Exhibit 10.1
REVOLVING CREDIT AGREEMENT
by and among
GEOWASTE INCORPORATED
(the "Parent")
and its Subsidiaries
listed on Schedule 1 hereto
(collectively the "Borrowers")
and
BANKBOSTON, N.A.
(the "Lender")
October 9, 1997
TABLE OF CONTENTS
PAGE
ss.1. DEFINITIONS AND RULES OF INTERPRETATION. .........................1
ss.1.1. Definitions. ..........................................1
ss.1.2. Rules of Interpretation. ..............................7
ss.2. THE REVOLVING CREDIT FACILITY. ...................................8
ss.2.1. Commitment to Lend. ...................................8
ss.2.2. The Note. .............................................8
ss.2.3. Requests for Loans. ...................................9
ss.2.4. Funds for Loans. ......................................9
ss.2.5. Interest. .............................................9
ss.2.6. Maturity of the Loans and Reimbursement Obligations. ..9
ss.2.7. Early Termination Fee. ................................9
ss.2.8. Mandatory Repayments of the Loans. ....................9
ss.2.9. Optional Prepayments or Repayments of Loans. .........10
ss.3. LETTERS OF CREDIT. ..............................................10
ss.3.1. Letter of Credit Commitment. .........................10
ss.3.2. Reimbursement Obligation of the Borrowers. ...........10
ss.3.3. Letter of Credit Payments. ...........................11
ss.3.4. Obligations Absolute. ................................11
ss.3.5. Reliance by Lender. ..................................11
ss.4 FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY. .11
ss.4.1. Fees. ................................................11
ss.4.2. Payments. ............................................12
ss.4.3. Computations. ........................................12
ss.4.4. Capital Adequacy. ....................................12
ss.4.5. Interest on Overdue Amounts. .........................13
ss.4.6. Interest Limitation. .................................13
ss.4.7. Additional Costs, Etc. ...............................13
ss.4.8. Certificate. .........................................14
ss.4.9. Concerning Joint and Several Liability of
the Borrowers. .....................................14
ss.4.10. New Borrowers. .......................................15
ss.5 REPRESENTATIONS AND WARRANTIES. .................................16
ss.5.1. Corporate Authority. .................................16
ss.5.2. Governmental Approvals. ..............................16
ss.5.3. Title to Properties; Leases. .........................16
ss.5.4. Financial Statements; Solvency. ......................17
ss.5.5. No Material Changes, Etc. ............................17
ss.5.6. Permits, Franchises, Patents, Copyrights, Etc. .......17
ss.5.7. Litigation. ..........................................17
ss.5.8. No Materially Adverse Contracts, Etc. ................17
ss.5.9. Compliance With Other Instruments, Laws, Etc. ........18
ss.5.10. Tax Status. ..........................................18
ss.5.11. No Event of Default. .................................18
ss.5.12. Holding Company and Investment Company Acts. .........18
ss.5.13. Absence of Financing Statements, Etc. ................18
ss.5.14. Employee Benefit Plans. ..............................18
ss.5.15. Use of Proceeds. .....................................19
ss.5.16. Environmental Compliance. ............................20
ss.5.17. Perfection of Security Interests. ....................21
ss.5.18. Certain Transactions. ................................21
ss.5.19. Subsidiaries. ........................................21
ss.5.20. True Copies of Charter and Other Documents. ..........21
ss.5.21. Disclosure. ..........................................21
ss.5.22. Permits and Governmental Authority. ..................22
ss.5.23. Environmental Reports. ...............................22
ss.6 AFFIRMATIVE COVENANTS OF THE BORROWERS. .........................22
ss.6.1. Punctual Payment. ....................................22
ss.6.2. Maintenance of Office. ...............................22
ss.6.3. Records and Accounts. ................................22
ss.6.4. Financial Statements, Certificates and Information. ..22
ss.6.5. Corporate Existence and Conduct of Business. .........23
ss.6.6. Maintenance of Properties. ...........................24
ss.6.7. Insurance. ...........................................24
ss.6.8. Taxes. ...............................................24
ss.6.9. Inspection of Properties, Books, and Contracts. ......24
ss.6.10. Compliance with Laws, Contracts, Licenses and
Permits; Maintenance of Material Licenses and Permits.25
ss.6.11. Environmental Indemnification. .......................25
ss.6.12. Further Assurances. ..................................25
ss.6.13. Notice of Potential Claims or Litigation. ............25
ss.6.14. Notice of Certain Events. ............................26
ss.6.15. Response Actions. ....................................26
ss.6.16. Environmental Assessments. ...........................26
ss.6.17. Notice of Default. ...................................27
ss.6.18. Closure and Post Closure Liabilities. ................27
ss.6.19. Subsidiaries. ........................................27
ss.6.20. New Subsidiaries. ....................................27
ss.7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. ....................27
ss.7.1. Restrictions on Indebtedness. ........................27
ss.7.2. Restrictions on Liens. ...............................28
ss.7.3. Restrictions on Investments. .........................29
ss.7.4. Mergers, Consolidations, Sales, Acquisitions. ........30
ss.7.5. Sale and Leaseback. ..................................30
ss.7.6. Restricted Distributions and Redemptions. ............30
ss.7.7. Employee Benefit Plans. ..............................31
ss.7.8. Capital Expenditures. ................................31
ss.7.9. Negative Pledges. ....................................31
ss.8. FINANCIAL COVENANTS OF THE BORROWERS. ...........................31
ss.8.1. Interest Coverage Ratio. .............................32
ss.8.2. Balance Sheet Leverage Ratio. ........................32
ss.8.3. Profitable Operations. ...............................32
ss.8.4. Cash Flow Leverage Ratio. ............................32
ss.9. CLOSING CONDITIONS. .............................................32
ss.9.1. Corporate Action. ....................................32
ss.9.2. Loan Documents, Etc. .................................32
ss.9.3. Certified Copies of Charter Documents. ...............32
ss.9.4. Incumbency Certificate. ..............................32
ss.9.5. Validity of Liens. ...................................33
ss.9.6. UCC Search Results. ..................................33
ss.9.7. Certificates of Insurance. ...........................33
ss.9.8. Opinions of Counsel. .................................33
ss.9.9. Audited Financial Statements; Financial Projections. .33
ss.9.10. Environmental Reports and Certificate Regarding
Permits. ...........................................33
ss.9.11. Initial Compliance Certificate. ......................33
ss.10. CONDITIONS TO ALL LOANS. ........................................33
ss.10.1. Representations True; No Event of Default. ...........33
ss.10.2. Performance; No Event of Default. ....................34
ss.10.3. No Legal Impediment. .................................34
ss.10.4. Governmental Regulation. ............................34
ss.10.5. Proceedings and Documents. ..........................34
ss.11. COLLATERAL SECURITY. ............................................34
ss.12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT. ....34
ss.12.1. Events of Default and Acceleration. .................34
ss.12.2. Termination of Commitment. ..........................37
ss.12.3. Remedies. ...........................................37
ss.13. SETOFF. .........................................................37
ss.14. EXPENSES. .......................................................37
ss.15. INDEMNIFICATION. ................................................38
ss.16. SURVIVAL OF COVENANTS, ETC. .....................................38
ss.17. PARTIES IN INTEREST. ............................................38
ss.18. NOTICES, ETC. ...................................................38
ss.19. MISCELLANEOUS. ..................................................39
ss.20. ENTIRE AGREEMENT, ETC. ..........................................39
ss.21. WAIVER OF JURY TRIAL. ...........................................39
ss.22. GOVERNING LAW. ..................................................40
ss.23. SEVERABILITY. ...................................................40
TABLE OF CONTENTS
PAGE
SCHEDULES & EXHIBITS
Exhibit A Form of Revolving Credit Note
Exhibit B Form of Revolving Credit Loan Request
Exhibit C Form of Compliance Certificate
Exhibit D Form of Chief Operating Officer's Certificate
Exhibit E Borrowers' Standard Due Diligence Practices
Schedule 1 Subsidiaries of the Parent
Schedule 5.7 Litigation
Schedule 5.16 Environmental Compliance
Schedule 5.18 Certain Transactions
Schedule 5.22 Pending Permits
Schedule 6.7 Insurance Coverage
Schedule 6.10 Negative Pledges
Schedule 7.1(c) Indebtedness with Respect to Guaranties, Etc.
Schedule 7.1(d) Landfill Closure Bonds
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 9th day of October,
1997 by and among GEOWASTE INCORPORATED, a Delaware corporation (the "Parent"),
its Subsidiaries listed on SCHEDULE 1 hereto (the Parent and such Subsidiaries
herein collectively referred to as the "Borrowers" and, individually, as a
"Borrower"), each of which Borrowers (unless otherwise listed on SCHEDULE 1
hereto) having its principal place of business at Suite 700, 000 Xxxx Xxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxx 00000 and BANKBOSTON, N.A., a national banking
association having its principal place of business at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000 (the "Lender").
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
SS. 1.1 DEFINITIONS. The following terms shall have the meaningS set
forth in this ss.1 or elsewhere in the provisions of this Agreement referred to
below:
ACCOUNTANTS. See ss.5.4(a).
AGREEMENT. This Revolving Credit Agreement, including the Schedules
and Exhibits hereto, as amended and in effect from time to time.
APPLICABLE LAWS. See ss.6.10.
BALANCE SHEET DATE. June 30, 1997.
BASE RATE. The higher of (a) the annual rate of interest announced
from time to time by the Lender at its head office in Boston, Massachusetts, as
its "base rate" (it being understood that such rate is a reference rate and not
necessarily the lowest rate of interest charged by the Lender), or (b) one
percent (1%) above the overnight federal funds effective rate, as published by
the Board of Governors of the Federal Reserve System, as in effect from time to
time.
BASE RATE LOANS. Loans bearing interest calculated by reference to the
Base Rate.
BORROWERS. See Preamble.
BUSINESS DAY. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business.
CAPITAL ASSETS. Fixed assets, both tangible (such as land, buildings,
fixtures, machinery and equipment) and intangible (such as patents, copyrights,
trademarks, franchises and goodwill); PROVIDED THAT Capital Assets shall not
include (a) any item customarily charged directly to expense or depreciated over
a useful life of twelve (12) months or less in accordance with generally
accepted accounting principles, or (b) any item obtained through an acquisition
permitted by ss.7.4 hereof.
CAPITAL EXPENDITURES. Amounts paid or indebtedness incurred by the
Borrowers in connection with the purchase or lease of Capital Assets that would
be required to be capitalized and shown on the balance sheet of such Person in
accordance with GAAP.
CAPITALIZED LEASES. Leases, the discounted future rental payment
obligations under which are required to be capitalized on the balance sheet of
the lessee or obligor in accordance with GAAP.
CERTIFIED OR CERTIFIED. With respect to the financial statements of
any Person, such statements as audited by a firm of independent auditors, whose
report expresses the opinion, without qualification, that such financial
statements present fairly the financial position of such Person.
CFO. See ss.6.4(b).
CLOSING DATE. The date on which the conditions precedent set forth in
ss.9 are satisfied.
CODE. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
COLLATERAL. All of the property, rights and interests of the Borrowers
that are or are intended to be subject to the security interests and mortgages
created by the Security Documents.
COMMITMENT FEE. See ss.4.1(a).
COMPLIANCE CERTIFICATE. See ss.6.4(c).
CONSOLIDATED or CONSOLIDATED. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrowers
consolidated in accordance with GAAP.
CONSOLIDATED EARNINGS BEFORE INTEREST AND TAXES OR EBIT. For any
period, the Consolidated Net Income (or Deficit) of the Borrowers determined in
accordance with GAAP, PLUS (a) interest expense, and (b) income tax expense, to
the extent that each of the same has been deducted in calculating Consolidated
Net Income (or Deficit).
CONSOLIDATED EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND
AMORTIZATION OR EBITDA. For any twelve month period, the Consolidated Net Income
(or Deficit) of the Borrowers determined in accordance with GAAP excluding
pooling charges, PROVIDED THAT, with respect to any Subsidiary acquired within
the past twelve months or to be acquired, the calculation of Consolidated Net
Income (or Deficit) for the period prior to such Subsidiary's acquisition may
include reference to such Subsidiary's historical financial statements as if
such Subsidiary had been owned for those twelve months (PROVIDED THAT such
statements have been audited and approved by the Lender and the Lender has
received appropriate documentation thereof) and in the case of acquisitions
occurring after June 30, 1997, may be further adjusted to add back non-recurring
private company expenses which are discontinued upon such acquisitions to the
extent such adjustments are approved by the Lender, PLUS (a) interest expense,
(b) income taxes, (c) depreciation and landfill depletion expense, and (d)
amortization expense, to the extent that each of the same has been deducted in
calculating such adjusted Consolidated Net Income (or Deficit), as certified by
the CFO in the Compliance Certificate delivered to the Lender pursuant to ss.6.4
hereof.
CONSOLIDATED NET INCOME (OR DEFICIT). The consolidated net income (or
deficit) of the Borrowers after deduction of all expenses, taxes, and other
proper charges, determined in accordance with GAAP, after eliminating therefrom
all extraordinary nonrecurring items of income or loss.
CONSOLIDATED TOTAL ASSETS. All assets of the Borrowers determined on a
consolidated basis in accordance with GAAP.
CONSOLIDATED TOTAL INTEREST EXPENSE. For any period, the aggregate
amount of interest expense required to be paid or accrued by the Borrowers
during such period on all Indebtedness of the Borrowers outstanding during all
or any part of such period, including capitalized interest expense for such
period.
CONSOLIDATED TOTAL LIABILITIES. All liabilities of the Borrowers
determined on a consolidated basis in accordance with GAAP.
CONSULTING ENGINEER. An environmental consulting firm acceptable to
the Lender.
DEFAULT. See ss.12.
DISPOSAL. See "Release".
