<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 21, 1999
REGISTRATION NO. 333-87319
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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WASTE MANAGEMENT, INC.
(Exact name of registrant as specified in its charter)
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DELAWARE 4953 73-1309529
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
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1001 FANNIN STREET
SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
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BRYAN J. BLANKFIELD
ASSISTANT GENERAL COUNSEL
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after this Registration Statement becomes effective.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT BEING OFFERING PRICE AGGREGATE OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED PER NOTE(1) PRICE(1) FEE
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6.000% Senior Notes Due
2001......................... $ 200,000,000 100% $200,000,000 $ 55,600
6.500% Senior Notes Due
2004......................... 200,000,000 100% 200,000,000 55,600
6.875% Senior Notes Due
2009......................... 500,000,000 100% 500,000,000 139,000
7.375% Senior Notes Due
2029......................... 250,000,000 100% 250,000,000 69,500
Guarantee of Senior
Notes(2)..................... $1,150,000,000 100% (3)
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(1) Estimated solely for the purpose of calculating the registration fee.
(2) See inside facing page for additional registrant guarantors.
(3) Pursuant to Rule 457(n), no separate fee for the Guarantee is payable.
THE REGISTRANTS HEREBY AMEND THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANTS FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
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TABLE OF ADDITIONAL REGISTRANT GUARANTORS
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ADDRESS INCLUDING
STATE OR OTHER IRS ZIP CODE AND
EXACT NAME JURISDICTION OF EMPLOYER TELEPHONE NUMBER
AS SPECIFIED INCORPORATION OF IDENTIFICATION OF PRINCIPAL
IN ITS CHARTER ORGANIZATION NUMBER EXECUTIVE OFFICE
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Waste Management Holdings, Inc. ............ Delaware 36-2660763 1001 Fannin Street
Suite 4000
Houston, Texas 77002
(713) 512-6200
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SUBJECT TO COMPLETION, DATED DECEMBER 21, 1999
WASTE MANAGEMENT, INC.
OFFERS TO EXCHANGE
$200,000,000 6.000% SENIOR NOTES DUE 2001
$200,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
FOR
$200,000,000 6.000% SENIOR NOTES DUE 2001
$200,000,000 6.500% SENIOR NOTES DUE 2004
$500,000,000 6.875% SENIOR NOTES DUE 2009
$250,000,000 7.375% SENIOR NOTES DUE 2029
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THE EXCHANGE OFFER:
- We will exchange all outstanding notes that are validly tendered and not
validly withdrawn for an equal principal amount of exchange notes that
are freely tradeable.
- You may withdraw tenders of outstanding notes at any time prior to the
expiration of the exchange offer.
- The exchange offer expires at 5:00 p.m., New York City time, on
, 1999, unless extended. We do not currently intend to extend
the expiration date.
THE EXCHANGE NOTES:
- Terms: Will be substantially identical to the outstanding notes except
that the exchange notes will be freely tradeable.
RESALES OF EXCHANGE NOTES:
- The exchange notes may be sold in the over-the-counter market, in
negotiated transactions or through a combination of such methods.
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YOU SHOULD CONSIDER CAREFULLY THE RISK FACTORS BEGINNING ON PAGE 9
OF THIS PROSPECTUS BEFORE PARTICIPATING IN THE EXCHANGE OFFER
---------------------
Neither the Securities and Exchange Commission, nor any state securities
commission, has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this Prospectus. Any representation to the contrary is a
criminal offense.
The date of this Prospectus is , 1999
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TABLE OF CONTENTS
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PAGE
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Where to Find More Information.............................. i
Prospectus Summary.......................................... 1
Risk Factors................................................ 9
Special Note Regarding Forward-Looking Statements........... 16
Use of Proceeds............................................. 16
Ratio of Earnings to Fixed Charges.......................... 17
Description of the Exchange Notes........................... 18
The Exchange Offer.......................................... 37
Certain United States Federal Income Tax Consequences....... 44
Plan of Distribution........................................ 48
Legal Matters............................................... 48
Experts..................................................... 49
</TABLE>
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YOU SHOULD RELY ONLY ON THE INFORMATION INCORPORATED BY REFERENCE OR
CONTAINED IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT INFORMATION. WE ARE NOT MAKING AN OFFER OF THESE SECURITIES IN ANY
STATE WHERE THE OFFER IS NOT PERMITTED. YOU SHOULD NOT ASSUME THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN
THE DATE ON THE FRONT OF THIS PROSPECTUS.
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WHERE TO FIND MORE INFORMATION
We are subject to the information requirements of the Securities Exchange
Act of 1934, and in accordance therewith we file reports, proxy and information
statements and other information with the Securities and Exchange Commission.
You can inspect and copy these reports, proxy and information statements and
other information at:
- the public reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington DC 20549, and
- the regional offices of the Commission located at:
- 500 West Madison Street, Suite 1400, Chicago, Illinois 60661, and
- 7 World Trade Center, Suite 1300, New York, New York 10048.
You also can obtain copies of these materials from the Public Reference
Section of the Commission at 450 Fifth Street, N.W., Washington, DC 20549 at
prescribed rates. You may obtain information regarding the operation of the
public reference facilities by calling the Commission at 1-800-SEC-0330. You can
obtain electronic filings made through the Electronic Data Gathering, Analysis
and Retrieval System at the Commission's web site, http://www.sec.gov.
In addition, you can inspect material filed by us at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005, on which shares
of our common stock are listed.
We are incorporating by reference in this Prospectus some information we
file with the Commission, which means that we are disclosing important
information to you by referring you to those documents. Specifically, we
incorporate by reference the documents set forth below that we have previously
filed with the Commission:
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COMMISSION FILINGS (FILE NO. 1-12154) PERIOD/DATE
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- - Annual Report on Form 10-K Year ended December 31, 1998
- - Quarterly Report on Form 10-Q Quarter ended March 31, 1999 (certain
items in financial statements were
revised in June 30, 1999 Form 10-Q)
- - Quarterly Report on Form 10-Q Quarter ended June 30, 1999
- - Quarterly Report on Form 10-Q (as Quarter ended September 30, 1999
amended on Form 10-Q/A)
- - Current Report on Form 8-K September 16, 1999
- - Current Report on Form 8-K October 20, 1999
- - Proxy Statement for the 1999 Annual April 5, 1999
Meeting of Stockholders
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The documents we have filed with the Commission pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
before the termination of the offering made by this Prospectus are also
incorporated by reference into this Prospectus.
This Prospectus, which is a part of the exchange offer registration
statement, does not contain all of the information found in the exchange offer
registration statement. You should refer to the registration statement,
including its exhibits and schedules, for further information.
YOU MAY REQUEST A COPY OF THIS INFORMATION, THE EXCHANGE OFFER REGISTRATION
STATEMENT, AND THE COMMISSION FILINGS AT NO COST, BY WRITING OR TELEPHONING US
AT THE FOLLOWING ADDRESS:
WASTE MANAGEMENT, INC.
1001 FANNIN STREET, SUITE 4000
HOUSTON, TEXAS 77002
(713) 512-6200
ATTN: SECRETARY
TO ENSURE TIMELY DELIVERY, YOU SHOULD REQUEST THESE FILINGS NO LATER THAN
________________.
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PROSPECTUS SUMMARY
This summary highlights information contained elsewhere in this prospectus.
You should read the entire prospectus, including the financial data and related
notes and the information incorporated by reference into this prospectus, before
making an investment decision. In this prospectus, the terms "our," "we," "us,"
"Waste Management," and similar terms refer to Waste Management, Inc. and
include all of our consolidated subsidiaries. In this prospectus, the term "you"
refers to a holder of the outstanding notes or the exchange notes.
THE COMPANY
OVERVIEW
We are a global leader in providing integrated waste management services.
In North America, we provide solid waste management services throughout the
United States, as well as in Canada, Mexico and Puerto Rico, including
collection, transfer, recycling and resource recovery services, and disposal
services, including the landfill disposal of hazardous wastes. In addition, we
are a leading developer, operator and owner of waste-to-energy facilities in the
United States. We also engage in other hazardous waste management services
throughout North America, as well as low-level and other radioactive waste
services. Internationally, we operate throughout Europe, the Pacific Rim, South
America and other select international markets. Our diversified customer base
includes commercial, industrial, municipal and residential customers, other
waste management companies, governmental entities and independent power markets.
RECENT DEVELOPMENTS
On July 6, 1999, we announced that we had lowered our expected earnings per
share for the three-month period ended June 30, 1999. On July 29, 1999, we
announced a further reduction in our expected earnings for that period. On
August 3, 1999, we announced that our reported operating income for the
three-month period ended March 31, 1999 may have included certain non-recurring
pretax income items. Between July 8, 1999 and September 3, 1999, numerous
lawsuits that purport to be based on one or more of these announcements have
been filed against us and certain of our officers and directors. Taken together,
the plaintiffs of these lawsuits purport to assert claims on behalf of a class
of purchasers of our common stock between June 10, 1998 and August 2, 1999.
Among other things, the plaintiffs allege that Waste Management and certain of
its officers and directors (i) made knowingly false earnings projections for the
three months ended June 30, 1999 and (ii) failed to adequately disclose facts
relating to its earnings projections that the plaintiffs allege would have been
material to purchasers of Waste Management's common stock. The plaintiffs also
claim that certain of Waste Management's officers and directors sold common
stock at prices known to be inflated by the alleged material misstatements and
omissions. The plaintiffs in these actions seek damages with interest, costs and
such other relief as the respective courts deem proper.
In addition, three of Waste Management's shareholders have filed lawsuits
against certain of our officers and directors in connection with the events
surrounding our second quarter 1999 earnings projections and July 6, 1999
earnings announcement. The plaintiffs in these actions purport to allege
derivative claims on behalf of Waste Management against these officers and
directors for alleged breaches of fiduciary duty resulting from their alleged
stock sales during the three-month period ended June 30, 1999 and/or their
oversight of Waste Management's affairs. The lawsuits name Waste Management,
Inc. as a nominal defendant and seek compensatory and punitive damages with
interest, equitable and/or injunctive relief, costs and such other relief as the
respective courts deem proper.
In addition, the Commission has notified us of an informal inquiry into the
period ended June 30, 1999, as well as certain sales of our common stock that
preceded our July 6, 1999 earnings announcement.
The New York Stock Exchange has notified us that its market Trading
Analysis Department is reviewing transactions in our common stock prior to the
July 6, 1999 earnings forecast announcement.
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We are conducting a thorough investigation of each of the allegations that
have been made in connection with our second quarter 1999 earnings
communications. As part of this investigation, our Board of Directors has
authorized a review of the allegations that have been made against certain of
our officers and directors. Roderick M. Hills, a former chairman of the
Commission and chairman of our audit committee, is directing the review.
It is not possible at this time to predict the impact that the above
lawsuits may have on Waste Management Holdings or Waste Management, nor is it
possible to predict whether any other suits or claims may arise out of these
matters in the future. However, it is reasonably possible that the outcome of
any present or future litigation may have a material adverse impact on our
financial condition or results of operations in one or more future periods.
Waste Management and Waste Management Holdings intend to defend themselves
vigorously in all the above matters.
On November 10, 1999, we announced the selection of A. Maurice Myers as our
Chairman, Chief Executive Officer and President. Mr. Myers, 59, joins us from
Yellow Corporation, where he has been Chairman, CEO and President since April
1996. Yellow Corporation is the parent company of Yellow Freight, one of the
nation's oldest and largest trucking companies. Under Mr. Myers' leadership,
Yellow Corporation returned to profitability in just one year, after three years
of negative earnings. Mr. Myers also implemented a productivity initiative and a
re-structuring of the company's largest subsidiary, Yellow Freight, dividing
that company into five regionally-based business units and reducing operating
costs, while significantly increasing the company's ability to meet changing
customer needs. Mr. Myers is a recognized leader in integrating information
technology with business operations. He directed the re-engineering of Yellow
Corporation's information systems, providing the company with greater financial
accountability and a distinct competitive advantage over other freight haulers.
In 1999, Yellow Corporation was named one of the nation's top 100 Information
Technology companies, the only freight transportation company to be so
recognized. Prior to joining Yellow Corporation in 1996, Mr. Myers served as
President and Chief Operating Officer of America West Airlines and is credited
in part for that company's financial turnaround. Mr. Myers also served as
President and CEO of Aloha Airlines, and held a senior management position with
Continental Airlines.
On November 23, 1999 we announced the appointment of Thomas L. Smith as
Senior Vice President -- Information Systems. Mr. Smith will report to A.
Maurice Myers, and will be responsible for our information systems strategies
and implementation efforts. Mr. Smith joins us from Yellow Services, Inc., a
wholly owned subsidiary of Yellow Corporation, where he served as President.
Under Smith's leadership, Yellow Corporation was recently named as a recipient
of the 1999 CIO-100 Award by CIO Magazine for having information systems best
positioned to succeed beyond 2000.
An Executive Committee of our Board of Directors has been formed,
consisting of A. Maurice Myers, Ralph V. Whitworth, Roderick M. Hills and Jerome
P. York. The Board of Directors has appointed Mr. Whitworth, a managing member
of Relational Investors LLC, as Chairman of the Executive Committee.
The Board of Directors has initiated a strategic initiative aimed at
increasing shareholder value. We have engaged Chase Securities Inc. and
Donaldson, Lufkin and Jenrette Securities Corporation as financial advisors to
assist us in this matter. The plan calls for disposition of some or all of our
international assets, a substantial majority of our non-core assets, and certain
non-strategic North American solid waste assets that account for 10% of our
operating revenues in that sector. We intend immediately to initiate the
disposition of these assets, and plan to substantially complete these asset
sales in the next 12 months, although there can be no assurance that these
dispositions will be completed in the contemplated time frame. We expect to use
the proceeds of these asset dispositions as they are realized to repay debt,
repurchase shares and pursue tuck-in acquisitions.
In the second quarter of 1999, we entered into an agreement to purchase all
of the Canadian solid waste assets of Allied Waste Industries, Inc. ("Allied")
that Allied acquired upon its acquisition of Browning-Ferris Industries, Inc.
The purchase price of these assets was to be approximately $501 million
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in cash. On November 8, 1999, we entered into revised agreements with Allied,
which replace the original agreement.
Under the terms of the revised agreements, Allied has agreed to sell to us
all of the shares of Browning-Ferris Industries Limited ("BFIL"), which owns the
solid waste operations of Browning-Ferris in Canada, including collection
operations, transfer stations, landfill operations and recycling facilities.
Annual run rate revenues generated from these operations are approximately US
$176 million. Allied will continue to operate certain of the Canadian operations
that we are being required to divest by the Competition Bureau of Canada and
market those operations for sale, on behalf of BFIL, after the closing. The sale
of the BFIL shares is subject to final approval pursuant to the Competition Act
and the Investment Canada Act. Additionally, we have agreed to sell to Allied
certain U.S. solid waste services assets with combined reported historical
revenue of approximately $132 million, including nine landfill operations, 19
collection operations, five transfer stations and a landfill operating contract.
The sale of such assets is subject to final approval pursuant to the Hart-Scott
Rodino Act. We expect to receive net cash proceeds as a result of the revised
transactions.
On December 15 and 16, 1999 we permanently amended our two domestic bank
credit facilities and two Euro facilities, respectively, for which waivers were
sought in the third quarter 1999. The amended terms and conditions of the
facilities also contain the necessary provisions for us to follow through with
our strategy of divesting our international and non-core assets. Initial
proceeds from the sales of such assets will be used to reduce debt and improve
our financial position.
SUMMARY OF TERMS OF THE EXCHANGE OFFER
On May 21, 1999, we completed the private offering of the outstanding
notes, consisting of:
- $200 million principal amount of 6.000% Senior Notes due 2001;
- $200 million principal amount of 6.500% Senior Notes due 2004;
- $500 million principal amount of 6.875% Senior Notes due 2009; and
- $250 million principal amount of 7.375% Senior Notes due 2029.
We and the guarantor executed a registration rights agreement with the
initial purchasers in the private offering of the outstanding notes in which we
and the guarantor agreed to deliver to you this prospectus and agreed to:
- file an exchange offer registration statement with the Commission within
120 days after May 21, 1999;
- have the exchange offer registration statement declared effective by the
Commission within 210 days after May 21, 1999; and
- consummate the exchange offer within 30 business days after the date on
which the exchange offer registration statement is declared effective by
the Commission.
You are entitled to exchange in the exchange offer your outstanding notes
for exchange notes which are identical in all material respects to the
outstanding notes except that:
- the exchange notes have been registered under the Securities Act; and
- certain contingent interest rate provisions are no longer applicable.
The Exchange Offer......... We are offering to exchange the aggregate principal
amount of exchange notes for the aggregate
principal amount of outstanding notes. The
outstanding notes may be exchanged only in amounts
which are equal to whole multiples of $1,000.
3
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Resales of Exchange
Notes...................... Based on Commission no action letters, we believe
that after the exchange offer you may offer and
sell the exchange notes without registration under
the Securities Act so long as:
- You acquire the exchange notes in the ordinary
course of business.
- When the exchange offer begins you do not have an
arrangement with another person to participate in
a distribution of the exchange notes.
- You are not engaged in a distribution of, nor do
you intend to distribute, the exchange notes.
When you tender the outstanding notes, we will ask
you to represent to us that:
- You are not an affiliate of Waste Management.
- You will acquire the exchange notes in the
ordinary course of business.
- When the exchange offer begins you are not
engaged in, nor do you have plans with another
person to be engaged in, a distribution of the
exchange notes.
If you are unable to make these representations,
you will be required to comply with the
registration and prospectus delivery requirements
under the Securities Act in connection with any
resale transaction.
If you are a broker-dealer and receive exchange
notes for your own account, you must acknowledge
that you will deliver a prospectus if you resell
the exchange notes. By acknowledging your intent
and delivering a prospectus you will not be deemed
to admit that you are an "underwriter" under the
Securities Act. You may use this prospectus as it
is amended from time to time when you resell
exchange notes which were acquired from
market-making or trading activities. For a year
after the expiration date we will make this
prospectus available to any broker-dealer in
connection with such a resale. See "Plan of
Distribution."
Consequences of Failure to
Exchange Notes........... If you do not exchange your outstanding notes
during the exchange offer you will no longer be
entitled to registration rights. You will not be
able to offer or sell the outstanding notes unless
they are later registered, sold pursuant to an
exemption from registration or sold in a
transaction not subject to the Securities Act or
state securities laws. Other than in connection
with the exchange offer, we do not currently
anticipate that we will register the outstanding
notes under the Securities Act. See "The Exchange
Offer -- Consequences of Failure to Exchange."
Expiration Date............ The exchange offer will expire at 5:00 p.m., New
York City time, on , 1999 or such later
date and time to which we extend it, referred to as
the "expiration date."
Conditions to the Exchange
Offer.................... No minimum principal amount of outstanding notes
must be tendered to complete the exchange offer.
However, the exchange offer is subject
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to certain customary conditions which we may waive.
See "The Exchange Offer -- Conditions."
Procedures for Tendering
Outstanding Notes........ If you wish to participate in the exchange offer,
you must complete, sign and date the accompanying
letter of transmittal or a facsimile copy and mail
it or deliver it to the exchange agent along with
any necessary documentation. Instructions and the
address of the exchange agent are on the letter of
transmittal and in this prospectus. See "The
Exchange Offer -- Procedures for Tendering" and
"-- Exchange Agent." You may also effect a tender
of outstanding notes pursuant to the procedures for
book-entry transfer as described in this
prospectus. See "The Exchange Offer -- Procedures
for Tendering."
Guaranteed Delivery
Procedures............... If you cannot tender the outstanding notes,
complete the letter of transmittal or provide the
necessary documentation prior to the termination of
the exchange offer, you may tender your outstanding
notes according to the guaranteed delivery
procedures set forth in "The Exchange
Offer -- Guaranteed Delivery Procedures."
Special Procedures for
Beneficial Owners.......... If you are a beneficial owner of outstanding notes
which are registered in the name of a broker,
dealer, commercial bank, trust company or other
nominee, and you wish to tender outstanding notes
in the exchange offer, you should contact the
registered holder promptly and instruct the
registered holder to tender on your behalf. If you
wish to tender on your own behalf, you must, prior
to completing and executing the letter of
transmittal and delivering your outstanding notes,
either make appropriate arrangements to register
ownership of the outstanding notes in your name or
obtain a properly completed bond power from the
registered holder. The transfer of registered
ownership may take considerable time and may not be
able to be completed prior to the expiration date.
Withdrawal Rights.......... You may withdraw outstanding notes that have been
tendered at any time prior to the expiration date
by sending a written or facsimile withdrawal notice
to the Exchange Agent.
Acceptance of Outstanding
Notes and Delivery of
Exchange Notes........... All outstanding notes properly tendered to the
Exchange Agent by the expiration date will be
accepted for exchange. The exchange notes will be
delivered promptly after the expiration date. See
"The Exchange Offer -- Acceptance of Notes for
Exchange; Delivery of Exchange Notes."
Certain U.S. Federal Income
Tax Consequences........... The exchange of outstanding notes for exchange
notes will not be a taxable event for U.S. federal
income tax purposes. See "Certain United States
Federal Income Tax Consequences."
Exchange Agent............. Chase Bank of Texas, National Association is the
exchange agent for the exchange offer. The address
and telephone number of the exchange agent are set
forth in the section captioned "The Exchange
Offer -- Exchange Agent" of this prospectus.
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SUMMARY OF TERMS OF THE EXCHANGE NOTES
Issuer..................... Waste Management, Inc.
Notes Offered.............. $200 million principal amount of 6.000% Senior Notes
due 2001;
$200 million principal amount of 6.500% Senior Notes
due 2004;
$500 million principal amount of 6.875% Senior Notes
due 2009; and
$250 million principal amount of 7.375% Senior Notes
due 2029.
Maturities................. For the 2001 exchange notes, May 15, 2001;
for the 2004 exchange notes, May 15, 2004;
for the 2009 exchange notes, May 15, 2009; and
for the 2029 exchange notes, May 15, 2029.
Interest Payment Dates..... Interest on all exchange notes will be paid
semi-annually in cash in arrears on May 15 and
November 15 of each year, commencing November 15,
1999.
Optional Redemption........ Except for the exchange notes due in 2001, the
exchange notes will be redeemable at our option.
The exchange notes may be redeemed in whole or in
part, at any time or from time to time, on not less
than 30 days' notice, at the make-whole price as
defined under "Description of the Exchange
Notes -- Optional Redemption."
Ranking.................... The outstanding notes are, and the exchange notes
will be, our general unsecured senior obligations
and will rank equal in right of payment to all of
our other existing and future senior and unsecured
indebtedness, including debt under our credit
facilities. See "Description of Exchange
Notes -- Ranking."
Subsidiary Guarantee....... The outstanding notes are, and the exchange notes
will be, guaranteed by our subsidiary Waste
Management Holdings, Inc. on a full and
unconditional basis. The subsidiary guarantee will
be equal in right of payment to all senior and
unsecured indebtedness of Waste Management
Holdings, Inc.
Covenants.................. We issued the outstanding notes, and will issue the
exchange notes, under an indenture with Chase Bank
of Texas, National Association, the trustee. The
indenture, among other things, restricts our
ability and the ability of our subsidiaries to:
- create liens securing indebtedness; and
- engage in sale and leaseback transactions.
For more details, see "Description of Exchange
Notes -- Certain Covenants."
The exchange notes will be freely transferable but will also be new
securities for which there will not initially be a market. Accordingly, we
cannot assure you whether a market for the exchange notes will develop or as to
the liquidity of any such market. We do not intend to apply for a listing of the
exchange notes on any securities exchange or automated dealer quotation system.
The initial purchasers in the private offering of the outstanding notes have
advised us that they intend to make a market in the exchange notes. However,
they are not required to do so, and any market-making activities with respect to
the exchange notes may be discontinued without notice.
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HISTORICAL AND SELECTED FINANCIAL INFORMATION
The following selected consolidated financial information as of December
31, 1997 and 1998, and for each of the years in the three year period ended
December 31, 1998, has been derived from Waste Management's audited consolidated
financial statements incorporated by reference herein. This information should
be read in conjunction with such consolidated financial statements and related
notes thereto. The selected consolidated financial information as of December
31, 1994, 1995 and 1996, and for each of the years in the two year period ended
December 31, 1995, has been derived from audited consolidated financial
statements, that have been previously included in Waste Management's reports
under the Exchange Act, restated for certain pooling of interests transactions.
The following selected historical financial information as of and for the nine
months ended September 30, 1998 and 1999 has been derived from Waste
Management's unaudited historical financial statements and reflects all
adjustments management considers necessary for a fair presentation of the
financial position and results of operations for these periods. The results of
operations for the nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the full year.
The Company recorded significant adjustments in the quarter ended September
30, 1999, certain of which affect account balances applicable to periods prior
to the quarter ended September 30, 1999. Accordingly, the Company, after
consultation with its independent public accountants, has concluded that its
internal controls for the preparation of interim financial information did not
provide an adequate basis for its independent public accountants to complete
reviews of the quarterly data for the quarters in the nine-month period ended
September 30, 1999. The Company believes that certain charges that were recorded
in the quarter ended September 30, 1999 may relate to individual prior periods;
however, the Company does not have sufficient information to identify all
specific charges attributable to prior periods. Based on its quantitative and
qualitative analysis of available information, the Company, after consultation
with its independent accountants, has concluded that it does not have, nor is it
able to obtain, sufficient information to conclude whether or not a material
amount of these charges relate to any prior year, although qualitative analysis
indicates that these charges are principally related to 1999. The Company has
been advised by its independent public accountants that their report on the
Company's December 31, 1999 financial statements will specifically refer to the
matters discussed above regarding the interim periods within 1999.
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------- -------------------------
1994 1995 1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Operating revenues............ $ 9,677,048 $10,432,775 $10,998,602 $11,972,498 $12,625,769 $ 9,393,165 $ 9,790,462
----------- ----------- ----------- ----------- ----------- ----------- -----------
Costs and expenses:
Operating (exclusive of
depreciation and
amortization shown
below).................... 5,705,355 6,261,745 6,564,234 7,482,273 7,283,251 5,496,144 6,110,317
General and
administrative............ 1,236,765 1,279,719 1,316,480 1,438,501 1,332,736 1,049,994 1,309,829
Depreciation and
amortization.............. 1,129,890 1,186,492 1,264,196 1,391,810 1,498,712 1,125,046 1,202,735
Merger costs................ 3,782 26,539 126,626 112,748 1,807,245 1,579,127 111,263
Asset impairments and
unusual items............. 122,233 394,092 529,768 1,771,145 864,063 666,952 700,034
(Income) loss from
continuing operations held
for sale, net of minority
interest.................. (24,143) (25,110) (315) 9,930 151 151 --
----------- ----------- ----------- ----------- ----------- ----------- -----------
8,173,882 9,123,477 9,800,989 12,206,407 12,786,158 9,917,414 9,434,178
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from
operations.................. 1,503,166 1,309,298 1,197,613 (233,909) (160,389) (524,249) 356,284
----------- ----------- ----------- ----------- ----------- ----------- -----------
Other income (expense):
Interest expense............ (437,946) (534,964) (525,340) (555,576) (681,457) (503,347) (549,702)
Interest income............. 47,878 41,565 34,603 45,214 26,829 21,760 28,823
Minority interest........... (126,042) (81,367) (41,289) (45,442) (24,254) (14,298) (17,706)
Other income, net........... 113,526 257,773 108,645 127,216 139,392 122,960 39,268
----------- ----------- ----------- ----------- ----------- ----------- -----------
(402,584) (316,993) (423,381) (428,588) (539,490) (372,925) (499,317)
----------- ----------- ----------- ----------- ----------- ----------- -----------
</TABLE>
7
<PAGE> 13
<TABLE>
<CAPTION>
NINE MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 30,
------------------------------------------------------------------- -------------------------
1994 1995 1996 1997 1998 1998 1999
----------- ----------- ----------- ----------- ----------- ----------- -----------
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<S> <C> <C> <C> <C> <C> <C> <C>
Income (loss) from continuing
operations before income
taxes......................... 1,100,582 992,305 774,232 (662,497) (699,879) (897,174) (143,033)
Provision for income taxes.... 498,233 493,375 486,700 363,341 66,923 (66,887) 139,790
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income (loss) from continuing
operations.................. 602,349 498,930 287,532 (1,025,838) (766,802) (830,287) (282,823)
Income (loss) from
discontinued operations..... 27,324 4,863 (263,301) 95,688 -- -- --
Extraordinary item............ -- -- -- (6,809) (3,900) (3,900) --
Accounting change............. (1,281) -- -- (1,936) -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)............. $ 628,392 $ 503,793 $ 24,231 $ (938,895) $ (770,702) $ (834,187) $ (282,823)
=========== =========== =========== =========== =========== =========== ===========
Basic earnings (loss) per
common share:
Continuing operations....... $ 1.24 $ 0.99 $ 0.54 $ (1.84) $ (1.31) $ (1.44) $ (0.46)
Discontinued operations..... 0.06 0.01 (0.49) 0.17 -- -- --
Extraordinary item.......... -- -- -- (0.01) (0.01) -- --
Accounting change........... -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)........... $ 1.30 $ 1.00 $ 0.05 $ (1.68) $ (1.32) $ (1.44) $ (0.46)
=========== =========== =========== =========== =========== =========== ===========
Diluted earnings (loss) per
common share:
Continuing operations....... $ 1.23 $ 0.97 $ 0.53 $ (1.84) $ (1.31) $ (1.44) $ (0.46)
Discontinued operations..... 0.05 0.01 (0.49) 0.17 -- -- --
Extraordinary item.......... -- -- -- (0.01) (0.01) -- --
Accounting change........... -- -- -- -- -- -- --
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income (loss)........... $ 1.28 $ 0.98 $ 0.04 $ (1.68) $ (1.32) $ (1.44) $ (0.46)
=========== =========== =========== =========== =========== =========== ===========
Cash dividends per common
share....................... $ 0.60 $ 0.58 $ 0.57 $ 0.56 $ 0.16 $ 0.15 $ 0.01
=========== =========== =========== =========== =========== =========== ===========
BALANCE SHEET DATA (AT END OF
PERIOD):
Working capital (deficit)..... $ (681,813) $(1,027,093) $ (258,210) $(1,967,278) $ (412,269) $ (329,055) $(1,086,024)
Intangible assets, net........ 3,661,594 4,329,909 4,681,381 4,848,176 6,250,324 5,942,764 5,505,362
Total assets.................. 18,124,674 19,950,426 20,727,524 20,156,424 22,715,198 22,029,650 21,425,014
Long-term debt, including
current maturities.......... 7,677,360 8,404,034 9,064,566 9,479,961 11,697,943 10,538,299 11,403,244
Stockholders' equity.......... 4,506,454 5,184,104 5,201,610 3,854,929 4,372,496 4,351,521 4,533,048
</TABLE>
8
<PAGE> 14
RISK FACTORS
In addition to the information set forth in this Prospectus, you should
carefully consider the risks described below before deciding whether to
participate in the exchange offer. The following risks include all of the risks
which we believe to be material at the current time. Additional risks not
presently known to us or that we currently deem immaterial may also impair our
business operations.
THE NOTES ARE SUBORDINATED TO THE DEBT OF OUR SUBSIDIARIES
As a holding company, we conduct our operations through our subsidiaries.
Our only significant assets are the capital stock of our subsidiaries.
Accordingly, our ability to meet our cash obligations depends in part upon the
ability of our subsidiaries to make cash distributions to us. The ability of our
subsidiaries to make distributions to us is, and will continue to be, restricted
by, among other limitations, applicable provisions of the laws of national or
state governments and contractual provisions. Our right to participate in the
assets of any subsidiary (and thus the ability of holders of the exchange notes
to benefit indirectly from such assets) is generally subject to the prior claims
of creditors, including trade creditors, of that subsidiary, except to the
extent that we are recognized as a creditor of such subsidiary, in which case
our claims would still be subject to any security interest of other creditors of
such subsidiary. Therefore, except as described below, the exchange notes will
be subordinated by operation of law to creditors, including trade creditors, of
our subsidiaries with respect to the assets of the subsidiaries, against which
these creditors have a claim.
The exchange notes will be guaranteed by our subsidiary Waste Management
Holdings. Our obligations under our credit facilities and our other senior
indebtedness are also currently guaranteed by Waste Management Holdings.
Similarly, we have guaranteed the outstanding senior indebtedness of Waste
Management Holdings. Thus, the exchange notes will rank equally in right of
payment with the senior indebtedness of Waste Management Holdings, the debt
under our credit facilities and our other senior indebtedness. Because of our
holding company structure and the impact of the Waste Management Holdings'
guarantee, the exchange notes will be structurally subordinated to the claims of
creditors of our subsidiaries, other than Waste Management Holdings. As of
September 30, 1999, the amount of this subsidiary indebtedness was approximately
$1.6 billion out of our total consolidated long-term debt of approximately $11.4
billion.
Upon any release by the lenders under our credit facilities (or any
replacement or new principal credit facility) of the Waste Management Holdings'
guarantee, we and Waste Management Holdings will each be deemed automatically
and unconditionally released and discharged from our respective obligations
under the guarantees of the senior indebtedness of the other so guaranteed. In
such event, the claims of creditors of Waste Management Holdings will
effectively have priority with respect to the assets and earnings of Waste
Management Holdings over the claims of our creditors, including the holders of
the exchange notes.
U.S. BANKRUPTCY OR FRAUDULENT CONVEYANCE LAW MAY INTERFERE WITH THE PAYMENT OF
THE NOTES
Various applicable fraudulent transfer laws allow courts, under specific
circumstances, to avoid guarantees by a subsidiary and require holders of the
guaranteed obligations to return any payments received from the subsidiary
guarantors. A court may use these laws to avoid the Waste Management Holdings
guarantee of the exchange notes in the event of bankruptcy or insolvency of
Waste Management Holdings.
A court could set aside Waste Management Holdings' guarantee of the
exchange notes to the extent that either of the following were true at the time
it issued the guarantee:
- Waste Management Holdings incurred the guarantee with the intent to
hinder, delay or defraud any of its present or future creditors or
contemplated insolvency with a design to favor one or more creditors to
the total or partial exclusion of others; or
9
<PAGE> 15
- Waste Management Holdings did not receive fair consideration or
reasonably equivalent value for issuing the guarantee and, at the time it
issued the guarantee, it:
- was insolvent or was rendered insolvent by reason of the issuance of the
guarantee;
- engaged or was about to engage in a business or transaction for which
Waste Management Holdings' remaining assets constituted unreasonably
small capital; or
- intended to incur, or believed that it would incur, debts beyond its
ability to pay such debts as they mature.
Among other things, a legal challenge to Waste Management Holdings'
guarantee of the exchange notes on fraudulent transfer grounds may focus on the
benefits, if any, realized by it as a result of our issuance of the exchange
notes. To the extent Waste Management Holdings' guarantee of the exchange notes
were to be avoided on fraudulent conveyance grounds or held unenforceable for
any other reason, you would cease to have any claim in respect of Waste
Management Holdings' guarantee and would be solely our creditors. In such event,
your claim against Waste Management Holdings would be subject to the prior
payments of all Waste Management Holdings' obligations. Waste Management
Holdings may not have sufficient assets, after providing for all prior claims,
to satisfy the claims of all holders of the exchange notes relating to any
voided guarantee.
The obligations of Waste Management Holdings under its guarantee of the
exchange notes are limited to an amount which would not cause such guarantee to
be a fraudulent transfer or conveyance. Waste Management Holdings has issued
similar guarantees of certain of our other indebtedness. The determination of
the amount that would be due under its guarantee of the exchange notes or any of
such other guarantees is uncertain.
YOU MAY NOT BE ABLE TO SELL YOUR EXCHANGE NOTES
There is no active trading market for the exchange notes and this market
may never develop. If any of the exchange notes are traded after their initial
issuance, they may trade at a discount from their initial offering price.
Factors that could cause the exchange notes to trade at a discount are:
- an increase in prevailing interest rates;
- a decline in our credit worthiness;
- a weakness in the market for similar securities; and
- declining general economic conditions.
Future trading prices of the exchange notes will depend on many factors,
including, among other things, prevailing interest rates, our operating results
and the market for similar securities. We do not intend to apply for a listing
of the exchange notes on any securities exchange or automated dealer quotation
system. The initial purchasers of the outstanding exchange notes have advised us
that they currently intend to make a market in the exchange notes. However, they
are not obligated to do so and any market making may be discontinued at any time
without notice.
Historically, the market for non-investment grade debt has been subject to
disruptions that have caused volatility in prices. It is possible that the
market for the exchange notes will be subject to disruptions. Any disruptions
may have a negative effect on you, as a holder of the exchange notes, regardless
of our prospects and financial performance.
ACCOUNTING CHARGES HAVE NEGATIVELY IMPACTED REPORTED FINANCIAL RESULTS, RESULTED
IN THE IMPAIRMENT OF THE VALUE OF CERTAIN ASSETS AND MAY DECREASE OUR FUTURE
CASH FLOWS
During the third quarter of 1999, we initiated a comprehensive review of
our accounting records, systems, processes and controls at the direction of our
Board of Directors, which was completed in November 1999. As a result of this
review, we recorded certain charges and adjustments in the quarter
10
<PAGE> 16
ended September 30, 1999 totaling $1.23 billion after tax. Because of the size
of the charges, generally accepted accounting principles require us to attempt
to determine whether portions of the charges apply to prior periods. While we
believe that certain of these charges may relate to prior periods, we do not
currently have sufficient information to identify all specific charges
attributable to prior periods. Producing the information required to identify
these charges would be cost prohibitive and disruptive to our operations.
Some of the charges and adjustments we recorded in the third quarter 1999,
such as certain increases in insurance reserves, environmental reserves, loss
contract provisions and adjustments resulting from completing account
reconciliations, are recurring in nature, and should therefore be expected to
occur in future periods. Additionally, certain of these charges and adjustments,
including receivables-related adjustments and insurance reserves, could have an
impact on our future cash flows.
Because some of the charges discussed above affect account balances
applicable to periods prior to the quarter ended September 30, 1999, we
concluded, after consultation with our independent public accountants, that our
internal controls for the preparation of interim financial information did not
provide an adequate basis for them to complete reviews of the quarterly data for
the quarters in the nine months ended September 30, 1999. The review was
completed in November 1999, and we do not anticipate any additional material
adjustments to our financial statements based on the review. However, we may not
be able to successfully stabilize our accounting systems and procedures, and
close our accounting records and report our 1999 annual results in accordance
with yearend audit procedures. Any failure to stabilize our accounting systems
could result in additional material charges and adjustments in the future.
WE MAY ENCOUNTER DIFFICULTIES IN IMPLEMENTING OUR PROPOSED STRATEGIC INITIATIVE
Our ability to successfully implement our proposed strategic initiative may
be affected by the willingness of prospective purchasers to purchase the assets
we identify as divestiture candidates on terms we find acceptable, the timing
and terms on which such assets may be sold, uncertainties relating to regulatory
approvals and other factors affecting the ability of prospective purchasers to
consummate such transactions. The success of our strategic initiative could also
be affected by the availability of financing, and uncertainties relating to the
impact of the proposed strategic initiative on our credit ratings and,
consequently, the availability and cost of debt and equity financing to us.
WE ARE UNDERGOING CHANGES IN MANAGEMENT
Our business may be affected by our ability to attract and retain qualified
individuals to serve in senior management positions.
WE FACE UNCERTAINTIES RELATING TO PENDING LITIGATION AND INVESTIGATIONS
We face uncertainties relating to pending litigation and investigations as
described in "The Company -- Recent Developments" above. We are unable to
predict the outcome or impact of these matters and there can be no assurance
that they will not have a material adverse effect on us and our business.
WE FACE POTENTIAL DIFFICULTIES IN CONTINUING TO EXPAND AND MANAGE OUR GROWTH
We have grown rapidly, primarily through acquisitions. We cannot guarantee
that we will be able to continue to expand and successfully manage our growth.
We also cannot guarantee that our existing or acquired operations will not be
adversely affected by the pace of our growth. Improving the productivity of our
acquired operations and using our asset base and strategic position to operate
more efficiently is very important to our financial results and prospects. In
particular, whether we will ultimately achieve the
11
<PAGE> 17
anticipated benefits of acquired operations will depend on a number of factors,
including our ability to effect:
- administrative cost savings;
- rationalization of collection routes;
- insurance and bonding cost reductions; and
- general economies of scale.
Moreover, our ability to continue to grow will depend on a number of
factors, including:
- competition from other waste management companies;
- the availability of attractive acquisition opportunities;
- our ability to mitigate antitrust concerns related to acquisitions in
several markets;
- the availability of working capital;
- our ability to maintain margins on existing or acquired operations; and
- our ability to manage costs in a changing regulatory environment.
OUR ACQUISITION STRATEGY INVOLVES POTENTIAL RISKS
We regularly pursue opportunities to expand by acquiring additional waste
management businesses and operations that can be effectively integrated with our
existing operations. In addition, we regularly pursue mergers and acquisition
transactions, some of which are significant, in new markets where we believe
that we can successfully become a provider of integrated waste management
services. As one of the leading industry consolidators, we could announce
transactions with either publicly or privately owned businesses at any time.
Our acquisition strategy involves potential risks. These risks include:
- our failure to accurately assess all of the pre-existing liabilities of
acquired companies;
- unexpected difficulties in successfully integrating the operations of
acquired companies with our existing operations;
- a lack of attractive acquisition opportunities;
- our inability to obtain the capital required to finance potential
acquisitions on satisfactory terms;
- the businesses we acquire not proving profitable; and
- our incurring additional indebtedness or issuing additional equity
securities as a result of future acquisitions.
WE MAY NEED ADDITIONAL CAPITAL IF OUR CASH FLOW IS LESS THAN EXPECTED
We expect to generate sufficient cash flow from our operations to cover our
anticipated cash needs for capital expenditures and acquisitions. If our cash
flow from operations is less than currently expected, or our capital
requirements increase, either due to strategic decisions or otherwise, we may
elect to incur indebtedness or issue equity securities to cover any additional
capital needs. However, we cannot guarantee that we will be successful in
obtaining additional capital in this manner on acceptable terms.
We also cannot guarantee that we will be successful in renewing our
existing credit facilities, or that we will be able to renew the credit
facilities on terms acceptable to us. If we are unable to renew our existing
credit facilities, or to obtain other financing sources, our business and
operating results could be affected adversely to a material extent.
12
<PAGE> 18
FLUCTUATING VARIABLE INTEREST RATES COULD AFFECT US
In the past, we have used variable rate debt under revolving bank credit
arrangements as one method of financing our rapid growth. Although our recent
financings have reduced the amount of variable rate debt as a percentage of
total indebtedness outstanding, issuing variable rate debt will continue to be
an alternative for us. Fluctuations in variable interest rates, which may occur
as general interest rates change, could have a material effect on us.
INTENSE COMPETITION COULD REDUCE OUR PROFITABILITY
We encounter intense competition from governmental, quasi-governmental and
private sources in all aspects of our operations.
In North America, the waste management services industry consists of large
national companies and local and regional companies of varying sizes and
financial resources. We compete with numerous waste management companies as well
as with counties and municipalities that maintain their own waste collection and
disposal operations. These counties and municipalities may have financial
competitive advantages because tax revenues and tax-exempt financing are
available to them. In addition, competitors may reduce their prices to expand
sales volume or to win competitively bid municipal contracts. Profitability may
decline because of the national emphasis on recycling, composting, and other
waste reduction programs that could reduce the volume of solid waste collected
or deposited in disposal facilities.
Outside of North America, the waste management services industry is very
decentralized and highly fragmented. In some markets, however, we compete with
substantial companies that hold significant market shares, particularly in
Finland, Germany, the Netherlands, Sweden and the United Kingdom. Some of our
international competitors may have greater financial resources and greater
technical resources than we do with respect to specific matters. Especially in
the case of larger contracts, we may be required to commit substantial resources
over a long period of time during the proposal phase without any assurance that
the contract will be awarded to us. Examples include contracts for city-cleaning
services, contracts or bids with respect to the construction or development of
water and wastewater facilities, or permitting and development of a new
treatment facility, waste-to-energy facility, incinerator or landfill.
OUR ACCOUNTING POLICIES CONCERNING UNAMORTIZED CAPITALIZED EXPENDITURES COULD
RESULT IN A MATERIAL CHARGE AGAINST OUR EARNINGS
In accordance with generally accepted accounting principles, we capitalize
certain expenditures and advances relating to acquisitions, pending
acquisitions, and disposal site development and expansion projects. We expense
indirect acquisition costs, such as executive salaries, general corporate
overhead, public affairs and other corporate services, as incurred. Our policy
is to charge against earnings any unamortized capitalized expenditures and
advances relating to any facility or operation that is permanently shut down,
any pending acquisition that is not consummated, and any disposal site
development or expansion project that is not completed or is no longer deemed to
be profitable within certain time frames. The charge against earnings is reduced
by any portion of the capitalized expenditure and advances that we estimate will
be recoverable, through sale or otherwise. In future periods, we may be required
to incur a charge against earnings in accordance with our policy. Depending on
its magnitude, any such charge could have a material adverse effect on our
consolidated financial statements.
GOVERNMENTAL REGULATIONS MAY RESTRICT OUR OPERATIONS OR INCREASE THE LEVEL OF
COSTS OF OUR OPERATIONS
Stringent government regulations at the federal, state and local level in
the United States and in other countries have a substantial impact on our
operations. A large number of complex laws, rules, orders and interpretations
govern environmental protection, health and safety, land use, zoning and related
matters.
13
<PAGE> 19
Among other things, they may restrict our operations and adversely affect our
operating results and financial condition by imposing conditions such as:
- limitations on the siting and construction of new waste disposal,
transfer or processing facilities or the expansion of existing
facilities;
- limitations or bans on disposal of out-of-state waste or certain
categories of waste; or
- mandates regarding the disposal of solid waste.
Regulations also affect the siting, design and closure of landfills and
could require us to undertake investigatory or remedial activities, curtail
operations or close a landfill temporarily or permanently. Future changes in
these regulations may require us to modify, supplement or replace equipment or
facilities. The costs of complying with these regulations could be substantial.
In order to develop, expand or operate a landfill or other waste management
facility, we must have various facility permits and other governmental
approvals, including those relating to zoning, environmental protection and land
use. These permits and approvals are difficult, time consuming and costly to
obtain, in part because of possible opposition by governmental officials or
citizens. In addition, these permits and approvals may contain conditions that
limit operations and our ability to change the facility or are otherwise
difficult to comply with. We cannot guarantee that we will be successful in
obtaining and maintaining in effect permits and approvals required for the
successful operation and growth of our business, including permits and approvals
for the development of additional disposal capacity needed to replace existing
capacity that is exhausted.
Courts in the United States, basing their decisions on constitutional law,
have ruled that state and local governments may not use regulatory flow control
laws to restrict the free movement of waste in interstate commerce. We cannot
predict what impact, if any, these decisions will have on our disposal
facilities.
WE COULD BE LIABLE FOR ENVIRONMENTAL DAMAGES RESULTING FROM OUR DISPOSAL
FACILITIES AND COLLECTION OPERATIONS
We could be liable if our disposal facilities or collection operations
cause environmental damage to our properties or to nearby landowners,
particularly as a result of the contamination of drinking water sources or soil.
Under current law, we could even be held liable for damage caused by conditions
that existed before we acquired the assets or operations involved. Also, we
could be liable if we arrange for the transportation, disposal or treatment of
hazardous substances that cause environmental contamination, or if a predecessor
owner made such arrangements and under applicable law we are treated as a
successor to the prior owner. Any substantial liability for environmental damage
could have a material adverse effect on our operating results and financial
condition.
In the ordinary course of our business, we may become involved in a variety
of legal and administrative proceedings relating to land use and environmental
laws and regulations. These may include proceedings in which:
- agencies of federal, state, local or foreign governments seek to impose
liability on us under applicable statutes, sometimes involving civil or
criminal penalties for violations, or to revoke or deny renewal of a
permit we need; and
- citizen groups, adjacent landowners or governmental agencies oppose the
issuance of a permit or approval we need, allege violations of the
permits under which we operate or laws or regulations to which we are
subject, or seek to impose liability on us for environmental damage for
which we may be responsible.
The adverse outcome of one or more of these proceedings could have a
material adverse effect on our financial position, results of operations or cash
flows.
14
<PAGE> 20
From time to time we have received citations or notices from governmental
authorities that our operations are not in compliance with our permits or
certain applicable environmental or land use laws and regulations. In the future
we may receive additional citations or notices. We generally seek to work with
the authorities to resolve the issues raised by such citations or notices.
However, we cannot guarantee that we will always be successful in this regard.
Where we are not, we may incur fines, penalties or other sanctions that could
have a material adverse effect on our financial position, results of operations
or cash flows.
Our insurance for environmental liability meets or exceeds statutory
requirements. However, because we believe that the cost for such insurance is
high relative to the coverage it would provide, our coverages are generally
maintained at statutorily required levels. Due to the limited nature of such
insurance coverage for environmental liability, if we were to incur liability
for environmental damage, such liability could have a material adverse effect on
our financial position, results of operations or cash flows.
THE DEVELOPMENT AND ACCEPTANCE OF ALTERNATIVES TO LANDFILL DISPOSAL AND
WASTE-TO-ENERGY FACILITIES COULD REDUCE OUR ABILITY TO OPERATE AT FULL CAPACITY
Our customers are increasingly using alternatives to landfill disposal,
such as recycling and composting. In addition, state and local governments are
increasingly mandating recycling and waste reduction at the source and
prohibiting the disposal of certain types of wastes, such as yard wastes, at
landfills or waste-to-energy facilities. These developments could reduce the
volume of waste going to landfills and waste-to-energy facilities in certain
areas, which may affect our ability to operate our landfills and waste-to-energy
facilities at full capacity as well as the prices that we can charge for
landfill disposal and waste-to-energy services.
FLUCTUATIONS IN THE PRICE OF RECYCLABLE MATERIALS AFFECT OUR OPERATING REVENUES
Recyclable materials that we process for sale, including paper, plastics,
aluminum and other commodities, are subject to significant price fluctuations.
These fluctuations will affect our future operating revenues and income.
THE COMMISSION IS INVESTIGATING THE ACCOUNTING PRACTICES OF WASTE MANAGEMENT
HOLDINGS
The Commission has commenced a formal investigation with respect to the
previously filed financial statements (which were subsequently restated) and the
related accounting policies, procedures and system of internal controls of Waste
Management Holdings, Inc., or "WM Holdings," which we acquired through a merger
in July 1998. Several lawsuits and claims have been filed against WM Holdings
and some of its former officers and directors in connection with the restatement
of WM Holdings' financial statements. We are unable to predict the outcome or
impact of the investigation or any previously filed or future lawsuits or claims
arising out of the restatement. However, it is reasonably possible that they
could have a material adverse impact on our financial condition or results of
operations in one or more future periods.
OUR INTERNATIONAL OPERATIONS ENCOUNTER SOCIAL, POLITICAL AND ECONOMIC RISKS
Our operations in foreign countries generally are subject to a number of
risks inherent in any business operating in foreign countries, all of which are
beyond our control. These risks include:
- political, social and economic instability;
- inflation;
- general strikes;
- nationalization of assets;
- currency restrictions and exchange rate fluctuations;
- nullification, modification or renegotiation of contracts; and
- governmental regulation.
15
<PAGE> 21
We can make no prediction as to how existing or future foreign governmental
regulations in any jurisdiction may affect us in particular or the waste
management industry in general.
OUR BUSINESS IS SEASONAL IN NATURE AND OUR REVENUES AND RESULTS VARY FROM
QUARTER TO QUARTER
Our operating revenues are usually lower in the winter months, primarily
because the volume of waste relating to construction and demolition activities
usually increases in the spring and summer months and the volume of industrial
and residential waste in certain regions where we operate usually decreases
during the winter months. Our first and fourth quarter results of operations
typically reflect lower operating revenues as a result of this seasonality.
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
In the normal course of our business, we, in an effort to help keep our
stockholders and the public informed about our operations, may from time to time
issue or make certain statements, either in writing or orally, that are or
contain forward-looking statements, as that term is defined in the U.S. federal
securities laws. Generally, these statements relate to business plans or
strategies, projected or anticipated benefits or other consequences of such
plans or strategies, projected or anticipated benefits from acquisitions made by
or to be made by us, or projections involving anticipated revenues, earnings, or
other aspects of operating results. Certain statements contained in this
prospectus under "Prospectus Summary -- The Company -- Recent Developments" and
in the reports and filings with the Commission that we incorporated by reference
may be forward-looking statements. The words "may," "expect," "believe,"
"anticipate," "project," "estimate," their opposites and similar expressions are
intended to identify forward-looking statements. We caution readers that such
statements are not guarantees of future performance or events and are subject to
a number of factors that may tend to influence the accuracy of the statements
and the projections upon which the statements are based, including but not
limited to those discussed above under "Risk Factors." All phases of our
operations are subject to a number of uncertainties, risks, and other
influences, many of which are outside our control, and any one of which, or a
combination of which, could materially affect our consolidated financial
statements and operations and whether forward-looking statements made by us
ultimately prove to be accurate.
These factors are discussed more completely in our filings with the
Commission, including our annual report on Form 10-K for the year ended December
31, 1998, and our quarterly reports on Form 10-Q for the quarters ended March
31, 1999 and June 30, 1999, which are incorporated by reference into this
prospectus.
USE OF PROCEEDS
There will be no net proceeds payable to us from the issuance of the
exchange notes. The net proceeds of approximately $1.1 billion from the sale of
the outstanding notes were used to repay all outstanding indebtedness under our
syndicated credit facility and to reduce outstanding commercial paper.
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<PAGE> 22
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth our consolidated ratios of earnings to fixed
charges for the periods shown:
<TABLE>
<CAPTION>
NINE MONTHS
YEARS ENDED DECEMBER 31, ENDED
---------------------------------- SEPTEMBER 30,
1994 1995 1996 1997 1998 1999
---- ---- ---- ---- ---- --------------
<S> <C> <C> <C> <C> <C> <C>
Actual............................ 2.7x 2.6x 2.1x N/A(1) N/A(2) N/A(3)
</TABLE>
- ---------------
(1) Earnings were insufficient to fund fixed charges in 1997. Additional
earnings of $660.4 million were necessary to cover fixed charges for this
period. The earnings available for fixed charges were negatively impacted by
merger costs of $112.7 million (primarily related to the United Waste
Systems, Inc. merger in August 1997), and asset impairments and unusual
items of $1.8 billion. The asset impairment and unusual items of $1.8
billion primarily related to a comprehensive review performed by Waste
Management Holdings of its operating assets and investments.
(2) Earnings were insufficient to fund fixed charges in 1998. Additional
earnings of $720.4 million were necessary to cover fixed charges for this
period. The earnings available for fixed charges were negatively impacted by
merger costs of $1.8 billion and asset impairments and unusual items of
$864.1 million related primarily to the mergers between Waste Management,
Inc. and Waste Management Holdings in July 1998, and Waste Management, Inc.
and Eastern Environmental Services, Inc. in December 1998.
(3) Earnings were insufficient to fund fixed charges for the nine months ended
September 30, 1999. Additional earnings of $155.0 million were necessary to
cover fixed charges for this period. The earnings available for fixed
charges were negatively impacted by merger costs of $111.3 million related
to the merger between Waste Management, Inc. and Waste Management Holdings,
Inc. in July 1998 and $700.0 million related to the comprehensive review we
performed of our operating assets and investments.
We computed our consolidated ratios of earnings to fixed charges by
dividing earnings available for fixed charges by fixed charges. For this
purpose, earnings available for fixed charges are the sum of income available
for fixed charges before income taxes, undistributed earnings from affiliated
companies' minority interests, cumulative effect of accounting changes, and
fixed charges, excluding capitalized interest. Fixed charges are interest,
whether expensed or capitalized, amortization of debt expense and discount on
premium relating to indebtedness, and such portion of rental expense that can be
demonstrated to be representative of the interest factor in the particular case.
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<PAGE> 23
DESCRIPTION OF THE EXCHANGE NOTES
The following description is a summary of the material provisions of the
Senior Indenture and the Registration Rights Agreement. It does not restate
those agreements in their entirety. We urge you to read the Senior Indenture and
the Registration Rights Agreement because they, and not this description, define
your rights as holders of the Exchange Notes.
Capitalized terms used in this description, but not otherwise defined in
this description or other sections of this Prospectus, have the meanings
ascribed to them in the Senior Indenture and the Registration Rights Agreement,
as applicable, unless the context otherwise requires. For purposes of this
"Description of the Exchange Notes," the term "Senior Securities" means
collectively the outstanding notes (the "Notes"), the exchange notes (the
"Exchange Notes"), and all other senior debt securities of the Company issued
under the Senior Indenture. In this description, the words "we," "our," and the
"Company" refer only to Waste Management, Inc., but not to any of our
subsidiaries, unless the context otherwise requires.
We will issue the Exchange Notes as four series of Senior Securities under
an Indenture (the "Senior Indenture") dated as of September 10, 1997 between the
Company and Chase Bank of Texas, National Association, as trustee (the
"Trustee"). The terms of the Notes and the Exchange Notes include those stated
in the Senior Indenture and those made part of the Senior Indenture by reference
to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").
Anyone who receives this Prospectus may obtain a copy of the Senior
Indenture and Registration Rights Agreement without charge by writing to Waste
Management, Inc., 1001 Fannin Street, Suite 4000, Houston, Texas 77002,
Attention: Secretary.
GENERAL
The Exchange Notes:
- will be our general unsecured senior obligations;
- will rank equally with all of our other senior and unsecured obligations,
including debt under our credit facilities; and
- will be unconditionally guaranteed by our subsidiary Waste Management
Holdings (the "Subsidiary Guarantor").
We will issue the Exchange Notes under the Senior Indenture; the Exchange
Notes will rank pari passu as to the right of payment of principal and any
premium and interest with each other series issued thereunder and will rank
senior to all series of subordinated securities issued and outstanding and that
may be issued from time to time. The Exchange Notes will be our unsecured senior
obligations. The Senior Indenture does not limit the amount of Senior
Securities, debentures, notes or other types of indebtedness that may be issued
by us or any of our subsidiaries nor does it restrict transactions between us
and our affiliates or the payment of dividends or other distributions by us to
our stockholders. The rights of our creditors, including holders of the Exchange
Notes, will be limited to our assets and the Exchange Notes will not be an
obligation of any of our subsidiaries (other than pursuant to the Subsidiary
Guarantee). In addition, the Senior Indenture does not and the Exchange Notes
will not contain any covenants or other provisions that are intended to afford
holders of the Exchange Notes special protection in the event of either a change
of control of the Company or a highly leveraged transaction by us.
The Subsidiary Guarantee of the Exchange Notes:
- will be a general, unsecured obligation of the Subsidiary Guarantor; and
- will rank equally in right of payment with all existing and future senior
and unsecured indebtedness of the Subsidiary Guarantor.
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<PAGE> 24
We conduct our operations through our subsidiaries. Our operating
subsidiaries will not guarantee the Exchange Notes. (The Subsidiary Guarantor is
not an operating subsidiary.) Thus, in the event of a bankruptcy, liquidation or
reorganization of any of these non-guarantor subsidiaries, it will pay the
holders of its debts and its trade creditors before it will be able to
distribute any of its assets to us.
We will issue the Exchange Notes in the form of one or more Global Exchange
Notes, in registered form, without coupons, in denominations of $1,000 or an
integral multiple thereof as described under "-- Book-Entry; Delivery; Form and
Transfer." The Global Exchange Notes will be registered in the name of a nominee
of DTC. Each Global Exchange Note (and any Exchange Note issued in exchange
therefor) will be subject to certain restrictions on transfer set forth therein
as described under "-- Book-Entry; Delivery; Form and Transfer -- Transfers of
Interests in Global Exchange Notes for Certificated Exchange Notes." Except as
set forth herein under "-- Book-Entry; Delivery; Form and Transfer -- Transfers
of Interests in Global Exchange Notes for Certificated Exchange Notes," owners
of beneficial interests in a Global Exchange Note will not be entitled to have
Exchange Notes registered in their names, will not receive or be entitled to
receive physical delivery of any such Exchange Note and will not be considered
the registered holder thereof under the Senior Indenture.
PRINCIPAL, MATURITY AND INTEREST
We will issue the Exchange Notes as four series with an aggregate principal
amount of $1,150,000,000. The 2001 Exchange Notes will have an aggregate
principal amount of $200,000,000, the 2004 Exchange Notes will have an aggregate
principal amount of $200,000,000, the 2009 Exchange Notes will have an aggregate
principal amount of $500,000,000 and the 2029 Exchange Notes will have an
aggregate principal amount of $250,000,000. We will issue the Exchange Notes
only in fully registered form, without coupons, in denominations of $1,000 and
integral multiples of $1,000 in excess thereof. There is no sinking fund
applicable to the Exchange Notes.
The 2001 Exchange Notes will mature on May 15, 2001, the 2004 Exchange
Notes will mature on May 15, 2004, the 2009 Exchange Notes will mature on May
15, 2009, and the 2029 Exchange Notes will mature on May 15, 2029.
The Exchange Notes will bear interest at the respective rates per year set
forth on the front cover of this Prospectus. Interest on all Exchange Notes will
be payable semi-annually in arrears on May 15 and November 15 of each year until
maturity, commencing on November 15, 1999. The Company will make each interest
payment to the persons in whose name the Exchange Notes are registered at the
close of business on the April 30 and October 31 immediately preceding the
relevant interest payment date. Interest on the Exchange Notes will accrue from
and including the date of original issuance, or if interest has already been
paid, from and including the date it was most recently paid to (but not
including) each interest payment date. Interest will be computed on the basis of
a 360-day year comprised of twelve 30-day months.
EXCHANGE OFFER
We, the Subsidiary Guarantor and the Initial Purchasers entered into a
Registration Rights Agreement dated as of May 21, 1999 pursuant to which we and
the Subsidiary Guarantor agreed to use our best efforts to conduct an exchange
offer to exchange the Notes for Exchange Notes registered under the Securities
Act or have a shelf registration statement (the "Shelf Registration Statement")
declared effective with respect to the Notes. See "-- Registration Rights;
Liquidated Damages." Upon the issuance of the Exchange Notes, if any, or the
effectiveness of a Shelf Registration Statement, the Senior Indenture with
respect to the Notes and the Subsidiary Guarantee will be subject to and
governed by the Trust Indenture Act.
METHODS OF RECEIVING PAYMENTS ON THE EXCHANGE NOTES
If a holder has given wire transfer instructions to us, we will pay all
principal, interest, and premium, if any, on those Exchange Notes in accordance
with those instructions. All other payments on Exchange
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<PAGE> 25
Notes will be made at the office or agency of the Paying Agent and Registrar
within the City and State of New York unless we elect to make interest payments
by check mailed to the holders at their addresses set forth in the register of
holders.
REPLACEMENT OF SECURITIES
We will replace any mutilated Exchange Note at the expense of the holder
upon surrender of such Exchange Note to the Trustee. We will replace Exchange
Notes that become destroyed, stolen or lost at the expense of the holder upon
delivery to the Trustee of evidence of destruction, loss or theft thereof
satisfactory to us and the Trustee. In the case of a destroyed, lost or stolen
Exchange Note, an indemnity satisfactory to the Trustee and to us may be
required at the expense of the holder of such Exchange Note before a replacement
Exchange Note will be issued. (Section 306 of the Senior Indenture)
PAYING AGENT FOR THE NOTES
Payment of principal of and any premium and interest on the Exchange Notes
will be made at the office of the Paying Agent or Paying Agents, as we may
designate from time to time, except that at our option, payment of any interest
may be made by check mailed on or before the due date to the address of the
Person entitled thereto as such address shall appear in the Security Register.
(Sections 307, 1002 of the Senior Indenture) We may at any time rescind the
designation of any Paying Agent or approve a change in the office through which
any Paying Agent acts, except that we will be required to maintain a Paying
Agent in each Place of Payment for the Exchange Notes. Payment of any
installment of interest on an Exchange Note will be made to the Person in whose
name such Exchange Note is registered at the close of business on the Regular
Record Date for such interest. (Section 307 of the Senior Indenture)
All monies paid by us to a Paying Agent for the payment of principal of and
any premium or interest on any Exchange Note which remain unclaimed at the end
of two years after such principal, premium or interest shall have become due and
payable will (subject to applicable escheat laws) be repaid to us and the holder
of such Exchange Note will thereafter look only to us for payment thereof.
(Section 1003 of the Senior Indenture)
TRANSFER AND EXCHANGE
A holder may transfer or exchange the Exchange Notes in accordance with the
Senior Indenture. The Registrar and the Trustee may require a holder, among
other things, to furnish appropriate endorsements and transfer documents and we
may require a holder to pay any taxes and fees required by law or permitted by
the Senior Indenture. We are not required to transfer or exchange any Exchange
Note for a period of 15 days before a selection of Exchange Notes to be
redeemed. See -- "Optional Redemption."
The registered holder of an Exchange Note will be treated as the owner of
it for all purposes.
SUBSIDIARY GUARANTEE
The Subsidiary Guarantor will guarantee our obligations under the Exchange
Notes. However, the obligations of the Subsidiary Guarantor under its guarantee
of the Exchange Notes are limited to an amount which would not cause the
Subsidiary Guarantor's guarantee of the Exchange Notes to be a fraudulent
transfer or conveyance. The Subsidiary Guarantee will constitute a general,
unsecured obligation of the Subsidiary Guarantor and will rank equally in right
of payment with all existing and future senior and unsecured indebtedness of the
Subsidiary Guarantor. See "Risk Factors -- U.S. bankruptcy or fraudulent
conveyance law may interfere with the payment of the notes."
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<PAGE> 26
The Subsidiary Guarantee will be released:
(1) upon our consolidation or merger with or into the Subsidiary Guarantor;
(2) upon payment in full of all principal, premium, if any, and interest on
the Exchange Notes; or
(3) upon the release of the Subsidiary Guarantor's guarantees under our
credit facilities (or any replacement or new principal credit
facility).
RANKING
As a holding company, we conduct our operations through our subsidiaries.
Our only significant assets are the capital stock of our subsidiaries.
Accordingly, our ability to meet our cash obligations depends in part upon the
ability of our subsidiaries to make cash distributions to us. The ability of our
subsidiaries to make distributions to us is, and will continue to be, restricted
by, among other limitations, applicable provisions of the laws of national or
state governments and contractual provisions. Our right to participate in the
assets of any subsidiary (and thus the ability of holders of the Exchange Notes
to benefit indirectly from such assets) is generally subject to the prior claims
of creditors, including trade creditors, of that subsidiary, except to the
extent that we are recognized as a creditor of such subsidiary, in which case
our claims would still be subject to any security interest of other creditors of
such subsidiary. Therefore, except as described below, the Exchange Notes will
be subordinated by operation of law to creditors, including trade creditors, of
our subsidiaries with respect to the assets of the subsidiaries, against which
these creditors have a claim.
The Exchange Notes will be guaranteed by our subsidiary Waste Management
Holdings. Our obligations under our credit facilities and our other senior
indebtedness are currently guaranteed by Waste Management Holdings. Similarly,
we have guaranteed the outstanding senior indebtedness of Waste Management
Holdings. Thus, the Exchange Notes will rank equally in right of payment with
the senior indebtedness of Waste Management Holdings, the debt under our credit
facilities and our other senior indebtedness. Because of our holding company
structure and the impact of the Waste Management Holdings' guarantee, the
Exchange Notes will be structurally subordinated to the claims of creditors of
our subsidiaries, other than Waste Management Holdings. As of September 30,
1999, the amount of this subsidiary indebtedness was approximately $1.6 billion
out of our total consolidated long-term debt of approximately $11.4 billion.
Upon any release by the lenders under our credit facilities (or any
replacement or new principal credit facility) of the Waste Management Holdings'
guarantee, we and Waste Management Holdings will each be deemed automatically
and unconditionally released and discharged from our respective obligations
under the guarantees of the senior indebtedness of the other so guaranteed. In
such event, the claims of creditors of Waste Management Holdings will
effectively have priority with respect to the assets and earnings of Waste
Management Holdings over the claims of our creditors, including the holders of
the Exchange Notes.
OPTIONAL REDEMPTION
The 2001 Exchange Notes will not be redeemable. The 2004, 2009 and 2029
Exchange Notes will be redeemable at our option at any time and from time to
time, in whole or in part, upon not less than 30 nor more than 60 days notice to
each holder of Exchange Notes, at a redemption price equal to the Make-Whole
Price. "Make-Whole Price" means an amount equal to the greater of (1) 100% of
the principal amount of the Exchange Notes to be redeemed and (2) as determined
by an Independent Investment Banker, the sum of the present values of the
remaining scheduled payments of principal and interest thereon (not including
any portion of such payments of interest accrued as of the date of redemption)
discounted to the date of redemption on a semi-annual basis (assuming a 360-day
year consisting of twelve 30-day months) at the Adjusted Treasury Rate, plus, in
each case, accrued and unpaid interest thereon to the date of redemption. Unless
we default in payment of the redemption price, on and after the date of
redemption, interest will cease to accrue on the Exchange Notes or portions
thereof called for redemption.
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"Adjusted Treasury Rate" means, with respect to any date of redemption, the
rate per annum equal to the semi-annual yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such date of redemption, plus 0.125% for the 2004 Exchange Notes, 0.25% for the
2009 Exchange Notes and 0.30% for the 2029 Exchange Notes.
"Comparable Treasury Issue" means the United States Treasury security
selected by the Independent Investment Banker as having a maturity comparable to
the remaining term of the Exchange Notes to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice, in
pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Exchange Notes.
"Comparable Treasury Price" means, with respect to any date of redemption,
(1) the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such date of redemption, as set forth in the daily
statistical release (or any successor release) published by the Federal Reserve
Bank of New York and designated "Composite 3:30 p.m. Quotations for U.S.
Government Securities," or (2) if such release (or any successor release) is not
published or does not contain such prices on such Business Day, (A) the average
of the Reference Treasury Dealer Quotations for such date of redemption, after
excluding the highest and lowest such Reference Treasury Dealer Quotations, or
(B) if the Trustee obtains fewer than three such Reference Treasury Dealer
Quotations, the average of all such Reference Treasury Dealer Quotations.
"Independent Investment Banker" means one of the Reference Treasury Dealers
appointed by the Trustee after consultation with us.
"Reference Treasury Dealer" means each of Donaldson, Lufkin & Jenrette
Securities Corporation; Banc of America Securities LLC, Chase Securities, Inc.,
J.P. Morgan & Co., Credit Suisse First Boston, Deutsche Bank Securities, Inc.
and Salomon Smith Barney Inc., and their respective successors; but if any of
the foregoing shall not be a primary U.S. Government securities dealer in New
York City (a "Primary Treasury Dealer"), we shall substitute therefor another
Primary Treasury Dealer.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any date of redemption, the average, as determined
by the Trustee, of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) quoted in
writing to the Trustee by such Reference Treasury Dealer at 5:00 p.m. on the
third Business Day preceding such date of redemption.
We may purchase the Exchange Notes in the open market, by tender or
otherwise. The Exchange Notes so purchased may be held, resold or surrendered to
the Trustee for cancellation. If applicable, we will comply with the
requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and other securities laws and regulations in connection
with any such purchase. The Exchange Notes may be defeased in the manner
provided in the Senior Indenture.
CERTAIN COVENANTS
Certain Definitions. For purposes of the following discussion, the
following definitions are applicable. (Sections 1008, 1009 of the Senior
Indenture)
"Attributable Debt" shall mean, as of any particular time, the present
value, discounted at a rate per annum equal to (i) the implied lease rate of or
(ii) if the implied lease rate is not known to us, then the weighted average
interest rate of all Senior Securities outstanding at the time under the Senior
Indenture compounded semi-annually, in either case, of the obligation of a
lessee for rental payments during the remaining term of any lease (including any
period for which such lease has been extended or may, at the option of the
lessor, be extended); the net amount of rent required to be paid for any such
period shall be the total amount of the rent payable by the lessee with respect
to such period, but may exclude amounts required to be paid on account of
maintenance and repairs, insurance, taxes, assessments, water rates and
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<PAGE> 28
similar charges; and, in the case of any lease which is terminable by the lessee
upon the payment of a penalty, such net amount shall also include the amount of
such penalty, but no rent shall be considered as required to be paid under such
lease subsequent to the first date upon which it may be so terminated.
"Consolidated Net Tangible Assets" shall mean, at any date of
determination, the total amount of our assets after deducting: (i) all the
current liabilities (excluding (a) any current liabilities that by their terms
are extendible or renewable at the option of the obligor thereon to a time more
than 12 months after the time as of which the amount thereof is being computed,
and (b) current maturities of long term debt) and (ii) the value (net of any
applicable reserves) of all intangible assets such as excess of cost over net
assets of acquired businesses, customer lists, covenants not to compete,
licenses, and permits, all as set forth on our consolidated balance sheet and
our consolidated subsidiaries for our most recently completed fiscal quarter,
prepared in accordance with United States generally accepted accounting
principles.
"Guaranty" shall mean any agreement, undertaking or arrangement by which
any Person guarantees, endorses or otherwise becomes or is contingently liable
upon (by direct or indirect agreement, contingent or otherwise, to provide funds
for payment, to supply funds to, or otherwise to invest in, a debtor, or
otherwise to assure a creditor against loss) the debt, obligation or other
liability of any other Person (other than by endorsements of instruments in the
course of collection), or guarantees the payment of dividends or other
distributions upon the shares of any other Person. The amount of the obligor's
obligation under any Guaranty shall (subject to any limitation set forth
therein) be deemed to be the amount of such other Person's debt, obligation or
other liability or the amount of such dividends or other distributions
guaranteed.
"Indebtedness" of any Person shall mean
(a) all obligations of such Person for borrowed money (including,
without limitation, all notes payable and drafts accepted representing
extension of credit and all obligations evidenced by bonds, debentures,
notes or other similar instruments) or on which interest charges are
customarily paid, all as shown on a balance sheet of such Person as of the
date at which Indebtedness is to be determined;
(b) all other items which, in accordance with generally accepted
accounting principles, would be included as liabilities on the liability
side of a balance sheet of such Person as of the date at which Indebtedness
is to be determined; and
(c) whether or not so included as liabilities in accordance with
generally accepted accounting principles,
(i) all indebtedness (excluding, however, prepaid interest thereon)
secured by a Security Interest in property owned or being purchased by
such Person (including, without limitation, indebtedness arising under
conditional sales or other title retention agreements) whether or not
such indebtedness shall have been assumed by such Person, and
(ii) all Guaranties of such Person.
