UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACTOF 1934
For the Quarterly Period Ended February 28, 1999
Commission File Number 1-8368
SAFETY-KLEEN CORP.
(Exact name of registrant as specified in its charter)
Delaware 51-0228924
- ------------------------------- ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1301 Gervais Street, Suite 300, Columbia, South Carolina 29201
- -------------------------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(803) 933-4200 (Registrant's telephone number, including area code)
-------------------------------------------------------------------------
(Former name, address and former fiscal year, if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No ____
The number of shares of the issuer's common stock outstanding as of
April 9, 1999 was 88,387,466.
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SAFETY-KLEEN CORP.
<CAPTION>
INDEX
<S> <C> <C>
PART 1 FINANCIAL INFORMATION
Item 1 Financial Statements
Consolidated Statements of Income for the Three and Six Months Ended
February 28, 1999 and 1998.........................................................................2
Consolidated Statements of Comprehensive Income for the Three and Six Months Ended
February 28, 1999 and 1998.........................................................................3
Consolidated Balance Sheets as of February 28, 1999 and August 31, 1998.................................4
Consolidated Statements of Cash Flows for the Six Months Ended
February 28, 1999 and 1998.........................................................................5
Notes to Unaudited Consolidated Financial Statements....................................................6
Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations .................13
PART II OTHER INFORMATION
Item 1 Legal Proceedings.......................................................................................21
Item 5 Other Information.......................................................................................23
Item 6 Exhibits and Reports on Form 8-K........................................................................24
Signatures.........................................................................................................29
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1
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<TABLE>
<CAPTION>
SAFETY-KLEEN CORP.
CONSOLIDATED STATEMENTS OF INCOME
($ in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
------------------------ -------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues .......................................... $402,135 $173,215 $869,154 $384,767
-------- -------- -------- --------
Expenses:
Operating ...................................... 261,851 123,780 566,899 269,105
Depreciation and amortization .................. 33,678 10,924 70,973 24,819
Selling, general and administrative ............ 32,740 18,835 67,240 39,236
-------- -------- -------- --------
Total expenses .............................. 328,269 153,539 705,112 333,160
-------- -------- -------- --------
Operating income .................................. 73,866 19,676 164,042 51,607
Interest expense, net ............................. 42,726 13,607 86,683 28,246
Equity in earnings of associated company .......... 1,102 -- 1,102 --
-------- -------- -------- --------
Income before income tax expense .................. 32,242 6,069 78,461 23,361
Income tax expense ................................ 14,335 2,328 33,655 9,555
-------- -------- -------- --------
Income from continuing operations before
minority interest .............................. 17,907 3,741 44,806 13,806
Minority interest ................................. 338 (185) 1,211 (106)
-------- -------- -------- --------
Net income ........................................ $ 18,245 $ 3,556 $ 46,017 $ 13,700
======== ======== ======== ========
Basic income per share:
Net income ..................................... $ 0.21 $ 0.08 $ 0.53 $ 0.30
======== ======== ======== ========
Weighted average common stock outstanding (000s) 88,386 45,571 88,120 45,381
======== ======== ======== ========
Diluted income per share:
Net income ..................................... $ 0.19 $ 0.08 $ 0.46 $ 0.28
======== ======== ======== ========
Weighted average common stock outstanding and
assumed conversions (000s) ..................... 111,750 45,661 111,502 68,827
======== ======== ======== ========
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements
2
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<TABLE>
<CAPTION>
SAFETY-KLEEN CORP.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
($ in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
------------------ ----------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income ............................................ $ 18,245 $ 3,556 $ 46,017 $ 13,700
-------- -------- -------- --------
Other comprehensive income, net of tax:
Unrealized foreign currency translation adjustments . (1,556) 112 (64) (2,265)
Unrealized gain on securities available for sale, net
of tax of $(225) and $1,247 ...................... -- (339) -- 1,870
-------- -------- -------- --------
Other comprehensive income ............................ (1,556) (227) (64) (395)
-------- -------- -------- --------
Comprehensive income .................................. $ 16,689 $ 3,329 $ 45,953 $ 13,305
======== ======== ======== ========
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
3
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<TABLE>
<CAPTION>
SAFETY-KLEEN CORP.
CONSOLIDATED BALANCE SHEETS
($ in Thousands)
February 28, 1999
(Unaudited) August 31, 1998
----------------- ---------------
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents .............................. $ 10,949 $ 16,333
Trade and other accounts receivable .................... 357,327 320,048
Inventories ............................................ 55,435 53,759
Deferred income taxes .................................. 66,965 69,426
Income taxes recoverable ............................... -- 37,495
Other current assets ................................... 52,723 53,750
----------- -----------
Total current assets .............................. 543,399 550,811
Long-term investments ..................................... 75,671 35,926
Property, plant and equipment, net ........................ 2,551,533 2,850,502
Goodwill .................................................. 1,124,928 1,023,154
Other assets .............................................. 16,862 16,979
----------- -----------
Total assets ........................................... $ 4,312,393 $ 4,477,372
=========== ===========
LIABILITIES
Current liabilities
Accounts payable ....................................... $ 158,687 $ 128,560
Accrued liabilities .................................... 188,643 219,352
Current portion of long-term debt ...................... 77,441 77,004
----------- -----------
Total current liabilities ......................... 424,771 424,916
Environmental and other long-term liabilities ............. 339,445 259,459
Long-term debt ............................................ 1,670,955 1,853,164
Subordinated convertible debenture ........................ 350,000 350,000
Deferred income taxes ..................................... 457,720 575,127
----------- -----------
Total liabilities ................................. 3,242,891 3,462,666
----------- -----------
Commitments and contingencies ............................. -- --
STOCKHOLDERS' EQUITY
Common stock, par value $1.00 per share; authorized
250,000,000; issued and outstanding 88,387,466 -
February 28, 1999; 87,746,243 - August 31, 1998........ 88,387 87,746
Additional paid-in capital ................................ 1,190,749 1,182,547
Accumulated other comprehensive income .................... (18,892) (18,828)
Accumulated deficit ....................................... (190,742) (236,759)
----------- -----------
Total stockholders' equity ............................. 1,069,502 1,014,706
----------- -----------
Total liabilities and stockholders' equity ............. $ 4,312,393 $ 4,477,372
=========== ===========
</TABLE>
See Accompanying Notes to Unaudited Consolidated Financial Statements
4
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<TABLE>
<CAPTION>
SAFETY-KLEEN CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS
($ in Thousands)
(Unaudited)
Six Months Ended
February 28,
-----------------
1999 1998
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income ............................................................ $ 46,017 $ 13,700
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization ...................................... 70,973 24,819
Deferred income taxes .............................................. 27,217 5,986
Change in working capital .......................................... (13,687) 8,080
Decrease in liabilities assumed upon acquisition ................... (48,772) (20,237)
--------- ---------
Net cash provided by operating activities ................................ 81,748 32,348
--------- ---------
Cash flows from investing activities:
Cash expended on acquisition of business .............................. (4,394) --
Proceeds from sale of business ........................................ 138,714 33,675
Purchase of property, plant and equipment ............................. (29,682) (16,431)
Change in other, net .................................................. 488 (14,579)
--------- ---------
Net cash provided by investing activities ................................ 105,126 2,665
--------- ---------
Cash flows from financing activities:
Issuance of common stock on exercise of stock options ................. -- 414
Net repayments of long-term debt ...................................... (186,706) (34,640)
Change in other, net .................................................. (270) --
-------- ---------
Net cash used in financing activities .................................... (186,976) (34,226)
--------- ---------
Effect of exchange rate changes on cash .................................. (5,282) (181)
--------- ---------
Net increase (decrease) in cash and cash equivalents ..................... (5,384) 606
Cash and cash equivalents at:
Beginning of period ................................................... 16,333 11,160
--------- ---------
End of period ......................................................... $ 10,949 $ 11,766
========= =========
NONCASH INVESTING AND FINANCING ACTIVITIES:
Issuance of common stock to satisfy interest payment due on
subordinated convertible debenture ............................... $ 8,750 $ 8,750
Issuance of common stock for payment of directors' fees .............. $ 93 $ --
Net unrealized gain on securities available for sale ................. $ -- $ 1,870
Noncash transactions arising from sale of business:
Promissory note receivable ....................................... $ -- $ 8,000
Reduction of debt ................................................ $ -- $ 40,814
See Accompanying Notes to Unaudited Consolidated Financial Statements
</TABLE>
5
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SAFETY-KLEEN CORP.
Notes to Unaudited Consolidated Financial Statements
For the Six Months Ended February 28, 1999
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X and, therefore, do not include all of the disclosures required by
generally accepted accounting principles for annual financial statements. In the
opinion of management, all adjustments considered necessary for a fair
presentation of the interim period results have been included; all such
adjustments are of a normal recurring nature. Operating results for the three
and six months ended February 28, 1999 are not necessarily indicative of the
results that may be expected for the full fiscal year ending August 31, 1999.
These statements should be read in conjunction with the consolidated financial
statements, including the accounting policies, and notes thereto included in the
Registrant's Annual Report on Form 10-K, filed with the Securities and Exchange
Commission on October 29, 1998. Certain amounts as of August 31, 1998 have been
reclassified to conform to the current period's presentations.
In June 1997, the Financial Accounting Standards Board ("FASB") issued Statement
No. 130, "Reporting Comprehensive Income" ("SFAS 130"). This standard was
adopted by the Company for the fiscal year beginning September 1, 1998. SFAS 130
establishes standards for reporting and displaying comprehensive income and its
components. Comprehensive income is defined as the change in equity during a
period from transactions and other events and circumstances from non-owner
sources and includes all changes in equity during a period except those
resulting from investments by and distributions to owners. All prior periods
presented have been restated.
NOTE 2 - SHAREHOLDER MATTERS
At the annual meeting of shareholders held on November 24, 1998, shareholders
approved the change in the Company's name from Laidlaw Environmental Services,
Inc. to Safety-Kleen Corp.
In addition, the shareholders approved a one-for-four reverse stock split which
became effective at the close of business on November 30, 1998. For each four
shares of Safety-Kleen common stock, one share of new Safety-Kleen common stock
will be issued. In connection with the reverse stock split, the number of common
shares available for issuance was reduced from 750 million to 250 million. As a
result, prior period shares issued and outstanding, weighted average common
stock outstanding and basic and diluted income per share have been restated to
reflect the reverse split.
6
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NOTE 3 - COMMITMENTS AND CONTINGENCIES
Legal Proceedings:
TAX MATTERS: On March 1, 1999, Laidlaw Inc. ("Laidlaw") announced a settlement
of a dispute between Laidlaw's United States subsidiaries and the Commissioner
of Internal Revenue relating to the timing and deductibility for tax purposes of
interest attributable to loans owing to related foreign persons during the years
from 1986 to 1994.
The total net after tax cash cost to Laidlaw will be approximately $226 million.
The payment includes approximately $121 million in taxes together with interest
of approximately $161 million ($105 million after tax).
This settlement resolves matters in the United States Tax Court (captioned as
Laidlaw Transportation, Inc. and Subsidiaries et. al v. Commissioner of Internal
Revenue, Docket Nos. 9361-94 and 9362-94) relating to the 1986 to 1991 fiscal
years as well as claims raised in a thirty day letter relating to the 1992 to
1994 fiscal years. The Commissioner of Internal Revenue had asserted claims
totaling approximately $500 million.
Pursuant to the agreement dated February 6, 1997 among the Company, Laidlaw and
Laidlaw Transportation, Inc. ("LTI"), Laidlaw and LTI are responsible for any
tax liabilities resulting from these matters. Based upon discussions with
Laidlaw, the Company's income tax provision determined on a separate return
basis during the period audited by the Internal Revenue Service was sufficient
and no additional taxes or interest are due to or from Laidlaw as a result of
the settlement.
NOTE 4 - EUROPEAN OPERATIONS
On December 23, 1998, the Company announced the recapitalization of its European
operations resulting in the sale of 56% of the Company's equity interest in
those operations. As a result of the recapitalization, the Company will receive
gross proceeds totaling $154.0 million, which will be used to pay down
borrowings under the revolver tranche of the Senior Credit Facility. The
transaction resulted in no gain or loss.
Effective December 1, 1998, the Company ceased to consolidate the results of the
European operations and began to account for the investment by the equity
method.
NOTE 5 - PURCHASE PRICE ALLOCATION
The acquisition of the former Safety-Kleen Corp. in fiscal year 1998 was
accounted for under the purchase method. The purchase price was allocated to the
assets acquired and liabilities assumed based upon management's best estimate of
their fair value at the time of the acquisition. The areas of particular
complexity included the valuation of long-lived assets, environmental
liabilities, pre-acquisition contingencies and the related deferred tax
consequences. The determination of the fair value of these items has been
substantially completed and, as a result,
7
<PAGE>
the purhase price has been increased by approximately $100 million due
principally to fixed asset fair value adjustments and the recording of certain
pre-acquisition contingencies evaluated by the Company subsequent to the
acquisition.
NOTE 6 - STOCKHOLDERS' EQUITY
Changes in the components of stockholders' equity, restated for the effect of
the one-for-four reverse stock split, since September 1, 1998 are as follows ($
in thousands):
<TABLE>
<CAPTION>
Accumulated
Additional Other Total
Common Paid-In Comprehensive Accumulated Stockholders'
Stock Capital Income Deficit Equity
----- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
Balance at September 1,1998 $ 87,746 $ 1,182,547 $ (18,828) $ (236,759) $ 1,014,706
Net income for period ...... -- -- -- 46,017 46,017
Issuance of shares (Note A) 641 8,202 -- -- 8,843
Cumulative foreign
currency translation
adjustment ............... -- -- (64) -- (64)
----------- ----------- ----------- ----------- -----------
Balance at February 28, 1999 $ 88,387 $ 1,190,749 $ (18,892) $ (190,742) $ 1,069,502
=========== =========== =========== =========== ===========
</TABLE>
Note A: Includes 635,208 shares issued to satisfy November 15, 1998 interest
payment on subordinated convertible debenture.
NOTE 7 - SUMMARIZED FINANCIAL INFORMATION
The Senior Subordinated Notes (the "Notes") issued by Safety-Kleen Services,
Inc., a consolidated subsidiary of the Company, are jointly and severally
guaranteed by Safety-Kleen Corp. and all wholly-owned domestic subsidiaries of
the Company on a full and unconditional basis. The Notes contain certain
covenants, which, among other things, restrict the payment of dividends from
Safety-Kleen Services, Inc. and its subsidiary guarantors to Safety-Kleen Corp.
Summarized financial information for each of Safety-Kleen Corp., Safety-Kleen
Services, Inc., the subsidiary guarantors, and the subsidiary non-guarantors on
a consolidating basis are presented below. Separate financial statements and
other disclosures concerning the subsidiary guarantors are not included because
management believes that they are not material to investors.
8
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<TABLE>
<CAPTION>
Consolidating Condensed Balance Sheet
February 28, 1999
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets .......................... $ -- $ -- $ 445,506 $ 97,893 $ -- $ 543,399
Property, plant and equipment, net ...... -- -- 2,358,324 193,209 -- 2,551,533
Investment in Subsidiaries .............. 1,551,577 2,651,371 1,681,569 5,507 (5,890,024) --
Goodwill ................................ -- -- 1,045,086 79,842 -- 1,124,928
Other non-current assets ................ -- -- 91,188 1,345 -- 92,533
----------- ----------- ----------- ----------- ----------- -----------
Total assets ............................ $ 1,551,577 $ 2,651,371 $ 5,621,673 $ 377,796 $ (5,890,024) $ 4,312,393
=========== =========== =========== =========== =========== ===========
LIABILITIES
Current liabilities ..................... $ 6,875 $ 78,891 $ 235,890 $ 103,115 $ -- $ 424,771
Non-current liabilities ................. -- -- 798,101 (936) -- 797,165
Long-term debt .......................... 125,200 1,483,720 15,791 46,244 -- 1,670,955
Subordinated convertible debenture ...... 350,000 -- -- -- -- 350,000
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities ....................... 482,075 1,562,611 1,049,782 148,423 -- 3,242,891
STOCKHOLDERS' EQUITY .................... 1,069,502 1,088,760 4,571,891 229,373 (5,890,024) 1,069,502
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and stockholders equity $ 1,551,577 $ 2,651,371 $ 5,621,673 $ 377,796 $(5,890,024) $ 4,312,393
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Consolidating Condensed Statement of Income
Three Months Ended February 28, 1999
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
Total revenues ....................... $ -- $ -- $359,336 $ 40,990 $ 1,809 $402,135
Operating expenses ................... -- -- 294,877 31,583 1,809 328,269
-------- -------- -------- -------- -------- --------
Operating income ..................... -- -- 64,459 9,407 -- 73,866
Interest expense (income), net ....... 6,415 33,628 10,822 (8,477) -- 42,388
Undistributed earnings of subsidiaries 21,920 41,170 1,102 -- (63,090) 1,102
-------- -------- -------- -------- -------- --------
Income before income tax expense ..... 15,505 7,542 54,739 17,884 (63,090) 32,580
Income tax expense (benefit) ......... (2,740) (14,378) 23,442 8,011 -- 14,335
-------- -------- -------- -------- -------- --------
Net income ........................... $ 18,245 $ 21,920 $ 31,297 $ 9,873 $(63,090) $ 18,245
======== ======== ======== ======== ======== ========
</TABLE>
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<TABLE>
<CAPTION>
Consolidating Condensed Statement of Income
Six Months Ended February 28, 1999
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Total revenues ....................... $ -- $ -- $ 713,698 $ 164,161 $ (8,705) $ 869,154
Operating expenses ................... -- -- 595,259 118,558 (8,705) 705,112
--------- --------- --------- --------- --------- ---------
Operating income ..................... -- -- 118,439 45,603 -- 164,042
Interest expense (income), net ....... 12,827 70,219 3,422 (996) -- 85,472
Undistributed earnings of subsidiaries 53,424 93,970 1,102 -- (147,394) 1,102
--------- --------- --------- --------- --------- ---------
Income before income tax expense ..... 40,597 23,751 116,119 46,599 (147,394) 79,672
Income tax expense (benefit) ......... (5,420) (29,673) 49,081 19,667 -- 33,655
--------- --------- --------- --------- --------- ---------
Net income ........................... $ 46,017 $ 53,424 $ 67,038 $ 26,932 $(147,394) $ 46,017
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Consolidating Condensed Statement of Cash Flows
Six Months Ended February 28, 1999
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by (used in)
operating activities ............... $ (4,055) $ (75,916) $ 159,543 $ 2,176 $ -- $ 81,748
--------- --------- --------- --------- --------- ---------
Cash flows from investing activities:
Cash expended on acquisition of business -- -- (4,394) -- -- (4,394)
Proceeds from sale of business ......... -- -- 138,714 -- -- 138,714
Purchase of property, plant
and equipment ...................... -- -- (23,730) (5,952) -- (29,682)
Change in other, net ................... -- -- 357 131 -- 488
--------- --------- --------- --------- ---------- ---------
Net cash provided by (used in)
investing activities ............... -- -- 110,947 (5,821) -- 105,126
--------- --------- --------- --------- ---------- ---------
Cash flows from financing activities:
Net repayment of long-term debt ........ -- (181,500) (43) (5,163) -- (186,706)
Intercompany payable (receivable) ...... 4,055 257,686 (264,586) 2,845 -- --
Changes in other, net .................. -- (270) -- -- -- (270)
--------- --------- --------- --------- ---------- ---------
Net cash provided by (used in)
financing activities ............... 4,055 75,916 (264,629) (2,318) -- (186,976)
--------- --------- --------- --------- ---------- ---------
Effect of exchange rate changes on cash -- -- -- (5,282) -- (5,282)
--------- --------- --------- --------- ---------- ---------
Net increase (decrease) in cash and
cash equivalents ................... -- -- 5,861 (11,245) -- (5,384)
Cash and cash equivalents at:
Beginning of period ............... -- -- 4,343 11,990 -- 16,333
--------- --------- --------- --------- ---------- ---------
End of period ..................... $ -- $ -- $ 10,204 $ 745 $ -- $ 10,949
========= ========= ========= ========= ========== =========
</TABLE>
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<TABLE>
<CAPTION>
Consolidating Condensed Balance Sheet
August 31, 1998
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------- -----
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Current assets .......................... $ -- $ -- $ 439,751 $ 111,060 $ -- $ 550,811
Property, plant and equipment, net ...... -- -- 2,454,211 396,331 (40) 2,850,502
Investment in Subsidiaries .............. 1,496,759 2,776,635 1,322,059 166 (5,595,619) --
Goodwill ................................ -- -- 951,655 71,499 -- 1,023,154
Other non-current assets ................ -- -- 52,134 771 -- 52,905
----------- ----------- ----------- ----------- ----------- -----------
Total assets ............................ $ 1,496,759 $ 2,776,635 $ 5,219,810 $ 579,827 $(5,595,659) $ 4,477,372
=========== =========== =========== =========== =========== ===========
LIABILITIES
Current liabilities ..................... $ 6,853 $ 88,089 $ 246,359 $ 83,617 $ (2) $ 424,916
Non-current liabilities ................. -- -- 722,622 111,964 -- 834,586
Long-term debt .......................... 125,200 1,661,989 16,334 49,641 -- 1,853,164
Subordinated convertible debenture ...... 350,000 -- -- -- -- 350,000
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities ....................... 482,053 1,750,078 985,315 245,222 (2) 3,462,666
STOCKHOLDERS' EQUITY .................... 1,014,706 1,026,557 4,234,495 334,605 (5,595,657) 1,014,706
----------- ----------- ----------- ----------- ----------- -----------
Total liabilities and stockholders equity $ 1,496,759 $ 2,776,635 $ 5,219,810 $ 579,827 $(5,595,659) $ 4,477,372
=========== =========== =========== =========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
Consolidating Condensed Statement of Income
Three Months Ended February 28, 1998
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Total revenues ....................... $ -- $ -- $139,601 $ 33,614 $ -- $ 173,215
Operating expenses ................... -- -- 125,036 28,503 -- 153,539
-------- -------- -------- -------- -------- --------
Operating income ..................... -- -- 14,565 5,111 -- 19,676
Interest expense (income), net ....... 6,390 5,964 541 897 -- 13,792
Undistributed earnings of subsidiaries 7,871 11,939 -- -- (19,810) --
-------- -------- -------- -------- -------- --------
Income before income tax expense ..... 1,481 5,975 14,024 4,214 (19,810) 5,884
Income tax expense (benefit) ......... (2,075) (1,896) 4,979 1,320 -- 2,328
-------- -------- -------- -------- -------- --------
Net income ........................... $ 3,556 $ 7,871 $ 9,045 $ 2,894 $(19,810) $ 3,556
======== ======== ======== ======== ======== ========
</TABLE>
11
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<TABLE>
<CAPTION>
Consolidating Condensed Statement of Income
Six Months Ended February 28, 1998
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ----------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Total revenues ....................... $ -- $ -- $ 305,202 $ 79,565 $ -- $ 384,767
Operating expenses ................... -- -- 269,925 63,235 -- 333,160
--------- --------- --------- --------- --------- ---------
Operating income ..................... -- -- 35,277 16,330 -- 51,607
Interest expense (income), net ....... 12,760 12,561 (157) 3,188 -- 28,352
Undistributed earnings of subsidiaries 21,518 29,214 -- -- (50,732) --
--------- --------- --------- --------- --------- ---------
Income before income tax expense ..... 8,758 16,653 35,434 13,142 (50,732) 23,255
Income tax expense (benefit) ......... (4,942) (4,865) 14,787 4,575 -- 9,555
--------- --------- --------- --------- --------- ---------
Net income ........................... $ 13,700 $ 21,518 $ 20,647 $ 8,567 $ (50,732) $ 13,700
========= ========= ========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Consolidating Condensed Statement of Cash Flows
Six Months Ended February 28, 1998
(unaudited)
Subsidiary Consolidating
Safety-Kleen Safety-Kleen Subsidiary Non- Eliminating Consolidated
($ in Thousands) Corp. Services, Inc. Guarantors Guarantors Entries Total
------------ -------------- ---------- ---------- ------------- ------------
<S> <C> <C> <C> <C> <C> <C>
Net cash provided by
operating activities .............. $ 1,372 $ 1,469 $ 1,900 $ 27,607 $ -- $ 32,348
-------- -------- -------- -------- ---- --------
Cash flows from investing activities:
Purchase of plant, property and
equipment ......................... -- -- (12,384) (4,047) -- (16,431)
Proceeds from sale of business ........ -- -- 33,675 -- -- 33,675
Change in other, net .................. -- -- (14,380) (199) -- (14,579)
-------- -------- -------- -------- ---- --------
Net cash provided by (used in)
investing activities .............. -- -- 6,911 (4,246) -- 2,665
-------- -------- -------- -------- ---- --------
Cash flows from financing activities:
Issuance of common stock on exercise
of stock options .................. 414 -- -- -- -- 414
Repayment of long-term debt ........... -- (33,113) (265) (1,262) -- (34,640)
Intercompany payable (receivable) ..... (1,786) 31,644 (27,915) (1,943) -- --
-------- -------- -------- -------- ---- --------
Net cash used in
financing activities .............. (1,372) (1,469) (28,180) (3,205) -- (34,226)
-------- -------- -------- -------- ---- --------
Effect of exchange rate changes on cash -- -- -- (181) -- (181)
-------- -------- -------- -------- ---- --------
Net increase (decrease) in cash and
cash equivalents .................. -- -- (19,369) 19,975 -- 606
Cash and cash equivalents at:
Beginning of period .............. -- -- 24,770 (13,610) -- 11,160
-------- -------- -------- -------- ---- --------
End of period .................... $ -- $ -- $ 5,401 $ 6,365 $ -- $ 11,766
======== ======== ======== ======== ==== ========
</TABLE>
12
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion and analysis should be read in conjunction
with the Company's consolidated financial statements and related notes thereto
included elsewhere herein.
Results associated with the April 1, 1998 acquisition of Safety-Kleen
Corp. ("Old Safety-Kleen") have been included in the Company's consolidated
results as of the date of the acquisition.
The following discussion and analysis includes statements that are
considered forward-looking based on the Company's expectations and, as such,
these statements are subject to uncertainty and risk. See "Factors That May
Affect Future Results" below.
Results of Operations:
Three Months Ended February 28, 1999 compared with Three Months Ended
February 28, 1998
Operating results are as follows ($ in millions):
Three Months Ended February 28,
1999 1998
------------------------------------
Revenues .......................... $402.1 100.0% $173.2 100.0%
Operating expense ................. 261.8 65.1% 123.8 71.4%
Depreciation and amortization ..... 33.7 8.4% 10.9 6.3%
Selling, general and administrative 32.7 8.1% 18.8 10.9%
------ ----- ------ ------
Operating income .................. $ 73.9 18.4% $ 19.7 11.4%
====== ====== ====== ======
Revenues
Components of revenue ($ in millions): Three Months Ended February 28,
------------------------------------
1999 1998
----------------------------------
Collection and Recovery Services
Industrial Services ................. $193.5 48% $ 97.4 56%
Commercial and Institutional Services 132.2 33% 0.0 0%
------ ---- ------ ----
Total Collection and Recovery Services .. 325.7 81% 97.4 56%
Treatment and Disposal Services ......... 76.4 19% 75.8 44%
------ ---- ------ ----
Total revenue ...................... $402.1 100% $173.2 100%
====== ==== ====== ====
13
<PAGE>
Revenues increased $228.9 million, or 132%, during the three months ended
February 28, 1999 compared to the three months ended February 28, 1998. Revenue
from collection and recovery services to industrial customers increased $96.1
million, or 99%, while the addition of collection and recovery services to
commercial and institutional customers generated an additional $132.2 million.
Increased revenue from collection and recovery services reflects the inclusion
of the acquired Old Safety-Kleen business. Revenue from treatment and disposal
services increased $0.6 million, or 1%.
The Company eliminates inter-company revenues in presenting
consolidated financial results. The majority of such eliminations occur at the
Company's disposal facilities which receive waste streams from the Company's
collection and recovery services network.
Management's estimate of the components of the changes in the Company's
consolidated revenue is as follows:
Percentage Increase (Decrease)
Three Months Ended February 28,
--------------------------------
1999 over 1998 1998 over 1997
-------------- --------------
Expansion of customer base by acquisition ....... 130.6% 25.2%
Other, primarily through volume and price changes 3.8% 11.2%
Divestitures and closures ....................... (1.0%) (12.3%)
Foreign exchange rate changes ................... (1.2%) (0.9%)
------ ------
Total ...................................... 132.2% 23.2%
====== ======
The comparative increase in revenue for the three months ended February
28, 1999 was primarily due to the inclusion of the acquired operations of Old
Safety-Kleen. Revenues from existing operations grew as a result of both
increased throughput at the Company's treatment and disposal facilities and
growth in the industrial services component of the Company's operations. Prior
year revenues included contributions from a thermal treatment facility which was
closed on August 31, 1998. A reduction in revenues due to foreign exchange rate
changes resulted from a relative decline in the Canadian dollar translation
rate.
The Company believes it remains on course to achieve revenue growth of
10 - 12% by the end of fiscal 1999. The integration of the sales and service
groups of Old Safety-Kleen and the Company was completed during the quarter
which will facilitate the delivery of the expanded scope of industrial waste
services to the combined Company's customer base.
14
<PAGE>
Operating Expenses
Operating expenses increased $138.0 million, or 111%, during the three
months ended February 28, 1999, compared to the three months ended February 28,
1998. The increase was primarily attributable to additional business obtained as
part of the acquisition of Old Safety-Kleen. As a percentage of revenue,
operating expense decreased to 65.1% from 71.4% in the prior year, primarily due
to the increased utilization of existing facilities and acquisition related cost
reduction measures.
Depreciation and Amortization Expense
Depreciation and amortization expense increased $22.8 million, or 208%,
during the three months ended February 28, 1999, compared to the prior year. The
increase related to the acquired operations of Old Safety-Kleen. As a percentage
or revenue, depreciation and amortization expense was 8.4%, compared to 6.3% in
the prior year. The increase as a percentage of revenue is primarily
attributable to the amortization of the excess purchase price relating to the
acquisition of Old Safety-Kleen.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $13.9 million,
or 74% during the three months ended February 28, 1999, versus the prior year.
As a percentage of revenue, selling, general and administrative expenses
decreased to 8.1% from 10.9% in the prior year due to cost reduction measures
and economies of scale gained through the acquisition of Old Safety-Kleen.
Interest Expense
Interest expense increased $28.6 million, or 207%, during the three
months ended February 28, 1999, over the prior year as a result of the
additional long term debt incurred to finance the acquisition of Old
Safety-Kleen.
Equity in Earnings of Associated Companies
During the quarter the Company sold a 56% interest in its European
operations, realizing gross cash proceeds of $154.0 million. This transaction
resulted in no gain or loss. Effective December 1, 1998, the Company commenced
accounting for its remaining interest in the European operations on an equity
basis. The equity earnings recorded in the quarter ended February 28, 1999,
represent 100% of the European operations for the month of December, 1998, and
reflect a 44% interest thereafter. Thus, the European operations' results have
been excluded from revenue and expenses effective December 1, 1998.
15
<PAGE>
Income Tax Expense
Income tax expense increased $12.0 million, or 516%, during the three
months ended February 28, 1999, over the prior year due to an increase in
taxable income attributable to the acquisition of Old Safety-Kleen. The
effective tax rate of 44% has increased over levels reported in prior quarters,
post the acquisition of Old Safety-Kleen, due primarily to the sale of 56% of
the Company's European operations. The European operations had an effective tax
rate below that of the overall Company average.
The Company expects that the effective tax rate will also be higher in
subsequent quarters due to the impact of the sale of the European operations.
Results of Operations: Six Months Ended February 28, 1999 compared with Six
Months Ended February 28, 1998
Operating results are as follows ($ in millions):
Six Months Ended February 28,
1999 1998
------------------------------------
Revenues .......................... $869.2 100.0% $384.8 100.0%
Operating expense ................. 566.9 65.2% 269.1 69.9%
Depreciation and amortization ..... 71.0 8.2% 24.8 6.5%
Selling, general and administrative 67.3 7.7% 39.3 10.2%
------ ------ ------ ------
Operating income .................. $164.0 18.9% $ 51.6 13.4%
====== ====== ====== ======
Revenues
Components of revenue ($ in millions): Six Months Ended February 28,
------------------------------
1999 1998
------------------------------
Collection and Recovery Services
Industrial Services ....................... $399.8 46% $215.8 56%
Commercial and Institutional Services ..... 266.9 31% 0.0 0%
------ ---- ------ ----
Total Collection and Recovery Services ........ 666.7 77% 215.8 56%
Treatment and Disposal Services ............... 170.8 20% 169.0 44%
European Operations ........................... 31.7 3% 0.0 0%
------ ---- ------ ----
Total revenue ............................ $869.2 100% $384.8 100%
====== ==== ====== ====
16
<PAGE>
Revenues increased $484.4 million, or 126%, during the six months ended
February 28, 1999 compared to the six months ended February 28, 1998. Revenue
from collection and recovery services to industrial customers increased $184.0
million, or 85%, while the addition of collection and recovery services to
commercial and institutional customers generated an additional $266.9 million.
Increased revenue from collection and recovery services reflects the inclusion
of the acquired Old Safety-Kleen business. Revenue from treatment and disposal
services increased $1.8 million, or 1%. The acquired European operations of
Safety-Kleen provided an additional $31.7 million in revenue through the period
ended November 30, 1998 and have been reported on an equity basis subsequently.
The Company eliminates inter-company revenues in presenting
consolidated financial results. The majority of such eliminations occur at the
Company's disposal facilities which receive waste streams from the Company's
collection and recovery services network.
Management's estimate of the components of the changes in the Company's
consolidated revenue is as follows:
Percentage Increase (Decrease)
Six Months Ended February 28,
------------------------------
1999 over 1998 1998 over 1997
-------------- --------------
Expansion of customer base by acquisition ....... 126.0% 24.2%
Other, primarily through volume and price changes 3.7% 7.6%
Divestitures and closures ....................... (2.3%) (8.2%)
Foreign exchange rate changes ................... (1.5%) (0.7%)
------ -----
Total ...................................... 125.9% 22.9%
====== =====
The comparative increase in revenue for the six months ended February
28, 1999 was primarily due to the inclusion of the acquired operations of Old
Safety-Kleen. Current revenues from existing operations grew primarily as a
result of increased throughput at the Company's treatment and disposal
facilities. Prior year revenues included contributions from an industrial and
solid waste landfill which was divested on December 18, 1997 and from a thermal
treatment facility which was closed on August 31, 1998. A reduction in revenues
due to foreign exchange rate changes resulted from a relative decline in the
Canadian dollar translation rate.
Operating Expenses
Operating expenses increased $297.8 million, or 111%, during the six
months ended February 28, 1999, compared to the six months ended February 28,
1998. The increase was primarily attributable to additional business obtained as
part of the acquisition of Old Safety-Kleen. As a percentage of revenue,
operating expense decreased to 65.2% from 69.9% in the prior year, primarily due
to the increased utilization of existing facilities and acquisition related cost
reduction measures.
17
<PAGE>
The Company estimates that it has realized annualized acquisition
related cash cost savings of approximately $130 million. Management expects the
annualized acquisition related cash cost savings to reach approximately $165
million by the end of fiscal year 1999.
Depreciation and Amortization Expense
Depreciation and amortization expense increased $46.2 million, or 186%,
during the six months ended February 28, 1999, compared to the prior year. The
increase related to the acquired operations of Old Safety-Kleen. As a percentage
or revenue, depreciation and amortization expense was 8.2%, compared to 6.5% in
the prior year. The increase as a percentage of revenue is primarily
attributable to the amortization of the excess purchase price relating to the
acquisition of Old Safety-Kleen.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased $28.0 million,
or 71% during the six months ended February 28, 1999, versus the prior year. As
a percentage of revenue, selling, general and administrative expenses decreased
to 7.7% from 10.2% in the prior year due to cost reduction measures and
economies of scale gained through the acquisition of Old Safety-Kleen.
Interest Expense
Interest expense increased $57.1 million, or 202%, during the six
months ended February 28, 1999, over the prior year as a result of the
additional long term debt incurred to finance the acquisition of Old
Safety-Kleen.
Income Tax Expense
Income tax expense increased $24.1 million, or 252%, during the six
months ended February 28, 1999, over the prior year due to an increase in
taxable income attributable to the acquisition of Old Safety-Kleen.
FACTORS THAT MAY AFFECT FUTURE RESULTS
This report contains various forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995, including
financial, operating and other projections. These statements are based on
current plans and expectations of the Company and involve risks and
uncertainties that could cause actual future activities and results of
operations to be materially different from those set forth in the
forward-looking statements.
18
<PAGE>
Important factors that could cause actual results to differ include,
among others, risks associated with acquisitions and achieving the targeted cost
savings levels, fluctuations in operating results because of acquisitions,
changes in applicable government regulations (environmental and other), the
impact of litigation, competition, and risks associated with the operations and
growth of the newly acquired business of Old Safety-Kleen and other factors
described in Part I, Item 1 of the Company's report on Form 10-K for the Twelve
Months Ended August 31, 1998. As a result of these factors, the Company's
revenue and income could vary significantly from quarter to quarter, and past
financial performance should not be considered a reliable indicator of future
performance.
CAPITALIZATION
On November 24, 1998, the Company's shareholders approved a
one-for-four reverse stock split which became effective at the close of business
on November 30, 1998. As a result, shareholders received one share of
Safety-Kleen common stock for each four shares previously held.
On November 15, 1998, the Company issued 635,208 shares to satisfy
interest due on the subordinated convertible debenture.
LIQUIDITY
Total cash provided by operations during the six months ended February
28, 1999 was $80.7 million. This was composed of $143.3 million from operations
before financing working capital requirements of $13.8 million and $48.8 million
related to spending on acquisition liabilities.
On December 23, 1998, the Company announced the recapitalization of its
European operations resulting in the sale of 56% of the Company's equity
interest in that entity. As a result of the recapitalization the Company will
receive gross proceeds of $154.0 million. During the six months ended February
28, 1999, the Company received $138.7 million of net proceeds (net of $5 million
cash left in the European operations at the time of sale). The balance of the
gross proceeds will be received as a dividend tax refund within the current
year.
The Company's primary sources of liquidity are cash flows from
operations, existing cash and short-term investments of $10.9 million, and the
short-term unused working capital bank lines and unused cash portion of the
Senior Credit Facility's revolver tranche of $340.0 million.
The Company expects to fund capital expenditures, debt repayment and
environmental liability requirements from cash flows from operations.
19
<PAGE>
CAPITAL EXPENDITURES AND CAPITAL RESOURCES
Investing activities for the six months ended February 28, 1999,
generated cash of $105.1 million. Net expenditures for the purchase of fixed
assets for normal replacement requirements and increases in services were $29.7
million and net proceeds from the sale of the European operations were $138.7
million. The Company's projected capital expenditures for fiscal 1999 are
approximately $80.0 million. The Company believes that it has adequate resources
to finance these expenditures.
The Company's Senior Credit Facility contains negative, affirmative and
financial covenants customarily found in credit agreements for financings
similar to the financing provided under the Senior Credit Facility, including
covenants limiting annual capital expenditures, restricting debt, guaranties,
liens, mergers and consolidations, sales of assets and payment of dividends. The
Company was in compliance with all of its covenants at February 28, 1999.
YEAR 2000 ISSUES
The Year 2000 ("Y2K") issue is the result of computer programs using a
two-digit format, as opposed to four digits, to indicate the year. Such computer
programs will be unable to interpret dates beyond the year 1999, which could
cause a system failure or other computer errors, leading to disruptions in
operations. The Company developed a three-phase program for Y2K systems
compliance. Phase I identified those systems with respect to which the Company
has exposure to Y2K issues. Phase II was the development and implementation of
action plans for Y2K compliance. Phase III, to be completed by mid-calendar year
1999, is the final testing of the appropriate major areas of exposure to ensure
compliance.
Phase I was completed in early fiscal year 1998 and identified three major areas
of Y2K non-compliance:
(1) certain modules of the Company's financial and operational systems,
(2) incinerator distributed control systems, and
(3) third-party vendor relationships.
The Phase II action plans have been developed and the Company is currently
implementing those remedial plans. The Company's plan to bring deficient
financial systems into compliance through the previously scheduled purchase of
software upgrades has been accomplished and these upgrades have tested
satisfactorily. Remediation of the operational systems will be accomplished
through a combination of hardware and software upgrades and program changes. The
Company expects this process to be completed by mid-calendar year 1999. The
deficiencies in the incinerator distributed control systems will be remedied by
the installation, during the second calendar quarter of 1999, of upgrades
purchased from the systems vendors. With respect to the third-party vendors, the
Company has contacted most of its major suppliers and has received indications
that they are either compliant or intend to be compliant by mid-calendar year
1999.
20
<PAGE>
The Company believes it will spend approximately $10.0 million for Y2K
compliance and will require 20,000 programming man days to bring the Company's
computer systems into compliance, including Old Safety-Kleen issues. To date,
the Company has completed approximately 17,500 programming man days towards this
effort. $1.4 million was incurred in fiscal year 1998, with the balance to be
incurred in fiscal year 1999.
The Company believes that the action plans that have been developed and
the implementation time frames that have been established adequately allow for
unexpected issues that could arise, therefore, contingency plans have not been
prepared. The Company will monitor the remaining time to complete the
implementation and will review the requirement to prepare contingency plans on a
monthly basis. As all Phase II action plans are scheduled to be completed by
June 30, 1999, the Company will be in a position to determine the need for
contingency plans over the next few months.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
GENERAL
The business of the Company's hazardous and industrial waste services
is continuously regulated by federal, state, provincial and local provisions
that have been enacted or adopted, regulating the discharge of materials into
the environment or primarily for the purpose of protecting the environment. The
nature of the Company's businesses results in its frequently becoming a party to
judicial or administrative proceedings involving all levels of governmental
authorities and other interested parties. The issues that are involved generally
relate to applications for permits and licenses by the Company and their
conformity with legal requirements and alleged technical violations of existing
permits and licenses. The Company does not believe that these issues will be
material to the Company's operations or financial condition. At February 28,
1999, subsidiaries of the Company were involved in four proceedings of the
latter type relating primarily to activities at waste treatment, storage and
disposal facilities where the Company believes sanctions involved in each
instance may exceed $100,000. The Company believes that the ultimate disposition
of these issues will not have a materially adverse effect upon the Company's
consolidated financial position or results of operations.
The Company frequently becomes a party to legal proceedings wherein
persons claim injury resulting from the use of Company's parts cleaner equipment
and/or cleaning products. A number of legal proceedings of this nature are
currently pending in various courts and jurisdictions throughout North America.