DISTRIBUTION. The declaration or payment of any dividend or
distribution on or in respect of any shares of any class of capital stock, any
partnership interests or any membership interests of any Person, other than
dividends or other distributions payable solely in shares of common stock,
partnership interests or membership units of such Person, as the case may be;
the purchase, redemption, or other retirement of any shares of any class of
capital stock, partnership interests or membership units of such Person,
directly or indirectly through a Subsidiary or otherwise; the return of equity
capital by any Person to its shareholders, partners or members as such; or any
other distribution on or in respect of any shares of any class of capital stock,
partnership interest or membership unit of such Person.
DOLLARS or $. Dollars in lawful currency of the United States of
America.
DRAWDOWN DATE. The date on which any Loan is made or is to be made.
EBIT. See definition of Consolidated Earnings Before Interest and
Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest,
Taxes, Depreciation and Amortization.
EMPLOYEE BENEFIT PLAN. Any employee benefit plan within the meaning of
ss.3(3) of ERISA maintained or contributed to by any Borrower, other than a
Guaranteed Pension Plan or a Multiemployer Plan.
ENVIRONMENTAL LAWS. See ss.5.16(a).
ERISA. The Employee Retirement Income Security Act of 1974, as amended
and in effect from time to time.
ERISA AFFILIATE. Any Person which is treated as a single employer with
any Borrower under ss.414 of the Code.
ERISA REPORTABLE EVENT. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
EVENT OF DEFAULT. See ss.12.
FUNDED DEBT. Indebtedness of the Borrowers for borrowed money, PLUS
(i) Indebtedness in respect of Capitalized Leases, (ii) Indebtedness in respect
of letters of credit, and (iii) guarantees of all such Indebtedness listed
above. GENERALLY ACCEPTED ACCOUNTING PRINCIPLES OR GAAP. (i) When used in ss.8,
whether directly or indirectly through reference to a capitalized term used
therein, means (A) principles that are consistent with the principles
promulgated or adopted by the Financial Accounting Standards Board and its
predecessors, in effect for the fiscal year ended on the Balance Sheet Date, and
(B) to the extent consistent with such principles, the accounting practice of
the Borrowers reflected in their financial statements for the year ended on the
Balance Sheet Date, and (ii) when used in general, other than as provided above,
means principles that are (A) consistent with the principles promulgated or
adopted by the Financial Accounting Standards Board and its predecessors, as in
effect from time to time, and (B) consistently applied with past financial
statements of the Borrowers adopting the same principles, provided that in each
case referred to in this definition of "generally accepted accounting
principles" a certified public accountant would, insofar as the use of such
accounting principles is pertinent, be in a position to deliver an unqualified
opinion (other than a qualification regarding changes in generally accepted
accounting principles) as to financial statements in which such principles have
been properly applied.
GUARANTEED PENSION PLAN. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by any Borrower or any
ERISA Affiliate the benefits of which are guaranteed on termination in full or
in part by the PBGC pursuant to Title IV of ERISA, other than a Multiemployer
Plan.
HAZARDOUS SUBSTANCES. See ss.5.16(b).
INDEBTEDNESS. Collectively, without duplication, whether classified as
Indebtedness, an Investment or otherwise on the obligor's balance sheet, (a) all
indebtedness for borrowed money or credit obtained or other similar monetary
obligations, direct or indirect, (b) all obligations for the deferred purchase
price of property or services or for future payment to the seller of property or
services (other than trade payables not overdue by more than ninety (90) days
incurred in the ordinary course of business), (c) all obligations evidenced by
notes, bonds, debentures or other similar debt instruments, (d) all obligations
created or arising under any conditional sale or other title retention agreement
with respect to property acquired (even though the rights and remedies of the
seller or lender under such agreement in the event of default are limited to
repossession or sale of such property), (e) all obligations, liabilities and
indebtedness under Capitalized Leases, (f) all obligations, contingent or
otherwise, under acceptance, letter of credit or similar facilities, (g) all
agreements for indemnification or agreements to guarantee others against losses
of any kind, (h) all liabilities or obligations in respect of judgments or
awards against such Person, (i) all obligations, liabilities or indebtedness
(contingent or otherwise) under landfill closure and post- closure bonds, (j)
all Indebtedness of others referred to in clauses (a) through (i) above which is
guaranteed, or in effect guaranteed, directly or indirectly in any manner,
including through an agreement (A) to pay or purchase such Indebtedness or to
advance or supply funds for the payment or purchase of such Indebtedness, (B) to
purchase, sell or lease (as lessee or lessor) property, or to purchase or sell
services, primarily for the purpose of enabling any Person to make payment of
such Indebtedness or to assure the holder of such Indebtedness against loss, (C)
to supply funds to or in any other manner invest in any Person (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (D) otherwise to assure any Person
against loss, and (k) all Indebtedness referred to in clauses (a) through (j)
above secured or supported by (or for which the holder of such Indebtedness has
an existing right, contingent or otherwise, to be secured or supported by) any
lien or encumbrance on (or other right of recourse to or against) property
(including, without limitation, accounts and contract rights), even though the
owner of the property has not assumed or become liable, contractually or
otherwise, for the payment of such Indebtedness.
INVESTMENTS. All expenditures made and all liabilities incurred
(contingently or otherwise) for the acquisition of stock or Indebtedness of, or
for loans, advances, capital contributions or transfers of property to, or in
respect of any guaranties (or other commitments as described under
Indebtedness), or obligations of, any Person, or pre-payments for the use of
landfill air space in excess of usual and customary industry practice. In
determining the aggregate amount of Investments outstanding at any particular
time: (a) the amount of any Investment represented by a guaranty shall be taken
at not less than the principal amount of the obligations guaranteed and still
outstanding; (b) there shall be included as an Investment all interest accrued
with respect to Indebtedness constituting an Investment unless and until such
interest is paid; (c) there shall be deducted in respect of each such Investment
any amount received as a return of capital (but only by repurchase, redemption,
retirement, repayment, liquidating dividend or liquidating distribution); (d)
there shall not be deducted in respect of any Investment any amounts received as
earnings on such Investment, whether as dividends, interest or otherwise, except
that accrued interest included as provided in the foregoing clause (b) may be
deducted when paid; and (e) there shall not be deducted from the aggregate
amount of Investments any decrease in the value thereof.
LENDER'S HEAD OFFICE. The Lender's head office at 000 Xxxxxxx Xxxxxx,
Xxxxxx, Xxxxxxxxxxxxx 00000, or at such other location as the Lender may
designate from time to time.
LETTERS OF CREDIT. Standby Letters of Credit issued or to be issued by
the Lender under ss.3 hereof for the account of the Borrowers.
LETTER OF CREDIT APPLICATIONS. Letter of Credit Applications in such
form as may be agreed upon by the Borrowers and the Lender from time to time
which are entered into pursuant to ss.3 hereof as such Letter of Credit
Applications are amended, varied or supplemented from time to time.
LETTER OF CREDIT FEE. See ss.4.1(b).
LOAN DOCUMENTS. This Agreement, the Note, the Letter of Credit
Applications, the Letters of Credit, and the Security Documents, each as
amended, modified, or supplemented and in effect from time to time.
LOAN AND LETTER OF CREDIT REQUEST. See ss.2.3.
LOANS. Loans made by the Lender to the Borrowers pursuant to ss.2.1
hereof.
MATERIAL ACQUISITION. Acquisition for which the sum of the value of
the Stock given by the Borrowers in consideration for the acquisition plus the
cash paid and Indebtedness assumed or incurred (excluding landfill closure and
post-closure bonds) is $2,000,000 or more.
MATURITY DATE. October 9, 2000.
MAXIMUM DRAWING AMOUNT. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit.
MULTIEMPLOYER PLAN. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by any Borrower or any ERISA
Affiliate.
NOTE. See ss.2.2.
OBLIGATIONS. All indebtedness, obligations and liabilities of the
Borrowers to the Lender, individually or collectively, existing on the date of
this Agreement or arising thereafter, direct or indirect, joint or several,
absolute or contingent, matured or unmatured, liquidated or unliquidated,
secured or unsecured, arising by contract, operation of law or otherwise,
arising or incurred under this Agreement or any of the other Loan Documents or
in respect of any of the Loans made or Reimbursement Obligations incurred or the
Letters of Credit, the Note or any other instrument at any time evidencing any
thereof.
OVERNIGHT FEDERAL FUNDS EFFECTIVE RATE. The overnight federal funds
effective rate as published by the Board of Governors of the Federal Reserve
System, as in effect from time to time.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
PERMITTED LIENS. See ss.7.2.
PERSON. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof.
PLEDGE AGREEMENT. The Stock Pledge Agreement, dated as of the date
hereof, between the Borrowers and the Lender pledging all of the stock of the
Subsidiaries of the Parent to the Lender, as such agreement may be further
amended, modified, or supplemented from time to time.
REAL PROPERTY. All real property owned or leased by the Borrowers.
REIMBURSEMENT OBLIGATION. The Borrowers' obligation to reimburse the
Lender on account of any drawing under any Letter of Credit as provided in
ss.3.2.
RELEASE. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
ss.ss.9601 ET SEQ. ("CERCLA") and the term "DISPOSAL" (or "DISPOSED") shall have
the meaning specified in the Resource Conservation and Recovery Act of 1976, 42
U.S.C. ss.ss.6901 ET SEQ. ("RCRA") and regulations promulgated thereunder;
provided, that in the event either CERCLA or RCRA is amended so as to broaden
the meaning of any term defined thereby, such broader meaning shall apply as of
the effective date of such amendment and provided further, to the extent that
the laws of a state wherein the property lies establishes a meaning for
"Release" or "Disposal" which is broader than specified in either CERCLA or
RCRA, such broader meaning shall apply.
SECURITY AGREEMENT. The Security Agreement, dated as of the date
hereof, between the Borrowers and the Lender, as such agreement may be further
amended, modified, or supplemented from time to time, in form and substance
acceptable to the Lender.
SECURITY DOCUMENTS. The Security Agreement, the Pledge Agreement and
any additional documents evidencing or perfecting the Lender's lien on the
shares of the Subsidiaries of the Parent, including Uniform Commercial Code
financing statements, each as amended and in effect from time to time.
SUBSIDIARY. Any corporation, association, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority of the
outstanding capital stock or other interest entitled to vote generally.
TOTAL COMMITMENT. See ss.2.1.
ss.1.2. RULES OF INTERPRETATION.
(a) A reference to any document or agreement shall include such
document or agreement as amended, modified or supplemented from time to time in
accordance with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the
singular.
(c) A reference to any law includes any amendment or modification to
such law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms capitalized but not otherwise defined herein have
the meanings assigned to them by Generally Accepted Accounting Principles
applied on a consistent basis by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
(g) All terms not specifically defined herein or by Generally Accepted
Accounting Principles, which terms are defined in the Uniform Commercial Code as
in effect in the Commonwealth of Massachusetts, have the meanings assigned to
them therein.
(h) Reference to a particular "ss." refers to that section of this
Agreement unless otherwise indicated.
(i) The words "herein", "hereof", "hereunder" and words of like import
shall refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
ss. 2. THE REVOLVING CREDIT FACILITY.
ss. 2.1. COMMITMENT TO LEND. Subject to the terms and conditions set
forth in this Agreement, the Lender agrees to lend to the Borrowers and the
Borrowers may borrow, repay, and reborrow from time to time between the Closing
Date and the Maturity Date, upon notice by the Borrowers to the Lender given in
accordance with ss.2.3, such sums as are requested by the Borrowers PROVIDED
THAT the sum of the outstanding principal amount of the Loans (giving effect to
the requested Loan) plus the Maximum Drawing Amount shall not exceed a maximum
aggregate amount outstanding of $5,000,000 (the "Total Commitment"). Each
request for a Loan or Letter of Credit hereunder shall constitute a
representation and warranty by the Borrowers that the conditions set forth in
ss.9 and ss.10, as the case may be, have been satisfied on the date of such
request. Any unpaid Reimbursement Obligation with respect to any Letter of
Credit shall be a Base Rate Loan hereunder.
ss. 2.2 THE NOTE. The Revolving Credit Loans shall be evidenced by a
promissory note of the Borrowers in substantially the form of EXHIBIT A hereto
(the "Note"), dated as of the Closing Date and completed with appropriate
insertions. The Note shall be payable to the order of the Lender in an amount
equal to the Total Commitment, and representing the obligation of the Borrowers
to pay the Lender such principal amount or, if less, the outstanding principal
amount of all Loans made by the Lender, plus interest accrued thereon, as set
forth below. The Borrowers irrevocably authorize the Lender to make or cause to
be made, in connection with a Drawdown Date of any Loan or at the time of
receipt of any payment of principal on the Note, an appropriate notation on the
Lender's records reflecting the making of the Loan or the receipt of such
payment (as the case may be) and may, prior to any transfer of the Note, endorse
on the reverse side thereof the outstanding principal amount of Loans evidenced
thereby. The outstanding amount of the Loans set forth on the Lender's record
shall, absent manifest error, be PRIMA FACIE evidence of the principal amount
thereof owing and unpaid to the Lender, but the failure to record, or any error
in so recording, any such amount shall not limit or otherwise affect the
obligations of the Borrowers hereunder or under the Note to make payments of
principal of or interest on the Note when due.
ss. 2.3 REQUESTS FOR LOANS. The Parent as agent for the Borrowers
shall give to the Lender written notice in the form of EXHIBIT B hereto (or
telephonic notice confirmed in writing or a telecopy in the form of EXHIBIT B
hereto) of each Loan requested hereunder (a "Loan and Letter of Credit Request")
not later than 11:00 a.m. (Boston time) one Business Day prior to the Drawdown
Date of any Base Rate Loan. Each Loan requested shall be in a minimum amount of
$100,000. Each such request shall specify the principal amount of the Loan
requested and shall reflect the Maximum Drawing Amount of all Letters of Credit
outstanding. Requests for Loans made hereunder shall be irrevocable and binding
on the Borrowers, and shall obligate the Borrowers to accept the Loan requested
from the Lender on the proposed Drawdown Date. Each of the representations and
warranties made by or on behalf of the Borrowers to the Lender in this Agreement
or any other Loan Document shall be true and correct in all material respects
when made and shall, for all purposes of this Agreement, be deemed to be
repeated on and as of the date of the submission of a Loan and Letter of Credit
Request and on and as of the Drawdown Date of such Loan or the date of issuance
of such Letter of Credit (except to the extent (i) of changes resulting from
transactions contemplated or permitted by this Agreement and the other Loan
Documents, (ii) of changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse to the business, assets or
financial condition of any Borrower or the Borrowers taken as a whole, (iii) of
changes disclosed to the Lender in writing and accepted by the Lender, or (iv)
that such representations and warranties expressly relate only to an earlier
date).