"Principal Property" shall mean any waste processing, waste disposal or
resource recovery plant or similar facility located within the United States
(other than its territories and possessions and Puerto Rico) or Canada and owned
by, or leased to, us or any of our Restricted Subsidiaries, except (a) any such
plant or facility (i) owned or leased jointly or in common with one or more
Persons other than us and our Restricted Subsidiaries in which our interest and
the interest of our Restricted Subsidiaries does not exceed 50%, or (ii) which
the Board of Directors determines in good faith is not of material importance to
the total business conducted, or assets owned, by us and our Subsidiaries as an
entirety, or (b) any portion of such plant or facility which the Board of
Directors determines in good faith not to be of material importance to the use
or operation thereof.
"Restricted Subsidiary" shall mean any Subsidiary (other than any
Subsidiary of which we own directly or indirectly less than all of the
outstanding Voting Stock), (a) principally engaged in, or whose principal assets
consist of property used by us or any of our Restricted Subsidiaries in, the
storage,
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<PAGE> 29
collection, transfer, interim processing or disposal of waste within the United
States of America or Canada, or (b) which we shall designate as a Restricted
Subsidiary in an Officers' Certificate delivered to the Trustee.
"Security Instrument" shall mean any security agreement, chattel mortgage,
assignment, financing or similar statement or notice, continuation statement,
other agreement or instrument, or amendment or supplement to any thereof,
providing for, evidencing or perfecting any Security Interest or lien.
"Security Interest" shall mean any interest in any real or personal
property or fixture which secures payment or performance of an obligation and
shall include any mortgage, lien, encumbrance, charge or other security interest
of any kind, whether arising under a Security Instrument or as a matter of law,
judicial process or otherwise.
Consolidation, Merger, Sale. The Senior Indenture provides that we may not
consolidate with or merge into any other Person or convey, transfer or lease its
properties and assets substantially as an entirety to any Person, unless
(a) the Person formed by such consolidation or into which we are
merged or the Person which acquires by conveyance or transfer, or which
leases, our properties and assets substantially as an entirety shall be a
corporation, partnership or trust which shall expressly assume, by a
supplemental indenture, executed and delivered to the Trustee, in form
satisfactory to the Trustee, the due and punctual payment of the principal
of and any premium and interest (including all additional amounts, if any,
payable pursuant to the Senior Indenture) on all the Senior Securities and
the performance or observance of every other covenant of the Senior
Indenture on our part to be performed or observed; and
(b) immediately after giving effect to such transaction and treating
any indebtedness which becomes our obligation or the obligation of a
Subsidiary as a result of such transaction as having been incurred by us or
such Subsidiary at the time of such transaction, no Event of Default, and
no event which, after notice or lapse of time or both, would become an
Event of Default, shall have happened and be continuing.
Upon our consolidation with, or merger into, any other Person or any
conveyance, transfer or lease of our properties and assets substantially as an
entirety, the successor Person formed by such consolidation or into which we are
merged or to which such conveyance, transfer or lease is made shall succeed to,
and be substituted for, and may exercise every right and power of ours, under
the Senior Indenture with the same effect as if such successor Person had been
named as herein, and thereafter, except in the case of a lease, the predecessor
Person shall be relieved of all obligations and covenants under the Senior
Indenture and the Senior Securities, and may liquidate and dissolve. (Sections
801, 802 of the Senior Indenture)
Limitation on Liens. The Senior Indenture provides that:
(a) We will not, and will not permit any of our Restricted
Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Indebtedness secured by a Security Interest upon any of our
Principal Property or of any of our Restricted Subsidiaries, whether owned
as of the date of the Senior Indenture or thereafter acquired subsequent to
the date of the Senior Indenture, without making effective provision (and
we hereby covenant that in any such case we shall make or cause to be made
effective provision) whereby the Senior Securities of that series then
outstanding and any of our other Indebtedness or the other Indebtedness of
any of our Restricted Subsidiaries then entitled thereto shall be secured
by such Security Interest equally and ratably with any and all of our other
Indebtedness or other Indebtedness of any of our Restricted Subsidiaries
thereby secured for so long as any of our such other Indebtedness or such
other Indebtedness of any of our Restricted Subsidiaries shall be so
secured; but nothing in the Senior Indenture shall prevent, restrict or
apply to Indebtedness secured by:
(1) (a) any Security Interest upon property or assets which is
created prior to or contemporaneously with, or within 360 days after,
(i) in the case of the acquisition of such
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<PAGE> 30
property or assets, the completion of such acquisition and (ii) in the
case of the construction, development or improvement of such property or
assets, the later to occur of the completion of such construction,
development or improvement or the commencement of operation or use of
the property or assets, which Security Interest secures or provides for
the payment, financing or refinancing, directly or indirectly, of all or
any part of the acquisition cost of such property or assets or the cost
of construction, development or improvement thereof; or
(b) any Security Interest upon property or assets existing at
the time of its acquisition, which Security Interest secures obligations
assumed by the us or any of our Restricted Subsidiaries; or
(c) any conditional sales agreement or other title retention
agreement with respect to any property or assets acquired by us or any
of our Restricted Subsidiaries, or
(d) any Security Interest existing on the property or assets or
shares of stock of a corporation or firm at the time such corporation or
firm is merged into or consolidated with us or any of our Restricted
Subsidiaries or at the time of a sale, lease or other disposition of the
property or assets of such corporation or firm as an entirety or
substantially as an entirety to us or any of our Restricted Subsidiaries
or at the time such corporation becomes a Restricted Subsidiary; or
(e) any Security Interest existing on the property, assets or
shares of stock of any successor to us in accordance with the provisions
of the covenant described in "-- Consolidation, Merger, Sale";
if, in each case, any such Security Interest described in the foregoing
clauses (b), (c), (d) or (e) does not attach to or affect property or
assets owned by us or any of our Restricted Subsidiaries before the
event referred to in such clauses; or
(2) Mechanics', materialmen's, carriers' or other like liens
arising in the ordinary course of business (including construction of
facilities) in respect of obligations which are not due or which are
being contested in good faith; or
(3) Any Security Interest arising by reason of deposits with, or
the giving of any form of security to, any governmental agency or any
body created or approved by law or governmental regulation, which is
required by law or governmental regulation as a condition to the
transaction of any business or the exercise of any privilege, franchise
or license (including, without limitation, any Security Interest arising
by reason of one or more letters of credit in connection with any
international waste management contract to be performed by us or by any
of our Subsidiaries or their respective affiliates); or
(4) Security Interests for taxes, assessments or governmental
charges or levies not yet delinquent or Security Interests for taxes,
assessments or governmental charges or levies already delinquent but the
validity of which is being contested in good faith; or
(5) Security Interests (including judgment liens) arising in
connection with legal proceedings so long as such proceedings are being
contested in good faith and, in the case of judgment liens, execution
thereon is stayed; or
(6) Landlords' liens on fixtures located on premises leased by us
or by any of our Restricted Subsidiaries in the ordinary course of
business; or
(7) Any Security Interest in favor of any governmental authority in
connection with the financing of the cost of construction or acquisition
of property; or
(8) Any Security Interest arising by reason of deposits to qualify
us or any of our Restricted Subsidiaries to conduct business, to
maintain self-insurance, or to obtain the benefit of, or comply with,
laws; or
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(9) Any Security Interest that secures any Indebtedness of a
Restricted Subsidiary owing to us or another of our Restricted
Subsidiaries or by us to a Restricted Subsidiary; or
(10) Any Security Interest incurred in connection with pollution
control, sewage or solid waste disposal, industrial revenue or similar
financing; or
(11) Any Security Interest created by any program providing for the
financing, sale or other disposition of trade or other receivables
qualified as current assets in accordance with United States generally
accepted accounting principles entered into by us or by any of our
Restricted Subsidiaries, if such program is on terms comparable for
similar transactions, or any document executed by us or by any of our
Restricted Subsidiaries in connection therewith, and if such Security
Interest is limited to the trade or other receivables in respect of
which such program is created or exists and the proceeds thereof; or
(12) Any extension, renewal or refunding (or successive extensions,
renewals or refundings) in whole or in part of any Indebtedness secured
by any Security Interest referred to in the foregoing clauses (1)
through (11), inclusive, but the Security Interest securing such
Indebtedness shall be limited to the property or assets which,
immediately before such extension, renewal or refunding, secured such
Indebtedness and additions to such property or assets.
Notwithstanding the foregoing provisions, we and any of our
Restricted Subsidiaries may create, incur, assume or suffer to exist any
Indebtedness secured by a Security Interest without so securing the
Notes if, at the time such Security Interest becomes a Security Interest
upon any of our Principal Property or the Principal Property of any such
Restricted Subsidiary and after giving effect thereto, the aggregate
outstanding principal amount of all our Indebtedness and the
Indebtedness of our Restricted Subsidiaries secured by Security
Interests permitted by this sentence (excluding Indebtedness secured by
a Security Interest existing as of the date of the Senior Indenture, but
including the Attributable Debt in respect of Sale and Leaseback
Transactions, other than Sale and Leaseback Transactions which, if the
Attributable Debt in respect thereof had been Indebtedness secured by a
Security Interest, would have been permitted by clause (1)(a) above,
other Sale and Leaseback Transactions the proceeds of which have been
applied or committed to be applied in accordance with the covenant
described in "-- Limitations on Sale and Leaseback Transactions" and
other than Sale and Leaseback Transactions between us and any of our
Restricted Subsidiaries) does not exceed 15% of Consolidated Net
Tangible Assets. (Section 1008 of the Senior Indenture)
(b) If, upon any consolidation or merger of any Restricted Subsidiary
with or into any other corporation, or upon any consolidation or merger of
any other corporation with or into us or any of our Restricted Subsidiaries
or upon any sale or conveyance of the Principal Property of any Restricted
Subsidiary as an entirety or substantially as an entirety to any other
Person, or upon any acquisition by us or by any of our Restricted
Subsidiaries by purchase or otherwise of all or any part of the Principal
Property of any other Person, any Principal Property theretofore owned by
us or such Restricted Subsidiary would thereupon become subject to any
Security Interest not permitted by the terms of the foregoing covenant, we,
before such consolidation, merger, sale or conveyance, or acquisition,
will, or will cause such Restricted Subsidiary to, secure payment of the
principal of and interest, if any, on the Exchange Notes (equally and
ratably with or prior to any of our other Indebtedness or the other
Indebtedness of such Restricted Subsidiary then entitled thereto) by a
direct lien on all such Principal Property prior to all liens other than
any liens theretofore existing thereon by a supplemental indenture or
otherwise. (Section 1008 of the Senior Indenture)
Limitations on Sale and Leaseback Transactions. The Senior Indenture
provides that:
We will not, and will not permit a Restricted Subsidiary to, enter into any
arrangement with any Person (other than with any Restricted Subsidiary)
providing for the leasing to us or any Restricted Subsidiary of any Principal
Property owned or hereafter acquired by us or such Restricted Subsidiary (except
for temporary leases for a term, including any renewal thereof, of not more than
three years and
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except for leases between us and a Restricted Subsidiary or between Restricted
Subsidiaries), which Principal Property has been or is to be sold or transferred
by us or such Restricted Subsidiary to such person (a "Sale and Leaseback
Transaction") unless
(a) we or such Restricted Subsidiary would be entitled, pursuant to
the covenant described in "-- Limitation on Liens," to incur Indebtedness
secured by a Security Interest on the property to be leased without equally
and ratably securing the Exchange Notes, or
(b) we shall, and in any such case we covenant that we will, within
180 days after the effective date of any such arrangement, apply an amount
equal to the fair value (as determined by our Board of Directors) of such
property to the redemption of Senior Securities that, by their terms, are
subject to redemption, or to the purchase and retirement of Senior
Securities, or to the payment or other retirement of funded debt for money
borrowed, incurred or assumed by us which ranks senior to or equally and
ratably with the Exchange Notes or of funded debt for money borrowed,
incurred or assumed by any Restricted Subsidiary (other than, in either
case, funded debt owed by us or any Restricted Subsidiary), or
(c) we shall within 180 days after entering into the Sale and
Leaseback Transaction, enter into a bona fide commitment or commitments to
expend for the acquisition or capital improvement of a Principal Property
an amount at least equal to the fair value (as determined by our Board of
Directors) of such property. (Section 1009 of the Senior Indenture)
Notwithstanding the foregoing, we may, and may permit any Restricted
Subsidiary to, effect any Sale and Leaseback Transaction that is not acceptable
pursuant to clauses (a)through (c), inclusive, of the foregoing covenant, if the
Attributable Debt associated with such Sale and Leaseback Transaction, together
with the aggregate principal amount of outstanding debt secured by Security
Interests upon Principal Property not acceptable pursuant to clauses (1) through
(12) of the covenant described in "-- Limitation on Liens," inclusive, do not
exceed 15% of Consolidated Net Tangible Assets. (Section 1009 of the Senior
Indenture)
Compliance Certificates. We are required to furnish to the Trustee annually
a statement as to our compliance with all conditions and covenants under the
Senior Indenture. (Section 1006 of the Senior Indenture)
EVENTS OF DEFAULT; REMEDIES
Events of Default. An Event of Default with respect to any given series of
the Exchange Notes is defined under the Senior Indenture as being one or more of
the following events (hereinafter in this "Description of the Exchange Notes,"
the term "Notes" or "Note" shall mean the "Exchange Note(s)" unless the context
otherwise requires):
(1) default in the payment of any interest upon any Note of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Note of that series as and when the same becomes due and payable
whether at maturity, by declaration of acceleration, call for redemption or
otherwise; or
(3) default in the performance, or breach, of any of our other
covenants or warranties in the Senior Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
Section 501 of the Senior Indenture specifically dealt with or which has
expressly been included in the Senior Indenture solely for the benefit of a
series of Senior Securities other than the Notes), and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to us by the Trustee or to us and the Trustee
by the holders of at least 25% in principal amount of the Notes of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default" under
the Senior Indenture; or
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(4) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in our respect in an involuntary case or
proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging us a
bankrupt or insolvent, or approving as properly filed a petition seeking
reorganization, arrangement, adjustment or composition of or in our respect
under any applicable Federal or State law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator or other similar
official of ours or of any substantial part of our property, or ordering
the winding up or liquidation of our affairs, and the continuance of any
such decree or order for relief or any such other decree or order unstayed
and in effect for a period of 90 consecutive days; or
(5) our commencement of a voluntary case or proceeding under any
applicable Federal or State bankruptcy, insolvency, reorganization or other
similar law or of any other case or proceeding to be adjudicated a bankrupt
or insolvent, or our consent to the entry of a decree or order for relief
in our respect in an involuntary case or proceeding under any applicable
Federal or State bankruptcy, insolvency, reorganization or other similar
law or the commencement of any bankruptcy or insolvency case or proceeding
against us, or our filing of a petition or answer or consent seeking
reorganization or relief under any applicable Federal or State law, or our
consent to the filing of such petition or to the appointment of or taking
possession by a custodian, receiver, liquidator, assignee, trustee,
sequestrator or similar official of ours or of any substantial part of our
property, or our making of an assignment for the benefit of creditors, or
our admission in writing of our inability to pay our debts generally as
they become due, or our taking of corporate action in furtherance of any
such action. (Section 501 of the Senior Indenture)
Remedies. If an Event of Default with respect to any given series of Notes
at the time outstanding occurs and is continuing, then in every such case,
either the Trustee or the holders of not less than 25% in principal amount of
the outstanding Notes of that series may declare the principal amount to be due
and payable immediately, by a notice in writing to us (and to the Trustee if
given by holders), and upon any such declaration such principal amount shall
become immediately due and payable. At any time after such a declaration of
acceleration with respect to the Notes of any given series has been made and
before a judgment or decree for payment of the money due has been obtained by
the Trustee, the holders of a majority in principal amount of the outstanding
Notes of that series, by written notice to us and the Trustee, may rescind and
annul such declaration and its consequences if:
(1) we have paid or deposited with the Trustee a sum sufficient to
pay:
(A) all overdue interest on all Notes of that series,
(B) the principal of (and premium, if any, on) any Note of that
series which has become due otherwise than by such declaration of
acceleration and any interest thereon at the rate prescribed therefor,
(C) to the extent that payment of such interest is lawful, interest
upon overdue interest at the rate prescribed therefor, and
(D) all sums paid or advanced by the Trustee and the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel, and
(2) all Events of Default with respect to Notes of that series, other
than the non-payment of the principal of Notes of that series which have
become due solely by such declaration of acceleration, have been cured or
waived as provided in the Senior Indenture.
No such rescission shall affect any subsequent default or impair any right
consequent thereon. (Section 502 of the Senior Indenture) If the Trustee or any
holder of a Note of a given series has instituted any proceeding to enforce any
right or remedy under the Senior Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such holder, then and in every such case, subject to any
determination in such proceeding, we, the Trustee
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and the holders of Notes of that series shall be restored severally and
respectively to their former positions under the Senior Indenture and the Notes
of that series, and thereafter all rights and remedies of the Trustee and the
holders shall continue as though no such proceeding had been instituted.
(Section 509 of the Senior Indenture)
The Senior Indenture provides that, subject to the duty of the Trustee
during default to act with the required standard of care, the Trustee is under
no obligation to exercise any of its rights or powers under the Senior Indenture
at the request or direction of any of the holders, unless such holders shall
have offered to the Trustee reasonable indemnity. (Sections 601, 603 of the
Senior Indenture) No holder of any Note of a given series shall have any right
to institute any proceeding, judicial or otherwise, with respect to the Senior
Indenture, or for the appointment of a receiver or trustee, or for any other
remedy thereunder, unless:
(1) such holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Notes of that series;
(2) the holders of not less than 25% in principal amount of the
outstanding Notes of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its
own name as Trustee under the Senior Indenture;
(3) such holder or holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the holders of a majority in
principal amount of the outstanding Notes of that series. (Section 507 of
the Senior Indenture)
Notwithstanding any other provision in the Senior Indenture, the right of
any holder of any Note to receive payment of the principal of and any premium
and any interest on such Note on the Stated Maturity or Maturities (each as
defined in the Senior Indenture) expressed in such Note, or to institute suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such holder. (Sections 508,
902 of the Senior Indenture)
The holders of a majority in principal amount of the outstanding Notes of
any given series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Notes of that
series, provided that (1) such direction shall not be in conflict with any rule
of law or with the Senior Indenture; (2) the Trustee may take any other action
deemed proper by the Trustee which is not inconsistent with such direction; and
(3) the Trustee shall not be obligated to take any action unduly prejudicial to
holders not joining in such direction or involving the Trustee in personal
liability. (Section 512 of the Senior Indenture) The holders of a majority in
principal amount of the outstanding Notes of any given series may on behalf of
the holders of all the Notes of that series waive any past default under the
Senior Indenture with respect to the Notes of that series and its consequences,
except a default in the payment of the principal of or any premium or interest
on any Note of that series or in respect of a covenant or provision of the
Senior Indenture which, pursuant to the Senior Indenture, cannot be modified or
amended without the consent of the holder of each outstanding Note of that
series. Upon any such waiver, such default shall cease to exist, and any Event
of Default arising therefrom shall be deemed to have been cured, for every
purpose of the Senior Indenture; but no such waiver shall extend to any
subsequent or other default or impair any right consequent thereon. (Sections
513, 902 of the Senior Indenture)
If a default occurs under the Senior Indenture with respect to the Notes of
any given series, the Trustee shall give the holders of Notes of that series
notice of such default as and to the extent provided by the Trust Indenture Act;
but in the case of any default or breach of certain covenants or warranties
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with respect to the Notes of any given series, no such notice to holders shall
be given until at least 30 days after the occurrence thereof (the term "default"
for purposes of these provisions being defined as any event which is, or after
notice or lapse of time or both would become, an Event of Default with respect
to the Notes of that series). (Section 602 of the Senior Indenture)
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against us in any court it is necessary to convert the sum
due in respect of the principal of, or premium, if any, or interest on, any
Notes (the "Required Currency") into a currency in which a judgment will be
rendered (the "Judgment Currency"), the rate of exchange used shall be the rate
at which in accordance with normal banking procedures the Trustee could purchase
in the City of New York the Required Currency with the Judgment Currency on the
business day in the City of New York next preceding that on which final judgment
is given. Neither we nor the Trustee shall be liable for any shortfall nor shall
either of them benefit from any windfall in payments to holders of Notes under
this provision of the Senior Indenture caused by a change in exchange rates
between the time the amount of a judgment against us is calculated as above and
the time the Trustee converts the Judgment Currency into the Required Currency
to make payments under the foregoing provisions of the Senior Indenture to
holders of Notes, but payment of such judgment shall discharge all amounts owed
by us on the claim or claims underlying such judgment. (Section 506 of the
Senior Indenture)
DISCHARGE OF INDENTURE
Satisfaction and Discharge of Indenture. The Senior Indenture provides that
we may at our option at any time, satisfy and discharge the Senior Indenture
(except as to any surviving rights of registration of transfer or exchange of
Senior Securities and any right to receive additional amounts pursuant to the
Senior Indenture) with respect to all Senior Securities issued under the Senior
Indenture, which Senior Securities have not already been delivered to the
Trustee for cancellation and which either have become due and payable or are by
their terms due and payable within one year (or are to be called for redemption
within one year) by depositing with the Trustee as trust funds an amount
sufficient to pay when due the principal (and premium, if any) and any interest
on all outstanding Senior Securities when due. (Section 401 of the Senior
Indenture)
Defeasance and Discharge. The Senior Indenture provides that, if we so
elect by Board Resolution with respect to the Notes of any given series, we will
be discharged from any and all obligations in respect of the Notes of that
series (except for certain obligations relating to temporary Notes and exchange
of Notes, registration of transfer or exchange of Notes, replacement of stolen,
lost or mutilated Notes, maintenance of paying agencies to hold moneys for
payment in trust and payment of additional amounts, if any, required in
consequence of United States withholding taxes imposed on payments to non-United
States persons or otherwise required by Section 1004 of the Senior Indenture)
upon the deposit with the Trustee, in trust, of money and/or U.S. Government
Obligations which through the payment of interest and principal in respect
thereof in accordance with their terms will provide money in an amount
sufficient to pay the principal of (and premium, if any), and each installment
of interest on, the Notes of that series on the stated maturity of such payments
in accordance with the terms of the Senior Indenture and the Notes of that
series. (Sections 1302, 1304 of the Senior Indenture) Such a trust may only be
established if, among other things, we have delivered to the Trustee an opinion
of counsel to the effect that (i) we have received from, or there has been
published by, the Internal Revenue Service a ruling, or (ii) since the date of
the Senior Indenture there has been a change in applicable federal income tax
law, in either case to the effect that, and based thereon such opinion of
counsel shall confirm that, the holders of such series will not recognize
income, gain or loss for federal income tax purposes as a result of such
deposit, defeasance and discharge, and will be subject to federal income tax on
the same amounts and in the same manner and at the same times as would have been
the case if such deposit, defeasance and discharge had not occurred. (Section
1304 of the Senior Indenture)
Covenant Defeasance. The Senior Indenture also provides that, if we so
elect by Board Resolution with respect to the Notes of any given series, we may
omit to comply with certain restrictive covenants, including the covenants
described under "-- Limitation on Liens" and "-- Limitations on Sale and
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Leaseback Transactions," and any such omission shall not be an Event of Default
with respect to the Notes of that series, upon the deposit with the Trustee, in
trust, of money and/or U.S. Government Obligations which through the payment of
interest and principal in respect thereof in accordance with their terms will
provide money in an amount sufficient to pay the principal of (and premium, if
any), and each installment of interest on, the Notes of that series on the
stated maturity of such payments in accordance with the terms of the Senior
Indenture and the Notes of that series. Our obligations under the Senior
Indenture and the Notes of that series other than with respect to such covenants
shall remain in full force and effect. (Section 1303 of the Senior Indenture)
Such a trust may be established only if, among other things, we have delivered
to the Trustee an opinion of counsel to the effect that the holders of such
series will not recognize income, gain or loss for federal income tax purposes
as a result of such deposit and defeasance of certain obligations and will be
subject to federal income tax on the same amounts and in the same manner and at
the same time as would have been the case if such deposit and defeasance had not
occurred. (Section 1304 of the Senior Indenture)
Although the amount of money and U.S. Government Obligations on deposit
with the Trustee would be intended to be sufficient to pay amounts due on the
Notes of such series at the time of their stated maturity, in the event we
exercise our option to omit compliance with the covenants defeased with respect
to the Notes as described above, and the Notes are declared due and payable
because of the occurrence of any Event of Default, such amount may not be
sufficient to pay amounts due on the Notes at the time of the acceleration
resulting from such Event of Default. We shall in any event remain liable for
such payments as provided in the Senior Indenture.
Federal Income Tax Consequences. Under current United States federal income
tax law, defeasance and discharge would likely be treated as a taxable exchange
of the Notes to be defeased for an interest in the defeasance trust. As a
consequence, a holder would recognize gain or loss equal to the difference
between the holder's cost or other tax basis for the Notes and the value of the
holder's interest in the defeasance trust, and thereafter would be required to
include in income the holder's share of the income, gain or loss of the
defeasance trust. Under current United States federal income tax law, covenant
defeasance would ordinarily not be treated as a taxable exchange of the Notes.
MEETINGS, MODIFICATION AND WAIVER
We and the Trustee may make modifications and amendments of the Senior
Indenture with the consent of the holders of a majority in aggregate principal
amount of the Outstanding Senior Securities of each series affected by such
modification or amendment; but no such modification or amendment may, without
the consent of the holder of each Outstanding Senior Security affected thereby,
(a) change the Stated Maturity of the principal of, or any installment
of principal of or interest on any Senior Security,
(b) change the Redemption Date with respect to any Senior Security,
(c) reduce the principal amount of, or premium or interest on, any
Senior Security,
(d) change any of our obligations to pay additional amounts,
(e) change the coin or currency in which any Senior Security or any
premium or interest thereon is payable,
(f) change the redemption right of any holder,
(g) impair the right to institute suit for the enforcement of any
payment on or with respect to any Senior Security,
(h) reduce the percentage in principal amount of outstanding Senior
Securities of any series, the consent of whose holders is required for
modification or amendment of the Senior Indenture or for waiver of
compliance with certain provisions of the Senior Indenture or for waiver of
certain defaults,
(i) reduce the requirements contained in the Senior Indenture for
quorum or voting,
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(j) change any of our obligations to maintain an office or agency in
the places and for the purposes required by the Senior Indenture, or
(k) modify any of the above provisions. (Section 902 of the Senior
Indenture)
We may make modifications and amendments of the Senior Indenture without
the consent of any holders of Senior Securities, when authorized by a Board
Resolution, and the Trustee, to:
(a) evidence the succession of another Person and the assumption by
any such successor of our covenants therein and in the Senior Securities
pursuant to Article Eight of the Senior Indenture; or
(b) add to our covenants for the benefit of the holders of all or any
series of Senior Securities (and if such covenants are to be for the
benefit of less than all series of Senior Securities, stating that such
covenants are expressly being included solely for the benefit of such
series) or to surrender any right or power therein conferred upon us; or
(c) add any additional Events of Default; or
(d) permit or facilitate the issuance of Senior Securities in
uncertificated form, provided that any such action shall not adversely
affect the interests of the holders of Senior Securities of any series in
any material respect; or
(e) add to, change or eliminate any of the provisions of the Senior
Indenture in respect of one or more series of Senior Securities, but any
such addition, change or elimination (A) shall neither (i) apply to any
Senior Security of any series created before the execution of such
supplemental indenture and entitled to the benefit of such provision nor
(ii) modify the rights of the holder of any such Senior Security with
respect to such provision or (B) shall become effective only when there is
no such Senior Security Outstanding; or
(f) secure the Senior Securities pursuant to the requirements of
Section 1006 of the Senior Indenture or otherwise; or
(g) establish the form or terms of Senior Securities of any series as
permitted by Sections 201 and 301 of the Senior Indenture; or
(h) evidence and provide for the acceptance of appointment under the
Senior Indenture by a successor Trustee with respect to the Senior
Securities of one or more series and to add to or change any of the
provisions of the Senior Indenture as shall be necessary to provide for or
facilitate the administration of the trusts thereunder by more than one
Trustee, pursuant to the requirements of Section 611(b) of the Senior
Indenture; or
(i) cure any ambiguity, to correct or supplement any provision therein
or in any supplemental indenture which may be defective or inconsistent
with any other provision therein or in any supplemental indenture, or to
make any other provisions with respect to matters or questions arising
under the Senior Indenture; but such action shall not adversely affect the
interests of the holders of Senior Securities of any series in any material
respect. (Section 901 of the Senior Indenture)
The holders of a majority in aggregate principal amount of outstanding
Notes of any given series may, on behalf of all holders of Notes of that series
outstanding, waive, insofar as the Notes of that series are concerned,
compliance by us with certain restrictive provisions of the Senior Indenture.
(Section 1007 of the Senior Indenture) The holders of a majority in aggregate
principal amount of the Notes of a series may, on behalf of all holders of Notes
of that series, waive any past default under the Senior Indenture with respect
to the Notes of that series, except a default (a) in the payment of the
principal of or any premium or interest on the Notes of that series or (b) in
respect of a covenant or provision of the Senior Indenture which cannot be
modified or amended without the consent of the holder of each outstanding Note
of that series. (Section 513 of the Senior Indenture)
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The Senior Indenture contains provisions for convening meetings of the
holders of Notes of any given series. (Section 1402) A meeting may be called at
any time by the Trustee, and also, upon our request, or the holders of at least
10% in aggregate principal amount of the outstanding Notes of any given series,
in any such case upon notice given in accordance with "Notices" below. (Section
1402 of the Senior Indenture) Except for any consent which must be given by the
holder of each outstanding Note of any given series, as described above, any
resolution presented at a meeting (or adjourned meeting at which a quorum is
present) may be adopted by the affirmative vote of the holders of a majority in
aggregate principal amount of the Notes of that series; but any resolution with
respect to any request, demand, authorization, direction, notice, consent,
waiver or other action which may be made, given or taken by the holders of a
specified percentage, which is less than a majority, in aggregate principal
amount of the Notes of any given series may be adopted at a meeting (or
adjourned meeting duly reconvened at which a quorum is present) by the
affirmative vote of the holders of such specified percentage in aggregate
principal amount of the Notes of that series. Any resolution passed or decision
taken at any meeting of holders of Notes of any given series duly held in
accordance with the Senior Indenture will be binding on all the holders of the
Notes of that series. The quorum at any meeting of the holders of Notes of any
given series, and at any reconvened meeting, will be Persons holding or
representing a majority in aggregate principal amount of the Notes of that
series. (Section 1404 of the Senior Indenture)
Governing Law. The Senior Indenture, the Notes and the Exchange Notes will
be governed by, and construed in accordance with, the laws of the State of New
York. (Section 113 of the Senior Indenture)
NOTICES
We will give notices to holders of the Notes by first-class mail to the
addresses of such holders as they appear in the Security Register. (Section 106
of the Senior Indenture)
REGARDING THE TRUSTEE
The Trustee appointed and serving as trustee pursuant to the Senior
Indenture is Chase Bank of Texas, National Association ("Chase Bank").
The Senior Indenture contains certain limitations on the right of the
Trustee, should it become our creditor, to obtain payment of claims in certain
cases, or to realize for its own account on certain property received in respect
of any such claim as security or otherwise. (Section 613 of the Senior
Indenture) The Trustee is permitted to engage in certain other transactions.
Chase Bank, as the trustee under the Senior Indenture, may be a depository for
funds of, may make loans to and may perform other routine banking services for
us and certain of our affiliates in the normal course of business. Chase Bank
also serves as trustee for our subordinated debentures. If the Trustee acquires
any conflicting interest (as described in the Senior Indenture), it must
eliminate such conflict or resign within 90 days of the occurrence and the
continuance of a default under the Senior Indenture. (Section 608 of the Senior
Indenture)
The holders of a majority in principal amount of all outstanding Notes of
any given series (or if more than one series of Senior Securities is affected
thereby, all series of Senior Securities so affected, voting as a single class)
will have the right to direct the time, method and place of conducting any
proceeding for exercising any remedy or power available to the Trustee for the
Notes of that series or all such series of Senior Securities so affected.
(Section 512 of the Senior Indenture)
In case an Event of Default with respect to the Notes of any given series
shall occur (and shall not be cured) under the Senior Indenture and is known to
the Trustee, the Trustee shall exercise such of the rights and powers vested in
it by the Senior Indenture and use the same degree of care and skill in its
exercise as a prudent person would exercise or use under the circumstances in
the conduct of his own affairs. Subject to such provisions, no Trustee will be
under any obligation to exercise any of its rights or powers under the Senior
Indenture at the request of any of the holders of the Notes of any given series
unless they shall have offered to the Trustee security and indemnity
satisfactory to it.
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BOOK-ENTRY, DELIVERY; FORM AND TRANSFER
We will initially issue the Exchange Notes in the form of one or more
registered global Exchange Notes without interest coupons (collectively the
"Global Exchange Notes"). Upon issuance, the Global Exchange Notes will be
deposited with the Trustee, as custodian for DTC, and registered in the name of
DTC or its nominee, in each case for credit to the accounts of DTC's Direct and
Indirect Participants (as defined below).
The Global Exchange Notes may be transferred, in whole and not in part,
only to another nominee of DTC or to a successor of DTC or its nominee in
certain limited circumstances. Beneficial interests in the Global Exchange Notes
may be exchanged for Exchange Notes in certificated form in certain limited
circumstances. See "-- Transfer of Interests in Global Exchange Notes for
Certificated Exchange Notes."
DEPOSITARY PROCEDURES
DTC has advised us that DTC is a limited-purpose trust company created to
hold securities for its participating organizations (collectively, the "Direct
Participants") and to facilitate the clearance and settlement of transactions in
those securities between Direct Participants through electronic book-entry
changes in accounts of Participants. The Direct Participants include securities
brokers and dealers (including the Initial Purchasers), banks, trust companies,
clearing corporations and certain other organizations. Access to DTC's system is
also available to other entities that clear through or maintain a direct or
indirect, custodial relationship with a Direct Participant (collectively, the
"Indirect Participants"). DTC may hold securities beneficially owned by other
persons only through the Direct Participants or Indirect Participants, and such
other persons' ownership interest and transfer of ownership interest will be
recorded only on the records of the appropriate Direct Participant and/or
Indirect Participant, and not on the records maintained by DTC.
DTC has also advised us that, pursuant to DTC's procedures, (1) upon
deposit of the Global Exchange Notes, DTC will credit the accounts of the Direct
Participants designated by the Initial Purchasers with portions of the principal
amount of the Global Exchange Notes allocated by the Initial Purchasers to such
Direct Participants, and (2) DTC will maintain records of the ownership
interests of such Direct Participants in the Global Exchange Notes and the
transfer of ownership interests by and between Direct Participants. DTC will not
maintain records of the ownership interests of, or the transfer of ownership
interests by and between, Indirect Participants or other owners of beneficial
interests in the Global Exchange Notes. Direct Participants and Indirect
Participants must maintain their own records of the ownership interests of, and
the transfer of ownership interests by and between, Indirect Participants and
other owners of beneficial interests in the Global Exchange Notes.
The laws of some states require that certain persons take physical delivery
in definitive, certificated form, of securities that they own. This may limit or
curtail the ability to transfer beneficial interests in a Global Exchange Note
to such persons. Because DTC can act only on behalf of Direct Participants,
which in turn act on behalf of Indirect Participants and others, the ability of
a person having a beneficial interest in a Global Exchange Note to pledge such
interest to persons or entities that are not Direct Participants in DTC, or to
otherwise take actions in respect of such interests, may be affected by the lack
of physical certificates evidencing such interests. For certain other
restrictions on the transferability of the Exchange Notes see "-- Transfers of
Interests in Global Exchange Notes for Certificated Exchange Notes."
EXCEPT AS DESCRIBED IN "-- TRANSFERS OF INTERESTS IN GLOBAL EXCHANGE NOTES
FOR CERTIFICATED EXCHANGE NOTES," OWNERS OF BENEFICIAL INTERESTS IN THE GLOBAL
EXCHANGE NOTES WILL NOT HAVE EXCHANGE NOTES REGISTERED IN THEIR NAMES, WILL NOT
RECEIVE PHYSICAL DELIVERY OF EXCHANGE NOTES IN CERTIFICATED FORM AND WILL NOT BE
CONSIDERED THE REGISTERED OWNERS OR HOLDERS THEREOF UNDER THE SENIOR INDENTURE
FOR ANY PURPOSE.
Under the terms of the Senior Indenture, we and the Trustee will treat the
persons in whose names the Exchange Notes are registered (including Exchange
Notes represented by Global Exchange Notes) as
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the owners thereof for the purpose of receiving payments and for any and all
other purposes whatsoever. Payments in respect of the principal, premium,
Liquidated Damages, if any, and interest on Global Exchange Notes registered in
the name of DTC or its nominee will be payable by the Trustee to DTC or its
nominee as the registered holder under the Senior Indenture. Consequently,
neither we, the Trustee nor any of our agents or the Trustee has or will have
any responsibility or liability for (1) any aspect of DTC's records or any
Direct Participant's or Indirect Participant's records relating to or payments
made on account of beneficial ownership interests in the Global Exchange Notes
or for maintaining, supervising or reviewing any of DTC's records or any Direct
Participant's or Indirect Participant's records relating to the beneficial
ownership interests in any Global Exchange Note or (2) any other matter relating
to the actions and practices of DTC or any of its Direct Participants or
Indirect Participants.
DTC has advised us that its current payment practice (for payments of
principal, interest and the like) with respect to securities such as the
Exchange Notes is to credit the accounts of the relevant Direct Participants
with such payment on the payment date in amounts proportionate to such Direct
Participant's respective ownership interests in the Global Exchange Notes as
shown on DTC's records. Payments by Direct Participants and Indirect
Participants to the beneficial owners of the Exchange Notes will be governed by
standing instructions and customary practices between them and will not be the
responsibility of DTC, the Trustee or us. Neither we nor the Trustee will be
liable for any delay by DTC or its Direct Participants or Indirect Participants
in identifying the beneficial owners of the Exchange Notes, and we and the
Trustee may conclusively rely on and will be protected in relying on
instructions from DTC or its nominee as the registered owner of the Exchange
Notes for all purposes.
The Global Exchange Notes will trade in DTC's Same-day Funds Settlement
System and, therefore, transfers between Direct Participants in DTC will be
effected in accordance with DTC's procedures, and will be settled in immediately
available funds. Transfers between Indirect Participants who hold an interest
through a Direct Participant will be effected in accordance with the procedures
of such Direct Participant but generally will settle in immediately available
funds.
DTC has advised us that it will take any action permitted to be taken by a
holder of Exchange Notes only at the direction of one or more Direct
Participants to whose account interests in the Global Exchange Notes are
credited and only in respect of such portion of the aggregate principal amount
of the Exchange Notes as to which such Direct Participant or Direct Participants
has or have given direction. However, if there is an Event of Default with
respect to the Exchange Notes, DTC reserves the right to exchange Global
Exchange Notes (without the direction of one or more of its Direct Participants)
for legended Exchange Notes in certificated form, and to distribute such
certificated forms of Exchange Notes to its Direct Participants. See
"-- Transfers of Interests in Global Exchange Notes for Certificated Exchange
Notes."
Although DTC has agreed to the foregoing procedures to facilitate transfers
of interests in Global Exchange Notes among Direct Participants, it is under no
obligation to perform or to continue to perform such procedures, and such
procedures may be discontinued at any time. None of the Initial Purchasers or
the Trustee will have any responsibility for the performance by DTC or its
respective Direct and Indirect Participants of their respective obligations
under the rules and procedures governing any of their operations.
The information in this section concerning DTC and its book-entry system
has been obtained from sources that we believe to be reliable, but we do not
take any responsibility for the accuracy thereof.
TRANSFERS OF INTERESTS IN GLOBAL EXCHANGE NOTES FOR CERTIFICATED EXCHANGE NOTES
We may exchange an entire Global Exchange Note for Certificated Exchange
Notes if (1) (a) DTC notifies us that it is unwilling or unable to continue as
Depositary for the Global Exchange Notes or we determine that DTC is unable to
act as such Depositary and we thereupon fail to appoint a successor depositary
within 90 days or (b) DTC has ceased to be a clearing agency registered under
the Exchange Act, (2) we at our option, notify the Trustee in writing that we
elect to cause the issuance of Certificated Exchange Notes or (3) there shall
have occurred and be continuing a Default or an Event of Default with
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respect to the Exchange Notes. In any such case, we will notify the Trustee in
writing that, upon surrender by the Direct and Indirect Participants of their
interest in such Global Exchange Note, Certificated Exchange Notes will be
issued to each person that such Direct and Indirect Participants and the DTC
identify as being the beneficial owner of the related Exchange Notes.
Beneficial interests in Global Exchange Notes held by any Direct or
Indirect Participant may be exchanged for Certificated Exchange Notes upon
request to DTC, by such Direct Participant (for itself or on behalf of an
Indirect Participant), to the Trustee in accordance with customary DTC
procedures. Certificated Exchange Notes delivered in exchange for any beneficial
interest in any Global Exchange Note will be registered in the names, and issued
in any approved denominations, requested by DTC on behalf of such Direct or
Indirect Participants (in accordance with DTC's customary procedures).
Neither we nor the Trustee will be liable for any delay by the holder of
the Global Exchange Notes or DTC in identifying the beneficial owners of
Exchange Notes, and we and the Trustee may conclusively rely on, and will be
protected in relying on, instructions from the holder of the Global Exchange
Note or DTC for all purposes.
CERTIFICATED EXCHANGE NOTES
Certificated Exchange Notes may be exchangeable for other Certificated
Exchange Notes of any authorized denominations and of a like aggregate principal
amount and tenor in accordance with the Senior Indenture. Certificated Exchange
Notes may be presented for exchange, and may be presented for registration of
transfer (duly endorsed, or accompanied by a duly executed written instrument of
transfer), at the designated office of the Trustee (the "Security Registrar").
Such transfer or exchange will be effected upon the Security Registrar or such
other transfer agent, as the case may be, being satisfied with the documents of
title and identity of the person making the request. We may at any time
designate additional transfer agents with respect to the Exchange Notes.
We shall not be required to (a) issue, exchange or register the transfer of
any Certificated Exchange Note for a period of 15 days next preceding the
mailing of notice of redemption of such Exchange Note or (b) exchange or
register the transfer of any Certificated Exchange Note or portion thereof
selected, called or being called for redemption, except in the case of any
Certificated Exchange Note to be redeemed in part, the portion thereof not so to
be redeemed.
If a Certificated Exchange Note is mutilated, destroyed, lost or stolen, it
may be replaced at the office of the Security Registrar upon payment by the
holder of such expenses as may be incurred by us and the Security Registrar in
connection therewith and the furnishing of such evidence and indemnity as we and
the Security Registrar may require. Mutilated Exchange Notes must be surrendered
before new Exchange Notes will be issued.
SAME DAY SETTLEMENT
Payments in respect of the Exchange Notes represented by the Global
Exchange Notes (including principal, premium, if any, and interest and
Liquidated Damages, if any) will be made by wire transfer of immediately
available same day funds to the accounts specified by the holder of interests in
such Global Exchange Note. Principal, premium, if any, and interest and
Liquidated Damages, if any, on all Certificated Exchange Notes in registered
form will be payable at the office or agency of the Trustee, except that, at our
option, payment of any interest and Liquidated Damages, if any, may be made (1)
by check mailed to the address of the Person entitled thereto as such address
shall appear in the security register or (2) by wire transfer to an account
maintained by the Person entitled thereto as specified in the security register.
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THE EXCHANGE OFFER
We sold the Notes on May 21, 1999, pursuant to the Purchase Agreement dated
as of March 18, 1999 (the "Purchase Agreement") by and among Waste Management
Holdings, the Initial Purchasers and us. The Notes were subsequently offered by
the Initial Purchasers to qualified institutional buyers pursuant to Rule 144A
and to purchasers pursuant to Regulation S under the Securities Act.
REGISTRATION RIGHTS; LIQUIDATED DAMAGES
The following description is a summary of the material provisions of the
Registration Rights Agreement. It does not restate that agreement in its
entirety. We urge you to read the proposed form of Registration Rights Agreement
in its entirety because it, and not this description, defines your registration
rights as holder of these Notes.
We, the Subsidiary Guarantor and the Initial Purchasers entered into the
Registration Rights Agreement as of May 21, 1999. Pursuant to the Registration
Rights Agreement, we and the Subsidiary Guarantor agreed to file with the
Commission the Exchange Offer Registration Statement on the appropriate form
under the Securities Act with respect to the exchange of Exchange Notes for
Notes (the "Exchange Offer"). Upon the effectiveness of the Exchange Offer
Registration Statement, we agreed to offer to the holders of Transfer Restricted
Securities (as defined below) pursuant to the Exchange Offer who are able to
make certain representations the opportunity to exchange their Transfer
Restricted Securities for Exchange Notes.
The Registration Rights Agreement provides that if:
(1) the Exchange Offer is not permitted by applicable law or
Commission policy; or
(2) any holder of Transfer Restricted Securities notifies us prior to
the 20th business day following the date by which the Exchange Offer is
required to be consummated that:
(a) it is prohibited by law or Commission policy from participating
in the Exchange Offer; or
(b) that it may not resell the Exchange Notes acquired by it in the
Exchange Offer to the public without delivering a prospectus and the
prospectus contained in the Exchange Offer Registration Statement is not
appropriate or available for such resales; or
(c) that it is a broker-dealer and owns Notes acquired directly
from us or one of our affiliates,
then we will file with the Commission a Shelf Registration Statement to cover
resales of the Notes by the holders thereof who satisfy certain conditions
relating to the provision of information in connection with the Shelf
Registration Statement.
"Transfer Restricted Securities" means:
(1) Each Note, until the earliest to occur of:
(a) the date on which such Note is exchanged in the Exchange Offer
for an Exchange Note;
(b) the date on which such Note has been disposed of in accordance
with a Shelf Registration Statement (and the purchasers thereof have
been issued Exchange Notes); and
(c) the date on which such Note is distributed to the public
pursuant to Rule 144 (and purchasers thereof have been issued Exchange
Notes).
(2) Each Exchange Note until the date on which such Exchange Note is
disposed of by a broker-dealer pursuant to the Plan of Distribution
contemplated by the Exchange Offer Registration Statement (including the
delivery of the Prospectus contained therein).
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The Registration Rights Agreement provides that, unless the Exchange Offer
is not permitted by applicable law or Commission policy:
(1) we will file an Exchange Offer Registration Statement with the
Commission on or prior to 120 days after May 21, 1999;
(2) we will use our best efforts to have the Exchange Offer
Registration Statement declared effective by the Commission on or prior to
210 days after May 21, 1999;
(3) we will:
(a) use our best efforts to cause the Exchange Offer Registration
Statement to be continuously effective and keep the Exchange Offer open
for not less than 20 business days or the minimum period required by
law, if such period is no longer than 20 business days; and
(b) use our best efforts to consummate the Exchange Offer on or
prior to 30 business days after the date on which the Exchange Offer
Registration Statement was declared effective by the Commission (the
"Consummation Deadline"); and
(4) if obligated to file the Shelf Registration Statement, we will
file the Shelf Registration Statement with the Commission on or prior to 90
days after such filing obligation arises and use its best efforts to cause
the Shelf Registration to be declared effective by the Commission on or
prior to 60 days after such Shelf Registration Statement is required to be
filed.
The Registration Rights Agreement provides that if:
(1) we fail to file any of the registration statements required to be
filed by the Registration Rights Agreement on or before the date specified
for such filing;
(2) any of such registration statements is not declared effective by
the Commission on or prior to the date specified for such effectiveness;
(3) we fail to consummate the Exchange Offer on or prior to the
Consummation Deadline; or
(4) the Shelf Registration Statement or the Exchange Offer
Registration Statement is declared effective but thereafter ceases to be
effective or usable in connection with resales of Transfer Restricted
Securities during the periods specified in the Registration Rights
Agreement (each such event referred to in clauses (1) through (4) above, a
"Registration Default"),
then we will pay liquidated damages to each holder of Notes subject to such
Registration Default in an amount equal to $.05 per week per $1,000 in principal
amount of Notes held by such holder for each week or portion thereof that the
Registration Default continues for the first 90-day period immediately following
the occurrence of the first Registration Default.
The amount of liquidated damages will increase by an additional $.05 per
week per $1,000 in principal amount of Notes with respect to each subsequent
90-day period until all Registration Defaults have been cured, up to a maximum
amount of liquidated damages of $.25 per week per $1,000 in principal amount of
Notes, provided that we will not be required to pay liquidated damages for more
than one Registration Default at any given time.
All accrued liquidated damages will be paid directly by us on each relevant
Interest Payment Date for the Notes to the persons whose names are registered at
the close of business on the relevant Regular Record Date.
Following the cure of all Registration Defaults, the accrual of Liquidated
Damages will cease.
Each holder of Notes will be required to make certain representations to us
(as described in the Registration Rights Agreement) in order to participate in
the Exchange Offer and will be required to deliver certain information to be
used in connection with the Shelf Registration Statement and to provide comments
on the Shelf Registration Statement within the time periods set forth in the
Registration Rights
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Agreement in order to have such holder's Notes included in the Shelf
Registration Statement and benefit from the provisions regarding liquidated
damages set forth above. By acquiring Notes, a holder will be deemed to have
agreed by virtue of the Registration Rights Agreement to indemnify us, against
certain losses arising out of information furnished by such holder in writing
for inclusion in any Shelf Registration Statement. Holders of Notes will also be
required to suspend their use of the prospectus included in the Shelf
Registration Statement under certain circumstances upon receipt of written
notice to that effect from us.
EXPIRATION DATE; EXTENSIONS; AMENDMENTS; TERMINATION
The term "Expiration Date" shall mean , 1999, unless we, in
our sole discretion, extend the Exchange Offer, in which case the term
"Expiration Date" shall mean the latest date to which the Exchange Offer is
extended.
To extend the Expiration Date, we will notify the Exchange Agent of any
extension by oral or written notice and will notify the holders of the Exchange
Notes by means of a press release or other public announcement prior to 9:00
a.m., New York City time, on the next business day after the previously
scheduled Expiration Date. Such announcement may state that we are extending the
Exchange Offer for a specified period of time.
We reserve the right (i) to delay acceptance of any Notes, to extend the
Exchange Offer or to terminate the Exchange Offer and not permit acceptance of
Notes not previously accepted if any of the conditions set forth herein under
"-- Conditions" shall have occurred and shall not have been waived by us, by
giving oral or written notice of such delay, extension or termination to the
Exchange Agent, or (ii) to amend the terms of the Exchange Offer in any manner
deemed by it to be advantageous to the holders of the Notes. Any such delay in
acceptance, extension, termination or amendment will be followed as promptly as
practicable by oral or written notice thereof to the Exchange Agent. If the
Exchange Offer is amended in a manner determined by us to constitute a material
change, we will promptly disclose such amendment in a manner reasonably
calculated to inform the holders of the Notes of such amendment.
Without limiting the manner in which we may choose to make public
announcement of any delay, extension, amendment or termination of the Exchange
Offer, we shall have no obligations to publish, advertise, or otherwise
communicate any such public announcement, other than by making a timely release
to an appropriate news agency.
INTEREST ON THE EXCHANGE NOTES
The Exchange Notes will accrue interest for the 2001 Exchange Notes at a
rate of 6.000% per annum, for the 2004 Exchange Notes at a rate of 6.500% per
annum, for the 2009 Exchange Notes at a rate of 6.875% per annum and for the
2029 Exchange Notes at a rate of 7.375% per annum. Interest on the Exchange
Notes will accrue from the last date on which interest was paid on the Notes,
or, if we have paid no interest on such Notes, from May 21, 1999, the date of
issuance of the Notes for which the Exchange Offer is being made. Interest on
the Exchange Notes are payable semi-annually on May 15 and November 15,
commencing on November 15, 1999.
PROCEDURES FOR TENDERING
To tender in the Exchange Offer, you must complete, sign and date the
Letter of Transmittal, or a facsimile thereof, have the signatures thereon
medallion guaranteed if required by the Letter of Transmittal, and mail or
otherwise deliver such Letter of Transmittal or such facsimile, together with
any other required documents, to the Exchange Agent prior to 5:00 p.m., New York
City time, on the Expiration Date. In addition, either (i) a timely confirmation
of a book-entry transfer (a "Book-Entry Confirmation") of such Notes into the
Exchange Agent's account at The Depositary (the "Book-Entry Transfer Facility")
pursuant to the procedure for book-entry transfer described below, must be
received by the Exchange Agent prior to the Expiration Date or (ii) you must
comply with the guaranteed delivery procedures described below. THE METHOD OF
DELIVERY OF LETTERS OF TRANSMITTAL
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AND ALL OTHER REQUIRED DOCUMENTS TO THE EXCHANGE AGENT IS AT THE ELECTION AND
RISK OF THE HOLDERS. IF SUCH DELIVERY IS BY MAIL, IT IS RECOMMENDED THAT
REGISTERED MAIL, PROPERLY INSURED, WITH RETURN RECEIPT REQUESTED, BE USED. IN
ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ASSURE TIMELY DELIVERY TO THE
EXCHANGE AGENT BEFORE THE EXPIRATION DATE. NO LETTERS OF TRANSMITTAL OR OTHER
REQUIRED DOCUMENTS SHOULD BE SENT TO THE COMPANY. Delivery of all documents must
be made to the Exchange Agent at its address set forth below. You may also
request your respective brokers, dealers, commercial banks, trust companies or
nominees to effect such tender.
Your tender of Notes will constitute an agreement between you and the
Company in accordance with the terms and subject to the conditions set forth
herein and in the Letter of Transmittal. Any beneficial owner whose Notes are
registered in the name of a broker, dealer, commercial bank, trust company or
other nominee and who wishes to tender should contact such registered holder
promptly and instruct such registered holder to tender on his behalf.
Signatures on a Letter of Transmittal or a notice of withdrawal, as the
case may be, must be medallion guaranteed by any member firm of a registered
national securities exchange or of the National Association of Securities
Dealers, Inc., a commercial bank or trust company having an office or
correspondent in the United States or an "eligible guarantor" institution within
the meaning of Rule 17Ad-15 under the Exchange Act (each an "Eligible
Institution") unless the Notes tendered pursuant thereto are tendered for the
account of an Eligible Institution.
If the Letter of Transmittal is signed by trustees, executors,
administrators, guardians, attorneys-in-fact, officers of corporations, or
others acting in a fiduciary or representative capacity, such person should so
indicate when signing, and unless waived by us, evidence satisfactory to us of
their authority to so act must be submitted with the Letter of Transmittal.
We will determine questions as to the validity, form, eligibility
(including time of receipt) and withdrawal of the tendered Notes, in our sole
discretion, which determination will be final and binding. We reserve the
absolute right to reject any and all Notes not properly tendered or any Notes
which, if accepted, would, in the opinion of our counsel, be unlawful. We also
reserve the absolute right to waive any irregularities or conditions of tender
as to particular Notes. Our interpretation of the terms and conditions of the
Exchange Offer (including the instructions in the Letter of Transmittal) will be
final and binding on all parties. Unless waived, any defects or irregularities
in connection with tenders of Notes must be cured within such time as we shall
determine. Neither we, the Exchange Agent nor any other person shall be under
any duty to give notification of defects or irregularities with respect to
tenders of Notes, nor shall any of them incur any liability for failure to give
such notification. Tenders of Notes will not be deemed to have been made until
such irregularities have been cured or waived. The Exchange Agent will return
any Notes it receives that are not properly tendered and as to which the defects
or irregularities have not been cured or waived without cost to such holder by
the Exchange Agent, unless otherwise provided in the Letter of Transmittal, as
soon as practicable following the Expiration Date.
In addition, we reserve the right, in our sole discretion, subject to the
provisions of the Senior Indenture, to purchase or make offers for any Notes
that remain outstanding subsequent to the Expiration Date or, as set forth under
"-- Conditions," to terminate the Exchange Offer in accordance with the terms of
the Registration Rights Agreement, and to the extent permitted by applicable
law, purchase Notes in the open market, in privately negotiated transactions or
otherwise. The terms of any such purchases or offers could differ from the terms
of the Exchange Offer.
ACCEPTANCE OF NOTES FOR EXCHANGE; DELIVERY OF EXCHANGE NOTES
Upon satisfaction or waiver of all of the conditions to the Exchange Offer,
we will accept all Notes properly tendered promptly after the Expiration Date,
and we will issue the Exchange Notes promptly after acceptance of the Notes. See
"-- Conditions." For purposes of the Exchange Offer, Notes shall be
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<PAGE> 46
deemed to have been accepted as validly tendered for exchange when, as and if we
have given oral or written notice thereof to the Exchange Agent.
In all cases, we will issue the Exchange Notes for Notes that are accepted
for exchange pursuant to the Exchange Offer only after timely receipt by the
Exchange Agent of a Book-Entry Confirmation of such Notes into the Exchange
Agent's account at the Book-Entry Transfer Facility, a properly completed and
duly executed Letter of Transmittal and all other required documents. If we do
not accept any tendered Notes for any reason set forth in the terms and
conditions of the Exchange Offer, we will credit such unaccepted or such
nonexchanged Notes to an account maintained with such Book-Entry Transfer
Facility as promptly as practicable after the expiration or termination of the
Exchange Offer.
BOOK-ENTRY TRANSFER
The Exchange Agent will make a request to establish an account with respect
to the Notes at the Book-Entry Transfer Facility for purposes of the Exchange
Offer within two business days after the date of this Prospectus. Any financial
institution that is a participant in the Book-Entry Transfer Facility's systems
may make book-entry delivery of Notes by causing the Book-Entry Transfer
Facility to transfer such Notes into the Exchange Agent's account at the
Book-Entry Transfer Facility in accordance with such Book-Entry Transfer
Facility's procedures for transfer. However, the Letter of Transmittal (or
facsimile) thereof with any required signature guarantees and any other required
documents must, in any case, be transmitted to and received by the Exchange
Agent at one of the addresses set forth under "-- Exchange Agent" no later than
the Expiration Date or the guaranteed delivery procedures described below must
be complied with.
GUARANTEED DELIVERY PROCEDURES
If the procedures for book-entry transfer cannot be completed on a timely
basis, a tender may be effected if (i) the tender is made through an Eligible
Institution, (ii) before the Expiration Date, the Exchange Agent receives from
such Eligible Institution a properly completed and duly executed Letter of
Transmittal (or a facsimile thereof) and Notice of Guaranteed Delivery,
substantially in the form we provided (by facsimile transmission, mail or hand
delivery), setting forth the name and address of the holder of Notes and the
amount of Notes tendered, stating that the tender is being made thereby and
guaranteeing that within three New York Stock Exchange, Inc. ("NYSE") trading
days after the date of execution of the Notice of Guaranteed Delivery, a
Book-Entry Confirmation and any other documents required by the Letter of
Transmittal will be deposited by the Eligible Institution with the Exchange
Agent, and (iii) a Book-Entry Confirmation and all other documents required by
the Letter of Transmittal are received by the Exchange Agent within three NYSE
trading days after the date of execution of the Notice of Guaranteed Delivery.
WITHDRAWAL OF TENDERS
Tenders of Notes may be withdrawn at any time prior to 5:00 p.m., New York
City time, on the Expiration Date.
For a withdrawal to be effective, a written notice of withdrawal must be
received by the Exchange Agent before 5:00 p.m., New York City time, on the
Expiration Date at one of the addresses set forth under "-- Exchange Agent." Any
such notice of withdrawal must specify the name and number of the account at the
Book-Entry Transfer Facility from which the Notes were tendered, identify the
principal amount of the Notes to be withdrawn, and specify the name and number
of the account at the Book-Entry Transfer Facility to be credited with the
withdrawn Notes and otherwise comply with the procedures of such Book-Entry
Transfer Facility. We will determine all questions as to the validity, form and
eligibility (including time of receipt) of such notice, and our determination
shall be final and binding on all parties. Any Notes so withdrawn will be deemed
not to have been validly tendered for exchange for purposes of the Exchange
Offer. Any Notes which have been tendered for exchange but which are not
exchanged for any reason will be credited to an account maintained with such
Book-Entry Transfer Facility for the Notes
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as soon as practicable after withdrawal, rejection of tender or termination of
the Exchange Offer. Properly withdrawn Notes may be retendered by following one
of the procedures described under "-- Procedures for Tendering" and
"-- Book-Entry Transfer" at any time on or prior to the Expiration Date.
CONDITIONS
Notwithstanding any other term of the Exchange Offer, Notes will not be
required to be accepted for exchange, nor will Exchange Notes be issued in
exchange for any Notes, and we may terminate or amend the Exchange Offer as
provided herein before the acceptance of such Notes, if, because of any change
in law, or applicable interpretations thereof by the Commission, we determine
that we are not permitted to effect the Exchange Offer. We have no obligation
to, and will not knowingly, permit acceptance of tenders of Notes from our
affiliates or from any other holder or holders who are not eligible to
participate in the Exchange Offer under applicable law or interpretations
thereof by the Staff of the Commission, or if the Exchange Notes to be received
by such holder or holders of Notes in the Exchange Offer, upon receipt, will not
be tradable by such holder without restriction under the Securities Act and the
Exchange Act and without material restrictions under the "blue sky" or
securities laws of substantially all of the states of the United States.
EXCHANGE AGENT
Chase Bank of Texas, National Association has been appointed as Exchange
Agent for the Exchange Offer. You should direct your questions and requests for
assistance and requests for additional copies of this Prospectus or of the
Letter of Transmittal to the Exchange Agent addressed as follows:
By Mail (Certified, Registered, Overnight or First Class) or Hand Delivery:
Chase Bank of Texas, National Association
600 Travis Street
Houston, Texas 77002
Telephone Number (713) 216-7000
FEES AND EXPENSES
We will bear the expenses of soliciting tenders pursuant to the Exchange
Offer. We are making the principal solicitation for tenders pursuant to the
Exchange Offer by mail; however we may make additional solicitations by
telegraph, telephone, telecopy or in person by our officers and regular
employees.
We will not make any payments to brokers, dealers or other persons
soliciting acceptances of the Exchange Offer. We, however, will pay the Exchange
Agent reasonable and customary fees for its services and will reimburse the
Exchange Agent for its reasonable out-of-pocket expenses in connection
therewith.
We will bear the expenses to be incurred in connection with the Exchange
Offer, including fees and expenses of the Exchange Agent and the Trustee, and
accounting, legal, printing and related fees and expenses.
We will pay all transfer taxes, if any, applicable to the exchange of Notes
pursuant to the Exchange Offer. If, however, Exchange Notes or Notes for
principal amounts not tendered or accepted for exchange are to be registered or
issued in the name of any person other than the registered holder of the Notes
tendered, or if tendered Notes are registered in the name of any person other
than the person signing the Letter of Transmittal, or if a transfer tax is
imposed for any reason other than the exchange of Notes pursuant to the Exchange
Offer, then the amount of any such transfer taxes (whether imposed on the
registered holder or any other persons) will be payable by the tendering holder.
If satisfactory evidence of payment of such taxes or exemption therefrom is not
submitted with the Letter of Transmittal, the amount of such transfer taxes will
be billed directly to such tendering holder.
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RESALE OF EXCHANGE NOTES
Based on an interpretation by the staff of the Commission set forth in
no-action letters issued to third parties, we believe that Exchange Notes issued
pursuant to the Exchange Offer in exchange for Notes may be offered for resale,
resold and otherwise transferred by any owner of such Exchange Notes (other than
any such owner which is our "affiliate" within the meaning of Rule 405 under the
Securities Act) without compliance with the registration and prospectus delivery
provisions of the Securities Act, if such Exchange Notes are acquired in the
ordinary course of such owner's business and such owner does not intend to
participate, and has no arrangement or understanding with any person to
participate, in the distribution of such Exchange Notes. Any owner of Notes who
tenders in the Exchange Offer with the intention to participate, or for the
purpose of participating, in a distribution of the Exchange Notes may not rely
on the position of the staff of the Commission enunciated in the "Exxon Capital
Holdings Corporation" or similar no-action letters but rather must comply with
the registration and prospectus delivery requirements of the Securities Act in
connection with any resale transaction. In addition, any such resale transaction
should be covered by an effective registration statement containing the selling
security holders information required by Item 507 of Regulation S-K of the
Securities Act. Each broker-dealer that receives Exchange Notes for its own
account in exchange for Notes, where such Notes were acquired by such
broker-dealer as a result of market-making activities or other trading
activities, may be a statutory underwriter and must acknowledge that it will
deliver a prospectus meeting the requirements of the Securities Act in
connection with any resale of such Exchange Notes.
By tendering in the Exchange Offer, each Holder (or DTC participant, in the
case of tenders of interests in the Global Notes held by DTC) will represent to
us (which representation may be contained the Letter of Transmittal) to the
effect that (A) it is not our affiliate, (B) it is not engaged in, and does not
intend to engage in, and has no arrangement or understanding with any person to
participate in, a distribution of the Exchange Notes to be issued in the
Exchange Offer and (C) it is acquiring the Exchange Notes in its ordinary course
of business. Each Holder will acknowledge and agree that any broker-dealer and
any such Holder using the Exchange Offer to participate in a distribution of the
Exchange Notes acquired in the Exchange Offer (1) could not under Commission
policy as in effect on the date of the Registration Rights Agreement rely on the
position of the Commission enunciated in the No-Action Letters, and (2) must
comply with the registration and prospectus delivery requirements of the
Securities Act in connection with a secondary resale transaction and that such a
secondary resale transaction must be covered by an effective registration
statement containing the selling security holder information required by Item
507 or 508, as applicable, of Regulation S-K if the resales are of Exchange
Notes obtained by such Holder in exchange for Notes acquired by such Holder
directly from us or our affiliate.
To comply with the securities laws of certain jurisdictions, it may be
necessary to qualify for sale or to register the Exchange Notes before offering
or selling such Exchange Notes. We have agreed, pursuant to the Registration
Rights Agreement and subject to certain specified limitations therein, to
cooperate with selling Holders or underwriters in connection with the
registration and qualification of the Exchange Notes for offer or sale under the
securities or "blue sky" laws of such jurisdictions as may be necessary to
permit the holders of Exchange Notes to trade the Exchange Notes without any
restrictions or limitations under the securities laws of the several states of
the United States.
CONSEQUENCES OF FAILURE TO EXCHANGE
Holders of Notes who do not exchange their Notes for Exchange Notes
pursuant to the Exchange Offer will continue to be subject to the restrictions
on transfer of such Notes as set forth in the legend thereon as a consequence of
the issuance of the Notes pursuant to exemptions from, or in transactions not
subject to, the registration requirements of the Securities Act and applicable
state securities laws. We do not currently anticipate that we will register the
Notes under the Securities Act. To the extent that Notes are tendered and
accepted in the Exchange Offer, the trading market for untendered and tendered
but unaccepted Notes could be adversely affected.
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CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of the principal United States federal income
tax consequences from the Exchange Offer and from the ownership of the Notes or
Exchange Notes. It deals only with Notes or Exchange Notes held as capital
assets and not with special classes of Holders, such as dealers in securities or
currencies, life insurance companies, tax exempt entities, and persons that hold
a Note or an Exchange Note in connection with an arrangement that completely or
partially hedges the Note or Exchange Note. Further, the discussion does not
address all aspects of taxation that might be relevant to particular Holders in
light of their individual circumstances. The discussion is based upon the
Internal Revenue Code of 1986, as amended (the "Code"), and regulations, rulings
and judicial decisions thereunder as of the date hereof. Such authorities may be
repealed, revoked or modified so as to result in federal income tax consequences
different from those discussed below.
For purposes of the following discussion, a "U.S. Holder" means a
beneficial owner of a Note or an Exchange Note that is, for United States
federal income tax purposes: (1) a citizen or resident of the United States; (2)
a partnership, corporation or other entity created or organized in or under the
law of the United States or of any State of the United States; (3) an estate,
the income of which is subject to United States federal income tax regardless of
its source; (4) a trust classified as a United States person for United States
federal income tax purposes. A "Non-U.S. Holder" is a beneficial owner of a Note
or an Exchange Note that, for United States federal income tax purposes, is not
a U.S. Holder.
HOLDERS TENDERING THEIR NOTES OR PROSPECTIVE PURCHASERS OF EXCHANGE NOTES
SHOULD CONSULT THEIR OWN TAX ADVISORS CONCERNING THE UNITED STATES FEDERAL
INCOME TAX AND ANY STATE OR LOCAL TAX CONSEQUENCES OF THE EXCHANGE OF THE NOTES
FOR EXCHANGE NOTES, AND OF THE OWNERSHIP AND DISPOSITION OF THE NOTES OR
EXCHANGE NOTES IN LIGHT OF THEIR PARTICULAR SITUATIONS, AND ANY CONSEQUENCES
UNDER THE LAWS OF ANY OTHER TAXING JURISDICTION.
EXCHANGE OF NOTES FOR EXCHANGE NOTES
The exchange of Notes for Exchange Notes pursuant to the Exchange Offer
will not be treated as an "exchange" for United States federal income tax
purposes because the Notes will not be considered to differ materially in kind
or extent from the Exchange Notes. Rather, the Exchange Notes received by a
Holder will be treated as a continuation of the Notes in the hands of such
Holder. The adjusted basis and holding period of the Exchange Notes for any
Holder will be the same as the adjusted basis and holding period of the Notes.
Similarly, there will be no United States federal income tax consequences to a
Holder of Notes that does not participate in the exchange offer.
TAX CONSEQUENCES TO U.S. HOLDERS
Payments of Interest. Payments of stated interest on a Note or an Exchange
Note generally will be taxable to a U.S. Holder as ordinary interest income at
the time it is received or accrued, depending on the U.S. Holder's method of
accounting for tax purposes.
Sale, Exchange, Redemption or Retirement. Upon the sale, exchange,
redemption or retirement of a Note or an Exchange Note, a U.S. Holder will
recognize taxable gain or loss equal to the difference between the amount
realized on such sale, exchange, redemption or retirement (not including any
amount attributable to accrued but unpaid interest not previously included in
gross income) and such Holder's adjusted tax basis in the Note or Exchange Note.
To the extent attributable to accrued but unpaid interest not previously
included in gross income, the amount recognized by the U.S. Holder will be
treated as a payment of interest. See "-- Payments of Interest." Gain or loss
recognized on the sale, exchange, redemption or retirement generally will be
capital gain or loss. The deductibility of capital losses is subject to
limitations.
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Market Discount and Premium. U.S. Holders that did not acquire their
interest in the Exchange Notes pursuant to an acquisition of Notes on their
original issue at their original offering price or pursuant to an exchange of
such Notes for Exchange Notes pursuant to the exchange offer may be considered
to have acquired their Exchange Notes with market discount or amortizable bond
premium as such terms are defined for United States federal income tax purposes.
Such Holders should consult their tax advisors as to the federal income tax
consequences of the market discount and premium rules of the Code.
Backup Withholding. Payments made on, and proceeds from the sale of, Notes
or Exchange Notes may be subject to a "backup" withholding tax of 31% unless the
Holder complies with certain identification requirements. Any withheld amounts
will generally be allowed as a credit against the Holder's federal income tax
provided the required information is timely filed with the IRS.
TAX CONSEQUENCES TO NON-U.S. HOLDERS
Interest. The so-called "portfolio interest" exception provides that
interest on the Notes or Exchange Notes will not be subject to U.S. federal
income tax and withholding of U.S. federal income tax will not be required with
respect to the payment by us or our paying agent of principal or interest on the
Notes or Exchange Notes owned by a Non-U.S. Holder, provided that (1) the
beneficial owner of the Notes or Exchange Notes does not actually or
constructively own 10% or more of the total combined voting power of all classes
of stock of the Company entitled to vote within the meaning of Section 871(h)(3)
of the Tax Code and the Treasury Regulations issued thereunder, (2) the
beneficial owner is not (i) a foreign tax exempt organization or a foreign
private foundation for U.S. federal income tax purposes, (ii) a bank whose
receipt of interest on the Notes or Exchange Notes is described in Section
881(c)(3)(A) of the Tax Code or (iii) a "controlled foreign corporation" (as
defined Section 957 of the Tax Code) that is related directly, indirectly or
constructively to us through stock ownership, (3) such interest is not
considered contingent interest under Section 871(h)(4) of the Tax Code and the
Treasury Regulations thereunder, and (4) the beneficial owner satisfies the
requirements (described generally below) set forth in Section 871(h) and Section
881(c) of the Tax Code and the Treasury Regulations thereunder relating to
registered securities.
To satisfy the requirements referred to in (4) above, the beneficial owner
of such Notes or Exchange Notes, or a financial institution holding the Notes or
Exchange Notes on behalf of such owner, must provide, in accordance with
specified procedures, our paying agent with a statement to the effect that the
beneficial owner is not a U.S. person. Currently, these requirements will be met
if either (i) the beneficial owner of the Notes or Exchange Notes certifies to
us or our paying agent, under penalties of perjury, that it is not a U.S. person
(which certification may be made on an IRS Form W-8 or successor form) and
provides its name and address or (ii) a securities clearing organization, bank
or other financial institution that holds customers' securities in the ordinary
course of its trade or business (a "financial institution") and that holds the
Notes or Exchange Notes on behalf of a beneficial owner, certifies to us or our
paying agent, under penalties of perjury, that such statement has been received
by it from the beneficial owner (directly or through another intermediary
financial institution), and furnishes us or our paying agent with a copy
thereof. A certificate described in this paragraph is effective only with
respect to payments of interest made to the certifying Non-U.S. Holder after the
issuance of the certificate, in the calendar year of its issuance and two
immediately succeeding calendar years.