The Company believes that the ultimate disposition of these legal proceedings
will not have a materially adverse effect upon the Company's consolidated
financial position or results of operations.
21
<PAGE>
In the United States, CERCLA imposes financial liability on persons who
are responsible for the release of hazardous substances into the environment.
Present and past owners and operators of sites which release hazardous
substances, as well as generators and transporters of the waste material, are
jointly and severally liable for remediation costs and environmental damage. At
February 28, 1999, the Company had been notified that it was a potentially
responsible party in connection with 48 locations in its hazardous waste
management and other businesses. The Company continually reviews its status with
respect to each location and the extent of its alleged contribution to the
volume of waste at the location, the available evidence connecting the Company
to that location, and the numbers and financial soundness of other potentially
responsible parties at the location. Based upon presently available information,
the Company does not believe that potential liabilities arising from its
involvement with these locations will be material to the Company's operations or
financial condition.
TAX MATTERS
On March 1, 1999, Laidlaw Inc. ("Laidlaw") announced a settlement of a
dispute between Laidlaw's United States subsidiaries and the Commissioner of
Internal Revenue relating to the timing and deductibility for tax purposes of
interest attributable to loans owing to related foreign persons during the years
from 1986 to 1994.
The total net after tax cash cost to Laidlaw will be approximately $226
million. The payment includes approximately $121 million in taxes together with
interest of approximately $161 million ($105 million after tax).
This settlement resolves matters in the United States Tax Court
(captioned as Laidlaw Transportation, Inc. and Subsidiaries et. al v.
Commissioner of Internal Revenue, Docket Nos. 9361-94 and 9362-94) relating to
the 1986 to 1991 fiscal years as well as claims raised in a thirty day letter
relating to the 1992 to 1994 fiscal years. The Commissioner of Internal Revenue
has asserted claims totaling approximately $500 million.
Pursuant to the agreement dated February 6, 1997 among the Company,
Laidlaw and Laidlaw Transportation, Inc. ("LTI"), Laidlaw and LTI are
responsible for any tax liabilities resulting from these matters. Based upon
discussions with Laidlaw, the Company's income tax provision determined on a
separate return basis during the period audited by the Internal Revenue Service
was sufficient and no additional taxes or interest are due to or from Laidlaw as
a result of the settlement.
VILLE MERCIER FACILITY
On or about February 9 and March 12, 1999, Ville Mercier and three
neighboring municipalities filed separate legal proceedings against the
subsidiary and certain related companies together with certain former officers
and directors, as well as against the Government of Quebec. The lawsuits assert
that the defendants are jointly and severally responsible for the contamination
of groundwater in the region, which Plaintiffs claim was caused by contamination
from the former Ville Mercier lagoons, and which they claim caused each
municipality to incur additional costs to
22
<PAGE>
supply drinking water for their citizens since the 1970's and early 1980's. The
four municipalities claim a total of CDN$1,595,000 as damages for additional
costs to obtain drinking water supplies and seek an injunctive order to obligate
the defendants to remediate the groundwater in the region.
Other than as herein reported there have been no additional significant
legal proceedings nor any material changes in the legal proceedings reported in
PART II, Item 3 of the Registrant's Report on Form 10-K for the twelve months
ended August 31, 1998.
ITEM 5. OTHER INFORMATION.
PROPOSALS FOR 1999 ANNUAL MEETING OF SHAREHOLDERS
Shareholders who intend to present proposals for consideration at next
year's annual meeting are advised that any such proposal must be received by the
secretary of the Company no later than the close of business on June 29, 1999,
if such proposal is to be considered for inclusion in the proxy statement and
form or proxy relating to that meeting.
If any shareholder's proposal is received after September 12, 1999 the
Company's proxies for the 1999 Annual Meeting may exercise discretionary
authority with respect to such proposal at the 1999 Annual Meeting without any
reference to such proposal being made in the proxy statement for such meeting.
RESIGNATION OF DIRECTOR AND APPOINTMENT OF SUBSTITUTE DIRECTOR
Mr. John Grainger resigned his position as Director of the Company on
March 30, 1999. In accordance with Article 3, Section 3.2 of the By-laws of the
Company, Mr. Robert Luba was appointed by a majority of the Board of Directors
on March 30, 1999 to hold the office vacated by Mr. Grainger until the
expiration of his term, at the Annual Meeting of Shareholders in 2001.
23
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(3)(a) Restated Certificate of Incorporation of the Company dated May 13, 1997
and Amendment to Certificate of Incorporation dated May 15, 1997 filed as
Exhibit 3(a) to the Registrant's Form 10-Q for the Quarter ended May 31, 1997
and incorporated herein by reference.
(3)(a)(i) Certificate of Correction Filed to Correct a Certain Error in the
Restated and Amended Certificate of Incorporation of the Company dated October
15, 1997 filed as Exhibit (3)(a)(i) to the Registrant's Form 10-K for the Year
ended August 31, 1997, and incorporated herein by reference.
(3)(a)(ii) Certificate of Amendment to the Restated Certificate of Incorporation
of the Company dated November 25, 1998 filed as Exhibit (3)(a)(iii) to the
Registrant's Form 10-Q for the quarter ended November 30, 1998 and incorporated
herein by reference.
(3)(a)(iii) Certificate of Amendment to the Restated Certificate of
Incorporation of the Company dated November 30, 1998 filed as Exhibit (3)(a)(iv)
to the Registrant's Form 10-Q for the quarter ended November 30, 1998 and
incorporated herein by reference.
(3)(b) Amended and Restated Bylaws of the Company filed as Exhibit 4(ii) to the
Registrant's Current Report on Form 8-K dated July 29, 1997 and incorporated
herein by reference.
(4)(a) Registration Rights Agreement dated as of May 29, 1998 between LES, Inc.
(a subsidiary of the Registrant), the Registrant, subsidiary guarantors of the
Registrant, TD Securities (USA) Inc. and NationsBanc Montgomery Securities LLC
filed as Exhibit 4(a) to the Registrant's Form S-4 Registration Statement No.
333-57587 filed June 24, 1998 and incorporated herein by reference.
(4)(b) Indenture dated as of May 29, 1998 between LES, Inc. (a subsidiary of the
Registrant), Registrant, subsidiary guarantors of the Registrant and The Bank of
Nova Scotia Trust Company of New York, as trustee filed as Exhibit 4(b) to the
Registrant's Form S-4 Registration Statement No. 333-57587 filed June 24, 1998
and incorporated herein by reference.
(4)(c) Rights Agreement dated as of June 14, 1989 between the Company and First
Chicago Trust Company as successor to Registrar and Transfer Company, as Rights
Agent filed as Exhibit 4(e) to the Registrant's Current Report on Form 8-K filed
on June 13, 1995 and incorporated herein by reference.
(4)(d) Amendment No. 1 dated as of March 31, 1995 to the Rights Agreement
between the Company and First Chicago Trust Company as successor to Registrar
and Transfer Company, as Rights Agent filed as Exhibit 4(f) to the Registrant's
Current Report on Form 8-K on June 13, 1995 and incorporated herein by
reference.
(4)(e) Amendment No. 2 dated as of April 30, 1997 to the Rights Agreement
between the Company and First Chicago Trust Company as successor to Registrar
and Transfer Company, as Rights Agent, filed as Exhibit 4(c) to the Registrant's
Form 10-Q for the quarter ended November 30, 1997, and incorporated herein by
reference.
24
<PAGE>
(4)(f) Amended and Restated Credit Agreement among Laidlaw Chem-Waste, Inc.,
Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion (Texas) Inc., The
Toronto-Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago and NationsBank, N.A.
as Syndication Agent dated as of April 3, 1998.
(4)(g) Supplement to the Amended and Restated Credit Agreement among Laidlaw
Chem-Waste, Inc., Laidlaw Environmental Services (Canada) Ltd., Toronto Dominion
(Texas) Inc., The Toronto-Dominion Bank, TD Securities (USA) Inc., The Bank of
Nova Scotia, NationsBank, N.A. and The First National Bank of Chicago and
NationsBank, N.A. as Syndication Agent dated as of April 3, 1998, filed as
Exhibit 4(e) to a subsidiary of the Registrant's Form S-4 Registration Statement
No. 333-57587 filed June 24, 1998 and incorporated herein by reference.
(4)(h) Waiver and First Amendment to the Amended and Restated Credit Agreement
dated as of May 15, 1998 among LES, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto Dominion
Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank, N.A., The
First National Bank of Chicago and Wachovia Bank filed as Exhibit 4(f) to a
subsidiary of the Registrant's Form S-4 Registration Statement No. 333-57587
filed June 24, 1998 and incorporated herein by reference.
(4)(i) Commitment to Increase Supplement to the Amended and Restated Credit
Agreement dated as of June 3, 1998 among LES, Inc., Laidlaw Environmental
Services (Canada) Ltd., the Lenders, Toronto Dominion (Texas), Inc., The Toronto
Dominion Bank, TD Securities (USA) Inc., The Bank of Nova Scotia, NationsBank,
N.A., The First National Bank of Chicago and Wachovia Bank filed as Exhibit 4(g)
to a subsidiary of the Registrant's Form S-4 Registration Statement No.
333-57587 filed June 24, 1998 and incorporated herein by reference.
(4)(j) Second Amendment to the Amended and Restated Credit Agreement dated as of
November 20, 1998 among Safety-Kleen Services, Inc. (formerly known as LES,
Inc.), Safety-Kleen Services (Canada) Ltd. (formerly known as Laidlaw
Environmental Services (Canada) Ltd.), the Lenders, Toronto Dominion (Texas),
Inc., The Toronto Dominion Bank, TD Securities (USA) Inc., The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank.
(4)(k) $350,000,000 5% Subordinated Convertible Pay-In-Kind Debenture due 2009
issued by Registrant on May 15, 1997 to Laidlaw Transportation, Inc. the form of
which was included as an appendix to the Registrant's Definitive Proxy Statement
on Form DEF 14A, filed on May 1, 1997 and incorporated herein by reference.
(4)(l) Registration Rights Agreement dated May 15, 1997 between Registrant,
Laidlaw Transportation, Inc. and Laidlaw Inc. the form of which was included as
an appendix to the Registrant's Definitive Proxy Statement on Form DEF 14A,
filed on May 1, 1997 and incorporated herein by reference.
25
<PAGE>
(4)(m) Indenture dated as of May 1, 1993 between the Industrial Development
Board of the Metropolitan Government of Nashville and Davidson County
(Tennessee) and NationsBank of Tennessee, N.A., filed as Exhibit 4(f) to the
Registrant's Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.
(4)(n) Indenture of Trust dated as of August 1995 between Tooele County, Utah
and West One Bank, Utah, now known as U.S. Bank, as Trustee, filed as Exhibit
4(h) to the Registrant's form 10-Q for the Quarter ended May 31, 1997, and
incorporated herein by reference.
(4)(o) Indenture of Trust dated as of July 1, 1997 between Carbon County, Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(i)
to the Registrant's Form 10-Q for the Quarter ended May 31, 1997, and
incorporated herein by reference.
(4)(p) Indenture of Trust dated as of July 1, 1997 between Tooele County, Utah
and U.S. Bank, a national banking association, as Trustee, filed as Exhibit 4(j)
to the Registrant's Form 10-Q for the Quarter ended May 31, 1997, and
incorporated herein by reference.
(4)(q) Indenture of Trust dated as of July 1, 1997 between California Pollution
Control Financing Authority and U.S. Bank, a national banking association, as
Trustee, filed as Exhibit 4(k) to the Registrant's Form 10-Q for the Quarter
ended May 31, 1997, and incorporated herein by reference.
(4)(r) Promissory Note dated May 15, 1997 for $60,000,000 from Laidlaw
Environmental Services, Inc. to Westinghouse Electric Corporation, filed as
Exhibit 4(n) to the Registrant's Form 10-Q for the Quarter ended May 31, 1997,
and incorporated herein by reference.
(4)(s) Guaranty Agreement dated May 15, 1997 by Laidlaw Inc. to Westinghouse
Electric Corporation guaranteeing Promissory Note dated May 15, 1997 (as
referenced in Exhibit (4)(r)) from Laidlaw Environmental Services, Inc. to
Westinghouse Electric Corporation), filed as Exhibit 4(o) to the Registrant's
Form 10-Q for the Quarter ended May 31, 1997, and incorporated herein by
reference.
(4)(t) Other instruments defining the rights of holders of nonregistered debt of
the Registrant have been omitted from this exhibit list because the amount of
debt authorized under any such instrument does not exceed 10% of the total
assets of the Registrant and its subsidiaries. The Registrant agrees to furnish
a copy of any such instrument to the Commission upon request.
(10)(a) Agreement and Plan of Merger dated as of March 16, 1998 by and among
Registrant, LES Acquisition, Inc., and Safety-Kleen Corp. included as Annex A of
Safety-Kleen's Revised Amended Prospectus on Form 14D-9 filed as Exhibit 62 to
Safety-Kleen's Amendment No. 28 to Schedule 14-9A on March 17, 1998, and
incorporated herein by reference.
(10)(b) Stock Purchase Agreement between Westinghouse Electric Corporation
(Seller) and Rollins Environmental Services, Inc. (Buyer) for National Electric,
Inc. dated March 7, 1995 filed as Exhibit 2 to the Registrant's Current Report
on Form 8-K filed on June 13, 1995 and incorporated herein by reference.
26
<PAGE>
(10)(c) Second Amendment to Stock Purchase Agreement (as referenced in Exhibit
(10)(b) above), dated May 15, 1997 among Westinghouse Electric Corporation,
Rollins Environmental Services, Inc. and Laidlaw Inc., filed as Exhibit 4(m) to
the Registrant's Form 10-Q for the Quarter ended May 31, 1997, and incorporated
herein by reference.
(10)(d) Rollins Environmental Services, Inc. 1982 Incentive Stock Option Plan
filed with Amendment No. 1 to the Company's Registration Statement No. 2-84139
on Form S-1 dated June 24, 1983 and incorporated herein by reference.
(10)(e) Rollins Environmental Services, Inc. 1993 Stock Option Plan filed with
the Company's Proxy Statement for the Annual Meeting of Shareholders held
January 28, 1994 and incorporated herein by reference.
(10)(f) Registrant's 1997 Stock Option Plan, filed as Exhibit 4.4 to the
Company's Registration Statement No. 333-41859 on Form S-8 dated December 10,
1997 and incorporated herein by reference.
(10)(g) Registrant's Director's Stock Option Plan, filed as Exhibit 4.5 to the
Company's Registration Statement No. 333-41859 on Form S-8 dated December 10,
1997 and incorporated herein by reference.
(10)(h) Stock Purchase Agreement dated February 6, 1997 among the Registrant,
Laidlaw Inc., and Laidlaw Transportation, Inc. included as an appendix to the
Definitive Proxy Statement on Form DEF 14A filed on May 1, 1997 and incorporated
herein by reference.
(10)(i) Corporate Incentive Plan for fiscal year 1999, filed as Exhibit (10)(i)
to the Registrant's Form 10-Q for the quarter ended November 30, 1998 and
incorporated herein by reference.
(10)(j) Operations Management Incentive Plan for fiscal year 1999 filed as
Exhibit (10)(j) to the Registrant's Form 10-Q for the quarter ended November 30,
1998 and incorporated herein by reference.
(10)(k) Laidlaw Environmental Services, Inc. U.S. Supplemental Executive
Retirement Plan filed as Exhibit 10(g) to the Registrant's 10-Q for the quarter
ended November 30, 1997, and incorporated herein by reference.
(10)(l) Form of Change of Control Agreement LES-A1, filed as Exhibit 10(k) to
the Registrant's 10-K for the year ended August 31, 1998, and incorporated
herein by reference.
(10)(m) Form of Change of Control Agreement LES-B-1, filed as Exhibit 10(l) to
the Registrant's 10-K for the year ended August 31, 1998, and incorporated
herein by reference.
27
<PAGE>
(10)(n) Form of Change of Control Agreement LES-C1, filed as Exhibit 10(m) to
the Registrant's 10-K for the year ended August 31, 1998, and incorporated
herein by reference.
(11) Statement of Computation of Per Share Earnings
(12) Statement Re: Computation of Ratios
(27) Financial Data Schedule.
(b) Reports on Form 8-K.
The Company filed a Current Report on Form 8-K, dated December 28, 1998, which
contained Item 5 related to a press release announcing the recapitalization of
Safety-Kleen Europe, its U.K. business unit.
28
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
DATE: April 14, 1999 SAFETY-KLEEN CORP.
----- -------------- ------------------
(Registrant)
/s/Kenneth W. Winger
-------------------------------------
Kenneth W. Winger
President and Chief Executive Officer
/s/Paul R. Humphreys
------------------------------------
Paul R. Humphreys
Senior Vice President-Finance and
Chief Financial Officer
29
================================================================================
AMENDED AND RESTATED CREDIT AGREEMENT
among
LES, INC.,
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.,
The Several Lenders
from Time to Time Parties hereto,
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent,
TD SECURITIES (USA) INC.,
as Arranger
THE BANK OF NOVA SCOTIA,
NATIONSBANK, N.A.,
THE FIRST NATIONAL BANK OF CHICAGO,
and
WACHOVIA BANK, N.A.,
as Managing Agents,
THE BANK OF NOVA SCOTIA
and
THE FIRST NATIONAL BANK OF CHICAGO,
as Co-Documentation Agents,
and
NATIONSBANK, N.A.,
as Syndication Agent
Dated as of ApriL 3, 1998
================================================================================
<PAGE>
<TABLE>
TABLE OF CONTENTS
<S> <C>
PAGE
SECTION 1. DEFINITIONS...........................................................................................2
1.1 Defined Terms......................................................................................2
1.2 Other Definitional Provisions.....................................................................32
SECTION 2. AMOUNT AND TERMS OF U.S. COMMITMENTS.................................................................33
2.1 U.S. Term Loan Commitments........................................................................33
2.2 Procedure for U.S. Term Loan Borrowing............................................................33
2.3 Repayment of U.S. Term Loans......................................................................35
2.4 Revolving Credit Commitments......................................................................38
2.5 Procedure for Revolving Credit Borrowing..........................................................38
2.6 Termination or Reduction of Revolving Credit Commitments..........................................39
2.7 Evidence of Debt..................................................................................39
SECTION 3. LETTERS OF CREDIT....................................................................................40
3.1 L/C Commitment....................................................................................40
3.2 Procedure for Issuance of Letter of Credit........................................................40
3.3 Commissions, Fees and Other Charges...............................................................41
3.4 L/C Participations................................................................................41
3.5 Reimbursement Obligation of the Company...........................................................42
3.6 Obligations Absolute..............................................................................43
3.7 Letter of Credit Payments.........................................................................43
3.8 Applications......................................................................................43
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN TERM LOAN COMMITMENTS......................................43
4.1 Canadian Term Loan Commitments....................................................................43
4.2 Procedure for Canadian Term Loan Borrowing........................................................44
4.3 Reduction of Canadian Facility; Repayment of Canadian Term Loans..................................45
4.4 Evidence of Debt.................................................................................46
SECTION 5. AMOUNT AND TERMS OF THE ACCEPTANCES .................................................................47
5.1 Acceptance Commitments............................................................................47
5.2 Creation of Acceptances...........................................................................47
5.3 Purchase of Acceptances...........................................................................48
5.4 Stamping Fees.....................................................................................49
5.5 Acceptance Reimbursement Obligations..............................................................49
5.6 Acceptances to be Allocated in order to be Created Ratably........................................51
5.7 Special Provisions Relating to Acceptance Notes...................................................51
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SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS AND LETTERS OF CREDIT................................52
6.1 Commitment Fees, etc. ............................................................................52
6.2 Optional Prepayments..............................................................................52
6.3 Mandatory Prepayments and Commitment Reductions...................................................54
6.4 Conversion and Continuation Options...............................................................57
6.5 Minimum Amounts of Tranches.......................................................................58
6.6 Interest Rates and Payment Dates..................................................................58
6.7 Computation of Interest and Fees..................................................................58
6.8 Inability to Determine Interest Rate..............................................................59
6.9 Pro Rata Treatment and Payments...................................................................60
6.10 Illegality.......................................................................................62
6.11 Requirements of Law..............................................................................63
6.12 Taxes............................................................................................64
6.13 Indemnity........................................................................................66
6.14 Change of Lending Office.........................................................................67
SECTION 7. REPRESENTATIONS AND WARRANTIES.......................................................................67
7.1 Financial Condition...............................................................................67
7.2 No Change.........................................................................................68
7.3 Corporate Existence; Compliance with Law..........................................................68
7.4 Corporate Power; Authorization; Enforceable Obligations...........................................68
7.5 No Legal Bar......................................................................................69
7.6 No Material Litigation............................................................................69
7.7 No Default........................................................................................69
7.8 Ownership of Property; Liens......................................................................70
7.9 Intellectual Property.............................................................................70
7.10 No Burdensome Restrictions.......................................................................70
7.11 Taxes............................................................................................70
7.12 Federal Regulations..............................................................................70
7.13 ERISA............................................................................................70
7.14 Canadian Benefit and Pension Plans...............................................................71
7.15 Investment Company Act; Other Regulations........................................................71
7.16 Subsidiaries.....................................................................................71
7.17 Purpose of Loans.................................................................................71
7.18 Environmental Matters............................................................................72
7.19 Accuracy of Information, etc.....................................................................73
7.20 Security Documents...............................................................................73
7.21 Solvency.........................................................................................74
7.22 Regulation H.....................................................................................74
7.23 Corsan Trucking, Inc.............................................................................74
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<PAGE>
SECTION 8. CONDITIONS PRECEDENT.................................................................................75
8.1 Conditions to Initial Extensions of Credit........................................................75
8.2 Conditions to Extensions of Credit made on the Merger Date........................................80
8.3 Conditions to Extension of Credit.................................................................81
SECTION 9. AFFIRMATIVE COVENANTS................................................................................82
9.1 Financial Statements..............................................................................82
9.2 Certificates; Other Information...................................................................81
9.3 Payment of Obligations............................................................................83
9.4 Conduct of Business and Maintenance of Existence..................................................83
9.5 Maintenance of Property; Insurance................................................................84
9.6 Inspection of Property; Books and Records; Discussions............................................84
9.7 Notices...........................................................................................84
9.8 Environmental Laws................................................................................85
9.9 Further Assurances................................................................................86
9.10 Additional Collateral............................................................................86
9.11 Canadian Benefit and Pension Plans...............................................................88
9.12 Interest Rate Protection.........................................................................88
9.13 Consummation of Merger...........................................................................88
9.14 Pledge Agreement Supplement......................................................................88
SECTION 10. NEGATIVE COVENANTS..................................................................................89
10.1 Financial Condition Covenants....................................................................89
10.2 Limitation on Indebtedness.......................................................................90
10.3 Limitation on Liens..............................................................................91
10.4 Limitation on Guarantee Obligations..............................................................93
10.5 Limitation on Fundamental Changes................................................................93
10.6 Limitation on Disposition of Assets..............................................................94
10.7 Limitation on Dividends..........................................................................94
10.8 Limitation on Investments, Loans and Advances....................................................95
10.9 Limitation on Optional Payments and Modifications of Debt Instruments............................96
10.10 Limitation on Transactions with Affiliates......................................................96
10.11 Limitation on Sales and Leasebacks..............................................................96
10.12 Limitation on Changes in Fiscal Year............................................................97
10.13 Limitation on Negative Pledge Clauses...........................................................97
10.14 Limitation on Lines of Business.................................................................97
10.15 Canadian Benefit and Pension Plans..............................................................97
10.16 Hedging Agreements..............................................................................97
SECTION 11. EVENTS OF DEFAULT...................................................................................98
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<PAGE>
SECTION 12. THE ADMINISTRATIVE AGENT...........................................................................101
12.1 Appointment.....................................................................................101
12.2 Delegation of Duties............................................................................102
12.3 Exculpatory Provisions..........................................................................102
12.4 Reliance by Administrative Agents...............................................................102
12.5 Notice of Default...............................................................................103
12.6 Non-Reliance on Administrative Agents and Other Lenders.........................................103
12.7 Indemnification.................................................................................104
12.8 Agent in Its Individual Capacity................................................................104
12.9 Successor Agent.................................................................................104
12.10 Others.........................................................................................105
SECTION 13. GUARANTEE..........................................................................................105
13.1 Guarantee.......................................................................................105
13.2 No Subrogation, Contribution, Reimbursement or Indemnity........................................106
13.3 Amendments, etc. with respect to the Canadian Borrower Obligations..............................106
13.4 Guarantee Absolute and Unconditional............................................................107
13.5 Reinstatement...................................................................................108
13.6 Payments........................................................................................108
SECTION 14. MISCELLANEOUS......................................................................................108
14.1 Amendments and Waivers..........................................................................108
14.2 Notices.........................................................................................109
14.3 No Waiver; Cumulative Remedies..................................................................110
14.4 Survival of Representations and Warranties......................................................110
14.5 Payment of Expenses and Taxes...................................................................110
14.6 Successors and Assigns; Participations and Assignments..........................................111
14.7 Adjustments; Set-off............................................................................114
14.8 Counterparts....................................................................................115
14.9 Severability....................................................................................115
14.10 Integration.....................................................................................115
14.11 GOVERNING LAW...................................................................................115
14.12 Submission To Jurisdiction; Waivers.............................................................115
14.13 Acknowledgments.................................................................................116
14.14 WAIVERS OF JURY TRIAL...........................................................................116
14.15 Judgment........................................................................................117
14.16 Confidentiality.................................................................................117
</TABLE>
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<PAGE>
SCHEDULES
1.1A Commitments of U.S. Lenders
1.1B Commitments of Canadian Lenders
1.1C Existing Letters of Credit
1.1D Existing Acceptances
1.1E Specified Acceptance
1.1F Addresses for Notices
2 Properties Covered by Existing Mortgages
3 Mortgage Recording Jurisdictions
4 Initial Canadian Collateral Documents
7.6 Litigation
7.9 Intellectual Property Matters
7.16 Subsidiaries
7.20 Canadian Collateral Perfection Procedures
8.2(g) Safety-Kleen Outstanding Debt
10.2(f) Existing Indebtedness
10.3(f) Existing Liens
10.4 Existing Guarantee Obligations
10.8 Existing Loans to Officers
EXHIBITS
A-1 Form of Draft
A-2 Form of Request for Acceptances
B-1 Form of Guarantee and Collateral Agreement
B-2 Form of Acquisition Corp. Pledge Agreement
C Form of Revolving Credit Note
D Form of U.S. Term Note
E Form of Canadian Term Note
F [Reserved]
G Form of Acceptance Note
H Form of Prepayment Option Notice
I Form of Closing Certificate
J [Reserved]
K [Reserved]
L Form of Assignment and Acceptance
M Form of Mortgage Amendment
N Form of Mortgage
O Form of Intercreditor Agreement
P Form of Exchange Agent Agency Agreement
-v-
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT, dated as of April 3,
1998, among LES, INC., a Delaware corporation (the "COMPANY"), LAIDLAW
ENVIRONMENTAL SERVICES (CANADA) LTD., a Canadian corporation and a wholly owned
Subsidiary of the Company (the "CANADIAN BORROWER"; together with the Company,
the "BORROWERS"), the several banks and other financial institutions or entities
from time to time parties to this Agreement (the "LENDERS"), TORONTO DOMINION
(TEXAS), INC., as general administrative agent (as hereinafter defined, the
"GENERAL ADMINISTRATIVE AGENT"), THE TORONTO-DOMINION BANK, as Canadian
administrative agent (as hereinafter defined, the "CANADIAN ADMINISTRATIVE
AGENT"), TD SECURITIES (USA) INC., as advisor to the Borrowers and arranger of
the commitments described herein (in such capacities, the "ARRANGER"), and THE
BANK OF NOVA SCOTIA, NATIONSBANK, N.A., THE FIRST NATIONAL BANK OF CHICAGO and
WACHOVIA BANK, N.A., as managing agents (each, in such capacity, a "MANAGING
AGENT"), THE BANK OF NOVA SCOTIA and THE FIRST NATIONAL BANK OF CHICAGO, as
co-documentation agent (each, in such capacity, a "CO-DOCUMENTATION AGENT"), and
NATIONSBANK, N.A., as syndication agent (in such capacity, the "SYNDICATION
AGENT").
W I T N E S S E T H
WHEREAS, the Borrowers are parties to the Credit Agreement,
dated as of May 9, 1997 (as heretofore amended or otherwise modified, the
"EXISTING CREDIT AGREEMENT"), with the lenders from time to time parties
thereto, Toronto Dominion (Texas), Inc., as general administrative agent, The
Toronto-Dominion Bank, as Canadian administrative agent, TD Securities (USA)
Inc., as arranger, The Bank of Nova Scotia, NationsBank, N.A. and The First
National Bank of Chicago, as managing agents, and NationsBank, N.A., as
syndication agent;
WHEREAS, pursuant to the Existing Credit Agreement, the
lenders parties thereto have agreed to make and have made certain loans and
other extensions of credit to or for the account of the Borrowers;
WHEREAS, Laidlaw Environmental Services, Inc., a Delaware
corporation and the parent of the Company ("HOLDINGS"), and LES Acquisition,
Inc., a Delaware corporation and a wholly owned subsidiary of the Company
("ACQUISITION CORP."), have made an exchange offer (as amended prior to the date
hereof and as hereafter amended in accordance with this Agreement, the "EXCHANGE
OFFER") pursuant to the Offer to Exchange, as finally amended on March 18, 1998
(such Offer to Exchange, together with the associated documents filed by
Holdings and Acquisition Corp. with the Securities and Exchange Commission in
connection with the Exchange Offer, as amended prior to the date hereof and as
hereafter amended in accordance with this Agreement, collectively, the "EXCHANGE
OFFER DOCUMENTS");
WHEREAS, pursuant to the Exchange Offer, shareholders of
Safety-Kleen Corp., a Wisconsin corporation ("SAFETY-KLEEN"), are invited to
exchange shares of common stock ("TARGET SHARES"), together with associated
share purchase rights ("TARGET RIGHTS"), for consideration equal to $18.30 in
cash plus 2.8 shares of common stock of Holdings;
1
<PAGE>
WHEREAS, pursuant to the Agreement and Plan of Merger, dated
as of March 16, 1998 (the "MERGER AGREEMENT"), among Holdings, Acquisition Corp.
and Safety-Kleen, as promptly as practicable after the consummation of the
Exchange Offer, Acquisition Corp. and Safety-Kleen will merge (the "MERGER"),
with Safety-Kleen being the surviving corporation of the Merger (such survivor,
the "SURVIVING CORPORATION");
WHEREAS, in order to provide for financing of the Exchange
Offer and the Merger and related costs and expenses, and for the refinancing of
certain existing indebtedness of Safety-Kleen, the Borrowers have requested that
the Existing Credit Agreement be amended and restated as provided herein; and
WHEREAS, the Lenders and the other parties hereto wish to
amend and restate the Existing Credit Agreement as provided herein;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter set forth, the parties hereby agree that on the
Closing Date the Existing Credit Agreement shall be amended and restated in its
entirety as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the following
terms shall have the following meanings:
"ACCEPTANCE": a Draft drawn by the Canadian Borrower and
accepted by a Canadian Lender which is (a) denominated in Canadian
Dollars, (b) for a term of not less than one month nor more than six
months and which matures prior to the Canadian Facility Termination
Date and (c) issuable and payable only in Canada; PROVIDED that to the
extent the context shall require, each Acceptance Note shall be deemed
to be an Acceptance.
"ACCEPTANCE NOTE": as defined in Section 5.7(b).
"ACCEPTANCE PURCHASE PRICE": in respect of an Acceptance of a
specified maturity, the result (rounded to the nearest whole cent, and
with one-half cent being rounded up) obtained by dividing the face
amount of such Acceptance by the sum of (a) one and (b) the product of
(i) the Reference Discount Rate for Acceptances of the same maturity
expressed as a decimal and (ii) a fraction, the numerator of which is
the term to maturity of such Acceptance and the denominator of which is
equal to 365.
"ACCEPTANCE REIMBURSEMENT OBLIGATIONS": the obligation of the
Canadian Borrower to the Canadian Lenders (a) to reimburse the Canadian
Lenders for maturing Acceptances pursuant to Section 5.5 and (b) to
make payments in respect of the Acceptance Notes in accordance with the
terms thereof.
2
<PAGE>
"ACCEPTANCE TRANCHES": the collective reference to Acceptances
all of which were created on the same date and have the same maturity
date.
"ACQUISITION CLOSING DATE": the closing date of the Existing
Credit Agreement and the Rollins Acquisition, which date was May 15,
1997.
"ACQUISITION CORP.": as defined in the Recitals to this
Agreement.
"ACQUISITION CORP. PLEDGE AGREEMENT": the Pledge Agreement to
be executed and delivered by Acquisition Corp., substantially in the
form of Exhibit B-2, as the same may be amended, supplemented or
otherwise modified from time to time.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENTS": the collective reference to the
General Administrative Agent and the Canadian Administrative Agent.
"AFFILIATE": as to any Person, any other Person (other than a
Subsidiary) which, directly or indirectly, is in control of, is
controlled by, or is under common control with, such Person. For
purposes of this definition, "control" of a Person means the power,
directly or indirectly, either to (a) vote 10% or more of the
securities having ordinary voting power for the election of directors
of such Person or (b) direct or cause the direction of the management
and policies of such Person, whether by contract or otherwise.
"AGGREGATE CANADIAN TERM LOAN OUTSTANDINGS": as at any date of
determination with respect to any Canadian Lender, an amount in
Canadian Dollars equal to the sum of the following, without
duplication: (a) the aggregate unpaid principal amount of such Canadian
Lender's Canadian Term Loans on such date, (b) the aggregate
undiscounted face amount of all outstanding Acceptances (other than
Existing Acceptances) of such Canadian Lender on such date, (c) such
Lender's Canadian Term Loan Commitment Percentage of the aggregate
undiscounted face amount of all outstanding Existing Acceptances on
such date and (d) the aggregate undiscounted face amount of such
Canadian Lender's Acceptance Notes on such date.
"AGGREGATE COMMITMENT PERCENTAGE": as to any Lender, the
percentage which such Lender's Aggregate Exposure constitutes of the
Aggregate Exposure of all Lenders.
"AGGREGATE EXPOSURE": as to any Lender, the sum of such
Lender's Revolving Credit Commitment (or, after termination of the
Revolving Credit Commitments, such Lender's Revolving Extensions of
Credit) and U.S. Term Loans and the U.S. Dollar Equivalent of such
Lender's Aggregate Canadian Term Loan Outstandings.
"AGREEMENT": this Amended and Restated Credit Agreement, as
amended, supplemented or otherwise modified from time to time.
3
<PAGE>
"AGREEMENT CURRENCY": as defined in Section 14.15(b).
"APPLICABLE MARGIN": (a) on any day, for each Type of
Revolving Credit Loan, Tranche A Term Loan and Canadian Term Loan, the
rate per annum determined pursuant to the Pricing Grid; and
(b) for each Type of Tranche B Term Loan and Tranche C Term
Loan, the rate per annum set forth under the relevant column heading
below:
BASE RATE LOANS LIBOR RATE LOANS
Tranche B Term Loans 1.75% 2.75%
Tranche C Term Loans 2.00% 3.00%
; PROVIDED, that in the event that the Consolidated Total Leverage
Ratio (the determination and effectiveness of which shall be made and
established, respectively, on an Adjustment Date in accordance with the
provisions of the Pricing Grid) is reduced to less than 3.00 to 1.00,
the Applicable Margins set forth above for Tranche B Term Loans and
Tranche C Term Loans shall be permanently reduced by 37.50 basis
points; PROVIDED FURTHER that no such reduction in Applicable Margin
shall occur prior to the Adjustment Date occurring after completion of
the first four full consecutive fiscal quarters of the Company ending
after the Closing Date.
"APPLICATION": an application, in such form as the relevant
Issuing Lender may specify from time to time, requesting such Issuing
Lender to issue a Letter of Credit.
"APPROVED FUND": with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans
and is advised or managed by the same investment advisor as such Lender
or by an Affiliate of such investment advisor.
"ARRANGER": as defined in the Preamble to this Agreement.
"ASSET SALE": any Disposition of assets or series of related
Dispositions of assets, excluding any Disposition of assets permitted
by clause (a), (c), (d), (e), (f) or (g) of Section 10.6; PROVIDED,
that asset Dispositions permitted by clauses (e) and (f) of Section
10.6 shall not be excluded from the definition of "Asset Sale" to the
extent that the Net Cash Proceeds therefrom exceed $225,000,000 in the
aggregate.
"ASSIGNEE": as defined in Section 14.6(c).
"AVAILABLE REVOLVING CREDIT COMMITMENT": as to any U.S. Lender
at any time, an amount equal to the excess, if any, of (a) such
Lender's Revolving Credit Commitment OVER (b) such Lender's Revolving
Extensions of Credit.
"BANK ACT (CANADA)": the BANK ACT (Canada), as amended from
time to time.
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"BASE RATE": a rate per annum determined by the General
Administrative Agent on a daily basis, equal to the higher of (a) the
Prime Rate in effect on such day and (b) the Federal Funds Effective
Rate in effect on such day plus one half of one percent (.50 of 1%) per
annum.
"BASE RATE LOAN": any Loan the rate of interest applicable to
which is based upon the Base Rate.
"BOARD": the Board of Governors of the Federal Reserve System.
"BORROWERS": as defined in the Preamble to this Agreement.
"BORROWING DATE": any Business Day specified in a notice
pursuant to Section 2.2, 2.5., 4.2 or 5.2 as a date on which a Borrower
requests the Lenders to make Loans, create Acceptances, convert
Acceptances into Canadian Term Loans or convert Canadian Term Loans
into Acceptances, as the case may be.
"BUSINESS DAY": a day other than a Saturday, Sunday or other
day on which commercial banks in New York City or Houston, Texas are
authorized or required by law to close; PROVIDED that (a) when such
term is used in respect of a day on which a Loan in Canadian Dollars is
to be made or an Acceptance is to be created, a payment is to be made
in respect of such Loan or Acceptance, an Exchange Rate is to be set in
respect of Canadian Dollars or any other dealing in Canadian Dollars is
to be carried out pursuant to this Agreement, such term shall mean a
day other than a Saturday, Sunday or other day on which commercial
banks in Toronto, Ontario are authorized or required by law to close
and (b) when such term is used with respect to notices and
determinations in connection with, and payments of principal of, and
interest on, LIBOR Loans, any day which is a Business Day in New York
City and which is also a day on which trading by and between banks in
Dollar deposits may be carried out in the London interbank eurodollar
market.
"CANADIAN ADMINISTRATIVE AGENT": The Toronto-Dominion Bank,
together with its affiliates, as the Canadian Administrative Agent for
the Canadian Lenders under this Agreement and the other Loan Documents,
and any successor thereto pursuant to Section 12.9.
"CANADIAN BENEFIT PLANS": all material employee benefit plans
maintained or contributed to by the Canadian Borrower or a Subsidiary
thereof that are not Canadian Pension Plans including, without
limitation, all profit sharing, savings, supplemental retirement,
retiring allowance, severance, deferred compensation, welfare, bonus,
supplementary unemployment benefit plans or arrangements and all life,
health, dental and disability plans and arrangements in which the
employees or former employees of the Canadian Borrower or a Subsidiary
thereof employed in Canada participate or are eligible to participate.
"CANADIAN BORROWER": as defined in the Preamble to this
Agreement.
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"CANADIAN BORROWER OBLIGATIONS": the unpaid principal of and
interest on (including, without limitation, interest accruing after the
maturity of the Loans and Acceptance Reimbursement Obligations and
interest accruing after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to the Canadian Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding)
the Loans and Acceptance Reimbursement Obligations and all other
obligations and liabilities of the Canadian Borrower to the
Administrative Agents or to any Lender (or, in the case of any Hedging
Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection
with, this Agreement, any other Loan Document, any Hedging Agreement
entered into with any Lender or any affiliate of any Lender or any
other document made, delivered or given in connection herewith or
therewith, whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses (including, without
limitation, all fees, charges and disbursements of counsel to the
Administrative Agents or to any Lender that are required to be paid by
the Canadian Borrower pursuant hereto) or otherwise.
"CANADIAN COLLATERAL DOCUMENTS": the collective reference to
the agreements, instruments and documents delivered from time to time
(both before and after the date of this Agreement) to the General
Administrative Agent, the Canadian Administrative Agent or the Lenders
by the Canadian Borrower or any of its Subsidiaries for the purpose of
establishing, perfecting, reserving or protecting the security of the
Lenders in respect hereof and in respect of amounts owing by the
Canadian Borrower hereunder (including, without limitation, guarantees,
debentures, Bank Act (Canada) assignments, general security agreements,
general assignments of receivables and share pledge agreements, each as
amended, restated, supplemented or replaced from time to time). The
Canadian Collateral Documents executed and delivered in connection with
the Acquisition Closing Date are listed on Schedule 4. On the Closing
Date, the parties to the Canadian Collateral Documents shall execute
and deliver one or more Affirmations of Security Agreements in form and
substance satisfactory to the General Administrative Agent and the
Canadian Administrative Agent, which shall affirm the continuing
existence and validity of the Canadian Collateral Documents as security
for the obligations of the Canadian Borrower hereunder.
"CANADIAN DOLLAR PRIME RATE": on any day, the higher of (a)
the rate per annum designated by the Canadian Administrative Agent from
time to time (and in effect on such day) as its reference rate for
Canadian Dollar commercial loans made in Canada and (b) the rate per
annum which is .75% above the one month acceptance rate quoted by The
Toronto-Dominion Bank at 10:00 A.M., Toronto time, that appears on the
Reuter's Screen CDOR page on such day as its rate for acceptances in
Canada. The Canadian Dollar Prime Rate is not intended to be the lowest
rate of interest charged by The Toronto-Dominion Bank in connection
with extensions of credit in Canadian Dollars to debtors.
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"CANADIAN DOLLARS" and "C$": dollars in the lawful currency of
Canada.
"CANADIAN FACILITY AMORTIZATION DATE": as defined in Section
4.3.
"CANADIAN FACILITY COMMITMENT PERIOD": the period from and
including the Closing Date to the Canadian Facility Termination Date.
"CANADIAN FACILITY MAXIMUM AMOUNT": on any date, the maximum
Aggregate Canadian Term Loan Outstandings permitted on such date after
giving effect to payments required to be made pursuant to Section 4.3
or reductions required to be made pursuant to Section 6.3(g), as the
case may be.
"CANADIAN FACILITY TERMINATION DATE": April 3, 2004.
"CANADIAN LENDERS": each Lender listed on Schedule 1.1B.
