EXHIBIT 10.50F
FIRST AMENDMENT TO THE TERM LOAN AGREEMENT
This Amendment is made and entered into as of the 30th day of August,
2004, by and between XXXXX FARGO BANK, NATIONAL ASSOCIATION, successor to First
Security Bank ("Bank"), and AMERICAN ECOLOGY CORPORATION, a Delaware corporation
("Borrower").
R E C I T A L S
D. Borrower and Bank entered into a Term Loan Agreement, dated as
of October 28, 2002 (as amended, modified, or supplemented from time to time,
the "Loan Agreement").
E. Borrower has asked Bank to amend the Loan Agreement to modify
some of the financial covenants and authorize annual dividends to the Borrower's
stockholders.
F. Bank is willing to amend the Loan Agreement upon the terms and
conditions of this Amendment.
A M E N D M E N T
NOW, THEREFORE, the parties agree as follows.
DEFINITIONS.
Except as specifically defined otherwise in this Amendment, all of the
terms herein shall have the same meaning as contained in the Loan Agreement.
AMENDMENTS.
AMENDMENTS TO ARTICLE 6 - NEGATIVE COVENANTS.
SECTION 6.6 OF THE LOAN AGREEMENT IS AMENDED TO PERMIT THE
DECLARATION AND PAYMENT OF ANNUAL DIVIDENDS, AND THE SECTION SHALL PROVIDE IN
ITS ENTIRETY AS FOLLOWS:
6.6 DIVIDENDS. Without Bank's prior written consent,
Borrower shall not declare or pay any dividends; or purchase, redeem,
retire, or otherwise acquire for value any of its capital stock now or
hereafter outstanding; or make any distribution of assets to its
shareholders as such whether in cash, assets, or in obligations of the
Borrower; or allocate or otherwise set apart any sum for the payment
of any dividend or distribution on, or for the purchase, redemption,
or retirement of any shares of its capital stock; or make any other
distribution by reduction of capital or otherwise in respect of any
shares of its capital stock, except that the Borrower (1) may declare
and deliver dividends and make distributions payable solely in common
stock of the Borrower; (2) may purchase or otherwise acquire shares of
its capital stock by exchange for or out of the proceeds received from
a substantially concurrent issue of new shares of its capital stock;
and (3)
may declare and pay an annual dividend as long as on the date the
dividend is declared by Borrower, no Event of Default shall have
occurred and be continuing, no event or condition that, with the
giving of notice or the passage of time or both, would constitute an
Event of Default shall have occurred and be continuing, and the
payment of the dividend will not result in the occurrence of an Event
of Default.
AMENDMENTS TO ARTICLE 7 - FINANCIAL COVENANTS
SECTION 7.1 OF THE LOAN AGREEMENT IS AMENDED TO REPLACE THE
REQUIREMENT THAT BORROWER MAINTAIN A DEBT SERVICE COVERAGE RATIO WITH A
REQUIREMENT THAT BORROWER MAINTAIN A FIXED CHARGE COVERAGE RATIO, AND THE
SECTION SHALL PROVIDE IN ITS ENTIRETY AS FOLLOWS:
7.1 FIXED CHARGE COVERAGE RATIO. Borrower shall maintain a
ratio of EBITDA to Fixed Charges determined on a rolling 4-quarter
basis at the end of each quarter of Borrower's fiscal year of not less
than 1.20 to 1.00 for Borrower's 2004 and 2005 fiscal years and not
less than 1.25 to 1.00 thereafter. The term "EBITDA" shall mean, for
any period, as applied to Borrower, the sum of (1) Borrower's Income
from Operations (consistent with GAAP and as reported in the Company's
filings with the Securities and Exchange Commission), plus (2) the sum
of the following items to the extent they were deducted to compute
Borrower's Income from Operations: (a) non-cash accretion of
closure/post-closure obligations, plus (b) depreciation, plus (c)
amortization, plus (d) other noncash charges. The term "Fixed Charges"
shall mean, for any period, the sum of (i) principal and interest
payments for indebtedness of Borrower owing to third parties for money
borrowed, including capitalized leases of Borrower, paid or scheduled
to be paid during the period, plus (ii) all cash payments paid or
scheduled to be paid during the period for deferred closure/post
closure obligations, plus (iii) all of Borrower's capital expenditures
during the period, plus (iv) all dividends paid by Borrower during the
period.