Treasury Regulations (the "Final Regulations") finalized in 1997,
applicable to interest paid after December 31, 1999, provide alternative
documentation procedures for satisfying the certification requirement described
above. However, the Department of the Treasury and the IRS have announced their
intention to extend the dates of applicability of the Final Regulations to
payments made after December 31, 2000. Such regulations add intermediary
certification options for certain qualifying agents. Under one such option, a
withholding agent would be allowed to rely on IRS Form W-8 furnished by a
financial institution or other intermediary on behalf of one or more beneficial
owners (or other intermediaries) without having to obtain the beneficial owner
certificate described in the preceding paragraph, provided that the financial
institution or intermediary has entered into a withholding agreement with the
IRS and thus is a "qualified intermediary." Under another option, an authorized
foreign agent of
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a U.S. withholding agent would be permitted to act on behalf of the U.S.
withholding agent, provided certain conditions are met. With respect to the
certification requirement for Notes or Exchange Notes that are held by a foreign
partnership, the Final Regulations provide that unless the foreign partnership
has entered into a withholding agreement with the IRS, the foreign partnership
will be required, in addition to providing an intermediary Form W-8, to attach
an appropriate certification by each partner. Prospective investors, including
foreign partnerships and their partners, should consult their tax advisors
regarding possible additional reporting requirements.
If a Non-U.S. Holder cannot satisfy the requirements of the "portfolio
interest" exception described above, payments of interest made to such Non-U.S.
Holder will generally be subject to withholding tax of 30% unless the beneficial
owner of the Notes or Exchange Notes provides us or our paying agent, as the
case may be, with a properly executed (i) IRS Form 1001 (or successor form)
claiming an exemption from or reduced rate of withholding under the benefit of a
tax treaty or (ii) IRS Form 4224 (or successor form) stating that interest paid
on the Notes or Exchange Notes is not subject to withholding tax because it is
effectively connected with the beneficial owner's conduct of a trade or business
in the United States. Under the Final Regulations, Non-U.S. Holders will
generally be required to provide IRS Form W-8BEN, W-8IMY, W-8EXP, or W-8ECI in
lieu of Form 1001 and Form 4224, although alternative documentation may be
applicable in certain situations. Additionally, the Non-U.S. Holders will be
required to obtain U.S. taxpayer identification numbers. In each such case, the
relevant IRS form must be delivered pursuant to applicable procedures and must
be properly transmitted to the person otherwise required to withhold U.S.
federal income tax, and none of the persons receiving the relevant form may have
actual knowledge that any statement on the form is false.
Gain on Disposition of Notes or Exchange Notes. A Non-U.S. Holder will not
be subject to withholding of U.S. federal income tax on any gain realized on the
sale, exchange, retirement, or other disposition of the Notes or Exchange Notes,
unless (i) such Holder is an individual who is present in the United States for
183 days or more during the taxable year and certain other requirements are met,
or (ii) the gain is effectively connected with the conduct of a United States
trade or business of the Holder.
Federal Estate Taxes. Under Section 2105(b) of the Tax Code, if interest on
the Notes or Exchange Notes would be exempt from withholding of U.S. federal
income tax under the rules described under "-- Interest" (without regard to the
statement requirement), the Notes or Exchange Notes will not be included in the
estate of a Non-U.S. Holder for U.S. federal estate tax purposes.
Effectively Connected Income. If a Non-U.S. Holder is engaged in a trade or
business in the United States and interest on the Notes or Exchange Notes (or
gain realized on the sale, exchange or other disposition of the Notes or
Exchange Notes) is effectively connected with the conduct of such trade or
business, the Non-U.S. Holder, although exempt from the withholding tax
discussed above, will generally be subject to U.S. federal income tax on such
effectively connected income in the same manner as if it were a U.S. person.
Under the Final Regulations, such Non-U.S. Holder may also need to provide a
United States taxpayer identification number (social security number or employer
identification number) on forms referred to under "-- Interest" in order to meet
the requirements set forth above. In addition, if such Non-U.S. Holder is a
foreign corporation, it may be subject to a branch profits tax equal to 30% of
its effectively connected earnings and profits for the taxable year, subject to
adjustments. For this purpose, interest on, and any gain recognized on the sale,
exchange or other disposition of, the Notes or Exchange Notes will be included
in such foreign corporation's effectively connected earnings and profits if such
interest or gain, as the case may be, is effectively connected with the conduct
by such foreign corporation of a trade or business in the United States.
Backup Withholding and Information Reporting. Certain "backup" withholding
and information reporting requirements may apply to payments on, and to proceeds
of sale before maturity of, the Notes or Exchange Notes. Interest paid to a
Non-U.S. Holder on a registered security will be required to be reported
annually on IRS Form 1042-S. We are not obligated to reimburse or indemnify
Holders of the Notes or Exchange Notes, including Non-U.S. Holders, for any tax
imposed on, or withheld from payments with respect to the Notes or Exchange
Notes.
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No information reporting on IRS Form 1099 or backup withholding will be
required with respect to payments made by us or any paying agent to Non-U.S.
Holders on registered securities with respect to which a statement described
under "-- Interest" has been received; provided that we or our paying agent, as
the case may be, does not have actual knowledge that the beneficial owner is a
U.S. person.
In addition, backup withholding and information reporting will not apply if
payments of principal or interest on the Notes or Exchange Notes are paid to or
collected by a foreign office of a custodian, nominee or other foreign agent on
behalf of the beneficial owner of such Notes or Exchange Notes, or if the
foreign office of a broker (as defined in applicable Treasury Regulations) pays
the proceeds of the sale of the Notes or Exchange Notes to the owner thereof.
If, however, such nominee, custodian, agent or broker is, for U.S. federal
income tax purposes, a U.S. person, a controlled foreign corporation or a
foreign person 50% or more of whose gross income is effectively connected with
the conduct of a United States trade or business for a specified three-year
period, or another United States related person described in Section
1.6049-5(c)(5) of the Treasury Regulations, then information reporting will be
required unless (i) such custodian, nominee, agent or broker has in its records
documentary evidence that the beneficial owner is not a U.S. person and certain
other conditions are met or (ii) the beneficial owner otherwise establishes an
exemption.
Payments of principal and interest on the Notes or Exchange Notes to the
beneficial owner of such Notes or Exchange Notes by a United States office of a
custodian, nominee or agent, or payment by the United States office of a broker
of the proceeds of the sale of the Notes or Exchange Notes, will be subject to
information reporting and backup withholding unless the Holder or beneficial
owner provides the statement described under "-- Interest" or otherwise
establishes an exemption from information reporting and backup withholding, and
the payor does not have actual knowledge that the beneficial owner is a U.S.
person.
Applicable Tax Treaties. Non-U.S. Holders should also consult any
applicable income tax treaties, which may provide for a lower rate of
withholding tax, exemption from or reduction of branch profits tax, or other
rules different from those under United States federal tax laws.
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PLAN OF DISTRIBUTION
Each broker-dealer that receives Exchange Notes for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Notes. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of the Exchange Notes received in
exchange for the Notes where such Notes were acquired as a result of
market-making activities or other trading activities. The Company has agreed
that, starting on the Expiration Date and ending on the close of business on the
first anniversary of the Expiration Date, it will make this Prospectus, as
amended or supplemented, available to any broker-dealer for use in connection
with any such resale.
The Company will not receive any proceeds from any sale of the Exchange
Notes by broker-dealers. The Exchange Notes received by broker-dealers for their
own account pursuant to the Exchange Offer may be sold from time to time in one
or more transactions in the over-the counter market, in negotiated transactions,
through the writing of options on the Exchange Notes or a combination of such
methods of resale, at market prices or negotiated prices. Any such resale may be
made directly to purchasers or to or through brokers or dealers who may receive
compensation in the form of commissions or concessions from any such
broker-dealer and/or the purchasers of any such Exchange Notes. Any
broker-dealer that resells Exchange Notes that were received by it for its own
account pursuant to the Exchange Offer and any broker or dealer that
participates in a distribution of such Exchange Notes may be deemed to be an
"Underwriter" within the meaning of the Securities Act and any profit of any
such resale of Exchange Notes and any commissions or concessions received by any
such persons may be deemed to be underwriting compensation under the Securities
Act. The Letter of Transmittal states that by acknowledging that it will deliver
and by delivering a prospectus, a broker-dealer will not be deemed to admit that
it is an "Underwriter" within the meaning of the Securities Act.
For a period of one year after the Expiration Date, the Company will
promptly send additional copies of this Prospectus and any amendment or
supplement to this Prospectus to any broker-dealer that requests such documents
in the Letter of Transmittal. The Company has agreed to pay all expenses
incident to the Exchange Offer and will indemnify the holders of the Exchange
Notes against certain liabilities, including liabilities under the Securities
Act.
LEGAL MATTERS
Locke Liddell & Sapp LLP will opine on the validity of the Exchange Notes
for us.
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EXPERTS
The audited consolidated financial statements for the year ended December
31, 1998 appearing in Waste Management's Current Report on Form 8-K dated
September 16, 1999 incorporated by reference in this prospectus have been
audited by Arthur Andersen LLP, independent public accountants, as set forth in
their report. In their report, that firm states that, with respect to USA Waste
Services, Inc. and its Subsidiaries as of December 31, 1997 and for each of the
years in the two-year period then ended, its opinion is based on reports of
other auditors, namely PricewaterhouseCoopers LLP. The financial statements of
Waste Management referred to above have been included herein in reliance upon
the authority of those firms as experts in giving said reports.
During the quarter ended September 30, 1999, the Company conducted a review
of its accounting records, systems, processes and controls. Based on that
review, the Company has concluded that its internal controls for the preparation
of interim financial information did not provide its independent public
accountants an adequate basis to complete reviews of the quarterly data for the
quarters in the nine-month period ended September 30, 1999. Our independent
public accountants have advised the Company that their report on the December
31, 1999 financial statements will include the following paragraph:
"The selected quarterly financial data included in the Company's
financial statements contain information that we did not audit, and
accordingly, we do not express an opinion on that data. We attempted,
but were unable to, review that quarterly data in accordance with
standards established by the American Institute of Certified Public
Accountants because we believe that the Company's internal controls for
the preparation of interim financial information do not provide an
adequate basis to enable us to complete such a review."
The audited consolidated financial statements of USA Waste Services, Inc.
as of December 31, 1997 and for the years ended December 31, 1997 and 1996, not
separately incorporated by reference in this prospectus, have been audited by
PricewaterhouseCoopers LLP, independent accountants, whose report thereon is
incorporated by reference herein. Such financial statements, to the extent they
have been included in the financial statements of Waste Management, Inc., have
been so included in reliance on the report of such independent accountants given
on the authority of said firm as experts in auditing and accounting.
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---------------------
WASTE MANAGEMENT, INC.
OFFERS TO EXCHANGE
$200,000,000 6.000% Senior Notes Due 2001
$200,000,000 6.500% Senior Notes Due 2004
$500,000,000 6.875% Senior Notes Due 2009
$250,000,000 7.375% Senior Notes Due 2029
FOR
$200,000,000 6.000% Senior Notes Due 2001
$200,000,000 6.500% Senior Notes Due 2004
$500,000,000 6.875% Senior Notes Due 2009
$250,000,000 7.375% Senior Notes Due 2029
---------------------
<PAGE> 56
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 102 of the Delaware General Corporation Law ("DGCL") allows a
corporation to eliminate the personal liability of a director to the corporation
or its stockholders for monetary damages for breach of fiduciary duty as a
director, except in cases where the director breached his or her duty of loyalty
to the corporation or its stockholders, failed to act in good faith, engaged in
intentional misconduct or a knowing violation of the law, willfully or
negligently authorized the unlawful payment of a dividend or approved an
unlawful stock redemption or repurchase or obtained an improper personal
benefit. The Registrant's Restated Certificate of Incorporation (the "Waste
Management Charter") contains a provision which eliminates directors' personal
liability as set forth above.
The Waste Management Charter and the Bylaws of Waste Management provide in
effect that the Registrant shall indemnify its directors and officers, and may
indemnify its employees and agents, to the extent permitted by the DGCL. Section
145 of the DGCL provides that a Delaware corporation has the power to indemnify
its directors, officers, employees and agents in certain circumstances.
Subsection (a) of Section 145 of the DGCL empowers a corporation to
indemnify any director, officer, employee or agent, or former director, officer,
employee or agent who was or is a party or is threatened to be made a party to
any threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative (other than an action by or in the
right of the corporation), against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
in connection with such action, suit or proceeding provided that such director,
officer, employee or agent acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, provided
that such director, officer, employee or agent had no reasonable cause to
believe that his or her conduct was unlawful.
Subsection (b) of Section 145 of the DGCL empowers a corporation to
indemnify any director, officer, employee or agent, or former director, officer,
employee or agent, who was or is a party or is threatened to be made a party to
any threatened, pending or completed action or suit by or in the right of the
corporation to procure a judgment in its favor by reason of the fact that such
person acted in any of the capacities set forth above, against expenses
(including attorneys' fees) actually and reasonably incurred in connection with
the defense or settlement of such action or suit provided that such person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
may be made in respect of any claim, issue or matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the Court of Chancery shall determine that, despite the adjudication
of liability, such person is fairly and reasonably entitled to indemnity for
such expenses which the court shall deem proper.
Section 145 of the DGCL further provides that, to the extent that a
director or officer of a corporation has been successful in the defense of any
action, suit or proceeding referred to in subsections (a) and (b) of Section 145
of the DGCL or in the defense of any claim, issue or matter therein, he or she
shall be indemnified against expenses (including attorneys' fees) actually and
reasonably incurred by him or her in connection therewith; that indemnification
provided by Section 145 of the DGCL shall not be deemed exclusive of any other
rights to which the party seeking indemnification may be entitled; and the
corporation is empowered to purchase and maintain insurance on behalf of a
director, officer, employee or agent of the corporation against any liability
asserted against him or her or incurred by him or her in any such capacity or
arising out of his or her status as such whether or not the corporation would
have the power to indemnify him or her against such liabilities under Section
145 of the DGCL; and that, unless indemnification is ordered by a court, the
determination that indemnification under subsections (a) and (b) of Section 145
of the DGCL is proper because the director, officer, employee or
II-1
<PAGE> 57
agent has met the applicable standard of conduct under such subsections shall be
made with respect to a person who is a director or officer at the time of such
determination (1) by a majority vote of the directors who are not parties to
such action, suit or proceeding, even though less than a quorum, or (2) by a
committee of such directors designated by majority vote of such directors, even
though less than a quorum, or (3) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, or (4)
by the stockholders.
The Registrant has purchased certain liability insurance for its officers
and directors as permitted by Section 145(g) of the DGCL.
The Registrant has entered into Indemnification Agreements with certain of
its directors and executive officers. Such Indemnification Agreements provide
that such persons (the "Indemnitees") will be indemnified and held harmless from
all expenses, including (without limitation) reasonable fees and expenses of
counsel, and all liabilities, including (without limitation) the amount of any
judgments, fines, penalties, excise taxes and amounts paid in settlement,
actually incurred by an Indemnitee with respect to any threatened, pending or
completed claim, action (including any action by or in the right of the
Registrant), suit or proceeding (whether formal or informal, or civil, criminal,
administrative, legislative, arbitrative or investigative) in respect of which
such Indemnitee is, was or at any time becomes, or is threatened to be made, a
party, witness, subject or target, by reason of the fact that such Indemnitee is
or was a director, officer, agent or fiduciary of the Registrant or serving at
the request of the Registrant as a director, officer, employee, fiduciary or
representative of another enterprise. Such Indemnification Agreements also
provide that the Registrant, if requested to do so by an Indemnitee, will
advance to such Indemnitee, prior to final disposition of any proceeding, the
expenses actually incurred by the Indemnitee subject to the obligation of the
Indemnitee to refund if it is ultimately determined that such Indemnitee was not
entitled to Indemnification.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
3.1 -- Restated Certificate of Incorporation, as amended
[Incorporated by reference to Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated July 16,
1998].
3.2 -- Restated Bylaws, as amended [Incorporated by reference to
Exhibit 3 to the Registrant's Form 10-Q for the quarter
ended June 30, 1999].
4.1 -- Specimen Stock Certificate [Incorporated by reference to
Exhibit 4.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1998].
4.2 -- Indenture for Senior Debt Securities dated September 10,
1997, among the Registrant and Texas Commerce Bank
National Association, as trustee, now known as Chase Bank
of Texas, National Association [Incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form
8-K dated September 10, 1997].
4.3* -- Form of Exchange Note.
4.4* -- Registration Rights Agreement dated as of May 21, 1999 by
and among Waste Management, Inc., Waste Management
Holdings, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Banc of America LLC, Chase
Securities Inc., J.P. Morgan & Co., Credit Suisse First
Boston, Deutsche Bank Securities Inc. and Salomon Smith
Barney.
5.1* -- Opinion of Locke Liddell & Sapp LLP.
10.1 -- 1990 Stock Option Plan [Incorporated by reference to
Exhibit 10.1 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990].
</TABLE>
II-2
<PAGE> 58
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.2 -- Conformed copy of 1993 Stock Incentive Plan, as amended
and restated [Incorporated by reference to Exhibit 10.2
to the Registrant's Annual Report on Form 10-K for year
ended December 31, 1998].
10.3 -- Conformed copy of 1996 Stock Option Plan for Non-Employee
Directors, as amended [Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
10.4 -- Envirofil, Inc. 1993 Stock Incentive Plan [Incorporated
by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, File No. 33-84990].
10.5 -- Western Waste Industries Amended and Restated 1983
Incentive Stock Option Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-02181].
10.6 -- Western Waste Industries 1983 Non-Qualified Stock Option
Plan [Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File No.
333-02181].
10.7 -- Western Waste Industries 1992 Option Plan [Incorporated
by reference to Exhibit 99.3 to the Registrant's
Registration Statement on Form S-8, File No. 333-02181].
10.8 -- Sanifill, Inc. 1994 Long-Term Incentive Plan
[Incorporated by reference to Exhibit 99.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-08161].
10.9 -- Sanifill, Inc. 1989 Stock Option Plan [Incorporated by
reference to Exhibit 99.2 to the Registrant's
Registration Statement on Form S-8, File No. 333-08161].
10.10 -- Waste Management, Inc. 1997 Equity Incentive Plan
[Incorporated by reference to Exhibit A to Waste
Management Holdings' Proxy Statement for its 1997 Annual
Meeting of Shareholders].
10.11 -- WMX Technologies, Inc. 1996 Replacement Stock Option Plan
[Incorporated by reference to Exhibit 4.13 to Waste
Management Holdings' Registration Statement on Form S-8,
File No. 333-01325].
10.12 -- WMX Technologies, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.31 to Waste
Management Holdings' Registration Statement on Form S-1,
File No. 33-44849].
10.13 -- WMX Technologies, Inc. 1992 Stock Option Plan for
Non-Employee Directors [Incorporated by reference to
Exhibit 10.23 to Waste Management Holdings' 1996 Annual
Report on Form 10-K].
10.14 -- Waste Management, Inc. 1982 Stock Option Plan, as amended
to March 11, 1988 [Incorporated by reference to Exhibit
10.3 to Waste Management Holdings' 1988 Annual Report on
Form 10-K].
10.15 -- Wheelabrator Technologies Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.45 to the 1991
Annual Report on Form 10-K of Wheelabrator Technologies
Inc.].
10.16 -- Wheelabrator Technologies Inc. 1988 Stock Plan for
Executive Employees of WTI and its Subsidiaries
[Incorporated by reference to Exhibit 28.1 to Amendment
No. 1 to the Registration Statement of Wheelabrator
Technologies Inc. on Form S-8, File No. 33-31523].
10.17 -- Chemical Waste Management, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.19 to the 1991
Annual Report on Form 10-K of Chemical Waste Management,
Inc.].
10.18 -- 1991 Stock Option Plan for Non-Employee Directors of
Wheelabrator Technologies, Inc. [Incorporated by
reference to Exhibit 19.04 WTI's Quarterly Report for the
quarterly period ended June 30, 1991].
</TABLE>
II-3
<PAGE> 59
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.19 -- Amendments dated as of September 7, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.20 -- Amendment dated as of November 1, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.04 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.21 -- Amendment dated as of November 1, 1990 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.03 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.22 -- Amendment dated as of December 6, 1991 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.01 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.23 -- Amendment dated as of December 6, 1991 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.24 -- 1997 Employee Stock Purchase Plan [Incorporated by
reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1997].
10.25 -- 401(k) Restoration Plan [Incorporated by reference to
Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1997].
10.26 -- TransAmerican Waste Industries, Inc. Amended and Restated
1990 Stock Incentive Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.27 -- TransAmerican Waste Industries, Inc. 1997 Non-Employee
Director Stock Option Plan [Incorporated by reference to
Exhibit 99.2 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.28 -- Eastern Environmental Services, Inc. 1997 Stock Option
Plan [Incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.29 -- Eastern Environmental Services, Inc. Amended and Restated
1996 Stock Option Plan [Incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-8, File No. 333-70055].
10.30 -- Eastern Environmental Services, Inc. 1991 Stock Option
Plan [Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.31 -- Form of Employment Agreement by and between the
Registrant and its Executive Officers [Incorporated by
reference to Exhibit 10.31 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1998].
10.32 -- Third Amended and Restated Revolving Credit Agreement,
dated as of December 15, 1999 among the Registrant,
guarantors thereunder, Bank of Americas N.A., Morgan
Guaranty Trust Company of New York and other financial
institutions.
10.33 -- Amended and Restated Loan Agreement dated as of December
15, 1999, among the Registrant, guarantors thereunder,
BankBoston, N.A., Bank of America National Trust and
Savings Association, Chase Bank of Texas, N.A., Deutsche
Bank AG, New York Branch, Morgan Guaranty Trust Company
of New York and other financial institutions.
10.34 -- 1998 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
</TABLE>
II-4
<PAGE> 60
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
------- -----------
<C> <S>
10.35 -- 1999 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.2 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
21.1 -- Subsidiaries of the Registrant [Incorporated by reference
to Exhibit 21.1 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Locke Liddell & Sapp LLP (included in Exhibit
5.1).
24.1* -- Power of Attorney (set forth on signature page).
25.1 -- Statement of Eligibility of Trustee.
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Previously filed
Exhibits listed above which have been filed with the Commission are
incorporated herein by reference with the same effect as if filed with this
Registration Statement.
ITEM 22. UNDERTAKINGS
The undersigned registrants hereby undertake:
(1) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Securities Exchange Act of 1934 that
is incorporated by reference in this registration statement shall be deemed
to be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(2) Insofar as indemnification for liabilities arising under the
Securities Act, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the provisions described under Item
20 above, or otherwise, the registrant has been advised that in the opinion
of the Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that as
claim for indemnification against such liabilities (other than the payment
by the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Act and be governed by the final
adjudication of such issue.
(3) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Item 4, 10(b), 11, or 13 of this
Form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(4) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in the registration statement when
it became effective.
II-5
<PAGE> 61
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WASTE MANAGEMENT, INC.
By: /s/ A. MAURICE MYERS
----------------------------------
A. Maurice Myers
President, Chief Executive Officer
and Chairman of the Board
Date: December 21, 1999
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons on behalf of the
Registrant and in the capacities and on December 21, 1999.
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
/s/ A. MAURICE MYERS President, Chief Executive
- ----------------------------------------------------- Officer, Chairman of the Board and
A. Maurice Myers Director
(Principal Executive Officer)
/s/ DONALD R. CHAPPEL Executive Vice President and
- ----------------------------------------------------- Chief Financial Officer
Donald R. Chappel (Principal Financial Officer)
/s/ BRUCE E. SNYDER Vice President and Chief
- ----------------------------------------------------- Accounting Officer
Bruce E. Snyder (Principal Accounting Officer)
* Director
- -----------------------------------------------------
H. Jesse Arnelle
Director
- -----------------------------------------------------
Pastora San Juan Cafferty
* Director
- -----------------------------------------------------
Ralph F. Cox
* Director
- -----------------------------------------------------
Roderick M. Hills
* Director
- -----------------------------------------------------
Robert S. Miller
* Director
- -----------------------------------------------------
Paul M. Montrone
</TABLE>
II-6
<PAGE> 62
<TABLE>
<CAPTION>
SIGNATURE TITLE
--------- -----
<C> <S>
* Director
- -----------------------------------------------------
John C. Pope
* Director
- -----------------------------------------------------
Steven G. Rothmeier
* Director
- -----------------------------------------------------
Ralph V. Whitworth
* Director
- -----------------------------------------------------
Jerome B. York
*By: /s/ BRYAN J. BLANKFIELD
-------------------------------------------------
Bryan J. Blankfield
As Attorney-in-Fact
</TABLE>
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized.
WASTE MANAGEMENT HOLDINGS, INC.
By: /s/ BRYAN J. BLANKFIELD
----------------------------------
Bryan J. Blankfield
Vice President and Secretary
Date: December 21, 1999
II-7
<PAGE> 63
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
3.1 -- Restated Certificate of Incorporation, as amended
[Incorporated by reference to Exhibit 3.2 to the
Registrant's Current Report on Form 8-K dated July 16,
1998].
3.2 -- Restated Bylaws, as amended [Incorporated by reference to
Exhibit 3 to the Registrant's Form 10-Q for the quarter
ended June 30, 1999].
4.1 -- Specimen Stock Certificate [Incorporated by reference to
Exhibit 4.1 to Registrant's Annual Report on Form 10-K
for the year ended December 31, 1998].
4.2 -- Indenture for Senior Debt Securities dated September 10,
1997, among the Registrant and Texas Commerce Bank
National Association, as trustee, now known as Chase Bank
of Texas, National Association [Incorporated by reference
to Exhibit 4.1 to the Registrant's Current Report on Form
8-K dated September 10, 1997].
4.3* -- Form of Exchange Note.
4.4* -- Registration Rights Agreement dated as of May 21, 1999 by
and among Waste Management, Inc., Waste Management
Holdings, Inc. and Donaldson, Lufkin & Jenrette
Securities Corporation, Banc of America LLC, Chase
Securities Inc., J.P. Morgan & Co., Credit Suisse First
Boston, Deutsche Bank Securities Inc. and Salomon Smith
Barney.
5.1* -- Opinion of Locke Liddell & Sapp LLP.
10.1 -- 1990 Stock Option Plan [Incorporated by reference to
Exhibit 10.1 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1990].
10.2 -- Conformed copy of 1993 Stock Incentive Plan, as amended
and restated [Incorporated by reference to Exhibit 10.2
to the Registrant's Annual Report on Form 10-K for year
ended December 31, 1998].
10.3 -- Conformed copy of 1996 Stock Option Plan for Non-Employee
Directors, as amended [Incorporated by reference to
Exhibit 10.3 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
10.4 -- Envirofil, Inc. 1993 Stock Incentive Plan [Incorporated
by reference to Exhibit 4.1 to the Registrant's
Registration Statement on Form S-8, File No. 33-84990].
10.5 -- Western Waste Industries Amended and Restated 1983
Incentive Stock Option Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-02181].
10.6 -- Western Waste Industries 1983 Non-Qualified Stock Option
Plan [Incorporated by reference to Exhibit 99.2 to the
Registrant's Registration Statement on Form S-8, File No.
333-02181].
10.7 -- Western Waste Industries 1992 Option Plan [Incorporated
by reference to Exhibit 99.3 to the Registrant's
Registration Statement on Form S-8, File No. 333-02181].
10.8 -- Sanifill, Inc. 1994 Long-Term Incentive Plan
[Incorporated by reference to Exhibit 99.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-08161].
10.9 -- Sanifill, Inc. 1989 Stock Option Plan [Incorporated by
reference to Exhibit 99.2 to the Registrant's
Registration Statement on Form S-8, File No. 333-08161].
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.10 -- Waste Management, Inc. 1997 Equity Incentive Plan
[Incorporated by reference to Exhibit A to Waste
Management Holdings' Proxy Statement for its 1997 Annual
Meeting of Shareholders].
</TABLE>
<PAGE> 64
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.11 -- WMX Technologies, Inc. 1996 Replacement Stock Option Plan
[Incorporated by reference to Exhibit 4.13 to Waste
Management Holdings' Registration Statement on Form S-8,
File No. 333-01325].
10.12 -- WMX Technologies, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.31 to Waste
Management Holdings' Registration Statement on Form S-1,
File No. 33-44849].
10.13 -- WMX Technologies, Inc. 1992 Stock Option Plan for
Non-Employee Directors [Incorporated by reference to
Exhibit 10.23 to Waste Management Holdings' 1996 Annual
Report on Form 10-K].
10.14 -- Waste Management, Inc. 1982 Stock Option Plan, as amended
to March 11, 1988 [Incorporated by reference to Exhibit
10.3 to Waste Management Holdings' 1988 Annual Report on
Form 10-K].
10.15 -- Wheelabrator Technologies Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.45 to the 1991
Annual Report on Form 10-K of Wheelabrator Technologies
Inc.].
10.16 -- Wheelabrator Technologies Inc. 1988 Stock Plan for
Executive Employees of WTI and its Subsidiaries
[Incorporated by reference to Exhibit 28.1 to Amendment
No. 1 to the Registration Statement of Wheelabrator
Technologies Inc. on Form S-8, File No. 33-31523].
10.17 -- Chemical Waste Management, Inc. 1992 Stock Option Plan
[Incorporated by reference to Exhibit 10.19 to the 1991
Annual Report on Form 10-K of Chemical Waste Management,
Inc.].
10.18 -- 1991 Stock Option Plan for Non-Employee Directors of
Wheelabrator Technologies, Inc. [Incorporated by
reference to Exhibit 19.04 WTI's Quarterly Report for the
quarterly period ended June 30, 1991].
10.19 -- Amendments dated as of September 7, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.20 -- Amendment dated as of November 1, 1990 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.04 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.21 -- Amendment dated as of November 1, 1990 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.03 to
the 1990 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.22 -- Amendment dated as of December 6, 1991 to the WTI 1986
Stock Plan [Incorporated by reference to Exhibit 19.01 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.23 -- Amendment dated as of December 6, 1991 to the WTI 1988
Stock Plan [Incorporated by reference to Exhibit 19.02 to
the 1991 Annual Report on Form 10-K of Wheelabrator
Technologies Inc.].
10.24 -- 1997 Employee Stock Purchase Plan [Incorporated by
reference to Exhibit 10.10 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1997].
10.25 -- 401(k) Restoration Plan [Incorporated by reference to
Exhibit 10.11 to the Registrant's Annual Report on Form
10-K for the year ended December 31, 1997].
10.26 -- TransAmerican Waste Industries, Inc. Amended and Restated
1990 Stock Incentive Plan [Incorporated by reference to
Exhibit 99.1 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
</TABLE>
<PAGE> 65
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
----------- -----------
<C> <S>
10.27 -- TransAmerican Waste Industries, Inc. 1997 Non-Employee
Director Stock Option Plan [Incorporated by reference to
Exhibit 99.2 to the Registrant's Registration Statement
on Form S-8, File No. 333-51975].
10.28 -- Eastern Environmental Services, Inc. 1997 Stock Option
Plan [Incorporated by reference to Exhibit 4.1 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.29 -- Eastern Environmental Services, Inc. Amended and Restated
1996 Stock Option Plan [Incorporated by reference to
Exhibit 4.2 to the Registrant's Registration Statement on
Form S-8, File No. 333-70055].
10.30 -- Eastern Environmental Services, Inc. 1991 Stock Option
Plan [Incorporated by reference to Exhibit 4.3 to the
Registrant's Registration Statement on Form S-8, File No.
333-70055].
10.31 -- Form of Employment Agreement by and between the
Registrant and its Executive Officers [Incorporated by
reference to Exhibit 10.31 to the Registrant's Annual
Report on Form 10-K for the year ended December 31,
1998].
10.32 -- Third Amended and Restated Revolving Credit Agreement,
dated as of December 15, 1999 among the Registrant,
guarantors thereunder, Bank of America, N.A., Morgan
Guaranty Trust Company of New York and other financial
institutions.
10.33 -- Amended and Restated Loan Agreement dated as of December
15, 1999, among the Registrant, guarantors thereunder,
BankBoston, N.A., Bank of America National Trust and
Savings Association, Chase Bank of Texas, N.A., Deutsche
Bank AG, New York Branch, Morgan Guaranty Trust Company
of New York and other financial institutions.
10.34 -- 1998 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.1 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
10.35 -- 1999 Waste Management, Inc. Directors' Deferred
Compensation Plan [Incorporated by reference to Exhibit
10.2 to the Registrant's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1999].
21.1 -- Subsidiaries of the Registrant [Incorporated by reference
to Exhibit 21.1 to the Registrant's Annual Report on Form
10-K for year ended December 31, 1998].
23.1 -- Consent of Arthur Andersen LLP.
23.2 -- Consent of PricewaterhouseCoopers LLP.
23.3* -- Consent of Locke Liddell & Sapp LLP (included in Exhibit
5.1).
24.1* -- Power of Attorney (set forth on signature page).
25.1 -- Statement of Eligibility of Trustee.
99.1* -- Form of Letter of Transmittal.
99.2* -- Form of Notice of Guaranteed Delivery.
</TABLE>
- ---------------
* Previously filed
Exhibits listed above which have been filed with the Commission are
incorporated herein by reference with the same effect as if filed with this
Registration Statement.
<PAGE> 1
Exhibit 10.32
- --------------------------------------------------------------------------------
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 15, 1999
by and among
WASTE MANAGEMENT, INC.
(the "Borrower")
and
THE GUARANTORS
and
BANK OF AMERICA, N.A.
("BOA")
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
("MGT")
AND THE OTHER FINANCIAL INSTITUTIONS WHICH BECOME
A PARTY TO THIS AGREEMENT
(Collectively, the "Banks")
and
MGT AS ADMINISTRATIVE AGENT AND DOCUMENTATION AGENT
(the "Administrative Agent")
and
BANC OF AMERICA SECURITIES, LLC AND CHASE SECURITIES INC.
AS JOINT LEAD ARRANGERS AND JOINT BOOK MANAGERS
(the "Joint Lead Arrangers and Joint Book Managers")
- --------------------------------------------------------------------------------
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1. DEFINITIONS AND RULES OF INTERPRETATION..................................................1
Section 1.1. Definitions...................................................................1
Section 1.2. Rules of Interpretation.......................................................15
Section 2. THE LOAN FACILITIES......................................................................16
Section 2.1. Commitment to Lend............................................................16
Section 2.2. Facility Fee..................................................................17
Section 2.3. Reduction of Total Commitment.................................................17
Section 2.4. The Syndicated Notes..........................................................17
Section 2.5. Interest on Loans.............................................................18
Section 2.6. Requests for Syndicated Loans.................................................18
Section 2.7. Election of Eurodollar Rate; Notice of Election; Interest Periods; Minimum
Amounts.....................................................................................19
Section 2.8. Funds for Syndicated Loans....................................................20
Section 2.9. Maturity of the Loans and Reimbursement Obligations...........................20
Section 2.10. Optional Prepayments or Repayments of Loans..................................20
Section 2.11. Swing Line Loans; Settlements................................................21
Section 3. LETTERS OF CREDIT........................................................................22
Section 3.1. Letter of Credit Commitments..................................................22
Section 3.2. Reimbursement Obligation of the Borrower......................................23
Section 3.3. Obligations Absolute..........................................................24
Section 3.4. Reliance by the Issuing Banks.................................................24
Section 3.5. Notice Regarding Letters of Credit............................................24
Section 3.6. Letter of Credit Fee..........................................................24
Section 4. COMPETITIVE BID LOANS....................................................................25
Section 4.1. The Competitive Bid Option....................................................25
Section 4.2. Competitive Bid Loan Accounts: Competitive Bid Notes.........................25
Section 4.3. Competitive Bid Quote Request; Invitation for Competitive Bid Quotes..........26
Section 4.4. Alternative Manner of Procedure...............................................27
Section 4.5. Submission and Contents of Competitive Bid Quotes.............................27
Section 4.6. Notice to Borrower............................................................28
Section 4.7. Acceptance and Notice by Borrower and Administrative Agent....................28
Section 4.8. Allocation by Administrative Agent............................................29
Section 4.9. Funding of Competitive Bid Loans..............................................29
Section 4.10. Funding Losses...............................................................29
Section 4.11. Repayment of Competitive Bid Loans; Interest.................................30
Section 5. Provisions Relating to All Loans and Letters of Credit...................................30
Section 5.1. Payments......................................................................30
Section 5.2. Mandatory Repayments of the Loans.............................................32
Section 5.3. Computations..................................................................32
Section 5.4. Illegality; Inability to Determine Eurodollar Rate............................32
Section 5.5. Additional Costs, Etc.........................................................33
Section 5.6. Capital Adequacy..............................................................34
Section 5.7. Certificate...................................................................34
</TABLE>
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Section 5.8. Eurodollar and Competitive Bid Indemnity......................................34
Section 5.9. Interest on Overdue Amounts...................................................35
Section 5.10. Interest Limitation..........................................................35
Section 5.11. Reasonable Efforts to Mitigate...............................................35
Section 5.12. Replacement of Banks.........................................................36
Section 5.13. Advances by Administrative Agent.............................................36
Section 6. REPRESENTATIONS AND WARRANTIES...........................................................37
Section 6.1. Corporate Authority...........................................................37
Section 6.2. Governmental and Other Approvals..............................................38
Section 6.3. Title to Properties; Leases...................................................38
Section 6.4. Financial Statements; Solvency................................................38
Section 6.5. No Material Changes, Etc......................................................39
Section 6.6. Franchises, Patents, Copyrights, Etc..........................................39
Section 6.7. Litigation....................................................................39
Section 6.8. No Materially Adverse Contracts, Etc..........................................39
Section 6.9. Compliance With Other Instruments, Laws, Etc..................................39
Section 6.10. Tax Status...................................................................40
Section 6.11. No Event of Default..........................................................40
Section 6.12. Holding Company and Investment Company Acts..................................40
Section 6.13. Absence of Financing Statements, Etc.........................................40
Section 6.14. Employee Benefit Plans.......................................................41
Section 6.14.1. In General........................................................41
Section 6.14.2. Terminability of Welfare Plans....................................41
Section 6.14.3. Guaranteed Pension Plans..........................................41
Section 6.14.4. Multiemployer Plans...............................................41
Section 6.15. Environmental Compliance.....................................................42
Section 6.16. True Copies of Charter and Other Documents...................................43
Section 6.17. Disclosure...................................................................43
Section 6.18. Permits and Governmental Authority...........................................43
Section 6.19. Year 2000 Compliance.........................................................43
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWER....................................................44
Section 7.1. Punctual Payment..............................................................44
Section 7.2. Maintenance of U.S. Office....................................................44
Section 7.3. Records and Accounts..........................................................44
Section 7.4. Financial Statements, Certificates and Information............................44
Section 7.5. Existence and Conduct of Business.............................................46
Section 7.6. Maintenance of Properties.....................................................46
Section 7.7. Insurance.....................................................................46
Section 7.8. Taxes.........................................................................47
Section 7.9. Inspection of Properties, Books and Contracts.................................47
Section 7.10. Compliance with Laws, Contracts, Licenses and Permits; Maintenance of Material
Licenses and Permits........................................................................47
Section 7.11. Environmental Indemnification................................................47
Section 7.12. Further Assurances...........................................................48
Section 7.13. Notice of Potential Claims or Litigation.....................................48
</TABLE>
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Section 7.14. Notice of Certain Events Concerning Insurance and Environmental Claims.......48
Section 7.15. Notice of Default............................................................49
Section 7.16. Use of Proceeds..............................................................49
Section 7.17. Certain Transactions.........................................................50
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...............................................50
Section 8.1. Restrictions on Indebtedness..................................................50
Section 8.2. Restrictions on Liens.........................................................51
Section 8.3. Restrictions on Investments...................................................52
Section 8.4. Mergers, Consolidations, Sales................................................53
Section 8.5. Restricted Distributions and Redemptions......................................55
Section 8.6. Employee Benefit Plans........................................................55
Section 9. FINANCIAL COVENANTS OF THE BORROWER......................................................56
Section 9.1. Interest Coverage Ratio.......................................................56
Section 9.2. Total Debt to EBITDA..........................................................56
Section 9.3. Minimum Net Worth.............................................................56
Section 10. CONDITIONS PRECEDENT....................................................................57
Section 10.1. Conditions To Effectiveness..................................................57
Section 10.1.1. Corporate Action..................................................57
Section 10.1.2. Loan Documents, Etc...............................................57
Section 10.1.3. Certified Copies of Charter Documents.............................57
Section 10.1.4. Incumbency Certificate............................................57
Section 10.1.5. Certificates of Insurance.........................................58
Section 10.1.6. Opinions of Counsel...............................................58
Section 10.1.7. Satisfactory Financial Condition..................................58
Section 10.1.8. Payment of Amendment Fees.........................................58
Section 10.1.9. Amendments to Existing Debt.......................................58
Section 10.2. Notice of Effective Date.....................................................58
Section 11. Conditions to all Loans.................................................................59
Section 11.1. Representations True.........................................................59
Section 11.2. Performance; No Event of Default.............................................59
Section 11.3. No Legal Impediment..........................................................59
Section 11.4. Governmental Regulation......................................................59
Section 11.5. Proceedings and Documents....................................................59
Section 12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT..............................60
Section 12.1. Events of Default and Acceleration...........................................60
Section 12.2. Termination of Commitments...................................................62
Section 12.3. Remedies.....................................................................62
Section 13. SETOFF..................................................................................63
Section 14. EXPENSES................................................................................63
Section 15. THE ADMINISTRATIVE AGENT................................................................63
Section 15.1. Appointment, Powers and Immunities...........................................63
Section 15.2. Actions By Administrative Agent..............................................64
Section 15.3. Indemnification..............................................................64
</TABLE>
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Section 15.4. Reimbursement................................................................64
Section 15.5. Documents....................................................................65
Section 15.6. Non-Reliance on Administrative Agent and Other Banks.........................65
Section 15.7. Resignation of Administrative Agent..........................................66
Section 15.8. Action by the Banks, Consents, Amendments, Waivers, Etc......................66
Section 16. INDEMNIFICATION.........................................................................67
Section 17. WITHHOLDING TAXES.......................................................................67
Section 18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...........................................69
Section 18.1. Sharing of Information with Section 20 Subsidiary............................69
Section 18.2. Confidentiality..............................................................69
Section 18.3. Prior Notification...........................................................69
Section 18.4. Other........................................................................70
Section 19. SURVIVAL OF COVENANTS, ETC..............................................................70
Section 20. ASSIGNMENT AND PARTICIPATION............................................................70
Section 21. PARTIES IN INTEREST.....................................................................71
Section 22. NOTICES, ETC............................................................................72
Section 23. MISCELLANEOUS...........................................................................72
Section 24. CONSENTS, ETC...........................................................................72
Section 25. WAIVER OF JURY TRIAL....................................................................73
Section 26. GOVERNING LAW; SUBMISSION TO JURISDICTION...............................................73
Section 27. SEVERABILITY............................................................................74
Section 28. GUARANTY................................................................................74
Section 28.1. Guaranty.....................................................................74
Section 28.2. Guaranty Absolute............................................................74
Section 28.3. Effectiveness; Enforcement...................................................75
Section 28.4. Waiver.......................................................................75
Section 28.5. Expenses.....................................................................75
Section 28.6. Concerning Joint and Several Liability of the Guarantors.....................76
Section 28.7. Waiver.......................................................................78
Section 28.8. Subrogation; Subordination...................................................78
Section 29. Pari Passu treatment....................................................................78
Section 30. TRANSITIONAL ARRANGEMENTS...............................................................79
Section 31. FINAL AGREEMENT.........................................................................79
</TABLE>
Exhibits
Exhibit A Form of Syndicated Note
Exhibit B Form of Swing Line Note
Exhibit C Form of Competitive Bid Note
Exhibit D Form of Syndicated Loan Request
Exhibit E Form of Letter of Credit Request
Exhibit F Form of Compliance Certificate
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Competitive Bid Quote Request
<PAGE> 6
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Exhibit I Form of Invitation for Competitive Bid Quotes
Exhibit J Form of Competitive Bid Quote
Exhibit K Form of Notice of Acceptance/Rejection of
Competitive Bid Quote(s)
Exhibit L Form of Net Cash Proceeds Certificate
Schedules
Schedule 1 Banks; Commitment Percentages
Schedule 1.1(a) Domestic Strategic Dispositions
Schedule 1.1(b) European Strategic Dispositions
Schedule 3.1(a) Existing Letters of Credit
Schedule 6.7 Litigation
Schedule 6.15 Environmental Compliance
Schedule 8.1(e) Existing Indebtedness of WMH
Schedule 8.2(a) Existing Liens
<PAGE> 7
THIRD AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This THIRD AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as
of the 15th day of December, l999, by and among WASTE MANAGEMENT, INC. (f/k/a
USA Waste Services, Inc.), a Delaware corporation having its chief executive
office at 1001 Fannin Street, Suite 4000, Houston, Texas 77002 (the "Borrower"),
the Guarantors, and BANK OF AMERICA, N.A., a national banking association having
a place of business at 231 South LaSalle Street Chicago, Illinois 60697 ("BOA"),
MORGAN GUARANTY TRUST COMPANY OF NEW YORK, a New York state banking association
having its principal place of business at 60 Wall Street, New York, New York
10260 ("MGT"), and each of the other financial institutions party hereto
(collectively, the "Banks"), MGT as administrative agent and documentation agent
(the "Administrative Agent"), and Banc of America Securities LLC and Chase
Securities Inc. as joint lead arrangers and joint book managers (the "Joint Lead
Arrangers and Joint Book Managers").
WITNESSETH:
WHEREAS, the Borrower, Sanifill, WMH, BOA, MGT, certain of the Banks,
and MGT as Administrative and Documentation Agent thereunder (collectively, the
"Original Parties") are party to that certain Second Amended and Restated
Revolving Credit Agreement dated as of July 16, 1998, by and among the Original
Parties (the "Existing Credit Agreement"); and
WHEREAS, the Borrower has requested changes in certain terms and the
pricing of the Existing Credit Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth herein below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, on the Effective Date, the Existing Credit Agreement shall be
amended and restated by this Agreement, the terms of which are as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
SECTION 1.1. DEFINITIONS. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Agreement
referred to below:
Absolute Competitive Bid Loan(s). See Section 4.3(a).
Accountants. See Section 7.4(a).
Administrative Agent. See Preamble.
Affected Bank. See Section 5.12.
<PAGE> 8
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Affiliate. Any Person that would be considered to be an affiliate of
the Borrower under Rule 144(a) of the Rules and Regulations of the Securities
and Exchange Commission, as in effect on the date hereof, if the Borrower were
issuing securities.
Agents. BOA, BancAmerica Securities, Inc. and J.P. Morgan Securities
Inc.
Agreement. This Third Amended and Restated Revolving Credit Agreement,
including the Schedules and Exhibits hereto, as from time to time amended and
supplemented in accordance with the terms hereof.
Allied Waste Transactions. The series of transactions, which have been
designed to be substantially cash neutral in the aggregate, to be entered into
among Allied Waste Services, Inc. ("Allied"), the Company, and certain of their
respective affiliates, pursuant to which, among other things, (i) the Company
through its affiliates will purchase from Allied and its affiliates all of the
outstanding capital stock of Browning-Ferris Industries Limited ("BFIL") which
owns certain solid waste operations in Canada (the "Canadian Operations"), and
(ii) Allied through its affiliates will acquire from the Company and its
affiliates certain solid waste operations in the United States (the "US
Operations"); and including, in each case, such divestitures of Canadian
Operations and US Operations as may be required by applicable governmental
authorities in connection with their review of such transactions for their
potential antitrust and competitive effects.
Applicable Canadian Pension Legislation. At any time, any pension or
retirement benefits legislation (be it federal, provincial, territorial, or
otherwise) then applicable to any of the Canadian Subsidiaries, including the
Pension Benefits Act (Ontario), the Income Tax Act (Canada), and all regulations
made thereunder.
Applicable Eurodollar Rate. The applicable rate per annum of interest
on the Eurodollar Loans shall be as set forth in the Pricing Table.
Applicable Facility Rate. The applicable rate per annum with respect to
the Facility Fee shall be as set forth in the Pricing Table.
Applicable L/C Rate. The applicable rate per annum on the Maximum
Drawing Amount shall be as set forth in the Pricing Table.
Applicable Requirements. See Section 7.10.
Applicable Swing Line Rate. The annual rate of interest agreed upon
from time to time by MGT and the Borrower with respect to Swing Line Loans.
Assignment and Acceptance. See Section 20.
Availability. As of any date of determination, the aggregate amount of
unused commitments of the lenders party to this Agreement and the 364 Day
Facility as of such date.
Balance Sheet Date. December 31, 1998.
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Banks. See Preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Administrative Agent at its Head Office as its "prime rate"
(it being understood that such rate is a reference rate and not necessarily the
lowest rate of interest charged by the Administrative Agent), or (b) one percent
(1%) above the Overnight Federal Funds Effective Rate.
Base Rate Loans. Syndicated Loans bearing interest calculated by
reference to the Base Rate.
BKB. See definition of "364-Day Facility".
BOA. See Preamble.
Borrower. See Preamble.
Business Day. Any day, other than a Saturday, Sunday or any day on
which banking institutions in New York, New York are authorized by law to close,
and, when used in connection with a Eurodollar Loan, a Eurodollar Business Day.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, 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.
CERCLA. See Section 6.15(a).
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 or the CAO. See Section 7.4(b).
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Commitment. With respect to each Bank, such Bank's commitment to make
Syndicated Loans to, and to participate in the issuance, extension and renewal
of Letters of Credit for the account of, the Borrower, determined by multiplying
such Bank's Commitment Percentage by the Total Commitment.
Commitment Percentage. With respect to each Bank, the percentage
initially set forth next to such Bank's name on Schedule 1 hereto, as the same
may be adjusted in accordance with Section 20.
Competitive Bid Loan(s). A borrowing hereunder consisting of one or
more loans made by any of the participating Banks whose offer to make a
Competitive Bid Loan as part of such borrowing has been accepted by the Borrower
under the auction bidding procedure described in Section 4 hereof.
<PAGE> 10
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Competitive Bid Loan Accounts. See Section 4.2(a).
Competitive Bid Margin. See Section 4.5(b)(iv).
Competitive Bid Notes. See Section 4.2(b).
Competitive Bid Quote. An offer by a Bank to make a Competitive Bid
Loan in accordance with Section 4.5 hereof.
Competitive Bid Quote Request. See Section 4.3.
Competitive Bid Rate. See Section 4.5(b)(v).
Compliance Certificate. See Section 7.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries consolidated in accordance with GAAP.
Consolidated Earnings Before Interest and Taxes, or EBIT. For any
period, the Consolidated Net Income (or Deficit) of the Borrower and its
Subsidiaries on a consolidated basis plus the sum of (1) interest expense, (2)
income taxes, and (3) $1,762,517,000 in charges, taken as a special charge in
respect of the Borrower's internal review in the fiscal quarter ending September
30, 1999, to the extent that each of items (1) through (3) was deducted, without
duplication, in determining Consolidated Net Income (or Deficit) in the relevant
period.
Consolidated Earnings Before Interest, Taxes, Depreciation and
Amortization or EBITDA. For any period, EBIT plus (a) depreciation expense, and
(b) amortization expense to the extent the same would be included in the
calculation of Consolidated Net Income (or Deficit) for such period, determined
in accordance with GAAP.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries on a consolidated basis, after
deduction of all expenses, taxes, and other proper charges, determined in
accordance with GAAP.
Consolidated Net Worth. The sum of the par value of the capital stock
(excluding treasury stock), capital in excess of par or stated value of shares
of capital stock, retained earnings (minus accumulated deficit) and any other
account which, in accordance with GAAP, constitute stockholders' equity, of the
Borrower and its Subsidiaries determined on a consolidated basis, excluding any
effect of foreign currency transaction computed pursuant to Financial Accounting
Standards Board Statement No. 52, as amended, supplemented or modified from time
to time, or otherwise in accordance with GAAP.
Consolidated Tangible Assets. Consolidated Total Assets less the sum
of:
(a) the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as goodwill, the
purchase price of acquired assets in excess of the
<PAGE> 11
5
fair market value thereof, trademarks, trade names, service marks,
customer lists, brand names, copyrights, patents and licenses, and
rights with respect to the foregoing; plus
(b) all amounts representing any write-up in the book value of
any assets of the Borrower or its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date.
Consolidated Total Assets. All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest expense required by GAAP to be paid or accrued during such
period on all Indebtedness of the Borrower and its Subsidiaries outstanding
during all or any part of such period, including capitalized interest expense
for such period.
364 Day Facility. That certain Amended and Restated Loan Agreement
dated as of December 15, 1999 by and among the Borrower, WMH as guarantor,
BankBoston, N.A. ("BKB"), BOA, Chase Bank of Texas, N.A., Deutsche and the other
banks party thereto, and BKB as administrative agent thereunder, Banc of America
Securities LLC and Chase Securities Inc. as joint lead arrangers and joint book
managers thereunder, BOA and Chase Securities Inc. as syndication agents
thereunder and Deutsche as documentation agent thereunder, as amended from time
to time.
Defaulting Bank. See Section 5.12.
Defaults. See Section 12.1.
Deutsche. Deutsche Bank AG, New York Branch, the duly licensed New York
branch of a German corporation having its principal place of business at 31 West
52nd Street, New York, New York 10019.
Disclosure Documents. The Borrower's financial statements referred to
in Section 6.4 and filings made by the Borrower or WMH with the Securities and
Exchange Commission that were publicly available prior to the Effective Date
which were provided to the Banks.
Disposal. See "Release".
Distribution. The declaration or payment of any dividend or other
return on equity 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 such returns 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.
<PAGE> 12
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Dollars or US$ or $ or U.S. Dollars. Dollars in lawful currency of the
United States of America.
Dome. Dome Merger Subsidiary, Inc., a Delaware corporation and wholly
owned Subsidiary of Borrower.
Domestic Strategic Dispositions. Any sale or other disposition of core
and non-core assets owned by the Borrower and its Subsidiaries formed under the
laws of the United States or any State thereof as more particularly described in
Schedule 1.1(a), as such Schedule 1.1(a) may be added to from time to time by
the Borrower with the approval of the Administrative Agent.
Drawdown Date. The date on which any Loan is made or is to be made, or
any amount is paid by an Issuing Bank under a Letter of Credit.
EBIT. See definition of Consolidated Earnings Before Interest and
Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization.
Effective Date. The date on which the conditions precedent set forth in
Section 10.1 hereof are satisfied and the Majority Banks consent to this
Agreement.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA or Applicable Canadian Pension Legislation maintained or
contributed to by the Borrower, any of its Subsidiaries, or any ERISA Affiliate,
other than a Multiemployer Plan.
Environmental Laws. See Section 6.15(a).
EPA. See Section 6.15(b).
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
the Borrower or any of its Subsidiaries under Section 414 of the Code.
ERISA Reportable Event. A reportable event within the meaning of
Section 4043 of ERISA and the regulations promulgated thereunder with respect to
a Guaranteed Pension Plan as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
<PAGE> 13
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Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.
Eurodollar Lending Office. Initially, the office of each Bank set forth
in the administrative materials provided to the Administrative Agent;
thereafter, upon notice to the Administrative Agent, such other office of such
Bank that shall be making or maintaining Eurodollar Loans.
Eurodollar Loans. Syndicated Loans bearing interest calculated by
reference to the Eurodollar Rate.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Loan, the rate of interest equal to (i) the arithmetic average of the rates per
annum for each Reference Bank at which such Reference Bank's Eurodollar Lending
Office is offered Dollar deposits at approximately 10:00 a.m. (New York time)
two (2) Eurodollar Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of such Reference
Bank to which such Interest Period applies, divided by (ii) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable (rounded upwards to the
nearest 1/16 of one percent).
European Credit Facilities. That certain Credit Agreement dated
November 26, 1998, providing for borrowings by Waste Management International
("International") and other foreign Subsidiaries of the Borrower, guaranteed by
the Borrower, in the amount of Euro 167,000,000, as amended; and that certain
Credit Agreement dated November 26, 1998, providing for borrowings by
International and other foreign subsidiaries, guaranteed by the Borrower, in the
amount of Euro 30,000,000, as amended.
European Strategic Dispositions. Any sale or other disposition of core
and non-core assets owned by any Subsidiary of the Borrower not formed under the
laws of the United States or any State thereof as more particularly described in
Schedule 1.1(b), as such Schedule 1.1(b) may be added to from time to time by
the Borrower with the approval of the Administrative Agent.
Events of Default. See Section 12.1.
Existing Credit Agreement. See Recitals.
Existing Domestic Bank Debt. The amount of Indebtedness outstanding
under this Agreement and the 364 Day Facility from time to time.
Facility Fee. See Section 2.2.
<PAGE> 14
8
generally accepted accounting principles or GAAP. (i) When used in
Section 9, 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 Borrower reflected in its 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 Borrower 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 Obligations. See Section 28.1.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower,
its Subsidiaries 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.
Guarantor(s). Sanifill and WMH, collectively, until the release of
Sanifill pursuant to Section 28.3 of this Agreement).
Hazardous Substances. See Section 6.15(b).
Head Office. The Administrative Agent's head office located in New
York, New York, or at such other location as the Administrative Agent may
designate from time to time.
Indebtedness. Collectively without duplication, whether classified as
Indebtedness, an Investment or otherwise on the obligor's balance sheet, (a) all
indebtedness for borrowed money, (b) all obligations for the deferred purchase
price 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, liabilities or indebtedness (contingent or otherwise) under surety,
performance bonds or any other bonding arrangements, (g) all Indebtedness of
others referred to in clauses (a) through (f) above which is guaranteed, or in
effect guaranteed, by such obligor 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
<PAGE> 15
9
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 (h) all Indebtedness referred to in clauses (a) through (g)
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; provided that if a Permitted
Receivables Transaction is outstanding and is accounted for as a sale of
accounts receivable under generally accepted accounting principles, Indebtedness
determined as aforesaid shall be adjusted to include the additional
Indebtedness, determined on a consolidated basis, which would have been
outstanding had such Permitted Receivables Transaction been accounted for as a
borrowing. The sum of all such Indebtedness of the Borrower and its Subsidiaries
on a consolidated basis under (a) through (h) above shall be referred to as
"Total Debt"; provided, however, that Indebtedness under (f) above shall be
included in such calculation only to the extent that a surety has been called
upon to make payment on a bond.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
Interest Period. With respect to each Loan (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in accordance with
this Agreement (i) for any Base Rate Loan or Swing Line Loan, the first day of
the month; (ii) for any Eurodollar Loan, 1, 2, 3, or 6 months; (iii) for any
Absolute Competitive Bid Loan, from 7 through 180 days; and (iv) for any LIBOR
Competitive Bid Loan, 1, 2, 3, 4, 5, or 6 months; and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the periods set
forth above, as selected by the Borrower in accordance with this Agreement or if
such period has no numerically corresponding day, on the last Business Day of
such period; provided that any Interest Period which would otherwise end on a
day which is not a Business Day shall be deemed to end on the next succeeding
Business Day; provided further that for any Interest Period for any Eurodollar
Loan or LIBOR Competitive Bid Loan, if such next succeeding Business Day falls
in the next succeeding calendar month, such Interest Period shall be deemed to
end on the next preceding Business Day; and provided further that no Interest
Period shall extend beyond the Maturity Date.
Interim Balance Sheet Date. September 30, 1999.
Investments. All expenditures made by a Person and all liabilities
incurred (contingently or otherwise) by a Person for the acquisition of stock
(other than the stock of wholly owned Subsidiaries), pre-payments for use of
landfill air space in excess of usual and customary industry practice, 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 other Person, including without
limitation, the funding of
<PAGE> 16
10
any captive insurance company (other than loans, advances, capital contributions
or transfers of property to any wholly owned Subsidiaries or guaranties with
respect to Indebtedness of wholly owned Subsidiaries). 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.
Issuance Fee. See Section 3.6.
Issuing Banks. The Bank(s) issuing Letters of Credit, which shall be
(a) MGT, BOA, BankBoston, N.A., Chase Bank of Texas, N.A. and Fleet Bank, N.A.
and (b) such other Banks as agreed to by the Borrower and the Administrative
Agent.
Letter of Credit Applications. Letter of credit applications in such
form as may be agreed upon by the Borrower and the Issuing Bank from time to
time which are entered into pursuant to Section 3 hereof, as such Letter of
Credit Applications are amended, varied or supplemented from time to time;
provided, however, in the event of any conflict or inconsistency between the
terms of any Letter of Credit Application and this Agreement, the terms of this
Agreement shall control.
Letter of Credit Fee. See Section 3.6.
Letter of Credit Participation. See Section 3.1(b).
Letters of Credit. Standby or direct-pay letters of credit issued or to
be issued by the Issuing Banks under Section 3 hereof for the account of the
Borrower.
LIBOR Competitive Bid Loan(s). See Section 4.3(a).
LIBOR Rate. For any Interest Period with respect to a LIBOR Competitive
Bid Loan, (a) the rate of interest equal to the rate determined by the
Administrative Agent at which Dollar deposits for such Interest Period are
offered based on information presented on Telerate Page 3750 as of 11:00 a.m.
(London time) two (2) Eurodollar Business Days prior to the first day of such
Interest Period, or (b) if such rate is not shown at such place, the rate of
interest equal to (i) the arithmetic average of the rates per annum for each
Reference Bank at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where the eurodollar
operations of such Eurodollar Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of such Reference Bank to which such
<PAGE> 17
11
Interest Period applies, divided by (ii) a number equal to 1.00 minus the
Eurocurrency Reserve Rate, if applicable (rounded upwards to the nearest 1/16 of
one percent).
Loan Documents. This Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit and any documents, instruments or agreements
executed in connection with any of the foregoing, each as amended, modified,
supplemented, or replaced from time to time.
Loans. Collectively, the Syndicated Loans, the Swing Line Loans and the
Competitive Bid Loans.
Majority Banks. The Banks with fifty-one percent (51%) of the Total
Commitment; provided that in the event that the Total Commitment has been
terminated, the Majority Banks shall be the Banks holding fifty-one percent
(51%) of the aggregate outstanding principal amount of the Obligations on such
date.
Material Subsidiary. Any Subsidiary which, at the time such
determination is made, (a) has assets, revenues, or liabilities equal to at
least $20,000,000, or (b) is the holder of or the applicant for a permit to
operate a solid waste facility pursuant to RCRA or any analogous state law.
Maturity Date. August 7, 2002.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit.
MGT. See Preamble.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower, any of its
Subsidiaries, or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale of any assets of the
Borrower or any of its Subsidiaries, the gross cash consideration received by
the Borrower or any of its Subsidiaries, net of (a) commissions, direct sales
costs, normal closing costs and adjustments, (b) the amount used to repay any
Indebtedness secured by such assets, (c) any amount which by the terms of such
sale, or by applicable law must be repaid out of the proceeds of such asset
sale, (d) all amounts to be provided by the seller as a reserve, in accordance
with GAAP, or retained in escrow with respect to any liabilities associated with
the assets disposed of in such asset sale, (e) income taxes attributable to such
sale, and (f) professional fees and expenses incurred directly or payable in
connection therewith; provided that if any consideration which would otherwise
constitute "Net Cash Proceeds" is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, such escrow
amount shall become "Net Cash Proceeds" only at such time as it is released from
escrow. For purposes of determining the amount of Net Cash Proceeds associated
with any asset sale which is in a currency other than U.S. Dollars, the Borrower
shall, for purposes of Section Section 8.4 and 8.5, calculate an equivalent
amount
<PAGE> 18
12
of such Net Cash Proceeds in U.S. Dollars by utilizing the conversion rates
published in the Wall Street Journal on the first Business Day of the week
during which such asset sale occurred.
New Lending Office. See Section 5.1(c).
Non-U.S. Bank. See Section 5.1(b).
Notes. Collectively, the Competitive Bid Notes, the Syndicated Notes,
and the Swing Line Note.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Administrative Agent 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 Notes, or any other instrument at any time evidencing any thereof
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.
Original Parties. See Recitals.
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, or if such rate is not published, the
average of the quotations at approximately 11:00 a.m. New York time for the day
of such transaction(s), received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. See Section 8.2.
Permitted Receivables Transaction. Any sale or sales of, and/or
securitization of, any accounts receivable of the Borrower and/or any of its
Subsidiaries (the "Receivables") pursuant to which (a) the Borrower and its
Subsidiaries realize aggregate net proceeds of not more than $500,000,000 at any
one time outstanding, including, without limitation, any revolving purchase(s)
of Receivables where the maximum aggregate uncollected purchase price (exclusive
of any deferred purchase price) for such Receivables at any time outstanding
does not exceed $500,000,000, and (b) which Receivables shall not be discounted
more than 25%.
Person. Any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated association, business, or other
legal entity, and any government or any governmental agency or political
subdivision thereof.
<PAGE> 19
13
Pricing Table:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
APPLICABLE
SENIOR PUBLIC APPLICABLE APPLICABLE EURODOLLAR
LEVEL DEBT RATING FACILITY RATE L/C RATE RATE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 (Greater than or equal to BBB by 0.2500% 1.0000% Eurodollar Rate
Standard & Poor's and greater than per annum per annum plus 1.0000%
or equal to Ba2 by Moody's) or per annum
(greater than or equal to BBB- by
Standard & Poor's and greater than
or equal to Ba1 by Moody's)
--------------------------------------------------------------------------------------------------------------
2 BBB- by Standard & Poor's and Ba2 by 0.3000% 1.2000% Eurodollar Rate
Moody's per annum per annum plus 1.2000%
per annum
--------------------------------------------------------------------------------------------------------------
3 (BB+ by Standard & Poor's and Ba1 or 0.3750% 1.3750% Eurodollar Rate
Ba2 by Moody's) or (BB by Standard & per annum per annum plus 1.3750%
Poor's and Ba1 by Moody's) per annum
--------------------------------------------------------------------------------------------------------------
4 BB by Standard & Poor's and Ba2 by 0.4000% 1.6000% Eurodollar Rate
Moody's per annum per annum plus 1.6000%
per annum
--------------------------------------------------------------------------------------------------------------
5 (Less than BB by Standard & Poor's 0.5000% 1.7500% Eurodollar Rate
or Ba2 by Moody's) or (Unrated by per annum per annum plus 1.7500%
Standard & Poor's and Moody's) per annum
--------------------------------------------------------------------------------------------------------------
</TABLE>
The applicable rates charged for any day shall be determined by the Senior
Public Debt Rating in effect as of that day.
RCRA. See Section 6.15(a).
Real Property. All real property heretofore, now, or hereafter owned,
operated, or leased by the Borrower or any of its Subsidiaries.
Reference Banks. BOA, Deutsche and MGT.
<PAGE> 20
14
Regulatory Disposition. The disposition of any assets of the Borrower
and its Subsidiaries required under antitrust laws in connection with the WMI
Merger.
Reimbursement Obligation. The Borrower's obligation to reimburse the
applicable Issuing Bank and the Banks on account of any drawing under any Letter
of Credit, all as provided in Section 3.2.
Release. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section Section 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. Section Section 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 Canada or a state, province, territory
or other political subdivision thereof wherein the property lies establish a
meaning for "Release" or "Disposal" which is broader than specified in either
CERCLA, or RCRA, such broader meaning shall apply to the Borrower's or any of
its Subsidiaries' activities in that state, province, territory or political
subdivision.
Replacement Bank. See Section 5.12.
Replacement Notice. See Section 5.12.
Sanifill. Sanifill, Inc., a Delaware corporation having its chief
executive office at 1001 Fannin Street, Suite 4000, Houston, Texas 77002.
Sanifill Convertible Subordinated Debt. Indebtedness under that certain
indenture dated as of March 1, 1996, by and between Sanifill and Chase Bank of
Texas (f/k/a Texas Commerce Bank National Association) as Trustee, as in effect
on August 7, 1997, with respect to $115,000,000 of 5% convertible subordinated
debt due March 1, 2006.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Senior Public Debt Rating. The ratings of the Borrower's public
unsecured long-term senior debt, without third party credit enhancement, issued
by Moody's and Standard & Poor's.
Standard & Poor's. Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
Strategic Dispositions. Domestic Strategic Dispositions and European
Strategic Dispositions.
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
<PAGE> 21
15
Subsidiaries at least a majority of the outstanding capital stock or other
interest entitled to vote generally.
Swing Line Loans. See Section 2.11(a).
Swing Line Note. See Section 2.11(a).
Swing Line Settlement. The making or receiving of payments, in
immediately available funds, by the Banks to or from the Administrative Agent in
accordance with Section 2.11 hereof to the extent necessary to cause each Bank's
actual share of the outstanding amount of the Syndicated Loans to be equal to
such Bank's Commitment Percentage of the outstanding amount of such Syndicated
Loans, in any case when, prior to such action, the actual share is not so equal.
Swing Line Settlement Amount. See Section 2.11(b).
Swing Line Settlement Date. See Section 2.11(b).
Swing Line Settling Bank. See Section 2.11(b).
Syndicated Loan Request. See Section 2.6(a).
Syndicated Loans. A borrowing hereunder consisting of one or more loans
made by the Banks to the Borrower under the procedure described in Section
2.1(a) and Section 2.11 hereof.
Syndicated Notes. See Section 2.4(a).
Terminated Plans. The Waste Management, Inc. Pension Plan and The Waste
Management of Alameda County, Inc. Retirement Plan.
Total Commitment. $2,000,000,000, as such amount may be reduced
pursuant to Section 2.3 hereof, or, if such Total Commitment has been terminated
pursuant to Section 2.3 or Section 12.2 hereof, zero.
WMH. Waste Management Holdings, Inc. (f/k/a Waste Management, Inc.), a
wholly owned subsidiary of the Borrower.
WMI Merger. The merger of Dome into WMH pursuant to the WMI Merger
Agreement, on or about July 16, 1998, with WMH having become the surviving
corporation and having become a wholly owned subsidiary of the Borrower and with
WMH having changed its name to Waste Management Holdings, Inc.
WMI Merger Agreement. The Agreement and Plan of Merger, dated as of
March 10, 1998, among the Borrower, Dome and WMH.
Year 2000 Compliance Issue. The risk that computer applications used by
the Borrower or any of its Subsidiaries may be unable to recognize and perform
properly date-sensitive functions involving certain dates prior to and any date
after December 31, 1999.
SECTION 1.2. RULES OF INTERPRETATION.
<PAGE> 22
16
(a) Unless otherwise noted, a reference to any document or
agreement (including this 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 State of New York, have the
meanings assigned to them therein.
(h) Reference to a particular "Section " 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.
SECTION 2. THE LOAN FACILITIES.
SECTION 2.1. COMMITMENT TO LEND.
(a) Subject to the terms and conditions set forth in this
Agreement, each of the Banks severally agrees to lend to the Borrower
and the Borrower may borrow, repay, and reborrow from time to time
between the Effective Date and the Maturity Date, upon notice by the
Borrower to the Administrative Agent given in accordance with this
Section 2, its Commitment Percentage of the Syndicated Loans as are
requested by the Borrower; provided that the sum of the outstanding
principal amount of the Syndicated Loans (including the Swing Line
Loans) and the Maximum Drawing Amount of outstanding Letters of Credit
shall not exceed the Total Commitment minus the aggregate amount of
Competitive Bid Loans outstanding at such time.
(b) Each request for a Loan or Letter of Credit hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 10 and Section 11, as the case may be,
have been satisfied on the date of such request. Any unpaid
Reimbursement Obligation shall be a Base Rate Loan, as set forth in
Section 3.2(a).
<PAGE> 23
17
SECTION 2.2. FACILITY FEE. The Borrower agrees to pay to the
Administrative Agent for the account of the Banks a fee (the "Facility Fee") on
the Total Commitment equal to the Applicable Facility Rate multiplied by the
Total Commitment. The Facility Fee shall be payable for the period from and
after the Effective Date quarterly in arrears on the first day of each calendar
quarter for the immediately preceding calendar quarter with the first such
payment commencing on January 1, 2000 and with a final payment on the Maturity
Date (or on the date of termination in full of the Total Commitment, if
earlier). The Facility Fee shall be distributed pro rata among the Banks in
accordance with each Bank's Commitment Percentage.
SECTION 2.3. REDUCTION OF TOTAL COMMITMENT.
(a) The Borrower shall have the right at any time and from
time to time upon three (3) Business Days' prior written notice to the
Administrative Agent to reduce by $25,000,000 or a greater amount or
terminate entirely, the Total Commitment, whereupon each Bank's
Commitment shall be reduced pro rata in accordance with such Bank's
Commitment Percentage of the amount specified in such notice or, as the
case may be, terminated provided that at no time may (i) the Total
Commitment be reduced to an amount less than the sum of (A) the Maximum
Drawing Amount of all Letters of Credit, and (B) all Loans then
outstanding.
(b) The Total Commitment shall be automatically reduced as
required pursuant to Section Section 8.4(c) and (d), whereupon each
Bank's Commitment shall be reduced pro rata in accordance with such
Bank's Commitment Percentage of the amount terminated.
(c) No reduction or termination of the Total Commitment once
made may be revoked; the portion of the Total Commitment reduced or
terminated may not be reinstated; and amounts in respect of such
reduced or terminated portion may not be reborrowed.
(d) The Administrative Agent will notify the Banks promptly
after receiving any notice delivered by the Borrower pursuant to this
Section 2.3 and will distribute to each Bank a revised Schedule 1 to
this Agreement.
SECTION 2.4. THE SYNDICATED NOTES.
(a) The Syndicated Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A
hereto (each, a "Syndicated Note"), dated as of the Effective Date (or
such later date at which a Bank becomes a party hereto pursuant to
Section 20) and completed with appropriate insertions. One Syndicated
Note shall be payable to the order of each Bank in an amount equal to
its maximum Commitment, and shall represent the obligation of the
Borrower to pay such Bank such principal amount or, if less, the
outstanding principal amount of all Syndicated Loans made by such Bank,
plus interest accrued thereon, as set forth herein.
(b) The Borrower irrevocably authorizes each Bank to make, or
cause to be made, in connection with a Drawdown Date of any Syndicated
Loan and at the time of receipt of any payment of principal on its
Syndicated Note, an appropriate notation on
<PAGE> 24
18
such Bank's records or on the schedule attached to such Bank's
Syndicated Note or a continuation of such schedule attached thereto
reflecting the making of such Loan, or the receipt of such payment (as
the case may be) and each Bank may, prior to any transfer of its
Syndicated Note endorse on the reverse side thereof the outstanding
principal amount of such Loans evidenced thereby. The outstanding
amount of the Loans set forth on such Bank's records shall be prima
facie evidence of the principal amount thereof owing and unpaid to such
Bank, but the failure to record, or any error in so recording, any such
amount shall not limit or otherwise affect the obligations of the
Borrower hereunder or under such Notes to make payments of principal of
or interest on any such Notes when due.
SECTION 2.5. INTEREST ON LOANS.
