1
EXHIBIT 10.50
Lease No. 001-5001733
FIRST SECURITY BANK, N.A.
LEASE SCHEDULE TO
MASTER EQUIPMENT LEASE AGREEMENT
CREDIT AGREEMENT
BETWEEN
FIRST SECURITY BANK, N.A.
AND
AMERICAN ECOLOGY CORPORATION
DATED
____________, 2000
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TABLE OF CONTENTS
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS.........................................1
1.1 DEFINED TERMS......................................................1
1.2 ACCOUNTING TERMS...................................................5
ARTICLE 2 - LOANS AND TERMS OF PAYMENT...............................................5
2.1 REVOLVING CREDIT...................................................5
2.1.1 MANNER OF REQUESTING......................................5
2.1.1.1 PRIME LOANS......................................5
2.1.1.2 LIBOR LOANS......................................5
2.1.2 INTEREST ON THE REVOLVING LOANS...........................5
2.1.3 REVOLVING NOTE............................................6
2.1.4 REPAYMENT.................................................6
2.1.5 COMMITMENT FEE............................................6
2.1.6 ORIGINATION FEE...........................................7
2.1.7 USE OF PROCEEDS OF REVOLVING LINE OF CREDIT...............7
2.2 LETTERS OF CREDIT..................................................7
2.2.1 APPLICATIONS..............................................7
2.2.2 FACILITY TERMINATION......................................7
2.2.3 FEES......................................................7
2.2.4 FORM......................................................7
2.2.5 REIMBURSEMENT.............................................7
2.2.6 REIMBURSEMENT OBLIGATIONS ABSOLUTE........................8
2.3 METHOD OF PAYMENT..................................................8
2.4 PREPAYMENTS........................................................8
2.5 LATE CHARGES AND DEFAULT INTEREST..................................8
2.6 ADDITIONAL INTEREST RATE PROVISIONS................................8
2.7 LIBOR LOAN EXTENSIONS AND CONVERSIONS..............................9
2.8 MINIMUM LIBOR LOAN REQUIREMENTS....................................9
2.9 FUNDING LOSS INDEMNIFICATION.......................................9
2.10 TAXES ON PAYMENTS..................................................9
2.11 GRANT OF SECURITY INTEREST........................................10
2.12 FINANCING STATEMENTS..............................................10
ARTICLE 3 - CONDITIONS PRECEDENT....................................................10
3.1 INITIAL ADVANCE...................................................10
3.1.1 REVOLVING NOTE...........................................10
3.1.2 SECURITY AGREEMENT.......................................10
3.1.3 GUARANTY.................................................10
3.1.4 GUARANTOR SECURITY AGREEMENTS............................10
3.1.5 EVIDENCE OF INSURANCE....................................10
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3.1.6 OPINION OF COUNSEL FOR BORROWER AND GUARANTOR............11
3.1.7 EVIDENCE OF ALL CORPORATE ACTION BY BORROWER.............11
3.1.8 CERTIFICATES OF EXISTENCE FOR BORROWER...................11
3.1.9 ARTICLES OF INCORPORATION AND BYLAWS OF BORROWER.........11
3.1.10 EVIDENCE OF ALL CORPORATE ACTION BY GUARANTOR............11
3.1.11 CERTIFICATES OF EXISTENCE FOR GUARANTOR..................11
3.1.12 ARTICLES OF INCORPORATION AND BYLAWS OF GUARANTOR........11
3.1.13 CERTIFICATES OF ASSUMED BUSINESS NAME....................11
3.1.14 LETTER TO ACCOUNTANTS....................................11
3.1.15 PUBLIC RECORD SEARCHES...................................11
3.1.16 PAYMENT OF ORIGINATION FEE...............................11
3.1.17 ADDITIONAL DOCUMENTS.....................................12
3.2 ALL ADVANCES......................................................12
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES..........................................12
4.1 ORGANIZATION, GOOD STANDING, AND DUE QUALIFICATION................12
4.2 POWER AND AUTHORITY...............................................12
4.3 LEGALLY ENFORCEABLE AGREEMENT.....................................12
4.4 FINANCIAL STATEMENTS..............................................13
4.5 LABOR DISPUTES AND CASUALTIES.....................................13
4.6 OTHER AGREEMENTS..................................................13
4.7 NO LITIGATION.....................................................13
4.8 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS....................13
4.9 OWNERSHIP AND LIENS...............................................13
4.10 EMPLOYEE BENEFITS.................................................13
4.11 OPERATION OF BUSINESS.............................................14
4.12 TAXES.............................................................14
4.13 DEBT..............................................................14
4.14 ENVIRONMENTAL MATTERS.............................................14
4.15 INVESTMENT COMPANY ACT............................................14
4.16 PERFECTION OF SECURITY INTEREST...................................14
4.17 SUBSIDIARIES AND OWNERSHIP OF STOCK...............................15
ARTICLE 5 - AFFIRMATIVE COVENANTS...................................................15
5.1 MAINTENANCE OF EXISTENCE..........................................15
5.2 MAINTENANCE OF RECORDS............................................15
5.3 MAINTENANCE OF PROPERTIES.........................................15
5.4 CONDUCT OF BUSINESS...............................................15
5.5 MAINTENANCE OF INSURANCE..........................................15
5.6 COMPLIANCE WITH LAWS..............................................15
5.7 RIGHT OF INSPECTION...............................................16
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5.8 REPORTING REQUIREMENTS............................................16
5.8.1 ANNUAL FINANCIAL STATEMENTS..............................16
5.8.2 BORROWING BASE CERTIFICATE...............................16
5.8.3 MANAGEMENT LETTERS.......................................16
5.8.4 NOTICE OF LITIGATION.....................................16
5.8.5 NOTICE OF DEFAULTS AND EVENTS OF DEFAULT.................16
5.8.6 ERISA REPORTS............................................16
5.8.7 REPORTS TO OTHER CREDITORS...............................16
5.8.8 SEC REPORTS..............................................17
5.8.9 COMPLIANCE CERTIFICATE...................................17
5.8.10 GENERAL INFORMATION......................................17
5.9 ENVIRONMENT.......................................................17
5.10 REIMBURSEMENT OF LENDER EXPENSES..................................17
5.11 BANK ACCOUNTS.....................................................17
ARTICLE 6 - NEGATIVE COVENANTS......................................................17
6.1 LIENS.............................................................17
6.2 DEBT..............................................................18
6.3 MERGERS OR REORGANIZATION.........................................18
6.4 LEASES............................................................18
6.5 SALE AND LEASEBACK................................................19
6.6 DIVIDENDS.........................................................19
6.7 SALE OF ASSETS....................................................19
6.8 INVESTMENTS.......................................................19
6.9 GUARANTIES........................................................19
6.10 ERISA PLANS.......................................................19
6.11 TRANSACTIONS WITH AFFILIATES......................................19
6.12 CHANGE OF NAME....................................................19
6.13 CHANGE IN MANAGEMENT..............................................20
6.14 ACCOUNTING........................................................20
6.15 LOCATION OF CHIEF EXECUTIVE OFFICE................................20
ARTICLE 7 - FINANCIAL COVENANTS.....................................................20
7.1 DEBT SERVICE COVERAGE RATIO.......................................20
7.2 LEVERAGE RATIO....................................................20
7.3 CURRENT RATIO.....................................................20
ARTICLE 8 - EVENTS OF DEFAULT.......................................................20
8.1 EVENTS OF DEFAULT.................................................20
8.2 CURE OF EVENT OF DEFAULT..........................................20
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ARTICLE 9 - BANK'S RIGHTS AND REMEDIES..............................................22
9.1 SPECIFIC REMEDIES.................................................22
9.2 SET OFF...........................................................22
9.3 CUMULATIVE REMEDIES...............................................22
ARTICLE 10 - MISCELLANEOUS..........................................................22
10.1 AMENDMENTS, ETC...................................................22
10.2 NOTICES, ETC......................................................22
10.3 NO WAIVER.........................................................23
10.4 SUCCESSORS AND ASSIGNS............................................23
10.5 INTEGRATION.......................................................23
10.6 APPLICATION OF PAYMENTS...........................................23
10.7 CONTINUING WARRANTIES, REPRESENTATIONS AND COVENANTS..............23
10.8 INDEMNITY.........................................................24
10.9 CHOICE OF LAW AND VENUE...........................................24
10.10 SEVERABILITY OF PROVISIONS........................................24
10.11 HEADINGS..........................................................24
10.12 JURY TRIAL WAIVER.................................................24
10.13 DESTRUCTION OF BORROWER'S DOCUMENTS...............................24
10.14 PARTICIPATIONS....................................................24
10.15 EFFECTIVE DATE....................................................25
10.16 COUNTERPARTS......................................................25
EXHIBITS TO CREDIT AGREEMENT
EXHIBIT NO. EXHIBIT DESCRIPTION
----------- -------------------
2.1.1.1 AUTHORIZED PERSONS
2.1.1.2 LIBOR LOAN REQUEST FORM
2.1.3 FORM OF REVOLVING NOTE
3.1.2 FORM OF SECURITY AGREEMENT
3.1.3 FORM OF CONTINUING AND UNCONDITIONAL GUARANTY
3.1.4 FORM OF GUARANTOR SECURITY AGREEMENT
3.1.6 FORM OF OPINION OF COUNSEL FOR BORROWER AND GUARANTORS
3.1.9 FORM OF LETTER TO ACCOUNTANTS
4.13 DEBT
4.17 SUBSIDIARIES
5.8.2 FORM OF BORROWING BASE CERTIFICATE
6.1 PERMITTED LIENS
6.10 ERISA PLANS
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is entered into as of the ___ day of August,
2000, between FIRST SECURITY BANK, N.A. ("Bank") and AMERICAN ECOLOGY
CORPORATION, a Delaware corporation ("Borrower").
The parties agree as follows:
AGREEMENT
ARTICLE 1 - DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINED TERMS.
As used in this Agreement, the following terms shall have the following
definitions (terms defined in the singular to have the same meaning when used in
the plural and vice versa):
"ACCOUNT" means a trade account, account receivable, or other right to
payment for goods sold or leased or for services rendered (whether or not it has
been earned by performance) owing to Borrower.
"ACCOUNT DEBTOR" means the person or entity obligated on an Account.
"ADJUSTED LIBOR INTEREST RATE" means the rate per annum equal to the
quotient of (i) the London Interbank Offered Rate divided by (ii) one (1) minus
the Eurocurrency Reserve Requirement for the applicable Interest Period, rounded
upward, if necessary, to the nearest one-sixteenth of one percent. "Eurocurrency
Reserve Requirement" means, for any LIBOR Loan for any Interest Period therefor,
the daily average of the stated maximum rate (expressed as a decimal) at which
reserves (including any marginal, supplemental, or emergency reserves) are
required to be maintained by Bank during such Interest Period under Regulation D
of the Board of Governors of the Federal Reserve System, as amended or
supplemented from time to time, against "Eurocurrency Liabilities" (as such term
is used in Regulation D) but without benefit or credit of proration, exemptions,
or offsets that might otherwise be available to Bank from time to time under
Regulation D. Without limiting the effect of the foregoing, the Eurocurrency
Reserve Requirement shall reflect any other reserves required to be maintained
by Bank against (i) any category of liabilities that includes deposits by
reference to which the Adjusted LIBOR Interest Rate for LIBOR Loans is to be
determined; or (ii) any category of extension of credit or other assets that
include LIBOR Loans.
"AFFILIATE" means any Person (1) who directly or indirectly controls,
or is controlled by, or is under common control with the Borrower; (2) who
directly or indirectly beneficially owns or holds five percent (5%) or more of
any class of voting stock of the Borrower; or (3) five percent (5%) or more of
the voting stock of which is directly or indirectly beneficially owned or held
by the Borrower. The term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract, or otherwise.
"AGREEMENT" means this Credit Agreement, as amended, supplemented, or
modified from time to time.
"BANK" means First Security Bank, N.A., its successors and assigns.
"BORROWER" means American Ecology Corporation, a Delaware corporation.
"BORROWING BASE" means eighty percent (80%) of the aggregate amount of
Eligible Accounts.
"BUSINESS DAY" means a day other than Saturday or Sunday and a day on
which commercial banks are required to be open for business in Boise, Idaho,
under the laws of the state of Idaho, and, if the applicable day relates to a
LIBOR Loan, Interest Period, or notice with respect to a LIBOR Loan, a day on
which dealings in Dollar deposits are also carried on in the London Interbank
market and banks are open for business in London.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the regulations and published interpretations thereof.
"COLLATERAL" means and includes, without limitation, all property and
assets granted as collateral security for an Obligation, whether real or
personal property, whether granted directly or indirectly, whether granted now
or in the future, and whether granted in the form of a security interest,
mortgage, deed of trust, assignment, pledge, chattel mortgage, chattel trust,
factor's lien, equipment trust, conditional sale, trust receipt, lien, charge,
lien or
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title retention contract, lease or consignment intended as a security device, or
any other security or lien interest whatsoever, whether created by law,
contract, or otherwise. The Collateral includes, without limitation, all of
Borrower's and each Guarantor's now owned or hereafter acquired Accounts.
"COMMITMENT AMOUNT" means Five Million Dollars ($5,000,000).
"COMMONLY CONTROLLED ENTITY" means an entity, whether or not
incorporated, that is under common control with a Borrower within the meaning of
Section 414(b) or 414(c) of the Code.
"ELIGIBLE ACCOUNT" means an Account, excluding all of the following:
(a) Accounts that remain uncollected more than ninety (90)
days from the invoice date ("Delinquent Accounts").
(b) Accounts due from an Account Debtor that has suffered a
business failure or the termination of its existence, or as to which a
dissolution, insolvency or bankruptcy proceeding has been commenced, any
assignment for the benefit of creditors has been made, or a trustee, receiver or
conservator has been appointed for all or any part of the property of such
Account Debtor.
(c) Accounts due from an Account Debtor affiliated with
Borrower in any manner, including, without limitation, as stockholder, owner,
officer, director, agent or employee.
(d) Accounts with respect to which payment is or may be
conditional.
(e) Accounts due from an Account Debtor who is not a resident
or citizen of, located in, or subject to service of process in, the United
States of America, except to the extent such Accounts are supported by
insurance, bonds or other assurances satisfactory to Bank.
(f) Accounts with respect to which goods are placed on
consignment, guaranteed sale, or other terms by reason of which the payment by
the Account Debtor may be conditional.
(g) Accounts due from an Account Debtor that is any national,
federal or state government, including, without limitation, any instrumentality,
division, agency, body or department thereof, except where such Account Debtor
has agreed to make payment directly to the Bank.
(h) Accounts commonly known as "xxxx and hold" or similar
arrangement.
(i) Accounts due from an Account Debtor as to which ten
percent (10%) or more of the aggregate dollar amount of all outstanding accounts
owing from such Account Debtor are Delinquent Accounts.
(j) That portion of Accounts due from an Account debtor that
is in excess of ten percent (10%) of Borrower's aggregate dollar amount of all
outstanding accounts.
(k) Accounts as to which Borrower is or may become liable to
the Account Debtor for any reason.
(l) Accounts that are not free of all liens, encumbrances,
charges, rights and interest of any kind, except in favor of Lender.
(m) Accounts that are supported or represented by chattel
paper or an instrument, unless such instrument or chattel paper is endorsed and
actually delivered to Bank and Bank shall have specifically agreed to include
the current payment due under the instrument or chattel paper as an Eligible
Account.