ss. 2.4 FUNDS FOR LOANS. Upon receipt of the documents required by
ss.9 or ss.10, as the case may be, and the satisfaction of the other conditions
set forth therein, to the extent applicable, the Lender will make available to
the Borrowers on the proposed Drawdown Date of any Loan, at the Lender's Head
Office, in immediately available funds, the amount of the requested Loan.
ss. 2.5. INTEREST. The outstanding principal amount of the Loans shall
bear interest at the rate per annum equal to the Base Rate PLUS one-quarter
percent (1/4%). Interest shall be payable (a) quarterly in arrears on the last
Business Day of each fiscal quarter for the fiscal quarter ending on such date,
and (b) on the Maturity Date for all Loans.
ss. 2.6. MATURITY OF THE LOANS AND REIMBURSEMENT OBLIGATIONS. The
Loans and all unpaid Reimbursement Obligations shall be due and payable on the
Maturity Date. Each of the Borrowers promises to pay on the Maturity Date all
Loans and all unpaid Reimbursement Obligations outstanding on such date,
together with any and all accrued and unpaid interest thereon and any fees and
other amounts owing hereunder.
ss. 2.7. EARLY TERMINATION FEE. In the event the Borrowers terminate
or refinance this facility prior to the Maturity Date, other than pursuant to a
refinancing provided by the Lender, the Borrowers shall pay a $50,000 early
termination fee to the Lender.
ss. 2.8. MANDATORY REPAYMENTS OF THE LOANS. If at any time the
outstanding amount of the Loans PLUS the Maximum Drawing Amount of all
outstanding Letters of Credit exceeds the Total Commitment, then the Borrowers
shall immediately pay the amount of such excess to the Lender (a) for
application to the Loans, or (b) if no Loans shall be outstanding, to be held by
the Lender as collateral security for the Reimbursement Obligations PROVIDED,
HOWEVER, that if the amount of cash collateral held by the Lender pursuant to
this ss.2.8(b) exceeds the Maximum Drawing Amount, the Lender shall return such
excess to the Borrowers.
ss. 2.9. OPTIONAL PREPAYMENTS OR REPAYMENTS OF LOANS. Subject to the
terms and conditions of ss.2.7, the Borrowers shall have the right, at their
election, to repay or prepay the outstanding amount of the Loans, as a whole or
in part, at any time without penalty or premium. The Borrowers shall give the
Lender, no later than 12:00 noon (Boston time) three (3) Business Days prior to
such proposed prepayment or repayment, written notice (or telephonic notice
confirmed in writing or by telecopy) of any proposed prepayment or repayment
pursuant to this ss.2.9, specifying the proposed date of prepayment or repayment
of Loans and the principal amount to be paid (in integral multiples of $100,000,
or, if less, the balance of the Loans).
ss. 3. LETTERS OF CREDIT.
ss. 3.1. LETTER OF CREDIT COMMITMENT. Subject to the terms and
conditions hereof and the execution and receipt of a Loan and Letter of Credit
Request reflecting the Maximum Drawing Amount of all Letters of Credit
(including the requested Letter of Credit) and a Letter of Credit Application,
the Lender, in reliance upon the representations and warranties of the Borrowers
contained herein, agrees to issue standby letters of credit, in such form as may
be requested from time to time by the Parent as agent for the Borrowers and
agreed to by the Lender; PROVIDED, HOWEVER, THAT, after giving effect to such
request, the aggregate Maximum Drawing Amount of all letters of credit issued at
any time under this ss.3.1 (the "Letters of Credit") shall not exceed
$1,000,000, and no Letter of Credit shall have an expiration date later than the
earlier of (i) one year after the date of issuance of the Letter of Credit, or
(ii) thirty (30) days prior to the Maturity Date.
ss. 3.2. REIMBURSEMENT OBLIGATION OF THE BORROWERS. In order to induce
the Lender to issue, extend and renew each Letter of Credit, the Borrowers
hereby agree to reimburse or pay to the Lender with respect to each Letter of
Credit issued, extended or renewed by the Lender hereunder as follows:
(a) on each date that any draft presented under any Letter of Credit
is honored by the Lender or the Lender otherwise makes payment with respect
thereto, (i) the amount paid by the Lender under or with respect to such Letter
of Credit, and (ii) the amount of any taxes, fees, charges or other costs and
expenses whatsoever incurred by the Lender in connection with any payment made
by the Lender under, or with respect to, such Letter of Credit; and
(b) upon the Maturity Date or the acceleration of the Reimbursement
Obligations with respect to all Letters of Credit in accordance with ss.12, an
amount equal to the then Maximum Drawing Amount of all Letters of Credit, which
amount shall be held by the Lender as cash collateral for all Reimbursement
Obligations.
Each such payment shall be made to the Lender at the Lender's Head
Office in immediately available funds. Interest on any and all amounts remaining
unpaid by the Borrowers under this ss.3.2 at any time from the date such amounts
become due and payable (whether as stated in this ss.3.2, by acceleration or
otherwise) until payment in full (whether before or after judgment) shall be
payable to the Lender on demand at the rate specified in ss.4.5 for overdue
amounts.
ss. 3.3. LETTER OF CREDIT PAYMENTS. If any draft shall be presented or
other demand for payment shall be made under any Letter of Credit, the Lender
shall notify the Borrowers of the date and amount of the draft presented or
demand for payment and of the date and time when it expects to pay such draft or
honor such demand for payment. The responsibility of the Lender to the Borrowers
shall be only to determine that the documents (including each draft) delivered
under each Letter of Credit in connection with such presentment shall be in
conformity with such Letter of Credit.
ss. 3.4. OBLIGATIONS ABSOLUTE. The Borrowers' obligations under this
ss.3 shall be absolute and unconditional under any and all circumstances and
irrespective of the occurrence of any Default or Event of Default or any
condition precedent whatsoever or any setoff, counterclaim or defense to payment
which the Borrowers may have or have had against the Lender or any beneficiary
of a Letter of Credit. The Borrowers further agree with the Lender that the
Lender shall not be responsible for, and the Borrowers' Reimbursement
Obligations under ss.3.2 shall not be affected by, among other things, the
validity or genuineness of documents or of any endorsements thereon, even if
such documents should in fact prove to be in any or all respects invalid,
fraudulent or forged, or any dispute between or among the Borrowers, the
beneficiary of any Letter of Credit or any financing institution or other party
to which any Letter of Credit may be transferred or any claims or defenses
whatsoever of the Borrowers against the beneficiary of any Letter of Credit or
any such transferee. The Lender shall not be liable, if done in good faith and
with due care and in conformity with such laws, regulations, usage of trade or
commercial or banking customs as may be applicable, for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Letter of Credit. The
Borrowers agree that any action taken or omitted by the Lender under or in
connection with each Letter of Credit and the related drafts and documents, if
done in good faith, shall be binding upon the Borrowers and shall not result in
any liability on the part of the Lender to the Borrowers.
ss. 3.5 RELIANCE BY LENDER. To the extent not inconsistent with
ss.3.4, the Lender shall be entitled to rely, and shall be fully protected in
relying upon, any Letter of Credit, draft, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, telecopy, telex or teletype
message, statement, order or other document believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person or Persons
and upon advice and statements of legal counsel, independent accountants and
other experts selected by the Lender.
ss. 4. FEES, PAYMENTS, AND COMPUTATIONS; JOINT AND SEVERAL LIABILITY.
ss. 4.1 FEES.
(a) COMMITMENT FEE. The Borrowers agree to pay to the Lender a
commitment fee (the "Commitment Fee") at the rate of one-half percent (1/2%) per
annum on the unused portion of the Total Commitment during each calendar quarter
or portion thereof from the Closing Date to the Maturity Date (or to the date of
termination in full of the Total Commitment, if earlier). This Commitment Fee
shall be payable quarterly in arrears on the last day of each fiscal quarter for
the fiscal quarter then ended commencing on the last day of the calendar month
in which the conditions set forth in ss.9 hereof are first satisfied, with a
final payment on the Maturity Date.
(b) LETTER OF CREDIT FEE. The Borrowers shall pay a fee (the "Letter
of Credit Fee") to the Lender equal to one and one-half percent (1 1/2%) per
annum on the average Maximum Drawing Amount of Letters of Credit outstanding
during each fiscal quarter, payable quarterly in arrears on the last day of each
fiscal quarter for the fiscal quarter then ended. The Borrowers shall also pay
the customary issuance and administrative fees of the Lender with respect to the
Letters of Credit, including, without limitation, fees for modifying such
Letters of Credit.
ss. 4.2 PAYMENTS.
(a) All payments of principal, interest, Reimbursement Obligations,
fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Lender, for the account of the Lender, received
at the Lender's Head Office in immediately available funds by 12:00 noon (Boston
time) on any due date.
(b) All payments by the Borrowers hereunder and under any of the other
Loan Documents shall be made without setoff or counterclaim and free and clear
of and without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrowers
are compelled by law to make such deduction or withholding. If any such
obligation is imposed upon the Borrowers with respect to any amount payable by
them hereunder or under any of the other Loan Documents, the Borrowers will pay
to the Lender, for the Lender's account, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such additional amount
in Dollars as shall be necessary to enable the Lender to receive the same net
amount which the Lender would have received on such due date had no such
obligation been imposed upon the Borrowers. The Borrowers will deliver promptly
to the Lender certificates or other valid vouchers for all taxes or other
charges deducted from or paid with respect to payments made by the Borrowers
hereunder or under such other Loan Document.
ss. 4.3. COMPUTATIONS. All computations of interest on the Loans and
of Letter of Credit Fees or other fees shall be based on a 365- or 366-day year,
and shall be paid for the actual number of days elapsed. Whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
Business Day, and interest shall accrue during such extension.
ss. 4.4 CAPITAL ADEQUACY. If any present or future law, governmental
rule, regulation, policy, guideline or directive (whether or not having the
force of law) or the interpretation thereof by a court or governmental authority
with appropriate jurisdiction affects the amount of capital required or expected
to be maintained by the Lender or any corporation controlling the Lender and the
Lender determines that the amount of capital required to be maintained by it is
increased by or based upon the existence of the Lender's Loans or Letters of
Credit, or commitment with respect thereto, then the Lender may notify the
Borrowers of such fact. To the extent that the costs of such increased capital
requirements are not reflected in the Base Rate (if relating to Base Rate
Loans), the Borrowers and the Lender shall thereafter attempt to negotiate in
good faith, within thirty (30) days of the day on which the Borrowers receive
such notice, an adjustment payable hereunder that will adequately compensate the
Lender in light of these circumstances. If the Borrowers and the Lender are
unable to agree to such adjustment within thirty (30) days of the date on which
the Borrowers receive such notice, then commencing on the date of such notice
(but not earlier than the effective date of any such increased capital
requirement), the fees payable hereunder shall increase by an amount that will,
in the Lender's reasonable determination, provide adequate compensation. The
Lender shall allocate such cost increases among its customers in good faith and
on an equitable basis.
ss. 4.5 INTEREST ON OVERDUE AMOUNTS. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest compounded monthly and be payable on demand at a rate per annum equal
to the Base Rate plus two and one-quarter percentage points (2.25%) until such
overdue amount shall be paid in full (after as well as before judgment).
ss. 4.6. INTEREST LIMITATION. Notwithstanding any other term of this
Agreement or any Note or any other document referred to herein or therein, the
maximum amount of interest which may be charged to or collected from any Person
liable hereunder or under the Note by the Lender shall be absolutely limited to,
and shall in no event exceed, the maximum amount of interest which could
lawfully be charged or collected under applicable law (including, to the extent
applicable, the provisions of Section 5197 of the Revised Statutes of the United
States of America, as amended, 12 U.S.C. Section 85, as amended), so that the
maximum of all amounts constituting interest under applicable law, howsoever
computed, shall never exceed as to any Person liable therefor such lawful
maximum, and any term of this Agreement, the Note, the Letter of Credit
Applications, or any other document referred to herein or therein which could be
construed as providing for interest in excess of such lawful maximum shall be
and hereby is made expressly subject to and modified by the provisions of this
paragraph.
ss. 4.7 ADDITIONAL COSTS, ETC. If any present or future applicable
law, which expression, as used herein, includes statutes, rules and regulations
thereunder and interpretations thereof by any competent court or by any
governmental or other regulatory body or official charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to the Lender by any central bank or other fiscal, monetary or
other authority (whether or not having the force of law), shall impose on the
Lender any tax (other than taxes imposed by any jurisdiction in which the
Lender's head office is located and based upon or measured by the income or
profits of the Lender), levy, impost, duty, charge fees, deduction or
withholdings of any nature or requirements with respect to this Agreement, the
other Loan Documents, the Loans, the Total Commitment, the Letters of Credit or
any class of loans or commitments or letters of credit of which any of the
Loans, the Total Commitment or the Letters of Credit forms a part, and the
result of any of the foregoing is:
(i) to increase the cost to the Lender of making, funding,
issuing, renewing, extending or maintaining the Loans, the Total
Commitment, or the Letters of Credit; or
(ii) to reduce the amount of principal, interest or other amount
payable to the Lender hereunder on account of the Total Commitment,
the Loans, drawings under the Letters of Credit, or
(iii) to require the Lender to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment
or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by the Lender
from the Borrowers hereunder,
then, and in each such case, the Borrowers will, upon demand made by the Lender
at any time and from time to time and as often as the occasion therefor may
arise, pay to the Lender such additional amounts as will be sufficient to
compensate the Lender for such additional cost, reduction, payment or foregone
interest or other sum (after the Lender shall have allocated the same fairly and
equitably among all customers of any class generally affected thereby).
ss. 4.8. CERTIFICATE. A certificate setting forth any additional
amounts payable pursuant to ss.4.7 and a reasonable explanation of such amounts
which are due, submitted by the Lender to the Borrowers, shall be conclusive,
absent manifest error, that such amounts are due and owing.
ss. 4.9. CONCERNING JOINT AND SEVERAL LIABILITY OF THE BORROWERS.