"CANADIAN OPERATING FACILITY": the C$35,000,000 credit
facility made available pursuant to the letter agreement, dated as of
the date hereof, between the Canadian Borrower, as borrower, and The
Toronto-Dominion Bank, as lender, as the same may be amended, modified
or otherwise supplemented from time to time.
"CANADIAN OPERATING FACILITY LENDER": The Toronto-Dominion
Bank in its capacity as lender under the Canadian Operating Facility.
"CANADIAN OPERATING FACILITY OBLIGATIONS": all of the
obligations, liabilities and indebtedness of the Canadian Borrower to
the Canadian Operating Facility Lender from time to time, whether
present or future, absolute or contingent, liquidated or unliquidated,
as principal or as surety, alone or with others, of whatsoever nature
or kind, in any currency, under or in respect of agreements or dealings
between the Canadian Borrower and the Canadian Operating Facility
Lender or agreements or dealings between the Canadian Borrower and any
Person by which such lender may be or become in any manner whatsoever a
creditor of the Canadian Borrower, including without limitation under
the Canadian Operating Facility (including, without limitation, all
fees and disbursements of the Canadian Operating Facility Lender or its
counsel or agents incurred in the enforcement of the Canadian Operating
Facility); the amount of the Canadian Operating Facility Obligations
will be determined without regard to any right of set-off or
counterclaim by the Canadian Borrower against the Canadian Operating
Facility Lender.
"CANADIAN PENSION PLAN": any plan, program, arrangement or
understanding that is a pension plan for the purposes of any applicable
pension benefit or tax laws of Canada or a province or territory
thereof (whether or not registered under any such laws) which is
maintained, administered or contributed to by (or to which there is or
may be an obligation to contribute by) the Canadian Borrower or a
Subsidiary thereof in respect to any person's past, present or future
employment in Canada or a province or territory thereof with the
Canadian Borrower or a Subsidiary thereof, all related funding
arrangements and all
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related agreements, arrangements and understandings in respect of, or
related to, any benefits to be provided thereunder or the effect
thereof on any other compensation or remuneration of any employee.
"CANADIAN REFERENCE LENDERS": the collective reference to the
Schedule 1 Canadian Reference Lenders and the Schedule 2 Canadian
Reference Lenders.
"CANADIAN TERM LOAN": as defined in Section 4.1.
"CANADIAN TERM LOAN COMMITMENT": as to any Canadian Lender,
the obligation of such Lender to make Canadian Term Loans to, and/or
create and discount Acceptances on behalf of (or, in lieu thereof, to
make loans pursuant to the Acceptance Notes to), the Canadian Borrower,
in an amount not to exceed the amount set forth opposite such Canadian
Lender's name on Schedule 1.1B under the heading "Canadian Term Loan
Commitment". The original aggregate amount of the Canadian Term Loan
Commitments is the equivalent in Canadian Dollars (determined in
accordance with Section 4.3(b)) of US$70,000,000.
"CANADIAN TERM LOAN COMMITMENT PERCENTAGE": as to any Canadian
Lender at any time, the percentage which such Canadian Lender's
Canadian Term Loan Commitment then constitutes of the aggregate
Canadian Term Loan Commitments (or, at any time after the Closing Date,
the percentage which the aggregate amount of such Canadian Lender's
Aggregate Canadian Term Loan Outstandings then outstanding constitutes
of the Total Aggregate Canadian Term Loan Outstandings then
outstanding).
"CANADIAN TERM LOAN NOTE": as defined in Section 4.4(d).
"CAPITAL STOCK": any and all shares, interests, participations
or other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
(other than a corporation) and any and all warrants or options to
purchase any of the foregoing.
"CASH EQUIVALENTS": (a) securities with maturities of one year
or less from the date of acquisition issued or fully guaranteed or
insured by the United States Government or any agency thereof, (b)
certificates of deposit and eurodollar time deposits with maturities of
one year or less from the date of acquisition and overnight bank
deposits of any Lender or of any commercial bank having capital and
surplus in excess of $500,000,000, (c) repurchase obligations of any
Lender or of any commercial bank satisfying the requirements of clause
(b) of this definition, having a term of not more than 30 days with
respect to securities issued or fully guaranteed or insured by the
United States Government, (d) commercial paper of a domestic issuer
rated at least A-2 by Standard and Poor's Rating Group ("S&P") or P-2
by Moody's Investors Service, Inc. ("MOODY'S"), (e) securities with
maturities of one year or less from the date of acquisition issued or
fully guaranteed by any state, commonwealth or territory of the United
States, by any political
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subdivision or taxing authority of any such state, commonwealth or
territory or by any foreign government, the securities of which state,
commonwealth, territory, political subdivision, taxing authority or
foreign government (as the case may be) are rated at least A by S&P or
A by Moody's, (f) securities with maturities of one year or less from
the date of acquisition backed by standby letters of credit issued by
any Lender or any commercial bank satisfying the requirements of clause
(b) of this definition or (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of
clauses (a) through (f) of this definition.
"CHANGE OF CONTROL": a Change of Control shall be deemed to
occur (a) if at any time Laidlaw shall cease to be a primary
shareholder of Holdings, (b) if at any time when the Consolidated Total
Leverage Ratio is greater than 2.50 to 1.00, Laidlaw shall not own,
directly or indirectly, at least 20% of the outstanding voting stock of
Holdings, (c) if at any time Holdings shall cease to own 100% of the
outstanding voting stock of the Company, (d) if at any time the Company
shall cease to own 100% of the outstanding voting stock of the Canadian
Borrower or (e) if at any time there shall cease to be at least one
member of the Board of Directors of Holdings who is a designee of
Laidlaw.
"CLOSING DATE": the date on which the conditions precedent set
forth in Section 8.1 shall be satisfied, which date shall not be later
than April 8, 1998.
"CO-DOCUMENTATION AGENT": as defined in the Preamble to this
Agreement.
"CODE": the Internal Revenue Code of 1986, as amended from
time to time.
"COLLATERAL": all assets of the Loan Parties, now owned or
hereinafter acquired, upon which a Lien is purported to be created by
any Security Document.
"COMMITMENT": as to any Lender, the sum of the Tranche A Term
Loan Commitment, the Tranche B Term Loan Commitment, the Tranche C Term
Loan Commitment, the Revolving Credit Commitment and the Canadian Term
Loan Commitment of such Lender.
"COMMITMENT FEE RATE": on any day, the rate per annum
determined pursuant to the Pricing Grid.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not
incorporated, which is under common control with the Company within the
meaning of Section 4001 of ERISA or is part of a group which includes
the Company and which is treated as a single employer under Section 414
of the Code.
"COMPANY": as defined in the Preamble to this Agreement.
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<PAGE>
"CONSOLIDATED CAPITAL EXPENDITURES": for any fiscal period,
the aggregate of all expenditures by Holdings and its Subsidiaries for
the acquisition or leasing (pursuant to a Financing Lease) of fixed or
capital assets or additions to equipment (including replacements,
capitalized repairs and improvements during such period, but excluding
investments made pursuant to Section 10.8(c)) which should be
capitalized under GAAP on a consolidated balance sheet of Holdings and
its Subsidiaries; PROVIDED that for any calculation of Consolidated
Capital Expenditures for any fiscal period ending November 30, 1998,
February 28, 1999 or May 31, 1999, Consolidated Capital Expenditures
shall be deemed to be Consolidated Capital Expenditures from September
1, 1998 to the last day of such period multiplied by 4, 2 and 4/3,
respectively.
"CONSOLIDATED CONTINGENT OBLIGATIONS": at any date (a) all
obligations of Holdings and its Subsidiaries in respect of performance
bonds, letters of credit in the nature of performance bonds and similar
obligations, and (b) all Guarantee Obligations of Holdings and it
Subsidiaries in respect of obligations of the kind referred to in the
foregoing clause (a).
"CONSOLIDATED DEBT SERVICE": for any fiscal period, the sum,
for Holdings and its Subsidiaries (determined on a consolidated basis
without duplication in accordance with GAAP), of (a) all regularly
scheduled payments of principal of Indebtedness during such period,
including all scheduled payments in respect of the Loans, and, without
duplication, all scheduled reductions in the Canadian Facility Maximum
Amount, during such period plus (b) Consolidated Projected Cash
Interest Expense for such period.
"CONSOLIDATED FIXED CHARGES": for any fiscal period, the sum
for such period of (i) Consolidated Debt Service and (ii) Consolidated
Projected Operating Lease Expense.
"CONSOLIDATED HISTORICAL CASH INTEREST EXPENSE": for any
fiscal period, the aggregate amount of interest in respect of
Consolidated Total Funded Debt and in respect of the Seller Note paid
in cash during such period as determined on a consolidated basis in
accordance with GAAP; PROVIDED that for any calculation of Consolidated
Historical Cash Interest Expense for any fiscal period ending November
30, 1998, February 28, 1999 or May 31, 1999, Consolidated Historical
Cash Interest Expense shall be deemed to be Consolidated Historical
Cash Interest Expense from September 1, 1998 to the last day of such
period multiplied by 4, 2 and 4/3, respectively.
"CONSOLIDATED HISTORICAL OPERATING LEASE EXPENSE": for any
fiscal period, the aggregate lease obligations of Holdings and its
Subsidiaries for which Holdings or any of its Subsidiaries is
contractually committed having a remaining term in excess of twelve
months determined on a consolidated basis payable in respect of such
period under leases of real and/or personal property (net of income
from sub-leases thereof and excluding lease payments on operating
leases which carry a termination payment of less than twelve months of
lease payments, but including taxes, insurance, maintenance and similar
expenses which the lessee is obligated to pay under the terms of said
leases), whether or
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not such obligations are reflected as liabilities or commitments on a
consolidated balance sheet of Holdings and its Subsidiaries or in the
notes thereto, excluding, however, obligations under Financing Leases;
PROVIDED that for any calculation of Consolidated Historical Operating
Lease Expense for any fiscal period ending November 30, 1998, February
28, 1999 or May 31, 1999, Consolidated Historical Operating Lease
Expense shall be deemed to be Consolidated Historical Operating Lease
Expense from September 1, 1998 to the last day of such period
multiplied by 4, 2 and 4/3, respectively.
"CONSOLIDATED NET INCOME": of any Person for any fiscal
period, net income of such Person and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that for any
calculation of Consolidated Net Income for any fiscal period ending
November 30, 1998, February 28, 1999 or May 31, 1999, Consolidated Net
Income shall be deemed to be Consolidated Net Income from September 1,
1998 to the last day of such period multiplied by 4, 2 and 4/3,
respectively.
"CONSOLIDATED OPERATING CASH FLOW": for any fiscal period,
Consolidated Net Income of Holdings and its Subsidiaries (excluding
without duplication, (w) extraordinary gains and losses in accordance
with GAAP, (x) gains and losses in connection with asset dispositions
whether or not constituting extraordinary gains and losses and (y)
gains or losses on discontinued operations and (z) non-cash investment
income) for such period, plus (i) to the extent deducted in determining
such Consolidated Net Income, interest expense and other financing
costs and expenses (cash and non-cash) for such period, plus (ii) to
the extent deducted in computing such Consolidated Net Income, the sum
of income taxes (whether or not deferred), depreciation and
amortization, and all other non-cash expenses; PROVIDED that for any
calculation of Consolidated Operating Cash Flow for any fiscal period
ending November 30, 1998, February 28, 1999 or May 31, 1999,
Consolidated Operating Cash Flow shall be deemed to be Consolidated
Operating Cash Flow from September 1, 1998 to the last day of such
period multiplied by 4, 2 and 4/3, respectively.
"CONSOLIDATED PROJECTED CASH INTEREST EXPENSE": for any fiscal
period, the aggregate amount of interest in respect of Consolidated
Total Funded Debt and in respect of the Seller Note projected to be
payable in cash during such period as determined on a consolidated
basis in accordance with GAAP (such interest expense being calculated
based upon the assumption that interest rates in effect on the date of
calculation will remain in effect for such future fiscal period).
"CONSOLIDATED PROJECTED OPERATING LEASE EXPENSE": for any
fiscal period, the aggregate lease obligations of Holdings and its
Subsidiaries for which Holdings or any of its Subsidiaries is
contractually committed having a remaining term in excess of twelve
months determined on a consolidated basis projected to be payable in
respect of such period under leases of real and/or personal property
(net of income from sub-leases thereof and excluding lease payments on
operating leases which carry a termination payment of less than twelve
months of lease payments, but including taxes, insurance, maintenance
and similar expenses which the lessee is obligated to pay under the
terms of
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said leases), whether or not such obligations would be reflected as
liabilities or commitments on a consolidated balance sheet of Holdings
and its Subsidiaries or in the notes thereto, excluding, however,
obligations under Financing Leases.
"CONSOLIDATED TOTAL FUNDED DEBT": at any date, all
Indebtedness of Holdings and its Subsidiaries outstanding on such date
for borrowed money or the deferred purchase price of property and all
Guarantee Obligations of the Company and its Subsidiaries in respect of
Indebtedness for borrowed money or the deferred purchase price of
property, in each case determined on a consolidated basis in accordance
with GAAP, including, without limitation, Indebtedness in respect of
Financing Leases, but excluding Indebtedness in respect of the Seller
Note.
"CONSOLIDATED TOTAL LEVERAGE RATIO" as at any date of
determination, the ratio of (i) Consolidated Total Funded Debt as at
such date to (ii) Consolidated Operating Cash Flow for the four fiscal
quarters ended on or most recently prior to such date of determination.
"CONSOLIDATED WORKING CAPITAL": of any Person at any date, the
excess of (a) the sum of all amounts (other than cash and cash
equivalents) that would, in accordance with GAAP, be set forth opposite
the caption "total current assets" (or any like caption) on a
consolidated balance sheet of such Person and its Subsidiaries at such
date over (b) all amounts that would, in accordance with GAAP, be set
forth opposite the caption "total current liabilities" (or any like
caption) on a consolidated balance sheet of such Person and its
Subsidiaries on such date (excluding, to the extent it would otherwise
be included under current liabilities, the current portion of any
Consolidated Total Funded Debt).
"CONTRACTUAL OBLIGATION": as to any Person, any provision of
any security issued by such Person or of any agreement, instrument or
other undertaking to which such Person is a party or by which it or any
of its property is bound.
"CPCFA DEBT": the Indebtedness incurred by Holdings pursuant
to a credit agreement, dated as of July 1, 1997, between Holdings and
the California Pollution Control Financing Authority in connection with
the issuance by such Authority of Pollution Control Revenue Bonds, due
July 1, 2007, in the aggregate principal amount of $19,500,000.
"DEFAULT": any of the events specified in Section 11, whether
or not any requirement for the giving of notice, the lapse of time, or
both, or any other condition, has been satisfied.
"DISPOSITION": with respect to any asset, any sale, lease,
sale and leaseback, assignment, conveyance, transfer or other
disposition thereof; and the terms "DISPOSE" and "DISPOSED OF" shall
have correlative meanings.
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"DOMESTIC SUBSIDIARY": any Subsidiary of the Company organized
under the laws of any jurisdiction within the United States.
"DRAFT": a draft substantially in the form of Exhibit A-1 or
in such other form as the Canadian Administrative Agent may from time
to time reasonably request (or to the extent the context shall require,
an Acceptance Note, delivered in lieu of a draft), as the same may be
amended, supplemented or otherwise modified from time to time.
"ENVIRONMENTAL LAWS": any and all laws (including, without
limitation, all common and civil law), rules, orders, regulations,
statutes, ordinances, guidelines, codes, decrees, or other legally
enforceable requirement of any foreign government, the United States,
Canada, or any state, provincial, local, municipal or other
governmental authority, regulating, relating to or imposing liability
or standards of conduct concerning protection of the environment or of
human health, or employee health and safety, as has been, is now, or
may at any time hereafter be, in effect.
"ENVIRONMENTAL PERMITS": any and all permits, licenses,
registrations, approvals, notifications, exemptions and any other
authorization required under any Environmental Law.
"ERISA": the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to
a LIBOR Loan, the aggregate (without duplication) of the rates
(expressed as a decimal fraction) of reserve requirements in effect on
such day (including, without limitation, basic, supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other Governmental Authority having
jurisdiction with respect thereto) dealing with reserve requirements
prescribed for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) maintained by
a member bank of such System.
"EURODOLLAR BUSINESS DAY": any day on which banks are open for
dealings in dollar deposits in the London interbank market.
"EVENT OF DEFAULT": any of the events specified in Section 11,
PROVIDED that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
"EXCESS CASH FLOW": with respect to any Person for any fiscal
year, the excess of (a) the sum, without duplication, of (i)
Consolidated Net Income of such Person and its Subsidiaries for such
fiscal year, (ii) the net decrease, if any, in Consolidated Working
Capital of such Person and its Subsidiaries during such fiscal year,
(iii) to the extent deducted in computing such Consolidated Net Income,
non-cash interest expense and
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other financing costs and expenses, depreciation and amortization for
such fiscal year, (iv) extraordinary non-cash losses during such fiscal
year subtracted in the determination of such Consolidated Net Income,
(v) deferred income tax expense of such Person and its Subsidiaries for
such fiscal year, (vi) non-cash losses of such Person and its
Subsidiaries for such fiscal year in connection with asset dispositions
whether or not constituting extraordinary losses, and (vii) non-cash
ordinary losses of such Person and its Subsidiaries for such fiscal
year OVER (b) the sum, without duplication, of (i) the aggregate amount
of permitted cash capital expenditures made by such Person and its
Subsidiaries during such fiscal year, (ii) the net increase, if any, in
Consolidated Working Capital of such Person and its Subsidiaries during
such fiscal year, (iii) the aggregate amount of (A) scheduled payments
of principal in respect of any Indebtedness of such Person and its
Subsidiaries during such fiscal year, (B) optional prepayments of
principal in respect of any Indebtedness of such Person and its
Subsidiaries during such fiscal year (other than, with respect to
Holdings, prepayments in respect of the Revolving Credit Loan not
accompanied by a reduction in Revolving Credit Commitments), (C) with
respect to Holdings for fiscal year 1997 only, repayments of existing
Indebtedness required to be repaid in connection with the Acquisition
Closing Date, (iv) deferred income tax credit of such Person and its
Subsidiaries for such fiscal year, (v) extraordinary non-cash gains
during such fiscal year added in the determination of Consolidated Net
Income of such Person and its Subsidiaries for such fiscal year, (vi)
non-cash gains of such Person and its Subsidiaries during such fiscal
year in connection with asset dispositions whether or not constituting
extraordinary gains, (vii) non-cash ordinary gains of such Person and
its Subsidiaries during such fiscal year and (viii) cash expenditures
of such Person and its Subsidiaries during such fiscal year on deferred
(including the current portion thereof) long term liabilities (net of
related cash taxes), (ix) to the extent not deducted in determining
Consolidated Net Income of such Person and its Subsidiaries for such
fiscal year, cash expenditures made or committed during such fiscal
year in respect of site closure, related severance costs, financing
fees and other costs incurred in connection with the Rollins
Acquisition and the Safety-Kleen Acquisition (provided that amounts
deducted in any fiscal year for expenditures committed, but not made,
during such fiscal year shall not be deducted in the fiscal year in
which such expenditures are actually made) and (x) non-cash investment
income of such Person and its Subsidiaries during such fiscal year.
"EXCHANGE AGENT": IBJ Schroder Bank & Trust Company, as
exchange agent under the Exchange Agent Agency Agreement, and any
successor thereto pursuant to the terms of such agreement.
"EXCHANGE AGENT AGENCY AGREEMENT": the Exchange Agent Agency
Agreement to be executed and delivered by the Exchange Agent, the
General Administrative Agent and Acquisition Corp., substantially in
the form of Exhibit P, as the same may be amended, supplemented or
otherwise modified from time to time.
"EXCHANGE OFFER": as defined in the Recitals to this
Agreement.
"EXCHANGE OFFER DOCUMENTS": as defined in the Recitals to this
Agreement.
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"EXCHANGE RATE": with respect to Canadian Dollars on any date,
the Bank of Canada noon spot rate on such date for the exchange of
Canadian Dollars into U.S. Dollars.
"EXISTING ACCEPTANCES": as defined in Section 5.1(a).
"EXISTING ACCEPTANCE LENDERS": as defined in Section 5.1(a).
"EXISTING CREDIT AGREEMENT": as defined in the Recitals to
this Agreement.
"EXISTING LETTERS OF CREDIT": as defined in Section 3.1(c).
"EXISTING MORTGAGES": the collective reference to (i) the Deed
of Trust, Assignment of Rents and Leases and Security Agreement, dated
as of May 15, 1997, from Rollins Environmental, Inc., as Grantor, to
First American Title Insurance Company, as trustee for the use and
benefit of Toronto Dominion (Texas), Inc., as beneficiary, and (ii) the
Mortgage, dated as of May 15, 1997, from Rollins Environmental, Inc.,
as mortgagor, to Toronto Dominion (Texas), Inc., as general
administrative agent, in each case encumbering the properties described
in Schedule 2 and recorded in the recording office described in
Schedule 3.
"EXTENSION OF CREDIT": as to any Lender, the making of a Loan
by such Lender, the issuance (or acquisition of a participating
interest in) any Letter of Credit or the creation of an Acceptance or
Acceptance Note by such Lender. It is expressly understood and agreed
that the following do not constitute Extensions of Credit for purposes
of this Agreement: (a) the conversions and continuations of U.S. Loans
as or to LIBOR Loans or Base Rate Loans pursuant to Section 6.4, (b)
the substitution of maturing Acceptances with new Acceptances, (c) the
conversion of Acceptances to Canadian Term Loans and (d) the conversion
of Canadian Term Loans to Acceptances.
"FACILITY": each of (a) the Tranche A Term Loan Commitments
and the Tranche A Term Loans made thereunder (the "TRANCHE A TERM LOAN
FACILITY"), (b) the Tranche B Term Loan Commitments and the Tranche B
Term Loans made thereunder (the "TRANCHE B TERM LOAN FACILITY"), (c)
the Tranche C Term Loan Commitments and the Tranche C Term Loans made
thereunder (the "TRANCHE C TERM LOAN FACILITY"), (d) the Revolving
Credit Commitments and the Revolving Extensions of Credit (the
"REVOLVING CREDIT FACILITY") and (e) the Canadian Term Loan Commitments
and the Canadian Term Loans made, and the Acceptances issued,
thereunder (the "CANADIAN TERM LOAN FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, the weighted
average of the rates on overnight federal funds transactions with
members of the Federal Reserve System arranged by federal funds brokers
as published for such day (or, if such day is not a Business Day, for
the next preceding Business Day) by the Federal Reserve Bank of
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New York or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such
transactions received by the General Administrative Agent from three
federal funds brokers of recognized standing selected by it.
"FINANCING LEASE": any lease of property, real or personal,
the obligations of the lessee in respect of which are required in
accordance with GAAP to be capitalized on a balance sheet of the
lessee.
"FIXED CHARGE COVERAGE RATIO": as at the last day of any
fiscal quarter, the ratio of (i) the sum of Consolidated Operating Cash
Flow and Consolidated Historical Operating Lease Expense for the four
consecutive fiscal quarters ended on such last day to (ii) Consolidated
fixed Charges for the next succeeding four consecutive fiscal quarters.
"FOREIGN CURRENCY PROTECTION AGREEMENTS": as to any Person,
all foreign exchange contracts, currency swap agreements or other
similar agreements or arrangements entered into by such Person to
protect such Person against fluctuations in currency values.
"FOREIGN SUBSIDIARY": any Subsidiary of the Company organized
under the laws of any jurisdiction outside the United States of
America.
"GAAP": generally accepted accounting principles in the United
States of America in effect from time to time.
"GENERAL ADMINISTRATIVE AGENT": Toronto Dominion (Texas) Inc.,
together with its affiliates, as arranger of the Commitments and as
administrative agent for the U.S. Lenders under this Agreement and the
other Loan Documents, and any successor thereto pursuant to Section
12.9.
"GOVERNMENTAL AUTHORITY": any nation or government, any state,
provincial or other political subdivision thereof and any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"GUARANTEE AND COLLATERAL AGREEMENT": the Amended and Restated
Guarantee and Collateral Agreement to be executed and delivered by the
Company and each Guarantor, substantially in the form of Exhibit B-1,
as the same may be amended, supplemented or otherwise modified from
time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING
PERSON"), any obligation of (a) the guaranteeing person or (b) another
Person (including, without limitation, any bank under any letter of
credit) to induce the creation of which obligation the guaranteeing
person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases,
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dividends or other obligations (the "PRIMARY OBLIGATIONS") of any other
third Person (the "PRIMARY OBLIGOR") in any manner, whether directly or
indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any
such primary obligation or any property constituting direct or indirect
security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working
capital or equity capital of the primary obligor or otherwise to
maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv)
otherwise to assure or hold harmless the owner of any such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments
for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Guarantee Obligation is made and (b) the maximum amount for which such
guaranteeing person may be liable pursuant to the terms of the
instrument embodying such Guarantee Obligation, unless such primary
obligation and the maximum amount for which such guaranteeing person
may be liable are not stated or determinable, in which case the amount
of such Guarantee Obligation shall be such guaranteeing person's
maximum reasonably anticipated liability in respect thereof as
determined by the Company in good faith. For avoidance of doubt,
Guarantee Obligations will not include obligations of Holdings and its
Subsidiaries incurred in the ordinary course of business to indemnify
customers in connection with business services provided by Holdings or
its Subsidiaries.
"GUARANTOR": each party to the Guarantee and Collateral
Agreement other than the Company, which shall include Holdings and all
wholly owned Domestic Subsidiaries of the Company.
"HEDGING AGREEMENT": any Foreign Currency Protection Agreement
or Interest Rate Protection Agreement.
"HIGH YIELD NOTES": up to $400,000,000 of subordinated notes
of the Company maturing no earlier than the Revolving Credit
Termination Date and having subordination and other terms reasonably
acceptable to the Company and the General Administrative Agent.
"HIGH YIELD OFFERING": the contemplated offering by the
Company of the High Yield Notes.
"HOLDINGS": as defined in the Recitals to this Agreement.
"INDEBTEDNESS": of any Person at any date, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (other than current trade
liabilities incurred in the ordinary course of business and payable in
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accordance with customary practices), (b) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar
instrument, (c) all obligations of such Person under Financing Leases,
(d) all obligations of such Person, contingent or otherwise, as an
account party under acceptance, letter of credit or similar facilities
(other than obligations in respect of performance bonds and letters of
credit in the nature of performance bonds), (e) all obligations of such
Person, contingent or otherwise, to purchase, redeem, retire or
otherwise acquire for value any Capital Stock (other than common stock)
of such Person, (f) all Guarantee Obligations of such Person in respect
of obligations of the kind referred to in clauses (a) through (e)
above, (g) all obligations of the kind referred to in clauses (a)
through (f) above secured by (or for which the holder of such
obligation has an existing right, contingent or otherwise, to be
secured by) any Lien on property (including, without limitation,
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation
and (h) for the purposes of Section 11(e) only, all obligations of such
Person in respect of Hedging Agreements.
"INSOLVENCY": with respect to any Multiemployer Plan, the
condition that such Plan is insolvent within the meaning of Section
4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTERCREDITOR AGREEMENT": the Amended and Restated
Intercreditor Agreement, substantially in the form of Exhibit O, to be
entered into by the Administrative Agents and The Toronto-Dominion
Bank, as Canadian Operating Facility Agent (as defined therein), and
NationsBank, N.A., in its capacity as a lender providing the
NationsBank Line of Credit.
"INTEREST COVERAGE RATIO": for any period, the ratio of (i)
Consolidated Operating Cash Flow less Consolidated Capital Expenditures
for such period to (ii) Consolidated Historical Cash Interest Expense
for such period.
"INTEREST DETERMINATION DATE": with respect to any Interest
Period for LIBOR Loans, the date which is two Eurodollar Business Days
prior to the first day of such LIBOR Interest Period.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan and any
Canadian Term Loan, the last Business Day of each February, May, August
and November, and, in the case of any Canadian Term Loan converted to
an Acceptance pursuant to Section 5.1(b), the Borrowing Date on which
such conversion occurs, (b) as to any LIBOR Loan having an Interest
Period of three months or less, the last day of such Interest Period,
and (c) as to any LIBOR Loan having an Interest Period longer than
three months, each day which is three months, or a whole multiple
thereof, after the first day of such Interest Period and the last day
of such Interest Period.
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"INTEREST PERIOD": with respect to any LIBOR Loan:
(a) initially, the period commencing on the
Borrowing Date or conversion date, as the case may be, with
respect to such LIBOR Loan and ending one, two, three or six
months or (if available to all Lenders under the relevant
Facility) nine or twelve months thereafter, as selected by the
Company in its notice of borrowing or notice of conversion, as
the case may be, given with respect thereto; and
(b) thereafter, each period commencing on the
last day of the next preceding Interest Period applicable to
such LIBOR Loan and ending one, two, three or six months or (if
available to all Lenders under the relevant Facility) nine or
twelve months thereafter, as selected by the Company by
irrevocable notice to the General Administrative Agent not less
than three Business Days prior to the last day of the then
current Interest Period with respect thereto; PROVIDED that,
all of the foregoing provisions relating to Interest Periods
are subject to the following:
(1) if any Interest Period would otherwise end on a
day that is not a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into
another calendar month in which event such Interest Period
shall end on the immediately preceding Business Day;
(2) any Interest Period in respect of Revolving
Credit Loans, Tranche A Term Loans, Tranche B Term Loans or
Tranche C Term Loans, as the case may be, that would otherwise
extend beyond the Revolving Credit Termination Date or beyond
the date final payment is due on the Tranche A Term Loans, the
Tranche B Term Loans or the Tranche C Term Loans, as the case
may be, shall end on the Revolving Credit Termination Date or
such due date, as applicable;
(3) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last
Business Day of a calendar month; and
(4) the Company shall select Interest Periods so as
not to require a payment or prepayment of any LIBOR Loan
during an Interest Period for such Loan.
"INTEREST RATE PROTECTION AGREEMENTS": as to any Person, all
interest rate swaps, caps or collar agreements or similar arrangements
entered into by such Person providing for protection against
fluctuations in interest rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
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"ISSUANCE DATE": any Business Day specified in a notice
pursuant to Section 3.2 as a date on which an Issuing Lender is
requested to issue a Letter of Credit hereunder.
"ISSUING LENDER": any of The Toronto-Dominion Bank or any
Managing Agent or any Affiliates thereof, as selected by the Company.
"ITA": the Income Tax Act (Canada) and the regulations
promulgated thereunder, as amended or re-enacted from time to time.
"LAIDLAW": Laidlaw Inc., a Canadian corporation.
"L/C COMMITMENT": at any time, the lesser of (a) $200,000,000
and (b) the aggregate Revolving Credit Commitments then in effect.
"L/C FEE PAYMENT DATE": the last day of each February, May,
August and November and the last day of the Revolving Credit Commitment
Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of
(a) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit and (b) the aggregate amount of drawings
under Letters of Credit which have not then been reimbursed pursuant to
Section 3.5.
"L/C PARTICIPANTS": with respect to any Letter of Credit, the
collective reference to all the Revolving Credit Lenders other than the
relevant Issuing Lender.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIBOR LOAN": any Loan the rate of interest applicable to
which is based upon the LIBOR Rate.
"LIBOR RATE": with respect to a LIBOR Loan for the relevant
Interest Period, the rate per annum determined by the General
Administrative Agent as follows:
(a) on the Interest Determination Date relating to
such Interest Period, the General Administrative Agent shall
obtain the offered quotation(s) for U.S. Dollar deposits for a
period comparable to such Interest Period that appear on the
Reuter's Screen as of 11:00 a.m., London time. If at least two
such offered quotations appear on the Reuter's Screen, the
LIBOR Rate shall be the arithmetic average (rounded up to the
nearest 1/16th of 1%) of such offered quotations, as
determined by the General Administrative Agent;
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(b) if the Reuter's Screen is not available or has
been discontinued, the LIBOR Rate shall be the rate per annum
that the General Administrative Agent determines to be the
arithmetic average (rounded as aforesaid) of the per annum
rates of interest reported to the General Administrative Agent
by each LIBOR Reference Bank (or, if any LIBOR Reference Bank
fails to provide such quotation, on the basis of the rates
reported to the General Administrative Agent by the remaining
LIBOR Reference Banks) as the rate at which deposits in U.S.
Dollars are offered to such Reference Banks in the London
interbank market at 11:00 a.m., London time, on the Interest
Determination Date in the approximate amount of such LIBOR
Reference Bank's relevant LIBOR Loan and having a maturity
approximately equal to the relevant LIBOR Interest Period; and
(c) if the General Administrative Agent is not able
to obtain quotations for the determination of the LIBOR Rate
pursuant to subsection (a) or (b) above, the LIBOR Rate shall
be the rate per annum which the General Administrative Agent
in good faith determines to be the arithmetic average (rounded
as aforesaid) of the offered quotations for U.S. Dollar
deposits in an amount comparable to the General Administrative
Agent's share of the relevant amount in respect of which the
LIBOR Rate is being determined for a period comparable to the
relevant LIBOR Interest Period that leading banks in New York
City selected by the General Administrative Agent are quoting
at 11:00 a.m., New York City time, on the Interest
Determination Date in the New York interbank market to major
international banks.
"LIBOR REFERENCE BANKS": The Toronto-Dominion Bank, The Bank
of Nova Scotia, NationsBank, N.A. and The First National Bank of
Chicago.
"LIEN": any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), charge or
other security interest or any preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title
retention agreement and any Financing Lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this
Agreement.
"LOAN DOCUMENTS": the collective reference to this Agreement,
any Notes, the Applications, the Syndication Letter Agreement, the
Drafts, the Acceptances, the Acceptance Notes and the Security
Documents.
"LOAN PARTIES": the collective reference to Holdings, the
Borrowers and each Subsidiary of the Company which is a party to a Loan
Document.
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"MAJORITY FACILITY LENDERS": with respect to any Facility, the
holders of more than 66-2/3% of the aggregate unpaid principal amount
of the U.S. Term Loans (and related undrawn U.S. Term Loan
Commitments), the Total Revolving Extensions of Credit or the Aggregate
Canadian Term Loan Outstandings, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Credit Facility, prior
to any termination of the Revolving Credit Commitments, the holders of
more than 66-2/3% of the aggregate Revolving Credit Commitments).
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a)
the Safety-Kleen Acquisition, (b) the business, operations, property,
condition (financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole or (c) the validity or enforceability of
this or any of the other Loan Documents or the rights or remedies of
the Administrative Agents or the Lenders hereunder or thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products, polychlorinated biphenyls, urea-formaldehyde insulation,
asbestos, pollutants, contaminants, radioactivity, and any other
substances or forces of any kind, whether or not any such substance or
force is defined as hazardous or toxic under any Environmental Law,
that is regulated pursuant to or could give rise to liability under any
Environmental Law.
"MERGER": as defined in the Recitals to this Agreement.
"MERGER AGREEMENT: as defined in the Recitals to this
Agreement.
"MERGER DATE": the date on which the Merger is consummated.
"MORTGAGE AMENDMENT": each Mortgage Amendment, substantially
in the form of Exhibit M, to be entered into on the Closing Date to
amend each Existing Mortgage.
"MORTGAGES": the collective reference to the Existing
Mortgages, as amended by the Mortgage Amendments, and the Mortgages,
substantially in the form of Exhibit N, to be executed and delivered in
respect of the properties to be mortgaged pursuant to Section 9.10(d),
as the same may be amended, supplemented or otherwise modified from
time to time.
"MULTIEMPLOYER PLAN": a Plan which is a multiemployer plan as
defined in Section 4001(a)(3) of ERISA.
"NATIONSBANK LINE OF CREDIT": the working capital credit
facility in an amount not exceeding $25,000,000 made available pursuant
to a letter agreement, dated March 31, 1998 between NationsBank of
Texas, N.A., as lender, and the Company, as borrower, as the same may
be amended, modified or otherwise supplemented from time to time.
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"NET CASH PROCEEDS": (a) in connection with any Asset Sale or
any Recovery Event, the proceeds thereof in the form of cash and cash
equivalents (including any such proceeds received by way of deferred
payment of principal pursuant to a note or installment receivable or
purchase price adjustment receivable or otherwise, but only as and when
received) of such Asset Sale or Recovery Event, net of attorneys' fees,
accountants' fees, investment banking fees, amounts required to be
applied to the repayment of Indebtedness secured by a Lien expressly
permitted hereunder on any asset which is the subject of such Asset
Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in
connection therewith and net of taxes paid or reasonably estimated to
be payable as a result thereof (after taking into account any available
tax credits or deductions and any tax sharing arrangements) and (b) in
connection with any issuance or sale of equity securities or debt
securities or instruments or the incurrence of loans, the cash proceeds
received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other customary fees and expenses actually incurred in
connection therewith.
"NON-EXCLUDED TAXES": as defined in Section 6.12.
"NOTES": the collective reference to the Revolving Credit
Notes, the U.S. Term Notes and the Canadian Term Notes.
"PARTICIPANT": as defined in Section 14.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA.
"PERMITTED EMPLOYEE STOCK ISSUANCES": the issuance by Holdings
of its common stock to employees or directors of Holdings and its
Subsidiaries for aggregate proceeds not exceeding $5,000,000 per fiscal
year during fiscal year 1997, 1998 and 1999 and $10,000,000 per fiscal
year thereafter.
"PERSON": an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint
venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan which
is covered by ERISA and in respect of which the Company or a Commonly
Controlled Entity is (or, if such plan were terminated at such time,
would under Section 4069 of ERISA be deemed to be) an "employer" as
defined in Section 3(5) of ERISA.
"PREPAYMENT OPTION NOTICE": as defined in Section 6.3(i).
"PRICING GRID": the pricing grid attached hereto as Annex A.
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"PRIME RATE": the prime commercial lending rate of The
Toronto-Dominion Bank as in effect from time to time in New York City
for loans in U.S. Dollars, such rate to be adjusted on and as of the
effective date of any change in the Prime Rate. The Prime Rate is only
one of the bases for computing interest on loans made by the Lenders,
and by basing interest on the unpaid principal amount of the Loans on
the Prime Rate, the Lenders have not committed to charge, and the
Company has not in any way bargained for, interest based on a lower or
the lowest rate at which the Lenders may now or in the future make
loans to other borrowers.
"PRO FORMA BALANCE SHEET": as defined in Section 7.1(a).
"PROPOSED PREPAYMENT DATE": as defined in Section 6.3(i).
"RECOVERY EVENT": any settlement of or payment in respect of
any property or casualty insurance claim or any condemnation proceeding
relating to any asset of the Company or any of its Subsidiaries.
"REFERENCE DISCOUNT RATE": on any date with respect to each
Draft requested to be accepted by a Canadian Lender, (a) if such
Canadian Lender is a Schedule 1 Canadian Lender, the arithmetic average
of the discount rates (expressed as a percentage calculated on the
basis of a year of 365 days) quoted by the Toronto offices of each of
the Schedule 1 Canadian Reference Lenders, at 10:00 a.m. (Toronto time)
on the Borrowing Date on which such Draft is to be accepted as the
discount rate at which each such Schedule 1 Canadian Reference Lender
would, in the normal course of its business, purchase on such date
Acceptances having an aggregate face amount and term to maturity as
designated by the Canadian Borrower pursuant to Section 5.2 and (b) if
such Canadian Lender is a Schedule 2 Canadian Lender, the arithmetic
average of the discount rates (expressed as a percentage calculated on
the basis of a year of 365 days) quoted by the Toronto offices of each
of the Schedule 2 Canadian Reference Lenders, at 10:00 a.m. (Toronto
time) on the Borrowing Date on which such Draft is to be accepted as
the discount rate at which each such Schedule 2 Canadian Reference
Lender would, in the normal course of its business, purchase on such
date Acceptances having an aggregate face amount and term to maturity
as designated by the Canadian Borrower pursuant to Section 5.2. The
Canadian Administrative Agent shall advise the Canadian Borrower and
the Canadian Lenders, either in writing or verbally, by 11:00 a.m.
(Toronto time) on each Borrowing Date in respect of Acceptances as to
the applicable Reference Discount Rate and corresponding Acceptance
Purchase Price in respect of Acceptances having the maturities selected
by the Canadian Borrower for such Borrowing Date.
"REGISTER": as defined in Section 14.6(d).
"REGULATION U": Regulation U of the Board as in effect from
time to time.
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"REIMBURSEMENT OBLIGATION": the obligation of the Company to
reimburse the Issuing Lenders pursuant to Section 3.5 for amounts drawn
under Letters of Credit.
"REINVESTMENT DEFERRED AMOUNT": with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by a
Borrower or any of its Subsidiaries in connection therewith which are
not applied to prepayments or reductions pursuant to Section 6.3(c) as
a result of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Recovery Event or Asset Sale in
respect of which the relevant Borrower has delivered a Reinvestment
Notice.
"REINVESTMENT NOTICE": a written notice executed by a
Responsible Officer to the General Administrative Agent within 30 days
of the Reinvestment Event to which it relates stating that no Event of
Default has occurred and is continuing and that the relevant Borrower
(directly or indirectly through a Subsidiary), in good faith, intends
and expects to use all or a specified portion of the Net Cash Proceeds
of a Recovery Event or an Asset Sale to restore or replace the assets
in respect of which such Recovery Event or Asset Sale occurred or to
purchase other assets used in the existing business of the Company and
its Subsidiaries within twelve months from the date of receipt of such
Net Cash Proceeds (provided that if the affected assets constituted
Collateral, such restored, replacement or other purchased assets shall
also constitute Collateral).
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto
less any amount which, prior to the relevant Reinvestment Prepayment
Date, the relevant Borrower or the relevant Subsidiary has spent or has
agreed, pursuant to a binding written contract (under which performance
is in progress) to spend, to restore or replace the assets in respect
of which a Recovery Event or an Asset Sale has occurred or to purchase
other assets used in the existing business of such Borrower or such
Subsidiary.
"REINVESTMENT PREPAYMENT DATE": with respect to any
Reinvestment Event, the earliest of (a) the first date occurring after
such Reinvestment Event on which an Event of Default shall have
occurred, (b) the date occurring twelve months after such Reinvestment
Event and (c) the date on which the relevant Borrower shall have
determined not to, or shall have otherwise ceased to, restore or
replace the assets in respect of which a Recovery Event or an Asset
Sale has occurred or to purchase other assets used in the existing
business of such Borrower or such Subsidiary.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of
Section 4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the thirty-day
notice period is waived under subsections .27, .28, .29, .30, .31, .32,
.34 or .35 of PBGC Reg. ss. 4043.
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"REQUEST FOR ACCEPTANCES": as defined in Section 5.2(a).