(n) Accounts with respect to which the Account Debtor is
located in any state denying creditors access to its courts in the absence of a
Notice of Business Activities Report or other similar filing, unless Borrower
has either qualified as a foreign corporation authorized to transact business in
such state or has filed a Notice of Business Activities Report or similar filing
with the applicable state agency for the then current year.
"ENVIRONMENTAL LAWS" shall mean and include, without limitation, the
Resource Conversation and Recovery Act of 1976 (RCRA), 42 USC Sections 6901 et.
seq., the Comprehensive Environmental Response, Compensation and Liability Act
of 1980 (CERCLA) 42 USC Sections 9601-9657, as amended by the Superfund
Amendments and Reauthorization Act of 1986 (XXXX), the Hazardous Materials
Transportation Authorization Act of 1994, 49 USC Sections 5101 et. seq., the
Federal Water Pollution Control Act, 33 USC Sections 1251 et. seq., the Clean
Air Act, 42 USC Sections 741 et. seq., the Clean Water Act, 33 USC Section 7401,
the Toxic Substances Control Act, 15 USC Sections 2601-2629, the Safe Drinking
Water Act, 42 USC Sections 300f-300j, and all amendments thereto, and legally
enforceable rules, regulations, orders, and decrees promulgated thereunder, and
any other local, state and/or federal laws, rules,
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regulations and ordinances, whether currently in existence or hereafter enacted,
that govern, to the extent applicable to Borrower's businesses, properties and
assets: (a) the existence, cleanup and/or remedy of contamination on property;
(b) the protection of the environment from soil, air or water pollution, or from
spilled, deposited or otherwise emplaced contamination; (c) the emission or
discharge of Hazardous Substances into the environment; (d) the control of
Hazardous Substances; or (e) the use, generation, transport, treatment, removal
or recovery of Hazardous Substances.
"ERISA" means the Employment Retirement Income Security Act of 1974, as
the same may be amended or supplemented from time to time, including any
regulations issued in connection therewith.
"EVENT OF DEFAULT" means the occurrence of any of the events set forth
in Article 9 of this Agreement.
"GAAP" means the generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and the statements and
pronouncements of the Financial Accounting Standards Board that are applicable
to the circumstances as of the date of determination consistently applied.
"GUARANTOR" means, jointly and severally, US Ecology, Inc., a
California corporation, Texas Ecologists, Inc., a Texas corporation, American
Ecology Recycle Center, Inc., a Delaware corporation, American Ecology
Environmental Services Corporation, a Texas corporation, American Ecology
Management Corporation, a Delaware corporation, American Ecology International,
Inc., a Delaware corporation, American Ecology Services Corp., a Delaware
corporation, Transtec Environmental, Inc., an Ohio corporation, Nuclear
Equipment Services Center, Inc., a Delaware corporation, and American Liability
and Excess Insurance Company, a Vermont corporation.
"GUARANTY" means any guaranty of the Obligations executed by a
Guarantor.
"HAZARDOUS SUBSTANCE" means (a) any oil, petroleum products, flammable
substance, explosives, radioactive materials, hazardous wastes or substances,
toxic wastes or substances or any other wastes, materials or pollutants that (i)
pose a hazard to Borrower's owned or leased real property or to persons on or
about such real property or (ii) cause Borrower's owned or leased real property
to be in violation of any Environmental Laws; (b) asbestos in any form that is
or could become friable, urea formaldehyde foam insulation, transformers or
other equipment that contain dielectric fluid containing regulated levels of
polychlorinated biphenyls, or radon gas; (c) any chemical, material or substance
defined as or included in the definition of "toxic waste," "hazardous
substances," "hazardous wastes," "hazardous materials," "extremely hazardous
waste," "restricted hazardous waste," or "toxic substances" or words of similar
import under any Environmental Laws; (d) any other chemical, material or
substance, exposure to which is prohibited, limited or regulated by any
governmental authority or agency or may or could pose a hazard to the health and
safety of the occupants of Borrower's owned or leased real property or the
owners and/or occupants of property adjacent to or surrounding such real
property or any other person coming upon such real property or adjacent
property; and (e) any other chemical, materials or substance that may or could
pose a hazard to the environment and are or become subject to regulation by any
Environmental Laws.
"INTEREST PERIOD" means with respect to any LIBOR Loan, the period
commencing on the date such loan is made and ending, as the Borrower may select,
pursuant to this Agreement, on the numerically corresponding day in the first,
second, third or sixth calendar month thereafter, except that each such Interest
Period that commences on the last Business Day of a calendar month (or on any
day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the appropriate
subsequent calendar month; provided that if an Interest Period would end on a
day that is not a Business Day, such Interest Period shall be extended to the
next Business Day unless such Business Day would fall in the next calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day.
"LENDER EXPENSES" means all costs and expenses reasonably incurred by
Bank in connection with the preparation, negotiation, execution, delivery,
filing, and administration of the Loan Documents, and of any amendment,
modification, extension, renewal or supplement to the Loan Documents, including,
without limitation, the fees and out-of-pocket expenses of counsel for Bank,
incurred in connection with advising Bank as to its rights and responsibilities
hereunder and structuring, drafting, reviewing, amending, or otherwise involving
the Loan Documents, and all costs and expenses, including court costs, incurred
in connection with enforcement of the Loan Documents, or any amendment,
modification, or supplement thereto, whether by negotiation, legal proceedings,
or otherwise.
"LETTER OF CREDIT" has the meaning set forth in Section 2.2, but
specifically excludes the Term Standby Letter of Credit.
"LETTER OF CREDIT COMMITMENT" means Bank's commitment to issue letters
of credit from time to time in accordance with Section 2.2 of this Agreement.
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"LETTER OF CREDIT COMMITMENT AMOUNT" means Three Million Dollars
($3,000,000), less the amount of the outstanding principal balance of the
Revolving Loans in excess of Two Million Dollars ($2,000,000).
"LIBOR LOAN" means any loan under this Agreement bearing interest at a
rate based upon Adjusted LIBOR Interest Rate.
"LIEN" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment, deposit arrangement, encumbrance, lien (statutory or
other), or preference, priority, or other security agreement or preferential
arrangement, charge, or encumbrance of any kind or nature whatsoever (including,
without limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction to evidence any of the
foregoing).
"LOAN" means a Revolving Loan.
"LOAN DOCUMENTS" means collectively this Agreement, any note executed
by Borrower to the order of Bank and any other agreements or documents, whether
now or hereafter existing, executed or delivered in connection with this
Agreement or any amendment thereto, and any amendments, supplements,
modifications, renewals, extensions, or refundings of any of the foregoing
documents.
"LONDON INTERBANK OFFERED RATE" means for any Interest Period for a
LIBOR Loan the lowest rate per annum quoted by Barclays, Tokyo/Mitsubishi, and
Banker's Trust at approximately 11:00 a.m. London time appearing on the Reuters
LIBOR page screen two Business Days prior to the first day of such Interest
Period for the offering to leading banks in the London interbank market of
dollar deposits for a period and an amount comparable to the Interest Period and
principal amount of the LIBOR Loan that shall be made by Bank and outstanding
during the Interest Period.
"MATURITY DATE" means August 30, 2002, or such other date as Bank and
Borrower may agree upon in writing from time to time.
"MULTIEMPLOYER PLAN" means a Plan described in Section 4001(a)(3) of
ERISA.
"OBLIGATIONS" means any and all loans, lines of credit, advances,
letter of credit obligations, debts, overdrafts, liabilities, indebtedness,
lease payments, guaranties, covenants, and duties owing by Borrower to Bank of
any kind and description (whether advanced pursuant to or evidenced by the Loan
Documents or any other instrument or agreement between Bank and Borrower), any
debt, liability, or obligation owing by Borrower to others that Bank may have
obtained by assignment or otherwise, any interest not paid when due, all Lender
Expenses, and all renewals, extensions, and modifications of the foregoing, or
any part thereof, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising.
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERMITTED LIENS" shall have the meaning assigned to such term in
Section 6.1 of this Agreement.
"PERSON" means an individual, partnership, corporation, business trust,
joint stock company, trust, unincorporated association, joint venture,
governmental authority, or other entity of whatever nature.
"PLAN" means any pension plan that is covered by Title IV of ERISA and
in respect of which any Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3(5) of ERISA.
"PRIME LOAN" means any loan under this Agreement bearing interest at a
rate based upon the Prime Rate.
"PRIME RATE" means the Bank's announced rate of interest referred to as
its prime rate used as a reference point from which the cost of credit to
customers may be calculated. The Prime Rate is subject to change from time to
time. The Prime Rate is not intended to be the lowest rate of interest charge by
the Bank to its borrowers, and Bank may make loans to other Persons bearing
interest at, above, or below the Prime Rate.
"PROHIBITED TRANSACTION" means any transaction set forth in Section 406
of ERISA or Section 4975 of the Code.
"REPORTABLE EVENT" means any of the events set forth in Section 4043 of
ERISA.
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"REVOLVING LOANS" shall have the meaning assigned to such term in
Section 2.1 of this Agreement.
"REVOLVING NOTE" means the promissory note described in Subsection
2.1.3.
"SECURITY AGREEMENT" means the Security Agreement to be delivered to
Bank by the Borrower pursuant to Subsection 3.1.2 of this Agreement.
"SUBSIDIARY" means, as to the Borrower, a corporation of which shares
of stock having ordinary voting power (other than stock 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 are at the time owned, or the
management of which is otherwise controlled, directly, or indirectly through one
or more intermediaries, or both, by the Borrower.
1.2 ACCOUNTING TERMS.
All accounting terms not specifically defined in this Agreement shall
be construed in accordance with GAAP consistent with those applied in the
preparation of the financial statements referred to in Section 4.4, and all
financial data submitted pursuant to this Agreement shall be prepared in
accordance with GAAP.
ARTICLE 2 - LOANS AND TERMS OF PAYMENT
2.1 REVOLVING CREDIT.
Upon the request of Borrower, made at any time and from time to time
from the date hereof until the Maturity Date, and so long as no Event of Default
has occurred, Bank shall make loans (the "Revolving Loans") to Borrower in an
aggregate principal amount not to exceed at any time outstanding the lesser of
(i) the Borrowing Base or (ii) the Commitment Amount. Subject to the terms of
this Agreement, loans made by Bank may be repaid and reborrowed, up to and
including the Maturity Date. If at any time and for any reason the amount of
advances made pursuant to this Section exceed the above dollar limitation, then
Borrower, upon Bank's election and demand, shall immediately pay to Bank in cash
the amount of such excess.
2.1.1 MANNER OF REQUESTING.
2.1.1.1 PRIME LOANS. Except for Sweep Loans
described below, Bank is authorized to make a Prime Revolving Loan upon written
or, at the discretion of Bank, telephonic instructions received from any person
purporting to be a person identified in the attached EXHIBIT 2.1.1.1 or such
other persons as Borrower may from time to time designate in writing to Bank.
Upon receipt of such instructions and fulfillment of the applicable conditions
set forth in Article 3, Bank shall make the Revolving Loan to Borrower by
crediting the amount thereof to the Borrower's account with Bank. Subject to the
terms hereof, Bank shall make Prime Revolving Loans to Borrower in an amount
equal to the amount by which the amount of checks clearing any designated
disbursement bank account that Borrower may now or hereafter have with Bank
exceeds the amount of collected funds in the disbursement account's related
depository bank account that Borrower may now or hereafter have with Bank
("Sweep Loans"). The existence of such an excess of clearing checks shall be
deemed to be a request by Borrower for any such Prime Revolving Loan. Each Sweep
Loan shall be a Revolving Loan and must satisfy all requirements for a Revolving
Loan.
2.1.1.2 LIBOR LOANS. For any Revolving Loan that is
to be a LIBOR Loan, the Borrower shall request such a Loan by delivering a LIBOR
Loan Request to Bank no later than 11:00 a.m. (Boise, Idaho time) at least two
(2) Business days prior to the requested date of the Loan. A LIBOR Loan Request
shall specify (a) the date of the requested Loan, (b) the amount of such Loan,
and (c) the requested duration of the Interest Period for the Loan, and shall be
in substantially the form of the attached EXHIBIT 2.1.1.2 executed by any person
purporting to be a person identified in Exhibit 2.1.1.1 or such other persons as
Borrower may from time to time designate in writing to Bank. If Bank determines
that the requested Loan is available and will comply with this Agreement, and if
no Event of Default has occurred and is continuing, Bank shall make the LIBOR
Loan to Borrower by crediting the amount thereof to the Borrower's account with
Bank.
2.1.2 INTEREST ON THE REVOLVING LOANS.
Each Revolving Loan shall be a Prime Loan or a LIBOR Loan, as
selected by Borrower in accordance with the terms of this Agreement.
2.1.2.1 Each Revolving Loan that is a Prime Loan
shall bear interest at a fluctuating per annum rate equal to the Prime Rate
increased by 0.75% during the first 6 months after the date of this Agreement
and thereafter increased by the applicable Prime Margin set forth below. Agent's
Prime Rate may change from time to time, and the interest payable will continue
to fluctuate at the rate as stated herein. Any changes to the Prime Rate shall
become effective without prior notice to Borrower on the date on which the Prime
Rate changes.
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2.1.2.2 Each Revolving Loan that is a LIBOR Loan
shall bear interest at a fluctuating per annum rate equal to the Adjusted LIBOR
Interest Rate for the applicable Interest Period, as quotes are available,
increased by 3.25% during the first 6 months after the date of this Agreement
and thereafter increased by the applicable LIBOR Margin set forth below. Any
changes to the LIBOR Margin shall not apply to LIBOR Loans outstanding or
requested on the date the LIBOR Margin is adjusted.
2.1.2.3 The Prime Margins, the LIBOR Margins, and the
Commitment Margins and the L/C fees are as follows:
FUNDED DEBT RATIO PRIME LIBOR COMMITMENT L/C FEE
less than 1.00:1.00 0.0% 2.50% 0.15% 1.25%
less than 2.00:1.00 but greater than or 0.25% 2.75% 0.25% 1.375%
equal to 1.00:1.00
less than 3.00:1.00 but greater than or 0.50% 3.00% 0.30% 1.50%
equal to 2.00:1.00
less than 4.00:1.00 but greater than or 0.75% 3.25% 0.40% 1.75%
equal to 3.00:1.00
greater than or equal to 4.00:1.00 1.00% 3.50% 0.50% 2.00%
2.1.2.4 The Prime Margin, LIBOR Margin, and
Commitment Margin shall be based upon the Borrower's Funded Debt Ratio (defined
in paragraph 2.1.2.5) determined on a rolling four quarter basis from the
Borrower's financial statements delivered to Bank and adjusted, if necessary, on
the first day of the second month after Bank's receipt of financial statements
that show an adjustment is necessary.
2.1.2.5 Borrower's Funded Debt Ratio shall be the
ratio of Borrower's Funded Debt to EBITDA. The term "Funded Debt" shall mean, as
of the date of determination as applied to Borrower, the sum of (i) all
indebtedness of Borrower owing to third parties for money borrowed, including
capitalized leases of Borrower having a final maturity of one (1) year or more
from the date of creation (including that portion of the principal of such
indebtedness due within one (1) year from the date of such determination), (ii)
any indebtedness of the Borrower having a final maturity within one (1) year
from such date which may be renewed or extended at the option of the Borrower
for more than one (1) year from such date, (iii) the outstanding balance of the
Revolving Loans, (iv) all obligations for the deferred purchase price of any
property or assets, including, without limitation, operating leases for such
purpose (excluding trade payables), and (v) all obligations of Borrower created
or arising with respect to property or assets acquired under any conditional
sales contract or other title retention agreement or incurred as financing, less
the amount of Borrower's short term investments as of the date of determination.