(a) Each of the Borrowers is accepting joint and several liability
hereunder and under the other Loan Documents in consideration of the financial
accommodations to be provided by the Lender under this Agreement, for the mutual
benefit, directly and indirectly, of each of the Borrowers and in consideration
of the undertakings of each other Borrower to accept joint and several liability
for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby irrevocably
and unconditionally accepts, not merely as a surety but also as a co-debtor,
joint and several liability with the other Borrowers, with respect to the
payment and performance of all of the Obligations (including, without
limitation, any Obligations arising under this ss.4.9), it being the intention
of the parties hereto that all the Obligations shall be the joint and several
Obligations of each of the Borrowers without preferences or distinction among
them.
(c) If and to the extent that any of the Borrowers shall fail to make
any payment with respect to any of the Obligations as and when due or to perform
any of the Obligations in accordance with the terms thereof, then in each such
event the other Borrowers will make such payment with respect to, or perform,
such Obligation.
(d) The Obligations of each of the Borrowers under the provisions of
this ss.4.9 constitute full recourse Obligations of each of the Borrowers
enforceable against each such corporation to the full extent of its properties
and assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever except as subject to ss.5.1(c).
(e) Except as otherwise expressly provided in this Agreement, each of
the Borrowers hereby waives notice of acceptance of its joint and several
liability, notice of any Loans made under this Agreement, notice of any action
at any time taken or omitted by the Lender under or in respect of any of the
Obligations, and, generally, to the extent permitted by applicable law, all
demands, notices and other formalities of every kind in connection with this
Agreement. Each of the Borrowers hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Obligations,
the acceptance of any payment of any of the Obligations, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
the Lender at any time or times in respect of any default by any of the
Borrowers in the performance or satisfaction of any term, covenant, condition or
provision of this Agreement, any and all other indulgences whatsoever by the
Lender in respect of any of the Obligations, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution or release, in
whole or in part, of any of the Borrowers. Without limiting the generality of
the foregoing, each of the Borrowers assents to any other action or delay in
acting or failure to act on the part of the Lender with respect to the failure
by any of the Borrowers to comply with any of its respective Obligations,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this ss.4.9,
afford grounds for terminating, discharging or relieving any of the Borrowers,
in whole or in part, from any of its Obligations under this ss.4.9, it being the
intention of each of the Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Borrowers under this
ss.4.9 shall not be discharged except by performance and then only to the extent
of such performance. The Obligations of each of the Borrowers under this ss.4.9
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, re-construction or similar proceeding
with respect to any of the Borrowers or the Lender. The joint and several
liability of the Borrowers hereunder shall continue in full force and effect
notwithstanding any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of formation of any of
the Borrowers or the Lender.
(f) The provisions of this ss.4.9 are made for the benefit of the
Lender and its successors and assigns, and may be enforced in good faith by it
from time to time against any or all of the Borrowers as often as occasion
therefor may arise and without requirement on the part of the Lender first to
marshal any of its claims or to exercise any of its rights against any other
Borrower or to exhaust any remedies available to it against any other Borrower
or to resort to any other source or means of obtaining payment of any of the
Obligations hereunder or to elect any other remedy. The provisions of this
ss.4.9 shall remain in effect until all of the Obligations shall have been paid
in full or otherwise fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded or must
otherwise be restored or returned by the Lender upon the insolvency, bankruptcy
or reorganization of any of the Borrowers, or otherwise, the provisions of this
ss.4.9 will forthwith be reinstated in effect, as though such payment had not
been made.
ss. 4.10. NEW BORROWERS. Any newly-created or acquired Subsidiaries
shall become Borrowers hereunder by signing the Note (or, at the option of the
Lender, allonges to the Note), entering into an amendment to this Agreement and
the Security Documents with the other parties hereto providing that such
Subsidiary shall become a Borrower hereunder, and providing such other
documentation as the Lender may reasonably request including, without
limitation, documentation with respect to conditions noted in ss.9 hereof. In
such event, the Lender is hereby authorized by the parties to amend SCHEDULE 1
hereto to include each such Subsidiary as a Borrower hereunder.
ss. 5. REPRESENTATIONS AND WARRANTIES. The Borrowers jointly and
severally represent and warrant to the Lender as follows:
ss. 5.1. CORPORATE AUTHORITY.
(a) INCORPORATION; GOOD STANDING. Each of the Borrowers (i) is a
corporation duly organized, validly existing and in good standing
under the laws of its respective state of incorporation, (ii) has all
requisite corporate power to own its property and conduct its business
as now conducted and as presently contemplated, and (iii) is in good
standing as a foreign corporation and is duly authorized to do
business in each jurisdiction in which its property or business as
presently conducted or contemplated makes such qualification
necessary, except where a failure to be so qualified would not have a
material adverse effect on the business, assets or financial condition
of the Borrowers considered as a whole.
(b) AUTHORIZATION. The execution, delivery and performance of the
Loan Documents and the transactions contemplated hereby and thereby
(i) are within the corporate authority of each of the Borrowers, (ii)
have been duly authorized by all necessary corporate proceedings,
(iii) do not conflict with or result in any material breach or
contravention of any provision of law, statute, rule or regulation to
which any of the Borrowers is subject or any judgment, order, writ,
injunction, license or permit applicable to any of the Borrowers so as
to materially adversely affect the assets, business or any activity of
the Borrowers, and (iv) do not conflict with any provision of the
corporate charter or bylaws of the Borrowers or any agreement or other
instrument binding upon the Borrowers.
(c) ENFORCEABILITY. The execution, delivery and performance of
the Loan Documents will result in valid and legally binding
obligations of the Borrowers enforceable against each in accordance
with the respective terms and provisions hereof and thereof, except as
enforceability is limited by bankruptcy, insolvency, reorganization,
moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that
availability of the remedy of specific performance or injunctive
relief or other equitable remedy is subject to the discretion of the
court before which any proceeding therefor may be brought.
ss. 5.2. GOVERNMENTAL APPROVALS. The execution, delivery and
performance by the Borrowers of the Loan Documents and the transactions
contemplated hereby and thereby do not require any approval or consent of, or
filing with, any governmental agency or authority other than those already
obtained.
ss. 5.3. TITLE TO PROPERTIES; LEASES. The Borrowers own all of the
assets reflected in the consolidated or combined balance sheets as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no mortgages, capitalized leases, conditional sales agreements, title
retention agreements, liens or other encumbrances except Permitted Liens.
ss. 5.4. FINANCIAL STATEMENTS; SOLVENCY.
(a) There has been furnished to the Lender (i) the consolidated
balance sheet of the Borrowers dated the Balance Sheet Date and
consolidated statements of operations for the fiscal year then ended,
certified by Coopers & Xxxxxxx or such other independent accounting
firm acceptable to the Lender (the "Accountants"), and (ii) a
consolidated and consolidating balance sheet and related consolidated
and consolidating statement of operations of the Borrowers dated the
Balance Sheet Date for the fiscal quarter then ended. Said balance
sheets and statements of operations have been prepared in accordance
with GAAP, fairly present in all material respects the financial
condition of the Borrowers on a consolidated basis, as at the close of
business on the date thereof and the results of operations for the
period then ended. There are no contingent liabilities of the
Borrowers as of such date involving amounts of $100,000 or more in the
aggregate known to the officers of the Borrowers which have not been
disclosed in said balance sheets and the related notes thereto, as the
case may be.
(b) The Borrowers (both before and after giving effect to the
transactions contemplated by this Agreement) are solvent (I.E., they
have assets having a fair value in excess of the amount required to
pay their probable liabilities on their existing debts as they become
absolute and matured) and have, and expect to have, the ability to pay
their debts from time to time incurred in connection therewith as such
debts mature.
ss. 5.5. NO MATERIAL CHANGES, ETC. Since the Balance Sheet Date, there
have occurred no material adverse changes in the financial condition or business
of the Borrowers as shown on or reflected in the consolidated balance sheet of
such corporations as at the Balance Sheet Date, or the consolidated statement of
income for the fiscal year then ended other than changes in the ordinary course
of business which have not had any material adverse effect either individually
or in the aggregate on the business or financial condition of any Borrower.
Since the Balance Sheet Date, there has not been any Distribution.
ss. 5.6. PERMITS, FRANCHISES, PATENTS, COPYRIGHTS, ETC. Each of the
Borrowers possesses all franchises, patents, copyrights, trademarks, trade
names, licenses and permits, and rights in respect of the foregoing, adequate
for the conduct of its business substantially as now conducted without known
conflict with any rights of others.
ss. 5.7. LITIGATION. To the knowledge of the Borrowers, except as
shown on SCHEDULE 5.7 hereto, there are no actions, suits, proceedings or
investigations of any kind pending or threatened against any Borrower before any
court, tribunal or administrative agency or board which, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of the Borrowers
considered as a whole, or materially impair the right of the Borrowers to carry
on business substantially as now conducted, or result in any substantial
liability not adequately covered by insurance, or for which adequate reserves
are not maintained on the consolidated balance sheet or which question the
validity of any of the Loan Documents, or any action taken or to be taken
pursuant hereto or thereto.
ss. 5.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. None of the Borrowers
is subject to any charter, corporate or other legal restriction, or any
judgment, decree, order, rule or regulation which in the judgment of the
Borrowers' officers has or is expected in the future to have a materially
adverse effect on the business, assets or financial condition of the Borrowers
considered as a whole. None of the Borrowers is a party to any contract or
agreement which in the judgment of the Borrowers' officers has or is expected to
have any materially adverse effect on the business of the Borrowers considered
as a whole, except as otherwise reflected in adequate reserves.
ss. 5.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. None of the
Borrowers is violating any provision of its charter documents or by-laws or any
agreement or instrument by which any of them may be subject or by which any of
them or any of their properties may be bound or any decree, order, judgment, or
any statute, license, rule or regulation, in a manner which could result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of the Borrowers considered as a
whole.
ss. 5.10. TAX STATUS. The Borrowers have made or filed all federal and
state income and all other tax returns, reports and declarations required by any
jurisdiction to which any of them are subject (unless and only to the extent
that any Borrower has set aside on its books provisions reasonably adequate for
the payment of all unpaid and unreported taxes); and have paid all taxes and
other governmental assessments and charges that are material in amount, shown or
determined to be due on such returns, reports and declarations, except those
being contested in good faith; and have set aside on their books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in an aggregate amount of $100,000 or more claimed to be due by the
taxing authority of any jurisdiction, and the officers of the Borrowers know of
no basis for any such claim.
ss. 5.11. NO EVENT OF DEFAULT. No Default or Event of Default has
occurred and is continuing.
ss. 5.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. None of the
Borrowers is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is any of them a "registered
investment company", or an "affiliated company" or a "principal underwriter" of
a "registered investment company", as such terms are defined in the Investment
Company Act of 1940, as amended.
ss. 5.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except as contemplated
by ss.7.2 of this Agreement, there is no financing statement, security
agreement, chattel mortgage, real estate mortgage or other document filed or
recorded with any filing records, registry, or other public office, which
purports to cover, affect or give notice of any present or possible future lien
on, or security interest in, any assets or property of any of the Borrowers or
rights thereunder.
ss. 5.14 EMPLOYEE BENEFIT PLANS.
(a) IN GENERAL. Each Employee Benefit Plan and each Guaranteed
Pension Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions and the bonding of
fiduciaries and other persons handling plan funds as required by
ss.412 of ERISA. The Borrowers have heretofore delivered to the Lender
the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted
under ss.103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
(b) TERMINABILITY OF WELFARE PLANS. No Employee Benefit Plan
which is an employee welfare benefit plan within the meaning of
ss.3(1) or ss.3(2)(B) of ERISA, provides benefit coverage subsequent
to termination of employment except as required by Title I, Part 6 of
ERISA or applicable state insurance laws. Any Borrower may terminate
each such Plan at any time (or at any time subsequent to the
expiration of any applicable bargaining agreement) in the discretion
of such Borrower without liability to any Person other than for claims
arising prior to termination.
(c) GUARANTEED PENSION PLANS. Each contribution required to be
made to a Guaranteed Pension Plan, whether required to be made to
avoid the incurrence of an accumulated funding deficiency, the notice
or lien provisions of ss.302(f) of ERISA, or otherwise, has been
timely made. No waiver of an accumulated funding deficiency or
extension of amortization periods has been received with respect to
any Guaranteed Pension Plan, and neither any of the Borrowers nor any
ERISA Affiliate is obligated to or has posted security in connection
with an amendment of a Guaranteed Pension Plan pursuant to ss.307 of
ERISA or ss.401(a)(29) of the Code. No liability to the PBGC (other
than required insurance premiums, all of which have been paid) has
been incurred by any Borrower or any ERISA Affiliate with respect to
any Guaranteed Pension Plan and there has not been any ERISA
Reportable Event, or any other event or condition which presents a
material risk of termination of any Guaranteed Pension Plan by the
PBGC. Based on the latest valuation of each Guaranteed Pension Plan
(which in each case occurred within twelve months of the date of this
representation), and on the actuarial methods and assumptions employed
for that valuation, the aggregate benefit liabilities of all such
Guaranteed Pension Plans within the meaning of ss.4001 of ERISA did
not exceed the aggregate value of the assets of all such Guaranteed
Pension Plans, disregarding for this purpose the benefit liabilities
and assets of any Guaranteed Pension Plan with assets in excess of
benefit liabilities.