SECTION 7.2 OF THE LOAN AGREEMENT IS AMENDED TO MODIFY THE
LEVERAGE RATIO TO BE MAINTAINED BY BORROWER BEGINNING AS OF SEPTEMBER 30, 2004,
AND THE SECTION SHALL PROVIDE IN ITS ENTIRETY AS FOLLOWS:
7.2 LEVERAGE RATIO. Borrower shall maintain a ratio of
Borrower's total liabilities to Borrower's shareholder's equity of not
greater than 1.00 to 1.00 at the end of each fiscal quarter and each
fiscal year.
SECTION 7.3 OF THE LOAN AGREEMENT IS AMENDED TO MODIFY THE
CURRENT RATIO TO BE MAINTAINED BY BORROWER BEGINNING AS OF SEPTEMBER 30, 2004,
AND THE SECTION SHALL PROVIDE IN ITS ENTIRETY AS FOLLOWS:
7.3 CURRENT RATIO. Borrower shall maintain at the end of
each fiscal quarter and each fiscal year a ratio of current assets to
current liabilities of at least 1.50 to 1.00 during Borrower's fiscal
year 2004 and at least 2.00 to 1.00 thereafter.
CONSENT TO COMMON STOCK REPURCHASE PLAN.
From September 1, 2004, through August 31, 2005, Borrower may purchase
shares of its common stock in an aggregate amount not to exceed $4,000,000, as
long as on the date of each purchase (1) no Event of Default shall have occurred
and be continuing, (2) no event or condition that, with the giving of notice or
the passage of time or both, would constitute an Event of Default shall have
occurred and be continuing, (3) the purchase will not result in the occurrence
of an Event of Default, and (4) the purchase does not violate any law.
CONDITIONS PRECEDENT.
As conditions precedent to Bank's obligation to extend the financial
accommodations provided for in this Amendment, Borrower shall execute and
deliver, or cause to be executed and delivered, to Bank, in form and substance
satisfactory to Bank and its counsel, the following:
EVIDENCE OF ALL CORPORATE ACTION BY BORROWER.
Certified copies of all corporate action taken by Borrower
authorizing its execution and delivery of this Amendment and each other document
to be delivered pursuant to this Amendment and its performance of its agreements
thereunder.
CERTIFICATES OF EXISTENCE.
Certificates of good standing or existence that Bank may
reasonably require showing that Borrower is in good standing under the laws of
the state of its incorporation.
PUBLIC RECORD SEARCHES.
Uniform Commercial Code financing statement searches, federal and
state income tax lien searches, judgment or litigation searches, or other
similar searches that Bank may reasonably require and in such form as Bank may
reasonably require.
ADDITIONAL DOCUMENTATION.
Such other approvals, opinions, or documents as Bank may
reasonably request.
REAFFIRMATION OF LOAN DOCUMENTS.
Borrower acknowledges and reaffirms all existing security agreements,
financing statements, and any other documents executed in connection with the
Loan Agreement.
BORROWER'S COVENANTS, REPRESENTATIONS, AND WARRANTIES.
In order to induce Bank to enter into this Amendment and to amend the
Loan Agreement in the manner provided herein, Borrower acknowledges and
reaffirms as true, correct, and complete in all material respects on and as of
the date of this Amendment all covenants,
representations, and warranties made by Borrower in the Loan Agreement and the
other Loan Documents to the same extent as though made on and as of the date of
execution of this Amendment.
Borrower represents and warrants that the execution, delivery,
and performance by the Borrower of this Amendment has been duly authorized by
all necessary corporate action.
Borrower further represents and warrants that there are no Events
of Default or facts which constitute, or with the passage of time and without
change will constitute, an Event of Default under the Loan Documents.
Borrower further represents that there has been no material
adverse change in Borrower's business or financial condition from that reflected
in the most recent of Borrower's financial statements that have been delivered
to Bank.
Borrower further represents and warrants that Borrower has no
claims or causes of action of any kind whatsoever against Bank or any of Bank's
present or former employees, officers, directors, attorneys, or agents of any
kind in their capacity as such (collectively, the "Released Parties") and
further, that the Released Parties have performed all of the respective
obligations under the Loan Agreement and other Loan Documents and have complied
with all provisions therein set forth.