The term "EBITDA" shall mean, for any period, as applied to Borrower, the sum of
Borrower's earnings before (a) interest expense, (b) depreciation, (c)
dividends, (d) taxes, and (e) amortization.
2.1.3 REVOLVING NOTE.
All Revolving Loans made by the Bank under this Agreement
shall be evidenced by a single promissory note of the Borrower in the stated
principal amount of the Commitment Amount executed by Borrower substantially in
the form of EXHIBIT 2.1.3 (the "Revolving Note").
2.1.4 REPAYMENT.
Interest accrued on Prime Revolving Loans shall be paid on or
before the 10th day of each month in an amount equal to the interest accrued as
of the last day of the immediately preceding month. Interest accrued on LIBOR
Revolving Loans shall be paid on the last day of the Interest Period with
respect thereto and, in the case of an Interest Period greater than three months
(if such an Interest Period is permitted under this Agreement), at three month
intervals after the first day of such Interest Period. All outstanding principal
and accrued interest of the Revolving Loans shall be paid in full on the
Maturity Date.
2.1.5 COMMITMENT FEE.
The Borrower shall pay to the Bank a commitment fee on the
average daily unused portion of the Commitment Amount from the date of this
Agreement until the Maturity Date at the per annum rate of 0.40% during the
first 6 months after the date of this Agreement and thereafter at the per annum
rate of the Commitment Margin set forth in paragraph 2.1.2.3, payable in arrears
on the first Business Day of each of Borrower's fiscal quarter during the term
of such Bank's Commitment and on the Maturity Date.
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2.1.6 ORIGINATION FEE.
The Borrower shall pay Bank an origination fee for the
Revolving Loans in the amount of Ten Thousand Dollars ($10,000). The origination
fee shall be paid on the date of this Agreement. The origination fee shall
represent an unconditional payment to Bank in consideration of Bank's agreement
to extend financial accommodations to Borrower pursuant to this Agreement.
2.1.7 USE OF PROCEEDS OF REVOLVING LINE OF CREDIT.
The proceeds of the Revolving Line of Credit shall be used by
the Borrower to provide financing for Borrower's Accounts and other working
capital needs. The Borrower shall not, directly or indirectly, use any part of
such proceeds for the purpose of purchasing or carrying any margin stock within
the meaning of Regulation U of the Board of Governors of the Federal Reserve
System or to extend credit to any person for the purpose of purchasing or
carrying any such margin stock, or for any purpose that violates, or is
inconsistent with, Regulation X of such Board of Governors.
2.2 LETTERS OF CREDIT.
Subject to the terms and conditions of this Agreement, as a subfeature
of the Revolving Loans, Bank shall issue for the account of Borrower from time
to time until the Maturity Date such standby or commercial letters of credit to
be used by Borrower for general corporate purposes (individually a "Letter of
Credit" and collectively the "Letters of Credit") as Borrower may request under
this Section. Subject to the terms of this Agreement, Letters of Credit may be
drawn, reimbursed, or returned undrawn, as applicable, up to and including the
Maturity Date. At no time, however, shall the total face amount of the Letters
of Credit outstanding, less any partial draws under the Letters of Credit exceed
the Letter of Credit Commitment Amount.
2.2.1 APPLICATIONS.
Prior to issuance of each Letter of Credit, and in all events
prior to any daily cutoff time Bank may have established for purposes thereof,
Borrower shall deliver to Bank an executed standard form of application for
issuance of a letter of credit with such other documents, instruments and
agreements as Bank may reasonably require.
2.2.2 FACILITY TERMINATION.
The commitment by Bank to issue Letters of Credit shall,
unless earlier terminated in accordance with the terms of this Agreement,
automatically terminate on the Maturity Date. No Letter of Credit shall expire
on a date that is after the Maturity Date without Bank's prior written approval.
2.2.3 FEES.
Borrower shall pay Bank, on demand, Bank's standard fees for
issuing or administering a commercial Letter of Credit. With respect to each
standby Letter of Credit, Borrower shall pay Bank a fee equal to the L/C Fee
(set forth in paragraph 2.1.2.3) per annum of the face amount of the Letter of
Credit, payable quarterly in advance, except that during the first 6 months
after the date of this Agreement the fee shall be equal to 1.75% per annum of
the face amount of the Letter of Credit.
2.2.4 FORM.
Each Letter of Credit shall be subject to the terms and
conditions of the application and agreement submitted to Bank by Borrower and
otherwise in form and substance reasonably satisfactory to Bank and in favor of
beneficiaries reasonably satisfactory to Bank. Bank may, in its reasonable
discretion, refuse to issue a Letter of Credit due to the nature of the
transaction or its terms or in connection with any transaction where Bank, due
to the beneficiary or the nationality or residence of the beneficiary, would be
prohibited by any applicable law, regulation or order from issuing such Letter
of Credit. In all cases, however, the Bank shall use its best efforts to issue a
Letter of Credit reasonably acceptable to Bank and Borrower.
2.2.5 REIMBURSEMENT.
Immediately after the payment by Bank of any drawing under any
Letter of Credit (a "Drawing Payment") and not later than 12:00 noon (Boise,
Idaho time) on the date of such Drawing Payment, Borrower shall make or cause to
be made a payment in the amount of such Drawing Payment (a "Reimbursement
Payment") to Bank. Borrower may, to the extent Revolving Loans then are
available under this Agreement, make any Reimbursement Payment with the proceeds
of a Revolving Loan. Bank may, if it so elects (but shall have no obligation
to), treat any Drawing Payment as a Prime Loan. The right of Bank to treat a
Drawing Payment as a Prime Loan shall not be
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affected by the occurrence or existence of any Event of Default, the failure of
Borrower to satisfy any conditions precedent to a Loan, or any other
circumstance or condition.
2.2.6 REIMBURSEMENT OBLIGATIONS ABSOLUTE.
The obligation of Borrower to reimburse Bank for Drawing
Payments (such obligation referred to as a "Reimbursement Obligation") shall be
absolute, unconditional and irrevocable, and shall be performed strictly in
accordance with the terms of this Agreement and any Letter of Credit agreement.
2.3 METHOD OF PAYMENT.
All payments shall be made to Bank at its Corporate Banking office in
Boise, Idaho in lawful money of the United States in immediately available
funds. Bank shall send Borrower a monthly statement of the amount of interest
accrued during the preceding month. No checks, drafts, or other instruments
received by Bank purportedly in satisfaction of any of the Obligations shall
constitute payment thereof unless and until such instruments have actually been
collected. All payments received after 11:00 a.m. Boise, Idaho time shall be
considered to have been received the next Business Day. The Borrower authorizes
the Bank, if and to the extent payment is not made when due under any Loan
Document, to charge from time to time against any account of the Borrower with
the Bank any amount so due. In case the due date of any payment falls on a day
that is not a Business Day, such payment shall instead be due the next
succeeding Business Day, and interest shall continue to accrue. Bank may note
the date, amount and interest rate (and Interest Period with respect to LIBOR
Loans) of each Loan and each payment of principal and interest with respect
hereto in Bank's books and records (either manually or by electronic entry),
which notation shall be conclusive evidence of the information noted, absent
manifest error. Unless otherwise agreed or required by applicable law, payments
will be applied first to any unpaid collection costs and any late charges, then
to any unpaid interest, and any remaining amount to principal.
2.4 PREPAYMENTS.
The Borrower may prepay any or all Prime Loans without penalty or
premium. A LIBOR Loan may be prepaid in whole or in part only on the last day of
the Interest Period for such Loan, unless Borrower pays to Bank the prepayment
funding loss indemnification pursuant to Section 2.9.
2.5 LATE CHARGES AND DEFAULT INTEREST.
If Bank has not received the full amount of any payment by the end of
fifteen (15) calendar days after the date due, including the balance due at
maturity, Borrower shall pay a late charge to Bank in the amount of five percent
(5%) of the overdue payment of principal and/or interest. Borrower shall pay the
late charge promptly, but only once on each late payment. In addition to any
late charges that may be assessed as herein provided, the outstanding balance of
the Loans after the occurrence of an Event of Default shall accrue interest from
the date of the Event of Default at the rate equal to four (4) percentage points
per annum in excess of the interest rate that would otherwise be charged if no
Event of Default existed. If Bank shall waive in writing or Borrower shall cure
such Event of Default, the interest rate shall revert to the non-default rate
from and after such waiver or completion of such cure, until another such Event
of Default.
2.6 ADDITIONAL INTEREST RATE PROVISIONS.
2.6.1 If Bank shall have determined (which determination shall
be conclusive and binding) that for any reason adequate and reasonable means do
not exist for ascertaining the Adjusted LIBOR Interest Rate for any or all
Interest Periods, Bank shall give notice of such determination to the Borrower.
If such notice is given, and until such notice has been withdrawn by Bank, no
additional LIBOR Loans for such Interest Periods shall be made and no additional
conversions of Loans to LIBOR Loans for such Interest Periods shall be
permitted, and at the end of the Interest Period relating to any outstanding
LIBOR Loans such Loans shall become Prime Loans.
2.6.2 Notwithstanding any other provisions herein, if any law,
treaty, rule or regulation, or determination of a court or other governmental
authority, or any change therein or in the interpretation or application
thereof, shall make it unlawful for Bank to make or maintain LIBOR Loans as
contemplated by this Agreement, the obligation of Bank hereunder to make LIBOR
Loans shall forthwith be canceled, and, if required, each LIBOR Loan then
outstanding shall immediately become a Prime Loan.
2.6.3 In the event that any adoption or modification of any
law, treaty, rule, or regulation, or determination of a court or other
governmental authority, or that any change in the interpretation or application
thereof, which adoption, modification or change becomes effective after the date
hereof, or in the event that compliance by Bank with and request or directive
issued after the date hereof (whether or not having the force of law) from any
governmental authority:
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(A) does or shall subject Bank or any of its foreign
offices to any tax of any kind whatsoever with respect to the Loan Documents, or
changes the basis of taxation of payments to Bank of principal, interest, fees,
or any other amount payable hereunder (except for changes in the rate of tax on
the overall net income of Bank); or
(B) does or shall impose, modify, or hold applicable
any reserve, special deposit, compulsory loan, FDIC insurance, or similar
requirement against assets held by, deposits or other liabilities in or for the
account of, advances or loans by, other credit extended by or any other
acquisition of funds by any office of Bank (other than to the extent previously
taken into account in determining the Prime Rate or statutory reserves); or
(C) does or shall impose on Bank any other condition;
and the result of any of the foregoing is to increase the cost to Bank of
making, renewing, or maintaining the loans hereunder, or to reduce any amount
receivable thereunder or under any of the Loan Documents; then, in any such
case, the Borrower shall promptly pay to Bank, upon demand, such amount or
amounts as may be necessary to compensate Bank for any additional cost or
reduced amount received. Bank shall deliver to the Borrower a written statement
of the losses or expenses sustained or incurred, and any reasonable allocation
made by Bank of such losses and expenses shall be conclusive, absent manifest
error. Bank shall promptly notify the Borrower of any event of which it has
knowledge, occurring after the Closing Date, which event will entitle Bank to
compensation under this Section.
2.6.4 The actual interest to be charged on the Loans shall be
calculated daily on the outstanding balance for the actual number of days
elapsed on the basis of a year consisting of 360 days for LIBOR Loans and
365/366 days for Prime Loans. Should the rate of interest exceed that allowed by
law, the applicable rate of interest will be the maximum rate of interest
lawfully allowed. The principal amount outstanding on which the interest rate(s)
shall be charged shall be determined from the Bank's records, which shall at all
times be conclusive, absent manifest error.
2.7 LIBOR LOAN EXTENSIONS AND CONVERSIONS.
So long as no Event of Default has occurred and is continuing and
subject to the terms and conditions hereof, the Borrower may extend a LIBOR Loan
beyond its current Interest Period by giving Bank a LIBOR Loan Request for the
extension. The Borrower may also convert any Prime Loan into a LIBOR Loan by
giving Bank a LIBOR Loan Request for the conversion. Unless Bank receives notice
of a proposed extension or conversion as and when required hereunder, then at
the end of an Interest Period for a LIBOR Loan such Loan shall automatically
convert to a Prime Loan.
2.8 MINIMUM LIBOR LOAN REQUIREMENTS.
Each LIBOR Loan shall be in a minimum amount of Two Hundred Fifty
Thousand Dollars ($250,000). No Revolving Loan shall be made as, extended as, or
converted into, a LIBOR Loan with an Interest Period that ends after the
Maturity Date. No part of the Term Loan shall be made as, extended as, or
converted into, a LIBOR Loan with an Interest Period that ends after the Term
Loan Maturity Date. No part of the Loan shall be made as, extended as, or
converted into, a LIBOR Loan with an Interest Period that ends after the
Maturity Date. No more than four (4) LIBOR Loans shall be outstanding at one
time.
2.9 FUNDING LOSS INDEMNIFICATION.
The Borrower shall indemnify and hold Bank free and harmless from any
loss or expense (including without limitation any loss or expense incurred by
reason of the liquidation or redeployment of deposits or other funds acquired by
Bank to fund or maintain any LIBOR Loan) that Bank may incur as a result of (i)
the Borrower's failure to make a borrowing, conversion, or extension with
respect to a LIBOR Loan after making a request therefor; (ii) a prepayment
(whether optional or mandatory) of a LIBOR Loan prior to the expiration of a
related Interest Period, and (iii) the conversion of a LIBOR Loan as a result of
any of the events indicated in paragraph 2.6.2. At the election of Bank such
losses shall be conclusively deemed to consist of an amount equal to:
(i) The interest that would have been received from the
Borrower on the amounts during the Interest Period (or remaining portion thereof
in question) had the Borrower not prepaid, repaid, or failed to borrow, convert,
or extend, such funds, as the case may be, minus
(ii) The return that Bank could have obtained had it placed
such funds on deposit in the interbank dollar market selected by Bank in its
sole discretion on the date of such prepayment, repayment or failure to borrow,
convert, or extend as the case may be, and such funds had remained on deposit
until the end of the applicable Interest period.
2.10 TAXES ON PAYMENTS.
All payments made by Borrower under this Agreement and the 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 ("Taxes"),
now or hereafter imposed,
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levied, collected, withheld or assessed by any governmental authority (except
net income taxes and franchise taxes in lieu of net income taxes imposed on Bank
as a result of a present or former connection between the jurisdiction of the
governmental authority imposing such tax on Bank, excluding a connection arising
solely from Bank having executed, delivered, or performed its obligations or
received a payment under, or enforced, this Agreement or the other Loan
Documents). If any Taxes are required to be withheld from any amounts payable to
Bank under any Loan Document, the amounts so payable to Bank shall be increased
to the extent necessary to yield to Bank (after payment of all Taxes) interest
or any such other amounts payable hereunder at the rates or in the amounts
specified in this Agreement and the other Loan Documents.
2.11 GRANT OF SECURITY INTEREST.
Borrower grants to Bank a continuing security interest in the
Collateral, including all proceeds and products thereof, in order to secure
prompt repayment of the Obligations and prompt performance by Borrower of each
and all of its covenants and obligations under this Agreement and the other Loan
Documents. Bank's security interest in the Collateral shall be further evidenced
by the Security Agreement and such other security documents as Bank may at any
time require.
