or any
other Person, in accordance with applicable law, at any time sell to one or more
banks, financial institutions or other entities (each, a "PARTICIPANT")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents. In the event of any such sale by a Lender of a participating interest
to a Participant, such Lender's obligations under this Agreement to the other
parties to this Agreement shall remain unchanged, such Lender shall remain
solely responsible for the performance thereof, such Lender shall remain the
holder of any such Loan for all purposes under this Agreement and the other Loan
Documents, and the Borrower and the Agents shall
88
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and the other Loan
Documents. In no event shall any Participant under any such participation have
any right to approve any amendment or waiver of any provision of any Loan
Document, or any consent to any departure by any Loan Party therefrom, except to
the extent that such amendment, waiver or consent would require the consent of
all Lenders pursuant to Section 10.1. The Borrower agrees that if amounts
outstanding under this Agreement and the Loans are due or unpaid, or shall have
been declared or shall have become due and payable upon the occurrence of an
Event of Default, each Participant shall, to the maximum extent permitted by
applicable law, be deemed to have the right of setoff in respect of its
participating interest in amounts owing under this Agreement to the same extent
as if the amount of its participating interest were owing directly to it as a
Lender under this Agreement, PROVIDED that, in purchasing such participating
interest, such Participant shall be deemed to have agreed to share with the
Lenders the proceeds thereof as provided in Section 10.7(a) as fully as if such
Participant were a Lender hereunder. The Borrower also agrees that each
Participant shall be entitled to the benefits of Sections 2.16, 2.17 and 2.18
with respect to its participation in the Commitments and the Loans outstanding
from time to time as if such Participant were a Lender; PROVIDED that, in the
case of Section 2.17, such Participant shall have complied with the requirements
of said Section, and PROVIDED, FURTHER, that no Participant shall be entitled to
receive any greater amount pursuant to any such Section than the transferor
Lender would have been entitled to receive in respect of the amount of the
participation transferred by such transferor Lender to such Participant had no
such transfer occurred.
If and to the extent that a Non-U.S. Lender sells a
participating interest to a Participant which, pursuant to Section 9.12(c),
seeks to obtain the benefits of Section 2.17, then such Lender shall promptly
provide the Borrower and the Administrative Agent with documentation reflecting
the portion of its Loan, Commitment and/or any other interest of such Lender
hereunder and under the other Loan Documents sold pursuant to such participating
interest on a properly completed and duly executed Internal Revenue Service Form
W-8IMY (or any subsequent versions thereof or successors thereto) with any
required attachments and the portion of its Loan, Commitment and/or any other
interest of such Lender hereunder and under the other Loan Documents retained on
a properly completed and duly executed Internal Revenue Service Form W-8BEN or
Form W-8ECI (or any subsequent versions thereof or successors thereto).
(c) Any Lender (an "ASSIGNOR") may, in accordance with
applicable law and upon written notice to the Administrative Agent, at any time
and from time to time assign to any Lender or any affiliate, Related Fund or
Control Investment Affiliate thereof or, with the consent of the Borrower and
the Agents and, in the case of any assignment of Revolving Credit Commitments,
the written consent of the Issuing Lender and the Swing Line Lender (which, in
each case, shall not be unreasonably withheld or delayed); PROVIDED (x) that no
such consent need be obtained by the Administrative Agent or its affiliates and
(y) the consent of the Borrower need not be obtained with respect to any
assignment of Term Loans, to an additional bank, financial institution or other
entity (an "ASSIGNEE") all or any part of its rights and obligations under this
Agreement pursuant to an Assignment and Acceptance, substantially in the form of
Exhibit E (an "ASSIGNMENT AND ACCEPTANCE"), executed by such Assignee and such
Assignor (and, where the consent of the Borrower, the Administrative Agent, the
Issuing Lender or the Swing Line Lender is required pursuant to the foregoing
provisions, by the Borrower and such
89
other Persons) and delivered to the Administrative Agent for its acceptance and
recording in the Register; PROVIDED that no such assignment to an Assignee
(other than any Lender or any affiliate thereof) shall be in an aggregate
principal amount of less than $1,000,000 (with respect to Term Loans and
$5,000,000 with respect to the Revolving Credit Facility (other than, in each
case, in the case of an assignment of all of a Lender's interests under this
Agreement)), unless otherwise agreed by the Borrower and the Administrative
Agent. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with Commitments and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, except as
to Section 2.16, 2.17, 2.18, 9.12 and 10.5 in respect of the period prior to
such effective date). Notwithstanding any provision of this Section, the consent
of the Borrower shall not be required for any assignment that occurs at any time
when any Event of Default shall have occurred and be continuing. For purposes of
the minimum assignment amounts set forth in this paragraph, multiple assignments
by two or more Related Funds shall be aggregated.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of a
Loan evidenced by a Note shall be registered on the Register only upon surrender
for registration of assignment or transfer of the Note evidencing such Loan,
accompanied by a duly executed Assignment and Acceptance; thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
designated Assignee, and the old Notes shall be returned by the Administrative
Agent to the Borrower marked "canceled". The Register shall be available for
inspection by the Borrower or any Lender (with respect to any entry relating to
such Lender's Loans) at any reasonable time and from time to time upon
reasonable prior notice.