"REQUIRED LENDERS": the holders of more than 66-2/3% of (a)
until the Closing Date, the Tranche A Term Loan Commitments, the
Tranche B Term Loan Commitments, the Tranche C Term Loan Commitments,
the Revolving Credit Commitments and the U.S. Dollar Equivalent of the
Canadian Term Loan Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the U.S. Term Loans and the
aggregate undrawn amount of the U.S. Term Loan Commitments, (ii) the
U.S. Dollar Equivalent of the Aggregate Canadian Facility Term Loan
Outstandings of all Lenders and (iii) the aggregate Revolving Credit
Commitments of all Lenders or, if the Revolving Credit Commitments have
been terminated, the Total Revolving Extensions of Credit.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing
documents of such Person, and any law, treaty, rule or regulation or
determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or
any of its property or to which such Person or any of its property is
subject.
"RESPONSIBLE OFFICER": the chief executive officer and the
president of the Company or Holdings, as the case may be, or, with
respect to financial matters, the chief financial officer of the
Company or Holdings, as the case may be.
"REUTER'S SCREEN": the display designated at page "LIBO" on
the Reuter Monitor System or such other display on the Reuter Monitor
System as may replace such page displaying the London interbank bid or
offered rates.
"REVOLVING CREDIT COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make Revolving Credit Loans and
participate in Letters of Credit, in an aggregate principal and/or face
amount not to exceed the amount set forth under the heading "Revolving
Credit Commitment" opposite such Lender's name on Schedule 1.1A, as the
same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Revolving Credit Commitments is
$450,000,000; PROVIDED that at no time shall the aggregate principal
amount of all Revolving Credit Loans exceed $300,000,000.
"REVOLVING CREDIT COMMITMENT PERIOD": the period from and
including the Closing Date to the Revolving Credit Termination Date.
"REVOLVING CREDIT LENDER": each U.S. Lender which has a
Revolving Credit Commitment or which has made Revolving Extensions of
Credit.
"REVOLVING CREDIT LOANS": as defined in Section 2.4.
"REVOLVING CREDIT NOTE": as defined in Section 2.7.
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"REVOLVING CREDIT PERCENTAGE": as to any Revolving Credit
Lender at any time, the percentage which such Lender's Revolving Credit
Commitment then constitutes of the aggregate Revolving Credit
Commitments (or, at any time after the Revolving Credit Commitments
shall have expired or terminated, the percentage which the aggregate
principal amount of such Lender's Revolving Extensions of Credit then
outstanding constitutes of the Total Revolving Extensions of Credit
then outstanding).
"REVOLVING CREDIT TERMINATION DATE": the earlier of (a) April
3, 2004 and (b) the date on which the Revolving Credit Commitments are
terminated pursuant to Section 11.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Credit
Lender at any time, an amount equal to the sum of (a) the aggregate
principal amount of all Revolving Credit Loans made by such Lender then
outstanding and (b) such Lender's Revolving Credit Percentage of the
L/C Obligations then outstanding.
"ROLLINS ACQUISITION": the acquisition by Holdings of the
common stock of the Company, which was financed, in part, with proceeds
of loans under the Existing Credit Agreement.
"SAFETY-KLEEN": as defined in the Recitals to this Agreement.
"SAFETY-KLEEN ACQUISITION": the acquisition by Acquisition
Corp. of the common stock of Safety-Kleen pursuant to the Exchange
Offer and the Merger, financed, in part, with proceeds of Loans made
hereunder.
"SCHEDULE 1 CANADIAN LENDER": each Canadian Lender listed on
Schedule 1 to the Bank Act (Canada).
"SCHEDULE 1 CANADIAN REFERENCE LENDERS": initially, The
Toronto-Dominion Bank; and after completion of syndication of the
Facilities, The Toronto-Dominion Bank and one other Schedule 1 Canadian
Lender selected by the Canadian Administrative Agent and the Canadian
Borrower.
"SCHEDULE 2 CANADIAN LENDER": each Canadian Lender which is
not a Schedule 1 Canadian Lender.
"SCHEDULE 2 CANADIAN REFERENCE LENDERS": two Schedule 2
Canadian Lenders to be selected by the Canadian Administrative Agent
and the Canadian Borrower after completion of syndication of the
Facilities.
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"SECURITY DOCUMENTS": the collective reference to the
Guarantee and Collateral Agreement, the Acquisition Corp. Pledge
Agreement, the Mortgages, the Canadian Collateral Documents and all
other security documents hereafter delivered to the General
Administrative Agent or the Canadian Administrative Agent granting a
Lien on any property of any Person to secure the obligations and
liabilities of any Loan Party under any Loan Document.
SELLER NOTE": the 5% Convertible Subordinated Debenture due
2009 in a principal amount of $350,000,000 issued by Holdings to
Laidlaw Transportation, Inc. on the Acquisition Closing Date as a
portion of the consideration for the Rollins Acquisition.
"SINGLE EMPLOYER PLAN": any Plan which is covered by Title IV
of ERISA, but which is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that,
as of any date of determination, (a) the amount of the "present fair
saleable value" of the assets of such Person will, as of such date,
exceed the amount of all "liabilities of such Person, contingent or
otherwise", as of such date, as such quoted terms are determined in
accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair
saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required to pay the liability of
such Person on its debts as such debts become absolute and matured, (c)
such Person will not have, as of such date, an unreasonably small
amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of
this definition, (i) "debt" means liability on a "claim", and (ii)
"claim" means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent,
matured, unmatured, disputed, undisputed, legal, equitable, secured or
unsecured or (y) right to an equitable remedy for breach of performance
if such breach gives rise to a right to payment, whether or not such
right to an equitable remedy is reduced to judgment, fixed, contingent,
matured or unmatured, disputed, undisputed, secured or unsecured.
"SPECIFIED ACCEPTANCES": as defined in Section 5.1(a).
"SUBSIDIARY": as to any Person, a corporation, partnership or
other entity of which shares of stock or other ownership interests
having ordinary voting power (other than stock or such other ownership
interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the
time owned, or the management of which is otherwise controlled,
directly or indirectly through one or more intermediaries, or both, by
such Person. Unless otherwise qualified, all references to a
"Subsidiary" or to "Subsidiaries" in this Agreement shall refer to a
Subsidiary or Subsidiaries of the Company.
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"SURVIVING CORPORATION": as defined in the Recitals to this
Agreement.
"SYNDICATION AGENT": as defined in the Preamble to this
Agreement.
"SYNDICATION LETTER AGREEMENT": the Letter Agreement dated as
of April 3, 1998 among Holdings, the Borrowers and the Arranger
pertaining to the completion of the syndication of the Facilities after
the Closing Date.
"TARGET RIGHTS": as defined in the Recitals to this Agreement.
"TARGET SHARES": as defined in the Recitals to this Agreement.
"TAX ACT": the INCOME TAX ACT (Canada), as amended from time
to time.
"TERM LOANS": the collective references to the Canadian Term
Loans and the U.S. Term Loans.
"TOOELE COUNTY DEBT": the Indebtedness incurred by Holdings
pursuant to a credit agreement, dated as of July 1, 1997, between
Holdings and Tooele County, Utah, in connection with the issuance by
Tooele County, Utah, of Hazardous Waste Treatment Revenue Bonds, due
July 1, 2027, in the aggregate principal amount of $45,700,000.
"TOTAL AGGREGATE CANADIAN TERM LOAN OUTSTANDINGS": at any
time, the aggregate amount of the Aggregate Canadian Term Loan
Outstandings of the Canadian Lenders at such time.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the
aggregate amount of the Revolving Extensions of Credit of the Revolving
Credit Lenders at such time.
"TRANCHE": the collective reference to LIBOR Loans under the
same Facility the then current Interest Periods with respect to all of
which begin on the same date and end on the same later date (whether or
not such Loans shall originally have been made on the same day).
"TRANCHE A TERM LOAN": as defined in Section 2.1.
"TRANCHE A TERM LOAN COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche A Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche A Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche A Term Loan Commitments is $480,000,000.
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"TRANCHE A TERM LOAN LENDER": each U.S. Lender which has a
Tranche A Term Loan Commitment or which has made a Tranche A Term Loan.
"TRANCHE A TERM LOAN MATURITY DATE": April 3, 2004.
"TRANCHE A TERM LOAN PERCENTAGE": as to any Tranche A Term
Loan Lender at any time, the percentage which such Lender's Tranche A
Term Loan Commitment then constitutes of the aggregate Tranche A Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche A Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche A Term Loans then outstanding).
"TRANCHE B TERM LOAN": as defined in Section 2.1.
"TRANCHE B TERM LOAN COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche B Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche B Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche B Term Loan Commitments is $550,000,000. The Tranche B-1 Term
Loan Commitments are a subset of the Tranche B Term Loan Commitments.
"TRANCHE B TERM LOAN LENDER": each U.S. Lender which has a
Tranche B Term Loan Commitment or which has made a Tranche B Term Loan.
"TRANCHE B TERM LOAN MATURITY DATE": April 3, 2005.
"TRANCHE B TERM LOAN PERCENTAGE": as to any Tranche B Term
Loan Lender at any time, the percentage which such Lender's Tranche B
Term Loan Commitment then constitutes of the aggregate Tranche B Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche B Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche B Term Loans then outstanding).
"TRANCHE B-1 TERM LOAN COMMITMENTS": as defined in Section
2.1(b).
"TRANCHE B-1 TERM LOANS": as defined in Section 2.1(b).
"TRANCHE C TERM LOAN": as defined in Section 2.1.
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<PAGE>
"TRANCHE C TERM LOAN COMMITMENT": as to any U.S. Lender, the
obligation of such Lender, if any, to make a Tranche C Term Loan to the
Company hereunder in a principal amount not to exceed the amount set
forth under the heading "Tranche C Term Loan Commitment" opposite such
Lender's name on Schedule 1.1A. The original aggregate amount of the
Tranche C Term Loan Commitments is $550,000,000. The Tranche C-1 Term
Loan Commitments are a subset of the Tranche C Term Loan Commitments.
"TRANCHE C TERM LOAN LENDER": each U.S. Lender which has a
Tranche C Term Loan Commitment or which has made a Tranche C Term Loan.
"TRANCHE C TERM LOAN MATURITY DATE": April 3, 2006.
"TRANCHE C TERM LOAN PERCENTAGE": as to any Tranche C Term
Loan Lender at any time, the percentage which such Lender's Tranche C
Term Loan Commitment then constitutes of the aggregate Tranche C Term
Loan Commitments (or, at any time after the Closing Date, the
percentage which the aggregate principal amount of such Lender's
Tranche C Term Loans then outstanding constitutes of the aggregate
principal amount of the Tranche C Term Loans then outstanding).
"TRANCHE C-1 TERM LOAN COMMITMENTS": as defined in Section
2.1(b).
"TRANCHE C-1 TERM LOANS": as defined in Section 2.1(b).
"TRANSFEREE": as defined in Section 14.6(f).
"TYPE": as to any Loan, its nature as a Base Rate Loan or a
LIBOR Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"U.S. DOLLAR EQUIVALENT": with respect to an amount
denominated in Canadian Dollars, the equivalent in U.S. Dollars of such
amount determined at the Exchange Rate on the Business Day immediately
preceding the date of determination of such equivalent.
"U.S DOLLARS" and "$": dollars in the lawful currency of the
United States of America.
"U.S. LENDERS": the collective reference to the U.S. Term Loan
Lenders and the Revolving Credit Lenders.
"U.S. LOANS": the collective reference to the U.S. Term Loans
and the Revolving Credit Loans.
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"U.S. TERM LOAN COMMITMENTS": the collective reference to the
Tranche A Term Loan Commitments, the Tranche B Term Loan Commitments
and the Tranche C Term Loans Commitments.
"U.S. TERM LOAN COMMITMENT PERIOD": the period from the
Closing Date to the Merger Date.
"U.S. TERM LOAN LENDERS": the collective reference to the
Tranche A Term Loan Lenders, the Tranche B Term Loan Lenders and the
Tranche C Term Loan Lenders.
"U.S. TERM LOANS": the collective reference to the Tranche A
Term Loans, Tranche B Term Loans and Tranche C Term Loans.
"U.S. TERM NOTES": as defined in Section 2.7.
"WESTINGHOUSE DEBT": unsecured subordinated indebtedness of
Holdings in the initial principal amount of $60,000,000 evidenced by a
promissory note of Holdings, dated May 15, 1997, initially payable to
Westinghouse Electric Corporation and its assignees, and guaranteed by
Laidlaw.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise
specified therein, all terms defined in this Agreement shall have the defined
meanings when used in any Notes or any certificate or other document made or
delivered pursuant hereto.
(b) As used herein and in any Notes, and any certificate or
other document made or delivered pursuant hereto, accounting terms relating to
the Company and its Subsidiaries not defined in Section 1.1 and accounting terms
partly defined in Section 1.1, to the extent not defined, shall have the
respective meanings given to them under GAAP; PROVIDED that, if the Company
notifies the General Administrative Agent that the Company requests an amendment
to any provision hereof to eliminate the effect of any change occurring after
the date hereof in GAAP or in the application thereof on the operation of such
provision (or if the General Administrative Agent notifies the Company that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then, pending execution and delivery of such
an amendment, such provision shall be interpreted on the basis of GAAP as in
effect and applied immediately before such change shall have become effective
until such notice shall have been withdrawn or such provision amended in
accordance herewith.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
subsection, Schedule and Exhibit references are to this Agreement unless
otherwise specified.
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(d) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF U.S. COMMITMENTS
2.1 U.S. TERM LOAN COMMITMENTS. (a) Subject to the terms and
conditions hereof, (i) each Tranche A Term Loan Lender severally agrees to make
term loans (each, a "TRANCHE A TERM LOAN") denominated in U.S. Dollars to the
Company during the U.S. Term Loan Commitment Period in an aggregate principal
amount not to exceed the amount of the Tranche A Term Loan Commitment of such
Lender, (ii) each Tranche B Term Loan Lender severally agrees to make term loans
(each, a "TRANCHE B TERM LOAN") denominated in U.S. Dollars to the Company
during the U.S. Term Loan Commitment Period in an aggregate principal amount not
to exceed the amount of the Tranche B Term Loan Commitment of such Lender and
(iii) each Tranche C Term Loan Lender severally agrees to make term loans (each,
a "TRANCHE C TERM LOAN") denominated in U.S. Dollars to the Company during the
U.S. Term Loan Commitment Period in an aggregate principal amount not to exceed
the amount of the Tranche C Term Loan Commitment of such Lender. The U.S. Term
Loans may from time to time be LIBOR Loans or Base Rate Loans, as determined by
the Company and notified to the General Administrative Agent in accordance with
Sections 2.2 and 6.4; PROVIDED that the U.S. Term Loans made on the Closing Date
shall initially be made as Base Rate Loans.
(b) $150,000,000 of the Tranche B Term Loan Commitments shall
be designated as the "Tranche B-1 Term Loan Commitments", and $150,000,000 of
the Tranche C Term Loan Commitments shall be designated as the "Tranche C-1 Term
Loan Commitments". Schedule 1.1A sets forth the amount of the Tranche B-1 Term
Loan Commitments and the Tranche C-1 Term Loan Commitments held by each of the
U.S. Term Loan Lenders. Each borrowing of Tranche B Term Loans and Tranche C
Term Loans shall be deemed to utilize first the portions of the U.S. Term Loan
Commitments other than the Tranche B-1 Term Loan Commitments or the Tranche C-1
Term Loan Commitments, as the case may be, before utilizing the Tranche B-1 Term
Loan Commitment and the Tranche C-1 Term Loan Commitments. The portions of the
U.S. Term Loans attributable to the Tranche B-1 Term Loan Commitments and the
Tranche C-1 Term Loan Commitments shall be designated as the "Tranche B-1 Term
Loans" and the "Tranche C-1 Term Loans", respectively.
2.2 PROCEDURE FOR U.S. TERM LOAN BORROWING. The Company may
borrow under the U.S. Term Loan Commitments during the U.S. Term Loan Commitment
Period on any Business Day in accordance with this Section 2.2, PROVIDED that
the Company shall give the General Administrative Agent irrevocable written
notice (which notice must be received by the General Administrative Agent prior
to 12:00 Noon, New York City time, (a) three Business Days prior to the
requested Borrowing Date, in the case of LIBOR Loans, or (b) one Business Day
prior to the requested Borrowing Date, in the case of Base Rate Loans),
specifying (i) the amount and Type of U.S. Term Loans to be borrowed, (ii) the
requested Borrowing Date and (iii) in the case of LIBOR Loans, the respective
amounts of each such Type of Loan and the respective
<
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<PAGE>
lengths of the initial Interest Periods therefor. The U.S. Term Loans made on
the Closing Date shall be in an aggregate principal amount not exceeding the sum
of (i) the cash amount payable in connection with the Exchange Offer on the
Closing Date, (ii) the aggregate principal amount of the U.S. Term Loans and
Revolving Credit Loans outstanding under (and as defined in) the Existing Credit
Agreement and (iii) costs and expenses relating to the Exchange Offer and the
financing thereof. After the Closing Date and prior to the Merger Date, the
Company may make one additional borrowing of U.S. Term Loans in an aggregate
principal amount not exceeding the cash portion of the consideration payable in
connection with delayed delivery of Target Shares pursuant to the Exchange Offer
or in connection with Target Shares for which payment cannot be made on the
Closing Date because of inability of the Exchange Agent to complete the
verification process in respect of such Target Shares. On the Merger Date, the
Company may make an additional borrowing of U.S. Term Loans in an aggregate
principal amount not exceeding the cash portion of the consideration payable in
connection with the Merger, and costs and expenses related thereto, LESS the
amount, if any, of Net Cash Proceeds received by the Company from the High Yield
Offering, if it has been consummated, to the extent such Net Cash Proceeds have
not been applied to prepay the Term Loans or reduce the Term Loan Commitments
pursuant to Section 6.3(b) and (e). In addition, on the Merger Date the Company
may borrow U.S. Term Loans in an amount sufficient to repay existing
indebtedness of Safety-Kleen required to be repaid in connection with the
Merger. Each borrowing under the U.S. Term Loan Commitments shall be in an
amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a multiple of
$500,000 in excess thereof and (y) in the case of LIBOR Loans, $5,000,000 or a
whole multiple of $1,000,000 in excess thereof. Upon receipt of any such notice
from the Company, the General Administrative Agent shall promptly notify each
U.S. Term Loan Lender thereof. Each U.S. Term Loan Lender will make the amount
of its PRO RATA share of each borrowing available to the General Administrative
Agent for the account of the Company at the office of the General Administrative
Agent specified in Section 14.2 prior to 12:00 Noon, New York City time, on the
Borrowing Date requested by the Company in funds immediately available to the
General Administrative Agent. Such borrowing will then be made available to the
Company by the General Administrative Agent crediting the account of the Company
at the office of The Toronto-Dominion Bank at 909 Fannin Street, Suite 1700,
Houston, TX 77010 with the aggregate of the amounts made available to the
General Administrative Agent by the U.S. Term Loan Lenders and in like funds as
received by the General Administrative Agent.
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<PAGE>
2.3 REPAYMENT OF U.S. TERM LOANS (a) The Tranche A Term Loan
of each Tranche A Lender shall mature, and the Company unconditionally promises
to pay such Tranche A Term Loan to the General Administrative Agent for the
account of such Tranche A Lender, in 24 consecutive quarterly installments,
commencing on August 31, 1998, each of which shall be in an amount equal to such
Lender's Tranche A Term Loan Percentage multiplied by the amount set forth below
opposite such installment:
INSTALLMENT PRINCIPAL AMOUNT
August 31, 1998 US$16,000,000
November 30, 1998 16,000,000
February 28, 1999 16,000,000
May 31, 1999 16,000,000
August 31, 1999 16,000,000
November 30, 1999 16,000,000
February 28, 2000 16,000,000
May 31, 2000 16,000,000
August 31, 2000 22,000,000
November 30, 2000 22,000,000
February 28, 2001 22,000,000
May 31, 2001 22,000,000
August 31, 2001 22,000,000
November 30, 2001 22,000,000
February 28, 2002 22,000,000
May 31, 2002 22,000,000
August 31, 2002 22,000,000
November 30, 2002 22,000,000
February 28, 2003 22,000,000
May 31, 2003 22,000,000
August 31, 2003 22,000,000
November 30, 2003 22,000,000
February 28, 2004 22,000,000
Tranche A Term
Loan Maturity Date 22,000,000
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(b) The Tranche B Term Loan of each Tranche B Lender shall
mature, and the Company unconditionally promises to pay such Tranche B Term Loan
to the General Administrative Agent for the account of such Tranche B Lender, in
28 consecutive quarterly installments, commencing on August 31, 1998, each of
which shall be in an amount equal to such Lender's Tranche B Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
INSTALLMENT PRINCIPAL AMOUNT
----------- ----------------
August 31, 1998 US$1,375,000
November 30, 1998 1,375,000
February 28, 1999 1,375,000
May 31, 1999 1,375,000
August 31, 1999 1,375,000
November 30, 1999 1,375,000
February 28, 2000 1,375,000
May 31, 2000 1,375,000
August 31, 2000 1,375,000
November 30, 2000 1,375,000
February 28, 2001 1,375,000
May 31, 2001 1,375,000
August 31, 2001 1,375,000
November 30, 2001 1,375,000
February 28, 2002 1,375,000
May 31, 2002 1,375,000
August 31, 2002 1,375,000
November 30, 2002 1,375,000
February 28, 2003 1,375,000
May 31, 2003 1,375,000
August 31, 2003 1,375,000
November 30, 2003 1,375,000
February 28, 2004 1,375,000
May 31, 2004 1,375,000
August 31, 2004 129,250,000
November 30, 2004 129,250,000
February 28, 2005 129,250,000
Tranche B Term Loan Maturity Date 129,250,000
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<PAGE>
(c) The Tranche C Term Loan of each Tranche C Lender shall
mature, and the Company unconditionally promises to pay such Tranche C Term Loan
to the General Administrative Agent for the account of such Tranche C Lender, in
32 consecutive quarterly installments, commencing on August 31, 1998, each of
which shall be in an amount equal to such Lender's Tranche C Term Loan
Percentage multiplied by the amount set forth below opposite such installment:
INSTALLMENT PRINCIPAL AMOUNT
August 31, 1998 US$1,375,000
November 30, 1998 1,375,000
February 28, 1999 1,375,000
May 31, 1999 1,375,000
August 31, 1999 1,375,000
November 30, 1999 1,375,000
February 28, 2000 1,375,000
May 31, 2000 1,375,000
August 31, 2000 1,375,000
November 30, 2000 1,375,000
February 28, 2001 1,375,000
May 31, 2001 1,375,000
August 31, 2001 1,375,000
November 30, 2001 1,375,000
February 28, 2002 1,375,000
May 31, 2002 1,375,000
August 31, 2002 1,375,000
November 30, 2002 1,375,000
February 28, 2003 1,375,000
May 31, 2003 1,375,000
August 31, 2003 1,375,000
November 30, 2003 1,375,000
February 28, 2004 1,375,000
May 31, 2004 1,375,000
August 31, 2004 1,375,000
November 30, 2004 1,375,000
February 28, 2005 1,375,000
May 31, 2005 1,375,000
August 31, 2005 127,875,000
November 30, 2005 127,875,000
February 28, 2006 127,875,000
Tranche C Term
Loan Maturity Date 127,875,000
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2.4 REVOLVING CREDIT COMMITMENTS (a) Subject to the terms and
conditions hereof, each Revolving Credit Lender severally agrees to make
revolving credit loans ("REVOLVING CREDIT LOANS") to the Company from time to
time during the Revolving Credit Commitment Period in an aggregate principal
amount such that, after giving effect thereto, the aggregate outstanding
principal amount of such Lender's Revolving Credit Loans will not exceed the
lesser of (i) such Lender's Revolving Credit Commitment less such Lender's
Revolving Credit Percentage of the L/C Obligations then outstanding, and (ii)
such Lender's Revolving Credit Percentage of $300,000,000. During the Revolving
Credit Commitment Period the Company may use the Revolving Credit Commitments by
borrowing, prepaying the Revolving Credit Loans in whole or in part, and
reborrowing, all in accordance with the terms and conditions hereof. The
Revolving Credit Loans may from time to time be LIBOR Loans or Base Rate Loans,
as determined by the Company and notified to the General Administrative Agent in
accordance with Sections 2.5 and 6.4, PROVIDED that no Revolving Credit Loan
shall be made as a LIBOR Loan after the day that is one month prior to the
Revolving Credit Termination Date.
(b) The Company unconditionally promises to pay to the General
Administrative Agent for the account of the Revolving Credit Lenders all
outstanding Revolving Credit Loans on the Revolving Credit Termination Date.
2.5 PROCEDURE FOR REVOLVING CREDIT BORROWING. The Company may
borrow under the Revolving Credit Commitments during the Revolving Credit
Commitment Period on any Business Day, PROVIDED that the Company shall give the
General Administrative Agent irrevocable written notice (which notice must be
received by the General Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the case
of LIBOR Loans, or (b) one Business Day prior to the requested Borrowing Date,
in the case of Base Rate Loans), specifying (i) the amount and Type of Revolving
Credit Loans to be borrowed, (ii) the requested Borrowing Date and (iii) in the
case of LIBOR Loans, the respective amounts of each such Type of Loan and the
respective lengths of the initial Interest Periods therefor. Each borrowing
under the Revolving Credit Commitments shall be in an amount equal to (x) in the
case of Base Rate Loans, $1,000,000 or a multiple of $500,000 in excess thereof
(or, if the then aggregate Available Revolving Credit Commitments are less than
$1,000,000, such lesser amount) and (y) in the case of LIBOR Loans, $5,000,000
or a whole multiple of $1,000,000 in excess thereof. Upon receipt of any such
notice from the Company, the General Administrative Agent shall promptly notify
each Revolving Credit Lender thereof. Each Revolving Credit Lender will make the
amount of its PRO RATA share of each borrowing available to the General
Administrative Agent for the account of the Company at the office of the General
Administrative Agent specified in Section 14.2 prior to 12:00 Noon, New York
City time, on the Borrowing Date requested by the Company in funds immediately
available to the General Administrative Agent. Such borrowing will then be made
available to the Company by the General Administrative Agent crediting the
account of the Company at the office of The Toronto-Dominion Bank at 909 Fannin
Street, Suite 1700, Houston, TX 77010 with the aggregate of the amounts made
available to the General Administrative Agent by the Revolving Credit Lenders
and in like funds as received by the General Administrative Agent.
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2.6 TERMINATION OR REDUCTION OF REVOLVING CREDIT COMMITMENT.
The Company shall have the right, upon not less than three Business Days'
irrevocable written notice to the General Administrative Agent, to terminate the
Revolving Credit Commitments or, from time to time, to reduce the amount of the
Revolving Credit Commitments without premium or penalty; PROVIDED that no such
termination or reduction of Revolving Credit Commitments shall be permitted if,
after giving effect thereto and to any prepayments of the Revolving Credit Loans
made on the effective date thereof, the Total Revolving Extensions of Credit
would exceed the Revolving Credit Commitments then in effect. Any such reduction
shall be in an amount equal to $5,000,000, or a whole multiple of $1,000,000 in
excess thereof, and shall reduce permanently the Revolving Credit Commitments
then in effect.
2.7 EVIDENCE OF DEBT. (a) Each U.S. Lender shall maintain in
accordance with its usual practice an account or accounts evidencing
indebtedness of the Company to such Lender resulting from each U.S. Loan of such
Lender from time to time, including the amounts of principal and interest
payable and paid to such Lender from time to time under this Agreement.
(b) The General Administrative Agent shall maintain the
Register pursuant to Section 14.6(d), and a subaccount therein for each U.S.
Lender, in which shall be recorded (i) the amount of each Revolving Credit Loan
and U.S. Term Loan made hereunder, the Type thereof and each Interest Period
applicable thereto, (ii) the amount of any principal or interest due and payable
or to become due and payable from the Company to each U.S. Lender hereunder and
(iii) both the amount of any sum received by the General Administrative Agent
hereunder from the Company and each Lender's share thereof.
(c) The entries made in the Register and the accounts of each
U.S. Lender maintained pursuant to Section 2.7(a) shall, to the extent permitted
by applicable law, be PRIMA FACIE evidence of the existence and amounts of the
obligations of the Company therein recorded; PROVIDED, HOWEVER, that the failure
of any Lender or the General Administrative Agent to maintain the Register or
any such account, or any error therein, shall not in any manner affect the
obligation of the Company to repay (with applicable interest) the U.S. Loans
made to the Company by such U.S. Lender in accordance with the terms of this
Agreement.
(d) The Company agrees that, upon the request to the General
Administrative Agent by any U.S. Lender, the Company will execute and deliver to
such Lender (i) a promissory note of the Company evidencing the Revolving Credit
Loans of such Lender, substantially in the form of Exhibit C with appropriate
insertions as to date and principal amount (a "REVOLVING CREDIT NOTE"), and/or
(ii) a promissory note of the Company evidencing the Tranche A Term Loans,
Tranche B Term Loan or Tranche C Term Loan, as the case may be, of such Lender,
substantially in the form of Exhibit D with appropriate insertions as to date
and principal amount (a "U.S. TERM NOTE").
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SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Pursuant to the Existing Credit
Agreement, the Issuing Lenders specified on Schedule 1.1C have issued the
letters of credit described on Schedule 1.1C (the "EXISTING LETTERS OF CREDIT"),
which from and after the Closing Date shall continue to be "Letters of Credit"
hereunder. Subject to the terms and conditions hereof, each Issuing Lender, in
reliance on the agreements of the other Revolving Credit Lenders set forth in
Section 3.4(a), agrees to issue letters of credit (together with the Existing
Letters of Credit, the "LETTERS OF CREDIT") for the account of the Company on
any Business Day during the Revolving Credit Commitment Period in such form as
may be approved from time to time by such Issuing Lender; PROVIDED that (i) no
Issuing Lender shall issue any Letter of Credit if, after giving effect to such
issuance, the L/C Obligations would exceed the L/C Commitment or the Total
Revolving Extensions of Credit would exceed the Revolving Credit Commitments of
all Lenders and (ii) no Issuing Lender shall issue any Letter of Credit unless
it shall have received notice from the General Administrative Agent that the
issuance of such Letter of Credit will not violate the foregoing clause (i) of
this proviso. Each Letter of Credit shall (i) be denominated in U.S. Dollars and
(ii) expire no later than the earlier of (x) the first anniversary of its date
of issuance and (y) the date which is five Business Days prior to the Revolving
Credit Termination Date, PROVIDED that any Letter of Credit with a one-year term
may provide for the renewal thereof for additional one-year periods (which shall
in no event extend beyond the date referred to in the foregoing clause (y) of
this proviso).
(b) Each Letter of Credit shall be subject to the Uniform
Customs and, to the extent not inconsistent therewith, the laws of the State of
New York.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Company
may from time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein an
Application therefor, completed to the satisfaction of such Issuing Lender, and
such other certificates, documents and other papers and information as such
Issuing Lender may request. Upon receipt of any Application, each Issuing Lender
agrees to process such Application and the certificates, documents and other
papers and information delivered to it in connection therewith in accordance
with its customary procedures and shall promptly issue the Letter of Credit
requested thereby (but in no event shall such Issuing Lender be required to
issue any Letter of Credit earlier than three Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by such
Issuing Lender and the Company. Each Issuing Lender shall furnish a copy of each
Letter of Credit by it hereunder to the Company promptly following the issuance
thereof. Each Issuing Lender shall promptly furnish to the General
Administrative Agent, which shall in turn promptly furnish to the Revolving
Credit Lenders, notice of the issuance of each Letter of Credit (including the
amount thereof).
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3.3 COMMISSIONS, FEES AND OTHER CHARGES. (a) The Company shall
pay to the General Administrative Agent, for the account of the Revolving Credit
Lenders, a letter of credit commission with respect to each Letter of Credit
outstanding under this Agreement for the period from the Issuance Date of such
Letter of Credit (or, in the case of the Existing Letters of Credit, from the
Closing Date) to the expiration or termination of such Letter of Credit,
computed at a per annum rate equal to (i) the Applicable Margin then in effect
with respect to LIBOR Loans under the Revolving Credit Facility LESS (ii) 1/4 of
1% (the fronting fee referred to in paragraph (b) below) on the average
aggregate amount available to be drawn under such Letter of Credit during the
period for which such fee is calculated. Such commission shall be shared ratably
among the Revolving Credit Lenders and payable quarterly in arrears on each L/C
Fee Payment Date to occur after the respective Issuance Date (or the Closing
Date, as the case may be) and on the Revolving Credit Termination Date and shall
be nonrefundable.
(b) The Company shall pay to the relevant Issuing Lender with
respect to each Letter of Credit issued by such Issuing Lender under this
Agreement, for its own account, a fronting fee with respect to the period from
the Issuance Date of such Letter of Credit to the expiration or termination date
of such Letter of Credit, computed at a rate of 1/4 of 1% per annum on the
average aggregate amount available to be drawn under such Letter of Credit
during the period for which such fee is calculated. Such fronting fee shall be
payable in arrears on each L/C Fee Payment Date to occur after the Issuance Date
(or the Closing Date, as the case may be) and on the Revolving Credit
Termination Date and shall be nonrefundable.
(c) In addition to the foregoing fees and commissions, the
Company shall pay or reimburse each Issuing Lender for such normal and customary
costs and expenses as are incurred or charged by such Issuing Lender in issuing,
negotiating, effecting payment under, amending or otherwise administering any
Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) Effective on the Closing Date, in
respect of each Existing Letter of Credit, and effective on the Issuance Date,
in respect of each Letter of Credit issued after the Closing Date, each Issuing
Lender irrevocably agrees to grant and hereby grants to each L/C Participant
(other than such Issuing Lender), and, to induce such Issuing Lender to issue
Letters of Credit hereunder, each L/C Participant irrevocably agrees to accept
and purchase and hereby accepts and purchases from such Issuing Lender, on the
terms and conditions hereinafter stated, for such L/C Participant's own account
an undivided interest equal to such L/C Participant's Revolving Credit
Percentage in such Issuing Lender's obligations and rights under each Letter of
Credit issued hereunder and the amount of each draft paid by such Issuing Lender
thereunder. Each L/C Participant unconditionally and irrevocably agrees with
each Issuing Lender that, if a draft is paid under any Letter of Credit for
which such Issuing Lender is not reimbursed in full by the Company in accordance
with the terms of this Agreement, such L/C Participant shall pay to such Issuing
Lender upon demand at such Issuing Lender's address for notices specified herein
an amount equal to such L/C Participant's Revolving Credit Percentage of the
amount of such draft, or any part thereof, which is not so reimbursed.
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(b) If any amount required to be paid by any L/C Participant
to any Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by such Issuing Lender under any Letter of Credit
issued by such Issuing Lender is not paid when due but is paid within three
Business Days after the date such payment is due, such L/C Participant shall pay
to such Issuing Lender on demand an amount equal to the product of (i) such
amount, times (ii) the daily average Federal Funds Effective Rate during the
period from and including the date such payment is required to the date on which
such payment is immediately available to such Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360. If any such amount required to be
paid by any L/C Participant pursuant to Section 3.4(a) is not made available to
any Issuing Lender by such L/C Participant within three Business Days after the
date such payment is due, such Issuing Lender shall be entitled to recover from
such L/C Participant, on demand, such amount with interest thereon calculated
from such due date at the rate per annum applicable to Base Rate Loans under the
Revolving Credit Facility. A certificate of any Issuing Lender submitted to any
L/C Participant with respect to any amounts owing under this Section shall be
conclusive in the absence of manifest error.
(c) Whenever, at any time after any Issuing Lender has made
payment under any Letter of Credit issued by such Issuing Lender and has
received from any L/C Participant its PRO RATA share of such payment in
accordance with Section 3.4(a), such Issuing Lender receives any payment related
to such Letter of Credit (whether directly from the Company or otherwise,
including proceeds of collateral applied thereto by such Issuing Lender, but
excluding payments from L/C Participants), or any payment of interest on account
thereof, such Issuing Lender will distribute to such L/C Participant its PRO
RATA share thereof; PROVIDED, HOWEVER, that in the event that any such payment
received by such Issuing Lender shall be required to be returned by such Issuing
Lender, such L/C Participant shall return to such Issuing Lender the portion
thereof previously distributed by such Issuing Lender to it.
3.5 REIMBURSEMENT OBLIGATION OF THE COMPANY. If any draft
shall be presented for payment under any Letter of Credit issued by any Issuing
Lender, such Issuing Lender shall promptly notify the Company of the date and
amount thereof. If any Issuing Lender notifies the Company prior to 10:00 a.m.,
New York City time, on any Business Day, of any drawing under any Letter of
Credit issued by it, the Company shall reimburse such Issuing Lender with
respect to such drawing on the next succeeding Business Day. If any Issuing
Lender notifies the Company after 10:00 a.m., New York City time, on any
Business Day of any drawing under any Letter of Credit issued by it, the Company
shall reimburse such Issuing Lender with respect to such drawing on the second
succeeding Business Day. Interest shall be payable on any and all amounts drawn
under Letters of Credit from the date of such drawing until the date on which
reimbursement of such amount is due pursuant to the two immediately preceding
sentences at the interest rate then applicable to Base Rate Loans made under the
Revolving Credit Facility. In addition, the Company agrees to reimburse each
Issuing Lender for any taxes, fees, charges or other costs or expenses incurred
by such Issuing Lender in connection with any payment under any Letter of Credit
issued by such Issuing Lender. Each payment by the Company pursuant to this
Section 3.5 shall be made to the relevant Issuing Lender at its address for
notices specified herein in U.S. Dollars and in immediately available funds.
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3.6 OBLIGATIONS ABSOLUTE. The Company's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment which the
Company may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Company also agrees with each Issuing
Lender that such Issuing Lender shall not be responsible for, and the Company's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Company and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Company against any
beneficiary of such Letter of Credit or any such transferee. No Issuing Lender
shall 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 for errors or omissions found by a
final and nonappealable decision of a court of competent jurisdiction to have
resulted from the gross negligence or willful misconduct of such Issuing Lender.
The Company agrees that any action taken or omitted by any Issuing Lender under
or in connection with any Letter of Credit or the related drafts or documents,
if done in the absence of gross negligence or willful misconduct and in
accordance with the standards of care specified in the Uniform Commercial Code
of the State of New York, shall be binding on the Company and shall not result
in any liability of such Issuing Lender to the Company.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented
for payment under any Letter of Credit issued by any Issuing Lender, such
Issuing Lender shall promptly notify the Company of the date and amount thereof.
The responsibility of each Issuing Lender to the Company in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are substantially in
conformity with such Letter of Credit.
3.8 APPLICATIONS. To the extent that any provision of any
Application related to any Letter of Credit is inconsistent with the provisions
of this Section 3 or any other provision of this Agreement, the provisions of
this Section 3 or such other provisions of this Agreement shall apply.
SECTION 4. AMOUNT AND TERMS OF THE CANADIAN TERM LOAN
COMMITMENTS
4.1 CANADIAN TERM LOAN COMMITMENTS. (a) Subject to the terms
and conditions hereof, each Canadian Lender severally agrees to make term loans
(each, a "CANADIAN TERM LOAN") in Canadian Dollars to the Canadian Borrower on
the Closing Date in an aggregate principal amount not exceeding the Canadian
Term Loan Commitment of such Canadian Lender; PROVIDED, that after giving effect
to such Canadian Term Loans, the Total Aggregate Canadian Term Loan Outstandings
shall not exceed the Canadian Facility Maximum Amount.
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(b) Subject to the terms and conditions hereof, each Canadian
Lender severally agrees from time to time during the Canadian Facility
Commitment Period to convert maturing Acceptances created by it into Canadian
Term Loans in a principal amount not to exceed the face amount of such maturing
Acceptances; PROVIDED, that no such conversion shall occur if, after giving
effect thereto, the Total Aggregate Canadian Term Loan Outstandings would exceed
the Canadian Facility Maximum Amount at such time.
4.2 PROCEDURE FOR CANADIAN TERM LOAN BORROWING. The Canadian
Borrower shall give the Canadian Administrative Agent irrevocable written notice
(which notice must be received by the Canadian Administrative Agent prior to
10:00 a.m., Toronto time, at least two Business Days prior to the requested
Borrowing Date) requesting that the Canadian Term Loan Lenders make Canadian
Term Loans (or convert Acceptances into Canadian Term Loans) on a specified
Borrowing Date and specifying the amount to be borrowed or converted. Upon
receipt of such notice, the Canadian Administrative Agent shall promptly notify
each Canadian Lender thereof. In the case of any Canadian Term Loans other than
Canadian Term Loans resulting from the conversion of Acceptances pursuant to
Section 4.1(b), not later than 11:00 a.m., Toronto time, on the Borrowing Date
therefor, each Canadian Term Loan Lender shall make available to the Canadian
Administrative Agent at its office specified in Section 14.2 an amount in
Canadian Dollars in immediately available funds equal to the Canadian Term Loan
to be made by such Canadian Lender on such Borrowing Date. The Canadian
Administrative Agent shall on such date credit the account of the Canadian
Borrower at the office of The Toronto-Dominion Bank at Toronto Dominion Centre
Branch, 55 King Street West and Bay Street, Toronto, Ontario M5K 1A2 with the
aggregate of the amounts made available to the Canadian Administrative Agent by
the Canadian Lenders in like funds as received by the Canadian Administrative
Agent. In the case of any Canadian Term Loans resulting from the conversion of
Acceptances pursuant to Section 4.1(b), the proceeds of such Canadian Term Loans
made by each Canadian Lender, together with such additional funds of the
Canadian Borrower as may be necessary, shall be applied by it to repay the
maturing Acceptance being converted into such Canadian Term Loans.
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4.3 REDUCTION OF CANADIAN FACILITY; REPAYMENT OF CANADIAN TERM
LOANS. (a) The amount available under the Canadian Term Loans and the
Acceptances and Acceptance Notes shall be permanently reduced in 24 consecutive
quarterly installments, commencing on August 31, 1998, each of which shall be in
an amount equal to the equivalent in Canadian Dollars (determined in accordance
with Section 4.3(b)) of the amount set forth below opposite such installment
date (each, a "CANADIAN FACILITY AMORTIZATION DATE"):
INSTALLMENT PRINCIPAL AMOUNT
August 31, 1998 US$2,750,000
November 30, 1998 2,750,000
February 28, 1999 2,750,000
May 31, 1999 2,750,000
August 31, 1999 2,750,000
November 30, 1999 2,750,000
February 28, 2000 2,750,000
May 31, 2000 2,750,000
August 31, 2000 3,000,000
November 30, 2000 3,000,000
February 28, 2001 3,000,000
May 31, 2001 3,000,000
August 31, 2001 3,000,000
November 30, 2001 3,000,000
February 28, 2002 3,000,000
May 31, 2002 3,000,000
August 31, 2002 3,000,000
November 30, 2002 3,000,000
February 28, 2003 3,000,000
May 31, 2003 3,000,000
August 31, 2003 3,000,000
November 30, 2003 3,000,000
February 28, 2004 3,000,000
Canadian Facility
Termination Date 3,000,000
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Accordingly, on each Canadian Facility Amortization Date, the
Canadian Borrower unconditionally agrees to pay to the Canadian Administrative
Agent, for the account of each Canadian Lender, a principal amount of the
Canadian Term Loans of such Canadian Lender, which, together with the face
amount of Acceptances created by such Canadian Lender that mature and are being
repaid on such date (and not replaced with other Acceptances or converted into
Canadian Term Loans), is equal to such Canadian Lender's Canadian Term Loan
Commitment Percentage of the amount set forth opposite such Canadian Facility
Amortization Date above.
