Exhibit 10.1
AMENDMENT NO. 1 TO CREDIT AGREEMENT
Amendment No. 1 dated as of February 28, 2006 (this "FIRST
AMENDMENT") among SYNAGRO TECHNOLOGIES, INC., a Delaware corporation (the
"COMPANY"), the Lenders signatory hereto and BANK OF AMERICA, N.A., as
Administrative Agent for the Lenders (in such capacity, the "ADMINISTRATIVE
AGENT").
The Company, the lenders party thereto from time (each a
"LENDER" and, collectively, the "LENDERS"), the Administrative Agent, Xxxxxx
Commercial Paper, Inc., as Syndication Agent, and CIBC World Markets Corp., as
Documentation Agent, are parties to a Credit Agreement dated as of April 29,
2005 (the "CREDIT Agreement"). The Company has requested that the Lenders agree
to certain amendments to the Credit Agreement, and each of the Lenders signatory
hereto (which Lenders collectively constitute the Required Lenders referred to
in the Credit Agreement), have agreed, subject to the terms and conditions set
forth herein, to amend the Credit Agreement as herein provided. Accordingly, the
Company and the Lenders signatory hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01 DEFINITIONS. Unless otherwise defined herein, capitalized terms
defined in the Credit Agreement have the same meanings when used in this First
Amendment. The following additional term, as used herein, as the following
meaning:
"CONSENTING LENDER" means each Lender that consents to this
First Amendment on or prior to March 1, 2006, as evidenced by the receipt by
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel to the Administrative
Agent, of an executed counterpart signature page to this First Amendment from
such Lender prior to 5:00 P.M. (local time in New York City) on March 6, 2006.
ARTICLE II
AMENDMENTS TO THE CREDIT AGREEMENT
SECTION 2.01 AMENDMENTS TO THE CREDIT AGREEMENT.
(a) The definition of "Fixed Charge Coverage Ratio" in SECTION
1.01 of the Credit Agreement is hereby amended to read in full as follows:
"FIXED CHARGE COVERAGE RATIO" means, for any period, the ratio
of (i) Consolidated EBITDA less the aggregate amount of Consolidated
Capital Expenditures for such period (exclusive of Scheduled Capital
Expenditures and the portion of Consolidated Capital Expenditures
financed with (A) any Indebtedness, (B) any Qualifying Equity Issuance,
(C) the Net Cash Proceeds of Asset Dispositions received during such
period that are not required to be applied to repay Loans or cash
collateralize L/C Obligations pursuant to SECTION 2.09(B)(II) or (D) in
the case of Consolidated Capital Expenditures of Project Subsidiaries,
the portion thereof not exceeding, in the aggregate for all Project
Subsidiaries, the amount financed with Investments permitted under
SECTION 7.06(A)(XVI)) less the aggregate amount of Taxes paid in cash
during such period to (ii) Consolidated Fixed Charges for such period.
(b) The definition of "Transaction Expenses" in SECTION 1.01
of the Credit Agreement is hereby amended by inserting immediately after the
word "Transaction" therein the phrase:
or any amendment, waiver or modification of this Agreement (including,
without limitation, the First Amendment dated as of February 28, 2006)
(c) SECTION 7.16(A) of the Credit Agreement is hereby amended
to read in full as follows:
(a) LEVERAGE RATIO. The Leverage Ratio on the last day of each
fiscal quarter ended during any period or on any date set forth below
will not be greater than the ratio set forth below opposite such fiscal
quarter:
===========================================================================
FISCAL QUARTER ENDED LEVERAGE RATIO
---------------------------------------------------------------------------
6/30/05 through 12/31/05 4.50 to 1.0
---------------------------------------------------------------------------
3/31/06 through 6/30/06 4.75 to 1.0
---------------------------------------------------------------------------
9/30/06 through 3/31/07 4.90 to 1.0
---------------------------------------------------------------------------
6/30/07 4.75 to 1.0
---------------------------------------------------------------------------
9/30/07 through 12/31/07 4.50 to 1.0
---------------------------------------------------------------------------
3/31/08 through 6/30/08 4.25 to 1.0
---------------------------------------------------------------------------
9/30/08 and thereafter 4.00 to 1.0
===========================================================================
(d) SECTION 7.16(B) of the Credit Agreement is hereby amended
to read in full as follows:
(b) INTEREST COVERAGE RATIO. The Interest Coverage Ratio on
the last day of each fiscal quarter ending during any period or on any
date set forth below, in each case for the period of four consecutive
fiscal quarters of the Company then ending and taken as a single
accounting period, will not be less than the ratio set forth below
opposite such fiscal quarter:
===========================================================================
FISCAL QUARTER ENDED INTEREST COVERAGE RATIO
---------------------------------------------------------------------------
6/30/05 through 12/31/05 3.50 to 1.0
---------------------------------------------------------------------------
3/31/06 through 6/30/06 3.00 to 1.0
---------------------------------------------------------------------------
9/30/06 through 9/30/07 2.75 to 1.0
---------------------------------------------------------------------------
12/31/07 through 3/31/08 3.00 to 1.0
---------------------------------------------------------------------------
6/30/08 through 9/30/08 3.25 to 1.0
---------------------------------------------------------------------------
12/31/08 3.40 to 1.0
---------------------------------------------------------------------------
3/31/09 and thereafter 3.50 to 1.0
===========================================================================
(e) The initial parenthetical in the first sentence of SECTION
6.12(A) of the Credit Agreement and the parenthetical in the definition of
"Subsidiary Guarantor" in SECTION 1.01 of the Credit Agreement are each hereby
amended to read in full as follows:
(other than (i) Project Subsidiaries except to the extent not
prohibited by the terms of the instruments governing any Project
Non-Recourse Debt of such Project Subsidiary, (ii) Foreign
Subsidiaries, (iii) those Subsidiaries having limited or negligible
assets as of the Closing Date which are to be merged into, or
liquidated or dissolved and their residual assets distributed to, one
or more Loan Parties within 90 days after the Closing Date pursuant to
the Company's reorganization plan disclosed to the Administrative Agent
prior to the Closing Date and (iv)Synagro of Minnesota - Xxxxxxx, LLC,
Organi Gro, LLC and Soaring Vista Properties, LLC)
-2-
ARTICLE III
CONDITIONS; EFFECT OF AMENDMENT
SECTION 3.01 CONDITIONS TO EFFECTIVENESS OF THIS FIRST
AMENDMENT. This First Amendment, and the amendments contained herein, shall
become effective as of the date hereof on the date (the "FIRST AMENDMENT
EFFECTIVE DATE") when each of the following conditions precedent have been
fulfilled to the reasonable satisfaction of the Administrative Agent:
(a) EXECUTION AND DELIVERY OF THIS FIRST AMENDMENT. The
Company and the Required Lenders shall have signed a counterpart hereof (whether
the same or different counterparts) and shall have delivered (including by way
of facsimile transmission) the same to Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx,
LLP, One New York Plaza, 10004 Attention: Xxxxx Xxxxx (facsimile 000-000-0000.
(b) ACKNOWLEDGEMENT. The Administrative Agent shall have
received counterparts of an Acknowledgement and Agreement, substantially in the
form of EXHIBIT A hereto, duly executed by each of the Loan Parties (other than
the Company).
(c) FEES IN RESPECT OF FIRST AMENDMENT. The Company shall have
paid to the Administrative Agent for the account of each Consenting Lender a fee
equal to 7.5 basis points on each such Consenting Lender's Revolving Commitment
and on the aggregate outstanding principal amount of its Term B Loans on the
First Amendment Effective Date.
(d) COUNSEL FEES. The Administrative Agent shall have received
full payment from the Company of the fees and expenses of Fried, Frank, Harris,
Xxxxxxx & Xxxxxxxx LLP described in SECTION 10.04(A) of the Credit Agreement and
in SECTION 5.05 of this First Amendment which are billed through the First
Amendment Effective Date.
(e) OTHER. The Administrative Agent shall have received such
other documents, instruments, agreements or information as may be reasonably
requested by the Administrative Agent. All corporate and legal proceedings and
all instruments and agreements relating to the transactions contemplated by this
First Amendment or in any other document delivered in connection herewith shall
be reasonably satisfactory in form and substance to the Administrative Agent and
its counsel. The documents referred to in this Section shall be delivered to the
Administrative Agent no later than the First Amendment Effective Date.
SECTION 3.02 EFFECTS OF THIS FIRST AMENDMENT.