(d) MULTIEMPLOYER PLANS. None of the Borrowers nor any ERISA
Affiliate has incurred any material liability (including secondary
liability) to any Multiemployer Plan as a result of a complete or
partial withdrawal from such Multiemployer Plan under ss.4201 of ERISA
or as a result of a sale of assets described in ss.4204 of ERISA. None
of the Borrowers nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or is insolvent under and
within the meaning of ss.4241 or ss.4245 of ERISA or is at risk of
entering reorganization or becoming insolvent, or that any
Multiemployer Plan intends to terminate or has been terminated under
ss.4041A of ERISA
ss. 5.15. USE OF PROCEEDS. The proceeds of the Loans shall be used for
corporate purposes, including to refinance certain existing Indebtedness of the
Borrowers, for working capital purposes, for Capital Expenditures, for Letters
of Credit, and for additional acquisitions permitted by ss.7.4 hereof or
otherwise approved in writing by the Lender. No proceeds of the Loans shall be
used in any way that will violate Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System.
ss. 5.16 ENVIRONMENTAL COMPLIANCE. The Borrowers have taken all
reasonable and prudent steps to investigate the past and present condition and
usage of the Real Properties and the operations conducted thereon and, based
upon such diligent investigation, have determined that, except as shown on
SCHEDULE 5.16:
(a) None of the Borrowers, nor any operator of their properties,
is in violation, or alleged violation, of any judgment, decree, order,
law, permit, license, rule or regulation pertaining to environmental
matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive
Environmental Response, Compensation and Liability Act of 1980 as
amended ("CERCLA"), the Superfund Amendments and Reauthorization Act
of 1986 ("XXXX"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any other federal, state or
local statute, regulation, ordinance, order or decree relating to
health, safety or the environment (the "Environmental Laws"), which
violation would have a material adverse effect on the business, assets
or financial condition of the Borrowers considered as a whole.
(b) None of the Borrowers has received notice from any third
party including, without limitation, any federal, state or local
governmental authority, (i) that any one of them has been identified
by the United States Environmental Protection Agency ("EPA") as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 000 Xxxxxxxx X;
(ii) that any hazardous waste, as defined by 42 U.S.C. ss.6903(5), any
hazardous substances as defined by 42 U.S.C. ss.9601(14), any
pollutant or contaminant as defined by 42 U.S.C. ss.9601(33) and any
toxic substance, oil or hazardous materials or other chemicals or
substances regulated by any Environmental Laws ("Hazardous
Substances") which any one of them has generated, transported or
disposed of has been found at any site at which a federal, state or
local agency or other third party has conducted or has ordered that
any Borrower conduct a remedial investigation, removal or other
response action pursuant to any Environmental Law; or (iii) that it is
or shall be a named party to any claim, action, cause of action,
complaint, legal or administrative proceeding arising out of any third
party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
(c) (i) To the best of Borrower's knowledge, no portion of the
Real Property has been used for the handling, processing, storage or
disposal of Hazardous Substances except in material compliance with
applicable Environmental Laws; and no underground tank or other
underground storage receptacle for Hazardous Substances is located on
such properties; (ii) in the course of any activities conducted by the
Borrowers, or operators of the Real Property, no Hazardous Substances
have been generated or are being used on such properties except in
material compliance with applicable Environmental Laws; (iii) there
have been no unpermitted Releases or threatened Releases of Hazardous
Substances on, upon, into or from the Real Property, which Releases
would have a material adverse effect on the value of such properties;
(iv) to the best of the Borrowers' knowledge, there have been no
Releases on, upon, from or into any real property in the vicinity of
the Real Property which, through soil or groundwater contamination,
may have come to be located on, and which would have a material
adverse effect on the value of, such properties; and (v) in addition,
any Hazardous Substances that have been generated on the Real Property
have been transported offsite only by carriers having an
identification number issued by the EPA, treated or disposed of only
by treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters and
facilities, to the best of the Borrowers' knowledge, have been and are
operating in material compliance with such permits and applicable
Environmental Laws.
(d) none of the Real Property is or shall be subject to any
applicable environmental clean-up responsibility law or environmental
restrictive transfer law or regulation, by virtue of the transactions
set forth herein and contemplated hereby.
ss. 5.17. PERFECTION OF SECURITY INTERESTS. All filings, assignments,
pledges and deposits of documents or instruments have been made and all other
actions have been taken that are necessary under applicable law, or reasonably
requested by the Lender, to establish and perfect the Lender's security
interests in the Collateral as described in the Security Documents. The
Collateral and the Lender's rights with respect to the Collateral are not
subject to any setoff, claims, withholdings or other defenses, except for
Permitted Liens. The Borrowers are the owners of the Collateral free from any
lien, security interest, encumbrance and any other claim or demand, except for
Permitted Liens.
ss. 5.18. CERTAIN TRANSACTIONS. Except as set forth on SCHEDULE 5.18
and except for arm's length transactions pursuant to which the Borrowers make
payments in the ordinary course of business upon terms no less favorable than
the Borrowers could obtain from third parties, none of the officers, directors,
or employees of the Borrowers are presently a party to any transaction with the
Borrowers (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrowers, any
corporation, partnership, trust or other entity in which any officer, director,
or any such employee has a substantial interest or is an officer, director,
trustee or partner.
ss. 5.19. SUBSIDIARIES. SCHEDULE 1 sets forth a complete and accurate
list of the Subsidiaries, including the name of each Subsidiary and its
jurisdiction of incorporation, together with the number of authorized and
outstanding shares of each Subsidiary. Each Subsidiary is directly or indirectly
wholly owned by the Parent. The Parent has good and marketable title to all of
the shares it purports to own of the stock of each Subsidiary, free and clear in
each case of any lien. All such shares have been duly issued and are fully paid
and non-assessable.
ss. 5.20. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. The Borrowers
have furnished the Lender copies, in each case true and complete as of the
Closing Date, of (a) all charter and other incorporation documents (together
with any amendments thereto) and (b) by-laws (together with any amendments
thereto).
ss. 5.21. DISCLOSURE. No representation or warranty made by the
Borrowers in this Agreement or in any agreement, instrument, document,
certificate, statement or letter furnished to the Lender by or on behalf of or
at the request of the Borrowers in connection with any of the transactions
contemplated by the Loan Documents contains any untrue statement of a material
fact or omits to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances in which they are
made.
ss. 5.22. PERMITS AND GOVERNMENTAL AUTHORITY. Except as disclosed in
SCHEDULE 5.22 hereto, all permits (other than those the absence of which would
not have a material adverse effect on the business, operations or financial
condition of any Borrower) required for the construction and operation of all
landfills currently owned or operated by the Borrowers have been obtained and
remain in full force and effect and are not subject to any appeals or further
proceedings or to any unsatisfied conditions that may allow material
modification or revocation. None of the Borrowers, nor, to the knowledge of the
Borrowers, the holder of such permits is in violation of any such permits,
except for any violation which would not have a material adverse effect on the
business, operations or financial condition of the Borrowers considered as a
whole.
ss. 5.23. ENVIRONMENTAL REPORTS. The Borrowers have delivered to the
Lender copies of all environmental reports in their possession (or in the
possession of their Lenders, consultants, or professional advisors) relating to
the Real Property.
ss. 6. AFFIRMATIVE COVENANTS OF THE BORROWERS. The Borrowers jointly
and severally covenant and agree that, so long as any Loan, the Note, or any
Letter of Credit is outstanding or the Lender has any obligation to make Loans
or to issue, extend, or renew any Letters of Credit hereunder:
ss. 6.1. PUNCTUAL PAYMENT. The Borrowers will duly and punctually pay
or cause to be paid the principal and interest on the Loans, all Reimbursement
Obligations, fees and other amounts provided for in this Agreement and the other
Loan Documents, all in accordance with the terms of this Agreement and such
other Loan Documents.
ss. 6.2. MAINTENANCE OF OFFICE. The Borrowers will maintain their
chief executive offices at Jacksonville, Florida, or at such other place in the
United States of America as the Borrowers shall designate upon 30 days prior
written notice to the Lender.
ss. 6.3. RECORDS AND ACCOUNTS. Each of the Borrowers will keep true
and accurate records and books of account in which full, true and correct
entries will be made in accordance with GAAP and with the requirements of all
regulatory authorities and maintain adequate accounts and reserves for all taxes
(including income taxes), depreciation, depletion, obsolescence and amortization
of its properties, all other contingencies, and all other proper reserves.
ss. 6.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrowers will deliver to the Lender:
(a) as soon as practicable, but, in any event not later than 95
days after the end of each fiscal year of the Borrowers, the
consolidated and consolidating balance sheets of Borrowers as at the
end of such year, statements of cash flows, and the related
consolidated and consolidating statements of operations, each setting
forth in comparative form the figures for the previous fiscal year,
all such consolidated and consolidating financial statements to be in
reasonable detail, prepared, in accordance with GAAP and, with respect
to the consolidated financial statements, certified by the
Accountants. In addition, simultaneously therewith, the Borrowers
shall use their best efforts to provide the Lender with a written
statement from such Accountants to the effect that the Borrowers are
in compliance with the covenants set forth in ss.8 hereof, and that,
in making the examination necessary to said certification, nothing has
come to the attention of such Accountants that would indicate that any
Default or Event of Default exists, or, if such accountants shall have
obtained knowledge of any then existing Default or Event of Default
they shall disclose in such statement any such Default or Event of
Default; PROVIDED THAT such Accountants shall not be liable to the
Lender for failure to obtain knowledge of any Default or Event of
Default;
(b) as soon as practicable, but in any event not later than 45
days after the end of each fiscal quarter of the Borrowers commencing
with the fiscal quarter ending September 30, 1997, copies of the
consolidated and consolidating balance sheets and statement of
operations of the Borrowers as at the end of such quarter, subject to
year end adjustments, and the related statement of cash flows, all in
reasonable detail and prepared in accordance with GAAP with a
certification by the principal financial or accounting officer of the
Borrowers (the "CFO") that the consolidated financial statements are
prepared in accordance with GAAP and fairly present the consolidated
financial condition of the Borrowers as at the close of business on
the date thereof and the results of operations for the period then
ended, subject to year-end adjustments in accordance with GAAP;
(c) simultaneously with the delivery of the financial statements
referred to in (a) and (b) above, (i) a statement in the form of
EXHIBIT C hereto (the "Compliance Certificate") certified by the CFO
that the Borrowers are in compliance with the covenants contained in
ss.ss.6, 7 and 8 hereof as of the end of the applicable period setting
forth in reasonable detail computations evidencing compliance with
ss.ss.7.1, 7.3, 7.8, and 8 hereof, PROVIDED THAT if the Borrowers
shall at the time of issuance of such certificate or at any other time
obtain knowledge of any Default or Event of Default, the Borrowers
shall include in such certificate or otherwise deliver forthwith to
the Lender a certificate specifying the nature and period of existence
thereof and what action the Borrowers propose to take with respect
thereto, and (ii) a certificate in the form of EXHIBIT D hereto with
respect to the operating permits of the Borrowers;
(d) contemporaneously with, or promptly following, the filing or
mailing thereof, copies of all material of a financial nature filed
with the Securities and Exchange Commission or sent to the
stockholders of the Parent; and
(e) from time to time such other financial data and other
information (including accountants' management letters) as the Lender
may reasonably request.
The Borrowers hereby authorize the Lender to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law.
ss. 6.5. CORPORATE EXISTENCE AND CONDUCT OF BUSINESS. Except where the
failure of a Borrower to remain so qualified would not materially adversely
impair the financial condition of such Borrower, each Borrower will do or cause
to be done all things necessary to preserve and keep in full force and effect
its corporate existence, corporate rights and franchises; effect and maintain
its foreign qualifications, licensing, domestication or authorization except as
terminated by its Board of Directors in the exercise of its reasonable judgment;
use its best efforts to comply with all applicable laws; and shall not become
obligated under any contract or binding arrangement which, at the time it was
entered into would materially adversely impair the financial condition of such
Borrower. Each Borrower will continue to engage primarily in the businesses now
conducted by it and in related businesses.
ss. 6.6. MAINTENANCE OF PROPERTIES. The Borrowers will cause all
material properties used or useful in the conduct of their businesses to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Borrowers may be necessary so that the businesses carried on in
connection therewith may be properly and advantageously conducted at all times;
PROVIDED, HOWEVER, THAT nothing in this section shall prevent any Borrower from
discontinuing the operation and maintenance of any of its properties if such
discontinuance is, in the judgment of such Borrower, desirable in the conduct of
its or their business and which does not in the aggregate materially adversely
affect the business of the Borrowers considered as a whole.
ss. 6.7. INSURANCE. The Borrowers will maintain with financially sound
and reputable insurance companies, funds or underwriters' insurance of the
kinds, covering the risks (other than risks arising out of or in any way
connected with personal liability of any officers and directors thereof, which
risks may, but shall not be required by the Lender to be, covered by insurance
maintained by the Borrowers) and in the relative proportionate amounts usually
carried by reasonable and prudent companies conducting businesses similar to
that of the Borrowers (including but not limited to business interruption and,
to the extent such insurance becomes commercially available at reasonable cost,
environmental impairment insurance), but in no event less than the amounts and
coverages set forth in SCHEDULE 6.7 hereto. In addition, the Borrowers will
furnish from time to time, upon the Lender's request, a summary of the insurance
coverage of each of the Borrowers, which summary shall be in form and substance
satisfactory to the Lender and, if requested by the Lender, will furnish to the
Lender copies of the applicable policies.