(a) The outstanding principal amount of the Syndicated Loans
shall bear interest at the rate per annum equal to (i) the Base Rate on
Base Rate Loans, (ii) the Applicable Eurodollar Rate on Eurodollar
Loans and (iii) the Applicable Swing Line Rate on Swing Line Loans.
(b) Interest shall be payable (i) monthly in arrears on the
first Business Day of each month, with the first such payment
commencing January 1, 2000, on Base Rate Loans, (ii) on the last day of
the applicable Interest Period, and if such Interest Period is longer
than three months, also on the last day of each three month period
following the commencement of such Interest Period, on Eurodollar
Loans, and (iii) on the Maturity Date for all Loans.
SECTION 2.6. REQUESTS FOR SYNDICATED LOANS.
(a) The Borrower shall give to the Administrative Agent
written notice in the form of Exhibit D hereto (or telephonic notice confirmed
in writing or a facsimile in the form of Exhibit D hereto) of each Syndicated
Loan requested hereunder (a "Syndicated Loan Request") not later than (a) 11:00
a.m. (New York time) on the proposed Drawdown Date of any Base Rate Loan, or (b)
11:00 a.m. (New York time) three (3) Eurodollar Business Days prior to the
proposed Drawdown Date of any Eurodollar Loan. Each such Syndicated Loan Request
shall specify (A) the principal amount of the Syndicated Loan requested, (B) the
proposed Drawdown Date of such Syndicated Loan, (C) whether such Syndicated Loan
requested is to be a Base Rate Loan or a Eurodollar Loan, and (D) the Interest
Period for such Syndicated Loan, if a Eurodollar Loan. Each Syndicated Loan
requested shall be in a minimum amount of $10,000,000. Each such Syndicated Loan
Request shall reflect the Maximum Drawing Amount of all Letters of Credit
outstanding and the amount of all Loans outstanding (including Competitive Bid
Loans and Swing Line Loans). Syndicated Loan Requests made hereunder shall be
irrevocable and binding on the Borrower, and shall obligate the Borrower to
accept the Syndicated Loan requested from the Banks on the proposed Drawdown
Date.
(b) Each of the representations and warranties made by the Borrower to
the Banks or the Administrative Agent 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 by the Borrower on
and as of the date of the submission of a Syndicated
<PAGE> 25
19
Loan Request, Competitive Bid Quote Request, or Letter of Credit Application and
on and as of the Drawdown Date of any Loan or the date of issuance of any 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 the Borrower and its Subsidiaries as a whole, or (iii) that such
representations and warranties expressly relate only to an earlier date).
(c) The Administrative Agent shall promptly notify each Bank of each
Syndicated Loan Request received by the Administrative Agent (i) on the proposed
Drawdown Date of any Base Rate Loan, or (ii) three (3) Eurodollar Business Days
prior to the proposed Drawdown Date of any Eurodollar Loan.
SECTION 2.7. ELECTION OF EURODOLLAR RATE; NOTICE OF ELECTION; INTEREST
PERIODS; MINIMUM AMOUNTS.
(a) At the Borrower's option, so long as no Default or Event
of Default has occurred and is then continuing, the Borrower may (i)
elect to convert any Base Rate Loan or a portion thereof to a
Eurodollar Loan, (ii) at the time of any Syndicated Loan Request,
specify that such requested Loan shall be a Eurodollar Loan, or (iii)
upon expiration of the applicable Interest Period, elect to maintain an
existing Eurodollar Loan as such, provided that the Borrower give
notice to the Administrative Agent pursuant to Section 2.7(b) hereof.
Upon determining any Eurodollar Rate, the Administrative Agent shall
forthwith provide notice thereof to the Borrower and the Banks, and
each such notice to the Borrower shall be considered prima facie
correct and binding, absent manifest error.
(b) Three (3) Eurodollar Business Days prior to the making of
any Eurodollar Loan or the conversion of any Base Rate Loan to a
Eurodollar Loan, or, in the case of an outstanding Eurodollar Loan, the
expiration date of the applicable Interest Period, the Borrower shall
give written, telex or facsimile notice (or telephonic notice promptly
confirmed in a writing or a facsimile) received by the Administrative
Agent not later than 11:00 a.m. (New York time) of its election
pursuant to Section 2.7(a). Each such notice delivered to the
Administrative Agent shall specify the aggregate principal amount of
the Syndicated Loans to be borrowed or maintained as or converted to
Eurodollar Loans and the requested duration of the Interest Period that
will be applicable to such Eurodollar Loan, and shall be irrevocable
and binding upon the Borrower. If the Borrower shall fail to give the
Administrative Agent notice of its election hereunder together with all
of the other information required by this Section 2.7(b) with respect
to any Syndicated Loan, whether at the end of an Interest Period or
otherwise, such Syndicated Loan shall be deemed a Base Rate Loan. The
Administrative Agent shall promptly notify the Banks in writing (or by
telephone confirmed in writing or by facsimile) of such election.
(c) Notwithstanding anything herein to the contrary, the
Borrower may not specify an Interest Period that would extend beyond
the Maturity Date.
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20
(d) No conversion of Loans pursuant to this Section 2.7 may
result in Eurodollar Loans that are less than $5,000,000. In no event
shall the Borrower have more than eight (8) different Interest Periods
for borrowings of Eurodollar Loans outstanding at any time.
(e) Subject to the terms and conditions of Section 5.8 hereof,
if any Affected Bank demands compensation under Section 5.5(c) or (d)
with respect to any Eurodollar Loan, the Borrower may at any time, upon
at least three (3) Business Days' prior written notice to the
applicable Administrative Agent, elect to convert such Eurodollar Loan
into a Base Rate Loan (on which interest and principal shall be payable
contemporaneously with the related Eurodollar Loans of the other
Banks). Thereafter, and until such time as the Affected Bank notifies
the Administrative Agent that the circumstances giving rise to the
demand for compensation under Section 5.5(c) or (d) no longer exist,
all requests for Eurodollar Loans from such Affected Bank shall be
deemed to be requests for Base Rate Loans. Once the Affected Bank
notifies the Administrative Agent that such circumstances no longer
exist, the Borrower may elect that the principal amount of each such
Loan converted hereunder shall again bear interest as Eurodollar Loans
beginning on the first day of the next succeeding Interest Period
applicable to the related Eurodollar Loans of the other Banks.
SECTION 2.8. FUNDS FOR SYNDICATED LOANS. Not later than 1:00 p.m. (New
York time) on the proposed Drawdown Date of Syndicated Loans, each of the Banks
will make available to the Administrative Agent at its Head Office, in
immediately available funds, the amount of its Commitment Percentage of the
amount of the requested Loan. Upon receipt from each Bank of such amount, and
upon receipt of the documents required by Section 10 and Section 11 and the
satisfaction of the other conditions set forth therein, the Administrative Agent
will make available to the Borrower the aggregate amount of such Syndicated
Loans made available by the Banks. The failure or refusal of any Bank to make
available to the Administrative Agent at the aforesaid time and place on any
Drawdown Date the amount of its Commitment Percentage of the requested
Syndicated Loan shall not relieve any other Bank from its several obligations
hereunder to make available to the Administrative Agent the amount of such
Bank's Commitment Percentage of the requested Loan.
SECTION 2.9. MATURITY OF THE LOANS AND REIMBURSEMENT OBLIGATIONS. The
Borrower promises to pay on the Maturity Date, and there shall become absolutely
due and payable on the Maturity Date, all of the Loans and 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.
SECTION 2.10. OPTIONAL PREPAYMENTS OR REPAYMENTS OF LOANS. Subject to
the terms and conditions of Section 5.8, the Borrower shall have the right, at
its 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 Borrower shall give the
Administrative Agent no later than 11:00 a.m. (New York time) (a) on the
proposed date of prepayment or repayment of Base Rate Loans and (b) three (3)
Business Day prior to the proposed date of prepayment or repayment of all other
Loans, written notice (or telephonic notice confirmed in writing or by
facsimile) of any proposed prepayment or repayment pursuant to this Section
2.10, specifying the proposed date of prepayment or repayment of
<PAGE> 27
21
Loans and the principal amount to be paid. Notwithstanding the foregoing, the
Borrower may not prepay any Competitive Bid Loans. The Administrative Agent
shall promptly notify each Bank by written notice (or telephonic notice
confirmed in writing or by facsimile) of such notice of payment.
SECTION 2.11. SWING LINE LOANS; SETTLEMENTS.
(a) Solely for ease of administration of the Syndicated Loans,
MGT may, but shall not be required to, fund Base Rate Loans made in
accordance with the provisions of this Agreement ("Swing Line Loans").
The Swing Line Loans shall be evidenced by a promissory note of the
Borrower in substantially the form of Exhibit B hereto (the "Swing Line
Note") and, at the discretion of MGT may be in amounts less than
$10,000,000 provided that the outstanding amount of Swing Line Loans
advanced by MGT hereunder shall not exceed $10,000,000 at any time.
Each Bank shall remain severally and unconditionally liable to fund its
pro rata share (based upon each Bank's Commitment Percentage) of such
Swing Line Loans on each Swing Line Settlement Date and, in the event
MGT chooses not to fund all Base Rate Loans requested on any date, to
fund its Commitment Percentage of the Base Rate Loans requested,
subject to satisfaction of the provisions hereof relating to the making
of Base Rate Loans. Prior to each Swing Line Settlement, all payments
or repayments of the principal of, and interest on, Swing Line Loans
shall be credited to the account of MGT.
(b) The Banks shall effect Swing Line Settlements on (i) the
Business Day immediately following any day which MGT gives written
notice to the Administrative Agent to effect a Swing Line Settlement,
(ii) the Business Day immediately following the Administrative Agent's
becoming aware of the existence of any Default or Event of Default and
(iii) the Maturity Date (each such date, a "Swing Line Settlement
Date"). One (1) Business Day prior to each such Swing Line Settlement
Date, the Administrative Agent shall give telephonic notice to the
Banks of (A) the respective outstanding amount of Syndicated Loans made
by each Bank as at the close of business on the prior day, (B) the
amount that any Bank, as applicable (a "Swing Line Settling Bank"),
shall pay to effect a Swing Line Settlement (a "Swing Line Settlement
Amount") and (C) the portion (if any) of the aggregate Swing Line
Settlement Amount to be paid to each Bank. A statement of the
Administrative Agent submitted to the Banks with respect to any amounts
owing hereunder shall be prima facie evidence of the amount due and
owing. Each Swing Line Settling Bank shall, not later than 1:00 p.m.
(New York time) on each Swing Line Settlement Date, effect a wire
transfer of immediately available funds to the Administrative Agent at
its Head Office in the amount of such Bank's Swing Line Settlement
Amount. The Administrative Agent shall, as promptly as practicable
during normal business hours on each Swing Line Settlement Date, effect
a wire transfer of immediately available funds to each Bank of the
Swing Line Settlement Amount to be paid to such Bank. All funds
advanced by any Bank as a Swing Line Settling Bank pursuant to this
Section 2.11(b) shall for all purposes be treated as a Base Rate Loan
made by such Swing Line Settling Bank to the Borrower, and all funds
received by any Bank pursuant to this Section 2.11(b) shall for all
purposes be treated as repayment of amounts owed by the Borrower with
respect to Base Rate Loans made by such Bank.
<PAGE> 28
22
(c) The Administrative Agent may (unless notified to the
contrary by any Swing Line Settling Bank by 12:00 noon (New York time)
one (1) Business Day prior to the Settlement Date) assume that each
Swing Line Settling Bank has made available (or will make available by
the time specified in Section 2.11(b)) to the Administrative Agent its
Swing Line Settlement Amount, and the Administrative Agent may (but
shall not be required to), in reliance upon such assumption, make
available to each applicable Bank its share (if any) of the aggregate
Swing Line Settlement Amount. If the Swing Line Settlement Amount of
such Swing Line Settling Bank is made available to the Administrative
Agent by such Swing Line Settling Bank on a date after such Swing Line
Settlement Date, such Swing Line Settling Bank shall pay the
Administrative Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below,
of the weighted average annual interest rate paid by the Administrative
Agent for federal funds acquired by the Administrative Agent during
each day included in such period times (ii) such Swing Line Settlement
Amount times (iii) a fraction, the numerator of which is the number of
days that elapse from and including such Swing Line Settlement Date to
but not including the date on which such Swing Line Settlement Amount
shall become immediately available to the Administrative Agent, and the
denominator of which is 365. Upon payment of such amount such Swing
Line Settling Bank shall be deemed to have delivered its Swing Line
Settlement Amount on the Swing Line Settlement Date and shall become
entitled to interest payable by the Borrower with respect to such Swing
Line Settling Bank's Swing Line Settlement Amount as if such share were
delivered on the Swing Line Settlement Date. If such Swing Line
Settlement Amount is not in fact made available to the Administrative
Agent by such Swing Line Settling Bank within three (3) Business Days
of such Swing Line Settlement Date, the Administrative Agent shall be
entitled to recover such amount from the Borrower, with interest
thereon at the Base Rate.
(d) After any Swing Line Settlement Date, any payment by the
Borrower of Swing Line Loans hereunder shall be allocated among the
Banks, in amounts determined so as to provide that after such
application and the related Swing Line Settlement, the outstanding
amount of Syndicated Loans of each Bank equals, as nearly as
practicable, such Bank's Commitment Percentage of the aggregate amount
of Syndicated Loans.
SECTION 3. LETTERS OF CREDIT.
SECTION 3.1. LETTER OF CREDIT COMMITMENTS.
(a) Subject to the terms and conditions hereof and the receipt
of a Letter of Credit Application by an Issuing Bank, with a copy to
the Administrative Agent reflecting the Maximum Drawing Amount of all
Letters of Credit (including the requested Letter of Credit), such
Issuing Bank, on behalf of the Banks and in reliance upon the
representations and warranties of the Borrower contained herein and the
agreement of the Banks contained in Section 3.1(b) hereof, agrees to
issue Letters of Credit for the account of the Borrower (which may,
with such Issuing Bank's consent, incorporate automatic renewals for
periods of up to twelve (12) months), in such form as may be requested
from time to time by the Borrower and agreed to by the Issuing Bank;
<PAGE> 29
23
provided, however, that, after giving effect to such request, the
aggregate Maximum Drawing Amount of all Letters of Credit issued at any
time shall not exceed the Total Commitment minus the aggregate
outstanding amount of the Loans and provided further, that no Letter of
Credit shall have an expiration date later than the earlier of (i)
eighteen (18) months after the date of issuance (which may incorporate
automatic renewals for periods of up to twelve (12) months), or (ii)
five (5) Business Days prior to the Maturity Date. The letters of
credit listed in Schedule 3.1(a) issued by Issuing Banks under the
Existing Credit Agreement shall be Letters of Credit under this
Agreement.
(b) Each Letter of Credit shall be denominated in Dollars.
Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default, the
termination of the Total Commitment pursuant to Section 12.2, or any
other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage to reimburse the Issuing Bank on demand for the
amount of each draft paid by the Issuing Bank under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to Section 3.2 (such agreement for a Bank being called herein
the "Letter of Credit Participation" of such Bank). Each Bank agrees
that its obligation to reimburse the Issuing Bank pursuant to this
Section 3.1(b) shall not be affected in any way by any circumstance
other than the gross negligence or willful misconduct of the Issuing
Bank.
(c) Each such reimbursement payment made by a Bank to the
Issuing Bank shall be treated as the purchase by such Bank of a
participating interest in the applicable Reimbursement Obligation under
Section 3.2 in an amount equal to such payment. Each Bank shall share
in accordance with its participating interest in any interest which
accrues pursuant to Section 3.2.
SECTION 3.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to
induce the Issuing Banks to issue, extend and renew each Letter of Credit, the
Borrower hereby agrees to reimburse or pay to each Issuing Bank, with respect to
each Letter of Credit issued, extended or renewed by such Issuing Bank hereunder
as follows:
(a) if any draft presented under any Letter of Credit is
honored by such Issuing Bank or such Issuing Bank otherwise makes
payment with respect thereto, the sum of (i) the amount paid by such
Issuing Bank 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 such Issuing Bank in connection with any payment
made by such Issuing Bank under, or with respect to, such Letter of
Credit, provided however, if the Borrower does not reimburse such
Issuing Bank on the Drawdown Date, such amount shall, provided that no
Event of Default under Section Section 12.1(g) or 12.1(h) has occurred,
become automatically a Syndicated Loan which is a Base Rate Loan
advanced hereunder in an amount equal to such sum; and
(b) upon the Maturity Date or the acceleration of the
Reimbursement Obligations with respect to all Letters of Credit in
accordance with Section 12, an amount equal to the then Maximum Drawing
Amount of all Letters of Credit shall be paid by the
<PAGE> 30
24
Borrower to the Administrative Agent to be held as cash collateral for
the applicable Reimbursement Obligations.
SECTION 3.3. OBLIGATIONS ABSOLUTE. The Borrower's respective
obligations under this Section 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 Borrower may have or have had against any Issuing
Bank, any Bank or any beneficiary of a Letter of Credit, and the Borrower
expressly waives any such rights that it may have with respect thereto. The
Borrower further agrees with each Issuing Bank and the Banks that such Issuing
Bank and the Banks (i) shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 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 (unless due to the willful misconduct of
such Issuing Bank or any other Bank), or any dispute between or among the
Borrower and 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 Borrower against the beneficiary of any
Letter of Credit or any such transferee, and (ii) shall not be liable 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 except to the extent of their own willful misconduct. The Borrower agrees
that any action taken or omitted by any Issuing Bank or any Bank in good faith
under or in connection with any Letter of Credit and the related drafts and
documents shall be binding upon the Borrower and shall not result in any
liability on the part of such Issuing Bank or any Bank (or their respective
affiliates) to the Borrower. Nothing herein shall constitute a waiver by the
Borrower of any of its rights against any beneficiary of a Letter of Credit.
SECTION 3.4. RELIANCE BY THE ISSUING BANKS. To the extent not
inconsistent with Section 3.3, each Issuing Bank 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, facsimile, telex or teletype message, statement, order or other
document believed by such Issuing Bank in good faith 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 such Issuing Bank.
SECTION 3.5. NOTICE REGARDING LETTERS OF CREDIT. One (1) Business Day
prior to the issuance of any Letter of Credit or amendments, extensions or
terminations thereof, the applicable Issuing Bank shall notify the
Administrative Agent of the terms of such Letter of Credit, amendment, extension
or termination. On the day of any drawing under any Letter of Credit, such
Issuing Bank shall notify the Administrative Agent of such drawing under any
Letter of Credit.
SECTION 3.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (the
"Letter of Credit Fee") equal to the Applicable L/C Rate on the Maximum Drawing
Amount of the Letters of Credit to the Administrative Agent for the account of
the Banks, to be shared pro rata by the Banks in accordance with their
respective Commitment Percentages. The Letter of Credit Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the quarter
just ended, with the first such payment commencing January 1, 2000, and on the
Maturity Date. In addition,
<PAGE> 31
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an issuing fee (the "Issuance Fee") with respect to each Letter of Credit to be
agreed upon annually between the Borrower and each Issuing Bank shall be payable
to such Issuing Bank for its account.
SECTION 4. COMPETITIVE BID LOANS.
SECTION 4.1. THE COMPETITIVE BID OPTION. In addition to the Syndicated
Loans made pursuant to Section 2 hereof, the Borrower may request Competitive
Bid Loans pursuant to the terms of this Section 4. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept such offers in the manner set forth in this Section 4.
Notwithstanding any other provision herein to the contrary, at no time shall the
aggregate principal amount of Competitive Bid Loans outstanding at any time
exceed the Total Commitment minus the sum of (a) the aggregate outstanding
principal amount of Syndicated Loans (including the Swing Loans), plus (b) the
Maximum Drawing Amount of Letters of Credit, outstanding at such time.
SECTION 4.2. COMPETITIVE BID LOAN ACCOUNTS: COMPETITIVE BID NOTES.
(a) The obligation of the Borrower to repay the outstanding
principal amount of any and all Competitive Bid Loans, plus interest at
the applicable rate accrued thereon, shall be evidenced by this
Agreement and by individual loan accounts (the "Competitive Bid Loan
Accounts" and individually, a "Competitive Bid Loan Account")
maintained by the Administrative Agent on its books for each of the
Banks, it being the intention of the parties hereto that, except as
provided for in paragraph (b) of this Section 4.2, the Borrower's
obligations with respect to Competitive Bid Loans are to be evidenced
only as stated herein and not by separate promissory notes.
(b) Any Bank may at any time, and from time to time, request
that any Competitive Bid Loans outstanding to such Bank be evidenced by
a promissory note of the Borrower in substantially the form of Exhibit
C hereto (each, a "Competitive Bid Note"), dated as of the Effective
Date and completed with appropriate insertions. One Competitive Bid
Note shall be payable to the order of each Bank in an amount equal to
the Total Commitment, and representing the obligation of the Borrower
to pay such Bank such principal amount or, if less, the outstanding
principal amount of any and all Competitive Bid Loans made by such
Bank, plus interest at the applicable Competitive Bid Rate or
Competitive Bid Margin accrued thereon, as set forth herein. Upon
execution and delivery by the Borrower of a Competitive Bid Note, the
Borrower's obligation to repay any and all Competitive Bid Loans made
to it by such Bank and all interest thereon shall thereafter be
evidenced by such Competitive Bid Note.
(c) The Borrower irrevocably authorizes (i) each Bank to make
or cause to be made, in connection with a Drawdown Date of any
Competitive Bid Loan or at the time of receipt of any payment of
principal on such Bank's Competitive Bid Note in the case of a
Competitive Bid Note, and (ii) the Administrative Agent to make or
cause to be made, in connection with a Drawdown Date of any Competitive
Bid Loan or at the time of receipt of any payment of principal on such
Bank's Competitive Bid Loan Account in the case of a Competitive Bid
Loan Account, an appropriate notation on such Bank's
<PAGE> 32
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records or on the schedule attached to such Bank's Competitive Bid Note
or a continuation of such schedule attached thereto, or the
Administrative Agent's records, as applicable, reflecting the making of
the Competitive Bid Loan or the receipt of such payment (as the case
may be) and such Bank may, prior to any transfer of a Competitive Bid
Note, endorse on the reverse side thereof the outstanding principal
amount of Competitive Bid Loans evidenced thereby. The outstanding
amount of the Competitive Bid Loans set forth on such Bank's record or
the Administrative Agent's records, as applicable, shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank,
but the failure to record, or any error in so recording, any such
amount shall not limit or otherwise affect the obligations of the
Borrower hereunder to make payments of principal of or interest on any
Competitive Bid Loan when due.
SECTION 4.3. COMPETITIVE BID QUOTE REQUEST; INVITATION FOR COMPETITIVE
BID QUOTES.
(a) When the Borrower wishes to request offers to make
Competitive Bid Loans under this Section 4, it shall transmit to the
Administrative Agent by telex or facsimile a Competitive Bid Quote
Request substantially in the form of Exhibit H hereto (a "Competitive
Bid Quote Request") so as to be received no later than 1:00 p.m. (New
York time) (x) five (5) Eurodollar Business Days prior to the requested
Drawdown Date in the case of a LIBOR Competitive Bid Loan (a "LIBOR
Competitive Bid Loan") or (y) one (1) Business Day prior to the
requested Drawdown Date in the case of an Absolute Competitive Bid Loan
(an "Absolute Competitive Bid Loan"), specifying:
(i) the requested Drawdown Date (which must be a
Eurodollar Business Day in the case of a LIBOR Competitive Bid
Loan or a Business Day in the case of an Absolute Competitive
Bid Loan);
(ii) the aggregate amount of such Competitive Bid
Loans, which shall be $10,000,000 or larger multiple of
$1,000,000;
(iii) the duration of the Interest Period(s)
applicable thereto, subject to the provisions of the
definition of Interest Period; and
(iv) whether the Competitive Bid Quotes requested are
for LIBOR Competitive Bid Loans or Absolute Competitive Bid
Loans.
The Borrower may request offers to make Competitive Bid Loans for more
than one Interest Period in a single Competitive Bid Quote Request. No
new Competitive Bid Quote Request shall be given until the Borrower has
notified the Administrative Agent of its acceptance or non-acceptance
of the Competitive Bid Quotes relating to any outstanding Competitive
Bid Quote Request.
(b) Promptly upon receipt of a Competitive Bid Quote Request,
the Administrative Agent shall send to the Banks by telecopy or
facsimile transmission an Invitation for Competitive Bid Quotes
substantially in the form of Exhibit I hereto, which shall constitute
an invitation by the Borrower to each Bank to submit Competitive Bid
Quotes in accordance with this Section 4.
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SECTION 4.4. ALTERNATIVE MANNER OF PROCEDURE. If, after receipt by the
Administrative Agent and each of the Banks of a Competitive Bid Quote Request
from the Borrower in accordance with Section 4.3, the Administrative Agent or
any Bank shall be unable to complete any procedure of the auction process
described in Section Section 4.5 through 4.6 (inclusive) due to the inability of
such Person to transmit or receive communications through the means specified
therein, such Person may rely on telephonic notice for the transmission or
receipt of such communications. In any case where such Person shall rely on
telephone transmission or receipt, any communication made by telephone shall, as
soon as possible thereafter, be followed by written confirmation thereof.
SECTION 4.5. SUBMISSION AND CONTENTS OF COMPETITIVE BID QUOTES.
(a) Each Bank may, but shall be under no obligation to, submit
a Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Competitive Bid Quote Request.
Each Competitive Bid Quote must comply with the requirements of this
Section 4.5 and must be submitted to the Administrative Agent by telex
or facsimile transmission at its offices as specified in or pursuant to
Section 22 not later than (x) 2:00 p.m. (New York time) on the fourth
Eurodollar Business Day prior to the proposed Drawdown Date, in the
case of a LIBOR Competitive Bid Loan or (y) 10:00 a.m. (New York time)
on the proposed Drawdown Date, in the case of an Absolute Competitive
Bid Loan, provided that Competitive Bid Quotes may be submitted by the
Administrative Agent in its capacity as a Bank only if it submits its
Competitive Bid Quote to the Borrower not later than (x) one hour prior
to the deadline for the other Banks, in the case of a LIBOR Competitive
Bid Loan or (y) 15 minutes prior to the deadline for the other Banks,
in the case of an Absolute Competitive Bid Loan. Subject to the
provisions of Section Section 10 and 11 hereof, any Competitive Bid
Quote so made shall be irrevocable except with the written consent of
the Administrative Agent given on the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the
form of Exhibit J hereto and shall in any case specify:
(i) the proposed Drawdown Date;
(ii) the principal amount of the Competitive Bid Loan
for which each proposal is being made, which principal amount
(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the aggregate principal amount
of Competitive Bid Loans for which offers were requested and
(z) may be subject to an aggregate limitation as to the
principal amount of Competitive Bid Loans for which offers
being made by such quoting Bank may be accepted;
(iii) the Interest Period(s) for which Competitive
Bid Quotes are being submitted;
(iv) in the case of a LIBOR Competitive Bid Loan, the
margin above or below the applicable LIBOR Rate (the
"Competitive Bid Margin") offered for
<PAGE> 34
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each such Competitive Bid Loan, expressed as a percentage
(specified to the nearest 1/10,000th of 1%) to be added to or
subtracted from such LIBOR Rate;
(v) in the case of an Absolute Competitive Bid Loan,
the rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Competitive Bid Rate") offered for
each such Absolute Competitive Bid Loan; and
(vi) the identity of the quoting Bank.
A Competitive Bid Quote may include up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bid Quotes.
(c) Any Competitive Bid Quote shall be disregarded if it:
(i) is not substantially in the form of Exhibit J
hereto;
(ii) contains qualifying, conditional or similar
language;
(iii) proposes terms other than or in addition to
those set forth in the applicable Invitation for Competitive
Bid Quotes; or
(iv) arrives after the time set forth in Section
4.5(a) hereof.
SECTION 4.6. NOTICE TO BORROWER. The Administrative Agent shall
promptly notify the Borrower of the terms (x) of any Competitive Bid Quote
submitted by a Bank that is in accordance with Section 4.5 and (y) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Bank with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Administrative Agent unless such subsequent Competitive
Bid Quote is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Administrative Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request, (B) the respective principal amounts and
Competitive Bid Margins or Competitive Bid Rates, as the case may be, so
offered, and the identity of the respective Banks submitting such offers, and
(C) if applicable, limitations on the aggregate principal amount of Competitive
Bid Loans for which offers in any single Competitive Bid Quote may be accepted.
SECTION 4.7. ACCEPTANCE AND NOTICE BY BORROWER AND ADMINISTRATIVE
AGENT. Not later than 11:00 a.m. (New York time) on (x) the third Eurodollar
Business Day prior to the proposed Drawdown Date, in the case of a LIBOR
Competitive Bid Loan or (y) the proposed Drawdown Date, in the case of an
Absolute Competitive Bid Loan, the Borrower shall notify the Administrative
Agent of its acceptance or non-acceptance of each Competitive Bid Quote in
substantially the form of Exhibit K hereto. The Borrower may accept any
Competitive Bid Quote in whole or in part; provided that:
<PAGE> 35
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(i) the aggregate principal amount of each Competitive Bid
Loan may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(ii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Competitive Bid Rates, as the case
may be, and
(iii) the Borrower may not accept any offer that is described
in subsection 4.5(c) or that otherwise fails to comply with the
requirements of this Agreement.
The Administrative Agent shall promptly notify each Bank which submitted a
Competitive Bid Quote of the Borrower's acceptance or non-acceptance thereof. At
the request of any Bank which submitted a Competitive Bid Quote and with the
consent of the Borrower, the Administrative Agent will promptly notify all Banks
which submitted Competitive Bid Quotes of (a) the aggregate principal amount of,
and (b) the range of Competitive Bid Rates or Competitive Bid Margins of, the
accepted Competitive Bid Loans for each requested Interest Period.
SECTION 4.8. ALLOCATION BY ADMINISTRATIVE AGENT. If offers are made by
two or more Banks with the same Competitive Bid Margin or Competitive Bid Rate,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
nearly as possible (in such multiples, not less than $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determination by the Administrative Agent of
the amounts of Competitive Bid Loans shall be conclusive in the absence of
manifest error.
SECTION 4.9. FUNDING OF COMPETITIVE BID LOANS. If, on or prior to the
Drawdown Date of any Competitive Bid Loan, the Total Commitment has not
terminated in full and if, on such Drawdown Date, the applicable conditions of
Section Section 10 and 11 hereof are satisfied, the Bank or Banks whose offers
the Borrower has accepted will fund each Competitive Bid Loan so accepted. Such
Bank or Banks will make such Competitive Bid Loans by crediting the
Administrative Agent for further credit to the Borrower's specified account with
the Administrative Agent, in immediately available funds not later than 1:00
p.m. (New York time) on such Drawdown Date.
SECTION 4.10. FUNDING LOSSES. If, after acceptance of any Competitive
Bid Quote pursuant to Section 4, the Borrower (i) fails to borrow any
Competitive Bid Loan so accepted on the date specified therefor, or (ii) repays
the outstanding amount of the Competitive Bid Loan prior to the last day of the
Interest Period relating thereto, the Borrower shall indemnify the Bank making
such Competitive Bid Quote or funding such Competitive Bid Loan against any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain such unborrowed Loans,
including, without limitation compensation as provided in Section 5.8.
SECTION 4.11. REPAYMENT OF COMPETITIVE BID LOANS; INTEREST. The
principal of each Competitive Bid Loan shall become absolutely due and payable
by the Borrower on the last day
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30
of the Interest Period relating thereto, and the Borrower hereby absolutely and
unconditionally promises to pay to the Administrative Agent for the account of
the relevant Banks at or before 1:00 p.m. (New York time) on the last day of the
Interest Periods relating thereto the principal amount of all such Competitive
Bid Loans, plus interest thereon at the applicable rate. The Competitive Bid
Loans shall bear interest at the rate per annum specified in the applicable
Competitive Bid Quotes. Interest on the Competitive Bid Loans shall be payable
(a) on the last day of the applicable Interest Periods, and if any such Interest
Period is longer than three months, also on the last day of the third month
following the commencement of such Interest Period, and (b) on the Maturity Date
for all Loans. Subject to the terms of this Agreement, the Borrower may make
Competitive Bid Quote Requests with respect to new borrowings of any amounts so
repaid prior to the Maturity Date.
SECTION 5. PROVISIONS RELATING TO ALL LOANS AND LETTERS OF CREDIT.
SECTION 5.1. PAYMENTS.
(a) All payments of principal, interest, Reimbursement
Obligations, fees (other than the Issuance Fee) and any other amounts
due hereunder or under any of the other Loan Documents shall be made to
the Administrative Agent at its Head Office in immediately available
funds by 11:00 a.m. (New York time) on any due date. Subject to the
provisions of Section 29, if a payment is received by the
Administrative Agent at or before 1:00 p.m. (New York time) on any
Business Day, the Administrative Agent shall on the same Business Day
transfer in immediately available funds, as applicable, to (1) each of
the Banks, their pro rata portion of such payment in accordance with
their respective Commitment Percentages, in the case of payments with
respect to Syndicated Loans and Letters of Credit, (2) MGT in the case
of payments with respect to Swing Line Loans, and (3) the appropriate
Bank(s), in the case of payments with respect to Competitive Bid Loans.
If such payment is received by the Administrative Agent after 1:00 p.m.
(New York time) on any Business Day, such transfer shall be made by the
Administrative Agent to the applicable Bank(s) on the next Business
Day. In the event that the Administrative Agent fails to make such
transfer to any Bank as set forth above, the Administrative Agent shall
pay to such Bank on demand an amount equal to the product of (i) the
average, computed for the period referred to in clause (iii) below, of
the weighted average interest rate paid by such Bank for funds acquired
by such Bank during each day included in such period, times (ii) the
amount (A) equal to such Bank's Commitment Percentage of such payment
in the case of payments under clause (1) above, or (B) of such payment
to which such Bank is entitled in the case of payments with respect to
Competitive Bid Loans and Swing Line Loans, times (iii) a fraction, the
numerator of which is the number of days that elapse from and including
the date of payment to and including the date on which the amount due
to such Bank shall become immediately available to such Bank, and the
denominator of which is 365. A statement of such Bank submitted to the
applicable Administrative Agent with respect to any amounts owing under
this paragraph shall be prima facie evidence of the amount due and
owing to such Bank by the Administrative Agent.
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(b) Each Bank that is not incorporated or organized under the
laws of the United States of America or a state thereof or the District
of Columbia (a "Non-U.S. Bank") agrees that, prior to the first date on
which any payment is due to it hereunder, it will deliver to the
Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI or
successor applicable form, as the case may be, certifying in each case
that such Non-U.S. Bank is entitled to receive payments under this
Agreement and the Notes payable to it, without deduction or withholding
of any United States federal income taxes. Each Non-U.S. Bank that so
delivers a Form W-8BEN or W-8ECI pursuant to the preceding sentence
further undertakes to deliver to each of the Borrower and the
Administrative Agent two further copies of Form W-8BEN or W-8ECI or
successor applicable form, or other manner of certification, as the
case may be, on or before the date that any such letter or form expires
or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be
requested by the Borrower, certifying in the case of a Form W-8BEN or
W-8ECI that such Non-U.S. Bank is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any
United States federal income taxes, unless in any such case an event
(including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable
or which would prevent such Non-U.S. Bank from duly completing and
delivering any such form with respect to it and such Non-U.S. Bank
advises the Borrower that it is not capable of receiving payments
without any deduction or withholding of United States federal income
tax.
(c) The Borrower shall not be required to pay any additional
amounts to any Non-U.S. Bank in respect of United States Federal
withholding tax pursuant to Section 17 to the extent that (i) the
obligation to withhold amounts with respect to United States Federal
withholding tax existed on the date such Non-U.S. Bank became a party
to this Agreement or, with respect to payments to a different lending
office designated by the Non-U.S. Bank as its applicable lending office
(a "New Lending Office"), the date such Non-U.S. Bank designated such
New Lending Office with respect to a Loan; provided, however, that this
clause (i) shall not apply to any transferee or New Lending Office as a
result of an assignment, transfer or designation made at the request of
the Borrower; and provided further, however, that this clause (i) shall
not apply to the extent the indemnity payment or additional amounts any
transferee, or Bank through a New Lending Office, would be entitled to
receive without regard to this clause (i) do not exceed the indemnity
payment or additional amounts that the Person making the assignment or
transfer to such transferee, or Bank making the designation of such New
Lending Office, would have been entitled to receive in the absence of
such assignment, transfer or designation; or (ii) the obligation to pay
such additional amounts would not have arisen but for a failure by such
Non-U.S. Bank to comply with the provisions of paragraph (b) above.
(d) Notwithstanding the foregoing, each Bank agrees to use
reasonable efforts (consistent with legal and regulatory restrictions)
to change its lending office to avoid or to minimize any amounts
otherwise payable under Section 17 in each case solely if such change
<PAGE> 38
32
can be made in a manner so that such Bank, in its sole determination,
suffers no legal, economic or regulatory disadvantage.
SECTION 5.2. MANDATORY REPAYMENTS OF THE LOANS.
(a) If at any time the sum of the outstanding principal amount
of the Loans plus the Maximum Drawing Amount of all outstanding Letters
of Credit exceeds the Total Commitment, whether by reduction of the
Total Commitment or otherwise, then the Borrower shall immediately pay
the amount of such excess to the Administrative Agent, (i) for
application to the Loans, first to Syndicated Loans, then to
Competitive Bid Loans, subject to Section 5.8, or (ii) if no Loans
shall be outstanding, to be held by the Administrative Agent for the
benefit of the Banks as collateral security for such excess Maximum
Drawing Amount and the Borrower hereby grants a security interest in
such amount to the Administrative Agent for the benefit of the Banks;
provided, however, that if the amount of cash collateral held by the
Administrative Agent pursuant to this Section 5.2(a) exceeds the
Maximum Drawing Amount required to be collateralized from time to time,
the Administrative Agent shall return such excess to the Borrower.
(b) Payments required pursuant to Section Section 8.4(c) and
(d) shall be applied in the manner set forth in subsection (a) above.
SECTION 5.3. COMPUTATIONS. Except as otherwise expressly provided
herein, all computations of interest, Facility Fees, Letter of Credit Fees or
other fees shall be based on a 360-day year and paid for the actual number of
days elapsed, except that computations based on the Administrative Agent's
"prime rate" shall be based on a 365 or 366, as applicable, day year and 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 succeeding Business Day,
and interest shall accrue during such extension; provided that for any Interest
Period for any Eurodollar Loan if such next succeeding Business Day falls in the
next succeeding calendar month or after the Maturity Date, it shall be deemed to
end on the next preceding Business Day.
SECTION 5.4. ILLEGALITY; INABILITY TO DETERMINE EURODOLLAR RATE.
Notwithstanding any other provision of this Agreement (other than Section 5.10),
if (a) the introduction of, any change in, or any change in the interpretation
of, any law or regulation applicable to any Bank or the Administrative Agent
shall make it unlawful, or any central bank or other governmental authority
having jurisdiction thereof shall assert that it is unlawful, for any Bank or
the Administrative Agent to perform its obligations in respect of any Eurodollar
Loans, or (b) if any Bank or the Administrative Agent, as applicable, shall
reasonably determine with respect to Eurodollar Loans that (i) by reason of
circumstances affecting any Eurodollar interbank market, adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate which would otherwise
be applicable during any Interest Period, or (ii) deposits of Dollars in the
relevant amount for the relevant Interest Period are not available to such Bank
or the Administrative Agent in any Eurodollar interbank market, or (iii) the
Eurodollar Rate does not or will not accurately reflect the cost to the Bank or
the Administrative Agent of obtaining or maintaining the Eurodollar Loans during
any Interest Period, then such Bank or the Administrative Agent shall promptly
give telephonic, telex or cable notice of such determination to the Borrower
<PAGE> 39
33
(which notice shall be conclusive and binding upon the Borrower). Upon such
notification by the Bank or the Administrative Agent, the obligation of the
Banks and the Administrative Agent to make Eurodollar Loans shall be suspended
until the Banks or the Administrative Agent, as the case may be, determine that
such circumstances no longer exist, and to the extent permitted by law the
outstanding Eurodollar Loans shall continue to bear interest at the applicable
rate based on the Eurodollar Rate until the end of the applicable Interest
Period, and thereafter shall be deemed converted to Base Rate Loans in equal
principal amounts to such former Eurodollar Loans.
SECTION 5.5. 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 any Bank by any central bank or other fiscal, monetary or
other authority, whether or not having the force of law) shall:
(a) subject such Bank to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment or the
Loans (other than taxes based upon or measured by the income or profits
of such Bank imposed by the jurisdiction of its incorporation or
organization, or the location of its lending office); or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits of such Bank imposed by the
jurisdiction of its incorporation or organization, or the location of
its lending office) of payments to such Bank of the principal or of the
interest on any Loans or any other amounts payable to such Bank under
this Agreement or the other Loan Documents; or
(c) except as provided in Section 5.6 or as otherwise
reflected in the Base Rate, the Eurodollar Rate, or the applicable rate
for Competitive Bid Loans, impose or increase or render applicable
(other than to the extent specifically provided for elsewhere in this
Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force
of law) against assets held by, or deposits in or for the account of,
or loans by, or commitments of, an office of any Bank with respect to
this Agreement, the other Loan Documents, such Bank's Commitment or the
Loans; or
(d) impose on such Bank any other conditions or requirements
with respect to this Agreement, the other Loan Documents, the Loans,
such Bank's Commitment or any class of loans or commitments of which
any of the Loans or such Bank's Commitment forms a part, and the result
of any of the foregoing is:
(i) to increase the cost to such Bank of making,
funding, issuing, renewing, extending or maintaining the Loans
or such Bank's Commitment or issuing or participating in
Letters of Credit;
<PAGE> 40
34
(ii) to reduce the amount of principal, interest or
other amount payable to such Bank hereunder on account of such
Bank's Commitment, the Loans or the Reimbursement Obligations;
or
(iii) to require such Bank 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 such Bank from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand
made by such Bank at any time and from time to time as often as the
occasion therefore may arise (which demand shall be accompanied by a
statement setting forth the basis of such demand which shall be
conclusive absent manifest error), pay such reasonable additional
amounts as will be sufficient to compensate such Bank for such
additional costs, reduction, payment or foregone interest or other sum.
SECTION 5.6. CAPITAL ADEQUACY. If any Bank shall have determined that,
after the date hereof, the adoption of any applicable law, rule or regulation
regarding capital adequacy, or any change in any such law, rule, or regulation,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or any corporation controlling such
Bank) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or any corporation controlling such Bank) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank, the Borrower shall pay to such Bank such additional amount or
amounts as will, in such Bank's reasonable determination, fairly compensate such
Bank (or any corporation controlling such Bank) for such reduction. Each Bank
shall allocate such cost increases among its customers in good faith and on an
equitable basis.
SECTION 5.7. CERTIFICATE. A certificate setting forth the additional
amounts payable pursuant to Section 5.5 or Section 5.6 and a reasonable
explanation of such amounts which are due, submitted by any Bank to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
SECTION 5.8. EURODOLLAR AND COMPETITIVE BID INDEMNITY. The Borrower
agrees to indemnify the Banks and the Administrative Agent and to hold them
harmless from and against any reasonable loss, cost or expense that any such
Bank and the Administrative Agent may sustain or incur as a consequence of (a)
the default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Loans or Competitive Bid Loans as and when due and
payable, including any such loss or expense arising from interest or fees
payable by any Bank or the Administrative Agent to lenders of funds obtained by
it in order to maintain its Eurodollar Loans or Competitive Bid Loans, (b) the
default by the Borrower in making a borrowing of a
<PAGE> 41
35
Eurodollar Loan or Competitive Bid Loan or conversion of a Eurodollar Loan or a
prepayment of a Eurodollar or Competitive Bid Loan other than pursuant to
Section 2.5(b) after the Borrower has given (or is deemed to have given) a
Syndicated Loan Request, a notice pursuant to Section 2.7 or a Notice of
Acceptance/Rejection of Competitive Bid Quote(s), or a notice pursuant to
Section 2.10, and (c) the making of any payment of a Eurodollar Loan or
Competitive Bid Loan, or the making of any conversion of any Eurodollar Loan to
a Base Rate Loan on a day that is not the last day of the applicable Interest
Period with respect thereto. Such loss, cost, or reasonable expense shall
include an amount equal to the excess, if any, as reasonably determined by each
Bank of (i) its cost of obtaining the funds for (A) the Eurodollar Loan being
paid, prepaid, converted, not converted, reallocated, or not borrowed, as the
case may be (based on the Eurodollar Rate), or (B) the Competitive Bid Loan
being paid, prepaid, or not borrowed, as the case may be (based on the
applicable interest rate) for the period from the date of such payment,
prepayment, conversion, or failure to borrow or convert, as the case may be, to
the last day of the Interest Period for such Loan (or, in the case of a failure
to borrow, the Interest Period for the Loan which would have commenced on the
date of such failure to borrow) over (ii) the amount of interest (as reasonably
determined by such Bank) that would be realized by such Bank in reemploying the
funds so paid, prepaid, converted, or not borrowed, converted, or prepaid for
such period or Interest Period, as the case may be, which determinations shall
be conclusive absent manifest error.
SECTION 5.9. 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 payable on demand at a rate per annum equal to
the Base Rate plus 2%, until such amount shall be paid in full (after as well as
before judgment).
SECTION 5.10. INTEREST LIMITATION. Notwithstanding any other term of
this Agreement or the Notes, any other Loan Document 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 Notes by
any Bank shall be absolutely limited to, and shall in no event exceed, the
maximum amount of interest which could lawfully be charged or collected by such
Bank under applicable laws (including, to the extent applicable, the provisions
of Section 5197 of the Revised Statutes of the United States of America, as
amended, and 12 U.S.C. Section 85, as amended).
SECTION 5.11. REASONABLE EFFORTS TO MITIGATE. Each Bank agrees that as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under Section
Section 5.4, 5.5 or 5.6, such Bank will give notice thereof to the Borrower,
with a copy to the Administrative Agent and, to the extent so requested by the
Borrower and not inconsistent with such Bank's internal policies, such Bank
shall use reasonable efforts and take such actions as are reasonably appropriate
if as a result thereof the additional moneys which would otherwise be required
to be paid to such Bank pursuant to such sections would be materially reduced,
or the illegality or other adverse circumstances which would otherwise require a
conversion of such Loans or result in the inability to make such Loans pursuant
to such sections would cease to exist, and in each case if, as determined by
such Bank in its sole discretion, the taking of such actions would not adversely
affect such Loans or such Bank or otherwise be disadvantageous to such Bank.
<PAGE> 42
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SECTION 5.12. REPLACEMENT OF BANKS. If any Bank (an "Affected Bank")
(i) makes demand upon the Borrower for (or if the Borrower is otherwise required
to pay) amounts pursuant to Section Section 5.5 or 5.6, (ii) is unable to make
or maintain Eurodollar Loans as a result of a condition described in Section 5.4
or (iii) defaults in its obligation to make Loans or to participate in Letters
of Credit in accordance with the terms of this Agreement (such Bank being
referred to as a "Defaulting Bank"), the Borrower may, within 90 days of receipt
of such demand, notice (or the occurrence of such other event causing the
Borrower to be required to pay such compensation or causing Section 5.4 to be
applicable), or default, as the case may be, by notice (a "Replacement Notice")
in writing to the Administrative Agent and such Affected Bank (A) request the
Affected Bank to cooperate with the Borrower in obtaining a replacement bank
satisfactory to the Administrative Agent and the Borrower (the "Replacement
Bank") as provided herein, but none of such Banks shall be under an obligation
to find a Replacement Bank; (B) request the non-Affected Banks to acquire and
assume all of the Affected Bank's Loans and Commitment, and to participate in
Letters of Credit as provided herein, but none of such Banks shall be under an
obligation to do so; or (C) designate a Replacement Bank reasonably satisfactory
to the Administrative Agent. If any satisfactory Replacement Bank shall be
obtained, and/or any of the non-Affected Banks shall agree to acquire and assume
all of the Affected Bank's Loans and Commitment, and to participate in Letters
of Credit then such Affected Bank shall, so long as no Event of Default shall
have occurred and be continuing, assign, in accordance with Section 20, all of
its Commitment, Loans, Notes and other rights and obligations under this
Agreement and all other Loan Documents to such Replacement Bank or non-Affected
Banks, as the case may be, in exchange for payment of the principal amount so
assigned and all interest and fees accrued on the amount so assigned, plus all
other Obligations then due and payable to the Affected Bank; provided, however,
that (x) such assignment shall be without recourse, representation or warranty
and shall be on terms and conditions reasonably satisfactory to such Affected
Bank and such Replacement Bank and/or non-Affected Banks, as the case may be,
and (y) prior to any such assignment, the Borrower shall have paid to such
Affected Bank all amounts properly demanded and unreimbursed under Section
Section 5.5, 5.6 and 5.8. Upon the effective date of such assignment, the
Borrower shall issue replacement Notes to such Replacement Bank and/or
non-Affected Banks, as the case may be, and such Replacement Bank shall become a
"Bank" for all purposes under this Agreement and the other Loan Documents.
SECTION 5.13. ADVANCES BY ADMINISTRATIVE AGENT. The Administrative
Agent may (unless earlier notified to the contrary by any Bank by 12:00 noon
(New York time) one (1) Business Day prior to any Drawdown Date) assume that
each Bank has made available (or will before the end of such Business Day make
available) to the Administrative Agent the amount of such Bank's Commitment
Percentage with respect to the Loans (or, in the case of Competitive Bid Loans,
the amount of such Bank's accepted offers of such Loans, if any) to be made on
such Drawdown Date, and the Administrative Agent may (but shall not be required
to), in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes such amount available to the
Administrative Agent on a date after such Drawdown Date, such Bank shall pay the
Administrative Agent on demand an amount equal to the product of (i) the
average, computed for the period referred to in clause (iii) below, of the
weighted average annual interest rate paid by the Administrative Agent for
federal funds acquired by the Administrative Agent during each day included in
such period times (ii) the amount equal to such Bank's Commitment Percentage of
such Syndicated Loan (or, in the case of Competitive
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37
Bid Loans and Swing Line Loans, the amount of such Bank's accepted offer of such
Competitive Bid Loans, if any, and portion of such Swing Line Loans) times (iii)
a fraction, the numerator of which is the number of days that elapse from and
including such Drawdown Date to but not including the date on which the amount
equal to such Bank's Commitment Percentage of such Loans, or the amount of such
Bank's accepted offers of such Competitive Bid Loans, if any, and portion of
Swing Line Loans, shall become immediately available to the Administrative
Agent, and the denominator of which is 365. A statement of the Administrative
Agent submitted to such Bank with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and owing to the
Administrative Agent by such Bank. If such amount is not in fact made available
to the Administrative Agent by such Bank within three (3) Business Days of such
Drawdown Date, the Administrative Agent shall be entitled to recover such amount
from such Borrower, with interest thereon at the applicable rate per annum.
SECTION 6. REPRESENTATIONS AND WARRANTIES. The Borrower (and each of
the Guarantors, where applicable) represents and warrants to the Banks that:
SECTION 6.1. CORPORATE AUTHORITY.
(a) INCORPORATION; GOOD STANDING. The Borrower and each of its
Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of formation,
(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 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 Borrower and its
Subsidiaries as a whole.
(b) AUTHORIZATION. The execution, delivery and performance of
its Loan Documents and the transactions contemplated hereby and thereby
(i) are within the corporate authority of the Borrower and each of the
Guarantors, (ii) have been duly authorized by all necessary corporate
proceedings on the part of each of the Borrower and the Guarantors,
(iii) do not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which any of the
Borrower or the Guarantors or any of their Subsidiaries is subject or
any judgment, order, writ, injunction, license or permit applicable to
the Borrower, any of the Guarantors or any of their Subsidiaries so as
to materially adversely affect the assets, business or any activity of
the Borrower, the Guarantors and their Subsidiaries as a whole, and
(iv) do not conflict with any provision of the corporate charter or
bylaws of the Borrower, the Guarantors or any Subsidiary or any
agreement or other instrument binding upon the Borrower, the Guarantors
or any of their Subsidiaries.
(c) ENFORCEABILITY. The execution, delivery and performance of
the Loan Documents by the Borrower and the Guarantors will result in
valid and legally binding obligations of the Borrower and the
Guarantors enforceable against them 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
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38
or affecting generally the enforcement of creditors' rights and except
to the extent that availability of the remedy of specific performance
or injunctive relief is subject to the discretion of the court before
which any proceeding therefor may be brought.
SECTION 6.2. GOVERNMENTAL AND OTHER APPROVALS. The execution, delivery
and performance of the Loan Documents by the Borrower and the Guarantors and the
consummation by the Borrower and the Guarantors of the transactions contemplated
hereby and thereby do not require any approval or consent of, or filing with,
any governmental agency or authority or other third party other than those
already obtained and those required after the date hereof in connection with the
Borrower's and its Subsidiaries' performance of their covenants contained in
Section Section 7, 8 and 9 hereof.
SECTION 6.3. TITLE TO PROPERTIES; LEASES. The Borrower and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
as at the Interim Balance Sheet Date or acquired since that date (except
property and assets operated under capital leases or 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.
SECTION 6.4. FINANCIAL STATEMENTS; SOLVENCY.
(a) There have been furnished to the Banks consolidated
balance sheets of the Borrower and its Subsidiaries dated the Balance
Sheet Date and consolidated statements of operations for the fiscal
periods then ended, certified by the Accountants. In addition, there
have been furnished to the Banks consolidated balance sheets of the
Borrower and its Subsidiaries dated the Interim Balance Sheet Date and
the related consolidated statements of operation for the fiscal quarter
ending on the Interim Balance Sheet Date. All said balance sheets and
statements of operations have been prepared in accordance with GAAP
(but, in the case of any of such financial statements which are
unaudited, only to the extent GAAP is applicable to interim unaudited
reports), fairly present the financial condition of the Borrower and
its Subsidiaries on a consolidated basis as at the close of business on
the dates thereof and the results of operations for the periods then
ended, subject, in the case of unaudited interim financial statements,
to changes resulting from audit and normal year-end adjustments and to
the absence of complete footnotes. There are no contingent liabilities
of the Borrower and its Subsidiaries involving material amounts, known
to the officers of the Borrower which have not been disclosed in said
balance sheets and the related notes thereto or otherwise in writing to
the Banks.
(b) The Borrower and its Subsidiaries on a consolidated basis
(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.
SECTION 6.5. NO MATERIAL CHANGES, ETC. Since the Interim Balance Sheet
Date, there have occurred no material adverse changes in the consolidated
financial condition, business, assets or
<PAGE> 45
39
liabilities (contingent or otherwise) of the Borrower and its Subsidiaries,
taken together, as shown on or reflected in the consolidated balance sheets of
the Borrower and its Subsidiaries as at the Interim Balance Sheet Date, or the
consolidated statements of income for the period 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 financial condition,
business, assets or liabilities (contingent or otherwise) of the Borrower and
its Subsidiaries, taken together. Since the Interim Balance Sheet Date, there
have not been any Distributions other than as permitted by Section 8.5 hereof.
SECTION 6.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and
each of its Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now
conducted (other than those the absence of which would not have a material
adverse effect on the business, operations or financial condition of the
Borrower and its Subsidiaries as a whole) without known conflict with any rights
of others other than a conflict which would not have a material adverse effect
on the financial condition, business or assets of the Borrower and its
Subsidiaries as a whole.
SECTION 6.7. LITIGATION. Except as set forth on Schedule 6.7 or in the
Disclosure Documents, there are no actions, suits, proceedings or investigations
of any kind pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened against the Borrower or any of its Subsidiaries before
any court, tribunal or administrative agency or board which, either in any case
or in the aggregate, could reasonably be expected to have a material adverse
effect on the financial condition, business, or assets of the Borrower and its
Subsidiaries, considered as a whole, or materially impair the right of the
Borrower and its Subsidiaries, considered as a whole, 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 to which the Borrower or any of its Subsidiaries is a
party, or any action taken or to be taken pursuant hereto or thereto.
SECTION 6.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Borrower's or such Subsidiary's officers has or could reasonably
be expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries, considered
as a whole. Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Borrower's or its
Subsidiary's officers has or could reasonably be expected to have any materially
adverse effect on the financial condition, business or assets of the Borrower
and its Subsidiaries, considered as a whole, except as otherwise reflected in
adequate reserves as required by GAAP.
SECTION 6.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
Borrower nor any of its Subsidiaries is (a) violating any provision of its
charter documents or by-laws or (b) violating any agreement or instrument to
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,
<PAGE> 46
40
license, rule or regulation, in a manner which could (in the case of such
agreements or such instruments) reasonably be expected to result in the
imposition of substantial penalties or materially and adversely affect the
financial condition, business or assets of the Borrower and its Subsidiaries,
considered as a whole.
SECTION 6.10. TAX STATUS. The Borrower and its Subsidiaries have filed
all federal, state, provincial and territorial income and all other tax returns,
reports and declarations (or obtained extensions with respect thereto) required
by applicable law to be filed by them (unless and only to the extent that the
Borrower or such Subsidiary has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes as required by
GAAP); and have paid all taxes and other governmental assessments and charges
(other than taxes, assessments and other governmental charges imposed by
jurisdictions other than the United States, Canada or any political subdivision
thereof which in the aggregate are not material to the financial condition,
business or assets of the Borrower or such Subsidiary on an individual basis or
of the Borrower and its Subsidiaries on a consolidated basis) 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, as required by
GAAP, 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. Except to the extent contested in the
manner permitted in the preceding sentence, there are no unpaid taxes in any
material amount claimed by the taxing authority of any jurisdiction to be due
and owing by the Borrower or any Subsidiary, nor do the officers of the Borrower
or any of its Subsidiaries know of any basis for any such claim.
SECTION 6.11. NO EVENT OF DEFAULT. No (a) Default or Event of Default
has occurred hereunder and is continuing, and (b) no "Default" or "Event of
Default" (as defined in the 364 Day Facility or the European Credit Facilities,
respectively) under the 364 Day Facility or the European Credit Facilities,
respectively, has occurred and is continuing, or would be created by the
incurrence of Indebtedness under this Agreement.
SECTION 6.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Borrower nor any of its Subsidiaries 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.
SECTION 6.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except as permitted
by Section 8.2 of this Agreement, there is no Indebtedness senior to the
Obligations, and there is no effective 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 the Borrower or any of its Subsidiaries
or right thereunder.
<PAGE> 47
41
SECTION 6.14. EMPLOYEE BENEFIT PLANS.
SECTION 6.14.1. IN GENERAL. Each Employee Benefit Plan has
been maintained and operated in compliance in all material respects
with the provisions of ERISA and/or all Applicable Canadian Pension
Legislation, as applicable, and, to the extent applicable, the Code,
including but not limited to the provisions thereunder respecting
prohibited transactions. Promptly upon the request of any Bank or the
Administrative Agent, the Borrower will furnish to the Administrative
Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted
under Section 103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
SECTION 6.14.2. TERMINABILITY OF WELFARE PLANS. Under each
Employee Benefit Plan which is an employee welfare benefit plan within
the meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits
are due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA) . The Borrower or an ERISA Affiliate, as appropriate, 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
the Borrower or such ERISA Affiliate without liability to any Person.
SECTION 6.14.3. 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 Section 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. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by
the Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan (other than Terminated Plans) 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. Other than with respect to the Terminated Plans, 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 Section 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.
SECTION 6.14.4. MULTIEMPLOYER PLANS. Neither the Borrower 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
Section 4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
SECTION 6.15. ENVIRONMENTAL COMPLIANCE. The Borrower and its
Subsidiaries have taken all necessary steps to investigate the past and present
condition and usage of the Real Property and
<PAGE> 48
42
the operations conducted by the Borrower and its Subsidiaries and, based upon
such diligent investigation, have determined that, except as set forth on
Schedule 6.15 or in the Disclosure Documents:
(a) Neither the Borrower, its Subsidiaries, 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 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
applicable international, federal, state, provincial, territorial or
local statute, regulation, ordinance, order or decree relating to
health, safety, waste transportation or disposal, or the environment
(the "Environmental Laws"), which violation, individually or in the
aggregate, would have a material adverse effect on the business, assets
or financial condition of the Borrower and its Subsidiaries on a
consolidated basis.
(b) Except with respect to any such matters which individually
or in the aggregate would not reasonably be expected to have a material
adverse effect on the business, assets or financial condition of the
Borrower and its Subsidiaries on a consolidated basis, neither the
Borrower nor any of its Subsidiaries has received notice from any third
party including, without limitation: any federal, state, provincial,
territorial 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 300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42
U.S.C. Section 9601(33) or any toxic substance, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws, excluding household hazardous waste ("Hazardous
Substances"), which any one of them has generated, transported or
disposed of, has been found at any site at which a federal, state,
provincial, territorial or local agency or other third party has
conducted or has ordered that the Borrower or any of its Subsidiaries
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) No portion of the Real Property or other assets of the
Borrower and its Subsidiaries has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws, except as would not
reasonably be expected to have a material adverse effect on the
business, assets or financial condition of the Borrower and its
Subsidiaries on a consolidated basis; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries, or operators of
<PAGE> 49
43
the Real Property or other assets of the Borrower and its Subsidiaries,
no Hazardous Substances have been generated or are being used on such
properties except in accordance with applicable Environmental Laws,
except for occurrences that would not have a material adverse effect on
the business, assets or financial condition of the Borrower and its
Subsidiaries on a consolidated basis; (iii) there have been no
unpermitted Releases or threatened Releases of Hazardous Substances on,
upon, into or from the Real Property or other assets of the Borrower or
its Subsidiaries, which Releases would have a material adverse effect
on the value of such properties; (iv) to the best of the Borrower's and
its Subsidiaries' knowledge, there have been no Releases on, upon, from
or into any real property in the vicinity of the Real Property or other
assets of the Borrower or its Subsidiaries which, through soil or
groundwater contamination, may have come to be located on, and which
would reasonably be expected to 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 or other
assets of the Borrower or its Subsidiaries 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 have been and are, to the best
of the Borrower's and its Subsidiaries' knowledge, operating in
compliance with such permits and applicable Environmental Laws.
(d) None of the Real Property or other assets of the Borrower
or its Subsidiaries or any of the stock (or assets) being acquired with
proceeds of Loans 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.
SECTION 6.16. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. Each of the
Borrower and the Guarantors has furnished the Administrative Agent as of the
Effective Date, true and complete copies of (a) all charter and other
incorporation documents (together with any amendments thereto) and (b) by-laws
(together with any amendments thereto).
SECTION 6.17. DISCLOSURE. No representation or warranty made by the
Borrower or any Guarantor in this Agreement or in any agreement, instrument,
document, certificate, statement or letter furnished to the Banks or the
Administrative Agent by or on behalf of or at the request of the Borrower and
the Guarantors 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.
SECTION 6.18. PERMITS AND GOVERNMENTAL AUTHORITY. All permits (other
than those the absence of which would not have a material adverse effect on the
business, operations or financial condition of the Borrower and its Subsidiaries
as a whole) required for the construction and operation of all landfills
currently owned or operated by the Borrower or any of its Subsidiaries 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
<PAGE> 50
44
modification or revocation. Neither the Borrower nor any of its Subsidiaries,
nor, to the knowledge of the Borrower and its Subsidiaries, 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 Borrower and its Subsidiaries as a whole.
SECTION 6.19. YEAR 2000 COMPLIANCE. The Borrower and its Subsidiaries
have reviewed the areas within their businesses and operations which could be
adversely affected by, and have developed or are developing a program to address
on a timely basis, the Year 2000 Compliance Issue. Based upon such review, the
Borrower reasonably believes that the Year 2000 Compliance Issue will not have
any material adverse effect on the business, operations or financial condition
of the Borrower and its Subsidiaries as a whole.
SECTION 7. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower agrees
that, so long as any Obligation or any Letter of Credit is outstanding or the
Banks have any obligation to make Loans, or any Issuing Bank has any obligation
to issue, extend or renew any Letters of Credit hereunder, or the Banks have any
obligations to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 7.1. PUNCTUAL PAYMENT. The Borrower 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.
SECTION 7.2. MAINTENANCE OF U.S. OFFICE. The Borrower will maintain its
chief executive offices at Houston, Texas, or at such other place in the United
States of America as the Borrower shall designate upon 30 days' prior written
notice to the Administrative Agent.
SECTION 7.3. RECORDS AND ACCOUNTS. The Borrower will, and will cause
each of its Subsidiaries to, 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.
SECTION 7.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than
92 days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such year, consolidated statements of cash flows, and the
related consolidated statements of operations, each setting forth in
comparative form the figures for the previous fiscal year, all such
consolidated financial statements to be in reasonable detail, prepared,
in accordance with GAAP and, with respect to the consolidated financial
statements, certified by PricewaterhouseCoopers LLP or Arthur Andersen
LLP or by other independent auditors selected by the Borrower and
reasonably satisfactory to the Banks (the "Accountants"). In addition,
simultaneously therewith, the
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45
Borrower shall provide the Banks with a written statement from such
Accountants to the effect that they have read a copy of this Agreement,
and that, in making the examination necessary to said certification,
they have obtained no knowledge of any Default or Event of Default, 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;
(b) as soon as practicable, but in any event not later than 47
days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, copies of the consolidated balance sheet
and statement of operations of the Borrower and its Subsidiaries as at
the end of such quarter, subject to year-end adjustments, and the
related consolidated statement of cash flows, all in reasonable detail
and prepared in accordance with GAAP (to the extent GAAP is applicable
to interim unaudited financial statements) with a certification by the
principal financial or accounting officer of the Borrower (the "CFO or
the CAO") that the consolidated financial statements are prepared in
accordance with GAAP (to the extent GAAP is applicable to interim
unaudited financial statements) and fairly present the consolidated
financial condition of the Borrower and its Subsidiaries on a
consolidated basis as at the close of business on the date thereof and
the results of operations for the period then ended, it being
understood that no such statement need be accompanied by complete
footnotes;
(c) simultaneously with the delivery of the financial
statements referred to in (a) and (b) above, a certificate in the form
of Exhibit F hereto (the "Compliance Certificate") signed by the CFO or
the CAO or the Borrower's corporate treasurer, stating that the
Borrower and its Subsidiaries are in compliance with the covenants
contained in Section Section 7, 8 and 9 hereof as of the end of the
applicable period and setting forth in reasonable detail computations
evidencing such compliance with respect to the covenants contained in
Section Section 8.1(d), 8.3, 8.4, 8.5, and 9 hereof and that no Default
or Event of Default exists, provided that if the Borrower shall at the
time of issuance of such Compliance Certificate or at any other time
obtain knowledge of any Default or Event of Default, the Borrower shall
include in such certificate or otherwise deliver forthwith to the Banks
a certificate specifying the nature and period of existence thereof and
what action the Borrower proposes to take with respect thereto;
(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 Borrower's
and its Subsidiaries' stockholders generally; and
(e) from time to time such other financial data and other
information as the Banks may reasonably request.
The Borrower hereby authorizes each Bank to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required by law; provided, however, this authorization shall
not be deemed to be a waiver of any rights to object to the disclosure by the
Banks of any such information which the Borrower has or may have under the
federal Right to Financial Privacy Act of 1978, as in effect from time to time,
except as to matters specifically permitted therein.
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46
SECTION 7.5. EXISTENCE AND CONDUCT OF BUSINESS. The Borrower will, and
will cause each Subsidiary, to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
and effect and maintain its foreign qualifications (except where the failure of
the Borrower or any Subsidiary to remain so qualified would not materially
adversely impair the financial condition, business or assets of the Borrower and
its Subsidiaries on a consolidated basis), licensing, domestication or
authorization except as terminated by its Board of Directors in the exercise of
its reasonable judgment; provided that such termination would not have a
material adverse effect on the financial condition, business or assets of the
Borrower and its Subsidiaries on a consolidated basis. The Borrower will not,
and will cause its Subsidiaries not to, become obligated under any contract or
binding arrangement which, at the time it was entered into, would materially
adversely impair the financial condition, business or assets of the Borrower and
its Subsidiaries, on a consolidated basis. The Borrower will, and will cause
each Subsidiary to, continue to engage primarily in the businesses now conducted
by it and in related businesses.
SECTION 7.6. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause its Subsidiaries to, 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 (ordinary wear and tear excepted) and supplied with all
necessary equipment and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower and its Subsidiaries 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 the
Borrower or any of its Subsidiaries from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Borrower or such Subsidiary, desirable in the conduct of its or their
business and which does not in the aggregate materially adversely affect the
financial condition, business or assets of the Borrower and its Subsidiaries on
a consolidated basis.
SECTION 7.7. INSURANCE. The Borrower will, and will cause its
Subsidiaries to, 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) and in the relative proportionate amounts
usually carried by reasonable and prudent companies conducting businesses
similar to that of the Borrower and its Subsidiaries, in amounts substantially
similar to the existing coverage policies maintained by the Borrower and its
Subsidiaries, copies of which have been provided to the Administrative Agent. In
addition, the Borrower will furnish from time to time, upon any Bank's request,
a summary of the insurance coverage of the Borrower and its Subsidiaries, which
summary shall be in form and substance satisfactory to the Banks and, if
requested by any of the Banks, will furnish to the Administrative Agent and such
Bank copies of the applicable policies.
SECTION 7.8. TAXES. The Borrower will, and will cause its Subsidiaries
to, 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
jurisdictions other than the United States, Canada or any political subdivision
thereof, which in the aggregate are not material to the business, financial
conditions, or assets of the Borrower and its Subsidiaries on a consolidated
basis) imposed upon
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47
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 the Borrower or such
Subsidiary shall have set aside on its books adequate reserves with respect
thereto as required by GAAP; and provided, further, that the Borrower or such
Subsidiary 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.
SECTION 7.9. INSPECTION OF PROPERTIES, BOOKS AND CONTRACTS. The
Borrower will, and will cause its Subsidiaries to, permit the Administrative
Agent or any Bank or any of their designated representatives, upon reasonable
notice, to visit and inspect any of the properties of the Borrower and its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries, or contracts (and to make copies thereof and extracts therefrom),
and to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, their officers, all at
such times and intervals as may be reasonably requested.
SECTION 7.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS;
MAINTENANCE OF MATERIAL LICENSES AND PERMITS. The Borrower will, and will cause
each Subsidiary to, (i) comply with the provisions of its charter documents and
by-laws; (ii) comply in all material respects with all agreements and
instruments by which it or any of its properties may be bound; (iii) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits ("Applicable Requirements"), except where noncompliance
with such Applicable Requirements would not reasonably be expected to have a
material adverse effect in the aggregate on the consolidated financial
condition, properties or businesses of the Borrower and its Subsidiaries; (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 the Borrower's or such Subsidiary's
knowledge after reasonable inquiry, in compliance with Environmental Laws. If at
any time any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any Subsidiary may fulfill any of its
obligations hereunder or under any other Loan Document, the Borrower will
immediately take or cause to be taken all reasonable steps within the power of
the Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Banks with evidence thereof.
SECTION 7.11. ENVIRONMENTAL INDEMNIFICATION. The Borrower covenants and
agrees that it will indemnify and hold the Banks, the Issuing Banks and the
Administrative Agent and their respective affiliates, and each of the
representatives, agents and officers of each of the foregoing, harmless from and
against any and all claims, expense, damage, loss or liability incurred by the
Banks, the Issuing Banks or the Administrative Agent (including all costs of
legal representation incurred by the Banks, the Issuing Banks or the
Administrative Agent) relating to (a) any Release or threatened Release of
Hazardous Substances on the Real Property; (b) any violation of any
Environmental Laws or Applicable Requirements with respect to conditions at the
Real Property or other assets of the Borrower or its Subsidiaries, or the
operations conducted thereon;
<PAGE> 54
48
or (c) the investigation or remediation of offsite locations at which the
Borrower, any of its Subsidiaries, or their predecessors are alleged to have
directly or indirectly Disposed of Hazardous Substances. It is expressly
acknowledged by the Borrower that this covenant of indemnification shall survive
the payment of the Loans and Reimbursement Obligations and satisfaction of all
other Obligations hereunder and shall inure to the benefit of the Banks, the
Issuing Banks, the Administrative Agent and their affiliates, successors and
assigns.
SECTION 7.12. FURTHER ASSURANCES. The Borrower and the Guarantors will
cooperate with the Administrative Agent and execute such further instruments and
documents as the Administrative Agent shall reasonably request to carry out to
the Banks' satisfaction the transactions contemplated by this Agreement.
SECTION 7.13. NOTICE OF POTENTIAL CLAIMS OR LITIGATION. The Borrower
shall deliver to the Banks, 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 against the Borrower or any of its Subsidiaries wherein
the potential liability is in excess of $25,000,000 or which questions the
validity or enforceability of any Loan Document, together with a copy of each
such complaint or other notice received by the Borrower or any of its
Subsidiaries if requested by the Administrative Agent.
SECTION 7.14. NOTICE OF CERTAIN EVENTS CONCERNING INSURANCE AND
ENVIRONMENTAL CLAIMS.
(a) The Borrower will provide the Banks with written notice as
to any material cancellation or material adverse change in any
insurance of the Borrower or any of its Subsidiaries within ten (10)
Business Days after the Borrower's or any of its Subsidiary's receipt
of any notice (whether formal or informal) of such material
cancellation or material change by any of its insurers.
(b) The Borrower will promptly, and in any event within ten
(10) Business Days of the Borrower's obtaining knowledge thereof,
notify the Banks in writing of any of the following events:
(i) upon the Borrower's or any Subsidiary's obtaining
knowledge of any violation of any Environmental Law regarding
the Real Property or the Borrower's or any Subsidiary's
operations which violation could have a material adverse
effect on the business, financial condition, or assets of the
Borrower and its Subsidiaries on a consolidated basis;
(ii) upon the Borrower's or any Subsidiary'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 could materially affect the
business, financial condition, or assets of the Borrower and
its Subsidiaries on a consolidated basis;
(iii) upon the Borrower's or any Subsidiary's receipt
of any notice of any material violation of any Environmental
Law or of any Release or threatened Release of Hazardous
Substances, including a notice or claim of liability or
<PAGE> 55
49
potential responsibility from any third party (including any
federal, state, provincial, territorial or local governmental
officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard
to (A) the Borrower's, any Subsidiary'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 the Borrower, any Subsidiary, or
its predecessors are alleged to have directly or indirectly
Disposed of Hazardous Substances, and with respect to which
the liability associated therewith could be reasonably
expected to exceed $25,000,000; or
(iv) upon the Borrower's or any Subsidiary's
obtaining knowledge that any expense or loss which
individually or in the aggregate exceeds $25,000,000 has been
incurred by such governmental authority in connection with the
assessment, containment, removal or remediation of any
Hazardous Substances with respect to which the Borrower or any
Subsidiary may be liable or for which a lien may be imposed on
the Real Property.
