EXHIBIT 10.25
SIXTH AMENDMENT TO CREDIT AGREEMENT
This SIXTH AMENDMENT TO CREDIT AGREEMENT (the "Sixth Amendment") is dated as of
September 25, 1995 by and between EASTERN ENVIRONMENTAL SERVICES, INC., a
Delaware corporation ("Eastern"), the Subsidiaries of Eastern (together with
Eastern, the "Borrowers"), and CORESTATES BANK, N.A., a national banking
association (the "Bank"), with reference to the following
BACKGROUND
A. The Borrowers and the Bank have entered into a Credit Agreement dated
May 5, 1992, as amended September 24, 1992, March 31, 1993, September 24, 1993,
November 30, 1993, and September 26, 1994 (the "Agreement").
B. The Borrowers and the Bank desire to amend and extend the Agreement as
hereinafter set forth.
C. All capitalized terms used herein and not otherwise defined herein
shall have the meaning assigned to them in the Agreement and are used herein as
therein defined.
THEREOF, in consideration of the premises contained herein and intending to
be legally bound, the Borrowers and the Bank agree as follows:
1. Waiver of Certain Existing Defaults. The Borrowers expressly
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acknowledge and agree that they are in Default under the Agreement because of
their non-compliance with Sections 7.01, 7.02, 7.05, 7.06, and 7.07 of the
Agreement as of June 30, 1995. Notwithstanding such Borrowers' Default, the
Bank hereby waives such Borrowers' Default and the Borrowers' compliance with
Sections 7.01, 7.02, 7.05, 7.06, and 7.07 as to June 30, 1995 only, provided
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however, that such waiver shall not constitute a waiver as to any other Default
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under the Agreement, including, without limitation, any other non-compliance
with Sections 7.01, 7.02, 7.03, 7.04, 7.05, 7.06 and 7.07 after June 30, 1995,
nor impair any of the Bank's remedies under the Agreement as to any other
Default.
2. Termination Date. The definition of "Termination Date" in Section 1.01
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shall be deleted in its entirety and replaced by the following:
"Termination Date" means, with respect to the Revolving Credit Commitment
and the Refinancing Term Loan, the earlier of October 31, 1996 or the date
on which the Commitment and the Refinancing Term Loan and the Letter of
Credit Facility are terminated or prepaid in full pursuant to Sections
2.05, 2.11 or 8.01.
3. The Revolving Credit. Section 2.01 of the Agreement shall be amended
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by adding the following at the end:
Commencing September 25, 1995, the Bank agrees on the terms and
conditions hereinafter set forth, to maintain the currently outstanding
Revolving Credit Loans of the Borrowers from September 25, 1995 up to but
not including the Termination Date in an aggregate amount which, when added
to the aggregate Performance Letter of Credit Balance, shall not exceed at
any time outstanding the lesser of (1) One Million Three Hundred Twenty One
Thousand Dollars ($1,321,000), as such sum may be reduced pursuant to
Section 2.05 or (2) the Current Borrowing Base. Effective September 25,
1995, any Revolving Credit Loans, once repaid, may not be re-borrowed.
4. The Letter of Credit Facility. Section 2.04 of the Agreement shall be
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amended by adding the following at the end:
Commencing September 25, 1995, the Bank agrees on the Terms and
Conditions hereinafter set forth, to maintain currently outstanding
Letters of Credit. No new Letters of Credit will be issued under the
Letter of Credit Facility.
5. Termination or Reduction of Commitments.
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(a) Subsection (3) of Section 2.05 of the Agreement shall be amended by
adding the following at the end: The Borrowers will use their best efforts
to reduce the aggregate sum of the Commitment, plus the Refinancing Term
Loan, plus the Letter of Credit Facility to the following levels on or
before the applicable dates:
Commitment Level Applicable Date
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$1,200,000 December 31, 1995
$ 0 July 1, 1996
(b) The following shall be added to section 2.05 as new subsection
2.05(4):
(4) Commencing September 25, 1995, the Revolving Credit Commitment
shall be reduced by an amount equal to $12,500 per month payable on the
first day of each month commencing October 1, 1995 against the outstanding
Revolving Credit Loan balance at September 30, 1995, which is $1,321,000.