ss. 6.8. TAXES. The Borrowers will each duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges (other than taxes, assessments
and other governmental charges imposed by foreign jurisdictions which in the
aggregate are not material to the business or assets of any Borrower on an
individual basis or of the Borrowers on a consolidated basis) imposed upon it
and its real properties, sales and activities, or any part thereof, or upon the
income or profits therefrom, as well as all claims for labor, materials, or
supplies, which if unpaid might by law become a lien or charge upon any of its
property; PROVIDED, HOWEVER, THAT any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall currently be
contested in good faith by appropriate proceedings and if such Borrower shall
have set aside on its books adequate reserves with respect thereto; and
PROVIDED, FURTHER, THAT such Borrower will pay all such taxes, assessments,
charges, levies or claims forthwith upon the commencement of proceedings to
foreclose any lien which may have attached as security therefor.
ss. 6.9. INSPECTION OF PROPERTIES, BOOKS, AND CONTRACTS. The Borrowers
shall permit the Lender or any of its designated representatives, upon
reasonable notice, to visit and inspect any of the properties of the Borrowers,
to examine the books of account of the Borrowers (including the making of
periodic accounts receivable reviews), or contracts (and to make copies thereof
and extracts therefrom), and to discuss the affairs, finances and accounts of
the Borrowers with, and to be advised as to the same by, their officers, all at
such times and intervals as the Lender may reasonably request.
ss. 6.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS;
MAINTENANCE OF MATERIAL LICENSES AND PERMITS. Each Borrower will (i) comply with
the provisions of its charter documents and by-laws and all agreements and
instruments by which it or any of its properties may be bound; (ii) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits ("Applicable Laws"), except where noncompliance with such
Applicable Laws would not have a material adverse effect singly or in the
aggregate on the financial condition, properties or businesses of the Borrowers
considered as a whole; (iii) comply, except as set forth in SCHEDULE 6.10, in
all material respects with all agreements and instruments by which it or any of
its properties may be bound; (iv) maintain all material operating permits for
all landfills now owned or hereafter acquired; and (v) dispose of hazardous
waste only at licensed disposal facilities operating, to the best of such
Borrower's knowledge after reasonable inquiry, in compliance with Environmental
Laws. If at any time while the Note, or any Loan or Letter of Credit is
outstanding or the Lender has any obligation to make Loans or issue Letters of
Credit hereunder, any authorization, consent, approval, permit or license from
any officer, agency or instrumentality of any government shall become necessary
or required in order that any Borrower may fulfill any of its obligations
hereunder, such Borrower will immediately take or cause to be taken all
reasonable steps within the power of such Borrower to obtain such authorization,
consent, approval, permit or license and furnish the Lender with evidence
thereof.
ss. 6.11. ENVIRONMENTAL INDEMNIFICATION. The Borrowers covenant and
agree that they will indemnify and hold the Lender harmless from and against any
and all claims, expense, damage, loss or liability incurred by the Lender
(including all reasonable costs of legal representation incurred by the Lender)
relating to (a) any Release or threatened Release of Hazardous Substances on the
Real Property; (b) any violation of any Environmental Laws with respect to
conditions at the Real Property or the operations conducted thereon; or (c) the
investigation or remediation of offsite locations at which the Borrowers, or
their predecessors are alleged to have directly or indirectly Disposed of
Hazardous Substances. It is expressly acknowledged by the Borrowers that this
covenant of indemnification shall survive any foreclosure or any modification,
release or discharge of any or all of the Security Documents or the payment of
the Loans and shall inure to the benefit of the Lender and its successors and
assigns.
ss. 6.12. FURTHER ASSURANCES. The Borrowers will cooperate with the
Lender and execute such further instruments and documents as the Lender shall
reasonably request to carry out to the Lender's satisfaction the transactions
contemplated by this Agreement.
ss. 6.13. NOTICE OF POTENTIAL CLAIMS OR LITIGATION. The Borrowers
shall deliver to the Lender, within 30 days of receipt thereof, written notice
of the initiation of any action, claim, complaint, or any other notice of
dispute or potential litigation (including without limitation any alleged
violation of any Environmental Law), wherein the potential liability is in
excess of $100,000, together with a copy of each such notice received by any
Borrower.
ss. 6.14 NOTICE OF CERTAIN EVENTS.
(a) The Borrowers will provide the Lender with written notice
as to any cancellation or material change in any insurance of any of
the Borrowers within ten (10) Business Days after such Borrower's
receipt of any notice (whether formal or informal) of such cancellation
or change by any of its insurers.
(b) The Borrowers will promptly notify the Lender in writing
of any of the following events:
(i) upon any Borrower obtaining knowledge of any
violation of any Environmental Law regarding the Real Property
or any Borrower's operations which violation, together with
all such other violations, could result in a fine or penalty
of $100,000 or more or which would reasonably be expected to
require expenditures of $100,000 or more to remedy; (ii) upon
any Borrower's obtaining knowledge of any potential or known
Release, or threat of Release, of any Hazardous Substance at,
from, or into the Real Property which it reports in writing or
is required to report in writing to any governmental authority
and which is material in amount or nature or which could
materially affect the value of the Real Property; (iii) upon
any Borrower's receipt of any notice of violation of any
Environmental Laws or of any Release or threatened Release of
Hazardous Substances, including a notice or claim of liability
or potential responsibility from any third party (including
without limitation any federal, state or local governmental
officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard
to (A) any Borrower's, or any Person's operation of the Real
Property, (B) contamination on, from or into the Real
Property, or (C) investigation or remediation of offsite
locations at which any Borrower, or any of their predecessors
are alleged to have directly or indirectly Disposed of
Hazardous Substances; (iv) upon any Borrower's obtaining
knowledge that any expense or loss has been incurred by such
governmental authority in connection with the assessment,
containment, removal or remediation of any Hazardous
Substances with respect to which any Borrower may be liable or
for which a lien may be imposed on the Real Property; (v) any
setoff, claims (including, with respect to the Real Estate,
environmental claims), withholdings or other defenses to which
any of the Collateral, or the Lender's rights with respect to
the Collateral, are subject; or (vi) any labor dispute or
union contract dispute involving any of the Borrowers.
ss. 6.15. RESPONSE ACTIONS. The Borrowers covenant and agree that if
any Release or Disposal of Hazardous Substances shall occur or shall have
occurred on the Real Property, the Borrowers will cause the prompt containment
and removal of such Hazardous Substances and remediation of the Real Property as
necessary to comply with all Environmental Laws or to preserve the value of the
Real Property.
ss. 6.16. ENVIRONMENTAL ASSESSMENTS. If the Lender in itS good faith
judgment, after discussion with the Borrowers, has reason to believe that the
environmental condition of the Real Property has deteriorated, after reasonable
notice by the Lender, whether or not an Event of Default shall have occurred,
the Lender may, from time to time, for the purpose of assessing and ensuring the
value of the Real Property, obtain one or more environmental assessments or
audits of the Real Property prepared by a hydrogeologist, an independent
engineer or other qualified consultant or expert approved by the Lender to
evaluate or confirm (i) whether Hazardous Substances are present in the soil or
water at the Real Property in material amounts and (ii) whether the use and
operation of the Real Property is in material compliance with all Environmental
Laws. Environmental assessments may include without limitation detailed visual
inspections of the Real Property including, without limitation, any and all
storage areas, storage tanks, drains, dry xxxxx and leaching areas, and the
taking of soil samples, surface water samples and ground water samples, as well
as such other investigations or analyses as the Lender deems appropriate. All
such environmental assessments shall be at the sole cost and expense of the
Borrower.
ss. 6.17 NOTICE OF DEFAULT. The Borrowers will promptly notify the
Lender in writing of the occurrence of any Default or Event of Default, of which
the Borrowers have or should have knowledge. If any Person shall give any notice
or take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Agreement or any other note,
evidence of indebtedness, indenture or other obligation evidencing indebtedness
in excess of $100,000 as to which any Borrower is a party or obligor, whether as
principal or surety, the Borrowers shall forthwith give written notice thereof
to the Lender, describing the notice of action and the nature of the claimed
default.
SS.6.18 CLOSURE AND POST CLOSURE LIABILITIES. The Borrowers shall at
all times adequately accrue, in accordance with GAAP, and fund, as required by
applicable Environmental Laws, all closure and post closure liabilities with
respect to the operations of the Borrowers.
SS.6.19 SUBSIDIARIES. The Parent shall at all times directly or
indirectly through a Subsidiary own all of the shares of the capital stock of
each other Borrower, and such shares shall be pledged to the Lender.
ss.6.20 NEW SUBSIDIARIES. Any Borrower shall, prior to any acquisition
or creation of a new Subsidiary, give notice to the Lender and pledge to the
Lender the capital stock of such new Subsidiary pursuant to the Stock Pledge
Agreement to which such Borrower shall become party to, and such new Subsidiary,
as a Borrower under the Credit Agreement, shall grant to the Lender a perfected
first priority security interest in all of its personal property assets pursuant
to the Security Agreement to which it shall become party to.
ss. 7. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS. The Borrowers
agree that, so long as any Loan, the Note, or any Letter of Credit is
outstanding or the Lender has any obligation to make Loans or to issue, extend
or renew any Letters of Credit hereunder:
ss. 7.1. RESTRICTIONS ON INDEBTEDNESS. None of the Borrowers nor any
of their Subsidiaries shall become or be a guarantor or surety of, or otherwise
create, incur, assume, or be or remain liable, contingently or otherwise, with
respect to any Indebtedness, or become or be responsible in any manner (whether
by agreement to purchase any obligations, stock, assets, goods or services, or
to supply or advance any funds, assets, goods or services or otherwise) with
respect to any undertaking or Indebtedness of any other Person, or incur any
Indebtedness other than:
(a) Indebtedness to the Lender arising under this
Agreement or the Loan Documents;
(b) Indebtedness of the Borrowers in respect of judgments or
awards which have been in force for less than the applicable period for
taking an appeal so long as execution is not levied thereunder or in
respect of which any Borrower shall at the time in good faith be
prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or
review and in respect of which the Borrowers have maintained adequate
reserves;
(c) Indebtedness of any Borrower with respect to guaranty,
suretyship or indemnification obligations in connection with such
Borrower's performance of services for its respective customers in the
ordinary course of its business, such Indebtedness to be listed on
SCHEDULE 7.1(C) hereto;
(d) Indebtedness of the Borrowers incurred with respect to
landfill closure bonds, such bonds to be listed on SCHEDULE 7.1(D)
hereto, not to exceed an aggregate amount of $5,000,000 outstanding at
any time.
(e) Other Indebtedness of the Borrowers not to exceed an
aggregate amount of $5,000,000 at any one time; and
ss. 7.2. RESTRICTIONS ON LIENS. None of the Borrowers nor any of their
Subsidiaries will create or incur or suffer to be created or incurred or to
exist any lien, encumbrance, mortgage, pledge, charge, restriction or other
security interest of any kind upon any property or assets of any character,
whether now owned or hereafter acquired, or upon the income or profits
therefrom; or transfer any of such property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; or acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; or suffer to exist for a period of more than
thirty (30) days after the same shall have been incurred any Indebtedness or
claim or demand against it which if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over its general
creditors; or sell, assign, pledge or otherwise transfer any accounts, contract
rights, general intangibles or chattel paper, with or without recourse, EXCEPT
as follows (the "Permitted Liens"):
(a) Liens securing Indebtedness permitted by ss.7.1(e)
incurred in connection with the lease or acquisition of property or
fixed assets useful or intended to be used in carrying on the business
of the Borrowers, provided that such Liens shall encumber only the
property or assets so acquired and shall not exceed the fair market
value thereof.
(b) Liens to secure taxes, assessments and other government
charges or claims for labor, material or supplies in respect of
obligations not overdue;
(c) Deposits or pledges made in connection with, or to secure
payment of, workmen's compensation, unemployment insurance, old age
pensions or other social security obligations;
(d) Liens in respect of judgments or awards, the Indebtedness
with respect to which is permitted by ss.7.1(b);
(e) Liens of carriers, warehousemen, mechanics and
materialmen, and other like liens, in existence less than 120 days
from the date of creation thereof in respect of obligations not
overdue;
(f) Encumbrances consisting of easements, rights of way,
zoning restrictions, restrictions on the use of real property and
defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which any Borrower is a party, and
other minor liens or encumbrances none of which in the opinion of the
respective Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of such Borrower,
which defects do not individually or in the aggregate have a material
adverse effect on the business of such Borrower individually or of the
Borrowers on a consolidated basis;
(f) Liens granted pursuant to the Security Documents.
ss. 7.3. RESTRICTIONS ON INVESTMENTS. Except to the extent provided in
ss.7.4, none of the Borrowers nor any of their Subsidiaries shall make or permit
to exist or to remain outstanding any other Investment other than the following
Investments made or to be made by the Borrowers:
(a) Investments in obligations of the United States of America
and agencies thereof and obligations guaranteed by the United States of
America that are due and payable within one year from the date of
acquisition and prior to the Maturity Date;
(b) certificates of deposit, time deposits or repurchase
agreements which are fully insured or are issued by commercial banks
organized under the laws of the United States of America or any state
thereof and having a combined capital, surplus, and undivided profits
of not less than $100,000,000;
(c) commercial paper, maturing not more than nine months from
the date of issue, PROVIDED THAT, at the time of purchase, such
commercial paper is not rated lower than "P-1" by Xxxxx'x Investors
Service, Inc., or "A-1" by Standard & Poor's Corporation;
(d) Investments associated with insurance policies or surety
bonds required or allowed by state law to be posted as financial
assurance for landfill closure and post-closure liabilities;
(e) Investments by the Parent in any other Borrower and
Investments permitted by ss.7.4; PROVIDED THAT before and after giving
effect to any permitted Investment made after the date hereof, no
Default or Event of Default shall exist or would occur as a result of
making such Investment.