(a) On the First Amendment Effective Date, the Credit
Agreement will be automatically amended to reflect the amendments thereto
provided for in this First Amendment, with the amendment set forth in SECTION
2.01(D) above being retroactive to the Closing Date. On and after the First
Amendment Effective Date, the rights and obligations of the parties hereto shall
be governed by the Credit Agreement, as amended by this First Amendment. Once
the First Amendment Effective Date has occurred, all references to the Credit
Agreement in any document, instrument, agreement, or writing shall be deemed to
refer to the Credit Agreement as amended by this First Amendment. Promptly after
the First Amendment Effective Date occurs, the Administrative Agent shall notify
the Company and the Lenders of the First Amendment Effective Date, and such
notice shall be conclusive and binding on all parties hereto.
-3-
(b) Other than as specifically provided herein, this First
Amendment shall not operate as a waiver or amendment of any right, power or
privilege of the Administrative Agent or any Lender under the Credit Agreement
or any other Loan Document or of any other term or condition of the Credit
Agreement or any other Loan Document, nor shall the entering into of this First
Amendment preclude the Administrative Agent and/or any Lender from refusing to
enter into any further waivers or amendments with respect thereto. This First
Amendment is not intended by any of the parties hereto to be interpreted as a
course of dealing which would in any way impair the rights or remedies of the
Administrative Agent or any Lender except as expressly stated herein, and no
Lender shall have any obligation to extend credit to the Company other than
pursuant to the strict terms of the Credit Agreement and the other Loan
Documents, as amended or supplemented to date (including by means of this First
Amendment).
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01 REPRESENTATIONS AND WARRANTIES. In order to
induce the Lenders to consent to the amendments contained herein and to enter
into this First Amendment, the Company represents and warrants as set forth
below:
(a) Both immediately before and immediately after giving
effect to this First Amendment, the representations and warranties set forth in
ARTICLE V of the Credit Agreement and each other Loan Document are, in each
case, true and correct in all material respects (unless stated to relate solely
to an earlier date, in which case such representations and warranties shall be
true and correct in all material respects as of such earlier date).
(b) This First Amendment constitutes the legal, valid and
binding obligation of the Company enforceable in accordance with its terms,
subject to the effects of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
(c) The parties signatory to the Acknowledgment and Agreement
delivered pursuant to SECTION 3.01(B) of this First Amendment constitute all of
the Persons who (together with the Company) are or are required under the terms
of the Loan Documents to be Loan Parties.
ARTICLE V
MISCELLANEOUS
SECTION 5.01 HEADINGS. The various headings of this First
Amendment are inserted for convenience only and shall not affect the meaning or
interpretation of this First Amendment or any provisions hereof.
SECTION 5.02 EXECUTION IN COUNTERPARTS. This First Amendment
may be executed by the parties hereto in several counterparts, each of which
shall be deemed to be an original and all of which shall constitute together but
one and the same agreement. A counterpart hereof executed and delivered by
facsimile shall be effective as an original.
-4-
SECTION 5.03 SUCCESSORS AND ASSIGNS. This First Amendment
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns.
SECTION 5.04 GOVERNING LAW; ENTIRE AGREEMENT. THIS FIRST
AMENDMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE
GOVERNED BY AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE
GENERAL OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES. This First Amendment and the other Loan Documents constitute
the entire understanding among the parties hereto with respect to the subject
matter hereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 5.05 FEES AND EXPENSES. The Company agrees to pay all
reasonable out-of-pocket expenses incurred by the Administrative Agent in
connection with the preparation, negotiation, execution, delivery and
enforcement of this First Amendment and the other documents and instruments
referred to herein or contemplated hereby, including, but not limited to, the
fees and disbursements of Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx LLP, counsel
to the Administrative Agent.
SECTION 5.06 LOAN DOCUMENT PURSUANT TO CREDIT AGREEMENT. This
First Amendment is a Loan Document executed pursuant to the Credit Agreement and
shall be construed, administered and applied in accordance with all of the terms
and provisions of the Credit Agreement (and, following the date hereof, the
Credit Agreement, as amended hereby).
[Signature Pages Follow]
-5-
IN WITNESS WHEREOF, the signatories hereto have caused this
First Amendment to be executed by their respective officers thereunto duly
authorized as of the day and year first above written.
THE COMPANY: SYNAGRO TECHNOLOGIES, INC.