(e) Upon its receipt of an Assignment and Acceptance executed
by an Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more Related
Funds as a single assignment) (except that no such registration and processing
fee shall be payable in the case of an Assignee which is already a Lender or is
an affiliate or Related Fund of a Lender or a Person under common management
with a Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the
90
Register and give notice of such acceptance and recordation to the Borrower. On
or prior to such effective date, the Borrower, at its own expense, upon request,
shall execute and deliver to the Administrative Agent (in exchange for the
Revolving Credit Note and/or applicable Term Notes, as the case may be, of the
assigning Lender) a new Revolving Credit Note and/or applicable Term Notes, as
the case may be, to the order of such Assignee in an amount equal to the
Revolving Credit Commitment and/or applicable Term Loans, as the case may be,
assumed or acquired by it pursuant to such Assignment and Acceptance and, if the
Assignor has retained a Revolving Credit Commitment and/or Term Loans, as the
case may be, upon request, a new Revolving Credit Note and/or Term Notes, as the
case may be, to the order of the Assignor in an amount equal to the Revolving
Credit Commitment and/or applicable Term Loans, as the case may be, retained by
it hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.
(f) For the avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this Section concerning assignments of Loans
and Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests in Loans and Notes, including,
without limitation, any pledge or assignment by a Lender of any Loan or Note to
any Federal Reserve Bank in accordance with applicable law.
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "GRANTING LENDER") may grant to a special purpose funding vehicle
(an "SPC"), identified as such in writing from time to time by the Granting
Lender to the Administrative Agent and the Borrower, the option to provide to
the Borrower all or any part of any Loan that such Granting Lender would
otherwise be obligated to make to the Borrower pursuant to this Agreement;
PROVIDED that (i) nothing herein shall constitute a commitment by any SPC to
make any Loan and (ii) if an SPC elects not to exercise such option or otherwise
fails to provide all or any part of such Loan, the Granting Lender shall be
obligated to make such Loan pursuant to the terms hereof. The making of a Loan
by an SPC hereunder shall utilize the Commitment of the Granting Lender to the
same extent, and as if, such Loan were made by such Granting Lender. Each party
hereto hereby agrees that no SPC shall be liable for any indemnity or similar
payment obligation under this Agreement (all liability for which shall remain
with the Granting Lender). In furtherance of the foregoing, each party hereto
hereby agrees (which agreement shall survive the termination of this Agreement)
that, prior to the date that is one year and one day after the payment in full
of all outstanding commercial paper or other indebtedness of any SPC, it will
not institute against, or join any other person in instituting against, such SPC
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States of America or any state thereof.