2.12 FINANCING STATEMENTS.
The Borrower shall from time to time, at the expense of Borrower,
promptly execute and deliver all further instruments and documents, and take all
further action, that may be necessary or desirable, or that Bank may reasonably
request, in order to perfect and protect any pledge, assignment or security
interest granted or purported to be granted by any Loan Document or to enable
Bank to exercise and enforce its rights and remedies under any Loan Document
with respect to any Collateral. Without limiting the generality of the
foregoing, the Borrower shall execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices, as may
be necessary or desirable, or as Bank may request, in order to perfect and
preserve the pledge assignment, and security interest granted or purported to be
granted by any Loan Document. Borrower irrevocably makes, constitutes, and
appoints Bank (and any of Bank's officers, employees, or agents designated by
Bank) as Borrower's true and lawful attorney with power, upon Borrower's failure
or refusal to comply with their undertakings contained in this paragraph, to
sign the name of Borrower on any of the above-described documents or on any
other similar documents that need to be executed, recorded, and/or filed in
order to perfect or continue Bank's perfected security interest in the
Collateral.
ARTICLE 3 - CONDITIONS PRECEDENT
3.1 INITIAL ADVANCE.
The obligation of Bank to make the initial Loan to the Borrower under
this Agreement is subject to the conditions precedent that Bank shall have
received on or before the day of such loan each of the following, in form and
substance satisfactory to Bank and its legal counsel:
3.1.1 REVOLVING NOTE.
The Revolving Note executed by the Borrower.
3.1.2 SECURITY AGREEMENT.
The Security Agreement in substantially the form of EXHIBIT
3.1.2 executed by Borrower, together with all UCC-1 financing statements
desirable in the opinion of Bank to perfect the security interest created by the
Security Agreement.
3.1.3 GUARANTY.
A guaranty of the Obligations in substantially the form of
EXHIBIT 3.1.3 executed by each Guarantor.
3.1.4 GUARANTOR SECURITY AGREEMENTS.
A security agreement in substantially the form of EXHIBIT
3.1.4 executed by each Guarantor, together with all UCC-1 financing statements
desirable in the opinion of Bank to perfect the security interest created by the
security agreement.
3.1.5 EVIDENCE OF INSURANCE.
Evidence of the insurance Borrower must maintain in accordance
with the Loan Documents.
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3.1.6 OPINION OF COUNSEL FOR BORROWER AND GUARANTOR.
A favorable opinion of counsel for Borrower and Guarantor, in
substantially the form of EXHIBIT 3.1.6 and as to such other matters as Bank may
reasonably request.
3.1.7 EVIDENCE OF ALL CORPORATE ACTION BY BORROWER.
Certified copies of all corporate action taken by Borrower
authorizing its execution and delivery of the Loan Documents and each other
document to be delivered pursuant to this Agreement and its performance of its
agreements thereunder.
3.1.8 CERTIFICATES OF EXISTENCE FOR BORROWER.
Certificates of existence or good standing dated a reasonable
date before the effective date of this Agreement showing that the Borrower is in
good standing under the laws of the state of its incorporation and all other
states in which it is doing business.
3.1.9 ARTICLES OF INCORPORATION AND BYLAWS OF BORROWER.
Copies of the articles of incorporation and bylaws of Borrower
certified by an officer of Borrower to be true and correct.
3.1.10 EVIDENCE OF ALL CORPORATE ACTION BY GUARANTOR.
Certified copies of all corporate action taken by each
Guarantor authorizing its execution and delivery of the Guaranty and the
performance of its agreements thereunder.
3.1.11 CERTIFICATES OF EXISTENCE FOR GUARANTOR.
Certificates of existence or good standing dated a reasonable
date before the effective date of this Agreement showing that each Guarantor is
in good standing under the laws of the state of its incorporation and all other
states in which it is doing business.
3.1.12 ARTICLES OF INCORPORATION AND BYLAWS OF GUARANTOR.
Copies of the articles of incorporation and bylaws of each
Guarantor certified by an officer of the Guarantor to be true and correct.
3.1.13 CERTIFICATES OF ASSUMED BUSINESS NAME.
Copies of all certificates of assumed business name, if any,
filed by Borrower.
3.1.14 LETTER TO ACCOUNTANTS.
A letter in the form of EXHIBIT 3.1.14 to Borrower's outside
auditors (which letter Borrower shall also deliver to any subsequent outside
auditors hired by Borrower, all of which shall be independent certified public
accountants acceptable to Bank): (1) instructing such auditors to send to Bank
copies of all final financial statements and reports that are prepared as a
result of any audit or other review of Borrower's operations, finances, or
internal controls, including any reports dealing with improper accounting
practices, defalcations, financial reporting errors, or misstatements or fraud;
(2) authorizing such auditors to, upon Bank's request, meet with Bank to discuss
said financial statements and any questions regarding same; and (3) advising
such auditors that one of the principal purposes of the audited financial
statements which they may be asked to prepare is to provide Bank with
information regarding Borrower's financial condition.
3.1.15 PUBLIC RECORD SEARCHES.
Uniform Commercial Code financing statement searches, federal
and state income tax lien searches, judgment searches, or other similar searches
on Borrower and any other Persons that Bank may require and in such form as Bank
may require.
3.1.16 PAYMENT OF ORIGINATION FEE.
Payment of the origination fee as required by Section 2.1.6 of
this Agreement.
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3.1.17 ADDITIONAL DOCUMENTS.
Such additional approvals, opinions, or documents as Bank may
reasonably request.
3.2 ALL ADVANCES.
The obligation of Bank to make each Loan under this Agreement shall be
subject to the following conditions precedent:
3.2.1 The following statements shall be true on the date of
each loan, and, if requested by Bank, Borrower shall have delivered to Bank a
certificate signed by a duly authorized officer of the Borrower, certifying to
Bank the truth of the following statements:
(a) The representations and warranties contained in
this Agreement and in the Loan Documents are correct on and as of the date of
such loan as though made on and as of such date.
(b) No Event of Default has occurred and is
continuing, or would result from such loan.
3.2.2 Bank shall have received such other approvals, opinions,
or documents as Bank may reasonably request.
ARTICLE 4 - REPRESENTATIONS AND WARRANTIES
In order to induce the Bank to enter into this Agreement and to make
the loans as provided in this Agreement, the Borrower makes the following
representations and warranties to the Bank, which shall survive execution of
this Agreement:
4.1 ORGANIZATION, GOOD STANDING, AND DUE QUALIFICATION.
Borrower was organized under the Delaware General Corporation Law and
exists in good standing under the laws of the jurisdiction of its organization
with power under the Delaware General Corporation Law to own or lease its assets
and to transact the business in which it is now engaged or proposed to be
engaged. Borrower is qualified to transact business as a foreign corporation in
good standing under the laws of each other jurisdiction in which such
qualification is required. Each of Borrower's Subsidiaries and each Guarantor
was organized under the general business corporation law of the jurisdiction of
its organization and exists in good standing under the laws of the jurisdiction
of its organization with power under the general business corporation law of
such jurisdiction to own or lease its assets and to transact the business in
which it is now engaged or proposed to be engaged. Each of Borrower's
Subsidiaries and each Guarantor is qualified to transact business as a foreign
corporation in good standing under the laws of each other jurisdiction in which
such qualification is required.
4.2 POWER AND AUTHORITY.
Borrower has authorized the execution and delivery of the Loan
Documents to which it is a party and the performance of its agreements
thereunder by all necessary corporate action under the Delaware General
Corporation Law. Each Guarantor has authorized the execution and delivery of the
Loan Documents to which it is a party and the performance of its agreements
thereunder by all necessary corporate action under the general business
corporation law of the jurisdiction of its organization. Borrower's and each
Guarantor's execution and delivery of the Loan Documents to which it is a party
and the performance of its respective obligations thereunder will not (1)
require any consent or approval of the shareholders of Borrower or the Guarantor
that has not been obtained; (2) violate Borrower's or the Guarantor's
certificate or articles of incorporation (however denominated); (3) violate any
provision of any law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award presently in effect having applicability to
Borrower or the Guarantor; (4) result in a breach of or constitute a default
under any indenture or loan or credit agreement or any other agreement, lease,
or instrument to which Borrower or a Guarantor is a party or by which it or its
properties may be bound or affected; or (5) cause Borrower or a Guarantor to
violate any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination, or award or be in default under any such indenture,
agreement, lease, or instrument.
4.3 LEGALLY ENFORCEABLE AGREEMENT.
This Agreement is, and each of the other Loan Documents to which
Borrower is a party when delivered under this Agreement will be, legal, valid,
and binding obligations of the Borrower, enforceable against the Borrower, in
accordance with their respective terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency, and other
similar laws affecting creditors' rights generally. Each Guaranty and other Loan
Document to which a Guarantor is a party when delivered under this Agreement
will be the legal, valid, and binding obligation of the applicable Guarantor,
enforceable against the Guarantor in accordance with their terms, except to the
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extent that such enforcement may be limited by applicable bankruptcy,
insolvency, and other similar laws affecting creditors' rights generally.
4.4 FINANCIAL STATEMENTS.
All financial statements and information relating to Borrower, any
Subsidiary, any Affiliate of Borrower, and any Guarantor that have been
delivered by Borrower or a Guarantor to Bank are complete and correctly and
fairly present the financial condition of the Borrower, the Subsidiary, the
Affiliate of Borrower, or the Guarantor, as applicable, as of the date of such
statements and information and the results of the operations of the Borrower and
the affiliates of Borrower for the periods covered by such statements, all in
accordance with GAAP (subject to year-end adjustments in the case of the interim
financial statements). There has been no material adverse change in the
financial condition of Borrower, an Affiliate of Borrower, or a Guarantor since
the date of the most recent of such applicable financial statements submitted to
Bank. There are no liabilities of Borrower, a Subsidiary, or a Guarantor, fixed
or contingent, that are material but are not reflected in the financial
statements or in the notes thereto, other than liabilities arising in the
ordinary course of business since the date of the most recent of such applicable
financial statements submitted to Bank. No information, exhibit, or report
furnished by the Borrower to the Bank in connection with the negotiation of this
Agreement contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statement contained therein not
materially misleading.
4.5 LABOR DISPUTES AND CASUALTIES.
Except as disclosed in Borrower's Forms 10-K and 10-Q filed with the
Securities and Exchange Commission and copies of which have been delivered to
Bank, neither the businesses nor the properties of the Borrower or any
Subsidiary or any Guarantor are affected by any fire, explosion, accident,
strike, lockout, or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God, or other casualty (whether or not covered by insurance),
materially and adversely affecting such businesses or properties or the
operation of the Borrower or the Subsidiary or the Guarantor.
4.6 OTHER AGREEMENTS.
No event has occurred and is continuing that constitutes or that, with
the giving of notice or the lapse of time or both, could constitute, an event of
default or a default under any agreement or guaranty to which the Borrower or
any Subsidiary or any Guarantor is a party, and no such event will occur upon
the making of the loans hereunder.
4.7 NO LITIGATION.
Except as disclosed in Borrower's Forms 10-K and 10-Q filed with the
Securities and Exchange Commission and copies of which have been delivered to
Bank, there is no pending action or proceeding against or affecting the Borrower
or any Subsidiary or any Guarantor before any court, governmental agency, or
arbitrator, that would have a reasonable possibility to, in any one case or in
the aggregate, materially adversely affect the financial condition, operations,
properties, or business of the Borrower or the ability of the Borrower or any
Subsidiary or any Guarantor to perform its obligations under the Loan Documents
to which it is a party.
4.8 NO DEFAULTS ON OUTSTANDING JUDGMENTS OR ORDERS.
Except as disclosed in Borrower's Forms 10-K and 10-Q filed with the
Securities and Exchange Commission and copies of which have been delivered to
Bank, the Borrower, each Subsidiary, and each Guarantor have satisfied all
judgments against it, and neither the Borrower nor any Subsidiary nor any
Guarantor is in default with respect to any judgment, writ, injunction, decree,
rule, or regulation of any court, arbitrator, or federal, state, municipal, or
other governmental authority, commission, board, bureau, agency, or
instrumentality, domestic or foreign.
4.9 OWNERSHIP AND LIENS.
The Borrower and each Subsidiary has title to, or valid leasehold
interests in, all of its properties and assets, real and personal, including,
without limitation, the Collateral, and none of such properties and assets owned
by the Borrower or a Subsidiary and none of their leasehold interests are
subject to any Lien, except Permitted Liens.
4.10 EMPLOYEE BENEFITS.
The Borrower and each Subsidiary is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred and is continuing with respect to any
Plan; no notice of intent to terminate a Plan has been filed nor has any Plan
been terminated; no circumstances exist that constitute grounds entitling the
PBGC to institute proceedings to terminate, or appoint a trustee to administer,
a Plan, nor has the PBGC instituted any such proceedings; neither Borrower nor
any Commonly Controlled Entity has completely or partially withdrawn from a
Multiemployer Plan; the Borrower and each Commonly Controlled Entity have met
their minimum funding requirements under ERISA with respect to all of their
Plans and the
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present value of all vested benefits under each Plan does not exceed the fair
market value of all Plan assets allocable to such benefits, as determined on the
most recent valuation date of the Plan and in accordance with the provisions of
ERISA; and neither the Borrower nor any Commonly Controlled Entity has incurred
any liability to the PBGC under ERISA.
4.11 OPERATION OF BUSINESS.
To the best of Borrower's knowledge, Borrower, each Subsidiary, and
each Guarantor possesses all licenses, permits, franchises, patents, copyrights,
trademarks, and trade names, or rights thereto, to conduct its businesses
substantially as now conducted and as presently proposed to be conducted, and
the Borrower, each Subsidiary, and each Guarantor is not in violation of any
valid rights of others with respect to any of the foregoing. Borrower, each
Subsidiary, and each Guarantor has filed, and will file in the future, with the
appropriate governmental entities all assumed business name certificates
necessary or required to conduct its businesses.
4.12 TAXES.
The Borrower, each Subsidiary, and each Guarantor have filed all tax
returns (federal, state, and local) required to be filed and have paid all
taxes, assessments, and governmental charges and levies thereon to be due,
including interest and penalties, except those presently being or to be
contested by Borrower, a Subsidiary, or a Guarantor in good faith in the
ordinary course of business and for which adequate reserves have been provided
in Bank's reasonable judgment.
4.13 DEBT.
EXHIBIT 4.13 is a complete and correct list of all credit agreements,
indentures, purchase agreements, guaranties, capital leases, and other
investments, agreements, and arrangements presently in effect providing for or
relating to extensions of credit (including agreements and arrangements for the
issuance of letters of credit or for acceptance financing) in respect of which
the Borrower or any Subsidiary is in any manner directly or contingently
obligated; and the maximum principal or face amounts of the credit in question,
which are outstanding and which can be outstanding, are correctly stated, and
all Liens of any nature given or agreed to be given as security therefor are
correctly described or indicated in such Exhibit.