SECTION 7.15. NOTICE OF DEFAULT. The Borrower will promptly notify the
Banks in writing of the occurrence of any Default or Event of Default. 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 $25,000,000 as to which the Borrower or any
of its Subsidiaries is a party or obligor, whether as principal or surety, the
Borrower shall forthwith upon obtaining actual knowledge thereof give written
notice thereof to the Banks, describing the notice of action and the nature of
the claimed default.
SECTION 7.16. USE OF PROCEEDS. The proceeds of the Loans shall be used
for general corporate purposes. No proceeds of the Loans shall be used in any
way that will violate Regulations U or X of the Board of Governors of the
Federal Reserve System. No portion of the proceeds of any Loan is to be used,
and no portion of any Letter of Credit is to be obtained, for the purpose of (a)
knowingly purchasing, or providing credit support for the purchase of,
Ineligible Securities from a Section 20 Subsidiary during any period in which
such Section 20 Subsidiary makes a market in such Ineligible Securities, (b)
knowingly purchasing, or providing credit support for the purchase of, during
the underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (c) making, or
providing credit support for the making of, payments of principal or interest on
Ineligible Securities underwritten or privately placed by a Section 20
Subsidiary and issued by or for the benefit of the Borrower or any Subsidiary or
other Affiliate of the Borrower.
SECTION 7.17. CERTAIN TRANSACTIONS. Except as disclosed in the
Disclosure Documents prior to the Effective Date, and except for arm's length
transactions pursuant to which the Borrower or any Subsidiary makes payments in
the ordinary course of business upon terms no less favorable than the Borrower
or such Subsidiary could obtain from third parties, none of the officers,
directors, or employees or any other Affiliate of the Borrower or any Subsidiary
are presently or shall be a party to any transaction with the Borrower or any
Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement
<PAGE> 56
50
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 Borrower or any
Subsidiary, 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.
SECTION 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
agrees that, so long as any Obligation or Letter of Credit is outstanding or the
Banks have any obligation to make Loans or any Issuing Bank has any obligation
to issue, extend or renew any Letters of Credit hereunder, or the Banks have any
obligation to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 8.1. RESTRICTIONS ON INDEBTEDNESS. Neither the Borrower nor any
of its 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 Indebtedness of any other Person, or incur any Indebtedness other
than:
(a) Indebtedness arising under this Agreement or the other
Loan Documents;
(b) (i) Indebtedness incurred by the Borrower or any
Subsidiary with respect to any suretyship or performance bond incurred
in the ordinary course of its business and undrawn landfill closure
bonds; and
(ii) Guarantees of the Subsidiaries' obligations to
governmental authorities in lieu of the posting of any landfill closure
bonds;
(c) Unsecured Indebtedness of the Borrower (and any guarantee
thereof by WMH), including commercial paper, which is pari passu or
subordinated to the Obligations; provided that there does not exist a
Default or Event of Default at the time of the incurrence of such
Indebtedness and no Default or Event of Default would be created by the
incurrence of such Indebtedness;
(d) (i) Indebtedness of the Borrower's Subsidiaries (other
than of WMH and the Sanifill Convertible Subordinated Debt), (ii)
secured Indebtedness of the Borrower, (iii) Indebtedness with respect
to drawn landfill closure bonds of the Borrower's Subsidiaries (other
than of WMH), and (iv) Indebtedness with respect to Permitted
Receivables Transactions (other than of WMH); provided that the
aggregate amount of all such Indebtedness in this Section 8.1(d) shall
not exceed 15% of Consolidated Tangible Assets at any time;
<PAGE> 57
51
(e) Indebtedness of WMH listed in Schedule 8.1(e) on the terms
and conditions existing on July 16, 1998, provided that any extension,
renewal or refinancing of such Indebtedness is prohibited unless the
amount of such extended, renewed or refinanced Indebtedness by WMH is
deducted from Indebtedness allowed under Section 8.1(d) above;
(f) The Sanifill Convertible Subordinated Debt; and
(g) Indebtedness of the Borrower and certain of its
Subsidiaries under the 364 Day Facility and the European Credit
Facilities.
SECTION 8.2. RESTRICTIONS ON LIENS. The Borrower will not, and will
cause its Subsidiaries not to, 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 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 listed on Schedule 8.2(a) hereto;
(b) Liens securing Indebtedness permitted by Section 8.1(b)(i)
hereof; provided that the assets subject to such liens and security
interests shall be limited to those contracts to which such guaranty,
suretyship or indemnification obligations relate and the rights to
payment thereunder;
(c) Liens securing Indebtedness permitted under Section
Section 8.1(d) and (e) (provided that Liens created pursuant to a
Permitted Receivables Transaction are only on the receivables (and
related contract rights, general intangibles, and chattel paper) so
transferred and securing only the obligations with respect thereto);
(d) Liens to secure taxes, assessments and other government
charges in respect of obligations not overdue;
(e) 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;
(f) Liens 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
<PAGE> 58
52
thereunder or in respect of which the Borrower (or any Subsidiary)
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
Borrower maintains adequate reserves;
(g) 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,
provided that such liens may continue to exist for a period of more
than 120 days if the validity or amount thereof shall currently be
contested by the Borrower (or any Subsidiary) in good faith by
appropriate proceedings and if the Borrower shall have set aside on its
books adequate reserves with respect thereto as required by GAAP and
provided further that the Borrower (or any Subsidiary) will pay any
such claim forthwith upon commencement of proceedings to foreclose any
such lien; and
(h) 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 the Borrower or any Subsidiary is a party,
and other minor liens or encumbrances none of which in the opinion of
the Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower or any
of its Subsidiaries, which defects do not individually or in the
aggregate have a material adverse effect on the business of the
Borrower or any Subsidiary individually or of the Borrower and its
Subsidiaries on a consolidated basis.
The Borrower and the Guarantors covenant and agree that if any
of them or any of their Subsidiaries shall create or assume any lien
upon any of their respective properties or assets, whether now owned or
hereafter acquired, other than Permitted Liens (unless prior written
consent shall have been obtained from the Banks), the Borrower and the
Guarantors will make or cause to be made effective provision whereby
the Obligations and their respective Guaranteed Obligations will be
secured by such lien equally and ratably with any and all other
Indebtedness thereby secured so long as such other Indebtedness shall
be so secured; provided, that the covenants of the Borrower and the
Guarantors contained in this sentence shall only be in effect for so
long as the Borrower or any Guarantor shall be similarly obligated
under any other Indebtedness; provided, further, that an Event of
Default shall occur for so long as such other Indebtedness becomes
secured notwithstanding any actions taken by the Borrower or any
Guarantor to ratably secure the Obligations and the Guaranteed
Obligations hereunder.
SECTION 8.3. RESTRICTIONS ON INVESTMENTS. Except to the extent provided
in Section 8.4, neither the Borrower nor any Subsidiary may make or permit to
exist or to remain outstanding any Investment, unless both before and after
giving effect thereto (i) the Borrower and its Subsidiaries are in compliance
with the covenants set forth in Section Section 7, 8 and 9 hereof; (ii) there
does not exist a Default or Event of Default and no Default or Event of Default
would be created by the making of such Investment; and (iii) the aggregate
amount of all Investments (excluding Investments in (A) direct obligations of
the United States of America or any agency thereof having maturities of less
than one (1) year, (B) certificates of deposit having maturities of less
<PAGE> 59
53
than one (1) year, issued by commercial banks in the United States or Canada
having capital and surplus of not less than $100,000,000, and (C) wholly owned
Subsidiaries, does not exceed 10% of Consolidated Tangible Assets; provided,
that the ability of the Borrower and its Subsidiaries to incur any Indebtedness
in connection with any Investment permitted by this Section 8.3 shall be
governed by Section 8.1.
SECTION 8.4. MERGERS, CONSOLIDATIONS, SALES.
(a) Neither the Borrower nor any Subsidiary shall be a party
to any merger, consolidation or exchange of stock unless the Borrower
shall be the surviving entity with respect to any such transaction to
which the Borrower is a party and a Guarantor shall be the survivor of
any merger with any Subsidiary which is not Guarantor or a Subsidiary
shall be the surviving entity (and continue to be a Subsidiary) with
respect to any such transactions to which one or more Subsidiaries is a
party (and the conditions set forth below are satisfied), or purchase
or otherwise acquire all or substantially all of the assets or stock of
any class of, or any partnership, membership or joint venture or other
interest in, any other Person except as otherwise provided in Section
8.3 or this Section 8.4. Notwithstanding the foregoing, the Borrower
and its Subsidiaries may purchase or otherwise acquire all or
substantially all of the assets or stock of any class of, or joint
venture or other interest in, any Person if the following conditions
have been met: (i) the proposed transaction will not otherwise create a
Default or an Event of Default hereunder; (ii) the business to be
acquired predominantly involves (A) the collection, transfer, hauling,
disposal or recycling of solid waste (excluding hazardous waste as that
term is defined in RCRA) or thermal soil remediation, or (B) other
lines of businesses currently engaged in by WMH, including (1) on-site
portable sanitation services, (2) industrial cleaning services, (3)
chemical waste treatment, storage, disposal and related services, (4)
on-site integrated hazardous waste management services, including
hazardous waste identification, packaging, removal, and recycling
services, (5) radioactive waste management services, (6) development
and operation of waste-to-energy facilities and related services, (7)
the treatment and management of biosolids, (8) design and installation
of air pollution control systems and equipment, or (9) environmental
and infrastructure consulting and related services, provided that
revenues from operations with respect to items (3), (4) and (5) shall
not exceed ten percent (10%) of consolidated revenues without the
consent of the Majority Banks; (iii) the business to be acquired
operates predominantly (A) in North America or (B) outside North
America, provided, that the aggregate amount of such acquisitions under
this clause (B) does not exceed fifteen percent (15%) of Consolidated
Tangible Assets; and (iv) 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. Notwithstanding
anything herein to the contrary, the ability of the Borrower and its
Subsidiaries to incur any Indebtedness in connection with any
transaction permitted pursuant to this Section 8.4 shall be governed by
Section 8.1.
(b) Neither the Borrower nor any Subsidiary shall sell,
transfer, convey or lease any assets or group of assets including the
sale or transfer of any property owned by the Borrower or any
Subsidiary in order then or thereafter to lease such property or lease
other property which the Borrower or such Subsidiary intends to use for
substantially the
<PAGE> 60
54
same purpose as the property being sold or transferred (except (1)
transfers of real or personal property among Subsidiaries of the
Borrower which are wholly owned by the Borrower, (2) Regulatory
Dispositions, (3) Strategic Dispositions, (4) Allied Waste Transactions
and (5) so long as no Default or Event of Default has occurred and is
continuing, or would result therefrom, sales of assets in the ordinary
course of business in any calendar year with an aggregate value not
greater than $50,000,000), or sell or assign, with or without recourse,
any receivables (except accounts receivable (and contract rights,
general intangibles or chattel paper related thereto) more than sixty
(60) days past due sold or assigned in the ordinary course of
collecting past due accounts, or pursuant to a Permitted Receivables
Transaction).
(c) Commencing with the Effective Date, at any time when the
aggregate Net Cash Proceeds from all Domestic Strategic Dispositions
not previously applied or set aside for application under this Section
8.4(c) exceeds $25,000,000 in the aggregate, then all such Net Cash
Proceeds (including the first $25,000,000) received by the Borrower or
any Subsidiary from Domestic Strategic Dispositions shall be applied
within five (5) Business Days to pay down the Existing Domestic Bank
Debt on a pro rata basis as set forth in the following table (with
concurrent permanent reduction in the lenders' commitments to advance
funds or provide credit hereunder and thereunder of not less than
eighty percent (80%) of the amount of such pay down), with the
remainder of such Net Cash Proceeds to be available for share
repurchases (subject to Section 8.5 below), and for other general
corporate purposes (including acquisitions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Cumulative Net Cash Proceeds % Required to Repay % Available for Share
Existing Domestic Bank Repurchase
Debt
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tier I Greater than or equal to $0 and less than or 100% 0%
equal to $1,500,000,000
- --------------------------------------------------------------------------------------------------------------------------
Tier II Greater than $1,500,000,000 and less than or 50% 50%
equal to $2,500,000,000
- --------------------------------------------------------------------------------------------------------------------------
Tier III Greater than $2,500,000,000 and less than or 0% 100%
equal to $5,000,000,000
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
provided that in the event that the Senior Public Debt Rating is rated
less than BBB- by Standard & Poor's AND less than Baa3 by Moody's, Tier
III shall be adjusted such that 20% of Net Cash Proceeds are required
to repay Existing Domestic Bank Debt and 80% of Net Cash Proceeds will
be available for share repurchases. The Borrower shall promptly provide
a monthly report to the Administrative Agent in the form of Exhibit L
hereto (the "Form of Net Cash Proceeds Certificate") of Net Cash
Proceeds from all Domestic Strategic Dispositions for the month, and
demonstrating compliance with the conditions set forth above.
<PAGE> 61
55
(d) Net Cash Proceeds from any European Strategic Dispositions
shall be used first to permanently pay down the European Credit
Facilities (and concurrent permanent reduction of the commitments of
the lenders to advance funds or provide credit thereunder by the amount
of such pay down), with any surplus to be treated as if such surplus
were Net Cash Proceeds from a Domestic Strategic Disposition in
accordance with subsection (c) above. The Borrower shall promptly
provide a monthly report to the Administrative Agent in the form of
Exhibit L hereto of Net Cash Proceeds from all European Strategic
Dispositions for the month, and demonstrating compliance with the
conditions set forth above.
SECTION 8.5. RESTRICTED DISTRIBUTIONS AND REDEMPTIONS. Neither the
Borrower nor any of its Subsidiaries will (a) declare or pay any Distributions,
or (b) redeem, convert, retire or otherwise acquire shares of any class of its
capital stock (other than in connection with a merger permitted by Section 8.4
hereof or conversion into another form of equity of any preferred shares of the
Borrower existing as of the Effective Date pursuant to the terms thereof);
provided that, so long as no Default or Event of Default exists or would be
created hereunder, the Borrower and its Subsidiaries may (i) pay cash dividends
and redeem stock in an aggregate amount not to exceed Net Cash Proceeds from
Strategic Dispositions available for share repurchase in accordance with the
table set forth above in Section 8.4(c), provided further that, giving effect to
the proposed share repurchase on a proforma basis as if the transaction occurred
as of the last day of the prior fiscal quarter, the Borrower (x) shall have cash
equivalents plus Existing Domestic Bank Debt Availability of at least
$1,000,000,000, (y) the ratio of Total Debt to EBITDA for the most recently
ended period of four fiscal quarters shall not exceed 2.75:1 and (z) the
European Credit Facilities shall have been paid in full; and (ii) pay common
dividends in an aggregate amount not to exceed $25,000,000 per year.
Notwithstanding the above, any Subsidiary may make Distributions to the Borrower
and the Borrower agrees that neither the Borrower nor any Material Subsidiary
will enter into any agreement restricting Distributions from such Material
Subsidiary to the Borrower.
SECTION 8.6. EMPLOYEE BENEFIT PLANS. None of the Borrower, any of its
Subsidiaries, or any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could result
in a material liability for the Borrower on a consolidated basis; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
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 the Borrower or any Guarantor pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (within the meaning of Section 4001 of
ERISA), other than with respect to the
<PAGE> 62
56
Terminated Plans, 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; or
(e) take any action referred to in paragraph (a), (b), (c) or
(d) above that would violate any provisions of Applicable Canadian
Pension Legislation.
The Borrower and its Subsidiaries will (i) promptly upon the request of
any Bank or the Administrative Agent, furnish to the Banks a copy of the most
recent actuarial statement required to be submitted under Section 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 Banks any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Section Section 302, 4041, 4042, 4043, 4063, 4065,
4066 and 4068 of ERISA, or in respect of a Multiemployer Plan, under Section
Section 4041A, 4202, 4219, 4242 or 4245 of ERISA.
SECTION 9. FINANCIAL COVENANTS OF THE BORROWER. The Borrower agrees
that, so long as any Obligation or Letter of Credit is outstanding or the Banks
have any obligation to make Loans, or any Issuing Bank has any obligation to
issue, extend or renew any Letter of Credit hereunder, or the Banks have any
obligation to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 9.1. INTEREST COVERAGE RATIO. As of the end of any fiscal
quarter of the Borrower, the Borrower will not permit the ratio of (a) EBIT for
the four fiscal quarters then ending to (b) Consolidated Total Interest Expense
for such period to be less than the applicable ratio set forth in the table
below:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
FISCAL QUARTERS ENDING: RATIO:
---------------------------------------------------------------------------------
<S> <C>
December 31, 1999 - September 30, 2000 2.75:1
---------------------------------------------------------------------------------
December 31, 2000 and thereafter 3.00:1
---------------------------------------------------------------------------------
</TABLE>
SECTION 9.2. TOTAL DEBT TO EBITDA. As of the end of any fiscal quarter
of the Borrower, the Borrower will not permit the ratio of (a) Total Debt to (b)
EBITDA for the four fiscal quarters then ending to exceed the applicable ratio
set forth in the table below:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
FISCAL QUARTERS ENDING: RATIO:
---------------------------------------------------------------------------------
<S> <C>
December 31, 1999 - June 30, 2000 3.25:1.00
---------------------------------------------------------------------------------
September 30, 2000 and thereafter 3.00:1.00.
---------------------------------------------------------------------------------
</TABLE>
<PAGE> 63
57
SECTION 9.3. MINIMUM NET WORTH. The Borrower will not permit
Consolidated Net Worth at any time to be less than $3,500,000,000, plus 75% of
cumulative positive Consolidated Net Income for each fiscal quarter, beginning
with the fourth fiscal quarter of 1999, minus any share repurchases permitted
pursuant to Section 8.5 hereof.
SECTION 10. CONDITIONS PRECEDENT.
SECTION 10.1. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement and the obligations of the Banks to make any Loans and of any Issuing
Bank to issue Letters of Credit and of the Banks to participate in Letters of
Credit and otherwise be bound by the terms of this Agreement shall be subject to
the satisfaction of each of the following conditions precedent:
SECTION 10.1.1. CORPORATE ACTION. All corporate action
necessary for the valid execution, delivery and performance by the
Borrower and the Guarantors of the Loan Documents shall have been duly
and effectively taken, and evidence thereof certified by authorized
officers of the Borrower and the Guarantors and satisfactory to the
Majority Banks shall have been provided to the Banks.
SECTION 10.1.2. LOAN DOCUMENTS, ETC. Each of the Loan
Documents and other documents listed on the closing agenda shall have
been duly and properly authorized, executed and delivered by the
respective parties thereto and shall be in full force and effect in a
form satisfactory to the Majority Banks.
SECTION 10.1.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. The
Banks shall have received from each of the Borrower and the Guarantors
a certificate, certified by a duly authorized officer of such Person to
be true and complete on the Effective Date, of (a) no changes (other
than those attached thereto) to its charter or other incorporation
documents since last delivered to the Administrative Agent, and (b) no
changes to its by-laws (other than those attached thereto) since last
delivered to the Administrative Agent.
SECTION 10.1.4. INCUMBENCY CERTIFICATE. The Banks shall have
received an incumbency certificate, dated as of the Effective Date,
signed by duly authorized officers of the Borrower and each of the
Guarantors 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 Borrower and each Guarantor; (b) to make Syndicated Loan
Requests and Letter of Credit Requests; (c) to make Competitive Bid
Quote Requests; and (d) to give notices and to take other action on the
Borrower's or such Guarantor's behalf under the Loan Documents.
SECTION 10.1.5. CERTIFICATES OF INSURANCE. The Banks shall
have received (i) a certificate of insurance from an independent
insurance broker dated as of the Effective 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 of the Loan Documents and
(ii) copies of all policies evidencing such
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insurance (or certificates therefor signed by the insurer or an agent
authorized to bind the insurer).
SECTION 10.1.6. OPINIONS OF COUNSEL. The Banks shall have
received favorable legal opinions from outside counsel to the Borrower
and the Guarantors addressed to the Banks, dated the Effective Date, in
form and substance satisfactory to the Administrative Agent.
SECTION 10.1.7. SATISFACTORY FINANCIAL CONDITION. Other than
as disclosed in the Disclosure Documents, no material adverse change,
in the judgment of the Majority Banks, shall have occurred in the
financial condition, results of operations, business, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, since
the Interim Balance Sheet Date.
SECTION 10.1.8. PAYMENT OF AMENDMENT FEES. For each Bank which
executed and delivered its facsimile signature pages by 5:00 p.m. on
December 15, 1999, the Borrower shall have paid the agreed upon
amendment fee of 0.125% on each such Bank's Commitment to the
Administrative Agent for the account of such Banks.
SECTION 10.1.9. AMENDMENTS TO EXISTING DEBT. The
Administrative Agent shall have received evidence, in form and
substance satisfactory to the Administrative Agent, that the 364 Day
Facility is concurrently becoming effective in a form and substance
satisfactory to the Administrative Agent, BKB and the Joint Lead
Arrangers and Joint Book Managers, and no "Event of Default", "Default"
(each as defined in such agreement) or prepayment event shall exist
under such agreement and no liens shall be created under such agreement
as a result of the transactions contemplated hereby.
SECTION 10.2. NOTICE OF EFFECTIVE DATE. Promptly upon receipt of the
items set forth above, the Administrative Agent shall notify the Banks that all
of the conditions of Section 10.1 have been satisfied and that the Majority
Banks have approved this Agreement. As soon as practical thereafter, the
Administrative Agent shall distribute an original counterpart of this Agreement
to each Bank, together with copies of other items delivered in connection with
the closing of this Agreement.
SECTION 11. CONDITIONS TO ALL LOANS. The obligations of the Banks to
make any Loan and the obligation of any Issuing Bank to issue, extend, or renew
any Letter of Credit at the time of and subsequent to the Effective Date is
subject to the following conditions precedent:
SECTION 11.1. REPRESENTATIONS TRUE. Each of the representations and
warranties of the Borrower and the Guarantors (as applicable) 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 such
Loan or the issuance, extension, or renewal of any Letter of Credit, as
applicable, 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 and changes occurring in the ordinary course of business which
singly or in the aggregate are not materially adverse to the business,
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assets or financial condition of the Borrower and its Subsidiaries as a whole,
and to the extent that such representations and warranties relate expressly and
solely to an earlier date).
SECTION 11.2. PERFORMANCE; NO EVENT OF DEFAULT. The Borrower shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it prior to or at the time of the making of any
Loan the issuance, extension or renewal of any Letter of Credit, and at the time
of the making of any Loan or the issuance, renewal or extension of any Letter of
Credit, there shall exist no Default or Event of Default or condition which
would result in a Default or an Event of Default upon consummation of such Loan
or issuance, extension, or renewal of any Letter of Credit, as applicable. Each
request for a Loan, or for issuance, extension or renewal of a Letter of Credit
shall constitute certification by the Borrower that the conditions specified in
Section Section 11.1 and 11.2 will be duly satisfied on the date of such Loan or
Letter of Credit issuance, extension or renewal.
SECTION 11.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Banks would make it illegal for the Banks to make Loans, for any
Issuing Bank to issue, extend or renew, or the Banks to participate in, Letters
of Credit hereunder.
SECTION 11.4. GOVERNMENTAL REGULATION. The Banks shall have received
from the Borrower and its Subsidiaries such statements in substance and form
reasonably satisfactory to the Banks as they 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 or the Office of the
Superintendent of Financial Institutions.
SECTION 11.5. 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 Banks as of the date of the making of
any extension of credit in substance and in form satisfactory to the Banks,
including without limitation a Syndicated Loan Request in the form attached
hereto as Exhibit D or a Letter of Credit Request in the form of Exhibit E and
the Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Banks may reasonably request.
SECTION 12. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
SECTION 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 Borrower shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) if the Borrower shall fail to pay any interest or fees or
other amounts owing hereunder (other than those specified in subsection
(a) above) within five (5)
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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 Borrower shall fail to comply with any of the
covenants contained in Sections 7, 8 and 9 hereof;
(d) if the Borrower 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) and
such failure shall not be remedied within 30 days after written notice
of such failure shall have been given to the Borrower by the
Administrative Agent or any of the Banks;
(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 the Borrower or any of its Subsidiaries shall fail to
pay when due, or within any applicable period of grace, any
Indebtedness in an aggregate amount greater than $50,000,000, or fail
to observe or perform any material term, covenant or agreement
contained in any one or more agreements by which it is bound,
evidencing or securing any Indebtedness in an aggregate amount greater
than $50,000,000 for such period of time as would permit, 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 terminate its commitment with
respect thereto;
(g) if the Borrower, any Guarantor or any Material Subsidiary
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 the Borrower, the
Guarantors or any Material Subsidiary, or of any substantial part of
the assets of the Borrower, the Guarantors or any Material Subsidiary
or commences any case or other proceeding relating to the Borrower, the
Guarantors or any Material Subsidiary 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 the
Borrower, the Guarantors or any Material Subsidiary or the Borrower,
any Guarantor or any Material Subsidiary indicates its approval
thereof, consent thereto or acquiescence therein;
(h) if a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Borrower
or any Guarantor or any Material Subsidiary 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 the Borrower or any
Guarantor or any Material Subsidiary in an involuntary case under
federal bankruptcy laws of any jurisdiction as now or hereafter
constituted, and such decree or order remains in effect for more than
30 days, whether or not consecutive;
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(i) if there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive,
any final judgment against the Borrower or any Subsidiary which, with
other outstanding final judgments against the Borrower and its
Subsidiaries exceeds in the aggregate $25,000,000 after taking into
account any undisputed insurance coverage;
(j) if, with respect to any Guaranteed Pension Plan (or any
corresponding plan described in any Applicable Canadian Pension
Legislation), an ERISA Reportable Event or similar event under
Applicable Canadian Pension Legislation shall have occurred and the
Banks shall have determined in their reasonable discretion that such
event reasonably could be expected to result in liability of the
Borrower or any Subsidiary to the PBGC or similar Canadian authorities
or the Plan in an aggregate amount exceeding $25,000,000 and such event
in the circumstances occurring reasonably could constitute grounds for
the partial or complete termination of such Plan by the PBGC or similar
Canadian authorities or for the appointment by the appropriate United
States District Court or Canadian Court of a trustee to administer such
Plan; or a trustee shall have been appointed by the appropriate United
States District Court or Canadian Court to administer such Plan; or the
PBGC or similar Canadian authorities shall have instituted proceedings
to terminate such Plan;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, 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 Borrower, any Guarantor, 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; or
(l) if 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 25% or more of the outstanding shares of common voting stock of
the Borrower; or during any period of twelve consecutive calendar
months, individuals who were directors of the Borrower on the first day
of such period shall cease to constitute a majority of the board of
directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Banks shall, by
notice in writing to the Borrower, declare all amounts owing with respect to
this Agreement, the Notes 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, notice of intent to
accelerate, notice of acceleration to the extent permitted by law or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of any Event of Default specified in Section 12.1(g)
or 12.1(h), all such amounts shall become immediately due and
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payable automatically and without any requirement of notice from the
Administrative Agent or any Bank. Upon demand by the Majority Banks after the
occurrence of any Event of Default, the Borrower shall immediately provide to
the Administrative Agent cash in an amount equal to the aggregate Maximum
Drawing Amount to be held by the Administrative Agent as collateral security for
the Reimbursement Obligations.
SECTION 12.2. TERMINATION OF COMMITMENTS. If any Event of Default
pursuant to Sections 12.1(g) or 12.1(h) hereof shall occur, any unused portion
of the Total Commitment hereunder shall forthwith terminate and the Banks and
the Issuing Banks shall be relieved of all obligations to make Loans or to
issue, extend or renew Letters of Credit hereunder; or if any other Event of
Default shall occur, the Majority Banks may by notice to the Borrower 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 Banks and the Issuing Banks shall be relieved of
all further obligations to make Loans or to issue, extend or renew Letters of
Credit hereunder. No termination of any portion of the Total Commitment
hereunder shall relieve the Borrower of any of its existing Obligations to the
Banks, the Issuing Banks or the Administrative Agent hereunder or elsewhere.
SECTION 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 Banks
shall have accelerated the maturity of the Loans and other Obligations pursuant
to Section 12.1, each Bank, upon notice to the other Banks, 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 such Bank 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 such Bank, any recovery being subject to the terms
of Section 29 hereof. No remedy herein conferred upon any Bank or the
Administrative Agent or the holder of any Note 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.
SECTION 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 any Bank to the Borrower and any securities or other
property of the Borrower in the possession of such Bank may be applied to or set
off against the payment of 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 Borrower to the Banks or the Administrative Agent.
Any amounts set off pursuant to this Section 13 shall be distributed ratably in
accordance with Section 29 among all of the Banks by the Bank setting off such
amounts. If any Bank fails to share such setoff ratably, the Administrative
Agent shall have the right to withhold such Bank's share of the Borrower's
payments until each of the Banks shall have, in the aggregate, received a pro
rata repayment.
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SECTION 14. EXPENSES. Whether or not the transactions contemplated
herein shall be consummated, the Borrower hereby promises to reimburse the
Administrative Agent for all reasonable out-of-pocket fees and disbursements
(including all reasonable attorneys' 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 Borrower further promises to reimburse the
Administrative Agent and the Banks for all reasonable out-of-pocket fees and
disbursements (including all reasonable legal fees and the allocable cost of
in-house attorneys' fees) incurred or expended in connection with the
enforcement of any Obligations or the satisfaction of any indebtedness of the
Borrower hereunder or under any other Loan Document, or in connection with any
litigation, proceeding or dispute hereunder in any way related to the credit
hereunder. The Borrower also promises to pay the Administrative Agent all
reasonable out-of-pocket fees and disbursements, incurred or expended in
connection with the Competitive Bid Loan procedure under Section 4 hereof.
SECTION 15. THE ADMINISTRATIVE AGENT.
SECTION 15.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank hereby
irrevocably appoints and authorizes MGT to act as Administrative Agent,
provided, however, the Administrative Agent is hereby authorized to serve only
as administrative and documentation agent for the Banks and to exercise such
powers as are reasonably incidental thereto and as are set forth in this
Agreement and the other Loan Documents. The Administrative Agent hereby
acknowledges that it does not have the authority to negotiate any agreement
which would bind the Banks or agree to any amendment, waiver or modification of
any of the Loan Documents or bind the Banks except as set forth in this
Agreement or the Loan Documents. Except as provided in this Agreement, and in
the other Loan Documents, the Administrative Agent shall take action or refrain
from acting only upon instructions of the Banks. It is agreed that the duties,
rights, privileges and immunities of the Issuing Banks, in their capacity as
issuers of Letters of Credit hereunder, shall be identical to the duties,
rights, privileges and immunities of the Administrative Agent as provided in
this Section 15. The Administrative Agent shall not have any duties or
responsibilities or any fiduciary relationship with any Bank except those
expressly set forth in this Agreement and the other Loan Documents. Neither the
Administrative Agent nor any of its affiliates shall be responsible to the Banks
for any recitals, statements, representations or warranties made by the Borrower
or any other Person whether contained herein or otherwise or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the other Loan Documents or any other document referred to or
provided for herein or therein or for any failure by the Borrower or any other
Person to perform its obligations hereunder or thereunder or in respect of the
Notes. The Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent,
the Agents and any of their directors, officers, employees or agents shall not
be responsible for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Administrative Agent in its separate
capacity as a Bank shall have the same rights and powers hereunder as any other
Bank.
SECTION 15.2. ACTIONS BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement as reasonably deemed
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appropriate unless it shall first have received the consent of the Majority
Banks (or, when expressly required hereby, all of the Banks), and shall be
indemnified to its reasonable satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Administrative Agent shall in all cases
be fully protected in acting, or in refraining from acting, under this Agreement
or any of the Loan Documents in accordance with the instruction of the Majority
Banks (or, when expressly required hereby or thereby, all of the Banks), and
such instruction and any action taken or failure to act pursuant thereto shall
be binding upon the Banks and all future holders of the Notes or any Letter of
Credit Participation.
SECTION 15.3. INDEMNIFICATION. Without limiting the obligations of the
Borrower hereunder or under any other Loan Document, the Banks agree to
indemnify the Administrative Agent, its affiliates and its respective directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
ratably in accordance with their respective Commitment Percentages for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or the enforcement
of any of the terms hereof or thereof or of any such other documents; provided,
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Administrative Agent (or
any agent thereof) and provided further that no Bank shall be liable with
respect to acts of Section 20 Subsidiaries of other Banks, IT BEING THE INTENT
OF THE PARTIES HERETO THAT ALL SUCH INDEMNIFIED PARTIES SHALL BE INDEMNIFIED FOR
THEIR ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE.
SECTION 15.4. REIMBURSEMENT. Without limiting the provisions of
Sections 5.1(a), 5.13, and 13, the Administrative Agent shall not be obliged to
make available to any Person any sum which the Administrative Agent is expecting
to receive for the account of that Person until the Administrative Agent has
determined that it has received that sum. The Administrative Agent may, however,
disburse funds prior to determining that the sums which the Administrative Agent
expects to receive have been finally and unconditionally paid to the
Administrative Agent, if the Administrative Agent wishes to do so. If and to the
extent that the Administrative Agent does disburse funds and it later becomes
apparent that the Administrative Agent did not then receive a payment in an
amount equal to the sum paid out, then any Person to whom the Administrative
Agent made the funds available shall, on demand from the Administrative Agent,
refund to the Administrative Agent the sum paid to that Person. If, in the
opinion of the Administrative Agent, the distribution of any amount received by
it in such capacity hereunder or under the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be determined by
such court.
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SECTION 15.5. DOCUMENTS. The Administrative Agent will forward to each
Bank, promptly after receipt thereof, a copy of each notice or other document
furnished to the Administrative Agent for such Bank hereunder; provided,
however, that, notwithstanding the foregoing, the Administrative Agent may
furnish to the Banks a monthly summary with respect to Letters of Credit issued
hereunder in lieu of copies of the related Letter of Credit Applications.
SECTION 15.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.
Each Bank represents that it has, independently and without reliance on the
Administrative Agent, the Agents or any other Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of the Borrower and the Guarantors and the
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Administrative Agent,
the Agent or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action under this Agreement or any other Loan
Document. Except as herein expressly provided to the contrary, the
Administrative Agent shall not be required to keep informed as to the
performance or observance by the Borrower and the Guarantors of this Agreement,
the other Loan Documents or any other document referred to or provided for
herein or therein or by any other Person of any other agreement or to make
inquiry of, or to inspect the properties or books of, any Person. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning any person which may come into the
possession of the Administrative Agent or any of their affiliates. Each Bank
shall have access to all documents relating to the Administrative Agent's
performance of their duties hereunder at such Bank's request. Unless any Bank
shall promptly object to any action taken by the Administrative Agent hereunder
of which such Bank has actual knowledge (other than actions which require the
prior consent of such Bank in accordance with the terms hereof or to which the
provisions of Section 15.8 are applicable and other than actions which
constitute gross negligence or willful misconduct by the Administrative Agent),
such Bank shall be presumed to have approved the same.
SECTION 15.7. RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving 60 days' prior written notice thereof to
the Banks and the Borrower. Upon any such resignation, the Banks (other than the
resigning Administrative Agent) shall have the right to appoint a successor
Administrative Agent from among the Banks. If no successor to the Administrative
Agent shall have been so appointed by the Banks and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent from among the remaining
Banks, which shall be a financial institution having a combined capital and
surplus in excess of $1,000,000,000. Upon the acceptance of any appointment as
the Administrative Agent hereunder by a successor Administrative Agent, such
successor Administrative Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its duties
and obligations hereunder. After the retiring Administrative Agent's
resignation, the provisions of this Agreement shall continue in effect for its
benefit in respect of any actions taken or omitted to be
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taken by it while it was acting as the Administrative Agent. Any new Issuing
Bank appointed pursuant to this Section 15.7 shall immediately issue new Letters
of Credit in place of Letters of Credit previously issued or, if acceptable to
the resigning Issuing Bank, issue letters of credit in favor of the resigning
Issuing Bank as security for the outstanding Letters of Credit and shall in due
course replace all Letters of Credit previously issued by the resigning Issuing
Bank.
SECTION 15.8. ACTION BY THE BANKS, CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any action to be taken (including the giving of notice) may be taken, any
consent or approval required or permitted by this Agreement or any other Loan
Document to be given by the Banks may be given, any term of this Agreement, any
other Loan Document or any other instrument, document or agreement related to
this Agreement or the other Loan Documents or mentioned therein may be amended,
and the performance or observance by the Borrower or any other Person of any of
the terms thereof and any Default or Event of Default (as defined in any of the
above-referenced documents or instruments) may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Majority Banks; provided, however, that no such consent
or amendment which affects the rights, duties or liabilities of the
Administrative Agent or any Issuing Bank shall be effective without the written
consent of the Administrative Agent or such Issuing Bank, as the case may be.
Notwithstanding the foregoing, no amendment, waiver or consent shall do any of
the following unless in writing and signed by ALL of the Banks (a) increase the
principal amount of the Total Commitment (or subject any Bank to any additional
obligations), (b) reduce the principal of or interest on the Notes (including,
without limitation, interest on overdue amounts) or any fees payable hereunder,
(c) postpone any date fixed for any payment in respect of principal or interest
(including, without limitation, interest on overdue amounts) on the Notes or any
fee hereunder; (d) change the definition of "Majority Banks" or number of Banks
which shall be required for the Banks or any of them to take any action under
the Loan Documents; (e) amend this Section 15.8; (f) change the Commitment
Percentage of any Bank, except as permitted under Section 20 hereof, (g) change
the Total Commitment Percentage of any Bank, or (h) release the Borrower or any
Guarantor from its obligations hereunder (except as expressly set forth herein).
SECTION 16. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Banks, the Agents, the Issuing Banks, and the Administrative Agent
and their affiliates, as well as the Banks' and the Administrative Agent's and
their affiliates' 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 any
indemnified party. In any investigation, enforcement matter, proceeding or
litigation, or the preparation therefor, the Banks and the Administrative Agent
shall be entitled to select their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. In the event of the commencement of any such proceeding or
litigation against the Banks or Administrative Agent by third parties, the
Borrower 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 Banks or
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Administrative Agent. The covenants of this Section 16 shall survive payment or
satisfaction of payment of amounts owing with respect to any Note or any other
Loan Document and satisfaction of all the Obligations hereunder, IT BEING THE
INTENT OF THE PARTIES HERETO THAT ALL SUCH INDEMNIFIED PARTIES SHALL BE
INDEMNIFIED FOR THEIR ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE.
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SECTION 17. WITHHOLDING TAXES. The Borrower hereby agrees that:
(a) Any and all payments made by the Borrower hereunder shall
be made free and clear of, and without deduction for, any and all
present or future taxes, levies, fees, duties, imposts, deductions,
charges or withholdings of any nature whatsoever, excluding, in the
case of the Administrative Agent or the Banks or any holder of the
Notes, (i) taxes imposed on, or measured by, its net income or profits,
(ii) franchise taxes imposed on it, (iii) taxes imposed by any
jurisdiction as a direct consequence of it, or any of its affiliates,
having a present or former connection with such jurisdiction,
including, without limitation, being organized, existing or qualified
to do business, doing business or maintaining a permanent establishment
or office in such jurisdiction, and (iv) taxes imposed by reason of its
failure to comply with any applicable certification, identification,
information, documentation or other reporting requirement (all such
non-excluded taxes being hereinafter referred to as "Indemnifiable
Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of
any Indemnifiable Taxes pursuant to any applicable law, or governmental
rule or regulation, then the Borrower will (i) direct to the relevant
taxing authority the full amount required to be so withheld or
deducted, (ii) forward to the Administrative Agent for delivery to the
applicable Bank an official receipt or other documentation satisfactory
to the Administrative Agent and the applicable Bank evidencing such
payment to such taxing authority, and (iii) direct to the
Administrative Agent for the account of the relevant Banks such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each relevant Bank will equal the full
amount such Bank would have received had no such withholding or
deduction (including any Indemnifiable Taxes on such additional
amounts) been required. Moreover, if any Indemnifiable Taxes are
directly asserted against the Administrative Agent or any Bank with
respect to any payment received by the Administrative Agent or such
Bank by reason of the Borrower's failure to properly deduct and
withhold such Indemnifiable Taxes from such payment, the Administrative
Agent or such Bank may pay such Indemnifiable Taxes and the Borrower
will promptly pay all such additional amounts (including any penalties,
interest or reasonable expenses) as is necessary in order that the net
amount received by such Person after the payment of such Indemnifiable
Taxes (including any Indemnifiable Taxes on such additional amount)
shall equal the amount such Person would have received had not such
Indemnifiable Taxes been asserted. Any such payment shall be made
promptly after the receipt by the Borrower from the Administrative
Agent or such Bank, as the case may be, of a written statement setting
forth in reasonable detail the amount of the Indemnifiable Taxes and
the basis of the claim.
(b) The Borrower shall pay any present or future stamp or
documentary taxes or any other excise or any other similar levies which
arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement or any
other Loan Document ("Other Taxes").
(c) The Borrower hereby indemnifies and holds harmless the
Administrative Agent and each Bank for the full amount of Indemnifiable
Taxes or Other Taxes
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(including, without limitation, any Indemnifiable Taxes or Other Taxes
imposed on amounts payable under this Section 17) paid by the
Administrative Agent or such Bank, as the case may be, and any
liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto, by reason of the Borrower's
failure to properly deduct and withhold Indemnifiable Taxes pursuant to
paragraph (a) above or to properly pay Other Taxes pursuant to
paragraph (b) above. Any indemnification payment from the Borrower
under the preceding sentence shall be made promptly after receipt by
the Borrower from the Administrative Agent or Bank of a written
statement setting forth in reasonable detail the amount of such
Indemnifiable Taxes or such Other Taxes, as the case may be, and the
basis of the claim.
(d) If the Borrower pays any amount under this Section 17 to
the Administrative Agent or any Bank and such payee knowingly receives
a refund of any taxes with respect to which such amount was paid, the
Administrative Agent or such Bank, as the case may be, shall pay to the
Borrower the amount of such refund promptly following the receipt
thereof by such payee.
(e) In the event any taxing authority notifies the Borrower or
any Guarantor that any of them has improperly failed to deduct or
withhold any taxes (other than Indemnifiable Taxes) from a payment made
hereunder to the Administrative Agent or any Bank, the Borrower shall
timely and fully pay such taxes to such taxing authority.
(f) The Administrative Agent or the Banks shall, upon the
request of the Borrower, take reasonable measures to avoid or mitigate
the amount of Indemnifiable Taxes required to be deducted or withheld
from any payment made hereunder if such measures can be taken without
such Person in its sole judgment suffering any legal, regulatory or
economic disadvantage.
(g) Without prejudice to the survival of any other agreement
of the parties hereunder, the agreements and obligations of the
Borrower contained in this Section 17 shall survive the payment in full
of the Obligations.
SECTION 18. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
SECTION 18.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower or one or
more of its Subsidiaries, in connection with this Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the
Administrative Agent and each Bank any information delivered to such Section 20
Subsidiary by the Borrower or any of its Subsidiaries, and (b) the
Administrative Agent and each Bank to share with such Section 20 Subsidiary any
information delivered to the Administrative Agent or such Bank by the Borrower
or any of its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Bank to enter into this Agreement; it being understood, in each
case, that any such Section 20 Subsidiary receiving such information shall be
bound by the confidentiality provisions of this Agreement. Such authorization
shall survive the payment and satisfaction in full of all of Obligations.
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SECTION 18.2. CONFIDENTIALITY. Each of the Banks and the Administrative
Agent agrees, on behalf of itself and each of its affiliates, directors,
officers, employees and representatives, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower or any of its Subsidiaries pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Banks or the Administrative Agent, provided that nothing herein
shall limit the disclosure of any such information (a) after such information
shall have become public other than through a violation of this Section 18, (b)
to the extent required by statute, rule, regulation or judicial process, (c) to
counsel for any of the Banks or the Administrative Agent, (d) to bank examiners
or any other regulatory authority having jurisdiction over any Bank or the
Administrative Agent, or to auditors or accountants, (e) to the Administrative
Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Administrative Agent or
any Section 20 Subsidiary is a party, or in connection with the enforcement of
rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Bank as provided in Section 18.1 or (h) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant agrees to be bound by the provisions of Section 20.
SECTION 18.3. PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, each of the Banks and the Administrative Agent
shall, prior to disclosure thereof, notify the Borrower of any request for
disclosure of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Bank by such governmental agency)
or pursuant to legal process.
SECTION 18.4. OTHER. In no event shall any Bank or the Administrative
Agent be obligated or required to return any materials furnished to it or any
Section 20 Subsidiary by the Borrower or any of its Subsidiaries. The
obligations of each Bank under this Section 18 shall supersede and replace the
obligations of such Bank under any confidentiality letter in respect of this
financing signed and delivered by such Bank to the Borrower prior to the date
hereof and shall be binding upon any assignee of, or purchaser of any
participation in, any interest in any of the Loans or Reimbursement Obligations
from any Bank.
SECTION 19. 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 Borrower or any Guarantor pursuant hereto shall be deemed to have
been relied upon by the Banks, the Issuing Banks and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by them, and
shall survive the making by the Banks of the Loans and the issuance, extension
or renewal of any Letters of Credit by any Issuing Bank, as herein contemplated,
and shall continue in full force and effect so long as any amount due under this
Agreement, any Obligation, any Letter of Credit or any Note remains outstanding
and unpaid or any Bank has any obligation to make any Loans or any Issuing Bank
has any obligation to issue, extend, or renew any Letters of Credit hereunder.
All statements contained in any certificate or other paper
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delivered by or on behalf of the Borrower pursuant hereto or in connection with
the transactions contemplated hereby shall constitute representations and
warranties by the Borrower hereunder.
SECTION 20. ASSIGNMENT AND PARTICIPATION. It is understood and agreed
that each Bank shall have the right to assign at any time all or a portion of
its Commitment Percentage and interests in the risk relating to the Loans,
outstanding Letters of Credit and its Commitment hereunder in an amount equal to
or greater than $5,000,000 (or, if a Bank's Commitment is less than $5,000,000,
in a minimum amount equal to such Bank's Commitment, provided that prior to any
Commitment reductions pursuant to Section 2.3, such Bank's Commitment was at
least $10,000,000) to additional banks or other financial institutions with the
prior written approval of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower, which approvals shall not
be unreasonably withheld. Any Bank may at any time, and from time to time,
assign to any branch, lending office, or affiliate or such Bank all or any part
of its rights and obligations under the Loan Documents by notice to the
Administrative Agent and the Borrower. It is further agreed that each bank or
other financial institution which executes and delivers to the Administrative
Agent and the Borrower hereunder an Assignment and Acceptance substantially in
the form of Exhibit G hereto (an "Assignment and Acceptance") together with an
assignment fee in the amount of $3,500 payable by the assigning Bank to the
Administrative Agent, shall, on the date specified in such Assignment and
Acceptance, become a party to this Agreement and the other Loan Documents for
all purposes of this Agreement and the other Loan Documents, and its portion of
the Commitment, the Loans and Letters of Credit shall be as set forth in such
Assignment and Acceptance. The Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents. Upon the
execution and delivery of such Assignment and Acceptance, (a) the Borrower shall
issue to the assignee bank or other financial institution Notes in the amount of
such bank's or other financial institution's Commitment dated the date of the
assignment or such other date as may be specified by the Administrative Agent,
and otherwise completed in substantially the form of Exhibits A or B, and to the
extent any assigning Bank has retained a portion of its obligations hereunder, a
replacement Syndicated Note, to the assigning Bank reflecting its assignment;
(b) to the extent applicable, the Borrower shall issue a Competitive Bid Note in
substantially the form of Exhibit C (and a replacement Competitive Bid Note) or
the Administrative Agent shall make appropriate entries on the Competitive Bid
Loan Accounts to reflect such assignment of Competitive Bid Loan(s); (c) the
Administrative Agent shall distribute to the Borrower, the Banks and such bank
or financial institution a revised Schedule 1 reflecting such changes; and (d)
this Agreement shall be deemed to be appropriately amended to reflect (i) the
status of the bank or financial institution as a party hereto and (ii) the
status and rights of the Banks hereunder.
Each Bank shall also have the right to grant participations to one or
more banks or other financial institutions in its Commitment, the Loans and
outstanding Letters of Credit. The documents evidencing any such participation
shall limit such participating bank's or financial institution's voting rights
with respect to this Agreement to the matters set forth in Section 15.8 which
require the approval of all Banks.
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Notwithstanding the foregoing, no assignment or participation shall
operate to increase the Total Commitment hereunder or otherwise alter the
substantive terms of this Agreement, and no Bank which retains a Commitment
hereunder shall have a Commitment of less than $10,000,000, as such amount may
be reduced upon reductions in the Total Commitment pursuant to Section 2.3
hereof.
Anything contained in this Section 20 to the contrary notwithstanding,
any Bank may at any time pledge all or any portion of its interest and rights
under this Agreement (including all or any portion of its Notes) to any of the
twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve
Act, 12 U.S.C. Section 341. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations hereunder or under any of the
other Loan Documents.
The Borrower agrees that in addition to disclosures made in accordance
with standard and customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder; provided that such assignees
or participants or potential assignees or participants shall agree to be bound
by Section 18 hereof.
SECTION 21. 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 the Borrower shall not assign or transfer its rights
or obligations hereunder or thereunder without the prior written consent of each
of the Banks.
SECTION 22. 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 telegraph, telex or facsimile and confirmed by
letter, addressed as follows:
(a) if to the Borrower or the Guarantors, at 1001 Fannin
Street, Suite 4000, Houston, Texas 77002, Attention: Ronald H. Jones,
facsimile number (713) 209-9710; or
(b) if to BOA, at Bank of America, N.A., 231 South LaSalle
Street, Chicago, Illinois 60697, Attention: Robert P. Rospierski,
Managing Director, facsimile number (312) 828-1974; or
(c) if to MGT, J.P. Morgan Securities Inc. or the
Administrative Agent at Morgan Guaranty Trust Company of New York, 60
Wall Street, New York, New York 10260-0060, facsimile number (212)
648-5018; or
(d) if to any Bank, at the last address provided to the
Administrative Agent;
or such other address for notice as shall have last been furnished in writing to
the Person giving the notice.
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73
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 telex, facsimile, or cable, at the time of the dispatch thereof, if in normal
business hours in the country of receipt, or otherwise at the opening of
business on the following Business Day.
SECTION 23. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the Banks, the Issuing
Banks or the Administrative Agent 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.
SECTION 24. CONSENTS, ETC. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated, except as provided in this
Section 24, subject to the provisions of Section 15.8. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement to be given by the Banks may
be given, and any term of this Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Borrower and the Majority Banks. To the
extent permitted by law, no course of dealing or delay or omission on the part
of any of the Banks, the Issuing Banks or the Administrative Agent in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
SECTION 25. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES 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, THE BORROWER AND THE
GUARANTORS HEREBY WAIVE ANY RIGHT ANY OF THEM 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 BORROWER AND EACH OF THE GUARANTORS EACH (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK, ANY ISSUING BANK,
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THE ADMINISTRATIVE AGENT OR ANY AGENT HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH BANK, SUCH ISSUING BANK, THE ADMINISTRATIVE AGENT OR SUCH AGENT WOULD
NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT, THE BANKS, AND THE ISSUING BANKS
HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
BECAUSE OF, AMONG OTHER THINGS, THE BORROWER'S AND THE GUARANTORS' WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
SECTION 26. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
AND EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE
OF NEW YORK AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. THE BORROWER AND THE GUARANTORS CONSENT AND AGREE THAT ANY SUIT FOR
THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWER IN ACCORDANCE WITH LAW
AT THE ADDRESS SPECIFIED IN SECTION 22. THE BORROWER AND EACH OF THE GUARANTORS
HEREBY WAIVE ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
SECTION 27. 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.
SECTION 28. GUARANTY.
SECTION 28.1. GUARANTY. For value received and hereby acknowledged and
as an inducement to the Banks and the Issuing Banks to make the Loans available
to the Borrower, and issue, extend or renew Letters of Credit for the account of
the Borrower, each Guarantor hereby unconditionally and irrevocably guarantees
(a) the full punctual payment when due, whether at stated maturity, by
acceleration or otherwise, of all Obligations of the Borrower now or hereafter
existing whether for principal, interest, fees, expenses or otherwise, and (b)
the strict performance and observance by the Borrower of all agreements,
warranties and covenants applicable to the Borrower in the Loan Documents and
(c) the obligations of the Borrower under the Loan Documents (such Obligations
collectively being hereafter referred to as the "Guaranteed Obligations").
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SECTION 28.2. GUARANTY ABSOLUTE. Each of the Guarantors guarantees that
the Guaranteed Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Bank, any
Issuing Bank or the Administrative Agent with respect thereto. The liability of
the Guarantors under the guaranty granted under this Agreement with regard to
the Guaranteed Obligations shall be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or
in any other term of, all or any of its Guaranteed Obligations or any
other amendment or waiver of or any consent to departure from this
Agreement or any other Loan Document (with regard to such Guaranteed
Obligations);
(b) any release or amendment or waiver of or consent to
departure from any other guaranty for all or any of its Guaranteed
Obligations;
(c) any change in ownership of the Borrower;
(d) any acceptance of any partial payment(s) from the Borrower
or any other Guarantor; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of its
Obligations under any Loan Document.
The guaranty under this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by the Banks, the Issuing
Banks or the Administrative Agent upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.
SECTION 28.3. EFFECTIVENESS; ENFORCEMENT. The guaranty under this
Agreement shall be effective and shall be deemed to be made with respect to each
Loan and each Letter of Credit as of the time it is made, issued or extended, or
becomes a Letter of Credit under this Agreement, as applicable. No invalidity,
irregularity or unenforceability by reason of any bankruptcy or similar law, or
any law or order of any government or agency thereof purporting to reduce, amend
or otherwise affect any liability of the Borrower, and no defect in or
insufficiency or want of powers of the Borrower or irregular or improperly
recorded exercise thereof, shall impair, affect, be a defense to or claim
against such guaranty. The guaranty under this Agreement is a continuing
guaranty and shall (a) survive any termination of this Agreement, and (b) remain
in full force and effect until payment in full of, and performance of, all
Guaranteed Obligations and all other amounts payable under this Agreement.
Notwithstanding anything set forth in this Section 28 to the contrary, Sanifill
shall be released from its guaranty obligations upon the satisfaction (as
determined in the Administrative Agent's judgment and evidenced by a release
executed by the Administrative Agent) of the Sanifill Convertible Subordinated
Debt. The guaranty under this Agreement is made for the benefit of the
Administrative Agent, the Issuing Banks and the Banks and their successors and
assigns, and may be enforced from time to time as often as occasion therefor may
arise and without requirement on the part of the Administrative Agent, the
Issuing
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Banks or the Banks first to exercise any rights against the Borrower, or to
resort to any other source or means of obtaining payment of any of the said
obligations or to elect any other remedy.
SECTION 28.4. WAIVER. Except as otherwise specifically provided in any
of the Loan Documents, each of the Guarantors hereby waives promptness,
diligence, protest, notice of protest, all suretyship defenses, notice of
acceptance and any other notice with respect to any of its Guaranteed
Obligations and the guaranty under this Agreement and any requirement that the
Banks, the Issuing Banks or the Administrative Agent protect, secure, perfect
any security interest or lien or any property subject thereto or exhaust any
right or take any action against the Borrower or any other Person. Each of the
Guarantors also irrevocably waives, to the fullest extent permitted by law, all
defenses which at any time may be available to it in respect of its Guaranteed
Obligations by virtue of any statute of limitations, valuation, stay, moratorium
law or other similar law now or hereafter in effect.
SECTION 28.5. EXPENSES. Each of the Guarantors hereby promises to
reimburse (a) the Administrative Agent for all reasonable out-of-pocket fees and
disbursements (including all reasonable attorneys' fees), incurred or expended
in connection with the preparation, filing or recording, or interpretation of
the guaranty under this Agreement, the other Loan Documents to which such
Guarantor is a party, or any amendment, modification, approval, consent or
waiver hereof or thereof, and (b) the Administrative Agent, the Issuing Banks
and the Banks and their respective affiliates for all reasonable out-of-pocket
fees and disbursements (including reasonable attorneys' fees), incurred or
expended in connection with the enforcement of its Guaranteed Obligations
(whether or not legal proceedings are instituted). The Guarantors will pay any
taxes (including any interest and penalties in respect thereof) other than the
Banks' taxes based on overall income or profits, payable on or with respect to
the transactions contemplated by the guaranty under this Agreement, each of the
Guarantors hereby agreeing jointly and severally to indemnify each Bank with
respect thereto.
SECTION 28.6. CONCERNING JOINT AND SEVERAL LIABILITY OF THE GUARANTORS.
(a) Each of the Guarantors hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a
co-debtor, joint and several liability with the Borrower, with respect
to the payment and performance of all of its Guaranteed Obligations
(including, without limitation, any Guaranteed Obligations arising
under this Section 28), it being the intention of the parties hereto
that all such Guaranteed Obligations shall be the joint and several
Guaranteed Obligations of such Guarantor and the Borrower without
preferences or distinction among them.
(b) If and to the extent that the Borrower shall fail to make
any payment with respect to any of its Obligations as and when due or
to perform any of its Guaranteed Obligations in accordance with the
terms thereof, then in each such event the applicable Guarantor will
make such payment with respect to, or perform, such Guaranteed
Obligation.
(c) The Guaranteed Obligations of each Guarantor under the
provisions of this Section 28 constitute full recourse obligations of
such Guarantor enforceable against such
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Guarantor to the full extent of its properties and assets, irrespective
of the validity, regularity or enforceability of this Agreement or any
other circumstance whatsoever.
(d) Except as otherwise expressly provided in this Agreement,
each of the Guarantors hereby waives notice of acceptance of its joint
and several liability, notice of any Loans made, or Letters of Credit
issued under this Agreement, notice of any action at any time taken or
omitted by the Administrative Agent, the Issuing Banks or the Banks
under or in respect of any of the Guaranteed 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 Guarantors hereby assents to, and waives notice
of, any extension or postponement of the time for the payment of any of
the Guaranteed Obligations, the acceptance of any payment of any of the
Guaranteed Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by the
Administrative Agent, the Issuing Banks or the Banks at any time or
times in respect of any Default or Event of Default by the Borrower or
the Guarantors in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement or any other Loan
Document, any and all other indulgences whatsoever by the
Administrative Agent, the Issuing Banks or the Banks in respect of any
of the Guaranteed 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 Guaranteed Obligations or the addition, substitution or
release, in whole or in part, of the Borrower or any Guarantor. Without
limiting the generality of the foregoing, each of the Guarantors
assents to any other action or delay in acting or failure to act on the
part of the Banks, the Issuing Banks or the Administrative Agent with
respect to the failure by the Borrower or any Guarantor to comply with
its respective Obligations or Guaranteed 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
Section 28, afford grounds for terminating, discharging or relieving
the Guarantors, in whole or in part, from any of the Guaranteed
Obligations under this Section 28, it being the intention of the
Guarantors that, so long as any of the Guaranteed Obligations hereunder
remain unsatisfied, the Guaranteed Obligations of each of the
Guarantors under this Section 28 shall not be discharged except by
performance and then only to the extent of such performance. The
Guaranteed Obligations of each of the Guarantors under this Section 28
shall not be diminished or rendered unenforceable by any winding up,
reorganization, arrangement, liquidation, reconstruction or similar
proceeding with respect to the Borrower or any of the Guarantors or the
Banks, the Issuing Banks or the Administrative Agent. The joint and
several liability of each of the Guarantors hereunder shall continue in
full force and effect notwithstanding any absorption, merger,
consolidation, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of the Borrower or the
Guarantors, the Banks, the Issuing Banks or the Administrative Agent.
(e) The Guarantors shall be liable under this Section 28 only
for the maximum amount of such liabilities that can be incurred under
applicable law without rendering this Section 28 voidable under
applicable law relating to fraudulent conveyance and fraudulent
transfer, and not for any greater amount. Accordingly, if any
obligation under any
<PAGE> 84
78
provision under this Section 28 shall be declared to be invalid or
unenforceable in any respect or to any extent, it is the stated
intention and agreement of the Guarantors, the Administrative Agent,
the Issuing Banks and the Banks that any balance of the obligation
created by such provision and all other obligations of the Guarantors
under this Section 28 to the Banks, the Issuing Banks or the
Administrative Agent shall remain valid and enforceable, and that all
sums not in excess of those permitted under applicable law shall remain
fully collectible by the Banks, the Issuing Banks and the
Administrative Agent from the Borrower or the Guarantors, as the case
may be.
(f) The provisions of this Section 28 are made for the benefit
of the Administrative Agent, the Issuing Banks and the Banks and their
successors and assigns, and may be enforced in good faith by them from
time to time against the Guarantors as often as occasion therefor may
arise and without requirement on the part of the Administrative Agent,
the Issuing Banks or the Banks first to marshal any of their claims or
to exercise any of their rights against the Borrower or the Guarantors
or to exhaust any remedies available to them against the Borrower or
the Guarantors 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 Section 28 shall remain in effect until
all of the Guaranteed Obligations shall have been paid in full or
otherwise fully satisfied and the Commitments have expired and all
outstanding Letters of Credit have expired, matured or otherwise been
terminated. If at any time, any payment, or any part thereof, made in
respect of any of the Guaranteed Obligations, is rescinded or must
otherwise be restored or returned by the Banks, the Issuing Banks or
the Administrative Agent upon the insolvency, bankruptcy or
reorganization of the Borrower or any of the Guarantors, or otherwise,
the provisions of this Section 28 will forthwith be reinstated in
effect, as though such payment had not been made.
SECTION 28.7. WAIVER. Until the final payment and performance in full
of all of the Obligations, neither of the Guarantors shall exercise and each of
the Guarantors hereby waives any rights such Guarantor may have against the
Borrower or the other Guarantor arising as a result of payment by such Guarantor
hereunder, by way of subrogation, reimbursement, restitution, contribution or
otherwise, and will not prove any claim in competition with the Administrative
Agent, the Issuing Banks or any Bank in respect of any payment hereunder in any
bankruptcy, insolvency or reorganization case or proceedings of any nature; such
Guarantor will not claim any setoff, recoupment or counterclaim against the
Borrower or the other Guarantor in respect of any liability of the Borrower to
such Guarantor; and such Guarantor waives any benefit of and any right to
participate in any collateral security which may be held by the Administrative
Agent, the Issuing Banks or any Bank.
SECTION 28.8. SUBROGATION; SUBORDINATION. The payment of any amounts
due with respect to any indebtedness of the Borrower for money borrowed or
credit received now or hereafter owed to either of the Guarantors is hereby
subordinated to the prior payment in full of all of the Obligations. Each of the
Guarantors agrees that, after the occurrence of any default in the payment or
performance of any of the Obligations, such Guarantor will not demand, sue for
or otherwise attempt to collect any such indebtedness of the Borrower or the
other Guarantor to such Guarantor until all of the Obligations shall have been
paid in full. If, notwithstanding the
<PAGE> 85
79
foregoing sentence, either of the Guarantors shall collect, enforce or receive
any amounts in respect of such indebtedness while any Obligations are still
outstanding, such amounts shall be collected, enforced and received by such
Guarantor as trustee for the Banks, the Issuing Banks and the Administrative
Agent and be paid over to the Administrative Agent at Default, for the benefit
of the Banks, the Issuing Banks, and the Administrative Agent on account of the
Obligations without affecting in any manner the liability of such Guarantor
under the other provisions hereof.
SECTION 29. PARI PASSU TREATMENT.
(a) Notwithstanding anything to the contrary set forth herein,
each payment or prepayment of principal and interest received after the
occurrence of an Event of Default hereunder shall be distributed pari
passu among the Banks, in accordance with the aggregate outstanding
principal amount of the Obligations owing to each Bank divided by the
aggregate outstanding principal amount of all Obligations.
(b) Following the occurrence and during the continuance of any
Event of Default, each Bank agrees that if it shall, through the
exercise of a right of banker's lien, setoff or counterclaim against
any Borrower (pursuant to Section 13 or otherwise), including a secured
claim under Section 506 of the Bankruptcy Code or other security or
interest arising from or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or other similar
law or otherwise, obtain payment (voluntary or involuntary) in respect
of the Notes, Loans, Reimbursement Obligations and other Obligations
held by it (other than pursuant to Section 5.5, Section 5.6 or Section
5.8) as a result of which the unpaid principal portion of the Notes and
the Obligations held by it shall be proportionately less than the
unpaid principal portion of the Notes and Obligations held by any other
Bank, it shall be deemed to have simultaneously purchased from such
other Bank a participation in the Notes and Obligations held by such
other Bank, so that the aggregate unpaid principal amount of the Notes,
Obligations and participations in Notes and Obligations held by each
Bank shall be in the same proportion to the aggregate unpaid principal
amount of the Notes and Obligations then outstanding as the principal
amount of the Notes and other Obligations held by it prior to such
exercise of banker's lien, setoff or counterclaim was to the principal
amount of all Notes and other Obligations outstanding prior to such
exercise of banker's lien, setoff or counterclaim; provided, however,
that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 29 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments
shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustments restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any
Person holding such a participation in the Notes and the Obligations
deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Person as fully as if such Person
had made a Loan directly to the Borrower in the amount of such
participation.
SECTION 30. TRANSITIONAL ARRANGEMENTS. Upon the Effective Date (a) this
Agreement shall supersede the Existing Credit Agreement in its entirety, and (b)
the parties
<PAGE> 86
80
acknowledge and agree that the Pricing Table set forth herein shall be applied
retroactively to October 29, 1999 to the Loans and Letters of Credit outstanding
under the Existing Credit Agreement; and the Borrower hereby agrees to pay on
December 15, 1999 (i) any facility fees due under the Existing Credit Agreement,
(ii) any incremental amounts due as the result of such retroactive increase to
the extent not paid on or before the Effective Date, and (iii) any other amounts
due under the Existing Credit Agreement.
SECTION 31. FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
<PAGE> 87
81
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
THE BORROWER AND GUARANTORS:
WASTE MANAGEMENT, INC.
(f/k/a USA Waste Services, Inc.)
By:
----------------------------------
Name:
Title:
SANIFILL, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
WASTE MANAGEMENT HOLDINGS, INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
<PAGE> 88
82
THE BANKS AND ADMINISTRATIVE AGENT:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK,
individually and as Administrative Agent
By:
----------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By:
----------------------------------
Name:
Title:
ABN AMRO BANK, N.V.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
BANCA COMMERCIALE ITALIANA, LOS ANGELES
FOREIGN BRANCH
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
<PAGE> 89
83
BANK AUSTRIA AKTIENGESELLSCHAFT
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
BANKBOSTON, N.A.
By:
----------------------------------
Name:
Title:
BANK OF MONTREAL
By:
----------------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS
By:
----------------------------------
Name:
Title:
WELLS FARGO BANK (TEXAS),
NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
<PAGE> 90
84
THE BANK OF NOVA SCOTIA
By:
----------------------------------
Name:
Title:
BANK ONE, TEXAS, N.A.
By:
----------------------------------
Name:
Title:
PARIBAS
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
COMERICA BANK
By:
----------------------------------
Name:
Title:
CIBC INC.
By:
----------------------------------
Name:
Title:
<PAGE> 91
85
CREDIT LYONNAIS NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
THE DAI-ICHI KANGYO BANK, LTD.
By:
----------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK AND/OR CAYMAN ISLANDS
BRANCHES
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK AG
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
THE FIRST NATIONAL BANK OF MARYLAND
By:
----------------------------------
Name:
Title:
<PAGE> 92
86
FLEET BANK, N.A.
By:
----------------------------------
Name:
Title:
THE FUJI BANK, LIMITED, HOUSTON AGENCY
By:
----------------------------------
Name:
Title:
HIBERNIA NATIONAL BANK
By:
----------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN
TRUST COMPANY
By:
----------------------------------
Name:
Title:
KBC BANK N.V.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
<PAGE> 93
87
THE MITSUBISHI TRUST AND BANKING CORPORATION
By:
----------------------------------
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
----------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By:
----------------------------------
Name:
Title:
THE SANWA BANK LIMITED
By:
----------------------------------
Name:
Title:
THE SUMITOMO BANK, LIMITED
By:
----------------------------------
Name:
Title:
<PAGE> 94
88
SUNTRUST BANK, ATLANTA
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
CHASE BANK OF TEXAS, N.A.
By:
----------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
----------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By:
----------------------------------
Name:
Title:
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
<PAGE> 95
89
THE BANK OF NEW YORK
By:
----------------------------------
Name:
Title:
ABU DHABI INTERNATIONAL BANK INC.
By:
----------------------------------
Name:
Title:
By:
----------------------------------
Name:
Title:
CALIFORNIA BANK AND TRUST
(f/k/a Sumitomo Bank of California)
By:
----------------------------------
Name:
Title:
THE SUMITOMO TRUST & BANKING CO.,
LIMITED, NEW YORK BRANCH
By:
----------------------------------
Name:
Title:
REPUBLIC NATIONAL BANK OF NEW YORK
By:
----------------------------------
Name:
Title:
<PAGE> 96
90
ERSTE BANK
By:
----------------------------------
Name:
Title:
<PAGE> 1
Exhibit 10.33
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
LOAN AGREEMENT
DATED AS OF DECEMBER 15, L999
by and among
WASTE MANAGEMENT, INC.