(c) The following shall be added to section 2.05 as new subsection
2.05(5):
(5) Commencing September 25, 1995, the Revolving Credit Commitment
shall be further reduced, without duplication of the reduction called for
in section 2.05(4), by an amount equal to the amount of any prepaid
Revolving Credit Loans in excess of $12,500 per month and the amount of any
Letters of Credit which are returned and cancelled.
6. Notes. The sentence added to the end of Section 2.10 (2) by the Fifth
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Amendment dated September 26, 1994, (the "Fifth Amendment"), shall be amended by
adding the following at the end:
Effective September 25, 1995, the number of installments shall be reduced
to thirteen (13), with a fourteenth (14th) and final installment in an
amount necessary to repay in full the unpaid principal amount of the
Refinancing Term Loan on October 31, 1996.
7. Mandatory and Optional Prepayments. Sections 2.11 (3), 2.11 (4) and
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2.11 (5) of Section 2.11 of the Agreement as added by the Fifth Amendment, shall
be deleted in their entirety and replaced with the following:
(3) The Borrowers shall immediately prepay the Loans, in accordance
with Section 2.11 (2), in an amount equal to (a) the sum of the face
amount(s) of any new outstanding obligations of the Borrowers for money
borrowed, created between the date of the Sixth Amendment and the
Termination Date, but specifically excluding equipment money purchase
loans, and loan proceeds secured by the equipment, vehicles, and office
furnishings of the Borrowers in excess of the amounts owed on the
Refinancing Term Loan at the date of such loan and any funds borrowed using
the Company's West Virginia or Kentucky properties as collateral with funds
to be used for capital improvements at those facilities.
(4) If by operation of Section 2.11(3), a mandatory prepayment is
required to be made by the Borrowers and there are no Loans outstanding,
then the Borrowers shall pay to the Bank an amount of cash equal to the
lesser of (a) the prepayment required, or (b) 100% of the sum of the
Performance Letter of Credit Balance, to be retained by the Bank in an
account pledged as collateral security for the obligation of the Borrowers
to reimburse the Bank under or in conjunction with this Agreement, pursuant
to a pledge agreement in form and substance satisfactory to the Bank.
(5) On the Termination Date, the Borrowers will pay to the Bank an
amount of cash equal to 100% of the sum of the Performance Letter of Credit
Balance pledged as collateral security for the obligation of the Borrowers
to reimburse the Bank under or in conjunction with this Agreement pursuant
to a pledge agreement in form and substance satisfactory to the Bank. All
such amounts, including those received by operation of Section 2.11(4),
shall be held in an interest bearing account and all interest earned
thereon shall be paid over to the Borrowers monthly; provided, however,
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that in the event that the stated amount of all outstanding Letters of
Credit issued by the Bank are reduced, the Bank will return to the
Borrowers any amounts of the collateral security held by the Bank under
Sections 2.11(4) and 2.11(5) that exceeds the sum of (a) 100% of the sum of
the Performance Letter of Credit Balance, and (b) the unpaid principal of,
and interest on, Loans.
8. Minimum Working Capital. Section 7.01 of the Agreement shall be
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amended by adding the following at the end:
Commencing 9/30/95, the Borrowers will maintain at all times that the
sum of consolidated current assets minus consolidated current liabilities
(the maximum amount of the current portion of the Refinancing Term Loan
shall be limited to $600,000 for the purposes of calculating compliance
with this covenant) shall not exceed a deficit greater than One Million
Five Hundred Thousand Dollars ($1,500,000), compliance with this covenant
to be measured quarterly as at the end of each fiscal quarter.