In addition, notwithstanding anything to the contrary in this Section 10.6(g),
any SPC may (A) with notice to, but without the prior written consent of, the
Borrower and the Administrative Agent and without paying any processing fee
therefor, assign all or a portion of its interests in any Loans to the Granting
Lender, or with the prior written consent of the Borrower and the Administrative
Agent (which consent shall not be unreasonably withheld) to any financial
institutions providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans, and (B) disclose on a
confidential basis any non-public information relating to its Loans to any
rating agency, commercial paper dealer or provider of any surety, guarantee or
credit or liquidity enhancement to such SPC; PROVIDED that non-public
information with respect to the Borrower may be disclosed only with the
Borrower's consent which will not be unreasonably withheld. This
91
paragraph (g) may not be amended without the written consent of any SPC with
Loans outstanding at the time of such proposed amendment.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement provides for payments to be allocated to a particular Lender or to the
Lenders under a particular Facility, if any Lender (a "BENEFITED LENDER") shall
at any time receive any payment of all or part of the Obligations owing to it,
or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender's Obligations, such Benefited Lender shall purchase for
cash from the other Lenders a participating interest in such portion of each
such other Lender's Obligations, or shall provide such other Lenders with the
benefits of any such collateral, as shall be necessary to cause such Benefited
Lender to share the excess payment or benefits of such collateral ratably with
each of the Lenders; PROVIDED, HOWEVER, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to CERI
or the Borrower, any such notice being expressly waived by CERI and the Borrower
to the extent permitted by applicable law, upon any amount becoming due and
payable by CERI or the Borrower hereunder (whether at the stated maturity, by
acceleration or otherwise), to set off and appropriate and apply against such
amount any and all deposits (general or special, time or demand, provisional or
final), in any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or contingent,
matured or unmatured, at any time held or owing by such Lender or any branch or
agency thereof to or for the credit or the account of CERI or the Borrower, as
the case may be. Each Lender agrees to notify promptly the Borrower and the
Administrative Agent after any such setoff and application made by such Lender,
PROVIDED that the failure to give such notice shall not affect the validity of
such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts,
and all of said counterparts taken together shall be deemed to constitute one
and the same instrument. Delivery of an executed signature page of this
Agreement or of a Lender Addendum by facsimile transmission shall be effective
as delivery of a manually executed counterpart hereof. A set of the copies of
this Agreement signed by all the parties shall be lodged with the Borrower and
the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan
Documents, represent the entire agreement of CERI, the Borrower, the Agents, the
Arranger and the Lenders
92
with respect to the subject matter hereof and thereof, and there are no
promises, undertakings, representations or warranties by the Arranger, any Agent
or any Lender relative to the subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents, except the agreements of
CERI, the Borrower, the Arranger, the Administrative Agent and the other Lenders
party thereto, contained in the Fee Letter and Engagement Letter, dated as of
December 30, among CERI, the Borrower, Xxxxxx Brothers Inc. and Xxxxxx
Commercial Paper Inc, as amended, supplemented, replaced or otherwise modified
from time to time in accordance with the provisions thereof.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. Each of CERI and
the Borrower hereby irrevocably and unconditionally:
(a) submits for itself and its Property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the courts of the State of
New York located in the County of New York, the courts of the United States of
America for the Southern District of New York, and appellate courts from any
thereof;
(b) consents that any such action or proceeding may be brought
in such courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or certified
mail (or any substantially similar form of mail), postage prepaid, to CERI or
the Borrower, as the case may be at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been notified
pursuant thereto;
(d) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall limit
the right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any
right it may have to claim or recover in any legal action or proceeding referred
to in this Section any special, exemplary, punitive or consequential damages.
10.13 ACKNOWLEDGMENTS. Each of CERI and the Borrower hereby
acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
93
(b) neither the Arranger, any Agent nor any Lender has any
fiduciary relationship with or duty to CERI or the Borrower arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Arranger, the Agents and the Lenders, on one hand, and
CERI and the Borrower, on the other hand, in connection herewith or therewith is
solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Arranger, the Agents and the Lenders or among CERI, the Borrower and
the Lenders.
10.14 CONFIDENTIALITY. Each of the Arranger, the Agents and
the Lenders agrees to keep confidential all non-public information provided to
it by any Loan Party pursuant to this Agreement that is designated by such Loan
Party as confidential; PROVIDED that nothing herein shall prevent the Arranger,
any Agent or any Lender from disclosing any such information (a) to the
Arranger, any Agent, any other Lender or any affiliate of any thereof, (b) to
any Participant or Assignee (each, a "TRANSFEREE") or prospective Transferee
that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon the
request or demand of any Governmental Authority having jurisdiction over it, (f)
in response to any order of any court or other Governmental Authority or as may
otherwise be required pursuant to any Requirement of Law, (g) if requested or
required to do so in connection with any litigation or similar proceeding, (h)
that has been publicly disclosed other than in breach of this Section, (i) to
the National Association of Insurance Commissioners or any similar organization
or any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (j) in connection with the exercise of any remedy
hereunder or under any other Loan Document. Notwithstanding anything to the
contrary in the foregoing sentence or any other express or implied agreement,
arrangement or understanding, the parties hereto hereby agree that, from the
commencement of discussions with respect to the financing provided hereunder,
any party hereto (and each of its employees, representatives, or agents) is
permitted to disclose to any and all persons, without limitation of any kind,
the tax structure and tax aspects of the transactions contemplated hereby, and
all materials of any kind (including opinions or other tax analyses) related to
such tax structure and tax aspects.