4.14 ENVIRONMENTAL MATTERS.
To the best of its knowledge and except as disclosed in Borrower's
Forms 10-K and 10-Q filed with the Securities and Exchange Commission and copies
of which have been delivered to Bank, the Borrower and each Subsidiary has
materially complied with, and its businesses, operations, assets, equipment,
property, leaseholds or other facilities are in compliance with, the provisions
of the Environmental Laws and all other federal, state, and local environmental,
health and safety laws, codes and ordinances, and all rules and regulations
promulgated thereunder. The Borrower and each Subsidiary has been issued and
will maintain all required federal, state, and local permits, licenses,
certificates, and approvals relating to (1) air emissions; (2) discharges to
surface water or groundwater; (3) noise emissions; (4) solid or liquid waste
disposal; (5) the use, generation, storage, transportation, or disposal of
Hazardous Substances; or (6) other environmental, health, or safety matters.
Except as disclosed in Borrower's Forms 10-K and 10-Q filed with the Securities
and Exchange Commission and copies of which have been delivered to Bank, neither
Borrower nor any Subsidiary has received notice of, nor knows of, or suspects
facts that might constitute any material violations of an Environmental Law or
any other federal, state, or local environmental, health, noise emission, or
safety laws, codes, or ordinances and any rules or regulations promulgated
thereunder with respect to its businesses, operations, assets, equipment,
property, leaseholds, or other facilities. To the best of Borrower's knowledge,
except in accordance with a valid governmental regulation, permit, license,
certificate, or approval, and except as previously disclosed, there has been no
emission, spill, release, or discharge into or upon (1) the air; (2) soils, or
any improvements located thereon; (3) surface water or groundwater; or (4) the
sewer, septic system or waste treatment, storage, or disposal system servicing
the premises of any Hazardous Substances or from the premises.
4.15 INVESTMENT COMPANY ACT.
Neither Borrower nor any Subsidiary is an "investment company" or a
company "controlled" by an "investment company", within the meaning of the
Investment Company Act of 1940, as amended.
4.16 PERFECTION OF SECURITY INTEREST.
The Security Agreement and the pledge of the Collateral pursuant
thereto creates a valid and perfected first priority security interest in the
Collateral (except for Permitted Liens), securing the payment of the
obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest have been taken.
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4.17 SUBSIDIARIES AND OWNERSHIP OF STOCK.
Set forth in EXHIBIT 4.17 is a complete and accurate list of the
Subsidiaries of the Borrower, showing the jurisdiction of incorporation of each
and showing the percentage of the Borrower's ownership of the outstanding stock
of each Subsidiary. All of the outstanding capital stock of each such Subsidiary
has been validly issued, is fully paid and nonassessable, and is owned by the
Borrower free and clear of all Liens.
ARTICLE 5 - AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as any Obligation is
outstanding it will comply with the following provisions:
5.1 MAINTENANCE OF EXISTENCE.
Borrower shall preserve and maintain, and cause each Subsidiary to
preserve and maintain, its existence and good standing in the jurisdiction of
its organization, and qualify and remain qualified, as a foreign corporation in
each jurisdiction in which such qualification is required.
5.2 MAINTENANCE OF RECORDS.
Borrower shall keep, and cause each Subsidiary to keep, adequate
records and books of account, in which complete entries will be made in
accordance with GAAP consistently applied, reflecting all financial transactions
of the Borrower.
5.3 MAINTENANCE OF PROPERTIES.
Borrower shall maintain, keep, and preserve, and cause each Subsidiary
to maintain, keep, and preserve, all of its properties (tangible and intangible)
necessary or useful in the proper conduct of its business in good working order
and condition, ordinary wear and tear excepted.
5.4 CONDUCT OF BUSINESS.
Borrower shall continue, and cause each Subsidiary to continue, to
engage in a commercially reasonable and efficient and economical manner in
businesses of the same general type as conducted by it on the date of this
Agreement.
5.5 MAINTENANCE OF INSURANCE.
Borrower shall, at its expense, maintain, and cause each Subsidiary to
maintain, insurance with financially sound and reputable insurance companies or
associations in such amounts, covering such risks, and in such form as shall be
consistent with the industry practices and satisfactory to Bank. Without
limiting the foregoing sentence, Borrower shall procure and maintain all risks
insurance, including without limitation fire, theft, and liability coverage
together with such other insurance as Bank may require with respect to the
Collateral, in form, amounts coverages and basis consistent with industry
practices and reasonably acceptable to Bank and issued by a company or companies
reasonably acceptable to Bank. Borrower, upon request of Bank, shall deliver to
Bank from time to time the policies or certificates of insurance in form
satisfactory to Bank, including stipulations that coverages will not be canceled
or diminished without at least thirty (30) days' prior written notice to Bank
and not including any disclaimer of the insurer's liability for failure to give
such a notice. In connection with all policies covering the Collateral, Borrower
shall provide Bank with such lender loss payable or other endorsements as Bank
may require. If Borrower at any time fails to obtain or maintain any insurance
required under the Loan Documents, Bank may, but shall not be obligated to,
obtain such insurance as Bank deems appropriate, including if it so chooses,
"single interest insurance" that will cover only Bank's interest in the
Collateral.
5.6 COMPLIANCE WITH LAWS.
Borrower shall comply, and cause each Subsidiary to comply, in all
material respects with all applicable laws, rules, regulations, and orders, such
compliance to include, without limitation, paying before the same become
delinquent all taxes, assessments, and governmental charges imposed upon it or
upon its property, except for such taxes, assessments or charges that are
contested by Borrower or a Subsidiary in good faith in the ordinary course of
business and for which adequate reserves have been provided in Bank's reasonable
judgment.
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5.7 RIGHT OF INSPECTION.
Borrower shall, at any reasonable time and from time to time with
reasonable notice, permit the Bank or any agent or representative thereof to
inspect the Collateral, examine and make copies of and abstracts from the
records and books of account of, and visit the properties of, the Borrower and
any Subsidiary, and to discuss the affairs, finances, and accounts of the
Borrower and any Subsidiary with any of its employees, officers, and directors
and the Borrower's independent accountants. Without limiting the foregoing, at
least once every year, and more often if Bank reasonably deems it necessary,
Bank's auditors may audit and examine Borrower's books and records. Borrower
shall reimburse Bank at the rate of Three Hundred Fifty Dollars ($350) per day
for each auditor plus travel expenses, not to exceed Two Thousand Five Hundred
Dollars ($2,500) per year as long as no Event of Default occurs.
5.8 REPORTING REQUIREMENTS.
5.8.1 ANNUAL FINANCIAL STATEMENTS.
Borrower shall furnish to Bank within one hundred twenty (120)
days after the end of each fiscal year of the Borrower, consolidated and
consolidating balance sheets of the Borrower and its Subsidiaries as of the end
of such fiscal year, and consolidated and consolidating statements of income and
retained earnings of the Borrower and its Subsidiaries for such fiscal year, and
consolidated and consolidating statements of cash flows of the Borrower and its
Subsidiaries for such fiscal year, all in reasonable detail and stating in
comparative form the respective figures for the corresponding date and period in
the prior fiscal year and all prepared in accordance with GAAP consistently
applied and audited by independent certified public accountants selected by the
Borrower and acceptable to the Bank.
5.8.2 BORROWING BASE CERTIFICATE.
Borrower shall furnish to Bank on or before the 20th day of
each month reporting as of the end of the last Business Day of the prior month
statements of accounts receivable aging and a certificate setting forth
information with respect to the Borrowing Base, executed and certified as
accurate by an authorized officer of Borrower. The certificate shall be in
substantially the form attached as EXHIBIT 5.8.2 or such other form as Borrower
and Bank may agree upon in writing.
5.8.3 MANAGEMENT LETTERS.
Borrower shall furnish to Bank promptly upon receipt thereof,
copies of any reports submitted to the Borrower by independent certified public
accountants in connection with examination of the financial statements of the
Borrower made by such accountants.
5.8.4 NOTICE OF LITIGATION.
Borrower shall furnish to Bank promptly after the commencement
thereof, notice of all actions, suits, and proceedings before any court or
governmental department, commission, board, bureau, agency, or instrumentality,
domestic or foreign, affecting the Borrower that, if determined adversely to the
Borrower, could have a material adverse effect on the financial condition,
properties, or operations of the Borrower.
5.8.5 NOTICE OF DEFAULTS AND EVENTS OF DEFAULT.
Borrower shall furnish to Bank as soon as possible and in any
event within five Business Days after the occurrence of each Event of Default, a
written notice setting forth the details of such Event of Default and the action
that is proposed to be taken by the Borrower with respect thereto.
5.8.6 ERISA REPORTS.
Borrower shall furnish to Bank as soon as possible, and in any
event within thirty (30) days after the Borrower knows or has reason to know
that any circumstances exist that constitute grounds entitling the PBGC to
institute proceedings to terminate a Plan subject to ERISA with respect to the
Borrower or any Commonly Controlled Entity, and promptly but in any event within
ten (10) Business Days of receipt by the Borrower or any Commonly Controlled
Entity of notice that the PBGC intends to terminate a Plan or appoint a trustee
to administer the same, and promptly but in any event within ten (10) Business
Days of the receipt of notice concerning the imposition of withdrawal liability
with respect to the Borrower or any Commonly Controlled Entity, a certificate of
an authorized officer of the Borrower setting forth all relevant details and the
action that the Borrower proposes to take with respect thereto.
5.8.7 REPORTS TO OTHER CREDITORS.
Borrower shall furnish to Bank promptly after the furnishing
thereof, copies of any statement or report furnished to any party pursuant to
the terms of any indenture, loan, credit, or similar agreement and not otherwise
required to be furnished to the Bank pursuant to any other clause of this
Section.
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5.8.8 SEC REPORTS.
Borrower shall furnish to Bank as soon as possible and in any
event within five (5) Business Days after the filing thereof, copies of all
regular, periodic, and special reports, and all registration statements that the
Borrower or any Subsidiary files with the Securities and Exchange Commission or
any governmental authority that may be substituted therefor, or with any
national securities exchange, including, without limitation, 10-Q, 10-K, and 8-K
reports.
5.8.9 COMPLIANCE CERTIFICATE.
Borrower shall furnish Bank within 45 days after the end of
each fiscal quarter and 90 days after each fiscal year (in the case of the 4th
fiscal quarter) a certificate of the chief executive officer or the chief
financial officer or other officer approved by Bank in writing stating that he
or she has individually reviewed the provisions of this Agreement and that
review of the activities of Borrower during such quarter period has been made by
him or her or under his or her supervision, with a view to determining whether
Borrower had fulfilled all its obligations under this Agreement, and that
Borrower has observed and performed each undertaking contained in the Loan
Documents and is not in default in the observance or performance of any of the
provisions of the Loan Documents or, if Borrower shall be so in default,
specifying all such defaults and events of which he or she may have knowledge.
5.8.10 GENERAL INFORMATION.
Borrower shall furnish to Bank such other information
respecting the condition or operations, financial or otherwise, of the Borrower
as the Bank may from time to time reasonably request.
5.9 ENVIRONMENT.
Borrower shall, and shall cause each Subsidiary to, (i) be and remain
in substantial compliance with Environmental Laws and with the provisions of all
other federal, state, and local environmental, health, and safety laws, codes,
and ordinances, and all rules and regulations issued thereunder; (ii) notify the
Bank immediately of any notice of a Hazardous Substance discharge or
environmental complaint received by Borrower from any governmental agency or
other party; (iii) notify the Bank immediately of any material Hazardous
Substance discharge from or affecting its premises; (iv) immediately comply with
all applicable laws regarding the same; (v) promptly pay any fine or penalty
assessed in connection therewith after exhausting all recourse; (vi) permit the
Bank to inspect the premises, to conduct tests thereon, and to inspect all
books, correspondence, and records pertaining thereto; and (vii) at the Bank's
request, and at the Borrower's expense, provide a report of a qualified
environmental engineer, satisfactory in scope, form, and content to the Bank,
and such other and further assurances reasonably satisfactory to the Bank that
the condition has been corrected.
5.10 REIMBURSEMENT OF LENDER EXPENSES.
Borrower shall promptly on demand reimburse Bank for sums expended by
Bank that constitute Lender Expenses, and Borrower authorizes and approves all
advances and payments by Bank for items constituting Lender Expenses after
written notice to Borrower. In addition, the Borrower shall pay any and all
stamp and other taxes and fees payable or determined to be payable in connection
with the execution, delivery, filing, and recording of any of the Loan Documents
and the other documents to be delivered under any such Loan Documents, and
agrees to hold the Bank harmless from and against any and all liabilities with
respect to or resulting from any delay in paying or omission to pay such taxes
and fees. This provision shall survive termination of this Agreement.
5.11 BANK ACCOUNTS.
Borrower shall use Bank as Borrower's primary depository and
transaction bank.
ARTICLE 6 - NEGATIVE COVENANTS
The Borrower covenants and agrees that so long as any Obligation is
outstanding it will comply with the following provisions:
6.1 LIENS.
Without Bank's prior written consent, Borrower shall not create, incur,
assume, or suffer to exist, or permit any Subsidiary to create, incur, assume,
or suffer to exist, any Lien upon any of its property or assets, now owned or
hereafter acquired, except for the following ("Permitted Liens"):
(i) Liens (if any) granted to Bank to secure the Obligations,
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(ii) Liens described in the attached EXHIBIT 6.1,
(iii) pledges or deposits made to secure payment of worker's
compensation insurance (or to participate in any fund in connection with
worker's compensation insurance), unemployment insurance, pensions, or social
security programs,
(iv) Liens imposed by mandatory provisions of law such as for
materialmen, mechanics, warehousemen, and other like Liens arising in the
ordinary course of business, securing indebtedness whose payment is not yet due,
or that is being contested by Borrower in good faith and for which adequate
reserves have been provided,
(v) Liens for taxes, assessments, and governmental charges or
levies imposed upon a person or upon such person's income or profits or
property, if the same are not yet due and payable or if the same are being
contested in good faith and as to which adequate cash reserves have been
provided,
(vi) Liens arising from good faith deposits in connection with
tenders, leases, real estate bids, or contracts (other than contracts involving
the borrowing of money), pledges or deposits to secure public or statutory
obligations and deposits to secure (or in lieu of) surety, stay, appeal, or
customs bonds and deposits to secure the payment of taxes, assessments, customs
duties, or other similar charges,
(vii) encumbrances consisting of zoning restrictions,
easements, or other restrictions on the use of real property, provided that such
items do not impair the use of such property for the purposes intended, and none
of which is violated by existing or proposed structures or land use, or
(viii) purchase-money Liens on any property hereafter acquired
or the assumption of any Lien on property existing at the time of such
acquisition (and not created in contemplation of such acquisition), or a Lien
incurred in connection with any conditional sale or other title retention
agreement or a capital lease, provided that (a) any property subject to any of
the foregoing is acquired by the Borrower in the ordinary course of its business
and the Lien on any such property attaches to such asset concurrently or within
ninety (90) days after the acquisition thereof; (b) the obligation secured by
any Lien so created, assumed, or existing shall not exceed the lesser of the
cost or the fair market value as of the time of acquisition of the property
covered thereby to the Borrower, (c) each such Lien shall attach only to the
property so acquired, (d) the debt secured by all such Liens shall not exceed
Twenty-five Thousand Dollars ($25,000) at any time outstanding in the aggregate,
and (e) the debt secured by such Lien is permitted by the provisions of Section
6.2, and the related expenditure is permitted under Section 7.1.
6.2 DEBT.
Without Bank's prior written consent, Borrower shall not incur, assume,
or suffer to exist, or permit any Subsidiary to incur, assume, or suffer to
exist, any debt other than (i) the Obligations; (ii) indebtedness and
liabilities of Borrower identified in EXHIBIT 4.13; (iii) indebtedness and
liabilities of Borrower that have been subordinated to the Obligations by
written agreement in form and substance acceptable to Bank; (iv) accounts
payable to trade creditors for goods or services that are incurred in the
ordinary course of business, as presently conducted, and paid within a
reasonable time, unless contested in good faith and by appropriate proceedings;
and (vi) debt of the Borrower secured by purchase-money liens that are Permitted
Liens.