(the "Borrower")
and
THE GUARANTOR
and
BANKBOSTON, N.A. ("BKB")
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOA")
CHASE BANK OF TEXAS, N.A. ("CHASE")
DEUTSCHE BANK AG, NEW YORK BRANCH ("DEUTSCHE")
AND THE OTHER FINANCIAL INSTITUTIONS WHICH BECOME
A PARTY TO THIS AGREEMENT
(Collectively, the "Banks")
and
BKB AS ADMINISTRATIVE AGENT (the "Administrative Agent")
and
DEUTSCHE AS DOCUMENTATION AGENT (the "Documentation Agent")
and
BOA AND CHASE AS SYNDICATION AGENTS
(the "Syndication Agents")
and
BANC OF AMERICA SECURITIES, LLC AND CHASE SECURITIES INC. ("CSI")
AS JOINT LEAD ARRANGERS AND JOINT BOOK MANAGERS (the "Joint Lead Arrangers and
Joint Book Managers")
- --------------------------------------------------------------------------------
<PAGE> 2
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
Section 1. DEFINITIONS AND RULES OF INTERPRETATION..................................................1
Section 1.1. Definitions...................................................................1
Section 1.2. Rules of Interpretation.......................................................15
Section 2. THE SYNDICATED LOAN FACILITIES...........................................................16
Section 2.1. Commitment to Lend............................................................16
Section 2.2. Facility Fee..................................................................16
Section 2.3. Reduction of Total Commitment.................................................17
Section 2.4. The Syndicated Notes..........................................................17
Section 2.5. Interest on Syndicated Loans..................................................18
Section 2.6. Requests for Syndicated Loans.................................................18
Section 2.7. Election of Eurodollar Rate; Notice of Election; Interest Periods; Minimum
Amounts.....................................................................................19
Section 2.8. Funds for Syndicated Loans....................................................20
Section 2.9. Maturity of the Revolving Credit Loans and Reimbursement
Obligations.................................................................................20
Section 2.10. Request for Extension of Revolving Credit Maturity Date......................20
Section 2.11. Prepayments or Repayments of Revolving Credit Loans..........................21
Section 2.12. Swing Line Loans; Settlements................................................22
Section 3. LETTERS OF CREDIT........................................................................23
Section 3.1. Letter of Credit Commitments..................................................23
Section 3.2. Reimbursement Obligation of the Borrower......................................24
Section 3.3. Obligations Absolute..........................................................24
Section 3.4. Reliance by the Issuing Banks.................................................25
Section 3.5. Notice Regarding Letters of Credit............................................25
Section 3.6. Letter of Credit Fee..........................................................25
Section 4. COMPETITIVE BID LOANS....................................................................25
Section 4.1. The Competitive Bid Option....................................................26
Section 4.2. Competitive Bid Loan Accounts: Competitive Bid Notes..........................26
Section 4.3. Competitive Bid Quote Request; Invitation for Competitive Bid Quotes..........27
Section 4.4. Alternative Manner of Procedure...............................................27
Section 4.5. Submission and Contents of Competitive Bid Quotes.............................28
Section 4.6. Notice to Borrower............................................................29
Section 4.7. Acceptance and Notice by Borrower and Administrative Agent....................29
Section 4.8. Allocation by Administrative Agent............................................30
Section 4.9. Funding of Competitive Bid Loans..............................................30
Section 4.10. Funding Losses...............................................................30
Section 4.11. Repayment of Competitive Bid Loans; Interest.................................30
Section 5. THE TERM LOAN............................................................................31
Section 5.1. Conversion of Revolving Credit Loans; the Term Loan...........................31
Section 5.2. The Term Notes................................................................31
Section 5.3. Repayments of the Term Loan...................................................31
Section 5.4. Optional Prepayment of Term Loan..............................................31
Section 5.5. Interest on Term Loan.........................................................32
</TABLE>
<PAGE> 3
ii
<TABLE>
<S> <C> <C>
Section 5.5.1. Notification by Borrower....................................................32
Section 5.5.2. Amounts, etc................................................................32
Section 6. Provisions Relating to All Loans and Letters of Credit...................................32
Section 6.1. Payments......................................................................32
Section 6.2. Computations..................................................................34
Section 6.3. Illegality; Inability to Determine Eurodollar Rate............................34
Section 6.4. Additional Costs, Etc.........................................................34
Section 6.5. Capital Adequacy..............................................................36
Section 6.6. Certificate...................................................................36
Section 6.7. Eurodollar and Competitive Bid Indemnity......................................36
Section 6.8. Interest on Overdue Amounts...................................................37
Section 6.9. Interest Limitation...........................................................37
Section 6.10. Reasonable Efforts to Mitigate...............................................37
Section 6.11. Replacement of Banks.........................................................37
Section 6.12. Advances by Administrative Agent.............................................38
Section 7. REPRESENTATIONS AND WARRANTIES...........................................................39
Section 7.1. Corporate Authority...........................................................39
Section 7.2. Governmental and Other Approvals..............................................39
Section 7.3. Title to Properties; Leases...................................................40
Section 7.4. Financial Statements; Solvency................................................40
Section 7.5. No Material Changes, Etc......................................................40
Section 7.6. Franchises, Patents, Copyrights, Etc..........................................41
Section 7.7. Litigation....................................................................41
Section 7.8. No Materially Adverse Contracts, Etc..........................................41
Section 7.9. Compliance With Other Instruments, Laws, Etc..................................41
Section 7.10. Tax Status...................................................................41
Section 7.11. No Event of Default..........................................................42
Section 7.12. Holding Company and Investment Company Acts..................................42
Section 7.13. Absence of Financing Statements, Etc.........................................42
Section 7.14. Employee Benefit Plans.......................................................42
Section 7.14.1. In General.................................................................42
Section 7.14.2. Terminability of Welfare Plans.............................................43
Section 7.14.3. Guaranteed Pension Plans...................................................43
Section 7.14.4. Multiemployer Plans........................................................43
Section 7.15. Environmental Compliance.....................................................43
Section 7.16. True Copies of Charter and Other Documents...................................45
Section 7.17. Disclosure...................................................................45
Section 7.18. Permits and Governmental Authority...........................................45
Section 7.19. Year 2000 Compliance.........................................................45
Section 7.20. Use of Proceeds. ...........................................................46
Section 8. AFFIRMATIVE COVENANTS OF THE BORROWER....................................................46
Section 8.1. Punctual Payment..............................................................46
Section 8.2. Maintenance of U.S. Office....................................................46
Section 8.3. Records and Accounts..........................................................46
Section 8.4. Financial Statements, Certificates and Information............................46
Section 8.5. Existence and Conduct of Business.............................................47
</TABLE>
<PAGE> 4
iii
<TABLE>
<S> <C> <C>
Section 8.6. Maintenance of Properties.....................................................48
Section 8.7. Insurance.....................................................................48
Section 8.8. Taxes.........................................................................48
Section 8.9. Inspection of Properties, Books and Contracts.................................49
Section 8.10. Compliance with Laws, Contracts, Licenses and Permits; Maintenance of Material
Licenses and Permits..........................................................49
Section 8.11. Environmental Indemnification.................................................49
Section 8.12. Further Assurances............................................................50
Section 8.13. Notice of Potential Claims or Litigation......................................50
Section 8.14. Notice of Certain Events Concerning Insurance and Environmental Claims........50
Section 8.15. Notice of Default.............................................................51
Section 8.16. Use of Proceeds...............................................................51
Section 8.17. Certain Transactions..........................................................51
Section 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER...............................................52
Section 9.1. Restrictions on Indebtedness..................................................52
Section 9.2. Restrictions on Liens.........................................................53
Section 9.3. Restrictions on Investments...................................................54
Section 9.4. Mergers, Consolidations, Sales................................................54
Section 9.5. Restricted Distributions and Redemptions......................................56
Section 9.6. Employee Benefit Plans........................................................57
Section 10. FINANCIAL COVENANTS OF THE BORROWER.....................................................58
Section 10.1. Interest Coverage Ratio. ....................................................58
Section 10.2. Total Debt to EBITDA..........................................................58
Section 10.3. Minimum Net Worth.............................................................58
Section 11. CONDITIONS PRECEDENT....................................................................58
Section 11.1. Conditions To Effectiveness...................................................58
Section 11.1.1. Corporate Action.............................................58
Section 11.1.2. Loan Documents, Etc..........................................59
Section 11.1.3. Certified Copies of Charter Documents........................59
Section 11.1.4. Incumbency Certificate.......................................59
Section 11.1.5. Certificates of Insurance....................................59
Section 11.1.6. Opinions of Counsel..........................................59
Section 11.1.7. Satisfactory Financial Condition.............................59
Section 11.1.8. Payment of Amendment Fees....................................59
Section 11.1.9. Amendments to Existing Debt..................................59
Section 12. CONDITIONS TO ALL LOANS.................................................................59
Section 12.1. Representations True..........................................................60
Section 12.2. Performance; No Event of Default..............................................60
Section 12.3. No Legal Impediment...........................................................60
Section 12.4. Governmental Regulation.......................................................60
Section 12.5. Proceedings and Documents.....................................................60
Section 13. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT..............................61
Section 13.1. Events of Default and Acceleration............................................61
Section 13.2. Termination of Commitments....................................................63
</TABLE>
<PAGE> 5
iv
<TABLE>
<S> <C> <C>
Section 13.3. Remedies......................................................................63
Section 14. SETOFF..................................................................................64
Section 15. EXPENSES................................................................................64
Section 16. THE AGENTS..............................................................................64
Section 16.1. Appointment, Powers and Immunities...........................................64
Section 16.2. Actions By Administrative Agent..............................................65
Section 16.3. Indemnification..............................................................65
Section 16.4. Reimbursement................................................................65
Section 16.5. Documents....................................................................66
Section 16.6. Non-Reliance on Administrative Agent and Other Banks.........................66
Section 16.7. Resignation of Administrative Agent..........................................67
Section 16.8. Action by the Banks, Consents, Amendments, Waivers, Etc......................67
Section 17. INDEMNIFICATION.........................................................................67
Section 18. WITHHOLDING TAXES.......................................................................68
Section 19. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION...........................................70
Section 19.1. Sharing of Information with Section 20 Subsidiary............................70
Section 19.2. Confidentiality..............................................................70
Section 19.3. Prior Notification...........................................................70
Section 19.4. Other........................................................................71
Section 20. SURVIVAL OF COVENANTS, ETC..............................................................71
Section 21. ASSIGNMENT AND PARTICIPATION............................................................71
Section 22. PARTIES IN INTEREST.....................................................................72
Section 23. NOTICES, ETC............................................................................72
Section 24. MISCELLANEOUS...........................................................................73
Section 25. CONSENTS, ETC...........................................................................73
Section 26. WAIVER OF JURY TRIAL....................................................................74
Section 27. GOVERNING LAW; SUBMISSION TO JURISDICTION...............................................74
Section 28. SEVERABILITY............................................................................74
Section 29. GUARANTY................................................................................74
Section 29.1. Guaranty.....................................................................75
Section 29.2. Guaranty Absolute............................................................75
Section 29.3. Effectiveness; Enforcement...................................................75
Section 29.4. Waiver.......................................................................76
Section 29.5. Expenses.....................................................................76
Section 29.6. Concerning Joint and Several Liability of the Guarantor......................76
Section 29.7. Waiver.......................................................................78
Section 29.8. Subrogation; Subordination...................................................78
Section 30. Pari Passu treatment....................................................................79
Section 31. TRANSITIONAL ARRANGEMENTS...............................................................79
Section 32. FINAL AGREEMENT.........................................................................79
</TABLE>
Exhibits
Exhibit A Form of Syndicated Note
Exhibit B Form of Swing Line Note
Exhibit C Form of Competitive Bid Note
<PAGE> 6
-v-
Exhibit D Form of Syndicated Loan Request
Exhibit E Form of Letter of Credit Request
Exhibit F Form of Compliance Certificate
Exhibit G Form of Assignment and Acceptance
Exhibit H Form of Competitive Bid Quote Request
Exhibit I Form of Invitation for Competitive Bid Quotes
Exhibit J Form of Competitive Bid Quote
Exhibit K Form of Notice of Acceptance/Rejection of
Competitive Bid Quote(s)
Exhibit L Form of Term Note
Exhibit M Form of Net Cash Proceeds Certificate
Schedules
Schedule 1 Banks; Commitment Percentages
Schedule 1.1(a) Domestic Strategic Dispositions
Schedule 1.1(b) European Strategic Dispositions
Schedule 3.1(a) Existing Letters of Credit
Schedule 7.7 Litigation
Schedule 7.15 Environmental Compliance
Schedule 9.1(e) Guarantor Indebtedness
Schedule 9.2(a) Existing Liens
<PAGE> 7
BD DRAFT
12/15/99
AMENDED AND RESTATED LOAN AGREEMENT
This AMENDED AND RESTATED LOAN AGREEMENT is made as of the 15th day of
December, l999, by and among WASTE MANAGEMENT, INC., a Delaware corporation
having its chief executive office at 1001 Fannin Street, Suite 4000, Houston,
Texas 77002 (the "Borrower"), the Guarantor, and BANKBOSTON, N.A., a national
banking association having its principal place of business at 100 Federal
Street, Boston, MA 02110 ("BKB"), BANK OF AMERICA, N.A., a national banking
association having a place of business at 231 South LaSalle Street Chicago, IL
60697 ("BOA"), CHASE BANK OF TEXAS, N.A., a national banking association having
its principal place of business at 707 Travis Street, Houston, TX 77002
("Chase"), DEUTSCHE BANK AG, NEW YORK BRANCH, the duly licensed New York branch
of a German corporation having its principal place of business at 31 West 52nd
Street, New York, NY 10019 ("Deutsche"), and each of the other financial
institutions party hereto (collectively, the "Banks"), and BKB as administrative
agent (the "Administrative Agent"), Banc of America Securities LLC and Chase
Securities Inc. as joint lead arrangers and joint book managers (the "Joint Lead
Arrangers and Joint Book Managers"), BOA and Chase Securities Inc. as
syndication agents (the "Syndication Agents") and Deutsche as documentation
agent (the "Documentation Agent", and together with the Administrative Agent,
the Joint Lead Arrangers and Joint Book Managers and the Syndication Agents, the
"Agents").
WHEREAS, the Borrower, the Guarantor, BKB, BOA, Chase, Deutsche,
certain of the Banks, BKB as administrative agent thereunder, Banc of America
Securities LLC and Chase Securities Inc. as lead arrangers and book managers
thereunder, BOA and Chase Securities Inc. as syndication agents thereunder and
Deutsche as documentation agent thereunder (collectively, the "Original
Parties"), are party to that certain Loan Agreement dated as of July 13, 1999,
by and among the Original Parties (the "Prior Loan Agreement"); and
WHEREAS, the Borrower has requested changes in certain terms and the
pricing of the Prior Loan Agreement;
NOW, THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth herein below, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged by
the parties, on the Effective Date, the Prior Loan Agreement shall be amended
and restated by this Agreement, the terms of which are as follows:
SECTION 1. DEFINITIONS AND RULES OF INTERPRETATION.
SECTION 1.1. DEFINITIONS. The following terms shall have the meanings
set forth in this Section 1 or elsewhere in the provisions of this Agreement
referred to below:
Absolute Competitive Bid Loan(s). See Section 4.3(a).
<PAGE> 8
Accountants. See Section 8.4(a).
Administrative Agent. See Preamble.
Affected Bank. See Section 6.11.
Agents. See Preamble.
Agreement. This Amended and Restated Loan Agreement, including the
Schedules and Exhibits hereto, as from time to time amended and supplemented in
accordance with the terms hereof.
Allied Waste Transactions. The series of transactions, which have been
designed to be substantially cash neutral in the aggregate, to be entered into
among Allied Waste Services, Inc. ("Allied"), the Company, and certain of their
respective affiliates, pursuant to which, among other things, (i) the Company
through its affiliates will purchase from Allied and its affiliates all of the
outstanding capital stock of Browning-Ferris Industries Limited ("BFIL") which
owns certain solid waste operations in Canada (the "Canadian Operations"), and
(ii) Allied through its affiliates will acquire from the Company and its
affiliates certain solid waste operations in the United States (the "US
Operations"); and including, in each case, such divestitures of Canadian
Operations and US Operations as may be required by applicable governmental
authorities in connection with their review of such transactions for their
potential antitrust and competitive effects.
Applicable Canadian Pension Legislation. At any time, any pension or
retirement benefits legislation (be it federal, provincial, territorial, or
otherwise) then applicable to any of the Canadian Subsidiaries, including the
Pension Benefits Act (Ontario), the Income Tax Act (Canada), and all regulations
made thereunder.
Applicable Eurodollar Rate. The applicable rate per annum of interest
on the Eurodollar Loans as set forth in the Pricing Table.
Applicable Facility Rate. The applicable rate per annum with respect to
the Facility Fee as set forth in the Pricing Table.
Applicable L/C Rate. The applicable rate per annum on the Maximum
Drawing Amount as set forth in the Pricing Table.
Applicable Requirements. See Section 8.10.
Applicable Swing Line Rate. The annual rate of interest agreed upon
from time to time by BKB and the Borrower with respect to Swing Line Loans.
Assignment and Acceptance. See Section 21.
Availability. As of any date of determination, the aggregate amount of
unused commitments of the lenders party to this Agreement and the Revolving
Credit Facility as of such date.
<PAGE> 9
Balance Sheet Date. December 31, 1998.
Banks. See Preamble.
Base Rate. The higher of (a) the annual rate of interest announced from
time to time by the Administrative Agent at its Head Office 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 Administrative Agent), or (b) one percent
(1%) above the Overnight Federal Funds Effective Rate.
Base Rate Loans. Syndicated Loans bearing interest calculated by
reference to the Base Rate.
BKB. See Preamble.
BOA. See Preamble.
Borrower. See Preamble.
Business Day. Any day, other than a Saturday, Sunday or any day on
which banking institutions in Boston, Massachusetts and New York, New York are
authorized by law to close, and, when used in connection with a Eurodollar Loan,
a Eurodollar Business Day.
Capitalized Leases. Leases under which the Borrower or any of its
Subsidiaries is the lessee or obligor, 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.
CERCLA. See Section 7.15(a).
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 or the CAO. See Section 8.4(b).
Chase. See Preamble.
Code. The Internal Revenue Code of 1986, as amended and in effect from
time to time.
Commitment. With respect to each Bank, such Bank's commitment to make
Syndicated Loans to, and to participate in the issuance, extension and renewal
of Letters of Credit for the account of, the Borrower, determined by multiplying
such Bank's Commitment Percentage by the Total Commitment.
Commitment Percentage. With respect to each Bank, the percentage
initially set forth next to such Bank's name on Schedule 1 hereto, as the same
may be adjusted in accordance with Section 21.
<PAGE> 10
Competitive Bid Loan(s). A borrowing hereunder consisting of one or
more loans made by any of the participating Banks whose offer to make a
Competitive Bid Loan as part of such borrowing has been accepted by the Borrower
under the auction bidding procedure described in Section 4 hereof.
Competitive Bid Loan Accounts. See Section 4.2(a).
Competitive Bid Margin. See Section 4.5(b)(iv).
Competitive Bid Notes. See Section 4.2(b).
Competitive Bid Quote. An offer by a Bank to make a Competitive Bid
Loan in accordance with Section 4.5 hereof.
Competitive Bid Quote Request. See Section 4.3.
Competitive Bid Rate. See Section 4.5(b)(v).
Compliance Certificate. See Section 8.4(c).
Consolidated or consolidated. With reference to any term defined
herein, shall mean that term as applied to the accounts of the Borrower and its
Subsidiaries consolidated in accordance with GAAP.
Consolidated Earnings Before Interest and Taxes, or EBIT. For any
period, the Consolidated Net Income (or Deficit) of the Borrower and its
Subsidiaries on a consolidated basis plus the sum of (1) interest expense, (2)
income taxes, and (3) $1,762,517,000 in charges, taken as a special charge in
respect of the Borrower's internal review in the fiscal quarter ending September
30, 1999, to the extent that each of items (1) through (3) was deducted, without
duplication, in determining Consolidated Net Income (or Deficit) in the relevant
period.
Consolidated Earnings Before Interest, Taxes, Depreciation and
Amortization or EBITDA. For any period, EBIT plus (a) depreciation expense, and
(b) amortization expense to the extent the same would be included in the
calculation of Consolidated Net Income (or Deficit) for such period, determined
in accordance with GAAP.
Consolidated Net Income (or Deficit). The consolidated net income (or
deficit) of the Borrower and its Subsidiaries on a consolidated basis, after
deduction of all expenses, taxes, and other proper charges, determined in
accordance with GAAP.
Consolidated Net Worth. The sum of the par value of the capital stock
(excluding treasury stock), capital in excess of par or stated value of shares
of capital stock, retained earnings (minus accumulated deficit) and any other
account which, in accordance with GAAP, constitute stockholders' equity, of the
Borrower and its Subsidiaries determined on a consolidated basis, excluding any
effect of foreign currency transaction computed pursuant to Financial Accounting
Standards Board Statement No. 52, as amended, supplemented or modified from time
to time, or otherwise in accordance with GAAP.
<PAGE> 11
Consolidated Tangible Assets. Consolidated Total Assets less the sum
of:
(a) the total book value of all assets of the Borrower and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as goodwill, the
purchase price of acquired assets in excess of the fair market value
thereof, trademarks, trade names, service marks, customer lists, brand
names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(b) all amounts representing any write-up in the book value of
any assets of the Borrower or its Subsidiaries resulting from a
revaluation thereof subsequent to the Balance Sheet Date.
Consolidated Total Assets. All assets of the Borrower and its
Subsidiaries determined on a consolidated basis in accordance with GAAP.
Consolidated Total Interest Expense. For any period, the aggregate
amount of interest expense required by GAAP to be paid or accrued during such
period on all Indebtedness of the Borrower and its Subsidiaries outstanding
during all or any part of such period, including capitalized interest expense
for such period.
Defaulting Bank. See Section 6.11.
Defaults. See Section 13.1.
Deutsche. See Preamble.
Disclosure Documents. The Borrower's financial statements referred to
in Section 7.4 and filings made by the Borrower or Guarantor with the Securities
and Exchange Commission that were publicly available prior to the Effective Date
which were provided to the Banks.
Disposal. See "Release".
Distribution. The declaration or payment of any dividend or other
return on equity 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 such returns 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 US$ or $ or U.S. Dollars. Dollars in lawful currency of the
United States of America.
Dome. Dome Merger Subsidiary, Inc., a Delaware corporation and wholly
owned Subsidiary of Borrower.
<PAGE> 12
Domestic Strategic Dispositions. Any sale or other disposition of core
and non-core assets owned by the Borrower and its Subsidiaries formed under the
laws of the United States or any State thereof as more particularly described in
Schedule 1.1(a), as such Schedule 1.1(a) may be added to from time to time by
the Borrower with the approval of the Administrative Agent.
Drawdown Date. The date on which any Loan is made or is to be made, or
any amount is paid by the Issuing Bank under a Letter of Credit.
EBIT. See definition of Consolidated Earnings Before Interest and
Taxes.
EBITDA. See definition of Consolidated Earnings Before Interest, Taxes,
Depreciation and Amortization.
Effective Date. The date on which the conditions precedent set forth in
Section 11.1 hereof are satisfied and the Majority Banks consent to this
Agreement.
Employee Benefit Plan. Any employee benefit plan within the meaning of
Section 3(3) of ERISA or Applicable Canadian Pension Legislation maintained or
contributed to by the Borrower, any of its Subsidiaries, or any ERISA Affiliate,
other than a Multiemployer Plan.
Environmental Laws. See Section 7.15(a).
EPA. See Section 7.15(b).
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
the Borrower or any of its Subsidiaries under Section 414 of the Code.
ERISA Reportable Event. A reportable event within the meaning of
Section 4043 of ERISA and the regulations promulgated thereunder with respect to
a Guaranteed Pension Plan as to which the requirement of notice has not been
waived.
Eurocurrency Reserve Rate. For any day with respect to a Eurodollar
Loan, the maximum rate (expressed as a decimal) at which any lender subject
thereto would be required to maintain reserves under Regulation D of the Board
of Governors of the Federal Reserve System (or any successor or similar
regulations relating to such reserve requirements) against "Eurocurrency
Liabilities" (as that term is used in Regulation D), if such liabilities were
outstanding. The Eurocurrency Reserve Rate shall be adjusted automatically on
and as of the effective date of any change in the Eurocurrency Reserve Rate.
Eurodollar Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London or such
other eurodollar interbank market as may be selected by the Administrative Agent
in its sole discretion acting in good faith.
<PAGE> 13
Eurodollar Lending Office. Initially, the office of each Bank set forth
in the administrative materials provided to the Administrative Agent;
thereafter, upon notice to the Administrative Agent, such other office of such
Bank that shall be making or maintaining Eurodollar Loans.
Eurodollar Loans. Syndicated Loans bearing interest calculated by
reference to the Eurodollar Rate.
Eurodollar Rate. For any Interest Period with respect to a Eurodollar
Loan, the rate of interest equal to (i) the arithmetic average of the rates per
annum for each Reference Bank at which such Reference Bank's Eurodollar Lending
Office is offered Dollar deposits at approximately 10:00 a.m. (New York time)
two (2) Eurodollar Business Days prior to the beginning of such Interest Period
in the interbank eurodollar market where the eurodollar operations of such
Eurodollar Lending Office are customarily conducted, for delivery on the first
day of such Interest Period for the number of days comprised therein and in an
amount comparable to the amount of the Eurodollar Rate Loan of such Reference
Bank to which such Interest Period applies, divided by (ii) a number equal to
1.00 minus the Eurocurrency Reserve Rate, if applicable (rounded upwards to the
nearest 1/16 of one percent).
European Credit Facilities. That certain Credit Agreement dated
November 26, 1998, providing for borrowings by Waste Management International
("International") and other foreign Subsidiaries of the Borrower, guaranteed by
the Borrower, in the amount of Euro 167,000,000, as amended; and that certain
Credit Agreement dated November 26, 1998, providing for borrowings by
International and other foreign subsidiaries, guaranteed by the Borrower, in the
amount of Euro 30,000,000, as amended.
European Strategic Dispositions. Any sale or other disposition of core
and non-core assets owned by any Subsidiary of the Borrower not formed under the
laws of the United States or any State thereof as more particularly described in
Schedule 1.1(b), as such Schedule 1.1(b) may be added to from time to time by
the Borrower with the approval of the Administrative Agent.
Events of Default. See Section 13.1.
Existing Domestic Bank Debt. The amount of Indebtedness outstanding
under this Agreement and the Revolving Credit Facility from time to time.
Facility Fee. See Section 2.2.
generally accepted accounting principles or GAAP. (i) When used in
Section 10, 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 Borrower reflected in its 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
<PAGE> 14
predecessors, as in effect from time to time, and (B) consistently applied with
past financial statements of the Borrower 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 Obligations. See Section 29.1.
Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of Section 3(2) of ERISA maintained or contributed to by the Borrower,
its Subsidiaries 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.
Guarantor. Waste Management Holdings, Inc., a wholly owned Subsidiary
of the Borrower.
Hazardous Substances. See Section 7.15(b).
Head Office. The Administrative Agent's head office located in Boston,
Massachusetts, or at such other location as the Administrative Agent may
designate from time to time.
Indebtedness. Collectively without duplication, whether classified as
Indebtedness, an Investment or otherwise on the obligor's balance sheet, (a) all
indebtedness for borrowed money, (b) all obligations for the deferred purchase
price 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, liabilities or indebtedness (contingent or otherwise) under surety,
performance bonds or any other bonding arrangements, (g) all Indebtedness of
others referred to in clauses (a) through (f) 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
(h) all Indebtedness referred to in clauses (a) through (g) 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
<PAGE> 15
Indebtedness; provided that if a Permitted Receivables Transaction is
outstanding and is accounted for as a sale of accounts receivable under
generally accepted accounting principles, Indebtedness determined as aforesaid
shall be adjusted to include the additional Indebtedness, determined on a
consolidated basis, which would have been outstanding had such Permitted
Receivables Transaction been accounted for as a borrowing. The sum of all such
Indebtedness of the Borrower and its Subsidiaries on a consolidated basis under
(a) through (h) above shall be referred to as "Total Debt"; provided, however,
that Indebtedness under (f) above shall be included in such calculation only to
the extent that a surety has been called upon to make payment on a bond.
Ineligible Securities. Securities which may not be underwritten or
dealt in by member banks of the Federal Reserve System under Section 16 of the
Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as amended.
Interest Period. With respect to each Loan (a) initially, the period
commencing on the Drawdown Date of such Loan and ending on the last day of one
of the periods set forth below, as selected by the Borrower in accordance with
this Agreement (i) for any Base Rate Loan or Swing Line Loan, the first day of
the month; (ii) for any Eurodollar Loan, 1, 2, 3, or 6 months; (iii) for any
Absolute Competitive Bid Loan, from 7 through 180 days; and (iv) for any LIBOR
Competitive Bid Loan, 1, 2, 3, 4, 5, or 6 months; and (b) thereafter, each
period commencing on the last day of the next preceding Interest Period
applicable to such Loan and ending on the last day of one of the periods set
forth above, as selected by the Borrower in accordance with this Agreement or if
such period has no numerically corresponding day, on the last Business Day of
such period; provided that any Interest Period which would otherwise end on a
day which is not a Business Day shall be deemed to end on the next succeeding
Business Day; provided further that for any Interest Period for any Eurodollar
Loan or LIBOR Competitive Bid Loan, if such next succeeding Business Day falls
in the next succeeding calendar month, such Interest Period shall be deemed to
end on the next preceding Business Day; and provided further that no Interest
Period shall extend beyond the Revolving Credit Maturity Date or Term Loan
Maturity Date, as applicable.
Interim Balance Sheet Date. September 30, 1999.
Investments. All expenditures made by a Person and all liabilities
incurred (contingently or otherwise) by a Person for the acquisition of stock
(other than the stock of wholly owned Subsidiaries), pre-payments for use of
landfill air space in excess of usual and customary industry practice, 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 other Person, including without
limitation, the funding of any captive insurance company (other than loans,
advances, capital contributions or transfers of property to any wholly owned
Subsidiaries or guaranties with respect to Indebtedness of wholly owned
Subsidiaries). 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
<PAGE> 16
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.
Issuance Fee. See Section 3.6.
Issuing Banks. The Bank(s) issuing Letters of Credit, which shall be
(a) BKB, BOA and Chase, and (b) such other Banks as agreed to by the Borrower
and the Administrative Agent; and (c) the Transitional Issuing Banks.
Letter of Credit Applications. Letter of credit applications in such
form as may be agreed upon by the Borrower and the Issuing Bank from time to
time which are entered into pursuant to Section 3 hereof, as such Letter of
Credit Applications are amended, varied or supplemented from time to time;
provided, however, in the event of any conflict or inconsistency between the
terms of any Letter of Credit Application and this Agreement, the terms of this
Agreement shall control.
Letter of Credit Fee. See Section 3.6.
Letter of Credit Participation. See Section 3.1(b).
Letters of Credit. Standby or direct-pay letters of credit issued or to
be issued by the Issuing Banks under Section 3 hereof for the account of the
Borrower.
LIBOR Competitive Bid Loan(s). See Section 4.3(a).
LIBOR Rate. For any Interest Period with respect to a LIBOR Competitive
Bid Loan, (a) the rate of interest equal to the rate determined by the
Administrative Agent at which Dollar deposits for such Interest Period are
offered based on information presented on Telerate Page 3750 as of 11:00 a.m.
(London time) two (2) Eurodollar Business Days prior to the first day of such
Interest Period, or (b) if such rate is not shown at such place, the rate of
interest equal to (i) the arithmetic average of the rates per annum for each
Reference Bank at which such Reference Bank's Eurodollar Lending Office is
offered Dollar deposits two (2) Eurodollar Business Days prior to the beginning
of such Interest Period in the interbank eurodollar market where the eurodollar
operations of such Eurodollar Lending Office are customarily conducted, for
delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of the Eurodollar
Loan of such Reference Bank to which such Interest Period applies, divided by
(ii) a number equal to 1.00 minus the Eurocurrency Reserve Rate, if applicable
(rounded upwards to the nearest 1/16 of one percent).
Loan Documents. This Agreement, the Notes, the Letter of Credit
Applications, the Letters of Credit, and any documents, instruments or
agreements executed in connection with any of the foregoing, each as amended,
modified, supplemented, or replaced from time to time.
<PAGE> 17
Loans. Collectively, the Syndicated Loans, the Swing Line Loans, the
Competitive Bid Loans and the Term Loan.
Majority Banks. The Banks with fifty-one percent (51%) of the Total
Commitment; provided that in the event that the Total Commitment has been
terminated, the Majority Banks shall be the Banks holding fifty-one percent
(51%) of the aggregate outstanding principal amount of the Obligations on such
date.
Material Subsidiary. Any Subsidiary which, at the time such
determination is made, (a) has assets, revenues, or liabilities equal to at
least $20,000,000, or (b) is the holder of or the applicant for a permit to
operate a solid waste facility pursuant to RCRA or any analogous state law.
Maximum Drawing Amount. The maximum aggregate amount from time to time
that the beneficiaries may draw under outstanding Letters of Credit.
MGT. Morgan Guaranty Trust Company of New York.
Moody's. Moody's Investors Service, Inc.
Multiemployer Plan. Any multiemployer plan within the meaning of
Section 3(37) of ERISA maintained or contributed to by the Borrower, any of its
Subsidiaries, or any ERISA Affiliate.
Net Cash Proceeds. With respect to any sale of any assets of the
Borrower or any of its Subsidiaries, the gross cash consideration received by
the Borrower or any of its Subsidiaries, net of (a) commissions, direct sales
costs, normal closing costs and adjustments, (b) the amount used to repay any
Indebtedness secured by such assets, (c) any amount which by the terms of such
sale, or by applicable law must be repaid out of the proceeds of such asset
sale, (d) all amounts to be provided by the seller as a reserve, in accordance
with GAAP, or retained in escrow with respect to any liabilities associated with
the assets disposed of in such asset sale, (e) income taxes attributable to such
sale, and (f) professional fees and expenses incurred directly or payable in
connection therewith; provided that if any consideration which would otherwise
constitute "Net Cash Proceeds" is required to be held in escrow pending
determination of whether a purchase price adjustment will be made, such escrow
amount shall become "Net Cash Proceeds" only at such time as it is released from
escrow. For purposes of determining the amount of Net Cash Proceeds associated
with any asset sale which is in a currency other than U.S. Dollars, the Borrower
shall, for purposes of Sections 9.4 and 9.5, calculate an equivalent amount of
such Net Cash Proceeds in U.S. Dollars by utilizing the conversion rates
published in the Wall Street Journal on the first Business Day of the week
during which such asset sale occurred.
New Lending Office. See Section 6.1(c).
Non-U.S. Bank. See Section 6.1(b).
Notes. Collectively, the Competitive Bid Notes, the Syndicated Notes,
the Swing Line Note and the Term Notes.
<PAGE> 18
Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Administrative Agent 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 Notes, or any other instrument at any time evidencing any thereof
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.
Original Parties. See Recitals.
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, or if such rate is not published, the
average of the quotations at approximately 11:00 a.m. New York time for the day
of such transaction(s), received by the Administrative Agent from three Federal
Funds brokers of recognized standing selected by the Administrative Agent.
PBGC. The Pension Benefit Guaranty Corporation created by Section 4002
of ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. See Section 9.2.
Permitted Receivables Transaction. Any sale or sales of, and/or
securitization of, any accounts receivable of the Borrower and/or any of its
Subsidiaries (the "Receivables") pursuant to which (a) the Borrower and its
Subsidiaries realize aggregate net proceeds of not more than $500,000,000 at any
one time outstanding, including, without limitation, any revolving purchase(s)
of Receivables where the maximum aggregate uncollected purchase price (exclusive
of any deferred purchase price) for such Receivables at any time outstanding
does not exceed $500,000,000, and (b) which Receivables shall not be discounted
more than 25%.
Person. Any individual, corporation, partnership, joint venture,
limited liability company, trust, unincorporated association, business, or other
legal entity, and any government or any governmental agency or political
subdivision thereof.
<PAGE> 19
Pricing Table:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------------------------------
APPLICABLE
SENIOR PUBLIC APPLICABLE APPLICABLE EURODOLLAR
LEVEL DEBT RATING FACILITY RATE L/C RATE RATE
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1 (Greater than or equal to BBB by 0.2000% 1.0500% Eurodollar Rate
Standard & Poor's and greater than per annum per annum plus 1.0500%
or equal to Ba2 by Moody's) or per annum
(greater than or equal to BBB- by
Standard & Poor's and greater than
or equal to Ba1 by Moody's)
--------------------------------------------------------------------------------------------------------------
2 BBB- by Standard & Poor's and Ba2 by 0.2500% 1.2500% Eurodollar Rate
Moody's per annum per annum plus 1.2500%
per annum
--------------------------------------------------------------------------------------------------------------
3 (BB+ by Standard & Poor's and Ba1 or 0.2500% 1.5000% Eurodollar Rate
Ba2 by Moody's) or (BB by Standard & per annum per annum plus 1.5000%
Poor's and Ba1 by Moody's) per annum
--------------------------------------------------------------------------------------------------------------
4 BB by Standard & Poor's and Ba2 by 0.3000% 1.7000% Eurodollar Rate
Moody's per annum per annum plus 1.7000%
per annum
--------------------------------------------------------------------------------------------------------------
5 (Less than BB by Standard & Poor's 0.3750% 1.8750% Eurodollar Rate
or Ba2 by Moody's) or (Unrated by per annum per annum plus 1.8750%
Standard & Poor's and Moody's) per annum
--------------------------------------------------------------------------------------------------------------
</TABLE>
The applicable rates charged for any day shall be determined by the Senior
Public Debt Rating in effect as of that day.
Prior Loan Agreement. See Preamble.
RCRA. See Section 7.15(a).
Real Property. All real property heretofore, now, or hereafter owned,
operated, or leased by the Borrower or any of its Subsidiaries.
<PAGE> 20
Reference Banks. BKB, BOA, and Deutsche.
Regulatory Disposition. The disposition of any assets of the Borrower
and its Subsidiaries required under antitrust laws in connection with the WMI
Merger.
Reimbursement Obligation. The Borrower's obligation to reimburse the
applicable Issuing Bank and the Banks on account of any drawing under any Letter
of Credit, all as provided in Section 3.2.
Release. Shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Sections 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. Sections 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 Canada or a state, province, territory or other
political subdivision thereof wherein the property lies establish a meaning for
"Release" or "Disposal" which is broader than specified in either CERCLA, or
RCRA, such broader meaning shall apply to the Borrower's or any of its
Subsidiaries' activities in that state, province, territory or political
subdivision.
Replacement Bank. See Section 6.11.
Replacement Notice. See Section 6.11.
Revolving Credit Facility. That certain Third Amended and Restated
Revolving Credit Agreement dated as of December 15, 1999 by and among the
Borrower, Sanifill, the Guarantor, BOA, MGT and the other banks party thereto,
and MGT as administrative and documentation agent thereunder, as amended from
time to time.
Revolving Credit Loans. Collectively, the Syndicated Loans, the Swing
Line Loans and the Competitive Bid Loans.
Revolving Credit Maturity Date. July 10, 2000, as the same may be
extended in the sole discretion of the Banks pursuant to Section 2.10 hereof.
Revolving Credit Notes. Collectively, the Competitive Bid Notes, the
Syndicated Notes and the Swing Line Note.
Sanifill. Sanifill, Inc., a Delaware corporation having its chief
executive office at 1001 Fannin Street, Suite 4000, Houston, Texas 77002.
Section 20 Subsidiary. A Subsidiary of the bank holding company
controlling any Bank, which Subsidiary has been granted authority by the Federal
Reserve Board to underwrite and deal in certain Ineligible Securities.
Senior Public Debt Rating. The ratings of the Borrower's public
unsecured long-term senior debt, without third party credit enhancement, issued
by Moody's and Standard & Poor's.
<PAGE> 21
Standard & Poor's. Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc.
Strategic Dispositions. Domestic Strategic Dispositions and European
Strategic Dispositions.
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.
Swing Line Loans. See Section 2.12(a).
Swing Line Note. See Section 2.12(a).
Swing Line Settlement. The making or receiving of payments, in
immediately available funds, by the Banks to or from the Administrative Agent in
accordance with Section 2.12 hereof to the extent necessary to cause each Bank's
actual share of the outstanding amount of the Syndicated Loans to be equal to
such Bank's Commitment Percentage of the outstanding amount of such Syndicated
Loans, in any case when, prior to such action, the actual share is not so equal.
Swing Line Settlement Amount. See Section 2.12(b).
Swing Line Settlement Date. See Section 2.12(b).
Swing Line Settling Bank. See Section 2.12(b).
Syndicated Loan Request. See Section 2.6(a).
Syndicated Loans. A borrowing hereunder consisting of one or more loans
made by the Banks to the Borrower under the procedure described in Section
2.1(a) and Section 2.12 hereof.
Syndicated Notes. See Section 2.4(a).
Term Loan. The term loan made or to be made by the Banks to the
Borrower on the Revolving Credit Maturity Date as contemplated by Section 5.
Term Loan Maturity Date. The date 364 days after the Revolving Credit
Maturity Date.
Term Notes. See Section 5.1.
Terminated Plans. The Waste Management, Inc. Pension Plan and The Waste
Management of Alameda County, Inc. Retirement Plan.
Total Commitment. $3,000,000,000, as such amount may be reduced
pursuant to Section 2.3 hereof, or, if such Total Commitment has been terminated
pursuant to Section 2.3 or Section 13.2 hereof, zero.
<PAGE> 22
Transitional Issuing Banks. Bank One, Texas, N.A., First Union National
Bank, and Mellon Bank, N.A.
WMI Merger. The merger of Dome into the Guarantor pursuant to the WMI
Merger Agreement, on or about July 16, 1998, with the Guarantor having become
the surviving corporation and having become a wholly owned subsidiary of the
Borrower and with the Guarantor having changed its name to Waste Management
Holdings, Inc.
WMI Merger Agreement. The Agreement and Plan of Merger, dated as of
March 10, 1998, among the Borrower, Dome and the Guarantor.
Year 2000 Compliant. See Section 7.19.
SECTION 1.2. RULES OF INTERPRETATION.
(a) Unless otherwise noted, a reference to any document or
agreement (including this 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 State of New York, have the
meanings assigned to them therein.
(h) Reference to a particular "Section " 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.
<PAGE> 23
SECTION 2. THE SYNDICATED LOAN FACILITIES.
SECTION 2.1. COMMITMENT TO LEND.
(a) Subject to the terms and conditions set forth in this
Agreement, each of the Banks severally agrees to lend to the Borrower
and the Borrower may borrow, repay, and reborrow from time to time
between the Effective Date and the Revolving Credit Maturity Date, upon
notice by the Borrower to the Administrative Agent given in accordance
with this Section 2, its Commitment Percentage of the Syndicated Loans
as are requested by the Borrower; provided that the sum of the
outstanding principal amount of the Syndicated Loans (including the
Swing Line Loans) and the Maximum Drawing Amount of outstanding Letters
of Credit shall not exceed the Total Commitment minus the aggregate
amount of Competitive Bid Loans outstanding at such time.
(b) Each request for a Loan or Letter of Credit hereunder
shall constitute a representation and warranty by the Borrower that the
conditions set forth in Section 11 and Section 12, as the case may be,
have been satisfied on the date of such request. Any unpaid
Reimbursement Obligation shall be a Base Rate Loan, as set forth in
Section 3.2(a).
SECTION 2.2. FACILITY FEE. The Borrower agrees to pay to the
Administrative Agent for the account of the Banks a fee (the "Facility Fee") on
the Total Commitment equal to the Applicable Facility Rate multiplied by the
Total Commitment, provided that in the event that the Borrower exercises its
option under Section 5 to convert the outstanding Revolving Credit Loans into a
Term Loan, the Facility Fee will be equal to the aggregate principal amount of
the Term Loan multiplied by the Applicable Facility Rate. The Facility Fee shall
be payable for the period from and after the Effective Date quarterly in arrears
on the first day of each calendar quarter for the immediately preceding calendar
quarter with the first such payment commencing on January 1, 2000 and with a
final payment on the Revolving Credit Maturity Date (or on the date of
termination in full of the Total Commitment, if earlier), provided that in the
event the Borrower opts to convert its outstanding Revolving Credit Loans into a
Term Loan, the final payment shall be on the Term Loan Maturity Date (or on the
date the Term Loan is paid in full, if earlier). The Facility Fee shall be
distributed pro rata among the Banks in accordance with each Bank's Commitment
Percentage (as determined prior to the date the Borrower converts the
outstanding Revolving Credit Loans into a Term Loan, with respect to the
Facility Fee payable on the Term Loan).
SECTION 2.3. REDUCTION OF TOTAL COMMITMENT.
(a) The Borrower shall have the right at any time and from
time to time upon three (3) Business Days' prior written notice to the
Administrative Agent to reduce by $25,000,000 or a greater amount or
terminate entirely, the Total Commitment, whereupon each Bank's
Commitment shall be reduced pro rata in accordance with such Bank's
Commitment Percentage of the amount specified in such notice or, as the
case may be, terminated provided that at no time may (i) the Total
Commitment be reduced to an amount less than the sum of (A) the Maximum
Drawing Amount of all Letters of Credit, and (B) all Revolving Credit
Loans then outstanding.
(b) The Total Commitment shall be automatically reduced as
required pursuant to Sections 9.4(c) and (d), whereupon each Bank's
Commitment shall be reduced pro rata in accordance with such Bank's
Commitment Percentage of the amount terminated.
<PAGE> 24
(c) No reduction or termination of the Total Commitment once
made may be revoked; the portion of the Total Commitment reduced or
terminated may not be reinstated; and amounts in respect of such
reduced or terminated portion may not be reborrowed.
(d) The Administrative Agent will notify the Banks promptly
after receiving any notice delivered by the Borrower pursuant to this
Section 2.3 and will distribute to each Bank a revised Schedule 1 to
this Agreement.
SECTION 2.4. THE SYNDICATED NOTES.
(a) The Syndicated Loans shall be evidenced by separate
promissory notes of the Borrower in substantially the form of Exhibit A
hereto (each, a "Syndicated Note"), dated as of the Effective Date (or
such later date at which a Bank becomes a party hereto pursuant to
Section 21) and completed with appropriate insertions. One Syndicated
Note shall be payable to the order of each Bank in an amount equal to
its maximum Commitment, and shall represent the obligation of the
Borrower to pay such Bank such principal amount or, if less, the
outstanding principal amount of all Syndicated Loans made by such Bank,
plus interest accrued thereon, as set forth herein.
(b) The Borrower irrevocably authorizes each Bank to make, or
cause to be made, in connection with a Drawdown Date of any Syndicated
Loan and at the time of receipt of any payment of principal on its
Syndicated Note, an appropriate notation on such Bank's records or on
the schedule attached to such Bank's Syndicated Note or a continuation
of such schedule attached thereto reflecting the making of such Loan,
or the receipt of such payment (as the case may be) and each Bank may,
prior to any transfer of its Syndicated Note endorse on the reverse
side thereof the outstanding principal amount of such Loans evidenced
thereby. The outstanding amount of the Syndicated Loans set forth on
such Bank's records shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount shall not limit
or otherwise affect the obligations of the Borrower hereunder or under
such Notes to make payments of principal of or interest on any such
Notes when due.
SECTION 2.5. INTEREST ON SYNDICATED LOANS.
(a) The outstanding principal amount of the Syndicated Loans
shall bear interest at the rate per annum equal to (i) the Base Rate on
Base Rate Loans, (ii) the Applicable Eurodollar Rate on Eurodollar
Loans and (iii) the Applicable Swing Line Rate on Swing Line Loans.
(b) Interest shall be payable (i) monthly in arrears on the
first Business Day of each month, with the first such payment
commencing January 1, 2000, on Base Rate Loans, (ii) on the last day of
the applicable Interest Period, and if such Interest Period is longer
than three months, also on the last day of each three month period
following the commencement of such Interest Period, on Eurodollar
Loans, and (iii) on the Revolving Credit Maturity Date for all
Revolving Credit Loans.
<PAGE> 25
SECTION 2.6. REQUESTS FOR SYNDICATED LOANS.
(a) The Borrower shall give to the Administrative Agent
written notice in the form of Exhibit D hereto (or telephonic notice
confirmed in writing or a facsimile in the form of Exhibit D hereto) of
each Syndicated Loan requested hereunder (a "Syndicated Loan Request")
not later than (a) 11:00 a.m. (New York time) on the proposed Drawdown
Date of any Base Rate Loan, or (b) 11:00 a.m. (New York time) three (3)
Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Loan. Each such Syndicated Loan Request shall specify (A)
the principal amount of the Syndicated Loan requested, (B) the proposed
Drawdown Date of such Syndicated Loan, (C) whether such Syndicated Loan
requested is to be a Base Rate Loan or a Eurodollar Loan, and (D) the
Interest Period for such Syndicated Loan, if a Eurodollar Loan. Each
Syndicated Loan requested shall be in a minimum amount of $10,000,000.
Each such Syndicated Loan Request shall reflect the Maximum Drawing
Amount of all Letters of Credit outstanding and the amount of all
Revolving Credit Loans outstanding (including Competitive Bid Loans and
Swing Line Loans). Syndicated Loan Requests made hereunder shall be
irrevocable and binding on the Borrower, and shall obligate the
Borrower to accept the Syndicated Loan requested from the Banks on the
proposed Drawdown Date.
(b) Each of the representations and warranties made by the
Borrower to the Banks or the Administrative Agent 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 by the Borrower on and as of the date of the
submission of a Syndicated Loan Request, Competitive Bid Quote Request,
or Letter of Credit Application and on and as of the Drawdown Date of
any Revolving Credit Loan or the date of issuance of any 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 the Borrower and its
Subsidiaries as a whole, or (iii) that such representations and
warranties expressly relate only to an earlier date).
(c) The Administrative Agent shall promptly notify each Bank
of each Syndicated Loan Request received by the Administrative Agent
(i) on the proposed Drawdown Date of any Base Rate Loan, or (ii) three
(3) Eurodollar Business Days prior to the proposed Drawdown Date of any
Eurodollar Loan.
SECTION 2.7. ELECTION OF EURODOLLAR RATE; NOTICE OF ELECTION; INTEREST
PERIODS; MINIMUM AMOUNTS.
(a) At the Borrower's option, so long as no Default or Event
of Default has occurred and is then continuing, the Borrower may (i)
elect to convert any Base Rate Loan or a portion thereof to a
Eurodollar Loan, (ii) at the time of any Syndicated Loan Request,
specify that such requested Loan shall be a Eurodollar Loan, or (iii)
upon expiration of the applicable Interest Period, elect to maintain an
existing Eurodollar Loan as such, provided that the Borrower give
notice to the Administrative Agent pursuant to
<PAGE> 26
Section 2.7(b) hereof. Upon determining any Eurodollar Rate, the
Administrative Agent shall forthwith provide notice thereof to the
Borrower and the Banks, and each such notice to the Borrower shall be
considered prima facie correct and binding, absent manifest error.
(b) Three (3) Eurodollar Business Days prior to the making of
any Eurodollar Loan or the conversion of any Base Rate Loan to a
Eurodollar Loan, or, in the case of an outstanding Eurodollar Loan, the
expiration date of the applicable Interest Period, the Borrower shall
give written, telex or facsimile notice (or telephonic notice promptly
confirmed in a writing or a facsimile) received by the Administrative
Agent not later than 11:00 a.m. (New York time) of its election
pursuant to Section 2.7(a). Each such notice delivered to the
Administrative Agent shall specify the aggregate principal amount of
the Syndicated Loans to be borrowed or maintained as or converted to
Eurodollar Loans and the requested duration of the Interest Period that
will be applicable to such Eurodollar Loan, and shall be irrevocable
and binding upon the Borrower. If the Borrower shall fail to give the
Administrative Agent notice of its election hereunder together with all
of the other information required by this Section 2.7(b) with respect
to any Syndicated Loan, whether at the end of an Interest Period or
otherwise, such Syndicated Loan shall be deemed a Base Rate Loan. The
Administrative Agent shall promptly notify the Banks in writing (or by
telephone confirmed in writing or by facsimile) of such election.
(c) Notwithstanding anything herein to the contrary, the
Borrower may not specify an Interest Period that would extend beyond
the Revolving Credit Maturity Date.
(d) No conversion of Loans pursuant to this Section 2.7 may
result in Eurodollar Loans that are less than $5,000,000. In no event
shall the Borrower have more than eight (8) different Interest Periods
for borrowings of Eurodollar Loans outstanding at any time.
(e) Subject to the terms and conditions of Section 6.7 hereof,
if any Affected Bank demands compensation under Section 6.4(c) or (d)
with respect to any Eurodollar Loan, the Borrower may at any time, upon
at least three (3) Business Days' prior written notice to the
applicable Administrative Agent, elect to convert such Eurodollar Loan
into a Base Rate Loan (on which interest and principal shall be payable
contemporaneously with the related Eurodollar Loans of the other
Banks). Thereafter, and until such time as the Affected Bank notifies
the Administrative Agent that the circumstances giving rise to the
demand for compensation under Section 6.4(c) or (d) no longer exist,
all requests for Eurodollar Loans from such Affected Bank shall be
deemed to be requests for Base Rate Loans. Once the Affected Bank
notifies the Administrative Agent that such circumstances no longer
exist, the Borrower may elect that the principal amount of each such
Loan converted hereunder shall again bear interest as Eurodollar Loans
beginning on the first day of the next succeeding Interest Period
applicable to the related Eurodollar Loans of the other Banks.
SECTION 2.8. FUNDS FOR SYNDICATED LOANS. Not later than 1:00 p.m. (New
York time) on the proposed Drawdown Date of Syndicated Loans, each of the Banks
will make available to the Administrative Agent at its Head Office, in
immediately available funds, the amount of its Commitment Percentage of the
amount of the requested Loan. Upon receipt from each Bank of such amount, and
upon receipt of the documents required by Section 11 and Section 12 and the
satisfaction of
<PAGE> 27
the other conditions set forth therein, the Administrative Agent will make
available to the Borrower the aggregate amount of such Syndicated Loans made
available by the Banks. The failure or refusal of any Bank to make available to
the Administrative Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested Syndicated Loan shall
not relieve any other Bank from its several obligations hereunder to make
available to the Administrative Agent the amount of such Bank's Commitment
Percentage of the requested Loan.
SECTION 2.9. MATURITY OF THE REVOLVING CREDIT LOANS AND REIMBURSEMENT
OBLIGATIONS. The Borrower promises to pay on the Revolving Credit Maturity Date,
and there shall become absolutely due and payable on the Revolving Credit
Maturity Date, all of the Revolving Credit Loans and 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.
SECTION 2.10. REQUEST FOR EXTENSION OF REVOLVING CREDIT MATURITY DATE.
The Borrower may, provided that no Default or Event of Default has occurred and
is continuing, by written notice to the Administrative Agent given not more than
sixty (60) days nor less than forty-five (45) days prior to the initial
Revolving Credit Maturity Date (the "Initial Maturity Date") request that the
Initial Maturity Date be extended to the date which is 364 days after the
Initial Maturity Date. The Administrative Agent shall notify the Banks of such
request promptly after receipt, and request each Bank to notify the
Administrative Agent of its determination to consent or not to consent to such
extension. Each Bank which makes a determination not to consent shall notify the
Administrative Agent of such determination by the thirtieth (30th) day prior to
the Initial Maturity Date (without prejudice to any Bank's right to determine
not to consent after such thirtieth (30th) day but on or before the tenth (10th)
Business Day before the Initial Maturity Date). The Borrower may take the
actions permitted by Section 6.11 to replace any Bank that fails to consent to
such extension, or reduce the Total Commitment as permitted under Section 2.3.
If the Majority Banks (including any Replacement Bank, if applicable) consent to
the extension by so notifying the Administrative Agent in writing no earlier
than ten (10) Business Days prior to the Initial Maturity Date, the Revolving
Credit Maturity Date for Revolving Credit Loans of such consenting or
Replacement Banks shall be extended for 364 days. The determination of each Bank
shall be in the sole discretion of such Bank. Each Bank shall give written
notice of its determination to consent or not to consent to such extension
pursuant to this Section 2.10, no earlier than the tenth (10th) Business Day
prior to the Initial Maturity Date. All non-consenting Banks' Revolving Credit
Loans shall be payable in full on the Initial Maturity Date, unless the Borrower
has exercised its option to term out all Revolving Credit Loans pursuant to
Section 5.1. Any Bank which fails to give written notice of its consent or
non-consent shall be deemed not to have consented to the extension hereunder.
SECTION 2.11. PREPAYMENTS OR REPAYMENTS OF REVOLVING CREDIT LOANS.
(a) Optional Prepayments: Subject to the terms and conditions
of Section 6.7, the Borrower shall have the right, at its election, to
repay or prepay the outstanding amount of the Revolving Credit Loans
(other than Competitive Bid Loans), as a whole or in part, at any time
without penalty or premium. The Borrower shall give the Administrative
Agent no later than 11:00 a.m. (New York time) (i) on the proposed date
of prepayment
<PAGE> 28
or repayment of Base Rate Loans, and (ii) three (3) Eurodollar Business
Day prior to the proposed date of prepayment or repayment of Eurodollar
Rate Loans, written notice (or telephonic notice confirmed in writing
or by facsimile) of any proposed prepayment or repayment pursuant to
this Section 2.11, specifying the proposed date of prepayment or
repayment of such Loans and the principal amount to be paid.
Notwithstanding the foregoing, the Borrower may not prepay any
Competitive Bid Loans. The Administrative Agent shall promptly notify
each Bank by written notice (or telephonic notice confirmed in writing
or by facsimile) of such notice of payment.
(b) Mandatory Repayments:
(i) If at any time the sum of the
outstanding principal amount of the Revolving Credit
Loans plus the Maximum Drawing Amount of all
outstanding Letters of Credit exceeds the Total
Commitment, whether by reduction of the Total
Commitment or otherwise, then the Borrower shall
immediately pay the amount of such excess to the
Administrative Agent, (A) for application to the
Revolving Credit Loans, first to Syndicated Loans,
then to Competitive Bid Loans, subject to Section
6.7, or (B) if no Revolving Credit Loans shall be
outstanding, to be held by the Administrative Agent
for the benefit of the Banks as collateral security
for such excess Maximum Drawing Amount and the
Borrower hereby grants a security interest in such
amount to the Administrative Agent for the benefit of
the Banks; provided, however, that if the amount of
cash collateral held by the Administrative Agent
pursuant to this Section 2.11(b)(i) exceeds the
Maximum Drawing Amount required to be collateralized
from time to time, the Administrative Agent shall
return such excess to the Borrower.
(ii) Payments required pursuant to Section
Section 9.4(c) and (d) shall be applied in the manner
set forth in subsection (i) above.
SECTION 2.12. SWING LINE LOANS; SETTLEMENTS.
(a) Solely for ease of administration of the Syndicated Loans,
BKB may, but shall not be required to, fund Base Rate Loans made in
accordance with the provisions of this Agreement ("Swing Line Loans").
The Swing Line Loans shall be evidenced by a promissory note of the
Borrower in substantially the form of Exhibit B hereto (the "Swing Line
Note") and, at the discretion of BKB may be in amounts less than
$10,000,000 provided that the outstanding amount of Swing Line Loans
advanced by BKB hereunder shall not exceed $10,000,000 at any time.
Each Bank shall remain severally and unconditionally liable to fund its
pro rata share (based upon each Bank's Commitment Percentage) of such
Swing Line Loans on each Swing Line Settlement Date and, in the event
BKB chooses not to fund all Base Rate Loans requested on any date, to
fund its Commitment Percentage of the Base Rate Loans requested,
subject to satisfaction of the provisions hereof relating to the making
of Base Rate Loans. Prior to each Swing Line Settlement, all payments
or repayments of the principal of, and interest on, Swing Line Loans
shall be credited to the account of BKB.
<PAGE> 29
(b) The Banks shall effect Swing Line Settlements on (i) the
Business Day immediately following any day which BKB gives written
notice to the Administrative Agent to effect a Swing Line Settlement,
(ii) the Business Day immediately following the Administrative Agent's
becoming aware of the existence of any Default or Event of Default, and
(iii) the Revolving Credit Maturity Date (each such date, a "Swing Line
Settlement Date"). One (1) Business Day prior to each such Swing Line
Settlement Date, the Administrative Agent shall give telephonic notice
to the Banks of (A) the respective outstanding amount of Syndicated
Loans made by each Bank as at the close of business on the prior day,
(B) the amount that any Bank, as applicable (a "Swing Line Settling
Bank"), shall pay to effect a Swing Line Settlement (a "Swing Line
Settlement Amount") and (C) the portion (if any) of the aggregate Swing
Line Settlement Amount to be paid to each Bank. A statement of the
Administrative Agent submitted to the Banks with respect to any amounts
owing hereunder shall be prima facie evidence of the amount due and
owing. Each Swing Line Settling Bank shall, not later than 1:00 p.m.
(New York time) on each Swing Line Settlement Date, effect a wire
transfer of immediately available funds to the Administrative Agent at
its Head Office in the amount of such Bank's Swing Line Settlement
Amount. The Administrative Agent shall, as promptly as practicable
during normal business hours on each Swing Line Settlement Date, effect
a wire transfer of immediately available funds to each Bank of the
Swing Line Settlement Amount to be paid to such Bank. All funds
advanced by any Bank as a Swing Line Settling Bank pursuant to this
Section 2.12(b) shall for all purposes be treated as a Base Rate Loan
made by such Swing Line Settling Bank to the Borrower, and all funds
received by any Bank pursuant to this Section 2.12(b) shall for all
purposes be treated as repayment of amounts owed by the Borrower with
respect to Base Rate Loans made by such Bank.
(c) The Administrative Agent may (unless notified to the
contrary by any Swing Line Settling Bank by 12:00 noon (New York time)
one (1) Business Day prior to the Settlement Date) assume that each
Swing Line Settling Bank has made available (or will make available by
the time specified in Section 2.12(b)) to the Administrative Agent its
Swing Line Settlement Amount, and the Administrative Agent may (but
shall not be required to), in reliance upon such assumption, make
available to each applicable Bank its share (if any) of the aggregate
Swing Line Settlement Amount. If the Swing Line Settlement Amount of
such Swing Line Settling Bank is made available to the Administrative
Agent by such Swing Line Settling Bank on a date after such Swing Line
Settlement Date, such Swing Line Settling Bank shall pay the
Administrative Agent on demand an amount equal to the product of (i)
the average, computed for the period referred to in clause (iii) below,
of the weighted average annual interest rate paid by the Administrative
Agent for federal funds acquired by the Administrative Agent during
each day included in such period times (ii) such Swing Line Settlement
Amount times (iii) a fraction, the numerator of which is the number of
days that elapse from and including such Swing Line Settlement Date to
but not including the date on which such Swing Line Settlement Amount
shall become immediately available to the Administrative Agent, and the
denominator of which is 365. Upon payment of such amount such Swing
Line Settling Bank shall be deemed to have delivered its Swing Line
Settlement Amount on the Swing Line Settlement Date and shall become
entitled to interest payable by the Borrower with respect to such Swing
Line Settling Bank's Swing Line Settlement
<PAGE> 30
Amount as if such share were delivered on the Swing Line Settlement
Date. If such Swing Line Settlement Amount is not in fact made
available to the Administrative Agent by such Swing Line Settling Bank
within three (3) Business Days of such Swing Line Settlement Date, the
Administrative Agent shall be entitled to recover such amount from the
Borrower, with interest thereon at the Base Rate.
(d) After any Swing Line Settlement Date, any payment by the
Borrower of Swing Line Loans hereunder shall be allocated among the
Banks, in amounts determined so as to provide that after such
application and the related Swing Line Settlement, the outstanding
amount of Syndicated Loans of each Bank equals, as nearly as
practicable, such Bank's Commitment Percentage of the aggregate amount
of Syndicated Loans.
SECTION 3. LETTERS OF CREDIT.
SECTION 3.1. LETTER OF CREDIT COMMITMENTS.
(a) Subject to the terms and conditions hereof and the receipt
of a Letter of Credit Application by an Issuing Bank, with a copy to
the Administrative Agent reflecting the Maximum Drawing Amount of all
Letters of Credit (including the requested Letter of Credit), such
Issuing Bank, on behalf of the Banks and in reliance upon the
representations and warranties of the Borrower contained herein and the
agreement of the Banks contained in Section 3.1(b) hereof, agrees to
issue Letters of Credit for the account of the Borrower (which may,
with such Issuing Bank's consent, incorporate automatic renewals for
periods of up to twelve (12) months), in such form as may be requested
from time to time by the Borrower and agreed to by the Issuing Bank;
provided, however, that, after giving effect to such request, the
aggregate Maximum Drawing Amount of all Letters of Credit issued at any
time shall not exceed the lesser of (i) $100,000,000 or (ii) the Total
Commitment minus the aggregate outstanding amount of the Revolving
Credit Loans and provided further, that no Letter of Credit shall have
an expiration date later than five (5) Business Days prior to the
Revolving Credit Maturity Date. The letters of credit listed in
Schedule 3.1(a) issued by the Issuing Banks and the Transitional
Issuing Banks under the Prior Loan Agreement shall be Letters of Credit
under this Agreement. Letters of Credit may only be renewed or extended
by Letters of Credit issued by Issuing Banks (other than Transitional
Issuing Banks) hereunder.
(b) Each Letter of Credit shall be denominated in Dollars.
Each Bank severally agrees that it shall be absolutely liable, without
regard to the occurrence of any Default or Event of Default, the
termination of the Total Commitment pursuant to Section 13.2, or any
other condition precedent whatsoever, to the extent of such Bank's
Commitment Percentage to reimburse the Issuing Bank on demand for the
amount of each draft paid by the Issuing Bank under each Letter of
Credit to the extent that such amount is not reimbursed by the Borrower
pursuant to Section 3.2 (such agreement for a Bank being called herein
the "Letter of Credit Participation" of such Bank). Each Bank agrees
that its obligation to reimburse the Issuing Bank pursuant to this
Section 3.1(b) shall not be affected in any way by any circumstance
other than the gross negligence or willful misconduct of the Issuing
Bank.
<PAGE> 31
(c) Each such reimbursement payment made by a Bank to the
Issuing Bank shall be treated as the purchase by such Bank of a
participating interest in the applicable Reimbursement Obligation under
Section 3.2 in an amount equal to such payment. Each Bank shall share
in accordance with its participating interest in any interest which
accrues pursuant to Section 3.2.
SECTION 3.2. REIMBURSEMENT OBLIGATION OF THE BORROWER. In order to
induce the Issuing Banks to issue, extend and renew each Letter of Credit, the
Borrower hereby agrees to reimburse or pay to each Issuing Bank, with respect to
each Letter of Credit issued, extended or renewed by such Issuing Bank hereunder
as follows:
(a) if any draft presented under any Letter of Credit is
honored by such Issuing Bank or such Issuing Bank otherwise makes
payment with respect thereto, the sum of (i) the amount paid by such
Issuing Bank 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 such Issuing Bank in connection with any payment
made by such Issuing Bank under, or with respect to, such Letter of
Credit, provided however, if the Borrower does not reimburse such
Issuing Bank on the Drawdown Date, such amount shall, provided that no
Event of Default under Section 13(g) or 13(h) has occurred, become
automatically a Syndicated Loan which is a Base Rate Loan advanced
hereunder in an amount equal to such sum; and
(b) upon the Revolving Credit Maturity Date or the
acceleration of the Reimbursement Obligations with respect to all
Letters of Credit in accordance with Section 13, an amount equal to the
then Maximum Drawing Amount of all Letters of Credit shall be paid by
the Borrower to the Administrative Agent to be held as cash collateral
for the applicable Reimbursement Obligations.
SECTION 3.3. OBLIGATIONS ABSOLUTE. The Borrower's respective
obligations under this Section 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 Borrower may have or have had against any Issuing
Bank, any Bank or any beneficiary of a Letter of Credit, and the Borrower
expressly waives any such rights that it may have with respect thereto. The
Borrower further agrees with each Issuing Bank and the Banks that such Issuing
Bank and the Banks (i) shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 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 (unless due to the willful misconduct of
such Issuing Bank or any other Bank), or any dispute between or among the
Borrower and 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 Borrower against the beneficiary of any
Letter of Credit or any such transferee, and (ii) shall not be liable 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 except to the extent of their own willful misconduct. The Borrower agrees
that any action taken or omitted by any Issuing Bank or any Bank in good faith
<PAGE> 32
under or in connection with any Letter of Credit and the related drafts and
documents shall be binding upon the Borrower and shall not result in any
liability on the part of such Issuing Bank or any Bank (or their respective
affiliates) to the Borrower. Nothing herein shall constitute a waiver by the
Borrower of any of its rights against any beneficiary of a Letter of Credit.
SECTION 3.4. RELIANCE BY THE ISSUING BANKS. To the extent not
inconsistent with Section 3.3, each Issuing Bank 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, facsimile, telex or teletype message, statement, order or other
document believed by such Issuing Bank in good faith 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 such Issuing Bank.
SECTION 3.5. NOTICE REGARDING LETTERS OF CREDIT. One (1) Business Day
prior to the issuance of any Letter of Credit or amendments, extensions or
terminations thereof, the applicable Issuing Bank shall notify the
Administrative Agent of the terms of such Letter of Credit, amendment, extension
or termination. On the day of any drawing under any Letter of Credit, such
Issuing Bank shall notify the Administrative Agent of such drawing under any
Letter of Credit.
SECTION 3.6. LETTER OF CREDIT FEE. The Borrower shall pay a fee (the
"Letter of Credit Fee") equal to the Applicable L/C Rate on the Maximum Drawing
Amount of the Letters of Credit to the Administrative Agent for the account of
the Banks, to be shared pro rata by the Banks in accordance with their
respective Commitment Percentages. The Letter of Credit Fee shall be payable
quarterly in arrears on the first day of each calendar quarter for the quarter
just ended, with the first such payment commencing January 1, 2000, and on the
Revolving Credit Maturity Date. In addition, an issuing fee (the "Issuance Fee")
with respect to each Letter of Credit to be agreed upon annually between the
Borrower and each Issuing Bank shall be payable to such Issuing Bank for its
account.
SECTION 4. COMPETITIVE BID LOANS.
SECTION 4.1. THE COMPETITIVE BID OPTION. In addition to the Syndicated
Loans made pursuant to Section 2 hereof, the Borrower may request Competitive
Bid Loans pursuant to the terms of this Section 4. The Banks may, but shall have
no obligation to, make such offers and the Borrower may, but shall have no
obligation to, accept such offers in the manner set forth in this Section 4.
Notwithstanding any other provision herein to the contrary, at no time shall the
aggregate principal amount of Competitive Bid Loans outstanding at any time
exceed the Total Commitment minus the sum of (a) the aggregate outstanding
principal amount of Syndicated Loans (including the Swing Loans), plus (b) the
Maximum Drawing Amount of Letters of Credit, outstanding at such time.
SECTION 4.2. COMPETITIVE BID LOAN ACCOUNTS: COMPETITIVE BID NOTES.
(a) The obligation of the Borrower to repay the outstanding
principal amount of any and all Competitive Bid Loans, plus interest at
the applicable rate accrued thereon, shall be evidenced by this
Agreement and by individual loan accounts (the "Competitive Bid Loan
Accounts" and individually, a "Competitive Bid Loan Account")
maintained by
<PAGE> 33
the Administrative Agent on its books for each of the Banks, it being
the intention of the parties hereto that, except as provided for in
paragraph (b) of this Section 4.2, the Borrower's obligations with
respect to Competitive Bid Loans are to be evidenced only as stated
herein and not by separate promissory notes.
(b) Any Bank may at any time, and from time to time, request
that any Competitive Bid Loans outstanding to such Bank be evidenced by
a promissory note of the Borrower in substantially the form of Exhibit
C hereto (each, a "Competitive Bid Note"), dated as of the Effective
Date and completed with appropriate insertions. One Competitive Bid
Note shall be payable to the order of each Bank in an amount equal to
the Total Commitment, and representing the obligation of the Borrower
to pay such Bank such principal amount or, if less, the outstanding
principal amount of any and all Competitive Bid Loans made by such
Bank, plus interest at the applicable Competitive Bid Rate or
Competitive Bid Margin accrued thereon, as set forth herein. Upon
execution and delivery by the Borrower of a Competitive Bid Note, the
Borrower's obligation to repay any and all Competitive Bid Loans made
to it by such Bank and all interest thereon shall thereafter be
evidenced by such Competitive Bid Note.
(c) The Borrower irrevocably authorizes (i) each Bank to make
or cause to be made, in connection with a Drawdown Date of any
Competitive Bid Loan or at the time of receipt of any payment of
principal on such Bank's Competitive Bid Note in the case of a
Competitive Bid Note, and (ii) the Administrative Agent to make or
cause to be made, in connection with a Drawdown Date of any Competitive
Bid Loan or at the time of receipt of any payment of principal on such
Bank's Competitive Bid Loan Account in the case of a Competitive Bid
Loan Account, an appropriate notation on such Bank's records or on the
schedule attached to such Bank's Competitive Bid Note or a continuation
of such schedule attached thereto, or the Administrative Agent's
records, as applicable, reflecting the making of the Competitive Bid
Loan or the receipt of such payment (as the case may be) and such Bank
may, prior to any transfer of a Competitive Bid Note, endorse on the
reverse side thereof the outstanding principal amount of Competitive
Bid Loans evidenced thereby. The outstanding amount of the Competitive
Bid Loans set forth on such Bank's record or the Administrative Agent's
records, as applicable, shall be prima facie evidence of the principal
amount thereof owing and unpaid to such Bank, but the failure to
record, or any error in so recording, any such amount shall not limit
or otherwise affect the obligations of the Borrower hereunder to make
payments of principal of or interest on any Competitive Bid Loan when
due.
SECTION 4.3. COMPETITIVE BID QUOTE REQUEST; INVITATION FOR COMPETITIVE
BID QUOTES.
(a) When the Borrower wishes to request offers to make
Competitive Bid Loans under this Section 4, it shall transmit to the
Administrative Agent by telex or facsimile a Competitive Bid Quote
Request substantially in the form of Exhibit H hereto (a "Competitive
Bid Quote Request") so as to be received no later than 1:00 p.m. (New
York time) (x) five (5) Eurodollar Business Days prior to the requested
Drawdown Date in the case of a LIBOR Competitive Bid Loan (a "LIBOR
Competitive Bid Loan") or (y)
<PAGE> 34
one (1) Business Day prior to the requested Drawdown Date in the case
of an Absolute Competitive Bid Loan (an "Absolute Competitive Bid
Loan"), specifying:
(i) the requested Drawdown Date (which must be a
Eurodollar Business Day in the case of a LIBOR Competitive Bid
Loan or a Business Day in the case of an Absolute Competitive
Bid Loan);
(ii) the aggregate amount of such Competitive Bid
Loans, which shall be $10,000,000 or larger multiple of
$1,000,000;
(iii) the duration of the Interest Period(s)
applicable thereto, subject to the provisions of the
definition of Interest Period; and
(iv) whether the Competitive Bid Quotes requested are
for LIBOR Competitive Bid Loans or Absolute Competitive Bid
Loans.
The Borrower may request offers to make Competitive Bid Loans for more
than one Interest Period in a single Competitive Bid Quote Request. No
new Competitive Bid Quote Request shall be given until the Borrower has
notified the Administrative Agent of its acceptance or non-acceptance
of the Competitive Bid Quotes relating to any outstanding Competitive
Bid Quote Request.
(b) Promptly upon receipt of a Competitive Bid Quote Request,
the Administrative Agent shall send to the Banks by telecopy or
facsimile transmission an Invitation for Competitive Bid Quotes
substantially in the form of Exhibit I hereto, which shall constitute
an invitation by the Borrower to each Bank to submit Competitive Bid
Quotes in accordance with this Section 4.
SECTION 4.4. ALTERNATIVE MANNER OF PROCEDURE. If, after receipt by the
Administrative Agent and each of the Banks of a Competitive Bid Quote Request
from the Borrower in accordance with Section 4.3, the Administrative Agent or
any Bank shall be unable to complete any procedure of the auction process
described in Section Section 4.5 through 4.6 (inclusive) due to the inability of
such Person to transmit or receive communications through the means specified
therein, such Person may rely on telephonic notice for the transmission or
receipt of such communications. In any case where such Person shall rely on
telephone transmission or receipt, any communication made by telephone shall, as
soon as possible thereafter, be followed by written confirmation thereof.
SECTION 4.5. SUBMISSION AND CONTENTS OF COMPETITIVE BID QUOTES.
(a) Each Bank may, but shall be under no obligation to, submit
a Competitive Bid Quote containing an offer or offers to make
Competitive Bid Loans in response to any Competitive Bid Quote Request.
Each Competitive Bid Quote must comply with the requirements of this
Section 4.5 and must be submitted to the Administrative Agent by telex
or facsimile transmission at its offices as specified in or pursuant to
Section 23 not later than (x) 2:00 p.m. (New York time) on the fourth
Eurodollar Business Day prior to the proposed Drawdown Date, in the
case of a LIBOR Competitive Bid Loan or (y) 10:00 a.m. (New York time)
on the proposed Drawdown Date, in the case of an Absolute Competitive
Bid
<PAGE> 35
Loan, provided that Competitive Bid Quotes may be submitted by the
Administrative Agent in its capacity as a Bank only if it submits its
Competitive Bid Quote to the Borrower not later than (x) one hour prior
to the deadline for the other Banks, in the case of a LIBOR Competitive
Bid Loan or (y) 15 minutes prior to the deadline for the other Banks,
in the case of an Absolute Competitive Bid Loan. Subject to the
provisions of Sections 11 and 12 hereof, any Competitive Bid Quote so
made shall be irrevocable except with the written consent of the
Administrative Agent given on the instructions of the Borrower.
(b) Each Competitive Bid Quote shall be in substantially the
form of Exhibit J hereto and shall in any case specify:
(i) the proposed Drawdown Date;
(ii) the principal amount of the Competitive Bid Loan
for which each proposal is being made, which principal amount
(w) may be greater than or less than the Commitment of the
quoting Bank, (x) must be $5,000,000 or a larger multiple of
$1,000,000, (y) may not exceed the aggregate principal amount
of Competitive Bid Loans for which offers were requested and
(z) may be subject to an aggregate limitation as to the
principal amount of Competitive Bid Loans for which offers
being made by such quoting Bank may be accepted;
(iii) the Interest Period(s) for which Competitive
Bid Quotes are being submitted;
(iv) in the case of a LIBOR Competitive Bid Loan, the
margin above or below the applicable LIBOR Rate (the
"Competitive Bid Margin") offered for each such Competitive
Bid Loan, expressed as a percentage (specified to the nearest
1/10,000th of 1%) to be added to or subtracted from such LIBOR
Rate;
(v) in the case of an Absolute Competitive Bid Loan,
the rate of interest per annum (specified to the nearest
1/10,000th of 1%) (the "Competitive Bid Rate") offered for
each such Absolute Competitive Bid Loan; and
(vi) the identity of the quoting Bank.