10.15 RELEASE OF COLLATERAL AND GUARANTEE OBLIGATIONS.
(a) Notwithstanding anything to the contrary contained herein
or in any other Loan Document, upon request of the Borrower in connection with
any Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents; provided that the
94
Borrower shall have delivered to the Administrative Agent, at least ten Business
Days prior to the date of the proposed release (or such shorter period agreed to
by the Administrative Agent), a written request for release identifying the
relevant Collateral being Disposed of in such Disposition and the terms of such
Disposition in reasonable detail, including the date thereof, the price thereof
and any expenses in connection therewith, together with a certification by the
Borrower stating that such transaction is in compliance with this Agreement and
the other Loan Documents and that the proceeds of such Disposition will be
applied in accordance with this Agreement and the other Loan Documents.
(b) Notwithstanding anything to the contrary contained herein
or any other Loan Document, when all Obligations (other than obligations in
respect of any Specified Hedge Agreement) have been paid in full, all
Commitments have terminated or expired and no Letter of Credit shall be
outstanding, upon request of the Borrower, the Administrative Agent shall
(without notice to, or vote or consent of, any Lender, or any affiliate of any
Lender that is a party to any Specified Hedge Agreement) take such actions as
shall be required to release its security interest in all Collateral, and to
release all guarantee obligations provided for in any Loan Document, whether or
not on the date of such release there may be outstanding Obligations in respect
of Specified Hedge Agreements. Any such release of guarantee obligations shall
be deemed subject to the provision that such guarantee obligations shall be
reinstated if after such release any portion of any payment in respect of the
Obligations guaranteed thereby shall be rescinded or must otherwise be restored
or returned upon the insolvency, bankruptcy, dissolution, liquidation or
reorganization of the Borrower or any Guarantor, or upon or as a result of the
appointment of a receiver, interim receiver, receiver-manger, intervenor or
conservator of, or trustee or similar officer for, the Borrower or any Guarantor
or any substantial part of its property, or otherwise, all as though such
payment had not been made.
(c) For purposes of this Agreement, a Letter of Credit shall
not be deemed outstanding if (i) the Loans, the Reimbursement Obligations and
the other Obligations under the Loan Documents shall have been paid in full and
the Commitments have been terminated and (ii) the Borrower has either supported
such Letter of Credit, on terms and conditions reasonably acceptable to the
Issuing Lender, with another letter of credit from a financial institution
reasonably acceptable to the Issuing Lender or provided such Issuing Lender with
cash collateral in a manner and an amount acceptable to the Issuing Lender. Each
Issuing Lender hereby acknowledges and agrees that if a Letter of Credit has
been supported with another letter or credit or cash collateralized as provided
in this Section, all obligations of the Lenders with respect to such Letters of
Credit shall have terminated, including the obligations of the Lenders to
purchase L/C Participations pursuant to Section 3.4 and the obligations of the
Lenders to make Revolving Loans pursuant to Section 2.4.
10.16 ACCOUNTING CHANGES. In the event that any "Accounting
Change" (as defined below) shall occur and such change results in a change in
the method of calculation of financial covenants, standards or terms in this
Agreement, then CERI, the Borrower and the Administrative Agent agree to enter
into negotiations in order to amend such provisions of this Agreement so as to
equitably reflect such Accounting Change with the desired result that the
criteria for evaluating CERI's and the Borrower's financial condition shall be
the same after such Accounting Change as if such Accounting Change had not been
made. Until such time as such an amendment shall have been executed and
delivered by CERI and the Borrower, the
95
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. "Accounting Change"
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or, if
applicable, the SEC.