6.3 MERGERS OR REORGANIZATION.
Borrower shall not, without Bank's prior written consent, which consent
shall not be unreasonably withheld, wind up, liquidate or dissolve itself,
reorganize, merge or consolidate with or into, or convey, sell, assign,
transfer, lease, or otherwise dispose of (whether in one transactions or in a
series of transactions) all or substantially all of its assets (whether now
owned or hereafter acquired) to any Person, or acquire all or substantially all
of the assets or the business of any Person, or permit any Subsidiary to do so,
except that (1) any Subsidiary may merge into or transfer assets to the
Borrower, (2) any Subsidiary may merge into or consolidate with or transfer
assets to any other Subsidiary., (3) acquire or merge with any entity whose
assets are valued at ten percent (10%) or less of the Borrower's net worth.
6.4 LEASES.
Without Bank's prior written consent, Borrower shall not create, incur,
assume, or suffer to exist, or permit any Subsidiary to create, incur, assume,
or suffer to exist, any obligation as lessee for the rental or hire of any real
or personal property, except: (1) leases existing on the date of this Agreement
and any extensions or renewals thereof; (2) leases with Bank or an affiliate of
Bank; and (3) leases (other than capital leases) that do not in the aggregate
require the Borrower and its Subsidiaries on a consolidated basis to make
payments (including taxes, insurance, maintenance, and similar expenses that the
Borrower or any Subsidiary is required to pay under the terms of any lease) in
any fiscal year of the Borrower in excess of One Hundred Thousand Dollars
($100,000).
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6.5 SALE AND LEASEBACK.
Without Bank's prior written consent, Borrower shall not sell,
transfer, or otherwise dispose of, or permit any Subsidiary to sell, transfer,
or otherwise dispose of, any real or personal property to any Person other than
Bank or an affiliate of Bank and thereafter directly or indirectly lease back
the same or similar property.
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; and (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.
6.7 SALE OF ASSETS.
Without Bank's prior written consent, Borrower shall not sell, lease,
assign, transfer, or otherwise dispose of any of its now owned or hereafter
acquired material operating assets (including, without limitation, receivables),
except: (1) inventory disposed of in the ordinary course of business; and (2)
the sale or other disposition of assets no longer used or useful in the conduct
of its business.
6.8 INVESTMENTS.
Without Bank's Prior written consent, Borrower shall not make any loan
or advance to any Person, or purchase or otherwise acquire any capital stock,
assets, obligations, or other securities of, make any capital contribution to,
or otherwise invest in or acquire any interest in any Person, or participate as
a partner or joint venturer with any other Person, except: (1) direct
obligations of the United States or any agency thereof with maturities of one
year or less from the date of acquisition; (2) commercial paper of a domestic
issuer rated at least "A-1" by Standard & Poor's Corporation or "P-1" by Xxxxx'x
Investors Service, Inc.; (3) certificates of deposit with maturities of one year
or less from the date of acquisition; (4) stock, obligations, or securities
received in settlement of debts (created in the ordinary course of business)
owing to the Borrower; (5) investments made through Bank or one of its
affiliates, and (6) as provided for in Section 6.3.
6.9 GUARANTIES.
Without Bank's prior written consent, Borrower shall not assume,
guarantee, endorse, or otherwise be or become directly or contingently
responsible or liable (including, but not limited to, an agreement to purchase
any obligation, stock, assets, goods, or services, or to supply or advance any
funds, assets, goods, or services, or an agreement to maintain or cause such
Person to maintain a minimum working capital or net worth, or to otherwise
assure the creditors of any Person against loss) for obligations of any Person,
except guaranties by endorsement of negotiable instruments for deposit or
collection or similar transactions in the ordinary course of business.
6.10 ERISA PLANS.
Borrower shall not, without the Bank's prior written consent, enter
into, contribute to, or become a party to any Plan, other than those Plans
listed in EXHIBIT 6.10.
6.11 TRANSACTIONS WITH AFFILIATES.
Without Bank's prior written consent, Borrower shall not enter into any
transaction, including, without limitation, the purchase, sale, or exchange of
property or the rendering of any service, with any Affiliate except in the
ordinary course of and pursuant to the reasonable requirements of the Borrower's
business and upon fair and reasonable terms no less favorable to the Borrower
than would obtain in a comparable arm's-length transaction with a Person not an
Affiliate; except that Borrower may repay Affiliate Debt, as listed on Exhibit
4.13 at anytime.
6.12 CHANGE OF NAME.
Borrower shall not, without Bank's prior written consent, change the
Borrower's name, business structure, or identity, or add any new assumed
business name.
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6.13 CHANGE IN MANAGEMENT.
Borrower shall not materially and adversely alter the executive
management positions of Chief Executive Officer and/or Chief Financial Officer
without giving Bank written notice of such alteration at least sixty (60) days
prior to the effective date of such alteration in executive management. If such
advance notice is not possible, Borrower shall notify Bank of such change as
soon as is possible.
6.14 ACCOUNTING.
Borrower shall not (i) modify or change its method of accounting
without advising Bank of such change, or (ii) enter into, modify, or terminate
any agreement presently existing or at any time hereafter entered into with any
third party accounting firm and/or service bureau for the preparation and/or
storage of Borrower's accounting records without Borrower instructing said
accounting firm and/or service bureau to provide to Bank information regarding
the Collateral and Borrower's financial condition.
6.15 LOCATION OF CHIEF EXECUTIVE OFFICE.
Borrower shall not relocate its chief executive office from Boise,
Idaho without thirty (30) days prior written notice to Bank.
ARTICLE 7 - FINANCIAL COVENANTS
So long as any Obligation is outstanding or the Bank shall have any
commitment under this Agreement, Borrower shall maintain the following financial
covenants:
7.1 DEBT SERVICE COVERAGE RATIO.
Borrower shall maintain on a rolling four quarter basis a ratio of
EBITDA to Debt Service of not less than 1.50 to 1.00. The term "EBITDA" shall
mean, for any period, as applied to Borrower, the sum of Borrower's earnings
before (a) interest expense, (b) depreciation or amortization, (c) dividends,
(d) taxes, and (e) extraordinary expenses. The term "Debt Service" shall mean
for any fiscal period cash interest expense plus the scheduled amortization of
any outstanding Funded Debt (as defined in paragraph 2.1.2.5) for such period
plus required payments on operating leases.
7.2 LEVERAGE RATIO.
Borrower shall maintain at the end of each fiscal quarter and each
fiscal year a ratio of Borrower's total liabilities to Borrower's shareholder's
equity of not greater than 2.00 to 1.00.
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 less current
maturities of Deferred Site Maintenance of at least 0.75 to 1.00 through
December 31, 2000, 1.00 to 1.00 through June 30, 2001, and 1.20 to 1.00
thereafter. The term "Deferred Site Maintenance" shall be defined as "DSM" as
reported by the Borrower in accordance with GAAP in its periodic reports to the
Securities and Exchange Commission.
ARTICLE 8 - EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT.
Each of the following events, at the option of Bank, shall constitute
an event of default (each an "Event of Default"):
8.1.1 The Borrower shall fail to pay the principal of, or
interest on, the Revolving Note, or any Obligation within fifteen (15) days of
when due and payable.
8.1.2 Any representation or warranty made or deemed made by
Borrower in this Agreement, the Security Agreements, or other Loan Document or
that is contained in any certificate, document, opinion, or financial or other
statement furnished at any time under or in connection with any Loan Document
shall prove to have been incorrect, incomplete, or misleading in any material
respect on or as of the date made or deemed made.
8.1.3 Borrower shall fail to perform or observe any term,
covenant, or condition contained in this Agreement or other Loan Document, or
Borrower shall be in default under any other agreement with Bank or an affiliate
of Bank.
8.1.4 Borrower shall (a) fail to pay any indebtedness for
borrowed money (other than the Loans) of the Borrower in excess of an aggregate
principal amount of $25,000, or any interest or premium thereon, when due
(whether by scheduled maturity, required prepayment, acceleration, demand, or
otherwise); or (b) fail to perform or observe any term, covenant, or condition
on its part to be performed or observed under any agreement or
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instrument relating to any such indebtedness, when required to be performed or
observed, if the effect of such failure to perform or observe is to accelerate,
or to permit the acceleration of after the giving of notice or passage of time,
or both, the maturity of such indebtedness, whether or not such failure to
perform or observe shall be waived by the holder of such indebtedness, or any
such indebtedness shall be declared to be due and payable, or required to be
prepaid (other than by a regularly scheduled required prepayment), prior to the
stated maturity thereof.
8.1.5 Borrower (a) shall generally not pay, or shall be unable
to pay, or shall admit in writing its inability to pay its debts as such debts
become due; or (b) shall make an assignment for the benefit of creditors, or
petition or apply to any tribunal for the appointment of a custodian, receiver,
or trustee for it or a substantial part of its assets; or (c) shall commence any
proceeding under any bankruptcy, reorganization, arrangement, readjustment of
debt, dissolution, or liquidation law or statute of any jurisdiction, whether
now or hereafter in effect; or (d) shall have had any such petition or
application filed or any such proceeding commenced against it in which an order
for relief is entered or an adjudication or appointment is made, and that
remains undismissed for a period of sixty (60) days or more; or (e) shall take
any corporate action indicating its consent to, approval of, or acquiescence in
any such petition, application, proceeding, or order for relief or the
appointment of a custodian, receiver, or trustee for all or any substantial part
of its properties; or (f) shall suffer any such custodianship, receivership, or
trusteeship to continue undischarged for a period of sixty (60) days or more.
8.1.6 One or more judgments, decrees, or orders for the
payment of money in excess of One Hundred Twenty-five Thousand Dollars
($125,000) in the aggregate shall be rendered against the Borrower, and such
judgments, decrees, or orders shall continue unsatisfied and in effect for a
period of sixty (60) consecutive days without being vacated, discharged,
satisfied, or stayed or bonded pending appeal.
8.1.7 The Security Agreement shall at any time after its
execution and delivery and for any reason cease (a) to create a valid and
perfected first priority security interest in and to the property purported to
be subject to such Security Agreement; or (b) to be in full force and effect or
shall be declared null and void, or the validity or enforceability thereof shall
be contested by the Borrower, or the Borrower shall deny it has any further
liability or obligation under the Security Agreement, or the Borrower shall fail
to perform any of its obligations under the Security Agreement.
8.1.8 Any Guaranty shall at any time after its execution and
delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by the Guarantor, or the Guarantor shall deny he has any further
liability under, or shall fail to perform its obligations under, the Guaranty,
or the Guarantor, if a natural person, shall die.
8.1.9 Any of the following events shall occur or exist with
respect to Borrower and any Commonly Controlled Entity under ERISA: any
Reportable Event shall occur; complete or partial withdrawal from any
Multiemployer Plan shall take place; any Prohibited transaction shall occur; a
notice of intent to terminate a Plan shall be filed, or a Plan shall be
terminated; or circumstances shall exist that constitute grounds entitling the
PBGC to institute proceedings to terminate a Plan, or the PBGC shall institute
such proceedings; and in each case above, such event or condition, together with
all other events or conditions, if any, could subject the Borrower to any tax,
penalty, or other liability that in the aggregate may exceed Fifty Thousand
Dollars ($50,000).
8.1.10 If any federal, state, or local agency asserts or
creates a Lien upon any or all of the assets, equipment, property, leaseholds,
or other facilities of Borrower by reason of the occurrence of a hazardous
discharge or an environmental complaint; or if any federal, state, or local
agency asserts a claim against the Borrower and/or its assets, equipment,
property, leaseholds or other facilities for damages or cleanup costs relating
to a hazardous discharge or an environmental complaint; provided, however, that
such claim shall not constitute a default if, within ten (10) Business Days of
the occurrence giving rise to the claim, (a) the Borrower can prove to the
Bank's reasonable satisfaction that the Borrower has commenced and is diligently
pursuing an investigation of the claim to be followed promptly by either: (i) a
cure or plan for correction of the event that constitutes the basis for the
claim, and continues diligently to pursue such cure or correction to completion,
or (ii) proceedings for an injunction, a restraining order, or other appropriate
emergent relief preventing such agency or agencies from asserting such claim,
that relief is granted within ten (10) Business Days of the occurrence giving
rise to the claim and the injunction, order, or relief is not thereafter
resolved or reversed on appeal; and (b) in either of the foregoing events, the
Borrower has posted a bond, letter of credit, or other security satisfactory in
form, substance and amount to both the Bank and the agency or entity asserting
the claim to secure the proper and complete cure or correction of the event that
constitutes the basis for the claim.
8.1.11 Any material misrepresentation exists now or hereafter
in any warranty or representation made to Bank by any officer or director of
Borrower, or if any such warranty or representation is withdrawn by any officer
or director.
8.1.12 This Agreement shall at any time after its execution
and delivery and for any reason cease to be in full force and effect or shall be
declared null and void, or the validity or enforceability thereof shall be
contested by Borrower, or Borrower shall deny it has any further liability or
obligation under this Agreement.
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8.2 CURE OF EVENT OF DEFAULT.
If any Event of Default, other than a payment default, is curable and
if Borrower has not been given a notice of a similar default within the
preceding twelve (12) months, it may be cured (and no Event of Default will have
occurred) if Borrower, after receiving written notice from Bank demanding cure
of such default: (a) cures the default within fifteen (15) days; or (b) if the
cure requires more than fifteen (15) days, immediately initiates steps that Bank
deems in Bank's sole, but reasonable, discretion to be sufficient to cure the
default and thereafter continues and completes all reasonable and necessary
steps sufficient to produce compliance as soon as reasonably practical. Bank at
its sole discretion may elect to give Borrower additional cure opportunities.
ARTICLE 9 - BANK'S RIGHTS AND REMEDIES
9.1 SPECIFIC REMEDIES.
Upon the occurrence of an Event of Default by Borrower under this
Agreement, Bank may, at its election and without notice of its election and
without demand, do any one or more of the following, all of which are authorized
by Borrower:
9.1.1 Declare all Obligations, whether evidenced by this
Agreement or the Loan Documents, due and payable immediately.
9.1.2 Terminate this Agreement and any of the other Loan
Documents as to any future liability or obligation of Bank, but without
affecting Bank's rights and security interest in the Collateral and without
affecting the Obligations.
9.2 SET OFF.
Upon the occurrence and during the continuance of any Event of Default
the Bank is hereby authorized at any time and from time to time, without notice
to the Borrower (any such notice being expressly waived by the Borrower), to set
off and apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other indebtedness at any time owing
by the Bank to or for the credit or the account of Borrower against any and all
of the obligations of the Borrower now or hereafter existing under this
Agreement or the Revolving Note or any other Loan Document, irrespective of
whether or not the Bank shall have made any demand under this Agreement or the
Revolving Note or such other Loan Document and although such obligations may be
unmatured. The Bank agrees promptly to notify the Borrower after any such setoff
and application, provided that the failure to give such notice shall not affect
the validity of such setoff and application. The rights of the Bank under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of setoff) that the Bank may have.
9.3 CUMULATIVE REMEDIES.
The rights and remedies provided herein are cumulative, and are not
exclusive of any other rights, powers, privileges, or remedies, now or hereafter
existing, at law or in equity or otherwise.