By: /S/ XXXXX X. XXXXXX, XX
------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Executive Vice President
ADMINISTRATIVE AGENT: BANK OF AMERICA, N.A.,
as Administrative Agent
By:
---------------------------------------
Name:
Title:
S-1
SIGNATURE PAGE TO AMENDMENT NO. 1 DATED AS OF FEBRUARY
LENDERS: 28, 2006 TO THE CREDIT AGREEMENT DATED AS OF APRIL 29,
2005 AMONG SYNAGRO TECHNOLOGIES, INC., THE LENDERS
PARTY THERETO FROM TIME, BANK OF AMERICA, N.A., AS
ADMINISTRATIVE AGENT, XXXXXX COMMERCIAL PAPER, INC., AS
SYNDICATION AGENT, AND CIBC WORLD MARKETS CORP., AS
DOCUMENTATION AGENT
BANK OF AMERICA, N.A., as Administrative Agent, for and
on behalf of the Required Lenders as provided in
Section 10.01 of the Credit Agreement
By:
---------------------------------------------------
Name:
Title:
S-2
Exhibit A
ACKNOWLEDGEMENT AND AGREEMENT
Each Loan Party listed below hereby acknowledges that it has
reviewed the First Amendment to the Credit Agreement to which this
Acknowledgement and Agreement is attached as an exhibit (the "AMENDMENT") and
hereby consents to the execution, delivery and performance thereof by the
Company. Each Loan Party hereby confirms its obligation under each Loan Document
to which it is a party and agrees that, after giving effect to the Amendment,
neither the modification of the Credit Agreement or any other Loan Document
effected pursuant to the Amendment, nor the execution, delivery, performance or
effectiveness of the Amendment or any other Loan Document impairs the validity
or effectiveness of any Loan Document to which it is a party or impairs the
validity, effectiveness or priority of the Liens granted pursuant to any other
Loan Document to which it is a party or by which it is otherwise bound. Each
Loan Party hereby further agrees that the Liens created pursuant to the Loan
Documents continue unimpaired with the same enforceability and priority to
secure repayment of all Loans and other obligations arising thereunder, whether
heretofore or hereafter incurred. Under the foregoing circumstances, the
position of the Administrative Agent and the Lenders with respect to such Liens,
the Collateral in which a security interest was granted pursuant to the Loan
Documents, and the ability of the Administrative Agent to enforce the provisions
of the Loan Documents and to realize upon such Liens pursuant to the terms of
the Loan Documents, have not been adversely affected in any material respect by
the modification of the Credit Agreement, the modification of any other Loan
Document effected pursuant to the Amendment or the execution, delivery,
performance or effectiveness of the Amendment.
ST INTERCO, INC.
By: /s/ Xxxxx X. Xxxxxx, XX
----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO DELAWARE, LLC
By: /S/ XXXXX X. XXXXXXXXXXX
-----------------------------------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: President
SYNAGRO CENTRAL, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO NORTHEAST, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO SOUTH, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO WEST, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO OF CALIFORNIA, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
EARTHWISE ORGANICS, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO-WWT, INC.
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
ENVIRONMENTAL PROTECTION &
IMPROVEMENT COMPANY, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
PROVIDENCE SOILS, LLC
By: SYNAGRO TECHNOLOGIES, INC.,
as Manager
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Executive Vice President
SYNAGRO TEXAS, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO OF TEXAS - CDR, INC.
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO MANAGEMENT, L.P.
By: SYNAGRO TEXAS, LLC
as General Partner
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO COMPOSTING COMPANY OF CALIFORNIA, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO-CONNECTICUT, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO-WCWNJ, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO WOONSOCKET, LLC
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
SYNAGRO-BALTIMORE L.L.C.
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
NETCO-WATERBURY, LIMITED PARTNERSHIP
By: SYNAGRO OF TEXAS-CDR, INC.
as General Partner
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
NEW HAVEN RESIDUALS, LIMITED PARTNERSHIP
By: SYNAGRO TEXAS-CDR, INC.
as General Partner
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
GRAND RAPIDS BIOSOLIDS PROCESSING COMPANY, LLC
By: SYNAGRO-WWT, INC.
as Operating Manager
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
NEW YORK ORGANIC FERTILIZER COMPANY
By: SYNAGRO SOUTH, LLC,
as Partner
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
By: SYNAGRO CENTRAL, LLC,
as Partner
By: /S/ XXXXX X. XXXXXX, XX
-----------------------------------------------
Name: Xxxxx X. Xxxxxx, XX
Title: Vice President