A Competitive Bid Quote may include up to five separate offers by the
quoting Bank with respect to each Interest Period specified in the
related Invitation for Competitive Bid Quotes.
(c) Any Competitive Bid Quote shall be disregarded if it:
(i) is not substantially in the form of Exhibit J
hereto;
(ii) contains qualifying, conditional or similar
language;
(iii) proposes terms other than or in addition to
those set forth in the applicable Invitation for Competitive
Bid Quotes; or
<PAGE> 36
(iv) arrives after the time set forth in Section
4.5(a) hereof.
SECTION 4.6. NOTICE TO BORROWER. The Administrative Agent shall
promptly notify the Borrower of the terms (x) of any Competitive Bid Quote
submitted by a Bank that is in accordance with Section 4.5 and (y) of any
Competitive Bid Quote that amends, modifies or is otherwise inconsistent with a
previous Competitive Bid Quote submitted by such Bank with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Administrative Agent unless such subsequent Competitive
Bid Quote is submitted solely to correct a manifest error in such former
Competitive Bid Quote. The Administrative Agent's notice to the Borrower shall
specify (A) the aggregate principal amount of Competitive Bid Loans for which
offers have been received for each Interest Period specified in the related
Competitive Bid Quote Request, (B) the respective principal amounts and
Competitive Bid Margins or Competitive Bid Rates, as the case may be, so
offered, and the identity of the respective Banks submitting such offers, and
(C) if applicable, limitations on the aggregate principal amount of Competitive
Bid Loans for which offers in any single Competitive Bid Quote may be accepted.
SECTION 4.7. ACCEPTANCE AND NOTICE BY BORROWER AND ADMINISTRATIVE
AGENT. Not later than 11:00 a.m. (New York time) on (x) the third Eurodollar
Business Day prior to the proposed Drawdown Date, in the case of a LIBOR
Competitive Bid Loan or (y) the proposed Drawdown Date, in the case of an
Absolute Competitive Bid Loan, the Borrower shall notify the Administrative
Agent of its acceptance or non-acceptance of each Competitive Bid Quote in
substantially the form of Exhibit K hereto. The Borrower may accept any
Competitive Bid Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Competitive Bid
Loan may not exceed the applicable amount set forth in the related
Competitive Bid Quote Request;
(ii) acceptance of offers may only be made on the basis of
ascending Competitive Bid Margins or Competitive Bid Rates, as the case
may be, and
(iii) the Borrower may not accept any offer that is described
in subsection 4.5(c) or that otherwise fails to comply with the
requirements of this Agreement.
The Administrative Agent shall promptly notify each Bank which submitted a
Competitive Bid Quote of the Borrower's acceptance or non-acceptance thereof. At
the request of any Bank which submitted a Competitive Bid Quote and with the
consent of the Borrower, the Administrative Agent will promptly notify all Banks
which submitted Competitive Bid Quotes of (a) the aggregate principal amount of,
and (b) the range of Competitive Bid Rates or Competitive Bid Margins of, the
accepted Competitive Bid Loans for each requested Interest Period.
SECTION 4.8. ALLOCATION BY ADMINISTRATIVE AGENT. If offers are made by
two or more Banks with the same Competitive Bid Margin or Competitive Bid Rate,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Banks as
<PAGE> 37
nearly as possible (in such multiples, not less than $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amounts of such offers. Determination by the Administrative Agent of
the amounts of Competitive Bid Loans shall be conclusive in the absence of
manifest error.
SECTION 4.9. FUNDING OF COMPETITIVE BID LOANS. If, on or prior to the
Drawdown Date of any Competitive Bid Loan, the Total Commitment has not
terminated in full and if, on such Drawdown Date, the applicable conditions of
Sections 11 and 12 hereof are satisfied, the Bank or Banks whose offers the
Borrower has accepted will fund each Competitive Bid Loan so accepted. Such Bank
or Banks will make such Competitive Bid Loans by crediting the Administrative
Agent for further credit to the Borrower's specified account with the
Administrative Agent, in immediately available funds not later than 1:00 p.m.
(New York time) on such Drawdown Date.
SECTION 4.10. FUNDING LOSSES. If, after acceptance of any Competitive
Bid Quote pursuant to Section 4, the Borrower (i) fails to borrow any
Competitive Bid Loan so accepted on the date specified therefor, or (ii) repays
the outstanding amount of the Competitive Bid Loan prior to the last day of the
Interest Period relating thereto, the Borrower shall indemnify the Bank making
such Competitive Bid Quote or funding such Competitive Bid Loan against any loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Bank to fund or maintain such unborrowed
Competitive Bid Loans, including, without limitation compensation as provided in
Section 6.7.
SECTION 4.11. REPAYMENT OF COMPETITIVE BID LOANS; INTEREST. The
principal of each Competitive Bid Loan shall become absolutely due and payable
by the Borrower on the last day of the Interest Period relating thereto, and the
Borrower hereby absolutely and unconditionally promises to pay to the
Administrative Agent for the account of the relevant Banks at or before 1:00
p.m. (New York time) on the last day of the Interest Periods relating thereto
the principal amount of all such Competitive Bid Loans, plus interest thereon at
the applicable rates. The Competitive Bid Loans shall bear interest at the rate
per annum specified in the applicable Competitive Bid Quotes. Interest on the
Competitive Bid Loans shall be payable (a) on the last day of the applicable
Interest Periods, and if any such Interest Period is longer than three months,
also on the last day of the third month following the commencement of such
Interest Period, and (b) on the Revolving Credit Maturity Date for all Revolving
Credit Loans. Subject to the terms of this Agreement, the Borrower may make
Competitive Bid Quote Requests with respect to new borrowings of any amounts so
repaid prior to the Revolving Credit Maturity Date.
SECTION 5. THE TERM LOAN.
SECTION 5.1. CONVERSION OF REVOLVING CREDIT LOANS; THE TERM LOAN.
Subject to the terms and conditions set forth in this Agreement, including,
without limitation, the satisfaction of the conditions set forth in Section 12
hereof and the execution and delivery by the Borrower of the Term Notes to the
Banks, on the Revolving Credit Maturity Date the aggregate amount of the
outstanding Revolving Credit Loans at such date shall, at the option of the
Borrower, be converted into a Term Loan in the aggregate principal amount equal
to the aggregate outstanding principal balance of the Revolving Credit Loans on
such date, held severally by the Banks in accordance with their Commitment
Percentages and the Commitments hereunder shall terminate.
<PAGE> 38
The Term Loan outstanding after conversion shall be evidenced by the separate
Term Notes (the "Term Notes") of the Borrower payable to the order of each Bank,
each dated as of the Revolving Credit Maturity Date and in substantially the
form of Exhibit L hereto, completed with appropriate insertions. On the
Revolving Credit Maturity Date, the Borrower shall pay to the Administrative
Agent for the pro rata accounts of the Banks, all interest accrued to such date
on the Revolving Credit Loans, any Facility Fees and other fees payable to the
Administrative Agent and the Banks hereunder and, as soon as reasonably
practicable after such payment, each Bank shall surrender to the Borrower its
Revolving Credit Notes against receipt of its Term Note evidencing the amount of
the outstanding Revolving Credit Loans so converted. The term-out option granted
herein may be exercised only once (either on the Initial Maturity Date or the
extended Revolving Credit Maturity Date) and must term out all then existing
Revolving Credit Loans.
SECTION 5.2. THE TERM NOTES. Each Term Note shall represent the
obligation of the Borrower to pay to such Bank the principal amount of the Term
Loan evidenced by the Term Note plus interest accrued thereon, as set forth
below. The Borrower irrevocably authorizes each Bank to make or cause to be made
a notation on such Bank's Term Note Record reflecting the original principal
amount of such Bank's Commitment Percentage of the Term Loan and, at or about
the time of such Bank's receipt of any principal payment on such Bank's Term
Note, an appropriate notation on such Bank's Term Note Record reflecting such
payment. The aggregate unpaid amount set forth on such Bank's Term Note Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Term Note Record shall not affect the obligations of the
Borrower hereunder or under any Term Note to make payments of principal of and
interest on any Term Note when due.
SECTION 5.3. REPAYMENTS OF THE TERM LOAN. The Borrower promises to pay
to the Administrative Agent for the account of the Banks the principal amount of
the Term Loan on the Term Loan Maturity Date in an amount equal to the unpaid
balance of the Term Loan.
SECTION 5.4. OPTIONAL PREPAYMENT OF TERM LOAN. The Borrower shall have
the right at any time to prepay the Term Loans on or before the Term Loan
Maturity Date, as a whole, or in part, upon not less than one (1) Business Day
prior written notice to the Administrative Agent, without premium or penalty,
provided that (a) each partial prepayment shall be in the principal amount of
$5,000,000 or an integral multiple thereof, (b) any portion of any Eurodollar
Rate Loan which has been prepaid on any day other than the last day of the
Interest Period relating thereto shall be subject to the payment by the Borrower
of any applicable costs associated with such prepayment as set forth in Section
2.11 hereof, and (c) each partial prepayment shall be allocated among the Banks,
in proportion, as nearly as practicable, to the respective outstanding amount of
each Bank's Term Note, with adjustments to the extent practicable to equalize
any prior prepayments not exactly in proportion. Any prepayment of principal of
the Term Loan shall include all interest accrued on such amount to the date of
prepayment. No amount repaid with respect to the Term Loan may be reborrowed.
<PAGE> 39
SECTION 5.5. INTEREST ON TERM LOAN.
SECTION 5.5.1. NOTIFICATION BY BORROWER. The Borrower shall
notify the Administrative Agent, such notice to be irrevocable, at
least three (3) Eurodollar Business Days prior to the Drawdown Date of
the Term Loan if all or any portion of the Term Loan is to be a
Eurodollar Rate Loan. After the Term Loan has been made, the provisions
of Section 2 shall apply mutatis mutandis with respect to all or any
portion of the Term Loan so that the Borrower may have the same
interest rate options and interest rates with respect to all or any
portion of the Term Loan as it would be entitled to with respect to the
Syndicated Loans.
SECTION 5.5.2. AMOUNTS, ETC. Any portion of the Term Loan
which is a Eurodollar Loan relating to any Interest Period shall be in
the amount of $5,000,000 or a whole multiple or $1,000,000 in excess
thereof. No Interest Period relating to the Term Loan or any portion
thereof which is a Eurodollar Loan shall extend beyond the Term Loan
Maturity Date.
SECTION 6. PROVISIONS RELATING TO ALL LOANS AND LETTERS OF CREDIT.
SECTION 6.1. PAYMENTS.
(a) All payments of principal, interest, Reimbursement
Obligations, fees (other than the Issuance Fee) and any other amounts
due hereunder or under any of the other Loan Documents shall be made to
the Administrative Agent at its Head Office in immediately available
funds by 11:00 a.m. (New York time) on any due date. Subject to the
provisions of Section 30, if a payment is received by the
Administrative Agent at or before 1:00 p.m. (New York time) on any
Business Day, the Administrative Agent shall on the same Business Day
transfer in immediately available funds, as applicable, to (1) each of
the Banks, their pro rata portion of such payment in accordance with
their respective Commitment Percentages, in the case of payments with
respect to Syndicated Loans, Letters of Credit and the Term Loan, (2)
BKB in the case of payments with respect to Swing Line Loans, and (3)
the appropriate Bank(s), in the case of payments with respect to
Competitive Bid Loans. If such payment is received by the
Administrative Agent after 1:00 p.m. (New York time) on any Business
Day, such transfer shall be made by the Administrative Agent to the
applicable Bank(s) on the next Business Day. In the event that the
Administrative Agent fails to make such transfer to any Bank as set
forth above, the Administrative Agent shall pay to such Bank on demand
an amount equal to the product of (i) the average, computed for the
period referred to in clause (iii) below, of the weighted average
interest rate paid by such Bank for funds acquired by such Bank during
each day included in such period, times (ii) the amount (A) equal to
such Bank's Commitment Percentage of such payment in the case of
payments under clause (1) above, or (B) of such payment to which such
Bank is entitled in the case of payments with respect to Competitive
Bid Loans and Swing Line Loans, times (iii) a fraction, the numerator
of which is the number of days that elapse from and including the date
of payment to and including the date on which the amount due to such
Bank shall become immediately available to such Bank, and the
denominator of which is 365. A statement of such Bank submitted to the
applicable Administrative Agent with respect to any
<PAGE> 40
amounts owing under this paragraph shall be prima facie evidence of the
amount due and owing to such Bank by the Administrative Agent.
(b) Each Bank that is not incorporated or organized under the
laws of the United States of America or a state thereof or the District
of Columbia (a "Non-U.S. Bank") agrees that, prior to the first date on
which any payment is due to it hereunder, it will deliver to the
Borrower and the Administrative Agent two duly completed copies of
United States Internal Revenue Service Form W-8BEN or W-8ECI or
successor applicable form, as the case may be, certifying in each case
that such Non-U.S. Bank is entitled to receive payments under this
Agreement and the Notes payable to it, without deduction or withholding
of any United States federal income taxes. Each Non-U.S. Bank that so
delivers a Form W-8BEN or W-8ECI pursuant to the preceding sentence
further undertakes to deliver to each of the Borrower and the
Administrative Agent two further copies of Form W-8BEN or W-8ECI or
successor applicable form, or other manner of certification, as the
case may be, on or before the date that any such letter or form expires
or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the
Borrower, and such extensions or renewals thereof as may reasonably be
requested by the Borrower, certifying in the case of a Form W-8BEN or
W-8ECI that such Non-U.S. Bank is entitled to receive payments under
this Agreement and the Notes without deduction or withholding of any
United States federal income taxes, unless in any such case an event
(including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery
would otherwise be required which renders all such forms inapplicable
or which would prevent such Non-U.S. Bank from duly completing and
delivering any such form with respect to it and such Non-U.S. Bank
advises the Borrower that it is not capable of receiving payments
without any deduction or withholding of United States federal income
tax.
(c) The Borrower shall not be required to pay any additional
amounts to any Non-U.S. Bank in respect of United States Federal
withholding tax pursuant to Section 18 to the extent that (i) the
obligation to withhold amounts with respect to United States Federal
withholding tax existed on the date such Non-U.S. Bank became a party
to this Agreement or, with respect to payments to a different lending
office designated by the Non-U.S. Bank as its applicable lending office
(a "New Lending Office"), the date such Non-U.S. Bank designated such
New Lending Office with respect to a Loan; provided, however, that this
clause (i) shall not apply to any transferee or New Lending Office as a
result of an assignment, transfer or designation made at the request of
the Borrower; and provided further, however, that this clause (i) shall
not apply to the extent the indemnity payment or additional amounts any
transferee, or Bank through a New Lending Office, would be entitled to
receive without regard to this clause (i) do not exceed the indemnity
payment or additional amounts that the Person making the assignment or
transfer to such transferee, or Bank making the designation of such New
Lending Office, would have been entitled to receive in the absence of
such assignment, transfer or designation; or (ii) the obligation to pay
such additional amounts would not have arisen but for a failure by such
Non-U.S. Bank to comply with the provisions of paragraph (b) above.
<PAGE> 41
(d) Notwithstanding the foregoing, each Bank agrees to use
reasonable efforts (consistent with legal and regulatory restrictions)
to change its lending office to avoid or to minimize any amounts
otherwise payable under Section 18 in each case solely if such change
can be made in a manner so that such Bank, in its sole determination,
suffers no legal, economic or regulatory disadvantage.
SECTION 6.2. COMPUTATIONS. Except as otherwise expressly provided
herein, all computations of interest, Facility Fees, Letter of Credit Fees or
other fees shall be based on a 360-day year and paid for the actual number of
days elapsed, except that computations based on the Base Rate shall be based on
a 365 or 366, as applicable, day year and 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 succeeding Business Day, and interest shall accrue
during such extension; provided that for any Interest Period for any Eurodollar
Loan if such next succeeding Business Day falls in the next succeeding calendar
month or after the Revolving Credit Maturity Date, or Term Loan Maturity Date,
as the case may be, it shall be deemed to end on the next preceding Business
Day.
SECTION 6.3. ILLEGALITY; INABILITY TO DETERMINE EURODOLLAR RATE.
Notwithstanding any other provision of this Agreement (other than Section 6.9),
if (a) the introduction of, any change in, or any change in the interpretation
of, any law or regulation applicable to any Bank or the Administrative Agent
shall make it unlawful, or any central bank or other governmental authority
having jurisdiction thereof shall assert that it is unlawful, for any Bank or
the Administrative Agent to perform its obligations in respect of any Eurodollar
Loans, or (b) if any Bank or the Administrative Agent, as applicable, shall
reasonably determine with respect to Eurodollar Loans that (i) by reason of
circumstances affecting any Eurodollar interbank market, adequate and reasonable
methods do not exist for ascertaining the Eurodollar Rate which would otherwise
be applicable during any Interest Period, or (ii) deposits of Dollars in the
relevant amount for the relevant Interest Period are not available to such Bank
or the Administrative Agent in any Eurodollar interbank market, or (iii) the
Eurodollar Rate does not or will not accurately reflect the cost to the Bank or
the Administrative Agent of obtaining or maintaining the Eurodollar Loans during
any Interest Period, then such Bank or the Administrative Agent shall promptly
give telephonic, telex or cable notice of such determination to the Borrower
(which notice shall be conclusive and binding upon the Borrower). Upon such
notification by the Bank or the Administrative Agent, the obligation of the
Banks and the Administrative Agent to make Eurodollar Loans shall be suspended
until the Banks or the Administrative Agent, as the case may be, determine that
such circumstances no longer exist, and to the extent permitted by law the
outstanding Eurodollar Loans shall continue to bear interest at the applicable
rate based on the Eurodollar Rate until the end of the applicable Interest
Period, and thereafter shall be deemed converted to Base Rate Loans in equal
principal amounts to such former Eurodollar Loans.
SECTION 6.4. 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 any Bank by any
<PAGE> 42
central bank or other fiscal, monetary or other authority, whether or not having
the force of law) shall:
(a) subject such Bank to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this
Agreement, the other Loan Documents, such Bank's Commitment or the
Loans (other than taxes based upon or measured by the income or profits
of such Bank imposed by the jurisdiction of its incorporation or
organization, or the location of its lending office); or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits of such Bank imposed by the
jurisdiction of its incorporation or organization, or the location of
its lending office) of payments to such Bank of the principal or of the
interest on any Loans or any other amounts payable to such Bank under
this Agreement or the other Loan Documents; or
(c) except as provided in Section 6.5 or as otherwise
reflected in the Base Rate, the Eurodollar Rate, or the applicable rate
for Competitive Bid Loans, impose or increase or render applicable
(other than to the extent specifically provided for elsewhere in this
Agreement) any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the force
of law) against assets held by, or deposits in or for the account of,
or loans by, or commitments of, an office of any Bank with respect to
this Agreement, the other Loan Documents, such Bank's Commitment or the
Loans; or
(d) impose on such Bank any other conditions or requirements
with respect to this Agreement, the other Loan Documents, the Loans,
such Bank's Commitment or any class of loans or commitments of which
any of the Loans or such Bank's Commitment forms a part, and the result
of any of the foregoing is:
(i) to increase the cost to such Bank of making,
funding, issuing, renewing, extending or maintaining the Loans
or such Bank's Commitment or issuing or participating in
Letters of Credit;
(ii) to reduce the amount of principal, interest or
other amount payable to such Bank hereunder on account of such
Bank's Commitment, the Loans or the Reimbursement Obligations;
or
(iii) to require such Bank 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 such Bank from the Borrower
hereunder,
then, and in each such case, the Borrower will, upon demand
made by such Bank at any time and from time to time as often as the
occasion therefore may arise (which demand shall be accompanied by a
statement setting forth the basis of such demand which shall be
conclusive absent manifest error), pay such reasonable additional
amounts
<PAGE> 43
as will be sufficient to compensate such Bank for such additional
costs, reduction, payment or foregone interest or other sum.
SECTION 6.5. CAPITAL ADEQUACY. If any Bank shall have determined that,
after the date hereof, (i) the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change in any such law, rule, or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or any request or directive regarding
capital adequacy (whether or not having the force of law) of any such authority,
central bank or comparable agency, or (ii) compliance by such Bank or the
Administrative Agent or any corporation controlling such Bank or the
Administrative Agent with any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law and including any
determination by such central bank or other governmental authority that for
purposes of capital adequacy requirements the Commitments hereunder do not
constitute commitments with an original maturity of one year or less) of any
such entity regarding capital adequacy, has or would have the effect of reducing
the rate of return on capital of such Bank (or any corporation controlling such
Bank) as a consequence of such Bank's obligations hereunder to a level below
that which such Bank (or any corporation controlling such Bank) could have
achieved but for such adoption, change, request or directive (taking into
consideration its policies with respect to capital adequacy) by an amount deemed
by such Bank to be material, then from time to time, within 15 days after demand
by such Bank, the Borrower shall pay to such Bank such additional amount or
amounts as will, in such Bank's reasonable determination, fairly compensate such
Bank (or any corporation controlling such Bank) for such reduction. Each Bank
shall allocate such cost increases among its customers in good faith and on an
equitable basis.
SECTION 6.6. CERTIFICATE. A certificate setting forth the additional
amounts payable pursuant to Section 6.4 or Section 6.5 and a reasonable
explanation of such amounts which are due, submitted by any Bank to the
Borrower, shall be conclusive, absent manifest error, that such amounts are due
and owing.
SECTION 6.7. EURODOLLAR AND COMPETITIVE BID INDEMNITY. The Borrower
agrees to indemnify the Banks and the Administrative Agent and to hold them
harmless from and against any reasonable loss, cost or expense that any such
Bank and the Administrative Agent may sustain or incur as a consequence of (a)
the default by the Borrower in payment of the principal amount of or any
interest on any Eurodollar Loans or Competitive Bid Loans as and when due and
payable, including any such loss or expense arising from interest or fees
payable by any Bank or the Administrative Agent to lenders of funds obtained by
it in order to maintain its Eurodollar Loans or Competitive Bid Loans, (b) the
default by the Borrower in making a borrowing of a Eurodollar Loan or
Competitive Bid Loan or conversion of a Eurodollar Loan or a prepayment of a
Eurodollar or Competitive Bid Loan other than pursuant to Section 2.5(b) after
the Borrower has given (or is deemed to have given) a Syndicated Loan Request, a
notice pursuant to Section 2.7 or a Notice of Acceptance/Rejection of
Competitive Bid Quote(s), or a notice pursuant to Section 2.11, and (c) the
making of any payment of a Eurodollar Loan or Competitive Bid Loan, or the
making of any conversion of any Eurodollar Loan to a Base Rate Loan on a day
that is not the last day of the applicable Interest Period with respect thereto.
Such loss, cost, or reasonable expense shall include an amount equal to the
excess, if any, as reasonably determined by each Bank of (i) its
<PAGE> 44
cost of obtaining the funds for (A) the Eurodollar Loan being paid, prepaid,
converted, not converted, reallocated, or not borrowed, as the case may be
(based on the Eurodollar Rate), or (B) the Competitive Bid Loan being paid,
prepaid, or not borrowed, as the case may be (based on the applicable interest
rate) for the period from the date of such payment, prepayment, conversion, or
failure to borrow or convert, as the case may be, to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for the Loan which would have commenced on the date of such
failure to borrow) over (ii) the amount of interest (as reasonably determined by
such Bank) that would be realized by such Bank in reemploying the funds so paid,
prepaid, converted, or not borrowed, converted, or prepaid for such period or
Interest Period, as the case may be, which determinations shall be conclusive
absent manifest error.
SECTION 6.8. 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 payable on demand at a rate per annum equal to
the Base Rate plus 2%, until such amount shall be paid in full (after as well as
before judgment).
SECTION 6.9. INTEREST LIMITATION. Notwithstanding any other term of
this Agreement or the Notes, any other Loan Document 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 Notes by
any Bank shall be absolutely limited to, and shall in no event exceed, the
maximum amount of interest which could lawfully be charged or collected by such
Bank under applicable laws (including, to the extent applicable, the provisions
of Section 5197 of the Revised Statutes of the United States of America, as
amended, and 12 U.S.C. Section 85, as amended).
SECTION 6.10. REASONABLE EFFORTS TO MITIGATE. Each Bank agrees that as
promptly as practicable after it becomes aware of the occurrence of an event or
the existence of a condition that would cause it to be affected under Sections
6.3, 6.4 or 6.5, such Bank will give notice thereof to the Borrower, with a copy
to the Administrative Agent and, to the extent so requested by the Borrower and
not inconsistent with such Bank's internal policies, such Bank shall use
reasonable efforts and take such actions as are reasonably appropriate if as a
result thereof the additional moneys which would otherwise be required to be
paid to such Bank pursuant to such sections would be materially reduced, or the
illegality or other adverse circumstances which would otherwise require a
conversion of such Loans or result in the inability to make such Loans pursuant
to such sections would cease to exist, and in each case if, as determined by
such Bank in its sole discretion, the taking of such actions would not adversely
affect such Loans or such Bank or otherwise be disadvantageous to such Bank.
SECTION 6.11. REPLACEMENT OF BANKS. If any Bank (an "Affected Bank")
(i) makes demand upon the Borrower for (or if the Borrower is otherwise required
to pay) amounts pursuant to Sections 6.4 or 6.5, (ii) is unable to make or
maintain Eurodollar Loans as a result of a condition described in Section 6.3,
(iii) defaults in its obligation to make Loans or to participate in Letters of
Credit in accordance with the terms of this Agreement (such Bank being referred
to as a "Defaulting Bank") or (iv) fails to agree to extend the Revolving Credit
Maturity Date pursuant to Section 2.10, the Borrower may, within 90 days of
receipt of such demand, notice (or the occurrence
<PAGE> 45
of such other event causing the Borrower to be required to pay such
compensation or causing Section 6.3 to be applicable), or default, as the case
may be, by notice (a "Replacement Notice") in writing to the Administrative
Agent and such Affected Bank (A) request the Affected Bank to cooperate with the
Borrower in obtaining a replacement bank satisfactory to the Administrative
Agent and the Borrower (the "Replacement Bank") as provided herein, but none of
such Banks shall be under an obligation to find a Replacement Bank; (B) request
the non-Affected Banks to acquire and assume all of the Affected Bank's Loans
and Commitment, and to participate in Letters of Credit as provided herein, but
none of such Banks shall be under an obligation to do so; or (C) designate a
Replacement Bank reasonably satisfactory to the Administrative Agent. If any
satisfactory Replacement Bank shall be obtained, and/or any of the non-Affected
Banks shall agree to acquire and assume all of the Affected Bank's Loans and
Commitment, and to participate in Letters of Credit then such Affected Bank
shall, so long as no Event of Default shall have occurred and be continuing,
assign, in accordance with Section 21, all of its Commitment, Loans, Notes and
other rights and obligations under this Agreement and all other Loan Documents
to such Replacement Bank or non-Affected Banks, as the case may be, in exchange
for payment of the principal amount so assigned and all interest and fees
accrued on the amount so assigned, plus all other Obligations then due and
payable to the Affected Bank; provided, however, that (x) such assignment shall
be without recourse, representation or warranty and shall be on terms and
conditions reasonably satisfactory to such Affected Bank and such Replacement
Bank and/or non-Affected Banks, as the case may be, and (y) prior to any such
assignment, the Borrower shall have paid to such Affected Bank all amounts
properly demanded and unreimbursed under Sections 6.4, 6.5 and 6.7. Upon the
effective date of such assignment, the Borrower shall issue replacement Notes to
such Replacement Bank and/or non-Affected Banks, as the case may be, and such
Replacement Bank shall become a "Bank" for all purposes under this Agreement and
the other Loan Documents.
SECTION 6.12. ADVANCES BY ADMINISTRATIVE AGENT. The Administrative
Agent may (unless earlier notified to the contrary by any Bank by 12:00 noon
(New York time) one (1) Business Day prior to any Drawdown Date) assume that
each Bank has made available (or will before the end of such Business Day make
available) to the Administrative Agent the amount of such Bank's Commitment
Percentage with respect to the Loans (or, in the case of Competitive Bid Loans,
the amount of such Bank's accepted offers of such Loans, if any) to be made on
such Drawdown Date, and the Administrative Agent may (but shall not be required
to), in reliance upon such assumption, make available to the Borrower a
corresponding amount. If any Bank makes such amount available to the
Administrative Agent on a date after such Drawdown Date, such Bank shall pay the
Administrative Agent on demand an amount equal to the product of (i) the
average, computed for the period referred to in clause (iii) below, of the
weighted average annual interest rate paid by the Administrative Agent for
federal funds acquired by the Administrative Agent during each day included in
such period times (ii) the amount equal to such Bank's Commitment Percentage of
such Syndicated Loan (or, in the case of Competitive Bid Loans and Swing Line
Loans, the amount of such Bank's accepted offer of such Competitive Bid Loans,
if any, and portion of such Swing Line Loans) or the Term Loan, as the case may
be, times (iii) a fraction, the numerator of which is the number of days that
elapse from and including such Drawdown Date to but not including the date on
which the amount equal to such Bank's Commitment Percentage of such Loans, or
the amount of such Bank's accepted offers of such Competitive Bid Loans, if any,
and portion of Swing Line Loans, shall become immediately
<PAGE> 46
available to the Administrative Agent, and the denominator of which is 365. A
statement of the Administrative Agent submitted to such Bank with respect to any
amounts owing under this paragraph shall be prima facie evidence of the amount
due and owing to the Administrative Agent by such Bank. If such amount is not in
fact made available to the Administrative Agent by such Bank within three (3)
Business Days of such Drawdown Date, the Administrative Agent shall be entitled
to recover such amount from such Borrower, with interest thereon at the
applicable rate per annum.
SECTION 7. REPRESENTATIONS AND WARRANTIES. The Borrower (and the
Guarantor, where applicable) represents and warrants to the Banks that:
SECTION 7.1. CORPORATE AUTHORITY.
(a) INCORPORATION; GOOD STANDING. The Borrower and each of its
Subsidiaries (i) is duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of formation,
(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 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 Borrower and its
Subsidiaries as a whole.
(b) AUTHORIZATION. The execution, delivery and performance of
its Loan Documents and the transactions contemplated hereby and thereby
(i) are within the corporate authority of the Borrower and the
Guarantor, (ii) have been duly authorized by all necessary corporate
proceedings on the part of each of the Borrower and the Guarantor,
(iii) do not conflict with or result in any breach or contravention of
any provision of law, statute, rule or regulation to which any of the
Borrower or the Guarantor or any of their Subsidiaries is subject or
any judgment, order, writ, injunction, license or permit applicable to
the Borrower, the Guarantor or any of their Subsidiaries so as to
materially adversely affect the assets, business or any activity of the
Borrower, the Guarantor and their Subsidiaries as a whole, and (iv) do
not conflict with any provision of the corporate charter or bylaws of
the Borrower, the Guarantor or any Subsidiary or any agreement or other
instrument binding upon the Borrower, the Guarantor or any of their
Subsidiaries.
(c) ENFORCEABILITY. The execution, delivery and performance of
the Loan Documents by the Borrower and the Guarantor will result in
valid and legally binding obligations of the Borrower and the Guarantor
enforceable against them 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 is subject to the discretion of the
court before which any proceeding therefor may be brought.
<PAGE> 47
SECTION 7.2. GOVERNMENTAL AND OTHER APPROVALS. The execution, delivery
and performance of the Loan Documents by the Borrower and the Guarantor and the
consummation by the Borrower and the Guarantor of the transactions contemplated
hereby and thereby do not require any approval or consent of, or filing with,
any governmental agency or authority or other third party other than those
already obtained and those required after the date hereof in connection with the
Borrower's and its Subsidiaries' performance of their covenants contained in
Sections 8, 9 and 10 hereof.
SECTION 7.3. TITLE TO PROPERTIES; LEASES. The Borrower and its
Subsidiaries own all of the assets reflected in the consolidated balance sheet
as at the Interim Balance Sheet Date or acquired since that date (except
property and assets operated under capital leases or 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.
SECTION 7.4. FINANCIAL STATEMENTS; SOLVENCY.
(a) There have been furnished to the Banks consolidated
balance sheets of the Borrower and its Subsidiaries dated the Balance
Sheet Date and consolidated statements of operations for the fiscal
periods then ended, certified by the Accountants. In addition, there
have been furnished to the Banks consolidated balance sheets of the
Borrower and its Subsidiaries dated the Interim Balance Sheet Date and
the related consolidated statements of operation for the fiscal quarter
ending on the Interim Balance Sheet Date. All said balance sheets and
statements of operations have been prepared in accordance with GAAP
(but, in the case of any of such financial statements which are
unaudited, only to the extent GAAP is applicable to interim unaudited
reports), fairly present the financial condition of the Borrower and
its Subsidiaries on a consolidated basis as at the close of business on
the dates thereof and the results of operations for the periods then
ended, subject, in the case of unaudited interim financial statements,
to changes resulting from audit and normal year-end adjustments and to
the absence of complete footnotes. There are no contingent liabilities
of the Borrower and its Subsidiaries involving material amounts, known
to the officers of the Borrower or Guarantor which have not been
disclosed in said balance sheets and the related notes thereto or
otherwise in writing to the Banks.
(b) The Borrower and its Subsidiaries on a consolidated basis
(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.
SECTION 7.5. NO MATERIAL CHANGES, ETC. Since the Interim Balance Sheet
Date, there have occurred no material adverse changes in the consolidated
financial condition, business, assets or liabilities (contingent or otherwise)
of the Borrower and its Subsidiaries, taken together, as shown on or reflected
in the consolidated balance sheets of the Borrower and its Subsidiaries as at
the Interim Balance Sheet Date, or the consolidated statements of income for the
period then
<PAGE> 48
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
financial condition, business, assets or liabilities (contingent or otherwise)
of the Borrower and its Subsidiaries, taken together. Since the Interim Balance
Sheet Date, there have not been any Distributions other than as permitted by
Section 9.5 hereof.
SECTION 7.6. FRANCHISES, PATENTS, COPYRIGHTS, ETC. The Borrower and
each of its Subsidiaries possess all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now
conducted (other than those the absence of which would not have a material
adverse effect on the business, operations or financial condition of the
Borrower and its Subsidiaries as a whole) without known conflict with any rights
of others other than a conflict which would not have a material adverse effect
on the financial condition, business or assets of the Borrower and its
Subsidiaries as a whole.
SECTION 7.7. LITIGATION. Except as set forth on Schedule 7.7 or in the
Disclosure Documents, there are no actions, suits, proceedings or investigations
of any kind pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened against the Borrower or any of its Subsidiaries before
any court, tribunal or administrative agency or board which, either in any case
or in the aggregate, could reasonably be expected to have a material adverse
effect on the financial condition, business, or assets of the Borrower and its
Subsidiaries, considered as a whole, or materially impair the right of the
Borrower and its Subsidiaries, considered as a whole, 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 to which the Borrower or any of its Subsidiaries is a
party, or any action taken or to be taken pursuant hereto or thereto.
SECTION 7.8. NO MATERIALLY ADVERSE CONTRACTS, ETC. Neither the Borrower
nor any of its Subsidiaries is subject to any charter, corporate or other legal
restriction, or any judgment, decree, order, rule or regulation which in the
judgment of the Borrower's or such Subsidiary's officers has or could reasonably
be expected in the future to have a materially adverse effect on the business,
assets or financial condition of the Borrower and its Subsidiaries, considered
as a whole. Neither the Borrower nor any of its Subsidiaries is a party to any
contract or agreement which in the judgment of the Borrower's or its
Subsidiary's officers has or could reasonably be expected to have any materially
adverse effect on the financial condition, business or assets of the Borrower
and its Subsidiaries, considered as a whole, except as otherwise reflected in
adequate reserves as required by GAAP.
SECTION 7.9. COMPLIANCE WITH OTHER INSTRUMENTS, LAWS, ETC. Neither the
Borrower nor any of its Subsidiaries is (a) violating any provision of its
charter documents or by-laws or (b) violating any agreement or instrument to
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 (in the case of such agreements or
such instruments) reasonably be expected to result in the imposition of
substantial penalties or
<PAGE> 49
materially and adversely affect the financial condition, business or assets of
the Borrower and its Subsidiaries, considered as a whole.
SECTION 7.10. TAX STATUS. The Borrower and its Subsidiaries have filed
all federal, state, provincial and territorial income and all other tax returns,
reports and declarations (or obtained extensions with respect thereto) required
by applicable law to be filed by them (unless and only to the extent that the
Borrower or such Subsidiary has set aside on its books provisions reasonably
adequate for the payment of all unpaid and unreported taxes as required by
GAAP); and have paid all taxes and other governmental assessments and charges
(other than taxes, assessments and other governmental charges imposed by
jurisdictions other than the United States, Canada or any political subdivision
thereof which in the aggregate are not material to the financial condition,
business or assets of the Borrower or such Subsidiary on an individual basis or
of the Borrower and its Subsidiaries on a consolidated basis) 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, as required by
GAAP, 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. Except to the extent contested in the
manner permitted in the preceding sentence, there are no unpaid taxes in any
material amount claimed by the taxing authority of any jurisdiction to be due
and owing by the Borrower or any Subsidiary, nor do the officers of the Borrower
or any of its Subsidiaries know of any basis for any such claim.
SECTION 7.11. NO EVENT OF DEFAULT. (a) No Default or Event of Default
has occurred hereunder and is continuing, and (b) no "Default" or "Event of
Default" (as defined in the Revolving Credit Facility or the European Credit
Facilities, respectively) under the Revolving Credit Facility or the European
Credit Facilities, respectively, has occurred and is continuing, or would be
created by the incurrence of Indebtedness under this Agreement.
SECTION 7.12. HOLDING COMPANY AND INVESTMENT COMPANY ACTS. Neither the
Borrower nor any of its Subsidiaries 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.
SECTION 7.13. ABSENCE OF FINANCING STATEMENTS, ETC. Except as permitted
by Section 9.2 of this Agreement, there is no Indebtedness senior to the
Obligations, and there is no effective 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 the Borrower or any of its Subsidiaries
or right thereunder.
SECTION 7.14. EMPLOYEE BENEFIT PLANS.
SECTION 7.14.1. IN GENERAL. Each Employee Benefit Plan has
been maintained and operated in compliance in all material respects
with the provisions of ERISA and/or all Applicable Canadian Pension
Legislation, as applicable, and, to the extent applicable, the
<PAGE> 50
Code, including but not limited to the provisions thereunder respecting
prohibited transactions. Promptly upon the request of any Bank or the
Administrative Agent, the Borrower will furnish to the Administrative
Agent the most recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be submitted
under Section 103(d) of ERISA, with respect to each Guaranteed Pension
Plan.
SECTION 7.14.2. TERMINABILITY OF WELFARE PLANS. Under each
Employee Benefit Plan which is an employee welfare benefit plan within
the meaning of Section 3(1) or Section 3(2)(B) of ERISA, no benefits
are due unless the event giving rise to the benefit entitlement occurs
prior to plan termination (except as required by Title I, Part 6 of
ERISA) . The Borrower or an ERISA Affiliate, as appropriate, 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
the Borrower or such ERISA Affiliate without liability to any Person.
SECTION 7.14.3. 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 Section 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. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been incurred by
the Borrower or any ERISA Affiliate with respect to any Guaranteed
Pension Plan (other than Terminated Plans) 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. Other than with respect to the Terminated Plans, 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 Section 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.
SECTION 7.14.4. MULTIEMPLOYER PLANS. Neither the Borrower 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
Section 4201 of ERISA or as a result of a sale of assets described in
Section 4204 of ERISA. Neither the Borrower nor any ERISA Affiliate has
been notified that any Multiemployer Plan is in reorganization or
insolvent under and within the meaning of Section 4241 or Section 4245
of ERISA or that any Multiemployer Plan intends to terminate or has
been terminated under Section 4041A of ERISA.
SECTION 7.15. ENVIRONMENTAL COMPLIANCE. The Borrower and its
Subsidiaries have taken all necessary steps to investigate the past and present
condition and usage of the Real Property and the operations conducted by the
Borrower and its Subsidiaries and, based upon such diligent investigation, have
determined that, except as set forth on Schedule 7.15 or in the Disclosure
Documents:
<PAGE> 51
(a) Neither the Borrower, its Subsidiaries, 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 ("SARA"), the Federal Clean Water Act,
the Federal Clean Air Act, the Toxic Substances Control Act, or any
applicable international, federal, state, provincial, territorial or
local statute, regulation, ordinance, order or decree relating to
health, safety, waste transportation or disposal, or the environment
(the "Environmental Laws"), which violation, individually or in the
aggregate, would have a material adverse effect on the business, assets
or financial condition of the Borrower and its Subsidiaries on a
consolidated basis.
(b) Except with respect to any such matters which individually
or in the aggregate would not reasonably be expected to have a material
adverse effect on the business, assets or financial condition of the
Borrower and its Subsidiaries on a consolidated basis, neither the
Borrower nor any of its Subsidiaries has received notice from any third
party including, without limitation: any federal, state, provincial,
territorial 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 300 Appendix B; (ii) that any hazardous waste, as defined by 42
U.S.C. Section 6903(5), any hazardous substances as defined by 42
U.S.C. Section 9601(14), any pollutant or contaminant as defined by 42
U.S.C. Section 9601(33) or any toxic substance, oil or hazardous
materials or other chemicals or substances regulated by any
Environmental Laws, excluding household hazardous waste ("Hazardous
Substances"), which any one of them has generated, transported or
disposed of, has been found at any site at which a federal, state,
provincial, territorial or local agency or other third party has
conducted or has ordered that the Borrower or any of its Subsidiaries
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) No portion of the Real Property or other assets of the
Borrower and its Subsidiaries has been used for the handling,
processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws, except as would not
reasonably be expected to have a material adverse effect on the
business, assets or financial condition of the Borrower and its
Subsidiaries on a consolidated basis; (ii) in the course of any
activities conducted by the Borrower, its Subsidiaries, or operators of
the Real Property or other assets of the Borrower and its Subsidiaries,
no Hazardous Substances have been generated or are being used on such
properties except in accordance with applicable Environmental Laws,
except for occurrences that would not have a material adverse effect on
the business, assets or financial condition of the
<PAGE> 52
Borrower and its Subsidiaries on a consolidated basis; (iii) there have
been no unpermitted Releases or threatened Releases of Hazardous
Substances on, upon, into or from the Real Property or other assets of
the Borrower or its Subsidiaries, which Releases would have a material
adverse effect on the value of such properties; (iv) to the best of the
Borrower's and its Subsidiaries' knowledge, there have been no Releases
on, upon, from or into any real property in the vicinity of the Real
Property or other assets of the Borrower or its Subsidiaries which,
through soil or groundwater contamination, may have come to be located
on, and which would reasonably be expected to 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 or
other assets of the Borrower or its Subsidiaries 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 have been and are, to the best
of the Borrower's and its Subsidiaries' knowledge, operating in
compliance with such permits and applicable Environmental Laws.
(d) None of the Real Property or other assets of the Borrower
or its Subsidiaries or any of the stock (or assets) being acquired with
proceeds of Loans 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.
SECTION 7.16. TRUE COPIES OF CHARTER AND OTHER DOCUMENTS. Each of the
Borrower and the Guarantor has furnished the Administrative Agent as of the
Effective Date, true and complete copies of (a) all charter and other
incorporation documents (together with any amendments thereto) and (b) by-laws
(together with any amendments thereto).
SECTION 7.17. DISCLOSURE. No representation or warranty made by the
Borrower or the Guarantor in this Agreement or in any agreement, instrument,
document, certificate, statement or letter furnished to the Banks or the
Administrative Agent by or on behalf of or at the request of the Borrower and
the Guarantor 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.
SECTION 7.18. PERMITS AND GOVERNMENTAL AUTHORITY. All permits (other
than those the absence of which would not have a material adverse effect on the
business, operations or financial condition of the Borrower and its Subsidiaries
as a whole) required for the construction and operation of all landfills
currently owned or operated by the Borrower or any of its Subsidiaries 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. Neither the Borrower nor any of its Subsidiaries,
nor, to the knowledge of the Borrower and its Subsidiaries, 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 Borrower and its Subsidiaries as a whole.
<PAGE> 53
SECTION 7.19. YEAR 2000 COMPLIANCE. The Borrower and its Subsidiaries
have (i) reviewed the areas within their businesses and operations which could
be adversely affected by failure to become "Year 2000 Compliant" (i.e. that
computer applications, imbedded microchips and other systems used by the
Borrower or any of its Subsidiaries or any of their material vendors or
customers, will be able properly to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a detailed plan and timetable to become Year
2000 Compliant in a timely manner, and (iii) committed adequate resources to
support the Year 2000 plan of the Borrower and its Subsidiaries. Based upon such
review, the Borrower reasonably believes that the Borrower and its Subsidiaries,
as well as their material vendors and customers, will become "Year 2000
Compliant" in a timely manner except to the extent that failure to do so will
not have any materially adverse effect on the business or financial condition of
the Borrower or any of its Subsidiaries.
SECTION 7.20. USE OF PROCEEDS. The proceeds of the Loans shall be used
for general corporate purposes.
SECTION 8. AFFIRMATIVE COVENANTS OF THE BORROWER. The Borrower agrees
that, so long as any Obligation or any Letter of Credit is outstanding or the
Banks have any obligation to make Loans, or any Issuing Bank has any obligation
to issue, extend or renew any Letters of Credit hereunder, or the Banks have any
obligations to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 8.1. PUNCTUAL PAYMENT. The Borrower 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.
SECTION 8.2. MAINTENANCE OF U.S. OFFICE. The Borrower will maintain its
chief executive offices at Houston, Texas, or at such other place in the United
States of America as the Borrower shall designate upon 30 days' prior written
notice to the Administrative Agent.
SECTION 8.3. RECORDS AND ACCOUNTS. The Borrower will, and will cause
each of its Subsidiaries to, 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.
SECTION 8.4. FINANCIAL STATEMENTS, CERTIFICATES AND INFORMATION. The
Borrower will deliver to the Banks:
(a) as soon as practicable, but, in any event not later than
92 days after the end of each fiscal year of the Borrower, the
consolidated balance sheet of the Borrower and its Subsidiaries as at
the end of such year, consolidated statements of cash flows, and the
related consolidated statements of operations, each setting forth in
comparative form the figures for the previous fiscal year, all such
consolidated financial statements to be in
<PAGE> 54
reasonable detail, prepared, in accordance with GAAP and, with respect
to the consolidated financial statements, certified by
PricewaterhouseCoopers LLP or Arthur Andersen LLP or by other
independent auditors selected by the Borrower and reasonably
satisfactory to the Banks (the "Accountants"). In addition,
simultaneously therewith, the Borrower shall provide the Banks with a
written statement from such Accountants to the effect that they have
read a copy of this Agreement, and that, in making the examination
necessary to said certification, they have obtained no knowledge of any
Default or Event of Default, 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;
(b) as soon as practicable, but in any event not later than 47
days after the end of each of the first three fiscal quarters of each
fiscal year of the Borrower, copies of the consolidated balance sheet
and statement of operations of the Borrower and its Subsidiaries as at
the end of such quarter, subject to year-end adjustments, and the
related consolidated statement of cash flows, all in reasonable detail
and prepared in accordance with GAAP (to the extent GAAP is applicable
to interim unaudited financial statements) with a certification by the
principal financial or accounting officer of the Borrower (the "CFO or
the CAO") that the consolidated financial statements are prepared in
accordance with GAAP (to the extent GAAP is applicable to interim
unaudited financial statements) and fairly present the consolidated
financial condition of the Borrower and its Subsidiaries on a
consolidated basis as at the close of business on the date thereof and
the results of operations for the period then ended, it being
understood that no such statement need be accompanied by complete
footnotes;
(c) simultaneously with the delivery of the financial
statements referred to in (a) and (b) above, a certificate in the form
of Exhibit F hereto (the "Compliance Certificate") signed by the CFO or
the CAO or the Borrower's corporate treasurer, stating that the
Borrower and its Subsidiaries are in compliance with the covenants
contained in Sections 8, 9 and 10 hereof as of the end of the
applicable period and setting forth in reasonable detail computations
evidencing such compliance with respect to the covenants contained in
Sections 9.1(d), 9.3, 9.4, 9.5, and 10 hereof and that no Default or
Event of Default exists, provided that if the Borrower shall at the
time of issuance of such Compliance Certificate or at any other time
obtain knowledge of any Default or Event of Default, the Borrower shall
include in such certificate or otherwise deliver forthwith to the Banks
a certificate specifying the nature and period of existence thereof and
what action the Borrower proposes to take with respect thereto;
(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 Borrower's
and its Subsidiaries' stockholders generally; and
(e) from time to time such other financial data and other
information as the Banks may reasonably request.
The Borrower hereby authorizes each Bank to disclose any information
obtained pursuant to this Agreement to all appropriate governmental regulatory
authorities where required
<PAGE> 55
by law; provided, however, this authorization shall not be deemed to be a waiver
of any rights to object to the disclosure by the Banks of any such information
which the Borrower has or may have under the federal Right to Financial Privacy
Act of 1978, as in effect from time to time, except as to matters specifically
permitted therein.
SECTION 8.5. EXISTENCE AND CONDUCT OF BUSINESS. The Borrower will, and
will cause each Subsidiary, to do or cause to be done all things necessary to
preserve and keep in full force and effect its existence, rights and franchises;
and effect and maintain its foreign qualifications (except where the failure of
the Borrower or any Subsidiary to remain so qualified would not materially
adversely impair the financial condition, business or assets of the Borrower and
its Subsidiaries on a consolidated basis), licensing, domestication or
authorization except as terminated by its Board of Directors in the exercise of
its reasonable judgment; provided that such termination would not have a
material adverse effect on the financial condition, business or assets of the
Borrower and its Subsidiaries on a consolidated basis. The Borrower will not,
and will cause its Subsidiaries not to, become obligated under any contract or
binding arrangement which, at the time it was entered into, would materially
adversely impair the financial condition, business or assets of the Borrower and
its Subsidiaries, on a consolidated basis. The Borrower will, and will cause
each Subsidiary to, continue to engage primarily in the businesses now conducted
by it and in related businesses.
SECTION 8.6. MAINTENANCE OF PROPERTIES. The Borrower will, and will
cause its Subsidiaries to, 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 (ordinary wear and tear excepted) and supplied with all
necessary equipment and cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Borrower and its Subsidiaries 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 the
Borrower or any of its Subsidiaries from discontinuing the operation and
maintenance of any of its properties if such discontinuance is, in the judgment
of the Borrower or such Subsidiary, desirable in the conduct of its or their
business and which does not in the aggregate materially adversely affect the
financial condition, business or assets of the Borrower and its Subsidiaries on
a consolidated basis.
SECTION 8.7. INSURANCE. The Borrower will, and will cause its
Subsidiaries to, 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) and in the relative proportionate amounts
usually carried by reasonable and prudent companies conducting businesses
similar to that of the Borrower and its Subsidiaries, in amounts substantially
similar to the existing coverage policies maintained by the Borrower and its
Subsidiaries, copies of which have been provided to the Administrative Agent. In
addition, the Borrower will furnish from time to time, upon any Bank's request,
a summary of the insurance coverage of the Borrower and its Subsidiaries, which
summary shall be in form and substance satisfactory to the Banks and, if
requested by any of the Banks, will furnish to the Administrative Agent and such
Bank copies of the applicable policies.
<PAGE> 56
SECTION 8.8. TAXES. The Borrower will, and will cause its Subsidiaries
to, 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
jurisdictions other than the United States, Canada or any political subdivision
thereof, which in the aggregate are not material to the business, financial
conditions, or assets of the Borrower and its Subsidiaries 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 the Borrower or such Subsidiary shall have set aside on its books
adequate reserves with respect thereto as required by GAAP; and provided,
further, that the Borrower or such Subsidiary 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.
SECTION 8.9. INSPECTION OF PROPERTIES, BOOKS AND CONTRACTS. The
Borrower will, and will cause its Subsidiaries to, permit the Administrative
Agent or any Bank or any of their designated representatives, upon reasonable
notice, to visit and inspect any of the properties of the Borrower and its
Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries, or contracts (and to make copies thereof and extracts therefrom),
and to discuss the affairs, finances and accounts of the Borrower and its
Subsidiaries with, and to be advised as to the same by, their officers, all at
such times and intervals as may be reasonably requested.
SECTION 8.10. COMPLIANCE WITH LAWS, CONTRACTS, LICENSES AND PERMITS;
MAINTENANCE OF MATERIAL LICENSES AND PERMITS. The Borrower will, and will cause
each Subsidiary to, (i) comply with the provisions of its charter documents and
by-laws; (ii) comply in all material respects with all agreements and
instruments by which it or any of its properties may be bound; (iii) comply with
all applicable laws and regulations (including Environmental Laws), decrees,
orders, judgments, licenses and permits, including, without limitation, all
environmental permits ("Applicable Requirements"), except where noncompliance
with such Applicable Requirements would not reasonably be expected to have a
material adverse effect in the aggregate on the consolidated financial
condition, properties or businesses of the Borrower and its Subsidiaries; (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 the Borrower's or such Subsidiary's
knowledge after reasonable inquiry, in compliance with Environmental Laws. If at
any time any authorization, consent, approval, permit or license from any
officer, agency or instrumentality of any government shall become necessary or
required in order that the Borrower or any Subsidiary may fulfill any of its
obligations hereunder or under any other Loan Document, the Borrower will
immediately take or cause to be taken all reasonable steps within the power of
the Borrower or such Subsidiary to obtain such authorization, consent, approval,
permit or license and furnish the Banks with evidence thereof.
SECTION 8.11. ENVIRONMENTAL INDEMNIFICATION. The Borrower covenants and
agrees that it will indemnify and hold the Banks, the Issuing Banks and the
Administrative Agent and their respective affiliates, and each of the
representatives, agents and officers of each of the foregoing,
<PAGE> 57
harmless from and against any and all claims, expense, damage, loss or liability
incurred by the Banks, the Issuing Banks or the Administrative Agent (including
all costs of legal representation incurred by the Banks, the Issuing Banks or
the Administrative Agent) relating to (a) any Release or threatened Release of
Hazardous Substances on the Real Property; (b) any violation of any
Environmental Laws or Applicable Requirements with respect to conditions at the
Real Property or other assets of the Borrower or its Subsidiaries, or the
operations conducted thereon; or (c) the investigation or remediation of offsite
locations at which the Borrower, any of its Subsidiaries, or their predecessors
are alleged to have directly or indirectly Disposed of Hazardous Substances. It
is expressly acknowledged by the Borrower that this covenant of indemnification
shall survive the payment of the Loans and Reimbursement Obligations and
satisfaction of all other Obligations hereunder and shall inure to the benefit
of the Banks, the Issuing Banks, the Administrative Agent and their affiliates,
successors and assigns.
SECTION 8.12. FURTHER ASSURANCES. The Borrower and the Guarantor will
cooperate with the Administrative Agent and execute such further instruments and
documents as the Administrative Agent shall reasonably request to carry out to
the Banks' satisfaction the transactions contemplated by this Agreement.
SECTION 8.13. NOTICE OF POTENTIAL CLAIMS OR LITIGATION. The Borrower
shall deliver to the Banks, 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 against the Borrower or any of its Subsidiaries wherein
the potential liability is in excess of $25,000,000 or which questions the
validity or enforceability of any Loan Document, together with a copy of each
such complaint or other notice received by the Borrower or any of its
Subsidiaries if requested by the Administrative Agent.
SECTION 8.14. NOTICE OF CERTAIN EVENTS CONCERNING INSURANCE AND
ENVIRONMENTAL CLAIMS.
(a) The Borrower will provide the Banks with written notice as
to any material cancellation or material adverse change in any
insurance of the Borrower or any of its Subsidiaries within ten (10)
Business Days after the Borrower's or any of its Subsidiary's receipt
of any notice (whether formal or informal) of such material
cancellation or material change by any of its insurers.
(b) The Borrower will promptly, and in any event within ten
(10) Business Days of the Borrower's obtaining knowledge thereof,
notify the Banks in writing of any of the following events:
(i) upon the Borrower's or any Subsidiary's obtaining
knowledge of any violation of any Environmental Law regarding
the Real Property or the Borrower's or any Subsidiary's
operations which violation could have a material adverse
effect on the business, financial condition, or assets of the
Borrower and its Subsidiaries on a consolidated basis;
(ii) upon the Borrower's or any Subsidiary'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 could materially affect the
business,
<PAGE> 58
financial condition, or assets of the Borrower and its
Subsidiaries on a consolidated basis;
(iii) upon the Borrower's or any Subsidiary's receipt
of any notice of any material violation of any Environmental
Law 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 any
federal, state, provincial, territorial or local governmental
officials) and including notice of any formal inquiry,
proceeding, demand, investigation or other action with regard
to (A) the Borrower's, any Subsidiary'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 the Borrower, any Subsidiary, or
its predecessors are alleged to have directly or indirectly
Disposed of Hazardous Substances, and with respect to which
the liability associated therewith could be reasonably
expected to exceed $30,000,000; or
(iv) upon the Borrower's or any Subsidiary's
obtaining knowledge that any expense or loss which
individually or in the aggregate exceeds $30,000,000 has been
incurred by such governmental authority in connection with the
assessment, containment, removal or remediation of any
Hazardous Substances with respect to which the Borrower or any
Subsidiary may be liable or for which a lien may be imposed on
the Real Property.
SECTION 8.15. NOTICE OF DEFAULT. The Borrower will promptly notify the
Banks in writing of the occurrence of any Default or Event of Default. 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 $25,000,000 as to which the Borrower or any
of its Subsidiaries is a party or obligor, whether as principal or surety, the
Borrower shall forthwith upon obtaining actual knowledge thereof give written
notice thereof to the Banks, describing the notice of action and the nature of
the claimed default.
SECTION 8.16. USE OF PROCEEDS.
(a) GENERALLY: The proceeds of the Loans shall be used for
general corporate purposes. No proceeds of the Loans shall be used in
any way that will violate Regulations U or X of the Board of Governors
of the Federal Reserve System.
(b) INELIGIBLE SECURITIES: No portion of the proceeds of any
Loan is to be used, and no portion of any Letter of Credit is to be
obtained, for the purpose of (i) knowingly purchasing, or providing
credit support for the purchase of, Ineligible Securities from a
Section 20 Subsidiary during any period in which such Section 20
Subsidiary makes a market in such Ineligible Securities, (ii) knowingly
purchasing, or providing credit support for the purchase of, during the
underwriting or placement period, any Ineligible Securities being
underwritten or privately placed by a Section 20 Subsidiary, or (iii)
making, or providing credit support for the making of, payments of
principal or interest on Ineligible Securities underwritten or
privately placed by a Section
<PAGE> 59
20 Subsidiary and issued by or for the benefit of the Borrower or any
Subsidiary or other affiliate of the Borrower.
SECTION 8.17. CERTAIN TRANSACTIONS. Except as disclosed in the
Disclosure Documents prior to the Effective Date, and except for arm's length
transactions pursuant to which the Borrower or any Subsidiary makes payments in
the ordinary course of business upon terms no less favorable than the Borrower
or such Subsidiary could obtain from third parties, none of the officers,
directors, or employees or any other affiliate of the Borrower or any Subsidiary
are presently or shall be a party to any transaction with the Borrower or any
Subsidiary (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 Borrower or any
Subsidiary, 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.
SECTION 9. CERTAIN NEGATIVE COVENANTS OF THE BORROWER. The Borrower
agrees that, so long as any Obligation or Letter of Credit is outstanding or the
Banks have any obligation to make Loans or any Issuing Bank has any obligation
to issue, extend or renew any Letters of Credit hereunder, or the Banks have any
obligation to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 9.1. RESTRICTIONS ON INDEBTEDNESS. Neither the Borrower nor any
of its 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 Indebtedness of any other Person, or incur any Indebtedness other
than:
(a) Indebtedness arising under this Agreement or the other
Loan Documents;
(b) (i) Indebtedness incurred by the Borrower or any
Subsidiary with respect to any suretyship or performance bond incurred
in the ordinary course of its business, and undrawn landfill closure
bonds; and
(ii) Guarantees of the Subsidiaries' obligations to
governmental authorities in lieu of the posting of any landfill closure
bonds;
(c) Unsecured Indebtedness of the Borrower (and any guarantee
thereof by Guarantor), including commercial paper, which is pari passu
or subordinated to the Obligations; provided that there does not exist
a Default or Event of Default at the time of the incurrence of such
Indebtedness and no Default or Event of Default would be created by the
incurrence of such Indebtedness;
(d) (i) Indebtedness of the Borrower's Subsidiaries (other
than of the Guarantor incurred prior to July 16, 1998), (ii) secured
Indebtedness of the Borrower,
<PAGE> 60
(iii) Indebtedness with respect to drawn landfill closure bonds of the
Borrower's Subsidiaries (other than of the Guarantor), and (iv)
Indebtedness with respect to Permitted Receivables Transactions (other
than of the Guarantor); provided that the aggregate amount of all such
Indebtedness in this Section 9.1(d) shall not exceed 15% of
Consolidated Tangible Assets at any time;
(e) Indebtedness of the Guarantor listed in Schedule 9.1(e) on
the terms and conditions existing on July 16, 1998, provided that any
extension, renewal or refinancing by the Guarantor of such Indebtedness
is prohibited unless the amount of such extended, renewed or refinanced
Indebtedness by the Guarantor is deducted from Indebtedness allowed
under Section 9.1(d) above; and
(f) Indebtedness of the Borrower and certain of its
Subsidiaries under the Revolving Credit Facility and the European
Credit Facilities.
SECTION 9.2. RESTRICTIONS ON LIENS. The Borrower will not, and will
cause its Subsidiaries not to, 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 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 existing on the Effective Date and listed on
Schedule 9.2(a) hereto;
(b) Liens securing Indebtedness permitted by Section 9.1(b)(i)
hereof; provided that the assets subject to such liens and security
interests shall be limited to those contracts to which such guaranty,
suretyship or indemnification obligations relate and the rights to
payment thereunder;
(c) Liens securing Indebtedness permitted under Sections
9.1(d) and (e) (provided that Liens created pursuant to a Permitted
Receivables Transaction are only on the receivables (and related
contract rights, general intangibles, and chattel paper) so transferred
and securing only the obligations with respect thereto);
(d) Liens to secure taxes, assessments and other government
charges in respect of obligations not overdue;
<PAGE> 61
(e) 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;
(f) Liens 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 the
Borrower (or any Subsidiary) 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 Borrower maintains adequate
reserves;
(g) 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,
provided that such liens may continue to exist for a period of more
than 120 days if the validity or amount thereof shall currently be
contested by the Borrower (or any Subsidiary) in good faith by
appropriate proceedings and if the Borrower shall have set aside on its
books adequate reserves with respect thereto as required by GAAP and
provided further that the Borrower (or any Subsidiary) will pay any
such claim forthwith upon commencement of proceedings to foreclose any
such lien; and
(h) 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 the Borrower or any Subsidiary is a party,
and other minor liens or encumbrances none of which in the opinion of
the Borrower interferes materially with the use of the property
affected in the ordinary conduct of the business of the Borrower or any
of its Subsidiaries, which defects do not individually or in the
aggregate have a material adverse effect on the business of the
Borrower or any Subsidiary individually or of the Borrower and its
Subsidiaries on a consolidated basis.
The Borrower and the Guarantor covenant and agree that if
either of them or any of their Subsidiaries shall create or assume any
lien upon any of their respective properties or assets, whether now
owned or hereafter acquired, other than Permitted Liens (unless prior
written consent shall have been obtained from the Banks), the Borrower
and the Guarantor will make or cause to be made effective provision
whereby the Obligations and the Guaranteed Obligations will be secured
by such lien equally and ratably with any and all other Indebtedness
thereby secured so long as such other Indebtedness shall be so secured;
provided, that the covenants of the Borrower and the Guarantor
contained in this sentence shall only be in effect for so long as the
Borrower or the Guarantor shall be similarly obligated under any other
Indebtedness; provided, further, that an Event of Default shall occur
for so long as such other Indebtedness becomes secured notwithstanding
any actions taken by the Borrower or the Guarantor to ratably secure
the Obligations and the Guaranteed Obligations hereunder.
SECTION 9.3. RESTRICTIONS ON INVESTMENTS. Except to the extent provided
in Section 9.4, neither the Borrower nor any Subsidiary may make or permit to
exist or to remain outstanding any
<PAGE> 62
Investment, unless both before and after giving effect thereto (i) the Borrower
and its Subsidiaries are in compliance with the covenants set forth in Sections
8, 9 and 10 hereof; (ii) there does not exist a Default or Event of Default and
no Default or Event of Default would be created by the making of such
Investment; and (iii) the aggregate amount of all Investments (excluding
Investments in (A) direct obligations of the United States of America or any
agency thereof having maturities of less than one (1) year, (B) certificates of
deposit having maturities of less than one (1) year, issued by commercial banks
in the United States or Canada having capital and surplus of not less than
$100,000,000, and (C) wholly owned Subsidiaries) does not exceed 10% of
Consolidated Tangible Assets; provided, that the ability of the Borrower and its
Subsidiaries to incur any Indebtedness in connection with any Investment
permitted by this Section 9.3 shall be governed by Section 9.1.
SECTION 9.4. MERGERS, CONSOLIDATIONS, SALES.
(a) Neither the Borrower nor any Subsidiary shall be a party
to any merger, consolidation or exchange of stock unless the Borrower
shall be the surviving entity with respect to any such transaction to
which the Borrower is a party and the Guarantor shall be the survivor
of any merger with any other Subsidiary or a Subsidiary shall be the
surviving entity (and continue to be a Subsidiary) with respect to any
such transactions to which one or more Subsidiaries is a party (and the
conditions set forth below are satisfied), or purchase or otherwise
acquire all or substantially all of the assets or stock of any class
of, or any partnership, membership or joint venture or other interest
in, any other Person except as otherwise provided in Section 9.3 or
this Section 9.4. Notwithstanding the foregoing, the Borrower and its
Subsidiaries may purchase or otherwise acquire all or substantially all
of the assets or stock of any class of, or joint venture or other
interest in, any Person if the following conditions have been met: (i)
the proposed transaction will not otherwise create a Default or an
Event of Default hereunder; (ii) the business to be acquired
predominantly involves (A) the collection, transfer, hauling, disposal
or recycling of solid waste (excluding hazardous waste as that term is
defined in RCRA) or thermal soil remediation, or (B) other lines of
businesses currently engaged in, including (1) on-site portable
sanitation services, (2) industrial cleaning services, (3) chemical
waste treatment, storage, disposal and related services, (4) on-site
integrated hazardous waste management services, including hazardous
waste identification, packaging, removal, and recycling services, (5)
radioactive waste management services, (6) development and operation of
waste-to-energy facilities and related services, (7) the treatment and
management of biosolids, (8) design and installation of air pollution
control systems and equipment, or (9) environmental and infrastructure
consulting and related services, provided that revenues from operations
with respect to items (3), (4) and (5) shall not exceed ten percent
(10%) of consolidated revenues without the consent of the Majority
Banks; (iii) the business to be acquired operates predominantly (A) in
North America or (B) outside North America, provided, that the
aggregate amount of such acquisitions under this clause (B) does not
exceed fifteen percent (15%) of Consolidated Tangible Assets; and (iv)
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. Notwithstanding anything herein to the
contrary, the ability of the Borrower
<PAGE> 63
and its Subsidiaries to incur any Indebtedness in connection with any
transaction permitted pursuant to this Section 9.4 shall be governed by
Section 9.1.
(b) Neither the Borrower nor any Subsidiary shall sell,
transfer, convey or lease any assets or group of assets including the
sale or transfer of any property owned by the Borrower or any
Subsidiary in order then or thereafter to lease such property or lease
other property which the Borrower or such Subsidiary intends to use for
substantially the same purpose as the property being sold or
transferred (except (1) transfers of real or personal property among
Subsidiaries of the Borrower which are wholly owned by the Borrower,
(2) Regulatory Dispositions, (3) Strategic Dispositions, (4) Allied
Waste Transactions, and (5) so long as no Default or Event of Default
has occurred and is continuing, or would result therefrom, sales of
assets in the ordinary course of business in any calendar year with an
aggregate value not greater than $50,000,000), or sell or assign, with
or without recourse, any receivables (except accounts receivable (and
contract rights, general intangibles or chattel paper related thereto)
more than sixty (60) days past due sold or assigned in the ordinary
course of collecting past due accounts, or pursuant to a Permitted
Receivables Transaction).
(c) Commencing with the Effective Date, at any time when the
aggregate Net Cash Proceeds from all Domestic Strategic Dispositions
not previously applied or set aside for application under this Section
9.4(c) exceeds $25,000,000 in the aggregate, then all such Net Cash
Proceeds (including the first $25,000,000) received by the Borrower or
any Subsidiary from Domestic Strategic Dispositions shall be applied
within five (5) Business Days to pay down the Existing Domestic Bank
Debt on a pro rata basis as set forth in the following table (with
concurrent permanent reduction in the lenders commitments to advance
funds or provide credit hereunder and thereunder of not less than
eighty percent (80%) of the amount of such pay down), with the
remainder of such Net Cash Proceeds to be available for share
repurchases (subject to Section 9.5 below), and for other general
corporate purposes (including acquisitions):
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------
Cumulative Net Cash Proceeds % Required to Repay % Available for Share
Existing Domestic Bank Repurchase
Debt
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Tier I Greater than or equal to $0 and less than or 100% 0%
equal to $1,500,000,000
- --------------------------------------------------------------------------------------------------------------------------
Tier II Greater than $1,500,000,000 and less than or 50% 50%
equal to $2,500,000,000
- --------------------------------------------------------------------------------------------------------------------------
Tier III Greater than $2,500,000,000 and less than or 0% 100%
equal to $5,000,000,000
- --------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 64
provided that in the event that the Senior Public Debt Rating is rated
less than BBB- by Standard & Poor's AND less than Baa3 by Moody's, Tier
III shall be adjusted such that 20% of Net Cash Proceeds are required
to repay Existing Domestic Bank Debt and 80% of Net Cash Proceeds will
be available for share repurchases. The Borrower shall promptly provide
a monthly report to the Administrative Agent in the form of Exhibit M
hereto (the "Form of Net Cash Proceeds Certificate") of Net Cash
Proceeds from all Domestic Strategic Dispositions for the month, and
demonstrating compliance with the conditions set forth above.
(d) Net Cash Proceeds from any European Strategic Dispositions
shall be used first to permanently pay down the European Credit
Facilities (and concurrent permanent reduction of the commitments of
the lenders to advance funds or provide credit thereunder by the amount
of such pay down), with any surplus to be treated as if such surplus
were Net Cash Proceeds from a Domestic Strategic Disposition in
accordance with subsection (c) above. The Borrower shall promptly
provide a monthly report to the Administrative Agent in the form of
Exhibit M hereto of Net Cash Proceeds from all European Strategic
Dispositions for the month, and demonstrating compliance with the
conditions set forth above.
SECTION 9.5. RESTRICTED DISTRIBUTIONS AND REDEMPTIONS. Neither the
Borrower nor any of its Subsidiaries will (a) declare or pay any Distributions,
or (b) redeem, convert, retire or otherwise acquire shares of any class of its
capital stock (other than in connection with a merger permitted by Section 9.4
hereof or conversion into another form of equity of any preferred shares of the
Borrower existing as of the Effective Date pursuant to the terms thereof);
provided that, so long as no Default or Event of Default exists or would be
created hereunder, the Borrower and its Subsidiaries may (i) pay cash dividends
and redeem stock in an aggregate amount not to exceed Net Cash Proceeds from
Strategic Dispositions available for share repurchase in accordance with the
table set forth above in Section 9.4(c), provided further that, giving effect to
the proposed share repurchase on a proforma basis as if the transaction occurred
as of the last day of the prior fiscal quarter, the Borrower (x) shall have cash
equivalents plus Existing Domestic Bank Debt Availability of at least
$1,000,000,000, (y) the ratio of Total Debt to EBITDA for the most recently
ended period of four fiscal quarters shall not exceed 2.75:1 and (z) the
European Credit Facilities shall have been paid in full; and (ii) pay common
dividends in an amount not to exceed $25,000,000 per year. Notwithstanding the
above, any Subsidiary may make Distributions to the Borrower and the Borrower
agrees that neither the Borrower nor any Material Subsidiary will enter into any
agreement restricting Distributions from such Material Subsidiary to the
Borrower.
SECTION 9.6. EMPLOYEE BENEFIT PLANS. None of the Borrower, any of its
Subsidiaries, or any ERISA Affiliate will:
(a) engage in any "prohibited transaction" within the meaning
of Section 406 of ERISA or Section 4975 of the Code which could result
in a material liability for the Borrower on a consolidated basis; or
<PAGE> 65
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in Section
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 the Borrower or the Guarantor pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) permit or take any action which would result in the
aggregate benefit liabilities (within the meaning of Section 4001 of
ERISA), other than with respect to the Terminated Plans, 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;
or
(e) take any action referred to in paragraph (a), (b), (c) or
(d) above that would violate any provisions of Applicable Canadian
Pension Legislation.
The Borrower and its Subsidiaries will (i) promptly upon the request of
any Bank or the Administrative Agent, furnish to the Banks a copy of the most
recent actuarial statement required to be submitted under Section 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 Banks any notice, report or demand sent or received in respect of a
Guaranteed Pension Plan under Sections 302, 4041, 4042, 4043, 4063, 4065, 4066
and 4068 of ERISA, or in respect of a Multiemployer Plan, under Sections 4041A,
4202, 4219, 4242 or 4245 of ERISA.