ARTICLE 10 - MISCELLANEOUS
10.1 AMENDMENTS, ETC.
No amendment, modification, termination, or waiver of any provision of
any Loan Document to which the Borrower is a party, nor consent to any departure
by the Borrower from any Loan Document to which it is a party, shall in any
event be effective unless the same shall be in writing and signed by the Bank
and Borrower, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
10.2 NOTICES, ETC.
Unless otherwise provided in this Agreement, All notices and other
communications provided for under this Agreement and under the other Loan
Documents to which the Borrower is a party shall be in writing and either
personally served or sent by verified facsimile transmission, overnight delivery
service, or regular United States mail, postage prepaid, to Borrower or to Bank
as the case may be at the addresses set forth below:
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If to Borrower: American Ecology Corporation
000 X. Xxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxx Xxxxxxxxxxx
Fax: 208/000-0000
With a copy to: American Ecology Corporation
0 Xxxxxxxx Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
Fax: 281/000-0000
Xxxx X. Xxxx, Esq.
Stoel Rives
000 Xxxxx Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, Xxxxx 00000-0000
Fax: 208/000-0000
If to Bank: First Security Bank, N.A.
Xxxx Xxxxxx Xxx 0000
Xxxxx, Xxxxx 00000
Attention: Corporate Banking
Fax: 208/000-0000
With a copy to: Xxxxxxx, Xxxxxx, Xxxxxxx, Rock & Fields, Chartered
000 X. Xxxxxxx Xxxx., 00xx Xxxxx
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax: 208/000-0000
The parties may change the address at which they are to receive notices and
other communications hereunder by notice in writing in the foregoing manner
given to the other. All notices or demands sent in accordance with this Section
shall be deemed received on the earlier of the date of confirmed actual receipt
or three (3) Business Days after the deposit thereof in the mail.
10.3 NO WAIVER.
No failure or delay on the part of the Bank in exercising any right,
power, or remedy hereunder shall operate as a waiver thereof; nor shall any
single or partial exercise of any such right, power, or remedy preclude any
other or further exercise thereof or the exercise of any other right, power, or
remedy hereunder.
10.4 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon and inure to the benefit of the
Borrower and the Bank and their respective successors and assigns, except that
the Borrower may not assign or transfer any of its rights under any Loan
Document to which the Borrower is a party without the prior written consent of
the Bank.
10.5 INTEGRATION.
This Agreement and the Loan Documents contain the entire agreement
between the parties relating to the subject matter hereof and supersede all oral
statements and prior writings with respect thereto.
10.6 APPLICATION OF PAYMENTS.
Borrower waives the right to direct the application of any and all
payments at any time or times hereafter received by Bank on account of the
Obligations, and Borrower agrees that Bank shall have the continuing exclusive
right to apply and reapply such payments in any manner as Bank may deem
advisable, notwithstanding any entry by Bank upon its books.
10.7 CONTINUING WARRANTIES, REPRESENTATIONS AND COVENANTS.
Each warranty, representation, and covenant contained in this Agreement
shall continue until the Agreement is terminated and all Obligations have been
paid or satisfied in full and shall be conclusively presumed to have been relied
upon by Bank regardless of any investigation made or information possessed by
Bank. The
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warranties, representations, and covenants set forth herein shall be cumulative
and in addition to any and all other warranties, representations, and covenants
that Borrower shall give or cause to be given to Bank, either now or hereafter.
10.8 INDEMNITY.
The Borrower shall defend, indemnify, and hold the Bank harmless from
and against any and all claims, damages, judgments, penalties, costs, and
expenses (including attorney fees and court costs now or hereafter arising from
the aforesaid enforcement of this clause) arising directly or indirectly from
the activities of the Borrower and its Subsidiaries, its predecessors in
interest, or third parties with whom it has a contractual relationship, or
arising directly or indirectly from the violation of any environmental
protection, health, or safety law, whether such claims are asserted by any
governmental agency or any other person. This indemnity shall survive
termination of this Agreement for a period of five years.
10.9 CHOICE OF LAW AND VENUE.
This Agreement 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 Agreement 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
Agreement. All disputes, controversies, or claims arising out of, or in
connection with, this Agreement or any Loan Document shall be litigated in any
court of competent jurisdiction within the state of Idaho. Each party hereby
accepts jurisdiction of such state and agrees to accept service of process as if
it were personally served within such state. Each party irrevocably waives, to
the fullest extent permitted by law, any objection that the party may now or
hereafter have to the jurisdiction of the courts of such state and any claim
that any such litigation brought in any such court has been brought in an
inconvenient forum.
10.10 SEVERABILITY OF PROVISIONS.
Any provision of any Loan Document 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 of such Loan Document or affecting the validity or enforceability of
such provision in any other jurisdiction.
10.11 HEADINGS.
Article and Section headings in the Loan Documents are included in such
Loan Documents for the convenience of reference only and shall not constitute a
part of the applicable Loan Documents for any other purpose.
10.12 JURY TRIAL WAIVER.
THE BANK AND THE BORROWER HEREBY WAIVE TRIAL BY JURY IN ANY ACTION,
PROCEEDING, CLAIM, OR COUNTERCLAIM, WHETHER IN CONTRACT OR TORT, AT LAW OR IN
EQUITY, ARISING OUT OF OR IN ANY WAY RELATED TO THIS AGREEMENT OR THE LOAN
DOCUMENTS.
10.13 DESTRUCTION OF BORROWER'S DOCUMENTS.
After notice to Borrower, any documents, schedules, invoices, or other
papers delivered to Bank may be destroyed or otherwise disposed of by Bank at
any time six (6) months after they are delivered to or received by Bank, unless
Borrower requests in writing the return of the said documents, schedules,
invoices, or other papers and makes arrangements at Borrower's expense for their
return.
10.14 PARTICIPATIONS.
With Borrower's consent, which consent shall not be unreasonably
withheld, Bank may, at any time, sell to one or more banks, financial
institutions or other Persons (each a "Participant") participating interests in
the Loans or any other interest of Bank under the Loan Documents. In the event
of any such sale by Bank, Bank's obligations to Borrower under this Agreement
shall remain unchanged, Bank shall remain solely responsible for the performance
thereof, Bank shall remain the holder of the Loans for all purposes under the
Loan Documents, and Borrower shall continue to deal solely and directly with
Bank in connection with the Bank's rights and obligations under the Loan
Documents. If Obligations are due or unpaid, or shall have been declared or
shall have become due or unpaid, 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 the Loan Documents to the same extent as if the amount of
its participating interest were owing directly to it as Bank under this
Agreement.
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10.14.1 With Borrower's consent, which consent shall not be
unreasonably withheld, Borrower authorizes Bank to disclose to any actual or
prospective Participant and/or assignee, any and all financial information in
Bank's possession or known to Bank concerning Borrower, its affiliates, and the
Collateral that has been delivered to Bank by or on behalf of Borrower pursuant
to the Loan Documents or in connection with Bank's credit evaluation of
Borrower.
10.14.2 Notwithstanding any contrary provision of this
Section, Bank shall at all times be the lead lender (i.e., the sole party with
whom Borrower needs to communicate) with respect to the Loans, and Borrower
shall only be required to communicate with Bank. Each Participant that receives
confidential information regarding Borrower or the Collateral must agree to use
reasonable efforts to keep all information acquired by it in connection with the
Loans or Loan Documents and relating to Borrower and/or the collateral
confidential; provided, however, that such information may be distributed by any
Participant (i) pursuant to a court order or a demand made by any governmental
agency or authority, or otherwise in connection with litigation or as otherwise
required by law, (ii) after the occurrence of an Event of Default, but only with
respect to the Collateral, (iii) to such person's consultants or professionals,
as necessary, (iv) in connection with a sale or participation of such person's
interest in the Loans, and (v) to regulators in connection with audits.
10.15 EFFECTIVE DATE.
This Agreement shall be binding and deemed effective as of the date
first written above when executed by Borrower and accepted and executed by Bank.
10.16 COUNTERPARTS.
This Agreement may be executed in any number of counterparts and
delivered by facsimile transmission. Each counterpart when so executed shall be
deemed to be an original and all of which taken together shall constitute one
and the same Agreement.
[Signature Page Follows]
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IN WITNESS WHEREOF, Borrower has executed this Agreement.
Borrower: AMERICAN ECOLOGY CORPORATION
By
------------------------------------
Its
--------------------------------
ACCEPTED AND EFFECTIVE as of the _____ day of _________, 2000, in the
state of Idaho.
Bank: FIRST SECURITY BANK, N.A.
By
------------------------------------
Xxxxx X. Xxxx, Vice President
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REVOLVING NOTE
AUGUST 17, 2000
Boise, Idaho
BORROWER: AMERICAN ECOLOGY CORPORATION
ADDRESS: 000 X. XXXXX, XXXXX 000
XXXXX, XXXXX 00000
PRINCIPAL AMOUNT: FIVE MILLION DOLLARS ($5,000,000)
FOR VALUE RECEIVED, AMERICAN ECOLOGY CORPORATION, a Delaware
corporation ("Borrower"), promises to pay to the order of FIRST SECURITY BANK,
N.A. ("Bank") the total principal amount outstanding on this note (the "Note")
together with interest thereon as stated below, in lawful money of the United
States of America.
This Note is executed pursuant to and is the Revolving Note referred to
in that certain Credit Agreement, dated August 17, 2000, between Borrower and
Bank (as amended, modified, or supplemented from time to time, the "Credit
Agreement"). Capitalized terms used but not defined in this Note shall have the
same definitions as are ascribed to such terms in the Credit Agreement. This
Note is governed by the provisions of the Credit Agreement.
This Note is a revolving promissory note and evidences a revolving line
of credit not to exceed the maximum principal amount stated above at any one
time. The amount outstanding on this Note at any specific time shall be the
total amount advanced by Bank less the amount of principal payments made from
time to time, plus any interest due and payable.
Borrower agrees that any and all advances made hereunder shall be for
Borrower's benefit, whether or not said advances are deposited to Borrower's
account. Advances may be made at the request of those persons so identified in
the Credit Agreement and such persons are hereby authorized to request advances
and to direct the disposition of any such advances in the manner provided in the
Credit Agreement until written notice of revocation of this authority is
received by Bank from Borrower.
The outstanding unpaid balance of this Note shall bear interest at a
fluctuating per annum rate as set forth in the Credit Agreement. This Note shall
be repaid in the manner set forth in the Credit Agreement.
This Note is secured by a Security Agreement covering accounts and
other collateral as provided therein and in the Credit Agreement.
This Note 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 Note and the obligations
arising hereunder 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 Note. All disputes, controversies, or claims arising out of,
or in connection with, this Note shall be litigated in any court of competent
jurisdiction within the state of Idaho. Each party hereby accepts jurisdiction
of such state and agrees to accept service of process as if it were personally
served within such state. Each party irrevocably waives, to the fullest extent
permitted by law, any objection that the party may now or hereafter have to the
jurisdiction of the courts of such state and any claim that any such litigation
brought in any such court has been brought in an inconvenient forum.
Except as expressly provided in the Credit Agreement, the makers,
sureties, guarantors and endorsers of this Note jointly and severally waive
presentment for payment, protest, notice of protest and notice of nonpayment of
this Note, and consent that this Note or any payment due under
this Note may be extended or renewed without demand or notice, and further
consent to the release of any collateral or part thereof, with or without
substitution.
AMERICAN ECOLOGY CORPORATION
By
------------------------------------
Its
--------------------------------
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SECURITY AGREEMENT
This SECURITY AGREEMENT is made as of August 17, 2000, by AMERICAN
ECOLOGY CORPORATION, a Delaware corporation (the "Grantor"), to FIRST SECURITY
BANK, N.A., (the "Bank").
RECITALS:
A. Grantor and the Bank have entered into a Credit Agreement dated as of
August 17, 2000 (as amended from time to time, the "Credit Agreement").
B. It is a condition precedent to the making of financial accommodations to
Grantor by the Bank under the Credit Agreement that Grantor shall have granted
the security interest contemplated by this Agreement.
NOW, THEREFORE, in order to induce the Bank to make the loans under the
Credit Agreement, the Grantor agrees with the Bank as follows:
1. ASSIGNMENT AND GRANT OF SECURITY INTEREST. The Grantor hereby assigns
and grants to the Bank a security interest in all of the Grantor's right, title
and interest in and to the following, whether now owned or hereafter acquired
(the "Collateral"):
1.1 All trade accounts, accounts receivable or other rights to payment
for goods sold or leased or for services rendered, now or hereafter existing,
whether or not arising out of or in connection with the sale or lease of goods
or the rendering of services, and all rights, now or hereafter existing, in and
to all leases and other contracts securing or otherwise relating to the
foregoing obligations.
1.2 All proceeds of any and all of the foregoing Collateral (including,
without limitation, proceeds that constitute property of the types described in
clause l.1 of this Section 1), and, to the extent not otherwise included, all
(a) payments under insurance (whether or not the Bank is the loss payee
thereof), or any indemnity, warranty, or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral, and (b)
cash.
1.3 All records and data relating to any of the foregoing Collateral,
whether in the form of a writing, photograph, microfilm, microfiche, or
electronic media together with all of Grantor's right, title, and interest in
and to all computer software required to use, create, maintain, and process any
such records or data on electronic media.
2. SECURITY FOR OBLIGATIONS. The assignment and security interest granted
by this Agreement is granted to secure the payment of all obligations of the
Grantor now or hereafter existing under the Credit Agreement whether for
principal, interest, fees, expenses, or otherwise, and all obligations of the
Grantor now or hereafter existing under this Agreement (all such
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obligations of the Grantor being the "Obligations"). In addition, the
"Obligations" includes all other obligations, debts and liabilities, plus
interest thereon, of Grantor, or any one or more of them, to Bank, as well as
all claims by Bank against Grantor, or any one or more of them, whether existing
now or later; whether they are voluntary or involuntary, due or not due, direct
or indirect, absolute or contingent, liquidated or unliquidated; whether Grantor
may be liable individually or jointly with others; whether Grantor may be
obligated as guarantor, surety, accommodation party or otherwise. Without
limiting the generality of the foregoing, this Agreement secures the payment of
all amounts that constitute part of the Obligations and would be owed by the
Grantor to the Bank under the Credit Agreement but for the fact that they are
unenforceable or not allowable owing to the existence of bankruptcy,
reorganization, or similar proceedings involving the Grantor.
3. GRANTOR REMAINS LIABLE. Anything herein to the contrary notwithstanding,
(1) the Grantor shall remain liable under the contracts and agreements included
in the Collateral to the extent set forth therein to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed; (2) the exercise by the Bank of any rights hereunder shall not release
the Grantor from any of its duties or obligations under the contracts and
agreements included in the Collateral; and (3) the Bank shall not have any
obligation or liability under the contracts and agreements included in the
Collateral by reason of this Agreement, nor shall the Bank be obligated to
perform any of the obligations or duties of the Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.
4. REPRESENTATIONS AND WARRANTIES. The Grantor represents and warrants to
Bank as follows:
4.1 The chief place of business and chief executive office of the
Grantor and the office where the Grantor keeps its records concerning the
Receivables and other Collateral, and the originals of all chattel paper that
evidence Receivables, are located at its address specified in Section 16. None
of the Receivables is evidenced by a promissory note or other instrument.