ss. 7.4. MERGERS, CONSOLIDATIONS, SALES, ACQUISITIONS. None of the
Borrowers shall be a party to any merger, consolidation or exchange of stock, or
purchase or otherwise acquire all or substantially all of the assets or stock
of, or any partnership or joint venture interest in, any other Person except as
otherwise provided in ss.7.3 or this ss.7.4, or sell, transfer, convey or lease
any stock or assets or group of assets (except sales of equipment in the
ordinary course of business and sales of assets totaling an aggregate from the
date hereof through the Maturity Date of no more than 5% of the Consolidated
Total Assets of the Borrowers) or sell or assign, with or without recourse, any
receivables. A Borrower may purchase or otherwise acquire all or substantially
all of the assets or stock of any class of any Person PROVIDED THAT (a) no Event
of Default has occurred and is continuing and the proposed transaction will not
otherwise create an Event of Default hereunder; (b) the business to be acquired
predominantly involves non-hazardous solid waste disposal, collection, hauling,
recycling or transfer; (c) the business to be acquired operates in the United
States of America; (d) in the case of an asset acquisition, all of the assets to
be acquired shall be owned by an existing or newly created Subsidiary of the
Parent, 100% of the stock of which has been or will be pledged to the Lender and
which is a Borrower or will become a Borrower pursuant to ss.4.10 or, in the
case of a stock acquisition or an acquisition by merger, the acquired company
shall become or shall be merged with a wholly-owned Subsidiary of the Parent
that is a Borrower; (e) the aggregate cash consideration to be paid by the
Borrowers in connection with any such acquisition (including the aggregate
amount of all Indebtedness assumed but excluding landfill closure and
post-closure bonds) shall not exceed $5,000,000 without the consent of the
Lender; (f) each acquisition of a landfill shall be preceded by the standard due
diligence practices of the Borrowers as set forth on EXHIBIT E hereto, such due
diligence to include a review by a consulting engineer reasonably acceptable to
the Lender; (g) the board of directors and (if required by applicable law) the
shareholders, or the equivalent thereof, of the business to be acquired has
approved such acquisition; and (h) in the case of a Material Acquisition, the
Lender shall have been provided with (i) a Compliance Certificate demonstrating
that the Borrowers are in current compliance with and, giving effect to the
proposed acquisition (including any borrowings made or to be made in connection
therewith), will continue to be in compliance with, all of the covenants in ss.8
hereof, (ii) a copy of the purchase agreement, together with audited (if
available, or otherwise unaudited) financial statements for any business to be
acquired for the preceding two (2) fiscal years, and (iii) a summary of the
results of the Borrower's due diligence investigations.
ss. 7.5. SALE AND LEASEBACK. None of the Borrowers shall enter into
any arrangement, directly or indirectly, whereby any Borrower shall sell or
transfer any property owned by it in order then or thereafter to lease such
property or lease other property which such Borrower intends to use for
substantially the same purpose as the property being sold or transferred,
without the prior written consent of the Lender.
SS. 7.6. RESTRICTED DISTRIBUTIONS AND REDEMPTIONS. None of the
Borrowers may make Distributions except as set forth in this ss.7.6. Each
Borrower may make distributions payable solely in common stock of such Borrower.
Borrowers other than the Parent may declare or pay Distributions other than
Distributions payable solely in common stock of such Borrowers to the Parent. In
addition, the Borrowers (other than the Parent) shall not redeem, convert,
retire or otherwise acquire shares of any class of capital stock of such
Borrowers. The Borrowers shall not effect or permit any change in or amendment
to any document or instrument pertaining to the terms of the Borrowers' capital
stock.
SS. 7.7. EMPLOYEE BENEFIT PLANS. None of the Borrowers nor any ERISA
Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of ss.406 of ERISA or ss.4975 of the Code which could result in a
material liability for any Borrower; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in ss.302 of
ERISA, whether or not such deficiency is or may be waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a manner
which, could result in the imposition of a lien or encumbrance on the
assets of any Borrower pursuant to ss.302(f) or ss.4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to ss.307 of ERISA or
ss.401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (within the meaning of ss.4001 of ERISA)
of all Guaranteed Pension Plans exceeding the value of the aggregate
assets of such Plans, disregarding for this purpose the benefit
liabilities and assets of any such Plan with assets in excess of
benefit liabilities.
The Borrowers will (i) promptly upon filing the same with the Department of
Labor or Internal Revenue Service, furnish to the Lender a copy of the most
recent actuarial statement required to be submitted under ss.103(d) of ERISA and
Annual Report, Form 5500, with all required attachments, in respect of each
Guaranteed Pension Plan and (ii) promptly upon receipt or dispatch, furnish to
the Lender any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under ss.ss.302, 4041, 4042, 4043, 4063, 4066 and 4068
of ERISA, or in respect of a Multiemployer Plan, under ss.ss.4041A, 4202, 4219,
4242, or 4245 of ERISA.
ss. 7.8. CAPITAL EXPENDITURES. The Borrowers shall not make or commit
to make Capital Expenditures (excluding landfill closure and post-closure
expenditures) in excess of one and one-half (1.5) times the depreciation and
landfill amortization expense of the Borrowers for any fiscal year.
ss.7.9 NEGATIVE PLEDGES. No Borrower will pledge any of its assets to
any Person other than to the Lender, nor will any Borrower grant any negative
pledges on their assets to any Person, nor will any Subsidiary enter any
agreement that would in anyway restrict Distribution to the Parent, other than
expressly permitted hereunder.
ss. 8. FINANCIAL COVENANTS OF THE BORROWERS. The Borrowers agree that,
so long as any Loan or any Note or any Letter of Credit is outstanding or the
Lender has any obligation to make Loans or the Lender has any obligation to
issue, extend or renew any Letters of Credit hereunder:
ss. 8.1. INTEREST COVERAGE RATIO. As at the end of any fiscal quarter
commencing with the fiscal quarter ending September 30, 1997, the ratio of (a)
EBIT to (b) Consolidated Total Interest Expense shall not be less than the
stated ratio for the respective periods set forth below:
PERIOD RATIO
09/30/97 through 09/30/98] 2.25:1
Thereafter 2.50:1
ss. 8.2. BALANCE SHEET LEVERAGE RATIO. The ratio of (a) Funded Debt to
(b) the sum of (i) the excess of Consolidated Total Assets over Consolidated
Total Liabilities plus (ii) Funded Debt shall not exceed 0.55:1 at any time.
ss. 8.3. PROFITABLE OPERATIONS. The Borrowers will not permit
Consolidated Net Income to be less than $0 for any fiscal quarter.
ss. 8.4. CASH FLOW LEVERAGE RATIO. At the time of the making of any
Material Acquisition and at the end of any fiscal quarter commencing September
30, 1997, the ratio of (a) Funded Debt to (b) EBITDA for the prior four (4)
consecutive fiscal quarters ending on such date shall not exceed 2.50:1.
ss. 9. CLOSING CONDITIONS.
The obligations of the Lender to make the Loans and to issue Letters
of Credit on and after the Closing Date and otherwise be bound by the terms of
this Agreement shall be subject to the satisfaction of each of the following
conditions precedent:
ss. 9.1. CORPORATE ACTION. All corporate action necessary for the
valid execution, delivery and performance by each Borrower of the Loan Documents
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Lender shall have been provided to the Lender.
ss. 9.2. LOAN DOCUMENTS, ETC. Each of the Loan Documents shall have
been duly and properly authorized, executed and delivered by the respective
parties thereto and shall be in full force and effect and in form and substance
satisfactory to the Lender.
ss. 9.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. For each Borrower the
Lender shall have received from the Borrowers a copy, certified by a duly
authorized officer of such Borrower to be true and complete on the Closing Date,
of each of (a) its charter or other incorporation documents (including
certificates of merger and name changes) as in effect on such date of
certification, and (b) its by-laws as in effect on such date.
ss. 9.4. INCUMBENCY CERTIFICATE. The Lender shall have received an
incumbency certificate, dated as of the Closing Date, signed by duly authorized
officers giving the name and bearing a specimen signature of each individual who
shall be authorized: (a) to sign the Loan Documents on behalf of the Borrowers;
(b) to make Loan and Letter of Credit Requests; and (c) to give notices and to
take other action on the Borrowers' behalf under the Loan Documents.
ss. 9.5. VALIDITY OF LIENS. The Security Documents shall be effective
to create in favor of the Lender a legal, valid and enforceable first security
interest in and lien upon the Collateral, subject only to Permitted Liens. All
filings, recordings, deliveries of instruments and other actions necessary or
desirable in the opinion of the Lender to protect and preserve such security
interests shall have been duly effected. The Lender shall have received evidence
thereof in form and substance satisfactory to the Lender.
ss. 9.6. UCC SEARCH RESULTS. The Lender shall have received the
results of UCC searches with respect to the assets of all of the Borrowers
indicating no liens other than Permitted Liens and otherwise in form and
substance satisfactory to the Lender.
ss. 9.7. CERTIFICATES OF INSURANCE. The Lender shall have received a
certificate of insurance from an independent insurance broker dated as of the
Closing Date, or within 15 days prior thereto, identifying insurers, types of
insurance, insurance limits, and policy terms, and otherwise describing the
insurance obtained in accordance with the provisions hereof.
ss. 9.8. OPINIONS OF COUNSEL. The Lender shall have received from
outside counsel to the Borrowers, an opinion addressed to the Lender, dated the
date of the closing, in form and substance satisfactory to the Lender regarding
(i) enforceability and corporate matters; and (ii) such other matters as the
Lender may reasonably request.
ss. 9.9. AUDITED FINANCIAL STATEMENTS; FINANCIAL PROJECTIONS. The
Lender shall have received the audited financial statements of the Borrowers for
the fiscal year ended December 31, 1996, and the financial projections of the
Borrowers, in form and substance satisfactory to the Lender.
ss. 9.10. ENVIRONMENTAL REPORTS AND CERTIFICATE REGARDING Permits. The
Lender shall have received the environmental reports referred to in ss.5.23 and
a certificate in the form of EXHIBIT D hereto regarding operating permits of the
Borrowers.
ss. 9.11. INITIAL COMPLIANCE CERTIFICATE. The Lender shall have
received a proforma Compliance Certificate in the form of EXHIBIT C hereto
regarding compliance with the covenants set forth in ss.8.2 and ss.8.4 hereof as
of September 30, 1997.
ss. 10. CONDITIONS TO ALL LOANS.
The obligations of the Lender to make any Loan (including without
limitation the obligation to issue any Letter of Credit) on and subsequent to
the Closing Date is subject to the following conditions precedent:
ss. 10.1. REPRESENTATIONS TRUE; NO EVENT OF DEFAULT. Each of the
representations and warranties of the Borrowers contained in this Agreement or
in any document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of the Loan with the same effect as
if made at and as of that time (except to the extent of changes resulting from
transactions contemplated or permitted by this Agreement, changes disclosed to
the Lender in writing and accepted by the Lender, and changes occurring in the
ordinary course of business which singly or in the aggregate are not materially
adverse, and to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default shall have
occurred and be continuing.
ss. 10.2. PERFORMANCE; NO EVENT OF DEFAULT. The Borrowers shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by them prior to or at the time of the making of any
Loan or the issuance, extension, or renewal of any Letter of Credit, and at the
time of the making of any Loan or the issuance, extension, or renewal of any
Letter of Credit, there shall exist no Event of Default or condition which would
result in an Event of Default upon consummation of such Loan (including without
limitation any amounts to be drawn under a Letter of Credit). Each request by
the Borrowers for a Loan (including without limitation each request for issuance
of a Letter of Credit) subsequent to the first Loan shall constitute
certification by the Borrowers that the conditions specified in ss.ss.10.1 and
10.2 will be duly satisfied on the date of such Loan or Letter of Credit
issuance.
ss. 10.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Lender would make it illegal for the Lender to make Loans or to
issue, extend, or renew Letters of Credit hereunder.
ss. 10.4. GOVERNMENTAL REGULATION. The Lender shall have received such
statements in substance and form reasonably satisfactory to the Lender as it
shall require for the purpose of compliance with any applicable regulations of
the Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
ss. 10.5. PROCEEDINGS AND DOCUMENTS. All proceedings in connection
with the transactions contemplated by this Agreement and all documents incident
thereto shall have been delivered to the Lender as of the date hereof in
substance and in form satisfactory to the Lender, including without limitation a
Loan and Letter of Credit Request in the form attached hereto as EXHIBIT B, and
the Lender shall have received all information and such counterpart originals or
certified or other copies of such documents as the Lender may reasonably
request.
ss. 11. COLLATERAL SECURITY. The Obligations shall be secured by a
perfected security interest (having, with respect to each category of
Collateral, the respective rights and priorities set forth in the Security
Documents) in all of the shares of the Subsidiaries of the Parent, whether now
owned or hereafter acquired, pursuant to the terms of the Security Documents to
which the Borrowers are parties.