9. Minimum Tangible Net Worth. Section 7.02 of the Agreement shall be
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amended by adding the following at the end:
Commencing 9/30/95, compliance with this covenant shall be measured at
the end of each fiscal quarter with the standards set forth below:
Minimum Tangible
Date Net Worth ("TNW")
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9/30/95 $8,600,000
12/31/95 $8,300,000
3/31/96 $8,100,000
6/30/96 $8,200,000
9/30/96 and $8,400,000
thereafter
10. Cash Flow Ratio. Section 7.05 of the Agreement shall be amended by
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deleting the material beginning "at 6/30/95" and by adding the following at the
end:
Commencing 9/30/95, the Borrowers will maintain at all times a ratio
of (a) the sum of consolidated net income after taxes, plus depreciation,
plus amortization, plus the cash proceeds received during the measurement
period from asset sales of the Borrowers and cash proceeds from the
issuance of stock, less non cash income to (b) the sum of all current
maturities of long term Debt required to have been paid during that fiscal
year, plus 100% of all capital expenditures, including all costs of
acquisitions incurred during that fiscal year, on a consolidated basis, of
not less than the following ratios at the following dates, compliance with
this covenant to be measured annually as at each fiscal year end date:
Cash Flow Ratio
Date Not Less Than
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6/30/96 and 1.00 to 1.00
thereafter
11. Minimum Pre-Tax Income (Maximum Pre-Tax Loss). Section 7.06 of the
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Agreement shall be deleted in its entirety.
12. Maximum Capital Expenditures. Section 7.07 of the Agreement shall be
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amended by adding the following at the end:
Commencing the fiscal quarter beginning after 9/30/95, the Borrowers
agree that the sum of (a) capital expenditures plus landfill development
costs, shall not exceed the sum of (b) consolidated net income, plus
depreciation and amortization, plus the cash proceeds received during the
measurement period from asset sales of the Borrowers or cash proceeds from
the issuance of stock, less the amount of all current maturities of long
term Debt required to have been paid during the measurement period,
compliance with this covenant to be measured quarterly, on a cumulative
basis for the current fiscal year, as at the end of each fiscal quarter for
the period then ended.
13. Events of Default. Section 8.01(10) of the Agreement shall be deleted
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in its entirety.
14. Amendment of Loan Documents. Any and all corresponding portions of
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all Loan Documents are hereby amended to conform to and be consistent with the
amendments to the Agreement set forth above.
15. Non-amendment of Other Terms. All other terms of the Agreement and
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the other Loan Documents shall be unaffected by this Sixth Amendment and shall
remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have each caused this Sixth Amendment to
be duly executed by their duly authorized officers as of the date set forth
above.
CORESTATES BANK, N.A.
By:\s\ Xxxxxx X. Xxxxx, AVP
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Xxxxxx X. Xxxxx
Assistant Vice-President
EASTERN ENVIRONMENTAL S&S GRADING, INC., A
SERVICES, INC. West Virginia Corporation
By:\s\ Xxxxxxx X. Xxxxx, President By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
NHD, INC, a Pennsylvania PULASKI GRADING, INC., a
SERVICES, INC. Kentucky Corporation
By:\s\ Xxxxxxx X. Xxxxx, President By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
EASTERN ENVIRONMENTAL SERVICES CAROLINA GRADING, INC., a
OF THE NORTHEAST, INC., a South Carolina Corporation
New York corporation
By:\s\ Xxxxxxx X. Xxxxx, Secretary By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
EASTERN ENVIRONMENTAL SERVICES PULASKI SANITATION, INC.,
OF THE SOUTHEAST, INC., a a Kentucky corporation
Florida corporation
By:\s\ Xxxxxxx X. Xxxxx, Secretary By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
ADVANCED ANALYTICAL LABORATORIES, WRN PROPERTIES, INC., a
INC., a Delaware corporation Pennsylvania corporation
By:\s\ Xxxxxxx X. Xxxxx, President By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
(Signatures Continued on Next Page)
EASTERN REAL PROPERTY, INC. ALL WASTE REFUSE SERVICES,
a Florida corporation INC., a South Carolina
corporation
By:\s\ Xxxxxxx X. Xxxxx, President By:\s\ Xxxxxxx X. Xxxxx, President
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Title Title
A.W.S. OF VIRGINIA INCORPORATED,
a Virginia corporation
By:\s\ Xxxxxxx X. Xxxxx, President
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Title