SECTION 10. FINANCIAL COVENANTS OF THE BORROWER. The Borrower agrees
that, so long as any Obligation or Letter of Credit is outstanding or the Banks
have any obligation to make Loans, or any Issuing Bank has any obligation to
issue, extend or renew any Letter of Credit hereunder, or the Banks have any
obligation to reimburse any Issuing Bank for drawings honored under any Letter
of Credit, it shall, and shall cause its Subsidiaries to, comply with the
following covenants:
SECTION 10.1. INTEREST COVERAGE RATIO. As of the end of any fiscal
quarter of the Borrower, the Borrower will not permit the ratio of (a) EBIT for
the four fiscal quarters then ending to (b) Consolidated Total Interest Expense
for such period to be less than the applicable ratio set forth in the table
below:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
FISCAL QUARTERS ENDING: RATIO:
---------------------------------------------------------------------------------
<S> <C>
December 31, 1999 - September 30, 2000 2.75:1.00
---------------------------------------------------------------------------------
December 31, 2000 and thereafter 3.00:1.00
---------------------------------------------------------------------------------
</TABLE>
<PAGE> 66
SECTION 10.2. TOTAL DEBT TO EBITDA. As of the end of any fiscal quarter
of the Borrower, the Borrower will not permit the ratio of (a) Total Debt to (b)
EBITDA for the four fiscal quarters then ending to exceed the applicable ratio
set forth in the table below:
<TABLE>
<CAPTION>
---------------------------------------------------------------------------------
FISCAL QUARTERS ENDING: RATIO:
---------------------------------------------------------------------------------
<S> <C>
December 31, 1999 - June 30, 2000 3.25:1.00
---------------------------------------------------------------------------------
September 30, 2000 and thereafter 3.00:1.00
---------------------------------------------------------------------------------
</TABLE>
SECTION 10.3. MINIMUM NET WORTH. The Borrower will not permit
Consolidated Net Worth at any time to be less than $3,500,000,000, plus 75% of
cumulative positive Consolidated Net Income for each fiscal quarter, beginning
with the fourth fiscal quarter of 1999, minus any share repurchases permitted
pursuant to Section 9.5 hereof.
SECTION 11. CONDITIONS PRECEDENT.
SECTION 11.1. CONDITIONS TO EFFECTIVENESS. The effectiveness of this
Agreement and the obligations of the Banks to make any Loans and of any Issuing
Bank to issue Letters of Credit and of the Banks to participate in Letters of
Credit and otherwise be bound by the terms of this Agreement shall be subject to
the satisfaction of each of the following conditions precedent:
SECTION 11.1.1. CORPORATE ACTION. All corporate action
necessary for the valid execution, delivery and performance by the
Borrower and the Guarantor of the Loan Documents shall have been duly
and effectively taken, and evidence thereof certified by authorized
officers of the Borrower and the Guarantor and satisfactory to the
Banks shall have been provided to the Banks.
SECTION 11.1.2. LOAN DOCUMENTS, ETC. Each of the Loan
Documents and other documents listed on the closing agenda shall have
been duly and properly authorized, executed and delivered by the
respective parties thereto and shall be in full force and effect in a
form satisfactory to the Majority Banks.
SECTION 11.1.3. CERTIFIED COPIES OF CHARTER DOCUMENTS. The
Banks shall have received from each of the Borrower and the Guarantor a
certificate, certified by a duly authorized officer of such Person to
be true and complete on the Effective Date, of (a) no changes (other
than those attached thereto) to its charter or other incorporation
documents since last delivered to the Administrative Agent, and (b) no
changes to its by-laws (other than those attached thereto) since last
delivered to the Administrative Agent.
SECTION 11.1.4. INCUMBENCY CERTIFICATE. The Banks shall have
received an incumbency certificate, dated as of the Effective Date,
signed by duly authorized officers of the Borrower and the Guarantor
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
Borrower and the Guarantor; (b) to make Syndicated Loan Requests and
Letter of Credit
<PAGE> 67
Requests; (c) to make Competitive Bid Quote Requests; and (d) to give
notices and to take other action on the Borrower's or the Guarantor's
behalf under the Loan Documents.
SECTION 11.1.5. CERTIFICATES OF INSURANCE. The Banks shall
have received (i) a certificate of insurance from an independent
insurance broker dated as of the Effective 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 of the Loan Documents and
(ii) copies of all policies evidencing such insurance (or certificates
therefor signed by the insurer or an agent authorized to bind the
insurer).
SECTION 11.1.6. OPINION OF COUNSEL. The Banks shall have
received a favorable legal opinion from outside counsel to the Borrower
and the Guarantor addressed to the Banks, dated the Effective Date, in
form and substance satisfactory to the Administrative Agent.
SECTION 11.1.7. SATISFACTORY FINANCIAL CONDITION. Other than
as disclosed in the Disclosure Documents, no material adverse change,
in the judgment of the Majority Banks, shall have occurred in the
financial condition, results of operations, business, properties or
prospects of the Borrower and its Subsidiaries, taken as a whole, since
the Interim Balance Sheet Date.
SECTION 11.1.8. PAYMENT OF AMENDMENT FEES. For each Bank which
executed and delivered its facsimile signature pages by 5:00 p.m. on
December 15, 1999, the Borrower shall have paid the agreed upon
amendment fee of 0.125% on each such Bank's Commitment to the
Administrative Agent for the account of such Banks.
SECTION 11.1.9. AMENDMENTS TO EXISTING DEBT. The
Administrative Agent shall have received evidence, in form and
substance satisfactory to the Administrative Agent, that the Revolving
Credit Facility is concurrently becoming effective in a form and
substance satisfactory to the Administrative Agent, MGT and the Joint
Lead Arrangers and Joint Book Managers, and no "Event of Default",
"Default" (each as defined in such agreement) or prepayment event shall
exist under such agreement and no liens shall be created under such
agreement as a result of the transactions contemplated hereby.
SECTION 12. CONDITIONS TO ALL LOANS. The obligations of the Banks to
make any Loan and the obligation of any Issuing Bank to issue, extend, or renew
any Letter of Credit at the time of and subsequent to the Effective Date is
subject to the following conditions precedent:
SECTION 12.1. REPRESENTATIONS TRUE. Each of the representations and
warranties of the Borrower and the Guarantor (as applicable) 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 such
Loan or the issuance, extension, or renewal of any Letter of Credit, as
applicable, 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 and changes occurring in the ordinary course of business which
singly or in the aggregate are not materially adverse to the business,
<PAGE> 68
assets or financial condition of the Borrower and its Subsidiaries as a whole,
and to the extent that such representations and warranties relate expressly and
solely to an earlier date).
SECTION 12.2. PERFORMANCE; NO EVENT OF DEFAULT. The Borrower shall have
performed and complied with all terms and conditions herein required to be
performed or complied with by it prior to or at the time of the making of any
Loan the issuance, extension or renewal of any Letter of Credit, and at the time
of the making of any Loan or the issuance, renewal or extension of any Letter of
Credit, there shall exist no Default or Event of Default or condition which
would result in a Default or an Event of Default upon consummation of such Loan
or issuance, extension, or renewal of any Letter of Credit, as applicable. Each
request for a Loan, or for issuance, extension or renewal of a Letter of Credit
shall constitute certification by the Borrower that the conditions specified in
Sections 12.1 and 12.2 will be duly satisfied on the date of such Loan or Letter
of Credit issuance, extension or renewal.
SECTION 12.3. NO LEGAL IMPEDIMENT. No change shall have occurred in any
law or regulations thereunder or interpretations thereof which in the reasonable
opinion of the Banks would make it illegal for the Banks to make Loans, for any
Issuing Bank to issue, extend or renew, or the Banks to participate in, Letters
of Credit hereunder.
SECTION 12.4. GOVERNMENTAL REGULATION. The Banks shall have received
from the Borrower and its Subsidiaries such statements in substance and form
reasonably satisfactory to the Banks as they 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 or the Office of the
Superintendent of Financial Institutions.
SECTION 12.5. 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 Banks as of the date of the making of
any extension of credit in substance and in form satisfactory to the Banks,
including without limitation a Syndicated Loan Request in the form attached
hereto as Exhibit D or a Letter of Credit Request in the form of Exhibit E and
the Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Banks may reasonably request.
SECTION 13. EVENTS OF DEFAULT; ACCELERATION; TERMINATION OF COMMITMENT.
SECTION 13.1. 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 Borrower shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the stated
date of maturity or any accelerated date of maturity or at any other
date fixed for payment;
(b) if the Borrower shall fail to pay any interest or fees or
other amounts owing hereunder (other than those specified in subsection
(a) above) within five (5) Business Days after the same shall become
due and payable whether at the Revolving
<PAGE> 69
Credit Maturity Date, Term Loan Maturity Date or any accelerated date
of maturity or at any other date fixed for payment;
(c) if the Borrower shall fail to comply with any of the
covenants contained in Sections 8, 9 and 10 hereof;
(d) if the Borrower 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) and
such failure shall not be remedied within 30 days after written notice
of such failure shall have been given to the Borrower by the
Administrative Agent or any of the Banks;
(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 the Borrower or any of its Subsidiaries shall fail to
pay when due, or within any applicable period of grace, any
Indebtedness in an aggregate amount greater than $50,000,000, or fail
to observe or perform any material term, covenant or agreement
contained in any one or more agreements by which it is bound,
evidencing or securing any Indebtedness in an aggregate amount greater
than $50,000,000 for such period of time as would permit, 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 terminate its commitment with
respect thereto;
(g) if the Borrower, the Guarantor or any Material Subsidiary
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 the Borrower, the
Guarantor or any Material Subsidiary, or of any substantial part of the
assets of the Borrower, the Guarantor or any Material Subsidiary or
commences any case or other proceeding relating to the Borrower, the
Guarantor or any Material Subsidiary 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 the
Borrower, the Guarantor or any Material Subsidiary or the Borrower, the
Guarantor or any Material Subsidiary indicates its approval thereof,
consent thereto or acquiescence therein;
(h) if a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating the Borrower
or the Guarantor or any Material Subsidiary 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 the Borrower or the
Guarantor or any Material Subsidiary in an involuntary case under
federal bankruptcy laws of any jurisdiction as now or hereafter
constituted, and such decree or order remains in effect for more than
30 days, whether or not consecutive;
<PAGE> 70
(i) if there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty days, whether or not consecutive,
any final judgment against the Borrower or any Subsidiary which, with
other outstanding final judgments against the Borrower and its
Subsidiaries exceeds in the aggregate $25,000,000 after taking into
account any undisputed insurance coverage;
(j) if, with respect to any Guaranteed Pension Plan (or any
corresponding plan described in any Applicable Canadian Pension
Legislation), an ERISA Reportable Event or similar event under
Applicable Canadian Pension Legislation shall have occurred and the
Banks shall have determined in their reasonable discretion that such
event reasonably could be expected to result in liability of the
Borrower or any Subsidiary to the PBGC or similar Canadian authorities
or the Plan in an aggregate amount exceeding $25,000,000 and such event
in the circumstances occurring reasonably could constitute grounds for
the partial or complete termination of such Plan by the PBGC or similar
Canadian authorities or for the appointment by the appropriate United
States District Court or Canadian Court of a trustee to administer such
Plan; or a trustee shall have been appointed by the appropriate United
States District Court or Canadian Court to administer such Plan; or the
PBGC or similar Canadian authorities shall have instituted proceedings
to terminate such Plan;
(k) if any of the Loan Documents shall be cancelled,
terminated, revoked or rescinded otherwise than in accordance with the
terms thereof or with the express prior written agreement, consent or
approval of the Banks, 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 Borrower, the Guarantor, 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; or
(l) if 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 25% or more of the outstanding shares of common voting stock of
the Borrower; or during any period of twelve consecutive calendar
months, individuals who were directors of the Borrower on the first day
of such period shall cease to constitute a majority of the board of
directors of the Borrower;
then, and in any such event, so long as the same may be continuing, the
Administrative Agent may, and upon the request of the Majority Banks shall, by
notice in writing to the Borrower, declare all amounts owing with respect to
this Agreement, the Notes 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, notice of intent to
accelerate, notice of acceleration to the extent permitted by law or other
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided that in the event of any Event of Default specified in Section 13.1(g)
or 13.1(h), all such amounts shall become immediately due and
<PAGE> 71
payable automatically and without any requirement of notice from the
Administrative Agent or any Bank. Upon demand by the Majority Banks after the
occurrence of any Event of Default, the Borrower shall immediately provide to
the Administrative Agent cash in an amount equal to the aggregate Maximum
Drawing Amount to be held by the Administrative Agent as collateral security for
the Reimbursement Obligations.
SECTION 13.2. TERMINATION OF COMMITMENTS. If any Event of Default
pursuant to Sections 13.1(g) or 13.1(h) hereof shall occur, any unused
portion of the Total Commitment hereunder shall forthwith terminate and the
Banks and the Issuing Banks shall be relieved of all obligations to make Loans
or to issue, extend or renew Letters of Credit hereunder; or if any other Event
of Default shall occur, the Majority Banks may by notice to the Borrower
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 Banks and the Issuing Banks shall be relieved of
all further obligations to make Loans or to issue, extend or renew Letters of
Credit hereunder. No termination of any portion of the Total Commitment
hereunder shall relieve the Borrower of any of its existing Obligations to the
Banks, the Issuing Banks or the Administrative Agent hereunder or elsewhere.
SECTION 13.3. REMEDIES. In case any one or more of the Events of
Default shall have occurred and be continuing, and whether or not the Banks
shall have accelerated the maturity of the Loans and other Obligations pursuant
to Section 13.1, each Bank, upon notice to the other Banks, 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 such Bank 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 such Bank, any recovery being subject to the terms
of Section 30 hereof. No remedy herein conferred upon any Bank or the
Administrative Agent or the holder of any Note 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.
SECTION 14. 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 any Bank to the Borrower and any securities or other
property of the Borrower in the possession of such Bank may be applied to or set
off against the payment of 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 Borrower to the Banks or the Administrative Agent.
Any amounts set off pursuant to this Section 14 shall be distributed ratably in
accordance with Section 30 among all of the Banks by the Bank setting off such
amounts. If any Bank fails to share such setoff ratably, the Administrative
Agent shall have the right to withhold such Bank's share of the Borrower's
payments until each of the Banks shall have, in the aggregate, received a pro
rata repayment.
<PAGE> 72
SECTION 15. EXPENSES. Whether or not the transactions contemplated
herein shall be consummated, the Borrower hereby promises to reimburse the
Administrative Agent for all reasonable out-of-pocket fees and disbursements
(including all reasonable attorneys' fees) incurred or expended in connection
with the syndication, 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 Borrower further promises to
reimburse the Administrative Agent and the Banks for all reasonable
out-of-pocket fees and disbursements (including all reasonable legal fees and
the allocable cost of in-house attorneys' fees) incurred or expended in
connection with the enforcement of any Obligations or the satisfaction of any
indebtedness of the Borrower hereunder or under any other Loan Document, or in
connection with any litigation, proceeding or dispute hereunder in any way
related to the credit hereunder. The Borrower also promises to pay the
Administrative Agent all reasonable out-of-pocket fees and disbursements,
incurred or expended in connection with the Competitive Bid Loan procedure under
Section 4 hereof.
SECTION 16. THE AGENTS.
SECTION 16.1. APPOINTMENT, POWERS AND IMMUNITIES. Each Bank hereby
irrevocably appoints and authorizes BKB to act as Administrative Agent,
provided, however, the Administrative Agent is hereby authorized to serve only
as administrative and documentation agent for the Banks and to exercise such
powers as are reasonably incidental thereto and as are set forth in this
Agreement and the other Loan Documents. The Administrative Agent hereby
acknowledges that it does not have the authority to negotiate any agreement
which would bind the Banks or agree to any amendment, waiver or modification of
any of the Loan Documents or bind the Banks except as set forth in this
Agreement or the Loan Documents. Except as provided in this Agreement, and in
the other Loan Documents, the Administrative Agent shall take action or refrain
from acting only upon instructions of the Banks. It is agreed that the duties,
rights, privileges and immunities of the Issuing Banks, in their capacity as
issuers of Letters of Credit hereunder, shall be identical to the duties,
rights, privileges and immunities of the Administrative Agent as provided in
this Section 16. The Administrative Agent shall not have any duties or
responsibilities or any fiduciary relationship with any Bank except those
expressly set forth in this Agreement and the other Loan Documents. Neither the
Administrative Agent nor any of its affiliates shall be responsible to the Banks
for any recitals, statements, representations or warranties made by the Borrower
or any other Person whether contained herein or otherwise or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, the other Loan Documents or any other document referred to or
provided for herein or therein or for any failure by the Borrower or any other
Person to perform its obligations hereunder or thereunder or in respect of the
Notes. The Administrative Agent may employ agents and attorneys-in-fact and
shall not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care. The Administrative Agent,
the Agents and any of their directors, officers, employees or agents shall not
be responsible for any action taken or omitted to be taken by it or them
hereunder or in connection herewith, except for its or their own gross
negligence or willful misconduct. The Administrative Agent in its separate
capacity as a Bank shall have the same rights and powers hereunder as any other
Bank. The Documentation Agent and the Syndication Agents shall not have any
right, power, obligation, liability, responsibility or
<PAGE> 73
duty under this Credit Agreement in such capacity, other than with respect to
the Documentation Agent, those applicable to all Banks as Banks.
SECTION 16.2. ACTIONS BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement as reasonably deemed appropriate unless it shall first have received
the consent of the Majority Banks (or, when expressly required hereby, all of
the Banks), and shall be indemnified to its reasonable satisfaction by the Banks
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting, under
this Agreement or any of the Loan Documents in accordance with the instruction
of the Majority Banks (or, when expressly required hereby or thereby, all of the
Banks), and such instruction and any action taken or failure to act pursuant
thereto shall be binding upon the Banks and all future holders of the Notes or
any Letter of Credit Participation.
SECTION 16.3. INDEMNIFICATION. Without limiting the obligations of the
Borrower hereunder or under any other Loan Document, the Banks agree to
indemnify the Administrative Agent, its affiliates and its respective directors,
officers, agents and employees (to the extent not reimbursed by the Borrower)
ratably in accordance with their respective Commitment Percentages for any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may at any time be imposed on, incurred by or asserted against the
Administrative Agent in any way relating to or arising out of this Agreement or
any other Loan Document or any documents contemplated by or referred to herein
or therein or the transactions contemplated hereby or thereby or the enforcement
of any of the terms hereof or thereof or of any such other documents; provided,
that no Bank shall be liable for any of the foregoing to the extent they arise
from the gross negligence or willful misconduct of the Administrative Agent (or
any agent thereof) and provided further that no Bank shall be liable with
respect to acts of Section 20 Subsidiaries of other Banks, IT BEING THE INTENT
OF THE PARTIES HERETO THAT ALL SUCH INDEMNIFIED PARTIES SHALL BE INDEMNIFIED FOR
THEIR ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE.
SECTION 16.4. REIMBURSEMENT. Without limiting the provisions of
Sections 6.1(a), 6.12, and 14, the Administrative Agent shall not be obliged to
make available to any Person any sum which the Administrative Agent is expecting
to receive for the account of that Person until the Administrative Agent has
determined that it has received that sum. The Administrative Agent may, however,
disburse funds prior to determining that the sums which the Administrative Agent
expects to receive have been finally and unconditionally paid to the
Administrative Agent, if the Administrative Agent wishes to do so. If and to the
extent that the Administrative Agent does disburse funds and it later becomes
apparent that the Administrative Agent did not then receive a payment in an
amount equal to the sum paid out, then any Person to whom the Administrative
Agent made the funds available shall, on demand from the Administrative Agent,
refund to the Administrative Agent the sum paid to that Person. If, in the
opinion of the Administrative Agent, the distribution of any amount received by
it in such capacity hereunder or under the other Loan Documents might involve it
in liability, it may refrain from making distribution until its right to make
distribution shall have been adjudicated by a court of competent jurisdiction.
If
<PAGE> 74
a court of competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each Person to whom any
such distribution shall have been made shall either repay to the Administrative
Agent its proportionate share of the amount so adjudged to be repaid or shall
pay over the same in such manner and to such Persons as shall be determined by
such court.
SECTION 16.5. DOCUMENTS. The Administrative Agent will forward to each
Bank, promptly after receipt thereof, a copy of each notice or other document
furnished to the Administrative Agent for such Bank hereunder; provided,
however, that, notwithstanding the foregoing, the Administrative Agent may
furnish to the Banks a monthly summary with respect to Letters of Credit issued
hereunder in lieu of copies of the related Letter of Credit Applications.
SECTION 16.6. NON-RELIANCE ON ADMINISTRATIVE AGENT AND OTHER BANKS.
Each Bank represents that it has, independently and without reliance on the
Administrative Agent, the Agents or any other Bank, and based on such documents
and information as it has deemed appropriate, made its own appraisal of the
financial condition and affairs of the Borrower and the Guarantor and the
decision to enter into this Agreement and the other Loan Documents and agrees
that it will, independently and without reliance upon the Administrative Agent,
the Agents or any other Bank, and based on such documents and information as it
shall deem appropriate at the time, continue to make its own appraisals and
decisions in taking or not taking action under this Agreement or any other Loan
Document. Except as herein expressly provided to the contrary, the
Administrative Agent shall not be required to keep informed as to the
performance or observance by the Borrower and the Guarantor of this Agreement,
the other Loan Documents or any other document referred to or provided for
herein or therein or by any other Person of any other agreement or to make
inquiry of, or to inspect the properties or books of, any Person. Except for
notices, reports and other documents and information expressly required to be
furnished to the Banks by the Administrative Agent hereunder, the Administrative
Agent shall not have any duty or responsibility to provide any Bank with any
credit or other information concerning any person which may come into the
possession of the Administrative Agent or any of their affiliates. Each Bank
shall have access to all documents relating to the Administrative Agent's
performance of their duties hereunder at such Bank's request. Unless any Bank
shall promptly object to any action taken by the Administrative Agent hereunder
of which such Bank has actual knowledge (other than actions which require the
prior consent of such Bank in accordance with the terms hereof or to which the
provisions of Section 16.8 are applicable and other than actions which
constitute gross negligence or willful misconduct by the Administrative Agent),
such Bank shall be presumed to have approved the same.
SECTION 16.7. RESIGNATION OF ADMINISTRATIVE AGENT. The Administrative
Agent may resign at any time by giving 60 days' prior written notice thereof to
the Banks and the Borrower. Upon any such resignation, the Banks (other than the
resigning Administrative Agent) shall have the right to appoint a successor
Administrative Agent from among the Banks. If no successor to the Administrative
Agent shall have been so appointed by the Banks and shall have accepted such
appointment within 30 days after the retiring Administrative Agent's giving of
notice of resignation, then the retiring Administrative Agent may, on behalf of
the Banks, appoint a successor Administrative Agent from among the remaining
Banks, which shall be a financial institution having a combined capital and
surplus in excess of $1,000,000,000. Upon the
<PAGE> 75
acceptance of any appointment as the Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations hereunder. After the
retiring Administrative Agent's resignation, the provisions of this Agreement
shall continue in effect for its benefit in respect of any actions taken or
omitted to be taken by it while it was acting as the Administrative Agent. Any
new Issuing Bank appointed pursuant to this Section 16.7 shall immediately issue
new Letters of Credit in place of Letters of Credit previously issued or, if
acceptable to the resigning Issuing Bank, issue letters of credit in favor of
the resigning Issuing Bank as security for the outstanding Letters of Credit and
shall in due course replace all Letters of Credit previously issued by the
resigning Issuing Bank.
SECTION 16.8. ACTION BY THE BANKS, CONSENTS, AMENDMENTS, WAIVERS, ETC.
Any action to be taken (including the giving of notice) may be taken, any
consent or approval required or permitted by this Agreement or any other Loan
Document to be given by the Banks may be given, any term of this Agreement, any
other Loan Document or any other instrument, document or agreement related to
this Agreement or the other Loan Documents or mentioned therein may be amended,
and the performance or observance by the Borrower or any other Person of any of
the terms thereof and any Default or Event of Default (as defined in any of the
above-referenced documents or instruments) may be waived (either generally or in
a particular instance and either retroactively or prospectively), only with the
written consent of the Majority Banks; provided, however, that no such consent
or amendment which affects the rights, duties or liabilities of the
Administrative Agent or any Issuing Bank shall be effective without the written
consent of the Administrative Agent or such Issuing Bank, as the case may be.
Notwithstanding the foregoing, no amendment, waiver or consent shall do any of
the following unless in writing and signed by ALL of the Banks (a) increase the
principal amount of the Total Commitment (or subject any Bank to any additional
obligations), (b) reduce the principal of or interest on the Notes (including,
without limitation, interest on overdue amounts) or any fees payable hereunder,
(c) postpone any date fixed for any payment in respect of principal or interest
(including, without limitation, interest on overdue amounts) on the Notes or any
fee hereunder (except pursuant to Section 2.10); (d) change the definition of
"Majority Banks" or number of Banks which shall be required for the Banks or any
of them to take any action under the Loan Documents; (e) amend this Section
16.8; (f) change the Commitment Percentage of any Bank, except as permitted
under Section 21 and Section 2.10 hereof, (g) change the Total Commitment
Percentage of any Bank, or (h) release the Borrower or the Guarantor from its
obligations hereunder (except as expressly set forth herein).
SECTION 17. INDEMNIFICATION. The Borrower agrees to indemnify and hold
harmless the Banks, the Agents, the Issuing Banks, the Joint Lead Arrangers and
Joint Book Managers and the Administrative Agent and their affiliates, as well
as the Banks' and the Administrative Agent's and their affiliates' 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 any indemnified party. In any investigation,
<PAGE> 76
enforcement matter, proceeding or litigation, or the preparation therefor, the
Banks and the Administrative Agent shall be entitled to select their own counsel
and, in addition to the foregoing indemnity, the Borrower agrees to pay promptly
the reasonable fees and expenses of such counsel (including the non-duplicative
allocated cost of internal counsel), and settlement costs. In the event of the
commencement of any such proceeding or litigation against the Banks or
Administrative Agent by third parties, the Borrower 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 Banks or Administrative Agent. The covenants of this Section 17 shall
survive payment or satisfaction of payment of amounts owing with respect to any
Note or any other Loan Document and satisfaction of all the Obligations
hereunder, IT BEING THE INTENT OF THE PARTIES HERETO THAT ALL SUCH INDEMNIFIED
PARTIES SHALL BE INDEMNIFIED FOR THEIR ORDINARY SOLE OR CONTRIBUTORY NEGLIGENCE.
SECTION 18. WITHHOLDING TAXES. The Borrower hereby agrees that:
(a) Any and all payments made by the Borrower hereunder shall
be made free and clear of, and without deduction for, any and all
present or future taxes, levies, fees, duties, imposts, deductions,
charges or withholdings of any nature whatsoever, excluding, in the
case of the Administrative Agent or the Banks or any holder of the
Notes, (i) taxes imposed on, or measured by, its net income or profits,
(ii) franchise taxes imposed on it, (iii) taxes imposed by any
jurisdiction as a direct consequence of it, or any of its affiliates,
having a present or former connection with such jurisdiction,
including, without limitation, being organized, existing or qualified
to do business, doing business or maintaining a permanent establishment
or office in such jurisdiction, and (iv) taxes imposed by reason of its
failure to comply with any applicable certification, identification,
information, documentation or other reporting requirement (all such
non-excluded taxes being hereinafter referred to as "Indemnifiable
Taxes"). In the event that any withholding or deduction from any
payment to be made by the Borrower hereunder is required in respect of
any Indemnifiable Taxes pursuant to any applicable law, or governmental
rule or regulation, then the Borrower will (i) direct to the relevant
taxing authority the full amount required to be so withheld or
deducted, (ii) forward to the Administrative Agent for delivery to the
applicable Bank an official receipt or other documentation satisfactory
to the Administrative Agent and the applicable Bank evidencing such
payment to such taxing authority, and (iii) direct to the
Administrative Agent for the account of the relevant Banks such
additional amount or amounts as is necessary to ensure that the net
amount actually received by each relevant Bank will equal the full
amount such Bank would have received had no such withholding or
deduction (including any Indemnifiable Taxes on such additional
amounts) been required. Moreover, if any Indemnifiable Taxes are
directly asserted against the Administrative Agent or any Bank with
respect to any payment received by the Administrative Agent or such
Bank by reason of the Borrower's failure to properly deduct and
withhold such Indemnifiable Taxes from such payment, the Administrative
Agent or such Bank may pay such Indemnifiable Taxes and the Borrower
will promptly pay all such additional amounts (including any penalties,
interest or reasonable expenses) as is necessary in order that the net
amount received by such Person after the payment of
<PAGE> 77
such Indemnifiable Taxes (including any Indemnifiable Taxes on such
additional amount) shall equal the amount such Person would have
received had not such Indemnifiable Taxes been asserted. Any such
payment shall be made promptly after the receipt by the Borrower from
the Administrative Agent or such Bank, as the case may be, of a written
statement setting forth in reasonable detail the amount of the
Indemnifiable Taxes and the basis of the claim.
(b) The Borrower shall pay any present or future stamp or
documentary taxes or any other excise or any other similar levies which
arise from any payment made hereunder or from the execution, delivery
or registration of, or otherwise with respect to, this Agreement or any
other Loan Document ("Other Taxes").
(c) The Borrower hereby indemnifies and holds harmless the
Administrative Agent and each Bank for the full amount of Indemnifiable
Taxes or Other Taxes (including, without limitation, any Indemnifiable
Taxes or Other Taxes imposed on amounts payable under this Section 18)
paid by the Administrative Agent or such Bank, as the case may be, and
any liability (including penalties, interest and reasonable expenses)
arising therefrom or with respect thereto, by reason of the Borrower's
failure to properly deduct and withhold Indemnifiable Taxes pursuant to
paragraph (a) above or to properly pay Other Taxes pursuant to
paragraph (b) above. Any indemnification payment from the Borrower
under the preceding sentence shall be made promptly after receipt by
the Borrower from the Administrative Agent or Bank of a written
statement setting forth in reasonable detail the amount of such
Indemnifiable Taxes or such Other Taxes, as the case may be, and the
basis of the claim.
(d) If the Borrower pays any amount under this Section 18 to
the Administrative Agent or any Bank and such payee knowingly receives
a refund of any taxes with respect to which such amount was paid, the
Administrative Agent or such Bank, as the case may be, shall pay to the
Borrower the amount of such refund promptly following the receipt
thereof by such payee.
(e) In the event any taxing authority notifies the Borrower or
the Guarantor that any of them has improperly failed to deduct or
withhold any taxes (other than Indemnifiable Taxes) from a payment made
hereunder to the Administrative Agent or any Bank, the Borrower shall
timely and fully pay such taxes to such taxing authority.
(f) The Administrative Agent or the Banks shall, upon the
request of the Borrower, take reasonable measures to avoid or mitigate
the amount of Indemnifiable Taxes required to be deducted or withheld
from any payment made hereunder if such measures can be taken without
such Person in its sole judgment suffering any legal, regulatory or
economic disadvantage.
(g) Without prejudice to the survival of any other agreement
of the parties hereunder, the agreements and obligations of the
Borrower contained in this Section 18 shall survive the payment in full
of the Obligations.
<PAGE> 78
SECTION 19. TREATMENT OF CERTAIN CONFIDENTIAL INFORMATION.
SECTION 19.1. SHARING OF INFORMATION WITH SECTION 20 SUBSIDIARY. The
Borrower acknowledges that from time to time financial advisory, investment
banking and other services may be offered or provided to the Borrower or one or
more of its Subsidiaries, in connection with this Agreement or otherwise, by a
Section 20 Subsidiary. The Borrower, for itself and each of its Subsidiaries,
hereby authorizes (a) such Section 20 Subsidiary to share with the
Administrative Agent and each Bank any information delivered to such Section 20
Subsidiary by the Borrower or any of its Subsidiaries, and (b) the
Administrative Agent and each Bank to share with such Section 20 Subsidiary any
information delivered to the Administrative Agent or such Bank by the Borrower
or any of its Subsidiaries pursuant to this Agreement, or in connection with the
decision of such Bank to enter into this Agreement; it being understood, in each
case, that any such Section 20 Subsidiary receiving such information shall be
bound by the confidentiality provisions of this Agreement. Such authorization
shall survive the payment and satisfaction in full of all of Obligations.
SECTION 19.2. CONFIDENTIALITY. Each of the Banks and the Administrative
Agent agrees, on behalf of itself and each of its affiliates, directors,
officers, employees and representatives, to use reasonable precautions to keep
confidential, in accordance with their customary procedures for handling
confidential information of the same nature and in accordance with safe and
sound banking practices, any non-public information supplied to it by the
Borrower or any of its Subsidiaries pursuant to this Agreement that is
identified by such Person as being confidential at the time the same is
delivered to the Banks or the Administrative Agent, provided that nothing herein
shall limit the disclosure of any such information (a) after such information
shall have become public other than through a violation of this Section 19, (b)
to the extent required by statute, rule, regulation or judicial process, (c) to
counsel for any of the Banks or the Administrative Agent, (d) to bank examiners
or any other regulatory authority having jurisdiction over any Bank or the
Administrative Agent, or to auditors or accountants, (e) to the Administrative
Agent, any Bank or any Section 20 Subsidiary, (f) in connection with any
litigation to which any one or more of the Banks, the Administrative Agent or
any Section 20 Subsidiary is a party, or in connection with the enforcement of
rights or remedies hereunder or under any other Loan Document, (g) to a
Subsidiary or affiliate of such Bank as provided in Section 19.1 or (h) to any
assignee or participant (or prospective assignee or participant) so long as such
assignee or participant agrees to be bound by the provisions of Section 21.
SECTION 19.3. PRIOR NOTIFICATION. Unless specifically prohibited by
applicable law or court order, each of the Banks and the Administrative Agent
shall, prior to disclosure thereof, notify the Borrower of any request for
disclosure of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection with an
examination of the financial condition of such Bank by such governmental agency)
or pursuant to legal process.
SECTION 19.4. OTHER. In no event shall any Bank or the Administrative
Agent be obligated or required to return any materials furnished to it or any
Section 20 Subsidiary by the Borrower or any of its Subsidiaries. The
obligations of each Bank under this Section 19 shall supersede and replace the
obligations of such Bank under any confidentiality letter in respect of this
financing signed and delivered by such Bank to the Borrower prior to the date
hereof and shall be binding upon
<PAGE> 79
any assignee of, or purchaser of any participation in, any interest in any of
the Loans or Reimbursement Obligations from any Bank.
SECTION 20. 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 Borrower or the Guarantor pursuant hereto shall be deemed to have
been relied upon by the Banks, the Issuing Banks and the Administrative Agent,
notwithstanding any investigation heretofore or hereafter made by them, and
shall survive the making by the Banks of the Loans and the issuance, extension
or renewal of any Letters of Credit by any Issuing Bank, as herein contemplated,
and shall continue in full force and effect so long as any amount due under this
Agreement, any Obligation, any Letter of Credit or any Note remains outstanding
and unpaid or any Bank has any obligation to make any Loans or any Issuing Bank
has any obligation to issue, extend, or renew any Letters of Credit hereunder.
All statements contained in any certificate or other paper delivered by or on
behalf of the Borrower pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and warranties by the
Borrower hereunder.
SECTION 21. ASSIGNMENT AND PARTICIPATION. It is understood and agreed
that each Bank shall have the right to assign at any time all or a portion of
its Commitment Percentage and interests in the risk relating to the Loans,
outstanding Letters of Credit and its Commitment hereunder in an amount equal to
or greater than $5,000,000 (or, if a Bank's Commitment is less than $5,000,000,
in a minimum amount equal to such Bank's Commitment, provided that prior to any
Commitment reductions pursuant to Section 2.3, such Bank's Commitment was at
least $10,000,000) to additional banks or other financial institutions with the
prior written approval of the Administrative Agent and, so long as no Event of
Default has occurred and is continuing, the Borrower, which approvals shall not
be unreasonably withheld. Any Bank may at any time, and from time to time,
assign to any branch, lending office, or affiliate or such Bank all or any part
of its rights and obligations under the Loan Documents by notice to the
Administrative Agent and the Borrower. It is further agreed that each bank or
other financial institution which executes and delivers to the Administrative
Agent and the Borrower hereunder an Assignment and Acceptance substantially in
the form of Exhibit G hereto (an "Assignment and Acceptance") together with an
assignment fee in the amount of $3,500 payable by the assigning Bank to the
Administrative Agent, shall, on the date specified in such Assignment and
Acceptance, become a party to this Agreement and the other Loan Documents for
all purposes of this Agreement and the other Loan Documents, and its portion of
the Commitment, the Loans and Letters of Credit shall be as set forth in such
Assignment and Acceptance. The Bank assignor thereunder shall, to the extent
that rights and obligations hereunder have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement and the other Loan Documents. Upon the
execution and delivery of such Assignment and Acceptance, (a) the Borrower shall
issue to the assignee bank or other financial institution Notes in the amount of
such bank's or other financial institution's Commitment dated the date of the
assignment or such other date as may be specified by the Administrative Agent,
and otherwise completed in substantially the form of Exhibits A or B, and to the
extent any assigning Bank has retained a portion of its obligations hereunder, a
replacement Syndicated Note, to the assigning Bank reflecting its assignment;
(b) to the extent applicable, the Borrower shall issue a Competitive Bid Note in
substantially the form of Exhibit C (and a replacement
<PAGE> 80
Competitive Bid Note) or the Administrative Agent shall make appropriate entries
on the Competitive Bid Loan Accounts to reflect such assignment of Competitive
Bid Loan(s); (c) the Administrative Agent shall distribute to the Borrower, the
Banks and such bank or financial institution a revised Schedule 1 reflecting
such changes; and (d) this Agreement shall be deemed to be appropriately amended
to reflect (i) the status of the bank or financial institution as a party hereto
and (ii) the status and rights of the Banks hereunder.
Each Bank shall also have the right to grant participations to one or
more banks or other financial institutions in its Commitment, the Loans and
outstanding Letters of Credit. The documents evidencing any such participation
shall limit such participating bank's or financial institution's voting rights
with respect to this Agreement to the matters set forth in Section 16.8 which
require the approval of all Banks.
Notwithstanding the foregoing, no assignment or participation shall
operate to increase the Total Commitment hereunder or otherwise alter the
substantive terms of this Agreement, and no Bank which retains a Commitment
hereunder shall have a Commitment of less than $10,000,000, as such amount may
be reduced upon reductions in the Total Commitment pursuant to Section 2.3
hereof.
Anything contained in this Section 21 to the contrary notwithstanding,
any Bank may at any time pledge all or any portion of its interest and rights
under this Agreement (including all or any portion of its Notes) to any of the
twelve Federal Reserve Banks organized under Section 4 of the Federal Reserve
Act, 12 U.S.C. Section 341. No such pledge or the enforcement thereof shall
release the pledgor Bank from its obligations hereunder or under any of the
other Loan Documents.
The Borrower agrees that in addition to disclosures made in accordance
with standard and customary banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder; provided that such assignees
or participants or potential assignees or participants shall agree to be bound
by Section 19 hereof.
SECTION 22. 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 the Borrower shall not assign or transfer its rights
or obligations hereunder or thereunder without the prior written consent of each
of the Banks.
SECTION 23. 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 telegraph, telex or facsimile and confirmed by
letter, addressed as follows:
(a) if to the Borrower or the Guarantor, at 1001 Fannin
Street, Suite 4000, Houston, Texas 77002, Attention: Ronald H. Jones,
facsimile number (713) 209-9710; or
<PAGE> 81
(b) if to BKB or the Administrative Agent at BankBoston, N.A.,
100 Federal Street, Boston, Massachusetts 02110, Attention: Arthur J.
Oberheim, Director, facsimile number (617) 434-2160; or
(c) if to any Bank, at the last address provided to the
Administrative Agent;
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 telex, facsimile, or cable, at the time of the dispatch thereof, if in normal
business hours in the country of receipt, or otherwise at the opening of
business on the following Business Day.
SECTION 24. MISCELLANEOUS. The rights and remedies herein expressed are
cumulative and not exclusive of any other rights which the Banks, the Issuing
Banks or the Administrative Agent 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.
SECTION 25. CONSENTS, ETC. Neither this Agreement nor any term hereof
may be changed, waived, discharged or terminated, except as provided in this
Section 25, subject to the provisions of Section 16.8. No waiver shall extend to
or affect any obligation not expressly waived or impair any right consequent
thereon. Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement to be given by the Banks may
be given, and any term of this Agreement or of any other instrument related
hereto or mentioned herein may be amended, and the performance or observance by
the Borrower of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Borrower and the Majority Banks. To the
extent permitted by law, no course of dealing or delay or omission on the part
of any of the Banks, the Issuing Banks or the Administrative Agent in exercising
any right shall operate as a waiver thereof or otherwise be prejudicial thereto.
No notice to or demand upon the Borrower shall entitle the Borrower to other or
further notice or demand in similar or other circumstances.
SECTION 26. WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE
LAW, EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY OF THE OTHER LOAN DOCUMENTS,
ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
<PAGE> 82
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT AS PROHIBITED BY LAW, THE
BORROWER AND THE GUARANTOR HEREBY WAIVE ANY RIGHT EITHER OF THEM 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 BORROWER AND THE GUARANTOR EACH (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK, ANY ISSUING
BANK, THE ADMINISTRATIVE AGENT OR ANY AGENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH BANK, SUCH ISSUING BANK, THE ADMINISTRATIVE AGENT OR SUCH
AGENT WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVERS AND (B) ACKNOWLEDGES THAT THE ADMINISTRATIVE AGENT, THE BANKS, AND THE
ISSUING BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS BECAUSE OF, AMONG OTHER THINGS, THE BORROWER'S AND THE GUARANTOR'S
WAIVERS AND CERTIFICATIONS CONTAINED HEREIN.
SECTION 27. GOVERNING LAW; SUBMISSION TO JURISDICTION. THIS AGREEMENT
AND EACH OF THE OTHER LOAN DOCUMENTS ARE CONTRACTS UNDER THE LAWS OF THE STATE
OF NEW YORK AND SHALL, PURSUANT TO NEW YORK GENERAL OBLIGATIONS LAW SECTION
5-1401, BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF THE STATE OF
NEW YORK. THE BORROWER AND THE GUARANTOR CONSENT AND AGREE THAT ANY SUIT FOR THE
ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT
IN THE COURTS OF THE STATE OF NEW YORK OR ANY FEDERAL COURT SITTING THEREIN AND
CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND SERVICE OF PROCESS
IN ANY SUCH SUIT BEING MADE UPON THE BORROWER IN ACCORDANCE WITH LAW AT THE
ADDRESS SPECIFIED IN SECTION 23. THE BORROWER AND THE GUARANTOR HEREBY WAIVE ANY
OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY SUCH SUIT OR
ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT COURT.
SECTION 28. 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.
SECTION 29. GUARANTY.
SECTION 29.1. GUARANTY. For value received and hereby acknowledged and
as an inducement to the Banks and the Issuing Banks to make the Loans available
to the Borrower, and issue, extend or renew Letters of Credit for the account of
the Borrower, the Guarantor hereby unconditionally and irrevocably guarantees
(a) the full punctual payment when due, whether at stated maturity,
<PAGE> 83
by acceleration or otherwise, of all Obligations of the Borrower now or
hereafter existing whether for principal, interest, fees, expenses or otherwise,
and (b) the strict performance and observance by the Borrower of all agreements,
warranties and covenants applicable to the Borrower in the Loan Documents and
(c) the obligations of the Borrower under the Loan Documents (such Obligations
collectively being hereafter referred to as the "Guaranteed Obligations").
SECTION 29.2. GUARANTY ABSOLUTE. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms
hereof, regardless of any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights of any Bank, any
Issuing Bank or the Administrative Agent with respect thereto. The liability of
the Guarantor under the guaranty granted under this Agreement with regard to the
Guaranteed Obligations shall be absolute and unconditional irrespective of:
(a) any change in the time, manner or place of payment of, or
in any other term of, all or any of its Guaranteed Obligations or any
other amendment or waiver of or any consent to departure from this
Agreement or any other Loan Document (with regard to such Guaranteed
Obligations);
(b) any release or amendment or waiver of or consent to
departure from any other guaranty for all or any of its Guaranteed
Obligations;
(c) any change in ownership of the Borrower;
(d) any acceptance of any partial payment(s) from the Borrower
or the Guarantor; or
(e) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Borrower in respect of its
Obligations under any Loan Document.
The guaranty under this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any Guaranteed
Obligation is rescinded or must otherwise be returned by the Banks, the Issuing
Banks or the Administrative Agent upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, all as though such payment had not
been made.
SECTION 29.3. EFFECTIVENESS; ENFORCEMENT. The guaranty under this
Agreement shall be effective and shall be deemed to be made with respect to each
Loan and each Letter of Credit as of the time it is made, issued or extended, or
becomes a Letter of Credit under this Agreement, as applicable. No invalidity,
irregularity or unenforceability by reason of any bankruptcy or similar law, or
any law or order of any government or agency thereof purporting to reduce, amend
or otherwise affect any liability of the Borrower, and no defect in or
insufficiency or want of powers of the Borrower or irregular or improperly
recorded exercise thereof, shall impair, affect, be a defense to or claim
against such guaranty. The guaranty under this Agreement is a continuing
guaranty and shall (a) survive any termination of this Agreement, and (b) remain
in full force and effect until payment in full of, and performance of, all
Guaranteed Obligations and
<PAGE> 84
all other amounts payable under this Agreement. The guaranty under this
Agreement is made for the benefit of the Administrative Agent, the Issuing Banks
and the Banks and their successors and assigns, and may be enforced from time to
time as often as occasion therefor may arise and without requirement on the part
of the Administrative Agent, the Issuing Banks or the Banks first to exercise
any rights against the Borrower, or to resort to any other source or means of
obtaining payment of any of the said obligations or to elect any other remedy.
SECTION 29.4. WAIVER. Except as otherwise specifically provided in any
of the Loan Documents, the Guarantor hereby waives promptness, diligence,
protest, notice of protest, all suretyship defenses, notice of acceptance and
any other notice with respect to any of its Guaranteed Obligations and the
guaranty under this Agreement and any requirement that the Banks, the Issuing
Banks or the Administrative Agent protect, secure, perfect any security interest
or lien or any property subject thereto or exhaust any right or take any action
against the Borrower or any other Person. The Guarantor also irrevocably waives,
to the fullest extent permitted by law, all defenses which at any time may be
available to it in respect of its Guaranteed Obligations by virtue of any
statute of limitations, valuation, stay, moratorium law or other similar law now
or hereafter in effect.
SECTION 29.5. EXPENSES. The Guarantor hereby promises to reimburse (a)
the Administrative Agent for all reasonable out-of-pocket fees and disbursements
(including all reasonable attorneys' fees), incurred or expended in connection
with the preparation, filing or recording, or interpretation of the guaranty
under this Agreement, the other Loan Documents to which the Guarantor is a
party, or any amendment, modification, approval, consent or waiver hereof or
thereof, and (b) the Administrative Agent, the Issuing Banks and the Banks and
their respective affiliates for all reasonable out-of-pocket fees and
disbursements (including reasonable attorneys' fees), incurred or expended in
connection with the enforcement of its Guaranteed Obligations (whether or not
legal proceedings are instituted). The Guarantor will pay any taxes (including
any interest and penalties in respect thereof) other than the Banks' taxes based
on overall income or profits, payable on or with respect to the transactions
contemplated by the guaranty under this Agreement, the Guarantor hereby agreeing
jointly and severally to indemnify each Bank with respect thereto.
SECTION 29.6. CONCERNING JOINT AND SEVERAL LIABILITY OF THE GUARANTOR.
(a) The Guarantor hereby irrevocably and unconditionally
accepts, not merely as a surety but also as a co-debtor, joint and
several liability with the Borrower, with respect to the payment and
performance of all of its Guaranteed Obligations (including, without
limitation, any Guaranteed Obligations arising under this Section 29),
it being the intention of the parties hereto that all such Guaranteed
Obligations shall be the joint and several Guaranteed Obligations of
the Guarantor and the Borrower without preferences or distinction among
them.
(b) If and to the extent that the Borrower shall fail to make
any payment with respect to any of its Obligations as and when due or
to perform any of its Guaranteed Obligations in accordance with the
terms thereof, then in each such event the applicable Guarantor will
make such payment with respect to, or perform, such Guaranteed
Obligation.
<PAGE> 85
(c) The Guaranteed Obligations of the Guarantor under the
provisions of this Section 29 constitute full recourse obligations of
the Guarantor enforceable against the Guarantor to the full extent of
its properties and assets, irrespective of the validity, regularity or
enforceability of this Agreement or any other circumstance whatsoever.
(d) Except as otherwise expressly provided in this Agreement,
the Guarantor hereby waives notice of acceptance of its joint and
several liability, notice of any Loans made, or Letters of Credit
issued under this Agreement, notice of any action at any time taken or
omitted by the Administrative Agent, the Issuing Banks or the Banks
under or in respect of any of the Guaranteed Obligations, and,
generally, to the extent permitted by applicable law, all demands,
notices and other formalities of every kind in connection with this
Agreement. The Guarantor hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the
Guaranteed Obligations, the acceptance of any payment of any of the
Guaranteed Obligations, the acceptance of any partial payment thereon,
any waiver, consent or other action or acquiescence by the
Administrative Agent, the Issuing Banks or the Banks at any time or
times in respect of any Default or Event of Default by the Borrower or
the Guarantor in the performance or satisfaction of any term, covenant,
condition or provision of this Agreement or any other Loan Document,
any and all other indulgences whatsoever by the Administrative Agent,
the Issuing Banks or the Banks in respect of any of the Guaranteed
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
Guaranteed Obligations or the addition, substitution or release, in
whole or in part, of the Borrower or the Guarantor. Without limiting
the generality of the foregoing, the Guarantor assents to any other
action or delay in acting or failure to act on the part of the Banks,
the Issuing Banks or the Administrative Agent with respect to the
failure by the Borrower or the Guarantor to comply with its respective
Obligations or Guaranteed 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 Section 29,
afford grounds for terminating, discharging or relieving the Guarantor,
in whole or in part, from any of the Guaranteed Obligations under this
Section 29, it being the intention of the Guarantor that, so long as
any of the Guaranteed Obligations hereunder remain unsatisfied, the
Guaranteed Obligations of the Guarantor under this Section 29 shall not
be discharged except by performance and then only to the extent of such
performance. The Guaranteed Obligations of the Guarantor under this
Section 29 shall not be diminished or rendered unenforceable by any
winding up, reorganization, arrangement, liquidation, reconstruction or
similar proceeding with respect to the Borrower or the Guarantor or the
Banks, the Issuing Banks or the Administrative Agent. The joint and
several liability of the Guarantor hereunder shall continue in full
force and effect notwithstanding any absorption, merger, consolidation,
amalgamation or any other change whatsoever in the name, membership,
constitution or place of formation of the Borrower or the Guarantor,
the Banks, the Issuing Banks or the Administrative Agent.
(e) The Guarantor shall be liable under this Section 29 only
for the maximum amount of such liabilities that can be incurred under
applicable law without rendering this Section 29 voidable under
applicable law relating to fraudulent conveyance and fraudulent
<PAGE> 86
transfer, and not for any greater amount. Accordingly, if any
obligation under any provision under this Section 29 shall be declared
to be invalid or unenforceable in any respect or to any extent, it is
the stated intention and agreement of the Guarantor, the Administrative
Agent, the Issuing Banks and the Banks that any balance of the
obligation created by such provision and all other obligations of the
Guarantor under this Section 29 to the Banks, the Issuing Banks or the
Administrative Agent shall remain valid and enforceable, and that all
sums not in excess of those permitted under applicable law shall remain
fully collectible by the Banks, the Issuing Banks and the
Administrative Agent from the Borrower or the Guarantor, as the case
may be.
(f) The provisions of this Section 29 are made for the benefit
of the Administrative Agent, the Issuing Banks and the Banks and their
successors and assigns, and may be enforced in good faith by them from
time to time against the Guarantor as often as occasion therefor may
arise and without requirement on the part of the Administrative Agent,
the Issuing Banks or the Banks first to marshal any of their claims or
to exercise any of their rights against the Borrower or the Guarantor
or to exhaust any remedies available to them against the Borrower or
the Guarantor 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 Section 29 shall remain in effect until
all of the Guaranteed Obligations shall have been paid in full or
otherwise fully satisfied and the Commitments have expired and all
outstanding Letters of Credit have expired, matured or otherwise been
terminated. If at any time, any payment, or any part thereof, made in
respect of any of the Guaranteed Obligations, is rescinded or must
otherwise be restored or returned by the Banks, the Issuing Banks or
the Administrative Agent upon the insolvency, bankruptcy or
reorganization of the Borrower or the Guarantor, or otherwise, the
provisions of this Section 29 will forthwith be reinstated in effect,
as though such payment had not been made.
SECTION 29.7. WAIVER. Until the final payment and performance in full
of all of the Obligations, the Guarantor shall not exercise and the Guarantor
hereby waives any rights the Guarantor may have against the Borrower arising as
a result of payment by the Guarantor hereunder, by way of subrogation,
reimbursement, restitution, contribution or otherwise, and will not prove any
claim in competition with the Administrative Agent, the Issuing Banks or any
Bank in respect of any payment hereunder in any bankruptcy, insolvency or
reorganization case or proceedings of any nature; the Guarantor will not claim
any setoff, recoupment or counterclaim against the Borrower in respect of any
liability of the Borrower to the Guarantor; and the Guarantor waives any benefit
of and any right to participate in any collateral security which may be held by
the Administrative Agent, the Issuing Banks or any Bank.
SECTION 29.8. SUBROGATION; SUBORDINATION. The payment of any amounts
due with respect to any indebtedness of the Borrower for money borrowed or
credit received now or hereafter owed to the Guarantor is hereby subordinated to
the prior payment in full of all of the Obligations. The Guarantor agrees that,
after the occurrence of any default in the payment or performance of any of the
Obligations, the Guarantor will not demand, sue for or otherwise attempt to
collect any such indebtedness of the Borrower to the Guarantor until all of the
Obligations shall have been paid in full. If, notwithstanding the foregoing
sentence, the Guarantor shall collect, enforce
<PAGE> 87
or receive any amounts in respect of such indebtedness while any Obligations are
still outstanding, such amounts shall be collected, enforced and received by the
Guarantor as trustee for the Banks, the Issuing Banks and the Administrative
Agent and be paid over to the Administrative Agent at Default, for the benefit
of the Banks, the Issuing Banks, and the Administrative Agent on account of the
Obligations without affecting in any manner the liability of the Guarantor under
the other provisions hereof.
SECTION 30. PARI PASSU TREATMENT.
(a) Notwithstanding anything to the contrary set forth herein,
each payment or prepayment of principal and interest received after the
occurrence of an Event of Default hereunder shall be distributed pari
passu among the Banks, in accordance with the aggregate outstanding
principal amount of the Obligations owing to each Bank divided by the
aggregate outstanding principal amount of all Obligations.
(b) Following the occurrence and during the continuance of any
Event of Default, each Bank agrees that if it shall, through the
exercise of a right of banker's lien, setoff or counterclaim against
any Borrower (pursuant to Section 14 or otherwise), including a secured
claim under Section 506 of the Bankruptcy Code or other security or
interest arising from or in lieu of, such secured claim, received by
such Bank under any applicable bankruptcy, insolvency or other similar
law or otherwise, obtain payment (voluntary or involuntary) in respect
of the Notes, Loans, Reimbursement Obligations and other Obligations
held by it (other than pursuant to Section 6.4, Section 6.5 or Section
6.7) as a result of which the unpaid principal portion of the Notes and
the Obligations held by it shall be proportionately less than the
unpaid principal portion of the Notes and Obligations held by any other
Bank, it shall be deemed to have simultaneously purchased from such
other Bank a participation in the Notes and Obligations held by such
other Bank, so that the aggregate unpaid principal amount of the Notes,
Obligations and participations in Notes and Obligations held by each
Bank shall be in the same proportion to the aggregate unpaid principal
amount of the Notes and Obligations then outstanding as the principal
amount of the Notes and other Obligations held by it prior to such
exercise of banker's lien, setoff or counterclaim was to the principal
amount of all Notes and other Obligations outstanding prior to such
exercise of banker's lien, setoff or counterclaim; provided, however,
that if any such purchase or purchases or adjustments shall be made
pursuant to this Section 30 and the payment giving rise thereto shall
thereafter be recovered, such purchase or purchases or adjustments
shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustments restored without interest. The Borrower
expressly consents to the foregoing arrangements and agrees that any
Person holding such a participation in the Notes and the Obligations
deemed to have been so purchased may exercise any and all rights of
banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Person as fully as if such Person
had made a Loan directly to the Borrower in the amount of such
participation.
SECTION 31. TRANSITIONAL ARRANGEMENTS. Upon the Effective Date (a) this
Agreement shall supersede the Prior Loan Agreement in its entirety, and (b) the
parties acknowledge and agree that the Pricing Table set forth herein shall be
applied retroactively to
<PAGE> 88
October 29, 1999 to the Loans and Letters of Credit outstanding under the Prior
Loan Agreement; and the Borrower hereby agrees to pay on December 15, 1999 (i)
any facility fees due under the Prior Loan Agreement, (ii) any incremental
amounts due as the result of such retroactive increase to the extent not paid on
or before the Effective Date, and (iii) any other amounts due under the Prior
Loan Agreement.
SECTION 32. FINAL AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN
DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES.
<PAGE> 89
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as of the date first set forth above.
THE BORROWER:
WASTE MANAGEMENT, INC.
By:
------------------------------
Name:
Title:
<PAGE> 90
THE GUARANTOR:
WASTE MANAGEMENT HOLDINGS, INC.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
<PAGE> 91
THE BANKS AND AGENTS:
BANKBOSTON, N.A., individually and as
Administrative Agent
By:
------------------------------
Name:
Title:
BANK OF AMERICA, N.A.
By:
------------------------------
Name:
Title:
CHASE BANK OF TEXAS, N.A.
By:
------------------------------
Name:
Title:
DEUTSCHE BANK AG, NEW YORK BRANCH, individually
and as Documentation Agent
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
<PAGE> 92
ABN AMRO BANK N.V.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
ALLFIRST BANK
By:
------------------------------
Name:
Title:
BANCA DI ROMA
By:
------------------------------
Name:
Title:
BANCA MONTE DEI PASCHI DI SIENA S.P.A.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
BANK HAPOALIM
By:
------------------------------
Name:
Title:
<PAGE> 93
BANK OF MONTREAL
By:
------------------------------
Name:
Title:
THE BANK OF NEW YORK
By:
------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
By:
------------------------------
Name:
Title:
BANK ONE, TEXAS, N.A.
By:
------------------------------
Name:
Title:
BANQUE NATIONALE DE PARIS
By:
------------------------------
Name:
Title:
<PAGE> 94
CARIPLO-CASSA DI RISPARMIO DELLE PROVINCIE
LOMBARDE SPA
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
CITIBANK, N.A.
By:
------------------------------
Name:
Title:
COMERICA BANK
By:
------------------------------
Name:
Title:
COMMERZBANK AG, NEW YORK AND GRAND CAYMAN
BRANCHES
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By:
------------------------------
Name:
Title:
<PAGE> 95
CREDIT SUISSE FIRST BOSTON
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
DLJ CAPITAL FUNDING, INC.
By:
------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
------------------------------
Name:
Title:
FLEET BANK, N.A.
By:
------------------------------
Name:
Title:
THE INDUSTRIAL BANK OF JAPAN TRUST COMPANY
By:
------------------------------
Name:
Title:
<PAGE> 96
KBC BANK N.V.
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
MELLON BANK, N.A.
By:
------------------------------
Name:
Title:
MICHIGAN NATIONAL BANK
By:
------------------------------
Name:
Title:
MORGAN GUARANTY TRUST COMPANY OF NEW YORK
By:
------------------------------
Name:
Title:
NORDDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
<PAGE> 97
PNC BANK, NATIONAL ASSOCIATION
By:
------------------------------
Name:
Title:
ROYAL BANK OF CANADA
By:
------------------------------
Name:
Title:
SUNTRUST BANK, ATLANTA
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:
------------------------------
Name:
Title:
UNICREDITO ITALIANO, S.P.A.
By:
------------------------------
Name:
Title:
WACHOVIA BANK, N.A.
By:
------------------------------
Name:
Title:
<PAGE> 98
WESTDEUTSCHE LANDESBANK GIROZENTRALE,
NEW YORK BRANCH
By:
------------------------------
Name:
Title:
By:
------------------------------
Name:
Title:
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference of our report on Waste Management, Inc.'s
consolidated financial statements for the year ended December 31, 1998 dated
February 25, 1999 (except with respect to the matters discussed in Notes 20 and
21 as to which the date is September 16, 1999) included in Waste Management,
Inc.'s Current Report on Form 8-K dated September 16, 1999 in this Registration
Statement on Form S-4 and related Prospectus of Waste Management, Inc. and to
all references to our Firm included in or incorporated by reference in this
Registration Statement.
During the quarter ended September 30, 1999, the Company conducted a
review of its accounting records, systems, processes and controls. Based on that
review, the Company, after consultation with us, has concluded that its internal
controls for the preparation of interim financial information did not provide us
an adequate basis to complete reviews of the quarterly data for the quarters in
the nine-month period ended September 30, 1999. We have advised the Company that
our report on the December 31, 1999 financial statements will include the
following paragraph:
"The selected quarterly financial data included in the Company's
financial statements contain information that we did not audit, and
accordingly, we do not express an opinion on that data. We attempted,
but were unable, to review that quarterly data for the interim periods
within 1999 in accordance with standards established by the American
Institute of Certified Public Accountants because we believe that the
Company's internal controls for the preparation of interim financial
information did not provide an adequate basis to enable us to complete
such a review."
/s/ ARTHUR ANDERSEN LLP
Houston, Texas
December 17, 1999
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Amendment
No. 1 to the Registration Statement on Form S-4 relating to the exchange of
$1.15 billion of Senior Notes of Waste Management, Inc., of our report dated
March 16, 1998 relating to the consolidated financial statements of USA Waste
Services, Inc. as of December 31, 1997, and for the years ended December 31,
1997 and 1996, which appears in the Waste Management, Inc. Annual Report on Form
10-K for the year ended December 31, 1998 and Current Report on Form 8-K dated
September 16, 1999. We also consent to the reference to us under the heading
"Experts" in such Registration Statement.
/s/ PricewaterhouseCoopers LLP
Houston, Texas
December 17, 1999
<PAGE> 1
EXHIBIT 25.1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY UNDER THE
TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2) ____
-----------------------
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION
(Exact name of trustee as specified in its charter)
74-0800980
(I.R.S. Employer Identification Number)
712 MAIN STREET, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
LEE BOOCKER, 712 MAIN STREET, 26TH FLOOR
HOUSTON, TEXAS 77002 (713) 216-2448
(Name, address and telephone number of agent for service)
WASTE MANAGEMENT, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 73-1309529
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1001 FANNIN STREET, SUITE 4000, HOUSTON, TEXAS 77002
(Address of principal executive offices) (Zip code)
EXCHANGE NOTES
(Title of indenture securities)
================================================================================
<PAGE> 2
ITEM 1. GENERAL INFORMATION.
FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(a) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING
AUTHORITY TO WHICH IT IS SUBJECT.
Comptroller of the Currency, Washington, D.C.
Federal Deposit Insurance Corporation, Washington, D.C.
Board of Governors of the Federal Reserve System, Washington,
D.C.
(b) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
The trustee is authorized to exercise corporate trust powers.
ITEM 2. AFFILIATIONS WITH THE OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH
SUCH AFFILIATION.
The obligor is not an affiliate of the trustee. (See Note on
Page 7.)
ITEM 3. VOTING SECURITIES OF THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF VOTING
SECURITIES OF THE TRUSTEE.
COL. A COL. B
TITLE OF CLASS AMOUNT OUTSTANDING
-------------- ------------------
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 4. TRUSTEESHIPS UNDER OTHER INDENTURES.
IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER
WHICH ANY OTHER SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY
OTHER SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, FURNISH THE FOLLOWING
INFORMATION:
(a) TITLE OF THE SECURITIES OUTSTANDING UNDER EACH SUCH
OTHER INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
1
<PAGE> 3
ITEM 4. (CONTINUED)
(b) A BRIEF STATEMENT OF THE FACTS RELIED UPON AS A BASIS FOR
THE CLAIM THAT NO CONFLICTING INTEREST WITHIN THE MEANING OF
SECTION 310(b)(1) OF THE ACT ARISES AS A RESULT OF THE
TRUSTEESHIP UNDER ANY SUCH OTHER INDENTURE, INCLUDING A
STATEMENT AS TO HOW THE INDENTURE SECURITIES WILL RANK AS
COMPARED WITH THE SECURITIES ISSUED UNDER SUCH OTHER
INDENTURE.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 5. INTERLOCKING DIRECTORATES AND SIMILAR RELATIONSHIPS WITH
OBLIGOR OR UNDERWRITERS.
IF THE TRUSTEE OR ANY OF THE DIRECTORS OR EXECUTIVE OFFICER OF
THE TRUSTEE IS A DIRECTOR, OFFICER, PARTNER, EMPLOYEE, APPOINTEE, OR
REPRESENTATIVE OF THE OBLIGOR OR OF ANY UNDERWRITER FOR THE OBLIGOR, IDENTIFY
EACH SUCH PERSON HAVING ANY SUCH CONNECTION AND STATE THE NATURE OF EACH SUCH
CONNECTION.
Not applicable by virtue of Form T-1 General Instruction B and
response to Item 13.
ITEM 6. VOTING SECURITIES OF THE TRUSTEE OWNED BY THE OBLIGOR OR ITS
OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY THE OBLIGOR AND EACH DIRECTOR, PARTNER AND
EXECUTIVE OFFICER OF THE OBLIGOR.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
2
<PAGE> 4
ITEM 7. VOTING SECURITIES OF THE TRUSTEE OWNED BY UNDERWRITERS OR
THEIR OFFICIALS.
FURNISH THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES
OF THE TRUSTEE OWNED BENEFICIALLY BY EACH UNDERWRITER FOR THE OBLIGOR AND EACH
DIRECTOR, PARTNER AND EXECUTIVE OFFICER OF EACH SUCH UNDERWRITER.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
PERCENTAGE OF
VOTING SECURITIES
REPRESENTED BY
AMOUNT OWNED AMOUNT GIVEN IN
NAME OF OWNER TITLE OF CLASS BENEFICIALLY COL. C
------------- -------------- ------------ -----------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 8. SECURITIES OF THE OBLIGOR OWNED OR HELD BY THE TRUSTEE.
FURNISH THE FOLLOWING INFORMATION AS TO THE SECURITIES OF THE
OBLIGOR OWNED BENEFICIALLY OR HELD AS COLLATERAL SECURITY FOR OBLIGATIONS IN
DEFAULT BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
WHETHER THE BENEFICIALLY OR PERCENT OF
SECURITIES HELD AS COLLATERAL CLASS
ARE VOTING SECURITY FOR REPRESENTED BY
OR NONVOTING OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS SECURITIES DEFAULT COL. C
-------------- ------------- ------------------ ---------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
3
<PAGE> 5
ITEM 9. SECURITIES OF UNDERWRITERS OWNED OR HELD BY THE TRUSTEE.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF AN UNDERWRITER FOR THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OF
SUCH UNDERWRITER ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
-------------- ----------- ------------------- ---------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 10. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF VOTING SECURITIES
OF CERTAIN AFFILIATES OR SECURITY HOLDERS OF THE OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT VOTING SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE (1) OWNS 10% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR OR (2) IS AN AFFILIATE, OTHER THAN A SUBSIDIARY, OF THE OBLIGOR, FURNISH
THE FOLLOWING INFORMATION AS TO THE VOTING SECURITIES OF SUCH PERSON.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
--------------- ----------- ------------------ ---------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
4
<PAGE> 6
ITEM 11. OWNERSHIP OR HOLDINGS BY THE TRUSTEE OF ANY SECURITIES OF
A PERSON OWNING 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR.
IF THE TRUSTEE OWNS BENEFICIALLY OR HOLDS AS COLLATERAL
SECURITY FOR OBLIGATIONS IN DEFAULT ANY SECURITIES OF A PERSON WHO, TO THE
KNOWLEDGE OF THE TRUSTEE, OWNS 50% OR MORE OF THE VOTING SECURITIES OF THE
OBLIGOR, FURNISH THE FOLLOWING INFORMATION AS TO EACH CLASS OF SECURITIES OR
SUCH PERSON ANY OF WHICH ARE SO OWNED OR HELD BY THE TRUSTEE.
<TABLE>
<CAPTION>
COL. A COL. B COL. C COL. D
AMOUNT OWNED
BENEFICIALLY OR PERCENT OF
HELD AS COLLATERAL CLASS
NAME OF ISSUER SECURITY FOR REPRESENTED BY
AND AMOUNT OBLIGATIONS IN AMOUNT GIVEN IN
TITLE OF CLASS OUTSTANDING DEFAULT BY TRUSTEE COL. C
--------------- ----------- ------------------- ---------------
<S> <C> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 12. INDEBTEDNESS OF THE OBLIGOR TO THE TRUSTEE.
EXCEPT AS NOTED IN THE INSTRUCTIONS, IF THE OBLIGOR IS
INDEBTED TO THE TRUSTEE, FURNISH THE FOLLOWING INFORMATION:
<TABLE>
<CAPTION>
COL. A COL. B COL. C
NATURE OF AMOUNT
INDEBTEDNESS OUTSTANDING DATE DUE
------------ ----------- --------
<S> <C> <C>
</TABLE>
Not applicable by virtue of Form T-1 General Instruction B and response to
Item 13.
ITEM 13. DEFAULTS BY THE OBLIGOR.
(a) STATE WHETHER THERE IS OR HAS BEEN A DEFAULT WITH RESPECT TO THE
SECURITIES UNDER THIS INDENTURE. EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There is not, nor has there been, a default with respect to the
securities under this indenture. (See Note on Page 7.)
5
<PAGE> 7
ITEM 13. (CONTINUED)
(b) IF THE TRUSTEE IS A TRUSTEE UNDER ANOTHER INDENTURE UNDER WHICH ANY
SECURITIES, OR CERTIFICATES OF INTEREST OR PARTICIPATION IN ANY OTHER
SECURITIES, OF THE OBLIGOR ARE OUTSTANDING, OR IS TRUSTEE FOR MORE THAN ONE
OUTSTANDING SERIES OF SECURITIES UNDER THE INDENTURE, STATE WHETHER THERE HAS
BEEN A DEFAULT UNDER ANY SUCH INDENTURE OR SERIES, IDENTIFY THE INDENTURE OR
SERIES AFFECTED, AND EXPLAIN THE NATURE OF ANY SUCH DEFAULT.
There has not been a default under any such indenture or series. (See
Note on Page 7.)
ITEM 14. AFFILIATIONS WITH THE UNDERWRITERS.
IF ANY UNDERWRITER IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE
EACH SUCH AFFILIATION.
Not applicable by virtue of Form T-1 General Instruction B and response
to Item 13.
ITEM 15. FOREIGN TRUSTEE.
IDENTIFY THE ORDER OR RULE PURSUANT TO WHICH THE FOREIGN
TRUSTEE IS AUTHORIZED TO ACT AS SOLE TRUSTEE UNDER INDENTURES QUALIFIED OR TO BE
QUALIFIED UNDER THE ACT.
Not applicable.
ITEM 16. LIST OF EXHIBITS.
LIST BELOW ALL EXHIBITS FILED AS PART OF THIS STATEMENT OF
ELIGIBILITY.
o 1. A copy of the articles of association of the trustee now
in effect.
# 2. A copy of the certificate of authority of the trustee to
commence business.
* 3. A copy of the certificate of authorization of the trustee
to exercise corporate trust powers issued by the Board of
Governors of the Federal Reserve System under date of January
21, 1948.
+ 4. A copy of the existing bylaws of the trustee.
5. Not applicable.
6. The consent of the United States institutional trustees
required by Section 321(b) of the Act.
6
<PAGE> 8
[ ] 7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements of its supervising or
examining authority.
8. Not applicable.
9. Not applicable.
NOTE REGARDING INCORPORATED EXHIBITS
Effective January 20, 1998, the name of the Trustee was changed from
Texas Commerce Bank National Association to Chase Bank of Texas, National
Association. Certain of the exhibits incorporated herein by reference, with the
exception of Exhibit 7, were filed under the former name of the Trustee.
o Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission as
exhibits to the Form S-3 File No. 33-56195.
# Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission as
exhibits to the Form S-3 File No. 33-42814.
* Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission as
exhibits to the Form S-11 File No. 33-25132.
+ Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission as
exhibits to the Form S-3 File No. 33-65055.
[ ] Incorporated by reference to exhibit bearing the same
designation and previously filed with the Securities and Exchange Commission as
exhibits to the Form S-4 File No. 333-77263.
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment
by the trustee of all facts on which to base responsive answers to Items 2 and
13, the answers to said Items are based on incomplete information. Such Items
may, however, be considered as correct unless amended by an amendment to this
Form T-1.
7
<PAGE> 9
SIGNATURE
PURSUANT TO THE REQUIREMENTS OF THE TRUST INDENTURE ACT OF 1939 THE
TRUSTEE, CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, FORMERLY KNOWN AS TEXAS
COMMERCE BANK NATIONAL ASSOCIATION, A NATIONAL BANKING ASSOCIATION ORGANIZED AND
EXISTING UNDER THE LAWS OF THE UNITED STATES OF AMERICA, HAS DULY CAUSED THIS
STATEMENT OF ELIGIBILITY TO BE SIGNED ON ITS BEHALF BY THE UNDERSIGNED,
THEREUNTO AUTHORIZED, ALL IN THE CITY OF HOUSTON, AND STATE OF TEXAS, ON THE
16TH DAY OF DECEMBER, 1999.
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, AS TRUSTEE
By: /s/ LYNDA GUNTHER
------------------------------------------
Lynda Gunther
Assistant Vice President and Trust Officer
8
<PAGE> 10
EXHIBIT 6
Securities and Exchange Commission
Washington, D.C. 20549
Gentlemen:
The undersigned is trustee under a Senior Indenture dated as of
September 10, 1997, between USA Waste Services, Inc., a Delaware corporation,
now known as Waste Management, Inc. (the "Company"), and Texas Commerce Bank
National Association, now known as Chase Bank of Texas, National Association, as
Trustee, entered into in connection with the issuance of the Company's Exchange
Notes.
In accordance with Section 321(b) of the Trust Indenture Act of 1939,
the undersigned hereby consents that reports of examinations of the undersigned,
made by Federal or State authorities authorized to make such examinations, may
be furnished by such authorities to the Securities and Exchange Commission upon
its request therefor.
Very truly yours,
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION, as Trustee
By: /s/ LYNDA GUNTHER
------------------------------------------
Lynda Gunther
Assistant Vice President and Trust Officer