ss. 12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
ss. 12.1. EVENTS OF DEFAULT AND ACCELERATION. If any of the followinG
events ("Events of Default" or, if the giving of notice or the lapse of time or
both is required, then, prior to such notice and/or lapse of time, "Defaults")
shall occur:
(a) if the Borrowers shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the
Maturity Date or any accelerated date of maturity or at any other date
fixed for payment;
(b) if the Borrowers shall fail to pay any Reimbursement
Obligation, interest, fees or other amounts owing hereunder within five
(5) Business Days after the same shall become due and payable whether
at the Maturity Date or any accelerated date of maturity or at any
other date fixed for payment;
(c) if the Borrowers shall fail to comply with the covenants
contained in ss.ss.6.1, 6.3, 6.4, 6.5, 6.6, 6.7, 6.8, 6.13, 6.14, 6.17,
6.19, 7 or 8 hereof;
(d) if the Borrowers shall fail to perform any term, covenant
or agreement contained herein or in any of the other Loan Documents
(other than those specified in subsections (a), (b), and (c) above)
within thirty (30) days after written notice of such failure has been
given to the Borrowers by the Lender;
(e) if any representation or warranty contained in this
Agreement or in any document or instrument delivered pursuant to or in
connection with this Agreement shall prove to have been false in any
material respect upon the date when made or repeated;
(f) if any Borrower shall fail to pay at maturity, or within
any applicable period of grace, any and all obligations for borrowed
money or any guaranty with respect thereto in an aggregate amount
greater than $100,000, or fail to observe or perform any material term,
covenant or agreement contained in any agreement by which it is bound,
evidencing or securing borrowed money in an aggregate amount greater
than $100,000 for such period of time as would, or would have permitted
(assuming the giving of appropriate notice if required) the holder or
holders thereof or of any obligations issued thereunder to accelerate
the maturity thereof; or
(g) if any Borrower makes an assignment for the benefit of
creditors, or admits in writing its inability to pay or generally fails
to pay its debts as they mature or become due, or petitions or applies
for the appointment of a trustee or other custodian, liquidator or
receiver of any Borrower or of any substantial part of the assets of
any Borrower or commences any case or other proceeding relating to any
Borrower under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or takes any action to
authorize or in furtherance of any of the foregoing, or if any such
petition or application is filed or any such case or other proceeding
is commenced against any Borrower and or any Borrower indicates its
approval thereof, consent thereto or acquiescence therein;
(h) a decree or order is entered appointing any such trustee,
custodian, liquidator or receiver or adjudicating any Borrower bankrupt
or insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect of
any Borrower in an involuntary case under federal bankruptcy laws as
now or hereafter constituted, and such decree or order remains in
effect for more than sixty (60) days, whether or not consecutive;
(i) if there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty (30) days, whether or not
consecutive, any final judgment against any Borrower which, with other
outstanding final judgments, against the Borrowers exceeds in the
aggregate $100,000 after taking into account any undisputed insurance
coverage;
(j) any Borrower or any ERISA Affiliate incurs any liability
to the PBGC or a Guaranteed Pension Plan pursuant to Title IV of ERISA
in an aggregate amount exceeding $100,000; any Borrower or any ERISA
Affiliate is assessed withdrawal liability pursuant to Title IV of
ERISA by a Multiemployer Plan requiring aggregate annual payments
exceeding $100,000, or any of the following occurs with respect to a
Guaranteed Pension Plan: (i) an ERISA Reportable Event, or a failure to
make a required installment or other payment (within the meaning of
ss.302(f)(1) of ERISA), provided the Lender determines in its
reasonable discretion that such event (A) could be expected to result
in liability of such Borrower to the PBGC or the Plan in an aggregate
amount exceeding $100,000 and (B) could constitute grounds for the
termination of such Plan by the PBGC, for the appointment by the
appropriate United States District Court of a trustee to administer
such Plan or for the imposition of a lien in favor of the Guaranteed
Pension Plan; (ii) the appointment by a United States District Court of
a trustee to administer such Plan; or (iii) the institution by the PBGC
of proceedings to terminate such Plan;
(l) unless the Lender approves, any person or group of persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act
of 1934, as amended) shall have acquired beneficial ownership (within
the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 20% or more of the outstanding shares of
common stock of any Borrower; or, during any period of twelve
consecutive calendar months, individuals who were directors of any
Borrower on the first day of such period shall cease to constitute a
majority of the board of directors of such Borrower; or
(m) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Lender, or any action at law, suit or in equity or
other legal proceeding to cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of the Borrowers or any of
their respective stockholders, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make
a determination that, or issue a judgment, order, decree or ruling to
the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof,
then, and in any such event, so long as the same may be continuing, the Lender
may, by notice in writing to the Borrowers, declare all amounts owing with
respect to this Agreement, the Note and the other Loan Documents and all
Reimbursement Obligations to be, and they shall thereupon forthwith become,
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the Borrowers; PROVIDED
THAT in the event of any Event of Default specified in ss.12.1(g) or 12.1(h),
all such amounts shall become immediately due and payable automatically and
without any requirement of notice from the Lender. Upon demand by the Lender
after the occurrence of any Event of Default, the Borrowers shall immediately
provide to the Lender cash in an amount equal to the aggregate Maximum Drawing
Amount of all Letters of Credit outstanding, to be held by the Lender as
collateral security for the Obligations.
ss. 12.2. TERMINATION OF COMMITMENT. If any Event of Default shall
occur, or if on any Drawdown Date the conditions precedent to the making of the
Loans to be made on such Drawdown Date or the issuance of any Letters of Credit
to be issued on such date are not satisfied (except as a consequence of a
default on the part of the Lender), the Lender may by notice to the Borrowers,
terminate the unused portion of the Total Commitment hereunder, and upon such
Notice being given, such unused portion of the Total Commitment hereunder shall
terminate immediately and the Lender shall be relieved of all further
obligations to make Loans to or issue Letters of Credit for the account of the
Borrowers hereunder PROVIDED THAT if an Event of Default specified in ss.12.1(g)
or 12.1(h) shall have occurred, such unused portion of the Total Commitment
shall terminate immediately and the Lender shall be relieved of all further
obligations to make Loans to or issue Letters of Credit for the account of the
Borrowers without the requirement of notice from the Lender. No termination of
any portion of the Total Commitment hereunder shall relieve the Borrowers of any
of their existing Obligations to the Lender hereunder or elsewhere.
ss. 12.3. REMEDIES. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Lender shall have
accelerated the maturity of the Loans pursuant to ss.12.1, the Lender, if owed
any amount with respect to the Loans or the Reimbursement Obligations, may
proceed to protect and enforce its rights by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations to the Lender are evidenced,
including, without limitation, as permitted by applicable law the obtaining of
the EX PARTE appointment of a receiver, and, if such amount shall have become
due, by declaration or otherwise, proceed to enforce the payment thereof or any
legal or equitable right of the Lender. No remedy herein conferred upon the
Lender or the holder of the Note or purchaser of any Letter of Credit is
intended to be exclusive of any other remedy and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or any other provision
of law.
ss. 13. SETOFF. Regardless of the adequacy of any collateral, during
the continuance of an Event of Default, any deposits or other sums credited by
or due from the Lender to the Borrowers and any securities or other property of
the Borrowers in the possession of the Lender may be applied to or set off
against the payment of the Obligations and any and all other liabilities,
direct, or indirect, absolute or contingent, due or to become due, now existing
or hereafter arising, of the Borrowers to the Lender. The Lender agrees that if
an amount to be set off is to be applied to Indebtedness of the Borrowers, other
than Indebtedness evidenced by the Note held by the Lender or constituting
Reimbursement Obligations owed to the Lender, such amount shall be applied
ratably to such other Indebtedness and to the Indebtedness evidenced by the Note
held by the Lender or constituting Reimbursement Obligations owed to the Lender.
ss. 14. EXPENSES. Whether or not the transactions contemplated herein
shall be consummated, the Borrowers hereby promise to reimburse Lender for all
reasonable out-of-pocket fees and disbursements (including all reasonable
attorneys' fees, collateral evaluation costs and Consulting Engineer's fees),
incurred or expended in connection with the preparation, filing or recording, or
interpretation of this Agreement, the other Loan Documents, or any amendment,
modification, approval, consent or waiver hereof or thereof. The Borrowers
further agree to reimburse the Lender for all such fees and disbursements
expended in connection with the enforcement of any Obligations or the
satisfaction of any indebtedness of the Borrowers hereunder or under any of the
other Loan Documents, or in connection with any litigation, proceeding or
dispute hereunder in any way related to the credit hereunder, including, without
limitation, the so-called "workout" thereof after the occurrence of a Default or
Event of Default. The Borrowers will pay any taxes (including any interest and
penalties in respect thereof) other than the Lender's federal and state income
taxes, payable on or with respect to the transactions contemplated by this
Agreement (the Borrowers hereby agreeing to indemnify the Lender with respect
thereto).
ss. 15. INDEMNIFICATION. The Borrowers agree to indemnify and hold
harmless the Lender, as well as the Lender's shareholders, directors, agents,
officers, subsidiaries and affiliates, from and against all damages, losses,
settlement payments, obligations, liabilities, claims, suits, penalties,
assessments, citations, directives, demands, judgments, actions or causes of
action, whether statutorily created or under the common law, and reasonable
costs and expenses incurred, suffered, sustained or required to be paid by an
indemnified party by reason of or resulting from the transactions contemplated
hereby, except any of the foregoing which result from the gross negligence or
willful misconduct of the indemnified party. In any investigation, proceeding or
litigation, or the preparation therefor, the Lender shall be entitled to select
its own counsel and, in addition to the foregoing indemnity, the Borrowers agree
to pay promptly the reasonable fees and expenses of such counsel. In the event
of the commencement of any such proceeding or litigation, the Borrowers shall be
entitled to participate in such proceeding or litigation with counsel of their
choice at their expense, PROVIDED THAT such counsel shall be reasonably
satisfactory to the Lender. The covenants of this ss.15 shall survive payment or
satisfaction of payment of amounts owing with respect to the Note or any other
Loan Document.
ss.16. SURVIVAL OF COVENANTS, ETC. Unless otherwise stated herein, all
covenants, agreements, representations and warranties made herein, in the other
Loan Documents or in any documents or other papers delivered by or on behalf of
the Borrowers pursuant hereto shall be deemed to have been relied upon by the
Lender, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Lender of the Loans and the issuance,
extension or renewal of any Letters of Credit, as herein contemplated, and shall
continue in full force and effect so long as any amount due under this
Agreement, any Letter of Credit or the Note remains outstanding and unpaid or
the Lender has any obligation to make any Loans or to issue any Letters of
Credit hereunder. All statements contained in any certificate or other paper
delivered by or on behalf of the Borrowers pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrowers hereunder.
ss.17. PARTIES IN INTEREST. All the terms of this Agreement and the
other Loan Documents shall be binding upon and inure to the benefit of and be
enforceable by the respective successors and assigns of the parties hereto and
thereto; PROVIDED THAT no Borrower shall assign or transfer its rights hereunder
without the prior written consent of the Lender.
ss.18. NOTICES, ETC. Except as otherwise expressly provided in this
Agreement, all notices and other communications made or required to be given
pursuant to this Agreement or the other Loan Documents shall be in writing and
shall be delivered in hand, mailed by United States first-class mail, postage
prepaid, or sent by telecopier and confirmed by letter, addressed as follows:
(a) if to the Borrowers, at Suite 700, 000 Xxxx Xxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxx 00000, XXX, Attention: Xxx X.
MacF. Burbott, President;
(b) if to the Lender, at 000 Xxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000, XXX, Attention: Xxxxxxx X. XxXxxxxxx, Vice
President, telecopy number 000-000-0000;
or such other address for notice as shall have last been furnished in writing to
the Person giving the notice.
Any such notice or demand shall be deemed to have been duly given or
made and to have become effective (a) if delivered by hand to a responsible
officer of the party to which it is directed, at the time of the receipt thereof
by such officer, (b) if sent by registered or certified first-class mail,
postage prepaid, five Business Days after the posting thereof, and (c) if sent
by telecopier, at the time of the dispatch thereof, if in normal business hours
in the place of receipt, or otherwise at the opening of business on the
following Business Day.
ss. 19. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the lender would
otherwise have. The captions in this Agreement are for convenience of reference
only and shall not define or limit the provisions hereof. This Agreement and any
amendment hereof may be executed in several counterparts and by each party on a
separate counterpart, each of which when so executed and delivered shall be an
original, but all of which together shall constitute one instrument. In proving
this Agreement it shall not be necessary to produce or account for more than one
such counterpart signed by the party against whom enforcement is sought.
ss. 20. ENTIRE AGREEMENT, ETC. The Loan Documents and any otheR
documents executed in connection herewith or therewith express the entire
understanding of the parties with respect to the transactions contemplated
hereby. Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated, except as provided. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon. No course of dealing or omission on the part of the Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrowers shall entitle the
Borrowers to other or further notice or demand in similar or other
circumstances.
ss. 21. WAIVER OF JURY TRIAL. EACH OF THE BORROWERS HEREBY WAIVES ITS
RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY
DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTE OR ANY OF THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, EACH BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION
REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. THE BORROWERS (A) CERTIFY THAT NO REPRESENTATIVE, LENDER OR ATTORNEY OF
THE LENDER HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE LENDER WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGE THAT THE LENDER HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND
THE OTHER LOAN DOCUMENTS TO WHICH IT IS A PARTY BECAUSE OF, AMONG OTHER THINGS,
THE BORROWERS' WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
ss. 22. GOVERNING LAW. THIS AGREEMENT AND, EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS
UNDER THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL FOR ALL PURPOSES
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF SAID COMMONWEALTH
(EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE OF LAW). THE BORROWERS
CONSENT TO THE JURISDICTION OF ANY OF THE FEDERAL OR STATE COURTS LOCATED IN THE
COMMONWEALTH OF MASSACHUSETTS IN CONNECTION WITH ANY SUIT TO ENFORCE THE RIGHTS
OF THE LENDER UNDER THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS.
ss. 23. SEVERABILITY. The provisions of this Agreement are severable
and if any one clause or provision hereof shall be held invalid or unenforceable
in whole or in part in any jurisdiction, then such invalidity or
unenforceability shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such clause or provision
in any other jurisdiction, or any other clause or provision of this Agreement in
any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
under seal as of the date first set forth above.
THE BORROWERS:
GEOWASTE INCORPORATED
By: /s/ Xxx X. MacF. Burbott
Title: President and Chief Executive
Officer
GEOWASTE ACQUISITION CORP.
By: /s/ Xxx X. MacF. Xxxxxxx
Title:
GEOWASTE OF FL, INC.
By: /s/ Xxx X. MacF. Burbott
Title:
GEOWASTE OF GA, INC.
By: /s/ Xxx X. MacF. Xxxxxxx
Title:
LOW BROOK DEVELOPMENT, INC.
By: /s/ Xxx X. MacF. Burbott
Title:
NORTH FLORIDA SWEEPING, INC.
By: /s/ Xxx X. MacF. Xxxxxxx
Title:
SPECTRUM GROUP, INC.
By: /s/ Xxx X. MacF. Burbott
Title:
THE LENDER:
BANKBOSTON, N.A.,
By: /s/ Xxxxxxx XxXxxxxxx
Title: Vice President