(b) Not later than three Business Days prior to the Closing
Date, the Canadian Administrative Agent and the Canadian Borrower will
determine, based on then-prevailing market conditions, the exchange rate for
conversion into Canadian Dollars of the U.S. Dollar amount of the Canadian Term
Loan Commitments and the U.S. Dollar amount of each installment set forth in
Section 4.3(a), which determination shall be conclusive and binding on all
parties hereto. The Canadian Administrative Agent will advise the Canadian
Lenders of the results of such determination, and specify the amount in Canadian
Dollars of each Canadian Lender's Canadian Term Loan Commitment, prior to or
concurrently with the notice of borrowing given to the Canadian Lenders pursuant
to Section 4.2.
4.4 EVIDENCE OF DEBT. (a) Each Canadian Lender shall maintain
in accordance with its usual practice an account or accounts evidencing
indebtedness of the Canadian Borrower to such Canadian Lender resulting from the
Canadian Term Loans of such Canadian Lender, including the amounts of principal
and interest payable thereon and paid to such Canadian Lender from time to time
under this Agreement.
(b) The Canadian Administrative Agent (and the General
Administrative Agent) shall maintain the Register pursuant to Section 14.6(d),
and a subaccount therein for each Canadian Lender, in which shall be recorded
(i) the amount of each Canadian Term Loan made hereunder, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Canadian Borrower to each Canadian Lender hereunder in respect of the Canadian
Term Loans and (iii) both the amount of any sum received by the Canadian
Administrative Agent hereunder from the Canadian Borrower in respect of the
Canadian Term Loans and each Canadian Lender's share thereof.
(c) The entries made in the Register and the accounts of each
Canadian Lender maintained pursuant to Section 4.4(a) shall, to the extent
permitted by applicable law, be PRIMA FACIE evidence of the existence and
amounts of the obligations of the Canadian Borrower therein recorded; PROVIDED,
HOWEVER, that the failure of any Canadian Lender or the Canadian Administrative
Agent to maintain the Register or any such account, or any error therein, shall
not in any manner affect the obligation of the Canadian Borrower to repay (with
applicable interest) the Canadian Term Loans made to the Canadian Borrower by
such Canadian Lender in accordance with the terms of this Agreement.
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(d) The Canadian Borrower agrees that, upon request to the
Canadian Administrative Agent by any Canadian Lender, it will execute and
deliver to such Canadian Lender a promissory note of the Canadian Borrower
evidencing the Canadian Term Loans of such Canadian Lender, substantially in the
form of Exhibit E with appropriate insertions as to date and principal amount
(each, a "CANADIAN TERM LOAN NOTE").
SECTION 5. AMOUNT AND TERMS OF THE ACCEPTANCES
5.1 ACCEPTANCE COMMITMENTS. (a) Pursuant to the Existing
Credit Agreement, the Canadian Lenders (as defined under the Existing Credit
Agreement, the "EXISTING ACCEPTANCE LENDERS") have created (i) the Acceptances
described on Schedule 1.1D (the "EXISTING ACCEPTANCES"), which from and after
the Closing Date shall continue to be "Acceptances" hereunder and (ii) the
Acceptances described on Schedule 1.1E (the "SPECIFIED ACCEPTANCES"), which will
be repaid in full on the Closing Date. As of the Closing Date, The
Toronto-Dominion Bank, as a Canadian Lender, shall have entered into an
indemnity agreement with the Existing Acceptance Lenders with respect to amounts
to be paid to the Existing Acceptance Lenders in respect of the Existing
Acceptances and, as of the Closing Date, The Toronto-Dominion Bank shall be
deemed to have created all of the Existing Acceptances. In the event that any
Acceptances are outstanding on the date on which any Canadian Lender other than
The Toronto-Dominion Bank becomes a party to this Agreement, such Canadian
Lender shall enter into an indemnity agreement with The Toronto-Dominion Bank
with respect to such Existing Acceptances, in form and substance satisfactory to
such Canadian Lender and The Toronto-Dominion Bank.
(b) Subject to the terms and conditions hereof, each Canadian
Lender severally agrees during the Canadian Facility Commitment Period to
convert Canadian Term Loans made by such Canadian Lender to Acceptances in an
aggregate face amount not to exceed the aggregate principal amount of such
Canadian Term Loans; provided, that no such conversion shall occur if, (i) after
giving effect to such conversion and to the repayment of any portion of maturing
Acceptances not being so converted, the Total Aggregate Canadian Term Loan
Outstandings would exceed the Canadian Facility Maximum Amount at such time or
(ii) prior to the maturity of such Acceptances a Canadian Facility Amortization
Date will occur and, after giving effect to the reduction in the Canadian
Facility Maximum Amount on such date, the Total Aggregate Canadian Term Loan
Outstandings will exceed the Canadian Facility Maximum Amount. Notwithstanding
the foregoing, during the period prior to completion of the Syndication of the
Facilities, the Canadian Borrower will consult with the Canadian Administrative
Agent with respect to any request for Acceptances, and during such period no
Acceptance will be created having a maturity later than the date on which the
syndication of the Facilities is expected to be completed.
5.2 CREATION OF ACCEPTANCES. (a) The Canadian Borrower may
request the creation of Acceptances hereunder by submitting to the Canadian
Administrative Agent at its office in Canada specified in Section 14.2 prior to
11:00 a.m., Toronto time, two Business Days prior to the requested Borrowing
Date, (i) a request for acceptances, substantially in the form of Exhibit A-2
(each, a "REQUEST FOR ACCEPTANCES") completed in a manner and in form and
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substance reasonably satisfactory to the Canadian Administrative Agent and
specifying, among other things, the Borrowing Date, term in months and amount of
the Drafts to be accepted and discounted, and (ii) such other certificates,
documents and other papers and information as the Canadian Administrative Agent
may reasonably request. Upon receipt of any such Request for Acceptances, the
Canadian Administrative Agent shall promptly notify each Canadian Lender of
details thereof, including each Canadian Lender's share of the amount of Drafts
to be accepted and discounted.
(b) The Canadian Borrower hereby irrevocably authorizes each
Canadian Lender to draw Drafts on such Canadian Lender, in the name of and on
behalf of the Canadian Borrower, and to complete such Drafts in accordance with
the Requests for Acceptances submitted from time to time pursuant to Section
5.2(a). Drafts so completed and signed on behalf of the Canadian Borrower by any
Canadian Lender shall bind the Canadian Borrower as fully and effectively as if
so performed by an authorized officer of the Canadian Borrower. Any executed
Drafts which are held by any Canadian Lender need only be held in safekeeping
with the same degree of care as if they were such Canadian Lender's own property
and such Canadian Lender was keeping them at the place at which they are to be
held. The Canadian Borrower shall, by written notice to the Canadian
Administrative Agent, designate the persons authorized to sign Requests for
Acceptance. Neither the Canadian Administrative Agent nor any Canadian Lender
nor any of their respective directors, officers, employees or representatives
shall be liable for any action taken or omitted to be taken by any of them under
this Section 5 except for its own gross negligence or willful misconduct.
(c) Each Request for Acceptances made by or on behalf of the
Canadian Borrower hereunder shall contain a request for Acceptances denominated
in Canadian Dollars and having an aggregate undiscounted face amount equal to
C$5,000,000 or a whole multiple of C$1,000,000 in excess thereof. Each
Acceptance shall be dated the Borrowing Date specified in the Request for
Acceptances with respect thereto and shall be stated to mature on a Business Day
which is not less than one month and not more than six months after the date
thereof; PROVIDED, that no Acceptance shall mature after the Canadian Facility
Termination Date.
(d) Not later than 12:00 noon, Toronto time, on the Borrowing
Date specified in the relevant Request for Acceptances, each Canadian Lender
will, in accordance with such Request for Acceptances, (i) sign each Draft on
behalf of the Canadian Borrower pursuant to Section 5.3(b), (ii) complete the
date, amount and maturity of each Draft to be accepted, (iii) accept such Drafts
and give notice to the Canadian Administrative Agent of such acceptance and (iv)
upon such acceptance, purchase such Acceptances to the extent contemplated by
Section 5.3.
5.3 PURCHASE OF ACCEPTANCES. (a) Each Canadian Lender hereby
agrees, on the terms and subject to the conditions set forth in this Agreement,
to purchase Acceptances created by it on the Borrowing Date with respect thereto
for the applicable Acceptance Purchase Price and to notify the Canadian
Administrative Agent that such Draft has been accepted and purchased by such
accepting Canadian Lender.
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(b) In the event that the Canadian Administrative Agent
receives a Request for Acceptances to be created upon conversion of Canadian
Term Loans pursuant to Section 5.1, then the Canadian Borrower shall pay on the
requested Borrowing Date to the Canadian Administrative Agent, for the account
of the Canadian Lenders, the principal amount of the then outstanding Canadian
Term Loans being so converted, and each Canadian Lender shall accept and
purchase the Canadian Borrower's Drafts having an aggregate face amount not
greater than the principal amount of the Canadian Term Loans of such Canadian
Lender which are then being converted (it being understood and agreed that for
the purposes of this Section 5.3(b), such payment by the Canadian Borrower of
such outstanding Canadian Term Loans may be in part from the Acceptance Purchase
Price of such Drafts); PROVIDED that, following the occurrence and during the
continuance of a Default or an Event of Default, no Acceptances may be created.
(c) Acceptances purchased by any Canadian Lender may be held
by it for its own account until maturity or sold by it at any time prior thereto
in the relevant market therefor in Canada in such Canadian Lender's sole
discretion.
5.4 STAMPING FEES. On the Borrowing Date with respect to each
Acceptance, the Canadian Borrower shall pay to the Canadian Administrative
Agent, for the account of the Canadian Lenders, a stamping fee on the
undiscounted face amount of such Acceptance, computed at the rate per annum in
effect on such Borrowing Date (determined in accordance with the Pricing Grid)
for the period from and including the Borrowing Date with respect to such
Acceptance to but not including the maturity of such Acceptance. On the Closing
Date, in consideration of the obligations undertaken by The Toronto-Dominion
Bank pursuant to the indemnity agreement entered into pursuant to the second
sentence of Section 5.1(a), the Canadian Borrower agrees to pay to The
Toronto-Dominion Bank an amount in respect of each Existing Acceptance equal to
(i) the amount of stamping fee that would have been payable under this Section
in respect of such Existing Acceptance if such Existing Acceptance had been
created on the Closing Date with the maturity date set forth in such Existing
Acceptance LESS (ii) the amount received or to be received by The
Toronto-Dominion Bank from the relevant Existing Acceptance Lender in respect of
such Existing Acceptance pursuant to the provisions of such indemnity agreement.
5.5 ACCEPTANCE REIMBURSEMENT OBLIGATIONS. (a) The Canadian
Borrower hereby unconditionally agrees to pay to the Canadian Administrative
Agent for the account of each Canadian Lender, on the maturity date (whether at
stated maturity, by acceleration or otherwise) for each Acceptance created by
such Canadian Lender, the aggregate undiscounted face amount of each such
then-maturing Acceptance. Without limiting the generality of the foregoing, the
Canadian Borrower hereby unconditionally agrees to pay to the Canadian
Administrative Agent for the account of The Toronto-Dominion Bank (and each
other Canadian Lender which has an interest therein pursuant to an indemnity
agreement entered into pursuant to the last sentence of Section 5.1(a)) on the
maturity date (whether at stated maturity, by acceleration or otherwise) for
each Existing Acceptance, the aggregate undiscounted face amount of each such
then-maturing Existing Acceptance.
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(b) The obligation of the Canadian Borrower to reimburse the
Canadian Lenders for then-maturing Acceptances may be satisfied by the Canadian
Borrower by:
(i) paying to the Canadian Administrative Agent, for the
account of the Canadian Lenders, an amount in Canadian Dollars and in
immediately available funds equal to the aggregate undiscounted face
amount of all Acceptances which are then maturing by 12:00 noon,
Toronto time, on such maturity date; PROVIDED that the Canadian
Borrower shall have given not less than two Business Days' prior notice
to the Canadian Administrative Agent (which shall promptly notify each
Canadian Lender thereof) of its intent to reimburse the Canadian
Lenders in the manner contemplated by this clause (i); or
(ii) having new Drafts accepted and purchased by the
Canadian Lenders in the manner contemplated by Sections 5.2 and 5.3 in
substitution for the then-maturing Acceptances; PROVIDED that (A) the
Canadian Borrower shall have delivered to the Canadian Administrative
Agent (which shall promptly provide a copy thereof to each Canadian
Lender) a duly completed Request for Acceptances not later than 11:00
a.m., Toronto time, two Business Days prior to such maturity date,
together with the documents, instruments, certificates and other papers
and information contemplated by Sections 5.2(a)(ii) and 5.2(a)(iii),
(B) each Canadian Lender shall retain the Acceptance Purchase Price for
the Acceptance created by it and apply such Acceptance Purchase Price
to the Acceptance Reimbursement Obligations of the Canadian Borrower in
respect of the maturing Acceptance created by such Canadian Lender, (C)
when the Acceptance Purchase Price so retained by such Canadian Lender
is less than the undiscounted face amount of the then-maturing
Acceptance, the Canadian Borrower shall have made arrangements
reasonably satisfactory to such Canadian Lender for payment of such
deficiency, (D) if any Default or Event of Default has occurred and is
then continuing, the Request for Acceptances shall be deemed to be a
request to convert such then-maturing Acceptances into Canadian Term
Loans in an aggregate amount equal to the undiscounted face amount of
the Acceptances requested, (E) no such Acceptance shall be created if,
after giving effect thereto, the Aggregate Canadian Term Loan
Outstandings would exceed the Canadian Facility Maximum Amount and (F)
the Canadian Borrower shall request Acceptances in amounts and with
maturity dates such that the Aggregate Canadian Term Loan Outstandings
can be reduced to an amount not greater than the Canadian Facility
Maximum Amount on each Canadian Facility Amortization Date; or
(iii) to the extent that the Canadian Borrower has not given
to the Canadian Administrative Agent a notice contemplated by clause
(i) or (ii) above, then the Canadian Borrower shall be deemed to have
requested a conversion pursuant to Section 4.1(b) of such then-maturing
Acceptances into Canadian Term Loans in an aggregate principal amount
equal to the undiscounted face amount of such then-maturing
Acceptances. The Borrowing Date with respect to such conversion shall
be the maturity date for such Acceptances. Except to the extent that
any of the events contemplated by clause (i) or (ii) of paragraph (f)
of Section 11 with respect to the Canadian Borrower has
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occurred and is then continuing (in which case the Canadian Borrower
shall be obligated to pay to each Canadian Lender the undiscounted face
amount of the Acceptances created by such Canadian Lender which are
then maturing), each Canadian Lender shall convert the then-maturing
Acceptances into Canadian Term Loans as contemplated by this Section
5.5(b)(iii) regardless of whether the conditions precedent to borrowing
set forth in this Agreement are then satisfied. The proceeds of any
Canadian Term Loans made pursuant to this Section 5.5(b)(iii) shall be
retained by the Canadian Lenders and applied by them to the Acceptance
Reimbursement Obligations of the Canadian Borrower in respect of the
then-maturing Acceptances.
(c) In no event shall the Canadian Borrower claim from any
Canadian Lender any grace period with respect to the payment at maturity of any
Acceptances created by such Canadian Lender pursuant to this Agreement.
5.6 ACCEPTANCES TO BE ALLOCATED IN ORDER TO BE CREATED
RATABLY. The Canadian Borrower hereby agrees that each Request for Acceptances,
reimbursement of Acceptances and conversion of Canadian Term Loans to
Acceptances shall be made in a manner so that any such Request for Acceptances,
reimbursement or conversion shall apply ratably to all Canadian Lenders in
accordance with their respective Canadian Term Loan Commitment Percentages. In
the event that the aggregate undiscounted face amount of Acceptances requested
by the Canadian Borrower to be created by all Canadian Lenders hereunder
pursuant to any Request for Acceptances is an amount which, if divided ratably
among the Canadian Lenders in accordance with their respective Canadian Term
Loan Commitment Percentages, would not result in each Canadian Lender accepting
a Draft which has an undiscounted face amount equal to C$100,000 or a whole
multiple of C$100,000 in excess thereof, then the Canadian Administrative Agent
is authorized by the Canadian Borrower and the Canadian Lenders to allocate
among the Canadian Lenders the Acceptances to be issued in such manner and
amounts as the Canadian Administrative Agent may, in its sole discretion, acting
reasonably, consider necessary, rounding up or down, so as to ensure that no
Canadian Lender is required to accept a Draft for a fraction of $100,000 and, in
such event, the Canadian Lenders' ratable share with respect to such Acceptances
shall be adjusted accordingly.
5.7 SPECIAL PROVISIONS RELATING TO ACCEPTANCE NOTES. (a) The
Canadian Borrower and each Canadian Lender hereby acknowledge and agree that
from time to time certain Canadian Lenders may not be authorized to or may, as a
matter of market availability, elect not to accept Drafts, and the Canadian
Borrower and each Canadian Lender agree that any such Canadian Lender may
purchase Acceptance Notes of the Canadian Borrower in accordance with the
provisions of Section 5.7(b) in lieu of creating Acceptances for its account.
(b) In the event that any Canadian Lender described in Section
5.7(a) above is unable to, or elects as a matter of market availability not to,
create Acceptances hereunder, such Canadian Lender shall not create Acceptances
hereunder, but rather, if the Canadian Borrower requests the creation of such
Acceptances, the Canadian Borrower shall deliver to such Canadian Lender
non-interest bearing promissory notes (each, an "ACCEPTANCE NOTE") of the
Canadian
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Borrower, substantially in the form of Exhibit G, having the same maturity as
the Acceptances to be created and in an aggregate principal amount equal to the
undiscounted face amount of such Acceptances. Each such Canadian Lender hereby
agrees to purchase Acceptance Notes from the Canadian Borrower at a purchase
price equal to the Acceptance Purchase Price which would have been applicable if
a Draft in the same aggregate face amount as the principal amount of its
Acceptance Notes had been accepted by it (less any stamping fee which would have
been paid pursuant to Section 5.4 if such Lender had created an Acceptance) and
such Acceptance Notes shall be governed by the provisions of this Section 5 as
if they were Acceptances.
SECTION 6. GENERAL PROVISIONS APPLICABLE TO LOANS AND
LETTERS OF CREDIT
6.1 COMMITMENT FEES, ETC. (a) The Company agrees to pay to the
General Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment of
such Lender during the period for which payment is made, payable quarterly in
arrears on the last day of each February, May, August and November and on the
Revolving Credit Termination Date, commencing on the first of such dates to
occur after the date hereof.
(b) The Company agrees to pay to the General Administrative
Agent for the account of each of the U.S. Term Loan Lenders a commitment fee for
the period from and including the Closing Date to the last day of U.S. Term Loan
Commitment Period, computed at the Commitment Fee Rate on the average daily
amount of the unutilized U.S. Term Loan Commitments of such Lender during such
period, payable quarterly in arrears on the last day of each February, May,
August and November and on the last day of the U.S. Term Loan Commitment Period,
commencing on the first of such dates to occur after the date hereof.
(c) The Company agrees to pay to the General Administrative
Agent and the Arranger the fees in the amounts and on the dates previously
agreed to in writing by the Company and the General Administrative Agent and the
Arranger.
6.2 OPTIONAL PREPAYMENTS. (a) Subject to the provisions of
Section 6.3(i), the Company may at any time and from time to time prepay the
U.S. Loans, in whole or in part, without premium or penalty, upon at least three
Business Days' irrevocable notice to the General Administrative Agent,
specifying the date and amount of prepayment and whether the prepayment is of
LIBOR Loans or Base Rate Loans, PROVIDED, that if a LIBOR Loan is prepaid on any
day other than the last day of the Interest Period applicable thereto, the
Company shall also pay any amounts owing pursuant to Section 6.13. Upon receipt
of any such notice, the General Administrative Agent shall promptly notify each
relevant U.S. Lender thereof. If any such notice is given, the amount specified
in such notice shall be due and payable on the date specified therein, together
with any amounts payable pursuant to Section 6.13 and, except in the case of
Revolving
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Credit Loans that are Base Rate Loans, accrued interest to such date on the
amount prepaid. Amounts prepaid on account of the U.S. Term Loans may not be
reborrowed. Partial prepayments of U.S. Loans shall be in an aggregate principal
amount of not less than $5,000,000 and whole multiples of $1,000,000 in excess
thereof.
(b) Subject to Section 6.3(i), the amount of each optional
prepayment of the U.S. Term Loans under any Facility shall be applied to reduce
the then remaining installments of the U.S. Term Loans under such Facility, PRO
RATA based upon the then remaining number of installments thereof, after giving
effect to all prior reductions thereto (I.E., each then remaining installment of
the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term Loans, as the
case may be, shall be reduced by an amount equal to the aggregate amount to be
applied to the Tranche A Term Loans, Tranche B Term Loans or Tranche C Term
Loans, as the case may be, divided by the number of the then remaining
installments for such Tranche A Term Loans, Tranche B Term Loans or Tranche C
Term Loans); PROVIDED, that if the amount to be so applied to any installment
would exceed the then remaining amount of such installment, then an amount equal
to such excess shall be applied to the next succeeding installment after giving
effect to all prior reductions thereto (including the amount of prepayments
theretofore allocated pursuant to the preceding portion of this sentence).
(c) The Canadian Borrower may at any time and from time to
time prepay the Canadian Term Loans, in whole or in part, without premium or
penalty, upon at least four Business Days' irrevocable notice to the Canadian
Administrative Agent, specifying the date and amount of prepayment. Upon receipt
of any such notice, the Canadian Administrative Agent shall promptly notify the
General Administrative Agent and each Canadian Lender thereof. If any such
notice is given, the amount specified in such notice shall be due and payable on
the date specified therein, together with accrued interest to such date on the
amount prepaid. Amounts prepaid on account of the Canadian Term Loans may not be
reborrowed except as provided in Section 5. Partial prepayments of Canadian Term
Loans shall be in an aggregate principal amount of not less than C$5,000,000 and
whole multiples of C$1,000,000 in excess thereof.
(d) The amount of each optional prepayment of the Canadian
Term Loans shall be applied to reduce the then remaining installments of the
Canadian Term Loans PRO RATA based upon the then remaining number of
installments thereof, after giving effect to all prior reductions thereto (I.E.,
each then remaining installment of the Canadian Term Loans shall be reduced by
an amount equal to the aggregate amount to be applied to the Canadian Term Loans
divided by the number of the then remaining installments for such Canadian Term
Loans); PROVIDED, that if the amount to be so applied to any installment would
exceed the then remaining amount of such installment, then an amount equal to
such excess shall be applied to the next succeeding installment after giving
effect to all prior reductions thereto (including the amount of prepayments
theretofore allocated pursuant to the preceding portion of this sentence).
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6.3 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) If
after the Closing Date any Capital Stock shall be sold or issued by Holdings,
the Company or any of its Subsidiaries (including, without limitation, any sales
pursuant to the exercise of warrants, but excluding (i) any issuance of common
stock in payment of interest under the Seller Note, (ii) any Permitted Employee
Stock Issuances, to the extent the proceeds of such Permitted Employee Stock
Issuances are contributed by Holdings to the Company and (iii) the issuance of
common stock of Holdings as a part of the consideration for the Exchange Offer
and the Merger), an amount equal to 50% of the Net Cash Proceeds thereof shall
be applied within three Business Days after the date of receipt of such Net Cash
Proceeds toward the prepayment of the Term Loans and Acceptances and the
reduction of the Revolving Credit Commitments as set forth in Section 6.3(e).
(b) If after the Closing Date any Indebtedness shall be issued
or incurred by Holdings, the Company or any of its Subsidiaries (excluding any
Indebtedness (other than Indebtedness evidenced by High Yield Notes) incurred in
accordance with Section 10.2 as in effect on the date of this Agreement), an
amount equal to 100% of the Net Cash Proceeds thereof shall be applied within
three Business Days after the date of such issuance or incurrence toward the
prepayment of the Term Loans and the Acceptances and the reduction of the
Revolving Credit Commitments (or, if required by Section 6.3(e), reduction of
the Tranche B-1 Term Loan Commitments and the Tranche C-1 Term Loan Commitments)
as set forth in Section 6.3(e).
(c) If after the Closing Date the Company or any of its
Subsidiaries (other than the Canadian Borrower or any of its Subsidiaries) shall
receive Net Cash Proceeds from any Asset Sale (including, without limitation,
any Net Cash Proceeds from any Dispositions permitted by clauses (e) and (f) of
Section 10.6 to the extent such proceeds exceed $225,000,000 in the aggregate)
or Recovery Event, an amount equal to 100% of such Net Cash Proceeds shall be
applied on such date toward the prepayment of the U.S. Term Loans and the
reduction of the Revolving Credit Commitments as set forth in Section 6.3(f). If
after the Closing Date the Canadian Borrower or any of its Subsidiaries shall
receive Net Cash Proceeds from any Asset Sale or Recovery Event, an amount equal
to 100% of such Net Cash Proceeds shall be applied on such date toward the
prepayment of the Total Aggregate Canadian Term Loan Outstandings and the
permanent reduction of the Canadian Facility Maximum Amount as set forth in
Section 6.3(g). Notwithstanding the foregoing, (i) no such prepayment or
reduction shall be required in respect of Asset Sales for which the Net Cash
Proceeds in any fiscal year aggregate up to (but do not exceed) $5,000,000 (in
the aggregate for the Company and its Subsidiaries, including the Canadian
Borrower and its Subsidiaries) and (ii) no such prepayment or reduction shall be
required in respect of any Asset Sales or any Recovery Event if the Company
delivers a Reinvestment Notice in respect of each such Asset Sale and Recovery
Event; PROVIDED, that, on each Reinvestment Prepayment Date, an amount equal to
the Reinvestment Prepayment Amount with respect to the relevant Reinvestment
Event shall be applied toward the prepayments and reductions required by Section
6.3(f) or 6.3(g), as applicable; and PROVIDED, FURTHER, that no Reinvestment
Notice shall be required in respect of Asset Sales for which no prepayment is
required pursuant to the foregoing clause (i) of this sentence.
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(d) If, for any fiscal year of Holdings commencing with the
fiscal year ending August 31, 1999, Holdings shall have Excess Cash Flow
(calculated without taking into account the Canadian Borrower and its
Subsidiaries), the Company shall, on the relevant Excess Cash Flow Application
Date, apply 75% of such Excess Cash Flow toward the prepayment of the Term Loans
and the reduction of the Revolving Credit Commitments as set forth in Section
6.3(f). If, for any fiscal year of the Canadian Borrower commencing with the
fiscal year ending August 31, 1999, the Canadian Borrower shall have Excess Cash
Flow, the Canadian Borrower shall, on the relevant Excess Cash Flow Application
Date, apply 75% of such Excess Cash Flow toward the prepayment of the Total
Aggregate Canadian Term Loan Outstandings and the permanent reduction of the
Canadian Facility Maximum Amount as set forth in Section 6.3(g). Each such
prepayment and reduction shall be made on a date (an "EXCESS CASH FLOW
APPLICATION DATE") no later than five days after the earlier of (i) the date on
which the financial statements of Holdings referred to in Section 9.1(a), for
the fiscal year with respect to which such prepayment is made, are required to
be delivered to the Lenders and (ii) the date such financial statements are
actually delivered. Notwithstanding the foregoing, if for any fiscal year the
Excess Cash Flow of one of the Canadian Borrower or Holdings (calculated without
taking into account the Canadian Borrower and its Subsidiaries), as the case may
be, is a negative number, and the Excess Cash Flow of the other such Person is a
positive number, the amount of the prepayment and reduction required by this
Section 6.3(d) in respect of the Company (if Holdings is the Person having
positive Excess Cash Flow) or the Canadian Borrower (if the Canadian Borrower is
the Person having positive Excess Cash Flow) for such fiscal year shall be
reduced by the amount of the negative Excess Cash Flow of the other such Person
for such fiscal year.
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 6.3(a) or 6.3(b) shall be
applied, FIRST, to the prepayment of the U.S. Term Loans and Total Aggregate
Canadian Term Loan Outstandings, ratably in accordance with the outstanding
amount of each Facility and, SECOND, to reduce permanently the Revolving Credit
Commitments. Notwithstanding the preceding sentence, any prepayment made
pursuant to Section 6.3(b) with the Net Cash Proceeds of the High Yield Offering
shall be applied, FIRST, to prepay the Tranche B-1 Term Loans and the Tranche
C-1 Term Loans, ratably in accordance with the outstanding amounts thereof (or,
if the High Yield Offering is consummated prior to the Merger Date, such amount
shall be applied to permanently reduce the Tranche B-1 Term Loan Commitments and
the Tranche C-1 Term Loan Commitments) and, SECOND, in accordance with the
preceding sentence. Any such reduction of the Revolving Credit Commitments shall
be accompanied by prepayment of the Revolving Credit Loans to the extent, if
any, that the Total Revolving Extensions of Credit exceed the amount of the
aggregate Revolving Credit Commitments as so reduced, PROVIDED that if the
aggregate principal amount of Revolving Credit Loans then outstanding is less
than the amount of such excess (because L/C Obligations constitute a portion
thereof), the Company shall not be required to reduce any outstanding Letters of
Credit. The application of any such prepayment of U.S. Term Loans shall be made
first to Base Rate Loans and second to LIBOR Loans. The application of any such
prepayment to Total Aggregate Canadian Term Loan Outstandings shall be made
first to Canadian Term Loans and second (but only on the maturity date thereof)
to Acceptances. Each such prepayment of the Loans (except in the case of
Revolving Credit Loans that are Base Rate Loans) shall be accompanied by accrued
interest to the date of such prepayment on the amount prepaid.
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(f) Amounts to be applied in connection with prepayments and
reductions made pursuant to Section 6.2(c), the first sentence of Section 6.3(c)
or the first sentence of Section 6.3(d) shall be applied, FIRST, to the
prepayment of the U.S. Term Loans, ratably in accordance with the respective
outstanding amounts of the Facilities, and, SECOND, to reduce permanently the
Revolving Credit Commitments. Any such reduction of the Revolving Credit
Commitments shall be accompanied by prepayment of the Revolving Credit Loans to
the extent, if any, that the Total Revolving Extensions of Credit exceed the
amount of the aggregate Revolving Credit Commitments as so reduced, PROVIDED
that if the aggregate principal amount of Revolving Credit Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Company shall not be required to reduce any
outstanding Letters of Credit. The application of any such prepayment of U.S.
Term Loans shall be made first to Base Rate Loans and second to LIBOR Loans.
Each such prepayment of the Loans (except in the case of Revolving Credit Loans
that are Base Rate Loans) shall be accompanied by accrued interest to the date
of such prepayment on the amount prepaid.
(g) Amounts to be applied in connection with prepayments and
reductions made pursuant to Section 6.2(c), the second sentence of Section
6.3(c) or the second sentence of Section 6.3(d) shall be applied to the
reduction of the Total Aggregate Canadian Term Loan Outstandings and the
simultaneous and automatic reduction in an equal amount of the Canadian Facility
Maximum Amount. The application of any such prepayment to Total Aggregate
Canadian Term Loan Outstandings shall be made first to Canadian Term Loans and
second (but only on the maturity date thereof) to Acceptances. Each such
prepayment of the Canadian Term Loans shall be accompanied by accrued interest
to the date of such prepayment on the amount prepaid.
(h) The amount of each prepayment of the Tranche A Term Loans,
Tranche B Term Loans, Tranche C Term Loans or Canadian Term Loans, as the case
may be, required pursuant to this Section 6.3 shall be applied to reduce the
then remaining installments of the Term Loans under the relevant Facility, PRO
RATA based upon the then remaining outstanding principal amount of such
installments.
(i) Notwithstanding anything in Section 6.2(a), Section 6.3(e)
or Section 6.3(f) to the contrary and provided that there are Tranche A Term
Loans and/or Total Aggregate Canadian Term Loan Outstandings then outstanding,
with respect to the amount of any optional prepayment described in Section
6.2(a) or mandatory prepayment described in Section 6.3 that is allocated to the
Tranche B Term Loans or Tranche C Term Loans (such amounts, the "TRANCHE B
PREPAYMENT AMOUNT" and the "TRANCHE C PREPAYMENT AMOUNT", respectively), the
Company will, in lieu of applying such amount to the prepayment of Tranche B
Term Loans and Tranche C Term Loans, respectively, as provided in Section 6.2(a)
or Section 6.3(e) or (f), as the case may be, on the date specified in Section
6.2(a) or Section 6.3, as the case may be, for such prepayment, give the General
Administrative Agent telephonic notice (promptly confirmed in writing)
requesting that the General Administrative Agent prepare and provide to each
Tranche B Lender and Tranche C Lender a notice (each, a "PREPAYMENT OPTION
NOTICE") as described below. As promptly as practicable after receiving such
notice from the Company, the General Administrative
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Agent will send to each Tranche B Lender and Tranche C Lender a notice (a
"PREPAYMENT OPTION NOTICE"), which shall be in the form of Exhibit H, and shall
include an offer by the Company to prepay on the date (each a "PROPOSED
PREPAYMENT DATE") that is 15 days after the date of the Prepayment Option
Notice, the Tranche B Term Loans or Tranche C Term Loans, as the case may be, of
such Lender by an amount equal to the portion of the Tranche B Prepayment Amount
or Tranche C Prepayment Amount indicated in such Lender's Prepayment Option
Notice as being applicable to such Lender's Tranche B Term Loans or Tranche C
Term Loans, as the case may be. On the Proposed Prepayment Date, (A) the Company
shall pay to the General Administrative Agent the aggregate amount necessary to
prepay that portion of the outstanding Tranche B Term Loans or Tranche C Term
Loans, as the case may be, in respect of which Tranche B Lenders and Tranche C
Lenders have accepted prepayment as described above (such Lenders, the
"ACCEPTING LENDERS"), and such amount shall be applied to reduce the Tranche B
Prepayment Amount and Tranche C Prepayment Amount, as applicable, with respect
to each Accepting Lender and (B) the Company shall pay to the General
Administrative Agent an amount equal to 100% of the portion of the Tranche B
Prepayment Amount and Tranche C Prepayment Amount not accepted by the Accepting
Lenders, and such amount shall be applied (i) in the case of optional
prepayments pursuant to Section 6.2, to prepay the Tranche A Term Loans and (ii)
in the case of mandatory prepayments, to the other Facilities required to be
prepaid pursuant to Section 6.3(e) or Section 6.3(f), as the case may be,
ratably in accordance with the outstanding amounts thereof.
6.4 CONVERSION AND CONTINUATION OPTIONS. (a) The Company may
elect from time to time to convert LIBOR Loans to Base Rate Loans, by giving the
General Administrative Agent at least two Business Days' prior irrevocable
notice of such election; PROVIDED that any such conversion of LIBOR Loans may
only be made on the last day of an Interest Period with respect thereto. The
Company may elect from time to time to convert Base Rate Loans to LIBOR Loans by
giving the General Administrative Agent at least three Business Days' prior
irrevocable notice of such election. Any such notice of conversion to LIBOR
Loans shall specify the length of the initial Interest Period or Interest
Periods therefor. Upon receipt of any such notice the General Administrative
Agent shall promptly notify each affected Lender thereof. All or any part of
outstanding LIBOR Loans and Base Rate Loans may be converted as provided herein,
PROVIDED that (i) no Base Rate Loan under a particular Facility may be converted
into a LIBOR Loan when any Event of Default has occurred and is continuing and
the General Administrative Agent has or the Majority Facility Lenders in respect
of such Facility have determined in its or their sole discretion that such a
conversion is not appropriate and (ii) no Loan may be converted into a LIBOR
Loan after the date that is one month prior to the final maturity date of such
Facility.
(b) Any LIBOR Loans may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Company giving notice to the General Administrative Agent, in accordance with
the applicable provisions of the term "Interest Period" set forth in Section
1.1, of the length of the next Interest Period to be applicable to such Loans,
PROVIDED that no LIBOR Loan under a particular Facility may be continued as such
(i) when any Event of Default has occurred and is continuing and the General
Administrative Agent has or the Majority Facility Lenders in respect of such
Facility have determined in its or their sole discretion that such a
continuation is not appropriate or (ii) after the date that is one month prior
to the final maturity date of such Facility and PROVIDED, FURTHER, that if the
Company shall fail to give such
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notice or if such continuation is not permitted such Loans
shall be automatically converted to Base Rate Loans on the last day of such then
expiring Interest Period. Upon receipt of any such notice the General
Administrative Agent shall promptly notify each relevant Lender thereof.
6.5 MINIMUM AMOUNTS OF TRANCHES. Notwithstanding anything to
the contrary in this Agreement, all borrowings, conversions and continuations of
LIBOR Loans hereunder and all selections of Interest Periods hereunder shall be
in such amounts and be made pursuant to such elections so that, after giving
effect thereto, the aggregate principal amount of the LIBOR Loans comprising
each Tranche shall be equal to $5,000,000 or a whole multiple of $1,000,000 in
excess thereof.
6.6 INTEREST RATES AND PAYMENT DATES. (a) Each LIBOR Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the LIBOR Rate determined for such day plus
the Applicable Margin.
(b) Each Base Rate Loan shall bear interest at a rate per
annum equal to the Base Rate plus the Applicable Margin.
(c) Each Canadian Term Loan shall bear interest at a rate per
annum equal to the Canadian Dollar Prime Rate plus the Applicable Margin.
(d) If all or a portion of (i) any principal of any Loan, (ii)
any interest payable thereon, (iii) any commitment fee or (iv) any Reimbursement
Obligation or Acceptance Reimbursement Obligation or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), the principal of the Loans, the Reimbursement
Obligations or Acceptance Reimbursement Obligation and any such overdue
interest, commitment fee or other amount shall bear interest at a rate per annum
which is (w) in the case of principal, the rate that would otherwise be
applicable thereto pursuant to the foregoing provisions of this subsection PLUS
2% or, if higher, (x) in the case of Reimbursement Obligations, the rate
applicable to Base Rate Loans under the Revolving Credit Facility PLUS 2%, (y)
in the case of Acceptance Reimbursement Obligations, the rate applicable to
Revolving Credit Loans that are LIBOR Loans PLUS 2% or (z) in the case of any
such overdue interest, commitment fee or other amount, the rate described in
paragraph (b) of this subsection (paragraph (c) in the case of interest on
Canadian Term Loans) PLUS 2%, in each case from the date of such non-payment
until such overdue principal, interest, commitment fee or other amount is paid
in full (as well after as before judgment).
(e) Interest shall be payable in arrears on each Interest
Payment Date, PROVIDED that interest accruing pursuant to paragraph (d) of this
Section 6.6 shall be payable from time to time on demand.
6.7 COMPUTATION OF INTEREST AND FEES. (a) Commitment fees,
Acceptance stamping fees and, whenever it is calculated on the basis of the
Prime Rate or the Canadian Dollar Prime Rate, interest shall be calculated on
the basis of a 365- (or 366-, as the case may be) day year for the actual days
elapsed; and, otherwise, interest and letter of credit commissions and
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fronting fees shall be calculated on the basis of a 360-day
year for the actual days elapsed. The General Administrative Agent shall as soon
as practicable notify the Company and the U.S. Lenders of each determination of
a LIBOR Rate. Any change in the interest rate on a Loan resulting from a change
in the Base Rate, the Canadian Dollar Prime Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The General Administrative Agent shall as
soon as practicable notify the Company and the U.S. Lenders of the effective
date and the amount of each such change in the Base Rate. For purposes of the
Interest Act (Canada), whenever any interest under this Agreement is calculated
using an annual rate based on a period which is less than the actual number of
days in a year (the "LESSER PERIOD"), such rate determined pursuant to such
calculation, when expressed as an annual rate, is equivalent to (i) the
applicable rate based on such Lesser Period, (ii) multiplied by the actual
number of days in the calendar year in which the period for which such interest
is payable ends, and (iii) divided by the number of days in such Lesser Period.
The rates of interest specified in this Agreement are nominal rates and all
interest payments and computations are to be made without allowance or deduction
for deemed reinvestment of interest.
(b) Each determination of an interest rate by the General
Administrative Agent or the Canadian Administrative Agent pursuant to any
provision of this Agreement shall be conclusive and binding on the Borrowers and
the Lenders in the absence of manifest error.
(c) If any Canadian Reference Lender shall for any reason no
longer have a Canadian Loan Commitment or any Canadian Term Loans, such Canadian
Reference Lender shall thereupon cease to be a Canadian Reference Lender, and
if, as a result, there shall only be one Schedule 1 Canadian Reference Lender or
Schedule 2 Canadian Reference Lender (as the case may be) remaining, the
Canadian Administrative Agent (after consultation with the Canadian Borrower and
the Schedule 1 Canadian Lender or the Schedule 2 Canadian Lender, as applicable)
shall, by notice to the Canadian Borrower and the Canadian Lenders, designate
another Schedule 1 Canadian Lender or Schedule 2 Canadian Lender, as applicable,
as a Schedule 1 Canadian Reference Lender or a Schedule 2 Canadian Reference
Lender, as applicable, so that there shall at all times be at least two Schedule
1 Canadian Reference Lenders and two Schedule 2 Canadian Reference Lenders.
(d) Each Canadian Reference Lender shall use its best efforts
to furnish quotations of rates to the Canadian Administrative Agent as
contemplated hereby. If any of the Canadian Reference Lenders shall be unable or
shall otherwise fail to supply such rates to the Canadian Administrative Agent
upon its request, the rate of interest shall, subject to the provisions of
Section 6.8, be determined on the basis of the quotations of the remaining
Canadian Reference Lenders or Reference Lender.