4.2 The Grantor is the legal and beneficial owner of the Collateral
free and clear of any lien except for the security interest created by this
Agreement. No effective financing statement or other document similar in effect
covering all or any part of the Collateral is on file in any recording office,
except such as may have been filed in favor of the Bank. The Grantor has no
assumed business names.
4.3 This Agreement creates a valid security interest in the Collateral,
securing the payment of the Obligations, and all filings and other actions
necessary or desirable to perfect and protect such security interest in a first
priority position have been taken.
4.4 No consent of any other person or entity and no authorization,
approval, or other action by, and no notice to or filing with, any governmental
authority or regulatory body is required (a) for the grant by the Grantor of the
assignment and security interest granted hereby or for the execution and
delivery of this Agreement and the performance by the Grantor of its obligations
thereunder; (b) for the perfection or maintenance of the assignment and security
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interest created hereby (including the first priority nature of such assignment
and security interest); or (c) for the exercise by the Bank of the voting or
other rights provided for in this Agreement or the remedies in respect of the
Collateral pursuant to this Agreement (except as may be required in connection
with the disposition of any portion of the Security Collateral by laws affecting
the offering and sale of securities generally).
4.5 All of the Accounts are and will be bona fide existing obligations
created by the sale and actual delivery property, the rendition of services, or
the furnishing of other good and sufficient consideration to Account Debtors in
the regular course of business.
5. FURTHER ASSURANCES.
5.1 The Grantor shall from time to time, at the reasonable expense of
the Grantor, promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary or desirable, or that the
Bank may reasonably request, in order to perfect and protect any assignment or
security interest granted or purported to be granted hereby or to enable the
Bank to exercise and enforce its rights and remedies hereunder with respect to
any Collateral. Without limiting the generality of the foregoing, the Grantor
will: (a) xxxx conspicuously each chattel paper included in the Receivables,
each Related Contract, and, at the request of the Bank, each of its records
pertaining to the Collateral with a legend, in form and substance satisfactory
to the Bank, indicating that such document, chattel paper, Related Contract, or
Collateral is subject to the assignment, and security interest granted hereby;
(b) if any Collateral shall be evidenced by a promissory note or other
instrument or chattel paper, deliver and pledge to the Bank hereunder such note
or instrument or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance satisfactory to
the Bank; (c) execute and file such financing or continuation statements, or
amendments thereto, and such other instruments or notices, as may be necessary
or desirable, or as the Bank may request, in order to perfect and preserve the
pledge, assignment, and security interest granted or purported to be granted
hereby; and (d) deliver to Bank any certificate of title now or hereafter
existing on any of the Collateral and take all steps necessary for the title to
recite the interest of Bank.
5.2 The Grantor authorizes the Bank to file one or more financing or
continuation statements, and amendments thereto, relating to all or any part of
the Collateral without the signature of the Grantor where permitted by law. A
photocopy or other reproduction of this Agreement or any financing statement
covering the Collateral or any part thereof shall be sufficient as a financing
statement where permitted by law.
5.3 The Grantor will furnish to the Bank from time to time statements
and schedules further identifying and describing the Collateral and such other
reports in connection with the Collateral as the Bank may reasonably request,
all in reasonable detail.
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6. INSURANCE.
6.1 The Grantor shall, at its own expense, maintain insurance with
respect to the Collateral in such amounts, against such risks, in such form and
with such insurers, as shall be satisfactory to the Bank from time to time. Each
policy for liability insurance shall provide for all losses to be paid on behalf
of the Bank and the Grantor as their respective interests may appear and each
policy for property damage insurance shall provide for all losses (except for
losses of less than $50,000 per occurrence) to be paid directly to the Bank.
Each such policy shall in addition (a) name the Grantor and the Bank as insured
parties thereunder (without any representation or warranty by or obligation upon
the Bank) as their interests may appear; (b) contain the agreement by the
insurer that any loss thereunder shall be payable to the Bank notwithstanding
any action, inaction, or breach of representation or warranty by the Grantor;
(c) provide that there shall be no recourse against the Bank for payment of
premiums or other amounts with respect thereto; and (d) provide that at least
thirty days' prior written notice of cancellation or of lapse shall be given to
the Bank by the insurer. The Grantor shall, if so requested by the Bank, deliver
to the Bank original or duplicate policies of such insurance and, as often as
the Bank may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, the Grantor shall, at the request of the
Bank, duly execute and deliver instruments of assignment of such insurance
policies to comply with the requirements of Section 5.1 and cause the insurers
to acknowledge notice of such assignment.
6.2 Grantor shall promptly notify Bank of any loss or damage to the
Collateral. Bank may make proof of loss if Grantor fails to do so within fifteen
(15) days of the casualty. All proceeds of any insurance on the Collateral,
including accrued proceeds thereon, shall be held by Bank as part of the
Collateral. If Bank consents to repair or replacement of the damaged or
destroyed Collateral, Bank shall, upon satisfactory proof of expenditure, pay or
reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration. If Bank does not consent to repair or replacement of the
Collateral, Bank shall retain a sufficient amount of the proceeds to pay all of
the Obligations, and shall pay the balance to Grantor. Any proceeds that have
not been disbursed within six (6) months after their receipt and that Grantor
has not committed to the repair or restoration of the Collateral shall be used
to prepay the Obligations.
7. PLACE OF PERFECTION; RECORDS; COLLECTION OF RECEIVABLES.
7.1 The Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Receivables, and the originals of all chattel paper that evidence Receivables,
at the location therefor specified in Section 4.1 or, upon 30 days' prior
written notice to the Bank, at any other locations in a jurisdiction where all
actions required by Section 5 shall have been taken with respect to the
Receivables. The Grantor will hold and preserve such records and chattel paper
and will permit representatives of the Bank at any time during normal business
hours to inspect and make abstracts from such records and chattel paper.
7.2 Except as otherwise provided in this subsection, the Grantor shall
continue to collect, at its own expense, all amounts due or to become due the
Grantor under the Receivables. In connection with such collections, the Grantor
may take (and, at the Bank's direction, shall take) such action as the Grantor
or the Bank may deem necessary or advisable to enforce
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collection of the Receivables; provided, however, that the Bank shall have the
right upon the occurrence and during the continuance of an Event of Default or
an event that, with the giving of notice or the lapse of time, or both, would
become an Event of Default and upon written notice to the Grantor of its
intention to do so, to notify the account debtors or obligors under any
Receivables of the assignment of such Receivables to the Bank and to direct such
account debtors or obligors to make payment of all amounts due or to become due
to the Grantor thereunder directly to the Bank and, upon such notification and
at the expense of the Grantor, to enforce collection of any such Receivables,
and to adjust, settle, or compromise the amount or payment thereof, in the same
manner and to the same extent as the Grantor might have done. After receipt by
the Grantor of the notice from the Bank referred to in the proviso to the
preceding sentence, (a) all amounts and proceeds (including instruments)
received by the Grantor in respect of the Receivables shall be received in trust
for the benefit of the Bank hereunder, shall be segregated from other funds of
the Grantor, and shall be forthwith paid over to the Bank in the same form as so
received (with any necessary endorsement) to be held as cash collateral and
either (i) released to the Grantor so long as no Event of Default shall have
occurred and be continuing or (ii) if any Event of Default shall have occurred
and be continuing, applied as provided by Section 13.2, and (b) the Grantor
shall not adjust, settle, or compromise the amount or payment of any Receivable,
release wholly or partly any account debtor or obligor thereof, or allow any
credit or discount thereon.
8. TRANSFERS AND OTHER LIENS. The Grantor shall not (a) sell, assign (by
operation of law or otherwise), or otherwise dispose of, or grant any option
with respect to, any of the Collateral or (b) create or permit to exist any lien
upon or with respect to any of the Collateral, except for the security interest
under this Agreement.
9. BANK APPOINTED ATTORNEY-IN-FACT. The Grantor irrevocably appoints the
Bank the Grantor's attorney-in-fact, with full authority in the place and stead
of the Grantor and in the name of the Grantor or otherwise, from time to time in
the Bank's discretion, to take any action and to execute any instrument that the
Bank may deem necessary or advisable to accomplish the purposes of this
Agreement (subject to the rights of the Grantor under Section 8), including,
without limitation:
9.1 To obtain and adjust insurance required to be paid to the Bank
pursuant to the Section captioned "Insurance;"
9.2 To ask, demand, collect, xxx for, recover, compromise, receive and
give acquittance and receipts for moneys due and to become due under or in
connection with the Collateral;
9.3 To receive, endorse, and collect any drafts or other instruments,
documents, and chattel paper, in connection therewith; and
9.4 To file any claims or take any action or institute any proceedings
that the Bank may deem necessary or desirable for the collection of any of the
Collateral or otherwise to enforce the rights of the Bank with respect to any of
the Collateral.
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10. BANK MAY PERFORM. If the Grantor fails to perform any agreement
contained herein, the Bank may itself perform, or cause performance of, such
agreement, and the expenses of the Bank incurred in connection therewith shall
be payable by the Grantor under Subsection 14.2.
11. THE BANK'S DUTIES. The powers conferred on the Bank hereunder are
solely to protect its interest in the Collateral and shall not impose any duty
upon it to exercise any such powers. Except for the safe custody of any
Collateral in its possession and the accounting for moneys actually received by
it hereunder, the Bank shall have no duty as to any Collateral, or as to the
taking of any necessary steps to preserve rights against prior parties or any
other rights pertaining to any Collateral. The Bank shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.
12. REMEDIES. If any Event of Default shall have occurred and be
continuing:
12.1 The Bank may exercise in respect of the Collateral, in addition to
other rights and remedies provided for herein or otherwise available to it, all
the rights and remedies of a secured party on default under the Uniform
Commercial Code in effect in the State of Idaho at that time (whether or not
such code applies to the affected Collateral), and also may (a) require the
Grantor to, and the Grantor agrees that it will at its expense and upon request
of the Bank forthwith, assemble all or part of the Collateral as directed by the
Bank and make it available to the Bank at a place to be designated by the Bank
that is reasonably convenient to both parties and (b) without notice except as
specified below, sell the Collateral or any part thereof in one or more parcels
at public or private sale, at any of the Bank's offices or elsewhere, for cash,
on credit or for future delivery, and upon such other terms as the Bank may deem
commercially reasonable. The Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Bank shall not be obligated
to make any sale of Collateral regardless of notice of sale having been given.
The Bank may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
12.2 Any cash held by the Bank as Collateral and all cash proceeds
received by the Bank in respect of any sale of, collection from, or other
realization upon all or any part of the Collateral may, in the discretion of the
Bank, be held by the Bank as Collateral for, and/or then or any time thereafter
be applied (after payment of any amounts payable to the Bank pursuant to Section
14) in whole or in part by the Bank against, all or any part of the Obligations
in such order as the Bank shall elect. Any surplus of such cash or cash proceeds
held by the Bank and remaining after payment in full of all the Obligations
shall be paid over to the Grantor or to whomsoever may be lawfully entitled to
receive such surplus.
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13. INDEMNITY AND EXPENSES.
13.1 The Grantor shall indemnify the Bank from and against any and all
claims, losses, and liabilities (including reasonable attorney fees) growing out
of or resulting from this Agreement (including, without limitation, enforcement
of this Agreement), except claims, losses, or liabilities resulting from the
Bank's gross negligence or willful misconduct.
13.2 The Grantor shall upon demand pay to the Bank the amount of any
and all reasonable expenses, including the reasonable fees and expenses of its
counsel and of any experts and agents, that the Bank may incur in connection
with (a) the administration of this Agreement; (b) the custody, preservation,
use or operation of, or the sale of, collection from, or other realization upon,
any of the Collateral; (c) the exercise or enforcement of any of the rights of
the Bank hereunder; or (d) the failure by the Grantor to perform or observe any
of the provisions hereof.
14. AMENDMENTS. No amendment, modification, termination, or waiver of any
provision of this Agreement, and no consent to any departure by the Grantor
herefrom, shall in any event be effective unless the same shall be in writing
and signed by the Bank, and then such waiver or consent shall be effective only
in the specific instance and for the specific purpose for which given.
15. NOTICES. Unless otherwise provided in this Agreement, all notices or
demands by either party relating to this Agreement shall be in writing and
either personally served or sent by facsimile transmission, overnight delivery
service, or regular United States mail, postage prepaid, to Grantor or to Bank
as the case may be at the addresses set forth below:
If to Grantor: US Ecology Corporation
000 X. Xxxxx, Xxxxx 000
Xxxxx, Xxxxx 00000
Attention: Xxxxx X. Xxxxxxxxxxx
Fax: 000-000-0000
With a Copy to: Stoel Rives
000 X. Xxxxxxx Xxxx., Xxxxx 0000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxx X. Xxxx
Fax: 000-000-0000
And to: US Ecology Corporation
0 Xxxxxxxx Xxxxx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Fax: 000-000-0000
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If to Bank: First Security Bank
X.X. Xxx 0000
Xxxxx, Xxxxx 00000
Attention: Corporate Banking
Fax: 000-000-0000
With a copy to: Xxxxxxx, Xxxxxx, Xxxxxxx, Rock &
Fields, Chartered
000 X. Xxxxxxx Xxxx., 00xx Xxxxx (83702)
X.X. Xxx 000
Xxxxx, Xxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Fax: 000-000-0000
The parties may change the address at which they are to receive notices
hereunder by notice in writing in the foregoing manner given to the other. All
notices or demands sent in accordance with this Section shall be deemed received
on the earlier of the date of confirmed actual receipt or two (2) business days
after the deposit thereof in the mail.
16. CONTINUING SECURITY INTEREST; ASSIGNMENTS UNDER CREDIT AGREEMENT. This
Agreement shall create a continuing security interest in the Collateral and
shall (1) remain in full force and effect until the later of the payment in full
of the Obligations and all other amounts payable under this Agreement; (2) be
binding upon the Grantor, its successors and assigns; and (3) inure to the
benefit of, and be enforceable by, the Bank and its successors, transferees, and
assigns. Without limiting the generality of the foregoing clause (3), the Bank
may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement to any other person or entity, and such
other person or entity shall thereupon become vested with all the benefits in
respect thereof granted to the Bank herein or otherwise. Upon the later of the
payment in full of the Obligations and all other amounts payable under this
Agreement, the security interest granted hereby shall terminate and all rights
to the Collateral shall revert to the Grantor. Upon any such termination, the
Bank will, at the Grantor's expense, execute and deliver to the Grantor such
documents as the Grantor shall reasonably request to evidence such termination.
17. GOVERNING LAW. This Agreement 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, including,
without limiting the generality of the foregoing, matters of construction,
validity, enforceability and performance, this Agreement 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 Agreement. All disputes, controversies, or
claims arising out of, or in connection with, this Agreement shall be litigated
in any court of competent jurisdiction within the state of Idaho. Each party
hereby accepts jurisdiction of such state and agrees to accept service of
process as if it were personally served within such state. Each party
irrevocably waives, to the fullest extent permitted by law, any objection that
the party may now or hereafter have to the jurisdiction of the courts of such
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state and any claim that any such litigation brought in any such court has been
brought in an inconvenient forum.
18. DEFINITIONS. Capitalized terms used herein and not otherwise defined
herein shall have the respective meanings provided therefor in the Credit
Agreement.
19. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when executed and delivered shall be deemed an
original and all of which taken together shall be deemed to be one and the same
Agreement.
IN WITNESS WHEREOF, the Grantor has caused this Agreement to be executed as
of the date first written above.
AMERICAN ECOLOGY CORPORATION
By
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Its
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