10.17 DELIVERY OF LENDER ADDENDA. Each initial Lender shall
become a party to this Agreement by delivering to the Administrative Agent a
Lender Addendum duly executed by such Lender, the Borrower and the
Administrative Agent.
10.18 WAIVERS OF JURY TRIAL. CERI, THE BORROWER, THE ARRANGER,
THE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY
JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
10.19 SUBORDINATION OF INTERCOMPANY INDEBTEDNESS. CERI and the
Borrower agree that they will not, and will not permit any Loan Party to, become
obligated or otherwise liable for any intercompany Indebtedness that is owed to
any Group Member who is not a Guarantor, unless such Group Member agrees in
writing for the benefit of the Secured Parties that (a) such Indebtedness is
completely subordinated to the Obligations and subject in right of payment to
the prior payment in full of the Obligations, and (b) if an Event of Default has
occurred and is continuing, no payment on any such Indebtedness shall be made
until the payment in full in cash of the Obligations. If any payment on
intercompany Indebtedness is received by such Group Member prior to such time as
the Obligations are paid in full, then such Group Member shall receive and hold
the same in trust, as trustee, for the benefit of the Administrative Agent and
the other Secured Parties, and shall forthwith deliver the same to the
Administrative Agent in precisely the form received (except for the endorsement
or assignment of such Group Member where necessary or advisable in the
Administrative Agent's reasonable judgment) for application to any of the
Obligations, due or not due, and, until so delivered, the same shall be
segregated from the other assets of such Group Member and held in trust by such
Group Member as the property of the Administrative Agent for the benefit of the
Secured Parties.
10.20 JUDGMENT CURRENCY. (a) If, for the purpose of obtaining
or enforcing judgment against a Loan Party in any court in any jurisdiction, it
becomes necessary to convert into any other currency (such other currency being
hereinafter in this Section 10.20 referred to as the "Judgment Currency") an
amount due under any Loan Document in any currency (the "Obligation Currency")
other than the Judgment Currency, the conversion shall be made at the rate of
exchange prevailing on the Business Day immediately preceding the date of actual
payment of the amount due, in the case of any proceeding in the courts of the
State of New York or in the courts of any other jurisdiction that will give
effect to such conversion being made on such date, or the date on which the
judgment is given, in the case of any proceeding in the courts of any other
jurisdiction (the applicable date as of which such conversion is made pursuant
to this Section 10.20 being hereinafter in this Section 10.20 referred to as the
"Judgment Conversion Date"); and (b) If, in the case of any proceeding in the
court of any
96
jurisdiction referred to in Section 10.20(a), there is a change in the rate of
exchange prevailing between the Judgment Conversion Date and the date of actual
receipt of the amount due in immediately available funds, the Loan Party shall
pay such additional amount (if any, but in any event not a lesser amount) as may
be necessary to ensure that the amount actually received in the Judgment
Currency, when converted at the rate of exchange prevailing on the date of
payment, will produce the amount of the Obligation Currency which could have
been purchased with the amount of the Judgment Currency stipulated in the
judgment or judicial order at the rate of exchange prevailing on the Judgment
Conversion Date. Any amount due from Borrower under this Section 10.20 shall be
due as a separate debt and shall not be affected by judgment being obtained for
any other amounts due under or in respect of any of the Loan Documents. The term
"rate of exchange" in this Section 10.20 means the rate of exchange at which the
Administrative Agent, on the relevant date at or about 12:00 noon (New York
time), would be prepared to sell, in accordance with its normal course foreign
currency exchange practices, the Obligation Currency against the Judgment
Currency.
97
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
CAPITAL ENVIRONMENTAL
RESOURCE INC./RESSOURCES
ENVIRONNEMENTALES CAPITAL
INC
By: /s/ Xxxxxx X. Xxxxxx, III
-------------------------------------
Name: Xxxxxx X. Xxxxxx, III
Title: Executive Vice President,
General Counsel and Secretary
WASTE SERVICES, INC.
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Name: Xxxxx X. Xxxx
Title: President and Chief
Operating Officer
XXXXXX BROTHERS INC.,
as Arranger
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
XXXXXX COMMERCIAL PAPER INC.,
as Syndication Agent
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXX COMMERCIAL PAPER INC.,
as Administrative Agent
By: /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Authorized Signatory
98