6.8 INABILITY TO DETERMINE INTEREST RATE. If prior to the
first day of any Interest Period:
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(a) the General Administrative Agent shall have determined
(which determination shall be conclusive and binding upon the Company)
that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the LIBOR
Rate for such Interest Period, or
(b) the General Administrative Agent shall have received
notice from the Majority Facility Lenders in respect of the relevant
Facility that the LIBOR Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such
Lenders (as conclusively certified by such Lenders) of making or
maintaining their affected Loans during such Interest Period,
the General Administrative Agent shall give telecopy or telephonic notice
thereof to the Company and the relevant U.S. Lenders as soon as practicable
thereafter. If such notice is given (x) any LIBOR Loans under the relevant
Facility requested to be made on the first day of such Interest Period shall be
made as Base Rate Loans, (y) any Loans under the relevant Facility that were to
have been converted on the first day of such Interest Period to LIBOR Loans
shall be continued as Base Rate Loans and (z) any outstanding LIBOR Loans under
the relevant Facility shall be converted, on the first day of such Interest
Period, to Base Rate Loans. Until such notice has been withdrawn by the General
Administrative Agent, no further LIBOR Loans under the relevant Facility shall
be made or continued as such, nor shall the Company have the right to convert
Loans under the relevant Facility to LIBOR Loans.
6.9 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Company from the Lenders hereunder shall be made PRO RATA according to the
respective Tranche A Term Loan Percentages, Tranche B Term Loan Percentages,
Tranche C Term Loan Percentages, Canadian Term Loan Commitment Percentages or
Revolving Credit Percentages, as the case may be, of the relevant Lenders;
PROVIDED, that, pursuant to the second sentence of Section 5.6, Acceptances may
be created in non-PRO RATA amounts if required to permit rounding to whole
multiples of C$100,000. Each borrowing of the U.S. Term Loans shall be made
FIRST under the Tranche B Term Loan Commitments and the Tranche C Term Loan
Commitments, PRO RATA in accordance with the aggregate amounts of the Tranche B
Term Loan Commitments and Tranche C Term Loan Commitments of the respective
Lenders (PROVIDED, that until all Tranche B Term Loan Commitments and Tranche C
Term Loan Commitments other than the Tranche B-1 Term Loan Commitments and the
Tranche C-1 Term Loan Commitments have been fully drawn, such PRO RATA
calculations shall be made without regard to the Tranche B-1 Term Loan
Commitments and Tranche C-1 Term Loan Commitments of the Lenders) and, SECOND,
after the Tranche B Term Loan Commitments and the Tranche C Term Loan Commitment
have been utilized in full, under the Tranche A Term Loan Commitments PRO RATA
in accordance with the amounts of the Tranche A Term Loan Commitments of the
respective Lenders. Each payment by the Company on account of any commitment fee
and letter of credit commission and any reduction of the Revolving Credit
Commitments shall be made PRO RATA according to the respective Revolving Credit
Percentages of the Lenders. Each payment (other than any prepayment pursuant to
Section 6.2 or 6.3) shall be applied to the Facilities ratably in accordance
with the respective amounts due and owing under the Facilities.
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(b) Each payment (including each prepayment) by the Company on
account of principal of and interest on the U.S. Term Loans under any Facility
shall be made pro rata according to the respective outstanding principal amounts
of the U.S. Term Loans under such Facility then held by the U.S. Term Loan
Lenders.
(c) Each payment (including each prepayment) by the Canadian
Borrower on account of principal of and interest on the Canadian Term Loans
shall be made pro rata according to the respective outstanding principal amounts
of the Canadian Term Loans then held by the Canadian Lenders. Each payment in
respect of Acceptance Reimbursement Obligations shall be made PRO RATA according
to the respective amounts of Acceptance Reimbursement Obligations then due and
owing to the Canadian Lenders.
(d) Each payment (including each prepayment) by the Company on
account of principal of and interest on the Revolving Credit Loans shall be made
PRO RATA according to the respective outstanding principal amounts of the
Revolving Credit Loans then held by the Revolving Credit Lenders.
(e) All payments (including prepayments) to be made by the
Company hereunder, whether on account of principal, interest, fees or otherwise
(other than payments under Section 13 in respect of the Canadian Borrower
Obligations and the Canadian Operating Facility Obligations), shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York
City time, on the due date thereof to the General Administrative Agent, for the
account of the Lenders, at the General Administrative Agent's office specified
in Section 14.2, in Dollars and in immediately available funds. The General
Administrative Agent shall distribute such payments to the Lenders promptly upon
receipt in like funds as received. If any payment by the Company hereunder
(other than payments on the LIBOR Loans) becomes due and payable on a day other
than a Business Day, such payment shall be extended to the next succeeding
Business Day. If any payment on a LIBOR Loan becomes due and payable on a day
other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day unless the result of such extension would be to extend
such payment into another calendar month, in which event such payment shall be
made on the immediately preceding Business Day. In the case of any extension of
any payment of principal pursuant to the preceding two sentences, interest
thereon shall be payable at the then applicable rate during such extension.
(f) All payments (including prepayments) to be made by the
Canadian Borrower hereunder (or by the Company under Section 13 in respect of
the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations), whether on account of principal, interest, fees or otherwise,
shall be made without setoff or counterclaim and shall be made prior to 12:00
Noon, Toronto time, on the due date thereof to the Canadian Administrative
Agent, for the account of the Lenders, at the Canadian Administrative Agent's
office specified in Section 14.2, in Canadian Dollars and in immediately
available funds. The Canadian Administrative Agent shall distribute such
payments to the Lenders promptly upon receipt in like funds as received. If any
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payment by the Canadian Borrower hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next succeeding
Business Day. In the case of any extension of any payment of principal pursuant
to the preceding sentence, interest thereon shall be payable at the then
applicable rate during such extension.
(g) Unless the applicable Administrative Agent shall have been
notified in writing by any Lender prior to a Borrowing Date that such Lender
will not make available to such Administrative Agent the amount that would
constitute its share of the Loans or Acceptance Purchase Price to be disbursed
to a Borrower on such Borrowing Date, such Administrative Agent may assume that
such Lender is making such amount available to such Administrative Agent, and
such Administrative Agent may, in reliance upon such assumption, make available
to the applicable Borrower a corresponding amount. If such amount is not made
available to such Administrative Agent by the required time on the Borrowing
Date therefor, such Lender shall pay to such Administrative Agent, on demand,
such amount with interest thereon at a rate equal to (i) in the case of amounts
to be made available in U.S. Dollars, the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the General Administrative Agent and (ii) in the case of amounts to be made
available in Canadian Dollars, the Canadian Administrative Agent's reasonable
estimate of its average daily cost of funds. A certificate of the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
submitted to any Lender with respect to any amounts owing under this Section
6.9(g) shall be conclusive in the absence of manifest error. If such Lender's
share of such amount is not made available to such Administrative Agent by such
Lender within three Business Days of such Borrowing Date, such Administrative
Agent shall also be entitled to recover such amount from the relevant Borrower
on demand with interest thereon at the rate per annum applicable to Base Rate
Loans under the relevant Facility (in the case of amounts to be made available
in U.S. Dollars), or Canadian Term Loans (in the case of amounts to be made
available in Canadian Dollars).
6.10 ILLEGALITY. (a) Notwithstanding any other provision
herein, if the adoption of or any change in any Requirement of Law or in the
interpretation or application thereof shall make it unlawful for any Lender to
make or maintain LIBOR Loans as contemplated by this Agreement, (i) the
commitment of such U.S. Lender hereunder to make LIBOR Loans, continue LIBOR
Loans as such and convert Base Rate Loans to LIBOR Loans shall forthwith be
cancelled and (ii) such U.S. Lender's Loans then outstanding as LIBOR Loans, if
any, shall be converted automatically to Base Rate Loans on the respective last
days of the then current Interest Periods with respect to such Loans or within
such earlier period as required by law. If any such conversion of a LIBOR Loan
occurs on a day which is not the last day of the then current Interest Period
with respect thereto, the Company shall pay to such Lender such amounts, if any,
as may be required pursuant to Section 6.13.
(b) Notwithstanding any other provision herein, if the
adoption of or any change in any Requirement of Law or in the interpretation or
application thereof shall make it unlawful for any Canadian Lender to create or
maintain Acceptances as contemplated by this Agreement, (i) the commitment of
such Canadian Lender hereunder to accept Drafts, purchase Acceptances, continue
Acceptances as such and convert Canadian Term Loans to Acceptances shall
forthwith
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be cancelled until such time as it shall no longer be unlawful for such Canadian
Lender to create or maintain Acceptances and (ii) such Canadian Lender's then
outstanding Acceptances, if any, shall be converted automatically to Canadian
Term Loans on the respective maturities thereof or within such earlier period as
may be required by law.
6.11 REQUIREMENTS OF LAW. (a) If the adoption of or any change
in any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law, but with which similarly-situated entities generally comply)
from any central bank or other Governmental Authority made subsequent to the
date hereof:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Letter of Credit or any
LIBOR Loan made by it, or change the basis of taxation of payments to
such Lender in respect thereof (except for Non-Excluded Taxes covered
by Section 6.12 and changes in the rate of tax on the overall net
income of such Lender);
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement against assets
held by, deposits or other liabilities in or for the account of,
advances, loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender which is not
otherwise included in the determination of the LIBOR Rate; or
(iii) shall impose on such Lender any other condition, the
cost of which is not otherwise included in the determination of the
LIBOR Rate;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender deems to be material, of making, converting into,
continuing or maintaining LIBOR Loans or Acceptances or issuing or participating
in Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the applicable Borrower shall promptly pay such
Lender such additional amount or amounts as will compensate such Lender on an
after-tax basis for such increased cost or reduced amount receivable.
(b) If any Lender shall have determined that the adoption of
or any change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law, but with which
similarly-situated entities generally comply) from any Governmental Authority
made subsequent to the date hereof shall have the effect of reducing the rate of
return on such Lender's or such corporation's capital as a consequence of its
obligations hereunder to a level below that which such Lender or such
corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, the applicable Borrower shall promptly pay to such
Lender such additional amount or amounts as will compensate such Lender on an
after-tax basis for such reduction.
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(c) If any Lender becomes entitled to claim any additional
amounts pursuant to this Section, it shall promptly notify the applicable
Borrower (with a copy to the General Administrative Agent and, if applicable,
the Canadian Administrative Agent) of the event by reason of which it has become
so entitled. A certificate as to any additional amounts payable pursuant to this
Section submitted by such Lender to such Borrower (with a copy to the General
Administrative Agent and, if applicable, the Canadian Administrative Agent)
shall be conclusive in the absence of manifest error. The agreements in this
Section shall survive the termination of this Agreement and the payment of the
Loans, the Acceptance Reimbursement Obligations, the Acceptance Notes and all
other amounts payable hereunder.
6.12 TAXES. (a) All payments made by the Borrowers under this
Agreement and any Notes shall be made free and clear of, and without deduction
or withholding for or on account of, any present or future income, stamp or
other taxes, levies, imposts, duties, charges, fees, deductions or withholdings,
now or hereafter imposed, levied, collected, withheld or assessed by any
Governmental Authority, excluding net income taxes and franchise taxes (imposed
in lieu of net income taxes) imposed on either Administrative Agent or any
Lender as a result of a present or former connection between such Administrative
Agent or such Lender and the jurisdiction of the Governmental Authority imposing
such tax or any political subdivision or taxing authority thereof or therein
(other than any such connection arising solely from such Administrative Agent or
such Lender having executed, delivered or performed its obligations or received
a payment under, or enforced, this Agreement or any other Loan Document). If any
such non-excluded taxes, levies, imposts, duties, charges, fees deductions or
withholdings ("NON-EXCLUDED TAXES") are required to be withheld from any amounts
payable to such Administrative Agent, or any Lender hereunder or under any Note,
the amounts so payable to such Administrative Agent or such Lender shall be
increased to the extent necessary to yield to such Administrative Agent or such
Lender (after payment of all Non-Excluded Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement, PROVIDED, HOWEVER, that the Company shall not be required to increase
any such amounts payable to any U.S. Lender if such U.S. Lender fails to comply
with the requirements of paragraph (b) of this Section. Whenever any
Non-Excluded Taxes are payable by a Borrower, as promptly as possible thereafter
such Borrower shall send to the applicable Administrative Agent for its own
account or for the account of such Lender, as the case may be, a certified copy
of an original official receipt received by such Borrower showing payment
thereof. If a Borrower fails to pay any Non-Excluded Taxes when due to the
appropriate taxing authority or fails to remit to the applicable Administrative
Agent the required receipts or other required documentary evidence, such
Borrower shall indemnify such Administrative Agent and the Lenders for any
incremental taxes, interest or penalties that may become payable by either
Administrative Agent or any Lender as a result of any such failure. The
agreements in this subsection shall survive the termination of this Agreement
and the payment of the Loans, the Acceptance Reimbursement Obligations, the
Acceptance Notes and all other amounts payable hereunder.
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(b) Each U.S. Lender that is not incorporated under the laws
of the United States of America or a state thereof shall:
(i) in the case of a Lender other than a Lender described in
subsection 6.12(b)(ii);
(A) deliver to the Company and the General Administrative
Agent (A) two duly completed copies of United States Internal Revenue
Service Form 1001 or 4224, or successor applicable form, as the case
may be, and (B) an Internal Revenue Service Form W-8 or W-9, or
successor applicable form, as the case may be;
(B) deliver to the Company and the General Administrative
Agent two further copies of any such form or certification on or before
the date that any such form or certification expires or becomes
obsolete and after the occurrence of any event requiring a change in
the most recent form previously delivered by it to the Company; and
(C) obtain such extensions of time for filing and complete
such forms or certifications as may reasonably be requested by the
Company or the General Administrative Agent; and
(D) file amendments to such forms as and when required; and
(ii) in the case of a Lender that is not a "bank" under
Section 881(c)(3)(A) of the Code and that is legally unable to comply with the
requirements of subsection 6.11(b)(i);
(A) at least five Business Days before the date of the initial
payment to be made by the Company under this Agreement to such Lender,
deliver to the Company and the General Administrative Agent (I) a
statement that such Lender (x) is not a "bank" under Section
881(c)(3)(A) of the Code, is not subject to regulatory or other legal
requirements as a bank in any jurisdiction, and has not been treated as
a bank for purposes of any tax, securities law or other filing or
submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax, securities
law or other legal requirements, (y) is not a 10-percent shareholder
within the meaning of Section 881(c)(3)(B) of the Code and (z) is not a
controlled foreign corporation receiving interest from a related person
within the meaning of Section 881(c)(3)(C) of the Code and (II) a
properly completed and duly executed Internal Revenue Service Form W-8
or applicable successor form; and
(B) deliver to the Company and the General Administrative
Agent two further properly completed and duly executed copies of said
Form W-8, or any successor applicable form at least five Business Days
on or before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event
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requiring a change in the most recent form previously
delivered by it to the Company or upon the request of the
Company or the General Administrative Agent; and
(C) obtain such extensions of time for filing and completing
such forms or certifications as may be reasonably requested by the
Company and the General Administrative Agent; and
(D) file amendments to such forms as and when required;
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 Lender from duly completing and delivering any such
form with respect to it and such Lender so advises the Company and the General
Administrative Agent. Such Lender shall certify (i) in the case of a Form 1001
or 4224, that it is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes and (ii) in
the case of a Form W-8 or W-9, that it is entitled to an exemption from United
States backup withholding tax. Each Person that shall become a Lender or a
Participant pursuant to Section 14.6 shall, upon the effectiveness of the
related transfer, be required to provide all of the forms and statements
required pursuant to this subsection, provided that in the case of a Participant
such Participant shall furnish all such required forms and statements to the
Lender from which the related participation shall have been purchased.
6.13 INDEMNITY. Each Borrower agrees to indemnify each Lender
and to hold each Lender harmless from any loss or expense which such Lender may
sustain or incur as a consequence of (a) default by such Borrower in making a
borrowing of, conversion into or continuation of LIBOR Loans after such Borrower
has given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by such Borrower in making any prepayment after such
Borrower has given a notice thereof in accordance with the provisions of this
Agreement or (c) the making of a prepayment of LIBOR Loans on a day which is not
the last day of an Interest Period with respect thereto. Such indemnification
may include an amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so prepaid, or not so borrowed, converted
or continued, for the period from the date of such prepayment or of such failure
to borrow, convert or continue to the last day of such Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Loans provided for herein (excluding, however, the
Applicable Margin included therein, if any) OVER (ii) the amount of interest (as
reasonably determined by such U.S. Lender) which would have accrued to such
Lender on such amount by placing such amount on deposit for a comparable period
with leading banks in the interbank eurodollar market. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder.
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6.14 CHANGE OF LENDING OFFICE. Each Lender agrees that if it
makes any demand for payment under Section 6.11 or 6.12(a), or if any adoption
or change of the type described in Section 6.10 shall occur with respect to it,
it will use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrowers to make payments under Section 6.11 or
6.12(a), or would eliminate or reduce the effect of any adoption or change
described in Section 6.10; PROVIDED, that such designation is made on terms
that, in the sole judgment of such Lender, cause such Lender and its lending
office(s) to suffer no economic, legal or regulatory disadvantage, and PROVIDED,
FURTHER, that nothing in this Section 6.14 shall affect or postpone any of the
obligations of any Borrower or the rights of any Lender pursuant to Section 6.11
or 6.12(a).
SECTION 7. REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agents and the Lenders to enter
into this Agreement and to make the Loans and the other extensions of credit
hereunder, each of the Company and the Canadian Borrower (to the extent
applicable to the Canadian Borrower) hereby represents and warrants to each
Administrative Agent and each Lender that:
7.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA combined
balance sheet of Holdings and its consolidated Subsidiaries as at November 30,
1997 (including the notes thereto) (the "PRO FORMA BALANCE Sheet"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Exchange Offer and the Merger, (ii) the Loans to be made on or prior to the
Merger Date and the use of proceeds thereof and (iii) the payment of fees and
expenses in connection with the Exchange Offer and Merger. The Pro Forma Balance
Sheet has been prepared based on the best information available to the Company
as of the date of delivery thereof, and presents fairly on a PRO FORMA basis the
estimated combined financial position of Holdings and its consolidated
Subsidiaries as at the Closing Date, assuming that the events specified in the
preceding sentence had actually occurred at such date.
(b) To the best of the Company's knowledge, the audited
consolidated balance sheet of Safety-Kleen as of December 31, 1996 and the
related consolidated statements of income and of cash flows for the fiscal year
ended on such date, reported on by and accompanied by an unqualified report from
Arthur Andersen, present fairly the consolidated financial condition of
Safety-Kleen as at such date, and the consolidated results of its operations and
its consolidated cash flows for the fiscal year then ended. To the best of the
Company's knowledge, all such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the relevant
firm of accountants and disclosed therein). To the best of the Company's
knowledge, the balance sheet referred to above reflects any material Guarantee
Obligations, contingent liabilities and liabilities for taxes, and any long-term
leases and unusual forward or
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long-term commitments, including, without limitation, any
interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, in each case as of the date of such
balance sheets. During the period from December 31, 1996 to and including the
date hereof there has been no Disposition by Safety-Kleen or any of its
Subsidiaries of any material part of its business or property.
(c) The audited consolidated balance sheet of Holdings as at
August 31, 1997, and the related consolidated statements of income and of cash
flows for the fiscal year ended on such date, reported on by and accompanied by
an unqualified report from Coopers & Lybrand, present fairly the consolidated
financial condition of Holdings as at such date, and the consolidated results of
its operations and its consolidated cash flows for the respective fiscal year
then ended. All such financial statements, including the related schedules and
notes thereto, have been prepared in accordance with GAAP applied consistently
throughout the periods involved (except as approved by the relevant firm of
accountants and disclosed therein). The balance sheet referred to above reflects
any material Guarantee Obligations, contingent liabilities and liabilities for
taxes, and any long-term leases and unusual forward or long-term commitments,
including, without limitation, any interest rate or foreign currency swap or
exchange transaction or other obligation in respect of derivatives, in each case
as of the date of such balance sheets. During the period from August 31, 1997 to
and including the date hereof there has been no Disposition by Holdings or any
of its Subsidiaries of any material part of its business or property other than
the sale by the Company of ECDC Environmental, L.C.
7.2 NO CHANGE. Since August 31, 1997 there has been no
development or event which has had or could reasonably be expected to have a
Material Adverse Effect. Without limiting the representation in the preceding
sentence, since December 31, 1996 there has been no development or event which,
to the best knowledge of the Company, has had or could reasonably be expected to
have a material adverse effect on the business, operations, property, condition
(financial or otherwise) or prospects of Safety-Kleen and its Subsidiaries taken
as a whole.
7.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the
Company and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
corporate power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except to the extent that the failure to comply therewith could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
7.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
Each Loan Party has the corporate power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of each Borrower, to borrow hereunder and has taken all necessary corporate
action to authorize the borrowings on the terms and conditions of this Agreement
and any Notes and to authorize the execution, delivery and performance of the
Loan Documents to which it is a party. No consent or authorization of, filing
with, notice to or
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other act by or in respect of, any Governmental Authority or
any other Person is required in connection with (i) the borrowings hereunder or
with the execution, delivery, performance, validity or enforceability of the
Loan Documents or (ii) the consummation of the Exchange Offer or the Merger,
except approval of the Merger by the Safety-Kleen shareholders. This Agreement
has been, and each other Loan Document to which it is a party will be, duly
executed and delivered on behalf of each Loan Party which is a party thereto.
This Agreement constitutes, and each other Loan Document to which it is a party
when executed and delivered will constitute, a legal, valid and binding
obligation of the Loan Party which is a party thereto enforceable against such
Loan Party in accordance with its terms, subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other similar
laws relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
7.5 NO LEGAL BAR. The execution, delivery and performance of
the Loan Documents, the issuance of Letters of Credit, the borrowings hereunder
and the use of the proceeds thereof will not violate any Requirement of Law or
Contractual Obligation of the Company or of any of its Subsidiaries and will not
result in, or require, the creation or imposition of any Lien on any of its or
their respective properties or revenues pursuant to any such Requirement of Law
or Contractual Obligation (other than the Liens created by the Security
Documents).
7.6 NO MATERIAL LITIGATION. (a) No litigation, investigation
or proceeding of or before any arbitrator or Governmental Authority is pending
or, to the knowledge of the Company, threatened by or against the Company or any
of its Subsidiaries or against any of its or their respective properties or
revenues (i) with respect to any of the Loan Documents or any of the
transactions contemplated hereby or thereby (other than as set forth on Schedule
7.6 relating to the Exchange Offer, none of which, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect), or
(ii) which could reasonably be expected to have a Material Adverse Effect.
(b) Without limiting the representation made in paragraph (a)
of this Section 7.6, to the best knowledge of the Company, except as described
in the Exchange Offer Documents, no litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or threatened
against Safety-Kleen or any of its Subsidiaries or against any of its or their
respective properties or revenues which could reasonably be expected to have a
material adverse effect on the business, operations, property, condition
(financial or otherwise) or prospects of Safety-Kleen and its Subsidiaries taken
as a whole.
7.7 NO DEFAULT. Neither the Company nor any of its
Subsidiaries is in default under or with respect to any of its Contractual
Obligations in any respect which could have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
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7.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Company and its
Subsidiaries has good record and marketable title in fee simple to, or a valid
leasehold interest in, all its real property, and good title to, or a valid
leasehold interest in, all its other property, and none of such property is
subject to any Lien except as permitted by Section 10.3.
7.9 INTELLECTUAL PROPERTY. Each of the Company and its
Subsidiaries owns, or is licensed to use, all trademarks, tradenames,
copyrights, technology, know-how and processes necessary for the conduct of its
business as currently conducted (the "INTELLECTUAL PROPERTY"). Except as set
forth in Schedule 7.9, no claim has been asserted and is pending by any Person
challenging or questioning the use of any such Intellectual Property or the
validity or effectiveness of any such Intellectual Property, nor does the
Company know of any valid basis for any such claim. The use of such Intellectual
Property by the Company and its Subsidiaries does not infringe on the rights of
any Person, except for such claims and infringements that, in the aggregate,
could not reasonably be expected to have a Material Adverse Effect. An adverse
determination of any or all of the matters set forth on Schedule 7.9 could not
reasonably be expected to have a Material Adverse Effect.
7.10 NO BURDENSOME RESTRICTIONS. No Requirement of Law or
Contractual Obligation of the Company or any of its Subsidiaries could
reasonably be expected to have a Material Adverse Effect.
7.11 TAXES. Each of the Company and its Subsidiaries has filed
or caused to be filed all tax returns which, to the knowledge of the Company,
are required to be filed and has paid all taxes shown to be due and payable on
said returns or on any assessments made against it or any of its property and
all other taxes, fees or other charges imposed on it or any of its property by
any Governmental Authority (other than any taxes, fees or other charges, the
amount or validity of which are currently being contested in good faith by
appropriate proceedings and with respect to which reserves in conformity with
GAAP have been provided on the books of the Company or its Subsidiaries, as the
case may be); no tax Lien has been filed, and, to the knowledge of the Company,
no claim is being asserted, with respect to any such tax, fee or other charge.
7.12 FEDERAL REGULATIONS. No part of the proceeds of any Loans
will be used in violation of Regulation U of the Board of Governors of the
Federal Reserve System as now and from time to time hereafter in effect.
7.13 ERISA. Neither a Reportable Event nor an "accumulated
funding deficiency" (within the meaning of Section 412 of the Code or Section
302 of ERISA) has occurred during the five-year period prior to the date on
which this representation is made or deemed made with respect to any Plan, and
each Plan has complied in all material respects with the applicable provisions
of ERISA and the Code. No termination of a Single Employer Plan has occurred,
and no Lien in favor of the PBGC or a Plan has arisen, during such five-year
period. The present value of all accrued benefits under each Single Employer
Plan (based on those assumptions used to fund such Plans) did not, as of the
last annual valuation date prior to the date
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on which this representation is made or deemed made, exceed
the value of the assets of such Plan allocable to such accrued benefits. Neither
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan, and neither of the Borrowers nor any
Commonly Controlled Entity would become subject to any liability under ERISA if
the Borrowers or any such Commonly Controlled Entity were to withdraw completely
from all Multiemployer Plans as of the valuation date most closely preceding the
date on which this representation is made or deemed made. No such Multiemployer
Plan is in Reorganization or Insolvent. The present value (determined using
actuarial and other assumptions which are reasonable in respect of the benefits
provided and the employees participating) of the liability of the Borrowers and
each Commonly Controlled Entity for post retirement benefits to be provided to
their current and former employees under Plans which are welfare benefit plans
(as defined in Section 3(1) of ERISA) does not, in the aggregate, exceed the
assets under all such Plans allocable to such benefits by an amount in excess of
$2,000,000.
7.14 CANADIAN BENEFIT AND PENSION PLANS. The Canadian Pension
Plans are duly registered under the provisions of the ITA and any other
Requirements of Law and no event has occurred which is reasonably likely to
cause the loss of such registered status. The Canadian Pension Plans and the
Canadian Benefits Plans have been administered in accordance with the ITA and
all other Requirements of Law. All material obligations of each of the Canadian
Borrower or any Subsidiary thereof (including fiduciary and funding obligations)
required to be performed in connection with the Canadian Pension Plans have been
performed. No promises of benefit improvements under the Canadian Pension Plans
or the Canadian Benefit Plans have been made except where such improvement could
not have a Material Adverse Effect. There have been no improper withdrawals or
applications of the assets of the Canadian Pension Plans or the Canadian Benefit
Plans. As of the most current evaluation date, each of the Canadian Pension
Plans and the Canadian Benefit Plans is fully funded and there exist no going
concern unfunded actuarial liabilities or solvency deficiencies in respect of
such plans.
7.15 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party
is an "investment company", or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
No Loan Party is subject to regulation under any Federal or State statute or
regulation (other than Regulation X of the Board of Governors of the Federal
Reserve System) which limits its ability to incur Indebtedness.
7.16 SUBSIDIARIES. Schedule 7.16 sets forth a complete list of
all the Subsidiaries of the Company on the Closing Date after giving effect to
the consummation of the Exchange Offer.
7.17 PURPOSE OF LOANS. The proceeds of the Loans and
Acceptances shall be used (i) to finance a portion of the Safety-Kleen
Acquisition and the fees and expenses associated therewith, (ii) to purchase
stock appreciation rights from employees and directors of Safety-Kleen pursuant
to Safety-Kleen's existing stock option/purchase plans in an amount not to
exceed $46,000,000, (iii) to repay certain Indebtedness of the Borrowers
outstanding on the Closing Date, including all amounts outstanding under the
Existing Credit Agreement and (iv) on the Merger Date, to repay certain
Indebtedness of Safety-Kleen required to be repaid in connection
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with the Merger. The proceeds of the Loans and Acceptances
also shall be used to finance the ongoing working capital needs of the Borrowers
and their Subsidiaries in the ordinary course of business, capital expenditures
and acquisitions permitted by Section 10.8.
7.18 ENVIRONMENTAL MATTERS
Other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to give rise to a
Material Adverse Effect:
(a) The Company and each of its Subsidiaries: (i) are, and
within the period of all applicable statutes of limitation have been,
in compliance with all applicable Environmental Laws; (ii) hold all
Environmental Permits (each of which is in full force and effect)
required for any of their current or intended operations or for any
property owned, leased, or otherwise operated by any of them; (iii)
are, and within the period of all applicable statutes of limitation
have been, in compliance with all of their Environmental Permits; and
(iv) reasonably believe that: each of their Environmental Permits will
be timely renewed and complied with, without material expense; any
additional Environmental Permits that may be required of any of them
will be timely obtained and complied with, without material expense;
and compliance with any Environmental Law that is or is expected to
become applicable to it will be timely attained and maintained, without
material expense.
(b) Materials of Environmental Concern have not been
transported, disposed of, emitted, discharged, or otherwise released or
threatened to be released, to or at any real property now or formerly
owned, leased or operated by the Company or any of its Subsidiaries or
at any other location, which could reasonably be expected to (i) give
rise to liability of the Company or any of its Subsidiaries under any
applicable Environmental Law, (ii) interfere with the continued
operations of the Company or any of its Subsidiaries, or (iii) impair
the fair saleable value of any real property owned or leased by the
Company or any of its Subsidiaries.
(c) There is no judicial, administrative, or arbitral
proceeding (including any notice of violation or alleged violation)
under or relating to any Environmental Law to which the Company or any
of its Subsidiaries is, or to the knowledge of the Company or any of
its Subsidiaries will be, named as a party that is pending or, to the
knowledge of the Company or any of its Subsidiaries, threatened.
(d) Neither the Company nor any of its Subsidiaries has
received any written request for information, or been notified that it
is a potentially responsible party under or relating to the
Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. ss.ss. 9601 ET seq., or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.
(e) Neither the Company nor any of its Subsidiaries has
entered into or agreed to any consent decree, order, or settlement or
other agreement, nor is subject to any judgment, decree, or order or
other agreement, in any judicial, administrative, arbitral, or other
forum, relating to compliance with or liability under any Environmental
Law.
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(f) Neither the Company nor any of its Subsidiaries has
assumed or retained, by contract or operation of law, any liabilities
of any kind, fixed or contingent, known or unknown, under any
Environmental Law or with respect to any Materials of Environmental
Concern.
7.19 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document or any other document,
certificate or statement furnished to the Administrative Agents or the Lenders
or any of them, by or on behalf of any Loan Party for use in connection with the
transactions contemplated by this Agreement or the other Loan Documents,
contained as of the date such statement, information, document or certificate
was so furnished, any untrue statement of a material fact or omitted to state a
material fact necessary in order to make the statements contained herein or
therein not misleading. The projections and PRO FORMA financial information
contained in the materials referenced above are based upon good faith estimates
and assumptions believed by management of such Loan Party to be reasonable at
the time made, it being recognized by the Lenders that such financial
information as it relates to future events is not to be viewed as fact and that
actual results during the period or periods covered by such financial
information may differ from the projected results set forth therein by a
material amount. The Company has provided to the General Administrative Agent a
true and complete copy of the Exchange Offer Documents and the Merger Agreement
(including all exhibits and schedules thereto and financial statements referred
to therein). As of the date hereof, the representations and warranties contained
in the Merger Agreement are true and correct in all material respects. There is
no fact known to any Loan Party that could reasonably be expected to have a
Material Adverse Effect that has not been expressly disclosed herein, in the
other Loan Documents or in any other documents, certificates and statements
furnished to the Administrative Agents and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
7.20 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the General Administrative Agent,
for the benefit of the Lenders, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock described in the Guarantee and Collateral Agreement, when stock
certificates representing such Pledged Stock are delivered to the General
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 3 to the Guarantee and
Collateral Agreement, the Guarantee and Collateral Agreement shall constitute a
fully perfected Lien on, and security interest in, all right, title and interest
of the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Guarantee and Collateral Agreement), in each
case prior and superior in right to any other Person other than as permitted by
the Guarantee and Collateral Agreement.
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(b) The Acquisition Corp. Pledge Agreement is effective to
create in favor of the General Administrative Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
described therein and proceeds thereof. When the actions described in Section
3(a) or 3(b), as the case may be, of the Acquisition Corp. Pledge Agreement have
been taken, the Acquisition Corp. Pledge Agreement shall constitute a fully
perfected Lien on, and security interest in, all right, title and interest of
the Loan Parties in such Collateral and the proceeds thereof, as security for
the Obligations (as defined in the Acquisition Corp. Pledge Agreement), in each
case prior and superior in right to any other Person other than as permitted by
the Acquisition Corp. Pledge Agreement.
(c) Each of the Canadian Collateral Documents is effective to
create in favor of the Canadian Administrative Agent, for the benefit of the
Canadian Lenders, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. Upon completion of the
actions set forth on Schedule 7.20, the Canadian Collateral Documents shall
constitute fully perfected Liens on, and security interests in, all right, title
and interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Canadian Borrower Obligations, in each case prior and superior
in right to any other Person other than as permitted by the Canadian Collateral
Documents.
(d) Each of the Mortgages is effective to create in favor of
the General Administrative Agent, for the benefit of the Lenders, a legal, valid
and enforceable Lien on the mortgaged properties described therein and proceeds
thereof, and when the Mortgages are filed in the offices specified on Schedule
3, each such Mortgage shall constitute a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in such mortgaged
properties and the proceeds thereof, as security for the Obligations (as defined
in the relevant Mortgage), in each case prior and superior in right to any other
Person.
7.21 SOLVENCY. Each Loan Party is, and after giving effect to
the Safety-Kleen Acquisition and the incurrence of all Indebtedness and
obligations being incurred in connection herewith and therewith will be and will
continue to be, Solvent.
7.22 REGULATION H. No Mortgage encumbers improved real
property which is located in an area that has been identified by the Secretary
of Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood Insurance
Act of 1968.
7.23 CORSAN TRUCKING, INC. As of the date hereof, Corsan
Trucking, Inc., a wholly owned Subsidiary of the Company, does not have any
assets and does not conduct any operations.
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SECTION 8. CONDITIONS PRECEDENT
8.1 CONDITIONS TO INITIAL EXTENSIONS OF CREDIT. The agreement
of each Lender to make the initial Extension of Credit requested to be made by
it is subject to the satisfaction, immediately prior to or concurrently with the
making of such Extension of Credit on the Closing Date, of the following
conditions precedent:
(a) LOAN DOCUMENTS. The General Administrative Agent shall
have received (i) this Agreement, executed and delivered by a duly
authorized officer of each Borrower, with a counterpart for each
Lender, (ii) the Guarantee and Collateral Agreement, executed and
delivered by a duly authorized officer of the parties thereto, with a
counterpart or a conformed copy for each Lender, (iii) the Acquisition
Corp. Pledge Agreement and the Exchange Agent Agency Agreement, each
executed and delivered by a duly authorized officer of the parties
thereto, with a counterpart or a conformed copy for each Lender, (iv)
each of the Mortgage Amendments, each executed and delivered by a duly
authorized officer of the party thereto, with a counterpart or a
conformed copy for each Lender, (v) each Canadian Collateral Document
listed on Schedule 4, executed and delivered by a duly authorized
officer of the parties thereto, with a counterpart or a conformed copy
for each Lender and (vi) the Intercreditor Agreement, executed and
delivered by a duly authorized officer of the parties thereto.
(b) PAYMENT OF INDEBTEDNESS UNDER EXISTING CREDIT AGREEMENT
AND TERMINATION OF COMMITMENTS. The Commitments (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement shall
have been terminated and all Indebtedness of the Borrowers thereunder,
including all principal, interest and fees accrued to the Closing Date
(including, but not limited to, any prepayment premium payable in
connection with the prepayment of the Tranche B Term Loans and Tranche
C Term Loans (each as defined in the Existing Credit Agreement)), but
excluding reimbursement obligations in respect of the Existing
Acceptances and the Existing Letter of Credit, shall have been repaid
in full. The indemnity agreement described in the second sentence of
Section 5.1(a) shall have been executed and delivered by The
Toronto-Dominion Bank and the Existing Acceptance Lenders. All
reimbursement obligations in respect of the Specified Acceptances shall
have been paid in full and the Specified Acceptances shall have been
cancelled.
(c) EXCHANGE OFFER, MERGER, ETC. The following transactions
shall have been consummated (and the General Administrative Agent shall
have received a certificate of the Company to such effect, accompanied
by copies of any documentary evidence thereof reasonably requested by
the General Administrative Agent):
(i) all conditions precedent to the consummation of
the Exchange Offer set forth in the Exchange Offer Documents
shall have been satisfied or waived with the Required Lenders'
consent and the number of Target Shares being validly tendered
for exchange in the Exchange Offer and not properly withdrawn
prior to the expiration of the Exchange Offer, together with
the Target Shares owned by
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Holdings and its Subsidiaries, shall represent no
less than the minimum number of Target Shares (the "MINIMUM
NUMBER OF SHARES"), determined on a fully diluted basis after
giving effect to the exercise of any uncancelled warrants,
rights, options, conversion privileges or similar rights
(other than the Target Rights), necessary under Wisconsin law
and the articles of incorporation and bylaws of Safety-Kleen
to have sufficient voting power in Safety-Kleen to approve the
Merger independently of the votes of any other Safety-Kleen
shareholders;
(ii) since the date of this Agreement, the terms of
the Exchange Offer shall not have been amended, waived or
modified as to price, consideration, conditions, termination
or expiration or in any other material respect without the
prior approval of the General Administrative Agent;
(iii) there shall be no legal impediments to the
Merger that are not within the control of Holdings to
overcome;
(iv) all actions shall have been taken so that the
provisions of Section 180.1141 of the Wisconsin Business
Corporation Law shall be inapplicable to the Exchange Offer
and the Merger, and no other "fair price", "moratorium",
"business combination", "control share acquisition" or other
form of anti-takeover statute, regulation, charter or by-law
provision, is or shall become applicable which would cause or
could reasonably be expected to cause any material adverse
consequences to Acquisition Corp., Holdings, the Borrowers,
Safety-Kleen or the Exchange Offer or Merger;
(v) Safety-Kleen and its Board of Directors shall
have taken all necessary action to amend the Rights Agreement,
dated as of November 9, 1988 (as amended, the "RIGHTS
AGREEMENT") to provide for the redemption or annulment or
inapplicability (without any substantial cost) of all
interests outstanding under or issued pursuant to the Rights
Agreement and to otherwise avoid the occurrence of any
material adverse consequences to Acquisition Corp. or
Safety-Kleen as a consequence of the Exchange Offer or the
Merger;
(vi) Holdings, Acquisition Corp. and Safety-Kleen
shall have entered into a definitive Merger Agreement and
related documentation providing for the Merger in form and
substance satisfactory to the General Administrative Agent;
(vii) all regulatory approvals (including, without
limitation, all such approvals with respect to antitrust
matters) necessary to consummate the Exchange Offer shall have
been obtained, all applicable waiting periods shall have
expired and the General Administrative Agent shall be
satisfied that all material regulatory approvals necessary to
consummate the Merger have been obtained or can be timely
obtained;
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(viii) there shall be no order, injunction or
restraining order in effect or known by the Company to be
threatened which would prevent or delay the consummation of,
or impose material adverse conditions on, the Exchange Offer
or the Merger. There shall not exist any pending or threatened
litigation which, in the good faith judgment of the General
Administrative Agent, could reasonably be expected to have a
Material Adverse Effect or a material adverse effect on the
ability of Holdings or Acquisition Corp. to consummate the
Exchange Offer or on the ability of Holdings or Acquisition
Corp. to consummate the Merger or to perform any material
obligation contemplated hereby or thereby or on the General
Administrative Agent's and Lenders' rights and remedies;
(ix) neither Safety-Kleen nor any of its subsidiaries
shall have taken, or be taking, any action (including any
reorganization, recapitalization, asset sale, stock purchase
or distribution to its stockholders) that, in the good faith
judgment of the General Administrative Agent, could reasonably
be expected to have a material adverse effect on the condition
(financial or otherwise), business, operations, assets or
prospects of Safety-Kleen or its subsidiaries or on the
consummation of the Exchange Offer or the Merger. In the good
faith judgment of the General Administrative Agent, no
material adverse change shall have otherwise occurred in the
condition (financial or otherwise), business, operations,
assets or prospects of (A) Holdings and its Subsidiaries since
the date of the audited financial statements of Holdings dated
August 31, 1997 or (B) Safety-Kleen and its Subsidiaries since
the date of the audited financial statements of Safety-Kleen
dated December 31, 1996; and
(x) the capital and legal structure of each Loan
Party after the Safety-Kleen Acquisition as proposed to be
consummated pursuant to the Exchange Offer Documentation and
the Merger Agreement shall be satisfactory in all respects;
and
(xi) all actions required under Safety-Kleen's
existing credit facility shall have been taken such that the
consummation of the Exchange Offer does not constitute a
default, or an event of mandatory prepayment, thereunder.
(d) REGULATIONS OF BOARD; FORMS G-3 AND U-1. The Lenders shall
be satisfied that the Exchange Offer and the financing thereof comply
with Regulation T, U and X of the Board. Each Lender shall have
received a duly completed and executed Form FR G-3 or Form FR U-1, as
applicable, of the Board, demonstrating such compliance.
(e) PLEDGED STOCK; STOCK POWERS. The General Administrative
Agent or the Exchange Agent shall have received the certificates
representing the Target Shares pledged pursuant to the Acquisition
Corp. Pledge Agreement (other than such Shares constituting Book-Entry
Shares (as defined in the Acquisition Corp. Pledge Agreement)),
together with an undated stock power for each such certificate executed
in blank by a duly
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authorized officer of Acquisition Corp., and with respect to
Target Shares consisting of Book-Entry Shares, evidence that all
actions described in Section 3(b) of the Acquisition Corp. Pledge
Agreement which are necessary to create and perfect the security
interests pursuant to the Acquisition Corp. Pledge Agreement in
accordance with Article 8 of the Uniform Commercial Code of the State
of New York have been taken. The shares pledged on the Closing Date
pursuant to the Acquisition Corp. Pledge Agreement shall constitute all
Shares owned by Acquisition Corp. or any of its affiliates, whether
acquired in the Exchange Offer or otherwise.