Borrower acknowledges and agrees that as of August 27, 2004, the
outstanding principal balance of the Term Loans is $4,549,999.93.
COURSE OF DEALING.
No course of dealing heretofore or hereafter between Borrower and
Bank, or any failure or delay on the part of Bank in exercising any rights or
remedies under the Loan Agreement or existing by law shall operate as a waiver
of any right or remedy of Bank with respect to said indebtedness, and no single
or partial exercise of any right or remedy hereunder shall operate as a waiver
or preclusion to the exercise of any other rights or remedies Bank may have in
regard to said indebtedness.
GOVERNING LAW.
This Amendment is made in the State of Idaho, which state the parties
agree has a substantial relationship to the parties and to the underlying
transaction embodied hereby. Accordingly, in all respects, this Amendment and
the Loan Documents and the obligations arising hereunder and thereunder shall be
governed by, and construed in accordance with, the laws of the State of Idaho
applicable to contracts made and performed in such state and any applicable law
of the United States of America. Each party hereby unconditionally and
irrevocably waives, to the fullest extent permitted by law, any claim to assert
that the law of any jurisdiction other than the State of Idaho governs this
Amendment and the Loan Documents.
COSTS AND EXPENSES.
Borrower shall pay on demand by Bank all Bank Expenses incurred by
Bank in connection with the preparation, execution, delivery, filing, recording,
and administration of this Amendment or any of the documents contemplated
hereby, including, without limitation, the reasonable fees and out of pocket
expenses of counsel for Bank with respect to this Amendment and the documents
and transactions contemplated hereby.
ENTIRE AGREEMENT.
The Loan Agreement as amended by this Amendment together with the
other Loan Documents supersedes all prior negotiations, understandings, and
agreements between the parties, whether oral or written, and all such
negotiations, understandings, and agreements are evidenced by the terms of the
Loan Documents. The Loan Agreement may not be further altered or amended in any
manner except by a writing signed by Bank and Borrower.
EFFECTS OF THIS AMENDMENT.
This Amendment shall be binding and deemed effective when it is
executed by Borrower, accepted and executed by Bank, and all conditions
precedent set forth in Section 3 have been fulfilled. All terms, covenants and
conditions of the Loan Agreement that have not been modified, amended, or
otherwise changed by this Amendment are reaffirmed and remain in full force and
effect.
COUNTERPARTS.
This Amendment may be executed in counterparts and may be delivered by
facsimile transmission. Each such counterpart shall constitute an original, but
all such counterparts shall constitute but one Amendment.
Signature Pages Follow
IN WITNESS WHEREOF, Borrower has executed this Amendment as of the
date first written above.
BORROWER:
AMERICAN ECOLOGY CORPORATION
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Xx. Vice President and CFO
GUARANTOR'S CONSENT
Each Guarantor consents to, acknowledges, and accepts the forgoing
Amendment. Each Guarantor affirms and ratifies its Continuing and Unconditional
Guaranty made by Guarantor for the benefit of Bank (the "Guaranty"), and
confirms that the Guaranty remains in full force and effect and binding upon the
Guarantor without any setoffs, defenses, or counterclaims of any kind
whatsoever. Each Guarantor also acknowledges and reaffirms all existing
security agreements, financing statements, and any other documents the Guarantor
executed in connection with the Guaranty or the Loan Agreement.
Dated as of August 30, 2004.
GUARANTORS:
AMERICAN ECOLOGY SERVICES CORPORATION
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Xx. Vice President and CFO
AMERICAN ECOLOGY MANAGEMENT CORPORATION
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
TEXAS ECOLOGISTS, INC
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
AMERICAN ECOLOGY RECYCLE CENTER, INC.
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
AMERICAN ECOLOGY ENVIRONMENTAL SERVICES
CORPORATION
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
US ECOLOGY, INC.
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
US ECOLOGY IDAHO, INC.
By/s/ Xxxxx X. Xxxxxxxxxxx
------------------------
Xxxxx X. Xxxxxxxxxxx
Vice President and Treasurer
BANK'S ACCEPTANCE
Accepted and effective as of the 30th day of August, 2004, in the
State of Idaho.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By/s/ Xxxxx X. Xxxx
-----------------
Xxxxx X. Xxxx, Vice President