(f) EXCHANGE OFFER DOCUMENTS; MERGER AGREEMENT. The General
Administrative Agent shall have received certified true copies of the
Exchange Offer Documents and the Merger Agreement, in each case as in
effect on the Closing Date.
(g) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders
shall have received (i) the Pro Forma Balance Sheet, (ii) the audited
consolidated financial statements described in Section 7.1 and (iii)
unaudited interim consolidated financial statements of Holdings for the
most recent fiscal quarterly period ended subsequent to the date of the
latest applicable financial statement delivered pursuant to clause (ii)
of this paragraph as to which such financial statements have been made
publicly available.
(h) BUSINESS PLAN. The Lenders shall have received a business
plan for the Company and its Subsidiaries (including Safety-Kleen) for
the 1998 fiscal year and a written analysis of the business and
prospects of the Company and its Subsidiaries for the period from the
Closing Date through the final maturity of the Term Loans, in each case
as set forth in the Confidential Information Memorandum dated February
1998.
(i) ENVIRONMENTAL REPORTS. The General Administrative Agent
shall have received reports prepared by Dames & Moore with respect to
environmental matters relating to Safety-Kleen, in form and substance
satisfactory to the Lenders.
(j) CLOSING CERTIFICATE. The Administrative Agents shall have
received, with a counterpart for each Lender, a certificate of each
Loan Party, dated the Closing Date, substantially in the form of
Exhibit I, with appropriate insertions and attachments, satisfactory in
form and substance to the Administrative Agents, executed by the
President or any Vice President and the Secretary or any Assistant
Secretary of such party.
(k) FEES. The Administrative Agents and the Arranger shall
have received the fees to be received on the Closing Date referred to
in Sections 3.3 and 6.1.
(l) LEGAL OPINIONS. The Administrative Agents shall have
received, with a counterpart for each Lender, the following executed
legal opinions:
(i) the executed legal opinion of Katten,
Muchin & Zavis, U.S. counsel to the Company and the other Loan
Parties, in form and substance reasonably satisfactory to the
General Administrative Agent;
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(ii) the executed legal opinion of Ivan R.
Cairns, general counsel to Laidlaw, the Canadian Borrower and
its Subsidiaries, in form and substance reasonably
satisfactory to the General Administrative Agent;
(iii) the executed legal opinion of Tory Tory
DesLauriers & Binnington, Canadian counsel to the Lenders, in
form and substance reasonably satisfactory to the General
Administrative Agent; and
(iv) the executed legal opinion of South
Carolina counsel to the Company and the other Loan Parties, in
form and substance reasonably satisfactory to the General
Administrative Agent.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative
Agents may reasonably require.
(m) VALIDITY OF LIENS. The Security Documents shall be
effective to create in favor of the General Administrative Agent or
Canadian Administrative Agent, as the case may be, a legal, valid and
enforceable first (except for prior Liens not prohibited by Section
10.3) security interest in and lien upon the Collateral. The General
Administrative Agent shall have received evidence in form and substance
satisfactory to it that all filings, recordings, registrations and
other actions, including, without limitation, the filing of duly
executed financing statements on form UCC-1, necessary or, in the
opinion of the General Administrative Agent, desirable to perfect the
Liens created by the Security Documents shall have been completed.
(n) TITLE INSURANCE POLICY. The General Administrative Agent
shall have received in respect of each parcel covered by each Existing
Mortgage a mortgagee's title policy (or policies) or marked up
unconditional binder for such insurance dated the Closing Date. Each
such policy shall (i) be in an amount satisfactory to the General
Administrative Agent; (ii) be issued at ordinary rates; (iii) insure
that the Mortgage insured thereby creates a valid first Lien on such
parcel free and clear of all defects and encumbrances, except such as
may be approved by the General Administrative Agent; (iv) name the
General Administrative Agent for the benefit of the Lenders as the
insured thereunder; (v) be in the form of ALTA Loan Policy - 1970
(Amended 10/17/70); (vi) contain such endorsements and affirmative
coverage as the General Administrative Agent may request and (vii) be
issued by title companies satisfactory to the General Administrative
Agent (including any such title companies acting as co-insurers or
reinsurers, at the option of the General Administrative Agent). The
General Administrative Agent shall have received evidence satisfactory
to it that all premiums in respect of each such policy, and all charges
for mortgage recording tax, if any, have been paid.
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(o) COPIES OF DOCUMENTS. The General Administrative Agent
shall have received a copy of all recorded documents referred to, or
listed as exceptions to title in, the title policy or policies referred
to in Section 8.1(n) and a copy, certified by such parties as the
General Administrative Agent may deem appropriate, of all other
documents affecting the property covered by each Mortgage.
(p) LIEN SEARCHES. The General Administrative Agent shall have
received the results of a recent search by a Person satisfactory to the
General Administrative Agent, of the Uniform Commercial Code, judgement
and tax lien filings which may have been filed with respect to personal
property of the Loan Parties, and the results of such search shall be
satisfactory to the General Administrative Agent.
(q) INSURANCE. The General Administrative Agent shall have
received evidence in form and substance satisfactory to it that all of
the requirements of Section 9.5 of this Agreement and Section 5.3 of
the Guarantee and Collateral Agreement shall have been satisfied.
8.2 CONDITIONS TO EXTENSIONS OF CREDIT MADE ON THE MERGER
DATE. The agreement of each Lender to make Extensions of Credit on the Merger
Date requested to be made by it is subject to the satisfaction, immediately
prior to or concurrently with the making of such Extension of Credit on the
Merger Date, of the following conditions precedent:
(a) MERGER AGREEMENT. (i) The terms and conditions of
the Merger Agreement shall not have been amended, waived or
modified as to price, consideration, conditions, termination
or expiration or in any other material respect without the
prior approval of the General Administrative Agent and the
Required Lenders;
(ii) the Merger shall have been consummated
in accordance with the Merger Agreement and applicable law;
and
(iii) all conditions precedent to the
consummation of the Merger shall have been satisfied or waived
with the Required Lenders' consent.
(b) SOLVENCY CERTIFICATE. The General Administrative
Agent shall have received a solvency certificate of the
Company, in form, scope and substance satisfactory to the
General Administrative Agent and its legal counsel.
(c) COLLATERAL. All actions required by Section 9.10
in respect of all Subsidiaries and assets acquired on the
Merger Date (including delivery of legal opinions with respect
thereto as provided in Section 9.10) shall have been taken so
that on the Merger Date the General Administrative Agent shall
have a duly perfected first priority security interest in all
such assets.
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(d) LEGAL OPINIONS. The Administrative Agents shall
have received, with a counterpart for each Lender, the
executed legal opinion of Katten, Muchin & Zavis, U.S. counsel
to the Company and the other Loan Parties, in form and
substance reasonably satisfactory to the General
Administrative Agent. Such legal opinion shall cover such
other matters incident to the transactions contemplated by
this Agreement as the Administrative Agents may reasonably
require.
(e) LIEN SEARCHES. The General Administrative Agent
shall have received the results of a recent search by a Person
satisfactory to the General Administrative Agent, of the
Uniform Commercial Code, judgement and tax lien filings which
may have been filed with respect to personal property of
Safety-Kleen and its Subsidiaries, and the results of such
search shall be satisfactory to the General Administrative
Agent.
(f) INSURANCE. The General Administrative Agent shall
have received evidence in form and substance satisfactory to
it that all of the requirements of Section 9.5 of this
Agreement and Section 5.3 of the Guarantee and Collateral
Agreement shall have been satisfied with respect to the
Surviving Corporation and its Subsidiaries.
(g) all outstanding indebtedness of Safety-Kleen and
its subsidiaries (other than the indebtedness set forth on
Schedule 8.2(g) hereto) shall have been repaid in full.
8.3 CONDITIONS TO EXTENSION OF CREDIT. The agreement of each
Lender to make any Extension of Credit requested to be made by it on any date
(including, without limitation, its initial Extension of Credit) is subject to
the satisfaction of the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties made by any Loan Party in or pursuant to
the Loan Documents shall be true and correct in all material respects
on and as of such date as if made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have
occurred and be continuing on such date or after giving effect to the
extensions of credit requested to be made on such date.
(c) ADDITIONAL MATTERS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection
with the transactions contemplated by this Agreement, the other Loan
Documents and the Merger Agreement shall be satisfactory in form and
substance to the General Administrative Agent, and the General
Administrative Agent shall have received such other documents and legal
opinions in respect of any aspect or consequence of the transactions
contemplated hereby or thereby as it shall reasonably request.
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Each request by a Borrower for an Extension of Credit
hereunder shall constitute a representation and warranty by each Borrower as of
the date thereof that the conditions contained in this subsection have been
satisfied.
SECTION 9. AFFIRMATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Reimbursement Obligation, Acceptance Reimbursement
Obligation, Acceptance Note or Letter of Credit remains outstanding or any
amount is owing to any Lender, the General Administrative Agent or the Canadian
Administrative Agent hereunder or under any other Loan Document, the Company
shall and (except in the case of delivery of financial information, reports and
notices) shall cause each of its Subsidiaries to:
9.1 FINANCIAL STATEMENTS. Furnish to the General
Administrative Agent, the Canadian Administrative Agent and each Lender:
(a) as soon as available, but in any event within 90 days
after the end of each fiscal year of Holdings, a copy of the
consolidated and consolidating balance sheets of Holdings and its
consolidated Subsidiaries as at the end of such year and the related
consolidated and consolidating statements of income and retained
earnings and of cash flows for such year, setting forth in each case in
comparative form the figures for the previous year, reported on (in the
case of such consolidated statements and balance sheet) without a
"going concern" or like qualification or exception, or qualification
arising out of the scope of the audit, by Coopers & Lybrand or other
independent certified public accountants of nationally recognized
standing, and certified (in the case of such consolidating statements
and balance sheet) by a Responsible Officer as being fairly stated in
all material respects; and
(b) as soon as available, but in any event not later than 45
days after the end of each of the first three quarterly periods of each
fiscal year of Holdings, the unaudited consolidated and consolidating
balance sheets of Holdings and its consolidated Subsidiaries as at the
end of such quarter and the related unaudited consolidated and
consolidating statements of income and retained earnings and of cash
flows of Holdings and its consolidated Subsidiaries for such quarter
and the portion of the fiscal year through the end of such quarter,
setting forth in each case in comparative form the figures for the
previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments);
all such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
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9.2 CERTIFICATES; OTHER INFORMATION. Furnish to each Lender:
(a) concurrently with the delivery of the financial statements
referred to in Section 9.1(a), a certificate of the independent
certified public accountants reporting on such financial statements
stating that in making the examination necessary therefor no knowledge
was obtained of any Default or Event of Default, except as specified in
such certificate;
(b) concurrently with the delivery of the financial statements
referred to in Sections 9.1(a) and (b), (i) a certificate of a
Responsible Officer stating that, to the best of such Responsible
Officer's knowledge, during such period the Company has observed or
performed all of its covenants and other agreements, and satisfied
every condition, contained in this Agreement and the other Loan
Documents to be observed, performed or satisfied by it, and that such
Responsible Officer has obtained no knowledge of any Default or Event
of Default except as specified in such certificate and (ii) a
compliance certificate of a Responsible Officer containing all
information necessary, or reasonably requested by the General
Administrative Agent, for determining compliance by the Company and its
Subsidiaries with the provisions of Section 10 of this Agreement as of
the last day of the fiscal quarter or fiscal year of the Company, as
the case may be;
(c) prior to the end of each fiscal year of the Company, a
copy of the projections by the Company of the operating budget and cash
flow budget of the Company and its Subsidiaries for the succeeding
fiscal year, such projections to be accompanied by a certificate of a
Responsible Officer to the effect that such projections have been
prepared on the basis of sound financial planning practice and that
such Responsible Officer has no reason to believe they are incorrect or
misleading in any material respect;
(d) within five days after the same are sent, copies of all
financial statements and reports which the Company or Holdings sends to
its stockholders, and within five days after the same are filed, copies
of all financial statements and reports which the Company or Holdings
may make to, or file with, the Securities and Exchange Commission or
any successor or analogous Governmental Authority (including, but not
limited to, each Exchange Offer Document); and
(e) promptly, such additional financial and other information
as any Lender may from time to time reasonably request.
9.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise
satisfy at or before maturity or before they become delinquent, as the case may
be, all its obligations of whatever nature, except where the amount or validity
thereof is currently being contested in good faith by appropriate proceedings
and reserves in conformity with GAAP with respect thereto have been provided on
the books of the Company or its Subsidiaries, as the case may be.
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9.4 CONDUCT OF BUSINESS AND MAINTENANCE OF EXISTENCE. Continue
to engage in business of the same general type as now conducted by it and
preserve, renew and keep in full force and effect its corporate existence and
take all reasonable action to maintain all rights, privileges and franchises
necessary or desirable in the normal conduct of its business except as otherwise
permitted pursuant to Section 10.5; comply with all Contractual Obligations and
Requirements of Law except to the extent that failure to comply therewith could
not, in the aggregate, have a Material Adverse Effect.
9.5 MAINTENANCE OF PROPERTY; INSURANCE. Keep all property
useful and necessary in its business in good working order and condition;
maintain with financially sound and reputable insurance companies insurance on
all its property in at least such amounts and against at least such risks as are
usually insured against in the same general area by companies engaged in the
same or a similar business (including, but not limited to, general liability
insurance in an amount of at least $100,000,000 and a deductible of not more
than $5,000,000 per occurrence).
9.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS.
Keep proper books of records and account in which full, true and correct entries
in conformity with GAAP and all Requirements of Law shall be made of all
dealings and transactions in relation to its business and activities; and permit
representatives of the Administrative Agents (or, with the coordination of the
Administrative Agents, the Lenders) to visit and inspect any of its properties
and examine and make abstracts from any of its books and records at any
reasonable time and as often as may reasonably be desired and to discuss the
business, operations, properties and financial and other condition of the
Company and its Subsidiaries with officers and employees of the Company and its
Subsidiaries and with its independent certified public accountants.
9.7 NOTICES. Promptly give notice to the Administrative Agents
and each Lender of:
(a) the occurrence of any Default or Event of Default;
(b) any (i) default or event of default under any Contractual
Obligation of the Company or any of its Subsidiaries or (ii)
litigation, investigation or proceeding which may exist at any time
between the Company or any of its Subsidiaries and any Governmental
Authority, which in either case, if not cured or if adversely
determined, as the case may be, could have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Company or any
of its Subsidiaries in which the amount involved is $5,000,000 or more
and not covered by insurance or in which injunctive or similar relief
is sought;
(d) the following events, as soon as possible and in any event
within 30 days after the Company knows or has reason to know thereof:
(i) the occurrence or expected occurrence of any Reportable Event with
respect to any Plan, a failure to make any required contribution to a
Plan, the creation of any Lien in favor of the PBGC or a Plan or
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any withdrawal from, or the termination, Reorganization or
Insolvency of, any Multiemployer Plan or (ii) the institution of
proceedings or the taking of any other action by the PBGC or the
Company or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the terminating, Reorganization
or Insolvency of, any Plan;
(e) the occurrence or expected occurrence of any event that is
reasonably likely to result in the Company or any of its Subsidiaries
being unable to obtain, renew, or comply with any Environmental Permit
the absence of which could have a Material Adverse Effect, or being
unable to comply with any Environmental Law in a manner that could have
a Material Adverse Effect; and
(f) any material adverse change in the business, operations,
property, condition (financial or otherwise) or prospects of the
Company and its Subsidiaries taken as a whole.
Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Company proposes to take with respect thereto.
9.8 ENVIRONMENTAL LAWS. (a) (i) Comply with all Environmental
Laws applicable to it, and obtain, comply with and maintain any and all
Environmental Permits necessary for its operations as conducted and as planned;
and (ii) take all reasonable efforts to ensure that all of its tenants,
subtenants, contractors, subcontractors, and invitees comply with all
Environmental Laws, and obtain, comply with and maintain any and all
Environmental Permits, applicable to any of them insofar as any failure to so
comply, obtain or maintain reasonably could adversely affect the Company or any
Subsidiary. For purposes of this Section 9.8(a), noncompliance by the Company
and any of its Subsidiaries with any applicable Environmental Law or
Environmental Permit shall be deemed not to constitute a breach of this
covenant; provided that, upon learning of any actual or suspected noncompliance,
the Company and its Subsidiaries shall promptly undertake all reasonable efforts
to achieve compliance; and provided further that, in any case, such
non-compliance, and any other noncompliance with any Environmental Law,
individually or in the aggregate, could not reasonably be expected to give rise
to a Material Adverse Effect.
(b) Promptly comply with all orders and directives of all
Governmental Authorities regarding Environmental Laws, other than such orders
and directives as to which an appeal has been timely and properly taken in good
faith and provided that the pendency of any and all such appeals does not give
rise to a Material Adverse Effect.
(c) Prior to acquiring any ownership or leasehold interest in
real property for which a permit would be required for operation as a hazardous
waste facility, or any other real property or other interest in any real
property that could reasonably be expected to give rise to the Company or any of
its Subsidiaries being found to be subject to potential liability under any
Environmental Law: (i) obtain a written report by a reputable environmental
consultant of the environmental consultant's assessment of the presence or
potential presence of significant levels of any Materials of Environmental
Concern on, under, in, or about the property, or of other
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conditions or operations that could give rise to potentially significant
liability under or violations of Environmental Law relating to such acquisition;
and (ii) inform the General Administrative Agent of its plans to acquire such
interest in real property and, upon the General Administrative Agent's request,
afford the General Administrative Agent a reasonable opportunity to review and
discuss the contents of such report with the environmental consultant who
prepared it and a knowledgeable representative of the Company.
(d) Promptly upon the General Administrative Agent's request
if there has been an Event of Default which has not been fully and timely cured,
permit an environmental consultant whom the General Administrative Agent in its
discretion designates to perform an environmental assessment (including, without
limitation: reviewing documents; interviewing knowledgeable persons; and
sampling and analyzing soil, air, surface water, groundwater, building
materials, and/or other media or substances) in or about property owned or
leased by the Company or any of its Subsidiaries, or on which operations of the
Company or any of its Subsidiaries otherwise take place. Such environmental
assessment shall be in form, scope, and substance satisfactory to the General
Administrative Agent. The Company and its Subsidiaries shall cooperate fully in
the conduct of such environmental assessment, and shall pay the costs of such
environmental assessment immediately upon written demand by the General
Administrative Agent. Pursuant to this Section 9.8(d), the General
Administrative Agent shall have the right, but shall not have any duty, to
request and/or obtain any such environmental assessment.
9.9 FURTHER ASSURANCE. Upon the request of the General
Administrative Agent, promptly perform or cause to be performed any and all acts
and execute or cause to be executed any and all documents (including, without
limitation, financing statements and continuation statements) for filing under
the provisions of the Uniform Commercial Code or any other Requirement of Law
which are necessary or advisable to maintain in favor of the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
for the benefit of the Lenders, Liens on the Collateral that are duly perfected
in accordance with all applicable Requirements of Law.
9.10 ADDITIONAL COLLATERAL. (a) With respect to any assets
acquired after the Closing Date by the Company or any of its Subsidiaries (other
than each of ECDC East, L.C., ECDC Services, L.C., Osco Treatment Systems of
Mississippi, Inc., USPCI of Mississippi, Inc., so long as such entity is not,
directly or indirectly, a wholly-owned subsidiary of the Company) that are
intended to be subject to the Lien created by any of the Security Documents but
which are not so subject (other than any assets described in paragraph (b) or
(c) of this Section), promptly (and in any event within 30 days after the
acquisition thereof): (i) execute and deliver to the General Administrative
Agent or the Canadian Administrative Agent, as the case may be, such amendments
to the relevant Security Documents or such other documents as the General
Administrative Agent shall deem necessary or advisable to grant to the General
Administrative Agent or the Canadian Administrative Agent, as the case may be,
for the benefit of the Lenders, a Lien on such assets, (ii) take all actions
necessary or advisable to cause such Lien to be duly perfected in accordance
with all applicable Requirements of Law, including, without limitation, the
filing of financing statements in such jurisdictions as may be requested by the
General Administrative Agent or the Canadian Administrative Agent, as the case
may be, and (iii) if
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requested by the General Administrative Agent, deliver to the General
Administrative Agent legal opinions relating to the matters described in clauses
(i) and (ii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the General
Administrative Agent.
(b) With respect to any Person (other than a Subsidiary of the
Canadian Borrower) that, subsequent to the Closing Date, becomes a Subsidiary,
including, without limitation on the Merger Date, Safety-Kleen and its
Subsidiaries, promptly upon the request of the General Administrative Agent: (i)
execute and deliver to the General Administrative Agent, for the benefit of the
Lenders, a new pledge agreement or such amendments to the Guarantee and
Collateral Agreement as the General Administrative Agent shall deem necessary or
advisable to grant to the General Administrative Agent, for the benefit of the
Lenders, a Lien on the Capital Stock of such Subsidiary which is owned by the
Company or any of its Subsidiaries, (ii) deliver to the General Administrative
Agent the certificates representing such Capital Stock, together with undated
stock powers executed and delivered in blank by a duly authorized officer of the
Company or such Subsidiary, as the case may be, (iii) cause such new Subsidiary
(A) to become a party to the Guarantee and Collateral Agreement, and (B) to take
all actions necessary or advisable to cause the Lien created by the Guarantee
and Collateral Agreement to be duly perfected in accordance with all applicable
Requirements of Law, including, without limitation, the filing of financing
statements in such jurisdictions as may be requested by the General
Administrative Agent and (iv) if requested by the General Administrative Agent,
deliver to the General Administrative Agent legal opinions relating to the
matters described in clauses (i), (ii) and (iii) immediately preceding, which
opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the General Administrative Agent.
(c) With respect to any Person that, subsequent to the Closing
Date, becomes a Subsidiary of the Canadian Borrower, promptly upon the request
of the General Administrative Agent: (i) execute and deliver to the Canadian
Administrative Agent a new pledge agreement or such amendments to the Canadian
Collateral Documents as the General Administrative Agent shall deem necessary or
advisable to grant to the Canadian Administrative Agent, for the benefit of the
Canadian Lenders, a Lien on the Capital Stock of such Subsidiary which is owned
by the Canadian Borrower or any of its Subsidiaries, (ii) deliver to the
Canadian Administrative Agent any certificates representing such Capital Stock,
together with undated stock powers executed and delivered in blank by a duly
authorized officer of the Canadian Borrower or such Subsidiary, as the case may
be, and take or cause to be taken all such other actions under the law of the
jurisdiction of organization of such Subsidiary as may be necessary or advisable
to perfect such Lien on such Capital Stock, (iii) cause such Subsidiary to
become a guarantor under the Canadian Collateral Documents and to grant security
interests in its personal property assets and (iv) if requested by the General
Administrative Agent, deliver to the General Administrative Agent legal opinions
relating to the matters described in clauses (i), (ii) and (iii) immediately
preceding, which opinions shall be in form and substance, and from counsel,
reasonably satisfactory to the General Administrative Agent.
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(d) With respect to any parcel of real property having a book
value in excess of $1,000,000 acquired by the Company or any of its Subsidiaries
after the Closing Date (including any such real property owned by any Person
when it becomes a Subsidiary), if requested by the General Administrative Agent,
promptly provide to the General Administrative Agent a mortgage on such
property, together with such title insurance policies, surveys and legal
opinions related thereto as shall be reasonably requested by the General
Administrative Agent.
9.11 CANADIAN BENEFIT AND PENSION PLANS. (a) For each existing
Canadian Pension Plan and Canadian Benefit Plan and for any Canadian Pension
Plan or Canadian Benefit Plan hereafter adopted, the Canadian Borrower and its
Subsidiaries shall in a timely fashion perform all obligations (including
fiduciary, funding, investment and administration obligations) required to be
performed in connection with such plan and the funding media therefor in
accordance with the terms of such plan and all Requirements of Law.
(b) Each of the Canadian Borrower and its Subsidiaries shall
deliver to the General Administrative Agent (A) if requested by the Canadian
Administrative Agent, acting reasonably, promptly after the filing thereof by
the Canadian Borrower or such Subsidiary with any applicable Governmental
Authority, copies of each annual and other return, report or valuation with
respect to each Canadian Pension Plan, copies of any actuarial report with
respect to each Canadian Pension Plan (whether or not required by any
Governmental Authority) and (B) promptly after receipt thereof, a copy of any
direction, notice or other communication (i) in respect of any breach of
Applicable Law, (ii) which would have the effect of increasing the funding
obligation in respect of each such plan, or (iii) which could result in the
imposition of any Lien on any of the properties or assets of the Canadian
Borrower or such Subsidiary, and any order or ruling that the Canadian Borrower
or such Subsidiary may receive from any applicable Governmental Authority with
respect to any Canadian Pension Plan.
9.12 INTEREST RATE PROTECTION. Within 90 days after the
Closing Date, obtain interest rate protection for a period through March 31,
2000 for a notional amount at least equal to 40% of Consolidated Total Funded
Debt that bears interest at a floating rate on terms and conditions satisfactory
to the General Administrative Agent.
9.13 CONSUMMATION OF MERGER. As promptly as practicable, but
in any event within 60 days after the Closing Date, consummate the Merger in
accordance with the terms of the Merger Agreement.
9.14 PLEDGE AGREEMENT SUPPLEMENT. The Company shall cause
Acquisition Corp. to deliver to the General Administrative Agent on the date of
purchase an executed Pledge Agreement Supplement, substantially in the form of
Exhibit A to the Acquisition Corp. Pledge Agreement (a "PLEDGE AGREEMENT
SUPPLEMENT"), covering any Additional Pledged Stock (as defined in the
Acquisition Corp. Pledge Agreement) purchased by Acquisition Corp., together
with the stock certificates representing such Additional Pledged Stock and
appropriate undated stock powers duly executed in blank for each such stock
certificate.
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SECTION 10. NEGATIVE COVENANTS
The Company hereby agrees that, so long as the Commitments
remain in effect, any Loan, Reimbursement Obligation, Acceptance Reimbursement
Obligation, Acceptance Note or Letter of Credit remains outstanding or any
amount is owing to any Lender or either Administrative Agent hereunder or under
any other Loan Document, the Company shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly:
10.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED TOTAL LEVERAGE RATIO. Permit the Consolidated
Total Leverage Ratio as at the last day of any fiscal quarter of the Company
ending during any fiscal year set forth below, commencing with the fiscal
quarter ending November 30, 1998, to exceed the ratio set forth below opposite
such fiscal year:
Consolidated Total
FISCAL YEAR LEVERAGE RATIO
----------- ------------------
1999 4.50:1.00
2000 3.75:1.00
2001 3.25:1.00
2002 2.75:1.00
2003 2.50:1.00
2004 and thereafter 2.00:1.00
(b) FIXED CHARGE COVERAGE RATIO. Permit the Fixed Charge
Coverage Ratio as at the last day of any fiscal quarter ending during any fiscal
year set forth below, commencing with the fiscal quarter ending November 30,
1998, to be less than the ratio set forth below opposite such fiscal year:
Fixed
FISCAL YEAR CHARGE COVERAGE RATIO
----------- ---------------------
1999 1.25:1.00
2000 1.25:1.00
2001 and thereafter 1.50:1.00
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(c) INTEREST COVERAGE RATIO. Permit the Interest Coverage
Ratio for any period of four consecutive fiscal quarters of the Company (or, if
less, the number of full fiscal quarters ending subsequent to the Closing Date)
ending with any fiscal quarter ending during any fiscal year set forth below,
commencing with the fiscal quarter ending November 30, 1998, to be less than the
ratio set forth below opposite such fiscal year:
Interest
FISCAL YEAR COVERAGE RATIO
----------- --------------
1999 2.00:1.00
2000 2.25:1.00
2001 2.50:1.00
2002 2.75:1.00
2003 and thereafter 3.00:1.00
(d) MAXIMUM RATIO OF CONTINGENT OBLIGATIONS TO OPERATING CASH
FLOW. Permit the ratio of (i) Consolidated Contingent Obligations on the last
day of any fiscal quarter ending during any fiscal year, commencing with the
fiscal quarter ending November 30, 1998, to (ii) Consolidated Operating Cash
Flow for the period of four consecutive fiscal quarters ending on such last day
to be greater than 1.00 to 1.00.
For purposes of calculating the foregoing covenants of this Section 10.1 for any
period of four full fiscal quarters, the applicable income statement items for
any Person acquired by the Company or its Subsidiaries during such period shall
be included on a PRO FORMA basis for such period of four full fiscal quarters
(assuming the consummation of each such acquisition and the incurrence or
assumption of any Indebtedness in connection therewith occurred on the first day
of such period of four full fiscal quarters and assuming only such cost
reductions as are related to such acquisition and are immediately realizable as
of the date of such acquisition) if (i) the consolidated balance sheet of such
acquired Person and its consolidated Subsidiaries as at the end of the period
preceding the acquisition of such Person and the related consolidated statements
of income and stockholders' equity and of cash flows for such period have been
reported on without a qualification arising out of the scope of the audit (other
than a "going concern" or like qualification or exception) by independent
certified public accountants of nationally recognized standing and (ii) such
audited consolidated financial statements have been previously provided to the
General Administrative Agent and the Lenders.
10.2 LIMITATION ON INDEBTEDNESS. Create, incur, assume or
suffer to exist any Indebtedness,
except:
(a) Indebtedness of the Borrowers under this Agreement;
(b) Indebtedness of the Company to any Subsidiary and, to the
extent permitted by Section 10.8, of any Subsidiary to the Company or
any other Subsidiary;
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(c) Indebtedness of the Company and any of its Subsidiaries
incurred to finance the acquisition of fixed or capital assets (whether
pursuant to a loan, a Financing Lease or otherwise) in an aggregate
principal amount not exceeding as to the Company and its Subsidiaries
$40,000,000 at any one time outstanding;
(d) Indebtedness of the Canadian Borrower under the Canadian
Operating Facility incurred for working capital purposes in an
aggregate principal amount not exceeding C$35,000,000 at any one time
outstanding;
(e) Indebtedness of the Company under the NationsBank Line of
Credit incurred for working capital purposes in an aggregate principal
amount not exceeding $25,000,000 at any one time outstanding;
(f) Indebtedness outstanding on the date hereof and listed on
Schedule 10.2(f) and any refinancings, refundings, renewals or
extensions thereof (excluding any Indebtedness required to be repaid
pursuant to Section 8.2(g));
(g) Indebtedness of a corporation which becomes a Subsidiary
after the date hereof, PROVIDED that (i) such indebtedness existed at
the time such corporation became a Subsidiary and was not created in
anticipation thereof and (ii) immediately after giving effect to the
acquisition of such corporation by the Company no Default or Event of
Default shall have occurred and be continuing;
(h) Indebtedness of the Company of up to $400,000,000 under
the High Yield Notes, PROVIDED that the Borrowers and the General
Administrative Agent shall have entered into a written supplement to
this Agreement whereby the Company agrees to maintain a senior leverage
ratio of not greater than certain levels to be agreed by the Company
and the General Administrative Agent;
(i) Indebtedness in the form of Guarantee Obligations
permitted by Section 10.4; and
(j) additional Indebtedness of the Company not exceeding
$50,000,000 in aggregate principal amount at any one time outstanding.
10.3 LIMITATION ON LIENS. Create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired, except for:
(a) Liens for taxes not yet due or which are being contested
in good faith by appropriate proceedings, PROVIDED that adequate
reserves with respect thereto are maintained on the books of the
Company or its Subsidiaries, as the case may be, in conformity with
GAAP;
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(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 60 days or
which are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers'
compensation, unemployment insurance and other social security
legislation and deposits securing liability to insurance carriers under
insurance or self-insurance arrangements;
(d) deposits to secure the performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, surety and appeal bonds, performance bonds and other
obligations of a like nature incurred in the ordinary course of
business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business which, in the
aggregate, are not substantial in amount and which do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Company or such Subsidiary;
(f) Liens in existence on the date hereof listed on Schedule
10.3(f), securing Indebtedness permitted by Section 10.2(f), PROVIDED
that no such Lien is spread to cover any additional property after the
Closing Date and that the amount of Indebtedness secured thereby is not
increased;
(g) Liens securing Indebtedness of the Company and its
Subsidiaries permitted by Section 10.2(c) incurred to finance the
acquisition of fixed or capital assets, PROVIDED that (i) such Liens
shall be created substantially simultaneously with the acquisition of
such fixed or capital assets, (ii) such Liens do not at any time
encumber any property other than the property financed by such
Indebtedness, (iii) the amount of Indebtedness secured thereby is not
increased and (iv) the principal amount of Indebtedness secured by any
such Lien shall at no time exceed 90% of the original purchase price of
such property at the time it was acquired;
(h) Liens on assets of any Foreign Subsidiary securing
Indebtedness of such Foreign Subsidiary permitted by Section 10.2(f);
(i) Liens on the property or assets of a corporation which
becomes a Subsidiary after the date hereof securing Indebtedness
permitted by Section 10.2(g), PROVIDED that (i) such Liens existed at
the time such corporation became a Subsidiary and were not created in
anticipation thereof, (ii) any such Lien is not spread to cover any
property or assets of such corporation after the time such corporation
becomes a Subsidiary, and (iii) the amount of Indebtedness secured
thereby is not increased;
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(j) Liens (not otherwise permitted hereunder) which secure
obligations not exceeding (as to the Company and all Subsidiaries)
$5,000,000 in aggregate amount at any time outstanding; and
(k) Liens created pursuant to the Security Documents.
10.4 LIMITATION ON GUARANTEE OBLIGATIONS. Create, incur,
assume or suffer to exist any Guarantee Obligation except:
(a) Guarantee Obligations in existence on the date hereof and
listed on Schedule 10.4;
(b) Guarantee Obligations of the Company or any of its
Subsidiaries in respect of Indebtedness and other obligations of
Subsidiaries which are permitted to be incurred by such Subsidiaries
hereunder, PROVIDED that such Guarantee Obligations shall be deemed
"investments" and must be permitted under Section 10.8;
(c) Guarantee Obligations in respect of, or in the nature of,
performance bonds or performance letters of credit or similar
obligations incurred in the ordinary course of business;
(d) Guarantee Obligations incurred after the date hereof in an
aggregate amount not to exceed (i) $75,000,000 at any one time
outstanding for the Company and its Domestic Subsidiaries and (ii)
$25,000,000 at any one time outstanding for the Company's Foreign
Subsidiaries;
(e) the Guarantee Obligations of Subsidiaries in respect of
the High Yield Notes, PROVIDED that such Guarantee Obligations are
subordinated to the obligations of the Subsidiaries under the Loan
Documents to the same extent as the Company's obligations under the
High Yield Notes are subordinated to the Company's obligations under
the Loan Documents; and
(f) the Guarantee Obligations under this Agreement or any
Security Document.
10.5 LIMITATION ON FUNDAMENTAL CHANGES. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or convey, sell, lease, assign, transfer
or otherwise dispose of, all or substantially all of its property, business or
assets, or make any material change in its present method of conducting
business, except:
(a) any Subsidiary of the Company (other than the Canadian
Borrower) may be merged or consolidated with or into the Company
(PROVIDED that the Company shall be the continuing or surviving
corporation) or with or into any one or more wholly owned Subsidiaries
of the Company (PROVIDED that the wholly owned Subsidiary or
Subsidiaries shall be the continuing or surviving corporation);
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(b) any wholly owned Subsidiary (other than the Canadian
Borrower) may sell, lease, transfer or otherwise dispose of any or all
of its assets (upon voluntary liquidation or otherwise) to the Company
or any other wholly owned Subsidiary of the Company;
(c) the Merger may be consummated in accordance with the terms
of the Merger Agreement; and
(d) the dissolution of Corsan Trucking, Inc.
10.6 LIMITATION ON DISPOSITION OF ASSETS. Dispose of any of
its property, business or assets (including, without limitation, receivables and
leasehold interests), whether now owned or hereafter acquired, or, in the case
of any Subsidiary, issue or sell any shares of such Subsidiary's Capital Stock
to any Person other than the Company or any wholly owned Subsidiary, except:
(a) the sale or other Disposition of obsolete or worn out
property in the ordinary course of business;
(b) the sale or other Disposition of any property (other than
inventory), PROVIDED that the aggregate book value of all assets so
sold or disposed of in any period of twelve consecutive months shall
not exceed 5% of consolidated total assets of the Company and its
Subsidiaries as at the beginning of such twelve-month period;
(c) the sale of inventory in the ordinary course of business;
(d) the sale or discount without recourse of accounts
receivable arising in the ordinary course of business in connection
with the compromise or collection thereof;
(e) after the consummation of the Merger, the sale of
Safety-Kleen's European operations for fair market value;
(f) after the consummation of the Merger, the sale of
Safety-Kleen's oil recovery services business for fair market value;
and
(g) as permitted by Section 10.5(b).
10.7 LIMITATION ON DIVIDENDS. Declare or pay any dividend
(other than dividends payable solely in common stock of the Person making such
dividend) on, or make any payment on account of, or set apart assets for a
sinking or other analogous fund for, the purchase, redemption, defeasance,
retirement or other acquisition of, any shares of any class of Capital Stock of
the Company or any of its Subsidiaries or any warrants or options to purchase
any such Stock, whether now or hereafter outstanding, or make any other
distribution in respect thereof, either directly or indirectly, whether in cash
or property or in obligations of the Company or any
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Subsidiary (such declarations, payments, setting apart,
purchases, redemptions, defeasances, retirements, acquisitions and distributions
being herein called "RESTRICTED PAYMENTS"), except that any Subsidiary may make
Restricted Payments to the Company or any wholly owned Subsidiary of the Company
and so long as, on the date of such Restricted Payment, both before and after
giving effect thereto, no Default or Event of Default shall have occurred and be
continuing (a) the Company may make Restricted Payments to Holdings to service
the Seller Note, the Westinghouse Debt, the CPCFA Debt and the Tooele County
Debt, PROVIDED that (i) each such Restricted Payment shall be made on the date
on which a cash payment of interest under the Seller Note or of principal or
interest under the Westinghouse Debt, the CPCFA Debt or the Tooele County Debt,
as the case may be, is due and shall be in an amount not greater than the amount
of such cash payment, and such cash payment in respect of such Indebtedness
shall be made by Holdings on such date and (b) the Company may make Restricted
Payments to Holdings to provide for payment in the ordinary course of business
of taxes, directors' fees, stock exchange fees, and other costs and expenses of
its operations as a public company permitted by the Guarantee and Collateral
Agreement.
10.8 LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. Make any
advance, loan, extension of credit or capital contribution to, or purchase any
stock, bonds, notes, debentures or other securities of or any assets
constituting a business unit of, or make any other investment in, any Person,
except :
(a) extensions of trade credit in the ordinary course of
business;
(b) investments in Cash Equivalents;
(c) acquisitions of interests in any Persons (other than
Safety-Kleen) engaged in the hazardous and industrial waste management
services industry, provided that (i) the aggregate amount of cash
expended and Indebtedness assumed in connection with all such
investments does not exceed $100,000,000 in the aggregate during the
twelve month period following the Closing Date or $200,000,000 in the
aggregate during the term of this Agreement and (ii) after giving PRO
FORMA effect to any such investment, no Default or Event of Default
shall have occurred and be continuing (including, without limitation,
pursuant to Section 10.1, with compliance with Section 10.1 being
determined on a PRO FORMA basis as determined in the manner described
in the last paragraph of Section 10.1);
(d) loans to officers of the Company listed on Schedule 10.8
in aggregate principal amounts outstanding not to exceed the respective
amounts set forth for such officers on said Schedule;
(e) loans and advances to employees of the Company or its
Subsidiaries for travel, entertainment and relocation expenses in the
ordinary course of business in an aggregate amount for the Company and
its Subsidiaries not to exceed $1,000,000 at any one time outstanding;
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(f) investments by the Company and its Subsidiaries in the
Subsidiaries of the Company that are parties to the Guarantee and
Collateral Agreement;
(g) investments by the Company and its Domestic Subsidiaries
in the Canadian Borrower, the proceeds of which are used solely to
repay the Canadian Borrower Obligations, and additional investments by
the Company and its Domestic Subsidiaries in the Canadian Borrower in
an amount not exceeding $15,000,000 in the aggregate during the term of
this Agreement;
(h) investments by the Canadian Borrower in any of its
Subsidiaries that have guaranteed the Canadian Borrower Obligations;
(i) loans by the Company to its employees in connection with
management incentive plans in an aggregate amount not to exceed
$1,000,000;
(j) acquisitions of interests in Safety-Kleen pursuant to the
Exchange Offer and the Merger; and
(k) the loan made by the Company on the date hereof to
Safety-Kleen in the principal amount of $46,000,000.
10.9 LIMITATION ON OPTIONAL PAYMENTS AND MODIFICATIONS OF DEBT
INSTRUMENTS AND OTHER INSTRUMENTS. (a) Make any optional payment or prepayment
on or redemption or purchase of any Indebtedness (other than Indebtedness under
this Agreement), (b) amend, modify or change, or consent or agree to any
amendment, modification or change to any of the terms relating to the payment or
prepayment or principal of or interest on any such Indebtedness (other than any
such amendment, modification or change which would extend the maturity or reduce
the amount of any payment of principal thereof or which would reduce the rate or
extend the date for payment of interest thereon), (c) amend the subordination
provisions of the Seller Note or the High Yield Notes, if any, or (d) amend,
modify or change in any material respect the terms of the Exchange Offer or the
Merger Agreement.
10.10 LIMITATION ON TRANSACTIONS WITH AFFILIATES. Enter into
any transaction, including, without limitation, any purchase, sale, lease or
exchange of property or the rendering of any service, with any Affiliate unless
such transaction is (a) otherwise permitted under this Agreement, (b) in the
ordinary course of the Company's or such Subsidiary's business and (c) upon fair
and reasonable terms no less favorable to the Company or such Subsidiary, as the
case may be, than it would obtain in a comparable arm's length transaction with
a Person which is not an Affiliate.
10.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Company or any
Subsidiary of real or personal property which has been or is to be sold or
transferred by the Company or such Subsidiary to such Person or to any other
Person to whom funds have been or are to be advanced by such Person on the
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security of such property or rental obligations of the Company
or such Subsidiary, except for any such arrangements with respect to real or
personal property with respect to which the aggregate sales price shall not
exceed $25,000,000.
10.12 LIMITATION ON CHANGES IN FISCAL YEAR. Permit the fiscal
year of the Company to end on a day other than August 31, unless the Company
shall have provided to the General Administrative Agent evidence satisfactory to
it that such change will have no effect on the calculation of, or compliance by
the Company with, the covenants set forth in Section 10.1; or permit the fiscal
years of the Company and Holdings to end on different days.
10.13 LIMITATION ON NEGATIVE PLEDGE CLAUSES. Enter into with
any Person any agreement, other than (a) this Agreement and (b) any industrial
revenue bonds, purchase money mortgages or Financing Leases permitted by this
Agreement (in which cases, any prohibition or limitation shall only be effective
against the assets financed thereby), which prohibits or limits the ability of
the Company or any of its Subsidiaries to create, incur, assume or suffer to
exist any Lien upon any of its property, assets or revenues, whether now owned
or hereafter acquired.
10.14 LIMITATION ON LINES OF BUSINESS. Enter into any
business, either directly or through any Subsidiary, except for those businesses
in which the Company and its Subsidiaries, and Safety-Kleen and its
Subsidiaries, are engaged on the date of this Agreement or which are directly
related thereto.
10.15 CANADIAN BENEFIT AND PENSION PLANS. Permit the Canadian
Borrower or any of its Subsidiaries to directly, or indirectly, (a) terminate or
cause to terminate, in whole or in part, or initiate the termination of, in
whole or in part, any Canadian Pension Plan so as to result in any liability to
any of them which could have a Material Adverse Effect, (b) permit to exist any
event or condition in respect of any Canadian Pension Plan which presents the
risk of liability of the Canadian Borrower or any of its Subsidiaries which
could have a Material Adverse Effect, (c) enter into any new Canadian Pension
Plan or Canadian Benefit Plan or modify any such existing plans so as to
increase its obligations thereunder which could result in any liability to any
of them and which could have a Material Adverse Effect; (d) permit the greater
of the going concern unfunded liability or the solvency deficiency under
Canadian Pension Plans, but only to the extent they are permitted to remain
unfunded under Requirements of Law, to exceed (in the aggregate, taking into
account all Canadian Pension Plans of the Canadian Borrower and its
Subsidiaries) C$5,000,000, (e) fail to make minimum required contributions to
amortize any funding deficiencies under a Canadian Pension Plan within the time
period set out in any Requirements of Law, (f) fail to make a required
contribution under any Canadian Pension Plan or Canadian Benefit Plan which
could result in the imposition of a Lien upon the assets of any of the Canadian
Borrower or any of its Subsidiaries within 30 days after the date such payment
becomes due, unless such payment is being contested pursuant to Section 9.3; (g)
make any improper withdrawals or applications of assets of a Canadian Pension
Plan or Canadian Benefit Plan or (h) accept payment of any amount from any
Canadian Pension Plan.
10.16 HEDGING AGREEMENTS. Enter into any Hedging Agreement
outside the ordinary course of business or for speculative purposes.
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SECTION 11. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) Either Borrower shall fail to pay any principal of any
Loan when due in accordance with the terms thereof or hereof; or either
Borrower shall fail to pay any interest on any Loan, or any other
amount payable hereunder, within five days after any such interest or
other amount becomes due in accordance with the terms thereof or
hereof; or
(b) Any representation or warranty made or deemed made by
either Borrower or any other Loan Party herein or in any other Loan
Document or which is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement or any such other Loan Document shall
prove to have been incorrect in any material respect on or as of the
date made or deemed made; or
(c) The Company or any other Loan Party shall default in the
observance or performance of any agreement contained in Section 10 of
this Agreement or Section 5 of the Guarantee and Collateral Agreement,
or Acquisition Corp. shall default in the observance or performance of
any agreement contained in the Acquisition Corp. Pledge Agreement; or
(d) The Company or any other Loan Party shall default in the
observance or performance of any other agreement contained in this
Agreement or any other Loan Document (other than as provided in
paragraphs (a) through (c) of this Section), and such default shall
continue unremedied for a period of 30 days; or
(e) Holdings, the Company or any of its Subsidiaries shall (i)
default in any payment of principal of or interest of any Indebtedness
(other than the Loans) or in the payment of any Guarantee Obligation,
beyond the period of grace (not to exceed 30 days), if any, provided in
the instrument or agreement under which such Indebtedness or Guarantee
Obligation was created; or (ii) default in the observance or
performance of any other agreement or condition relating to any such
Indebtedness or Guarantee Obligation or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of
such Indebtedness or beneficiary or beneficiaries of such Guarantee
Obligation (or a trustee or agent on behalf of such holder or holders
or beneficiary or beneficiaries) to cause, with the giving of notice if
required, such Indebtedness to become due prior to its stated maturity
or such Guarantee Obligation to become payable; PROVIDED, however, that
no Default or Event of Default shall exist under this paragraph unless
the aggregate amount of Indebtedness and/or Guarantee Obligations in
respect of which any default or other event or condition referred to in
this paragraph shall have occurred shall be equal to at least
$15,000,000; or
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(f) (i) Holdings, the Company or any of its Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution,
composition or other relief with respect to it or its debts, or (B)
seeking appointment of a receiver, trustee, custodian, conservator or
other similar official for it or for all or any substantial part of its
assets, or Holdings, the Company or any of its Subsidiaries shall make
a general assignment for the benefit of its creditors; or (ii) there
shall be commenced against Holdings, the Company or any of its
Subsidiaries any case, proceeding or other action of a nature referred
to in clause (i) above which (A) results in the entry of an order for
relief or any such adjudication or appointment or (B) remains
undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Company or any of its
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against
all or any substantial part of its assets which results in the entry of
an order for any such relief which shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the
entry thereof; or (iv) Holdings, the Company or any of its Subsidiaries
shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause
(i), (ii), or (iii) above; or (v) Holdings, the Company or any of its
Subsidiaries shall generally not, or shall be unable to, or shall admit
in writing its inability to, pay its debts as they become due; or
(g) (i) Any Person shall engage in any "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist
with respect to any Plan or any Lien in favor of the PBGC or a Plan
shall arise on the assets of the Company or any Commonly Controlled
Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee
shall be appointed, to administer or to terminate, any Single Employer
Plan, which Reportable Event or commencement of proceedings or
appointment of a trustee is, in the reasonable opinion of the Required
Lenders, likely to result in the termination of such Plan for purposes
of Title IV of ERISA, (iv) any Single Employer Plan shall terminate for
purposes of Title IV of ERISA, (v) the Company or any Commonly
Controlled Entity shall, or in the reasonable opinion of the Required
Lenders is likely to, incur any liability in connection with a
withdrawal from, or the Insolvency or Reorganization of, a
Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through
(vi) above, such event or condition, together with all other such
events or conditions, if any, could have a Material Adverse Effect; or
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(h) One or more judgments or decrees shall be entered against
the Company or any of its Subsidiaries involving in the aggregate a
liability (not paid or fully covered by insurance) of $15,000,000 or
more, and all such judgments or decrees shall not have been vacated,
discharged, stayed or bonded pending appeal within 60 days from the
entry thereof; or
(i) (i) Any of the Security Documents shall cease, for any
reason, to be in full force and effect, or either Borrower or any other
Loan Party which is a party to any of the Security Documents shall so
assert or (ii) the Lien created by any of the Security Documents shall
cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) The Guarantee and Collateral Agreement shall cease, for
any reason, to be in full force and effect or any Guarantor shall so
assert; or
(k) A Change of Control shall occur;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) of this Section with respect to the
Company or the Canadian Borrower, automatically the Commitments shall
immediately terminate and the Loans hereunder (with accrued interest thereon)
and all other amounts owing under this Agreement (including, without limitation,
all Acceptance Reimbursement Obligations, regardless of whether or not such
Acceptance Reimbursement Obligations are then due and payable) and the other
Loan Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit shall
have presented the documents required thereunder) shall immediately become due
and payable, and (B) if such event is any other Event of Default, either or both
of the following actions may be taken: (i) with the consent of the Majority
Facility Lenders under the Revolving Credit Facility, the General Administrative
Agent may, or upon the request of the Majority Facility Lenders under the
Revolving Credit Facility, the General Administrative Agent shall, by notice to
the Company declare the Revolving Credit Commitments to be terminated forthwith,
whereupon such commitments shall immediately terminate; and (ii) with the
consent of the Required Lenders, the General Administrative Agent may, or upon
the request of the Required Lenders, the General Administrative Agent shall, by
notice to the Borrowers, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement (including, without
limitation, all amounts of L/C Obligations, whether or not the beneficiaries of
the then outstanding Letters of Credit shall have presented the documents
required thereunder, and all Acceptance Reimbursement Obligations, regardless of
whether or not such Acceptance Reimbursement Obligations are then due and
payable) and the other Loan Documents to be due and payable forthwith, whereupon
the same shall immediately become due and payable.
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With respect to all Letters of Credit with respect to which
presentment for honor shall not have occurred at the time of an acceleration
pursuant to the preceding paragraph, the Company shall at such time deposit in a
cash collateral account opened by the General Administrative Agent an amount
equal to the aggregate then undrawn and unexpired amount of such Letters of
Credit. Amounts held in such cash collateral account shall be applied by the
General Administrative Agent to the payment of drafts drawn under such Letters
of Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay other
obligations of the Company hereunder and under the other Loan Documents. After
all such Letters of Credit shall have expired or been fully drawn upon, all
Reimbursement Obligations shall have been satisfied and all other obligations of
the Company hereunder and under the other Loan Documents shall have been paid in
full, the balance, if any, in such cash collateral account shall be returned to
the Company (or such other Person as may be lawfully entitled thereto).
With respect to all outstanding Acceptance Reimbursement
Obligations in respect of Acceptances which have not matured at the time of an
acceleration pursuant to the paragraph above, the Canadian Borrower shall at
such time deposit in a cash collateral account opened by and maintained by the
Canadian Administrative Agent an amount equal to the aggregate undiscounted face
amount of all such unmatured Acceptances. Amounts held in such cash collateral
account shall be applied by the Canadian Administrative Agent to the payment of
maturing Acceptances, and any balance in such account shall be applied to repay
other obligations of the Canadian Borrower hereunder and under any Notes. After
all Acceptance Reimbursement Obligations shall have been satisfied and all other
obligations of the Canadian Borrower hereunder and under any Notes shall have
been paid in full, the balance, if any, in such cash collateral account shall be
returned to the Canadian Borrower.
Except as otherwise expressly provided above in this Section
11, the Borrowers waive presentment, demand, protest or other notice of any
kind.
SECTION 12. THE ADMINISTRATIVE AGENTS; OTHERS
12.1 APPOINTMENT. Each Lender hereby irrevocably designates
and appoints Toronto Dominion (Texas), Inc. as the General Administrative Agent
and The Toronto-Dominion Bank as the Canadian Administrative Agent of such
Lender under this Agreement and the other Loan Documents, and each such Lender
irrevocably authorizes the General Administrative Agent and the Canadian
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the General Administrative
Agent and the Canadian Administrative Agent, respectively, by the terms of this
Agreement and the other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement, the Administrative Agents shall not have any duties
or responsibilities, except those expressly set forth herein, or any
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fiduciary relationship with any Lender, and no implied covenants, functions,
responsibilities, duties, obligations or liabilities shall be read into this
Agreement or any other Loan Document or otherwise exist against either
Administrative Agent.
Each Issuing Lender shall act on behalf of the Lenders with
respect to Letters of Credit issued by it under this Agreement and the documents
associated therewith. It is understood and agreed that each Issuing Lender (a)
shall have all of the benefits and immunities (i) provided to an Administrative
Agent in this Section 12 with respect to acts taken or omissions suffered by
such Issuing Lender in connection with Letters of Credit issued by it under this
Agreement and the documents associated therewith as fully as if the term
"General Administrative Agent", "Canadian Administrative Agent" or
"Administrative Agent", as used in this Section 12, included such Issuing Lender
with respect to such acts or omissions and (ii) as additionally provided in this
Agreement and (b) shall have all of the benefits of the provisions of Section
12.7 as fully as if the term "General Administrative Agent", "Canadian
Administrative Agent" or "Administrative Agent", as used in Section 12.7,
included such Issuing Lender.
Each Lender authorizes and directs the Administrative Agents
to execute and deliver the Intercreditor Agreement.
12.2 DELEGATION OF DUTIES. Each Administrative Agent may
execute any of its duties under this Agreement and the other Loan Documents by
or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. Neither Administrative
Agent shall be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
12.3 EXCULPATORY PROVISIONS. Neither Administrative Agent nor
any of its respective officers, directors, employees, agents, attorneys-in-fact
or Affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except for its or such Person's own gross negligence or
willful misconduct) or (ii) responsible in any manner to any of the Lenders for
any recitals, statements, representations or warranties made by the Borrowers or
any officer thereof contained in this Agreement or any other Loan Document or in
any certificate, report, statement or other document referred to or provided for
in, or received by such Administrative Agent under or in connection with, this
Agreement or any other Loan Document or for the value, validity, effectiveness,
genuineness, enforceability or sufficiency of this Agreement or any other Loan
Document or for any failure of the Company to perform its obligations hereunder
or thereunder. Neither Administrative Agent shall be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of either Borrower.
12.4 RELIANCE BY ADMINISTRATIVE AGENTS. Each Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any Note, writing, resolution, notice, consent, certificate, affidavit, letter,
telecopy, telex or teletype message, statement, order or other document or
conversation believed by it to be genuine and correct and to have been signed,
sent
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or made by the proper Person or Persons and upon advice and statements of legal
counsel (including, without limitation, counsel to the Borrowers), independent
accountants and other experts selected by such Administrative Agent. Each
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof shall have been filed with such Administrative Agent. Each
Administrative Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders or Majority Facility
Lenders, as applicable, as it deems appropriate or it shall first be indemnified
to its satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of taking or continuing to take any such
action. Each Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, in any case
where this Agreement specifically requires the consent of the Majority Facility
Lenders under any Facility, such Majority Facility Lenders), and such request
and any action taken or failure to act pursuant thereto shall be binding upon
all the Lenders and all future holders of the Loans.
12.5 NOTICE OF DEFAULT. Neither Administrative Agent shall be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless such Administrative Agent has received notice from a
Lender or the Company referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a "notice of default". In the
event that an Administrative Agent receives such a notice, such Administrative
Agent shall give notice thereof to the Lenders. Each Administrative Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders or Majority Facility Lenders, as
applicable; PROVIDED that unless and until the Administrative Agents shall have
received such directions, the Administrative Agents may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
12.6 NON-RELIANCE ON ADMINISTRATIVE AGENTS AND OTHER LENDERS.
(a) Each Lender expressly acknowledges that neither Administrative Agent nor any
of its respective officers, directors, employees, agents, attorneys-in-fact or
Affiliates has made any representations or warranties to it and that no act by
either Administrative Agent hereinafter taken, including any review of the
affairs of the Company or the Canadian Borrower, shall be deemed to constitute
any representation or warranty by such Administrative Agent to any Lender. Each
Lender represents to each Administrative Agent that it has, independently and
without reliance upon such Administrative Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the business, operations, property,
financial and other condition and creditworthiness of the Company and made its
own decision to make its Loans hereunder and enter into this Agreement. Each
Lender also represents that it will, independently and without reliance upon
either Administrative Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition
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and creditworthiness of the Company. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by such
Administrative Agent hereunder, each Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, condition (financial
or otherwise), prospects or creditworthiness of the Company or the Canadian
Borrower which may come into the possession of such Administrative Agent or any
of its officers, directors, employees, agents, attorneys-in-fact or Affiliates.
(b) For purposes of determining compliance with the conditions
specified in Section 8.1, each Lender that has executed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter either sent by either Administrative Agent or the
Company to such Lender prior to the Closing Date, or required thereunder to be
consented to or approved by or acceptable or satisfactory to such Lender.
12.7 INDEMNIFICATION. The Lenders agree to indemnify each
Administrative Agent in its capacity as such (to the extent not reimbursed by
the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to their respective Aggregate Commitment Percentages in effect
on the date on which indemnification is sought, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Loans)
be imposed on, incurred by or asserted against such Administrative Agent in any
way relating to or arising out of, the Commitments, this Agreement, any of the
other Loan Documents or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by such Administrative Agent under or in connection with any of the
foregoing; PROVIDED that no Lender shall be liable for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from such
Administrative Agent's gross negligence or willful misconduct. The agreements in
this Section shall survive the payment of the Loans and all other amounts
payable hereunder.
12.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Administrative
Agent and its respective Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with the Borrowers as though such
Administrative Agent were not an Administrative Agent hereunder and under the
other Loan Documents. With respect to the Loans made by it and with respect to
any Letter of Credit issued or participated in by it, each Administrative Agent
shall have the same rights and powers under this Agreement and the other Loan
Documents as any Lender and may exercise the same as though it were not an
Administrative Agent, and the terms "Lender" and "Lenders" shall include such
Administrative Agent in its individual capacity.
12.9 SUCCESSOR AGENT. Either Administrative Agent may resign
as Administrative Agent upon 10 days' notice to the Lenders. If either
Administrative Agent shall resign as Administrative Agent under this Agreement
and the other Loan Documents, then the Required Lenders shall appoint from among
the Lenders a successor agent for the Lenders, which successor agent (provided
that it shall have been approved by the Company), shall succeed to the rights,
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powers and duties of such Administrative Agent hereunder. Effective upon such
appointment and approval, the term "General Administrative Agent" or "Canadian
Administrative Agent", as the case may be, shall mean such successor agent, and
such former Administrative Agent's rights, powers and duties as General
Administrative Agent or Canadian Administrative Agent, as the case may be, shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. After any retiring Administrative Agent's resignation as
an Administrative Agent, the provisions of this Section 12 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.
12.10 OTHERS. Neither the Arranger, the Syndication Agent nor
any Managing Agent, in such respective capacities, shall have any duties or
responsibilities, or incur any liabilities, under this Agreement or the other
Loan Documents.
SECTION 13. GUARANTEE
13.1 GUARANTEE. In order to induce the Administrative Agents
and the Lenders to execute and deliver this Agreement and to make or maintain
Extensions of Credit to the Canadian Borrower hereunder, and to induce the
Canadian Operating Facility Lender to enter into the Canadian Operating Facility
and to make loans to the Canadian Borrower thereunder, and in consideration
thereof, the Company hereby unconditionally and irrevocably guarantees to the
Administrative Agents, for the ratable benefit of the Lenders to which Canadian
Borrower Obligations are owed and to the Canadian Operating Facility Lender, the
prompt and complete payment and performance by the Canadian Borrower when due
(whether at stated maturity, by acceleration or otherwise) of the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations,
respectively, and the Company further agrees to pay any and all expenses
(including, without limitation, all reasonable fees, charges and disbursements
of counsel) which may be paid or incurred by either Administrative Agent, the
Lenders or the Canadian Operating Facility Lender in enforcing, or obtaining
advice of counsel in respect of, any of their rights under the guarantee
contained in this Section 13. The guarantee contained in this Section 13,
subject to Section 13.5, shall remain in full force and effect until the
Canadian Borrower Obligations and the Canadian Operating Facility Obligations
are paid in full, the Commitments are terminated, no Extensions of Credit are
outstanding and the Canadian Operating Facility is terminated, notwithstanding
that from time to time prior thereto the Canadian Borrower may be free from any
obligations or liabilities under this Agreement or the Canadian Operating
Facility.
The Company agrees that whenever, at any time, or from time to
time, it shall make any payment to the Administrative Agents, any Lender or the
Canadian Operating Facility Lender on account of its liability under this
Section 13, it will notify the Administrative Agents and such lender in writing
that such payment is made under the guarantee contained in this Section 13 for
such purpose. No payment or payments made by the Canadian Borrower or any other
Person or received or collected by either Administrative Agent, any Lender or
the Canadian Operating Facility Lender from the Canadian Borrower or any other
Person by virtue of any action or proceeding or any setoff or appropriation or
application, at any time or from time to
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time, in reduction of or in payment of the Canadian Borrower Obligations or the
Canadian Operating Facility Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Company under this Section 13
which, notwithstanding any such payment or payments, shall remain liable for the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations, as
the case may be, until, subject to Section 13.5, the Canadian Borrower
Obligations are paid in full, the Canadian Term Loan Commitments are terminated
and no Letters of Credit are outstanding, the Canadian Operating Facility
Obligations are paid in full and the Canadian Operating Facility is terminated.
13.2 NO SUBROGATION, CONTRIBUTION, REIMBURSEMENT OR INDEMNITY.
Notwithstanding anything to the contrary in this Section 13, the Company hereby
irrevocably waives all rights which may have arisen in connection with the
guarantee contained in this Section 13 to be subrogated to any of the rights
(whether contractual, under the United States Bankruptcy Code (or similar action
under any successor law or under any comparable law), including Section 509
thereof, under common law or otherwise) of the Administrative Agents, any Lender
or the Canadian Operating Facility Lender against the Canadian Borrower or
against either Administrative Agent or any such lender for the payment of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations,
until all the Canadian Borrower Obligations and Canadian Operating Facility
Obligations shall have been paid in full and each of the Canadian Term Loan
Commitments and the Canadian Operating Facility shall have been terminated. The
Company hereby further irrevocably waives all contractual, common law, statutory
and other rights of reimbursement, contribution, exoneration or indemnity (or
any similar right) from or against the Canadian Borrower or any other Person
which may have arisen in connection with the guarantee contained in this Section
13, until the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations shall have been paid in full and the Canadian Term Loan Commitments
and the Canadian Operating Facility shall have been terminated. So long as the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations
remain outstanding, if any amount shall be paid by or on behalf of the Canadian
Borrower to the Company on account of any of the rights waived in this Section
13.2, such amount shall be held by the Company in trust, segregated from other
funds of the Company, and shall, forthwith upon receipt by the Company, be
turned over to the Canadian Administrative Agent in the exact form received by
the Company (duly indorsed by the Company to the Canadian Administrative Agent,
if required), to be applied against the Canadian Borrower Obligations and the
Canadian Operating Facility Obligations, whether matured or unmatured, in such
order as the Canadian Administrative Agent may determine. The provisions of this
Section 13.2 shall survive the term of the guarantee contained in this Section
13 and the payment in full of the Canadian Borrower Obligations and the Canadian
Operating Facility Obligations and the termination of the Canadian Term Loan
Commitments and the Canadian Operating Facility.
13.3 AMENDMENTS, ETC. WITH RESPECT TO THE CANADIAN BORROWER
OBLIGATIONS. The Company shall remain obligated under this Section 13
notwithstanding that, without any reservation of rights against the Company, and
without notice to or further assent by the Company, any demand for payment of or
reduction in the principal amount of any of the Canadian Borrower Obligations or
the Canadian Operating Facility Obligations made by either
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Administrative Agent, any Lender or the Canadian Operating Facility Lender may
be rescinded by such Administrative Agent or such lender, and any of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations, as
the case may be, continued, and the Canadian Borrower Obligations or the
Canadian Operating Facility Obligations, as the case may be, or the liability of
any other party upon or for any part thereof, or any collateral security or
guarantee therefor or right of offset with respect thereto, may, from time to
time, in whole or in part, be renewed, extended, amended, modified, accelerated,
compromised, waived, surrendered or released by such Administrative Agent, any
Lender or the Canadian Operating Facility Lender, and this Agreement, any other
Loan Document, and any other documents executed and delivered in connection
therewith may be amended, modified, supplemented or terminated, in whole or in
part, as the Lenders (or the Required Lenders, as the case may be) may deem
advisable (or in the case of the Canadian Operating Facility Obligations, as the
Canadian Operating Facility Lender may deem advisable) from time to time, and
any collateral security, guarantee or right of offset at any time held by either
Administrative Agent, any Lender or the Canadian Operating Facility for the
payment of the Canadian Borrower Obligations or the Canadian Operating Facility
may be sold, exchanged, waived, surrendered or released. Neither Administrative
Agents nor any Lender or the Canadian Operating Facility Lender shall have any
obligation to protect, secure, perfect or insure any Lien at any time held by it
as security for the Canadian Borrower Obligations, the Canadian Operating
Facility Obligations or for the guarantee contained in this Section 13 or any
property subject thereto.
13.4 GUARANTEE ABSOLUTE AND UNCONDITIONAL. The Company waives
any and all notice of the creation, renewal, extension or accrual of any of the
Canadian Borrower Obligations or the Canadian Operating Facility Obligations and
notice of or proof of reliance by either Administrative Agent, any Lender or the
Canadian Operating Facility Lender upon the guarantee contained in this Section
13 or acceptance of the guarantee contained in this Section 13; the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or incurred,
or renewed, extended, amended or waived, in reliance upon the guarantee
contained in this Section 13; and all dealings between the Canadian Borrower or
the Company, on the one hand, and either Administrative Agent, the Lenders
and/or the Canadian Operating Facility Lender, on the other, shall likewise be
conclusively presumed to have been had or consummated in reliance upon the
guarantee contained in this Section 13. The Company waives diligence,
presentment, protest, demand for payment and notice of default or nonpayment to
or upon the Canadian Borrower or the Company with respect to the Canadian
Borrower Obligations and the Canadian Operating Facility Obligations. The
guarantee contained in this Section 13 shall be construed as a continuing,
absolute and unconditional guarantee of payment without regard to (a) the
validity or enforceability of this Agreement or any other Loan Document or the
Canadian Operating Facility, any of the Canadian Borrower Obligations or the
Canadian Operating Facility Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by either Administrative Agent, any Lender or the Canadian Operating
Facility Lender, (b) any defense, setoff or counterclaim (other than a defense
of payment or performance) which may at any time be available to or be asserted
by the Borrowers against either Administrative Agent, any Lender or the Canadian
Operating Facility Lender, or (c) any other circumstance whatsoever (with or
without notice to or knowledge of the Canadian Borrower or
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the Company) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Canadian Borrower for the Canadian Borrower
Obligations or the Canadian Operating Facility Obligations, or of the Company
under the guarantee contained in this Section 13, in bankruptcy or in any other
instance. When either Administrative Agent, any Lender or the Canadian Operating
Facility Lender is pursuing its rights and remedies under this Section 13
against the Company, such Administrative Agent or any such lender may, but shall
be under no obligation to, pursue such rights and remedies as it may have
against the Canadian Borrower or any other Person or against any collateral
security or guarantee for the Canadian Borrower Obligations or the Canadian
Operating Facility Obligations or any right of offset with respect thereto, and
any failure by such Administrative Agent or any such lender to pursue such other
rights or remedies or to collect any payments from the Canadian Borrower or any
such other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of the Canadian Borrower
or any such other Person or of any such collateral security, guarantee or right
of offset, shall not relieve the Company of any liability under this Section 13,
and shall not impair or affect the rights and remedies, whether express, implied
or available as a matter of law, of the Administrative Agents, the Lenders and
the Canadian Operating Facility Lender against the Company.
13.5 REINSTATEMENT. The guarantee contained in this Section 13
shall continue to be effective, or be reinstated, as the case may be, if at any
time payment, or any part thereof, of any of the Canadian Borrower Obligations
or the Canadian Operating Facility Obligations is rescinded or must otherwise be
restored or returned by either Administrative Agent, any Lender or the Canadian
Operating Facility Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Canadian Borrower or upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, the Canadian Borrower or any substantial part of its
property, or otherwise, all as though such payments had not been made.
13.6 PAYMENTS. The Company hereby agrees that any payments in
respect of the Canadian Borrower Obligations and the Canadian Operating Facility
Obligations pursuant to this Section 13 will be paid to the Canadian
Administrative Agent without setoff or counterclaim in Canadian Dollars, at the
office of the Canadian Administrative Agent specified in Section 14.2.
SECTION 14. MISCELLANEOUS
14.1 AMENDMENTS AND WAIVERS. Neither this Agreement, the
Intercreditor Agreement nor any other Loan Document, nor any terms hereof or
thereof may be amended, supplemented or modified except as set forth in Section
10.2(h) or in accordance with the provisions of this Section. The Required
Lenders may, or, with the written consent of the Required Lenders, the
Administrative Agents may, from time to time, (a) enter into with the Borrowers
written amendments, supplements or modifications hereto and to the other Loan
Documents or the Intercreditor Agreement for the purpose of adding any
provisions to this Agreement, the other Loan Documents or the Intercreditor
Agreement or changing in any manner the rights of the Lenders or of the
Borrowers hereunder or thereunder or (b) waive, on such terms
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and conditions as the Required Lenders or the Administrative Agents, as the case
may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or the Intercreditor Agreement or any
Default or Event of Default and its consequences; PROVIDED, HOWEVER, that no
such waiver and no such amendment, supplement or modification shall (i) reduce
the amount or extend the scheduled date of maturity of any Loan or of any
installment thereof, or reduce the stated rate of any interest or fee payable
hereunder or extend the scheduled date of any payment thereof or increase the
amount or extend the expiration date of any Lender's Commitments or extend the
expiry date of any Letter of Credit beyond the date referred to in Section
3.1(a), or modify the provisions of Section 6.9, in each case without the
consent of each Lender affected thereby, or (ii) amend, modify or waive any
provision of this Section or reduce the percentage specified in the definition
of Required Lenders or Majority Facility Lenders, or consent to the assignment
or transfer by either Borrower of any of its rights and obligations under this
Agreement and the other Loan Documents or release all or substantially all of
the Collateral or release all or substantially all of the Guarantors from their
obligations under the Guarantee and Collateral Agreement, in each case without
the written consent of all the Lenders, (iii) amend, modify or waive any
provision of Section 4 or 5 without the consent of the Majority Facility Lenders
under the Canadian Term Loan Facility, (iv) amend, modify or waive any provision
of Section 12 without the written consent of the Administrative Agents, (v)
amend, modify or waive any provision of Section 3 without the written consent of
each Issuing Lender, (vi) amend, modify or waive any provision of Section 13
without the consent of all the Canadian Lenders or (vii) amend, modify or waive
any provision of Section 6.3 without the consent of the Majority Facility
Lenders under each Facility. Any such waiver and any such amendment, supplement
or modification shall apply equally to each of the Lenders and shall be binding
upon the Borrowers, the Lenders, the Agents and all future holders of the Loans.
In the case of any waiver, the Borrowers, the Lenders and the Agents shall be
restored to their former positions and rights hereunder and under the other Loan
Documents, and any Default or Event of Default waived shall be deemed to be
cured and not continuing; no such waiver shall extend to any subsequent or other
Default or Event of Default or impair any right consequent thereon.
14.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
facsimile transmission) and, unless otherwise expressly provided herein, shall
be deemed to have been duly given or made (a) in the case of delivery by hand,
when delivered, (b) in the case of delivery by mail, three days after being
deposited in the mails, postage prepaid, or (c) in the case of delivery by
facsimile transmission, when sent and receipt has been confirmed, addressed as
follows in the case of the Borrowers, the General Administrative Agent and the
Canadian Administrative Agent, and as set forth in Schedule 1.1F in the case of
the other parties hereto, or to such other address as may be hereafter notified
by the respective parties hereto:
The Company: LES, Inc.
1301 Gervais Street, 3rd Floor
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: (803) 933-4346
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The Canadian Borrower: Laidlaw Environmental (Canada) Ltd.
c/o LES, Inc.
1301 Gervais Street, 3rd Floor
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: (803) 933-4346
The General Administrative Agent: Toronto Dominion (Texas), Inc.
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Fax: (713) 951-9921
The Canadian Administrative Agent The Toronto-Dominion Bank
9th Floor, Toronto Dominion Bank Tower
Toronto Dominion Centre
55 King Street West
Toronto, Ontario M5K 1A2
Attention: Manager Agency
Fax: (416) 982-5535
PROVIDED that any notice, request or demand to or upon the General
Administrative Agent, the Canadian Administrative Agent or the Lenders pursuant
to Section 2.2, 2.4, 2.6, 4.2, 5.2, 5.5, 6.2, 6.3 and 6.4 shall not be effective
until received.
14.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise
and no delay in exercising, on the part of either Administrative Agent or any
Lender, any right, remedy, power or privilege hereunder or under the other Loan
Documents shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, remedy, power or privilege hereunder preclude any other
or further exercise thereof or the exercise of any other right, remedy, power or
privilege. The rights, remedies, powers and privileges herein provided are
cumulative and not exclusive of any rights, remedies, powers and privileges
provided by law.
14.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder, in the other Loan Documents and
in any document, certificate or statement delivered pursuant hereto or in
connection herewith shall survive the execution and delivery of this Agreement
and the making of the Loans hereunder.
14.5 PAYMENT OF EXPENSES AND TAXES. The Company agrees (a) to
pay or reimburse each Administrative Agent for all its out-of-pocket costs and
expenses incurred in connection with the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
fees and disbursements of counsel to such Administrative Agent (b) to pay or
reimburse each Lender,
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the General Administrative Agent and the Canadian Administrative Agent for all
its costs and expenses incurred in connection with the enforcement or
preservation of any rights under this Agreement, the other Loan Documents and
any such other documents, including, without limitation, the fees and
disbursements of counsel to each Lender and of counsel to such Administrative
Agent, (c) to pay, indemnify, and hold each Lender and each Administrative Agent
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation or administration of any of
the transactions contemplated by, or any amendment, supplement or modification
of, or any waiver or consent under or in respect of, this Agreement, the other
Loan Documents and any such other documents, and (d) to pay, indemnify, and hold
each Lender and each Administrative Agent harmless from and against any and all
other liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever with
respect to the execution, delivery, enforcement, performance and administration
of this Agreement, the other Loan Documents and any such other documents,
including, without limitation, any of the foregoing relating to the violation
of, noncompliance with or liability under, any Environmental Law applicable to
the operations of the Company or any of its Subsidiaries or any of the
facilities or properties owned, leased or operated by the Company or any of its
Subsidiaries (all the foregoing in this clause (d), collectively, the
"indemnified liabilities"), PROVIDED that the Borrowers shall have no obligation
hereunder to any person seeking indemnification with respect to indemnified
liabilities arising from the gross negligence or willful misconduct of such
person. Without limiting the foregoing, and to the extent permitted by
applicable law, the Company agrees, and shall cause each of its Subsidiaries to
agree, not to assert, and hereby waives and agrees to cause each of its
Subsidiaries to waive, all rights for contribution or any other rights of
recovery with respect to all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of
whatever kind or nature whatsoever, under or related to Environmental Laws, that
any of them might have by statute or otherwise against each Lender and each
Administrative Agent. The agreements in this Section shall survive repayment of
the Loans and all other amounts payable hereunder.
14.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS.
(a) This Agreement shall be binding upon and inure to the benefit of the
Borrowers, the Lenders, the Administrative Agents, all future holders of the
Loans, the Reimbursement Obligations and the Acceptance Reimbursement
Obligations and their respective successors and assigns, except that no Borrower
may assign or transfer any of its rights or obligations under this Agreement
without the prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial
banking or institutional financial business and in accordance with applicable
law, at any time sell to one or more banks or other entities ("PARTICIPANTS")
participating interests in any Loan owing to such Lender, any Commitment of such
Lender or any other interest of such Lender hereunder and under the other Loan
Documents; PROVIDED that, in the case of participations in any Canadian Term
Loan granted by a Canadian Lender, such Participant must be a resident of Canada
for purposes of the Tax Act unless such participation is granted pursuant to
Section 14.7. In the
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event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan or other interest for all purposes under this Agreement and the other Loan
Documents, and the Borrowers and the Administrative Agents shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and the other Loan Documents. No
Lender shall be entitled to create in favor of any Participant, in the
participation agreement pursuant to which such Participant's participating
interest shall be created or otherwise, any right to vote on, consent to or
approve any matter relating to this Agreement or any other Loan Document except
for those specified in clauses (i) and (ii) of the proviso to Section 14.1. Each
of the Borrowers agrees that if amounts outstanding under this Agreement are due
or unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall, to the maximum
extent permitted by applicable law, be deemed to have the right of setoff in
respect of its participating interest in amounts owing under this Agreement to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement, PROVIDED that, in purchasing
such participating interest, such Participant shall be deemed to have agreed to
share with the Lenders the proceeds thereof as provided in Section 14.7(a) as
fully as if it were a Lender hereunder. Each of the Borrowers also agrees that
each Participant shall be entitled to the benefits of Sections 6.11, 6.12 and
6.13 with respect to its participation in the Commitments and the Loans and
other amounts outstanding from time to time as if it was a Lender; PROVIDED
that, in the case of Section 6.12, such Participant shall have complied with the
requirements of said Section and PROVIDED, FURTHER, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(c) Any Lender may, in the ordinary course of its commercial
banking or institutional financial business and in accordance with applicable
law, at any time and from time to time assign to any Lender, an Approved Fund of
any Lender, or any affiliate thereof or, with the consent of the Company and the
General Administrative Agent (which in each case shall not be unreasonably
withheld or delayed), to an additional bank, financial institution or fund (an
"ASSIGNEE") all or any part of its rights and obligations under this Agreement
and the other Loan Documents pursuant to an Assignment and Acceptance,
substantially in the form of Exhibit L, executed by such Assignee, such
assigning Lender (and, in the case of an Assignee that is not then a Lender, an
Approved Fund of any Lender, or an affiliate thereof, by the Company and the
General Administrative Agent) and delivered to the appropriate Administrative
Agent for its acceptance and recording in the Register, PROVIDED that no such
assignment to an Assignee (other than any Lender, any Approved Fund of any
Lender, or any affiliate thereof) shall be in an aggregate principal amount of
less than $5,000,000 (other than in the case of an assignment of all of a
Lender's interests under this Agreement), unless otherwise agreed by the Company
and the General Administrative Agent. Any such assignment need not be ratable as
among the Facilities. Upon such execution, delivery, acceptance and recording,
from and after the effective date determined pursuant to such Assignment and
Acceptance, (x) the Assignee thereunder shall be a party hereto and, to the
extent provided in such Assignment and Acceptance, have the rights and
112
<PAGE>
obligations of a Lender hereunder with a Commitment as set forth therein, and
(y) the assigning Lender thereunder shall, to the extent provided in such
Assignment and Acceptance, be released from its obligations under this Agreement
(and, in the case of an Assignment and Acceptance covering all or the remaining
portion of an assigning Lender's rights and obligations under this Agreement,
such assigning Lender shall cease to be a party hereto). Notwithstanding any
provision of this paragraph (c) and paragraph (e) of this Section, the consent
of the Company shall not be required, and, unless requested by the Assignee
and/or the assigning Lender, new Notes shall not be required to be executed and
delivered by any Borrower, for any assignment which occurs at any time when any
Event of Default shall have occurred and be continuing.
(d) The General Administrative Agent, on behalf of the
Borrowers, shall maintain at the address of the General Administrative Agent
referred to in Section 14.2 a copy of each Assignment and Acceptance delivered
to it and a register (the "REGISTER") for the recordation of the names and
addresses of the Lenders and the Commitments of, and principal amounts of the
Loans owing to, each Lender from time to time. The entries in the Register shall
be conclusive, in the absence of manifest error, and the Borrowers, the
Administrative Agents and the Lenders may (and, in the case of any Loan or other
obligation hereunder not evidenced by a Note, shall) treat each Person whose
name is recorded in the Register as the owner of a Loan or other obligation
hereunder as the owner thereof for all purposes of this Agreement and the other
Loan Documents, notwithstanding any notice to the contrary. Any assignment of
any Loan or other obligation hereunder not evidenced by a Note shall be
effective only upon appropriate entries with respect thereto being made in the
Register.
(e) Upon its receipt of an Assignment and Acceptance executed
by an assigning Lender and an Assignee (and, in the case of an Assignee that is
not then a Lender, an Approved Fund of any Lender, or an affiliate thereof, by
the Company and the General Administrative Agent) together with payment to the
General Administrative Agent (or, in the case of an Assignment of a portion of
the Canadian Term Loans only, to the Canadian Administrative Agent) of a
registration and processing fee of $3,500, the General Administrative Agent (or
the Canadian Administrative Agent, as appropriate) shall (i) promptly accept
such Assignment and Acceptance and (ii) on the effective date determined
pursuant thereto record the information contained therein in the Register and
give notice of such acceptance and recordation to the Lenders and the relevant
Borrower.
(f) Each Borrower authorizes each Lender to disclose to any
Participant or Assignee (each, a "TRANSFEREE") and any prospective Transferee,
subject to the provisions of Section 14.16, any and all financial information in
such Lender's possession concerning the Borrowers and their Affiliates which has
been delivered to such Lender by or on behalf of the Borrowers pursuant to this
Agreement or which has been delivered to such Lender by or on behalf of the
Borrowers in connection with such Lender's credit evaluation of the Borrower and
its Affiliates prior to becoming a party to this Agreement.
113
<PAGE>
(g) For avoidance of doubt, the parties to this Agreement
acknowledge that the provisions of this subsection concerning assignments of
Loans and Notes relate only to absolute assignments and that such provisions do
not prohibit assignments creating security interests, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
14.7 ADJUSTMENTS; SET-OFF. (a) If any Lender (a "BENEFITED
LENDER") (i) shall at any time prior to any date on which the Commitments are
terminated and the Loans become due and payable pursuant to Section 11 (an
"ACCELERATION") receive any payment of all or part of its Extensions of Credit
made by it to any Borrower, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by set-off or otherwise),
in a greater proportion than any such payment to or collateral received by any
other Lender, if any, in respect of such other Lender's Extensions of Credit
made by it to such Borrower, or interest thereon (in each case except to the
extent that this Agreement provides for payments to be allocated to the Lenders
under a particular Facility) or (ii) shall at any time after an Acceleration
receive any payment of all or part of the aggregate amount of the Extensions of
Credit made by such benefited Lender to all Borrowers, or interest thereon, or
receive any collateral in respect thereof (whether voluntarily, by set-off,
pursuant to events or proceedings of the nature referred to in Section 11(f), or
otherwise), in a greater proportion than any such payment or collateral received
by any other Lender, if any, in respect by the aggregate amount of the
Extensions of Credit made by such Lender to all Borrowers, or interest thereon,
then, in each case described in the foregoing clauses (i) and (ii), such
benefited Lender shall purchase for cash from the other Lenders a participating
interest in such portion of each such other Lender's Extensions of Credit, or
shall provide such other Lenders with the benefits of any such collateral, or
the proceeds thereof, as shall be necessary to cause such benefited Lender to
share the excess payment or benefits of such collateral or proceeds ratably with
each of the Lenders (to the extent required by the foregoing clause (i) or (ii),
as applicable); PROVIDED, HOWEVER, that if all or any portion of such excess
payment or benefits is thereafter recovered from such benefited Lender, such
purchase shall be rescinded, and the purchase price and benefits returned, to
the extent of such recovery, but without interest.
(b) In addition to any rights and remedies of the Lenders
provided by law, each Lender shall have the right, without prior notice to the
Borrowers, any such notice being expressly waived by the Borrowers to the extent
permitted by applicable law, upon any amount becoming due and payable by a
Borrower hereunder (whether at the stated maturity, by acceleration or
otherwise) to set-off and appropriate and apply against such amount any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by such Lender or any branch, agency or
Affiliate thereof to or for the credit or the account of the Borrower. Each
Lender agrees promptly to notify the Borrowers and the Administrative Agents
after any such set-off and application made by such Lender, PROVIDED that the
failure to give such notice shall not affect the validity of such set-off and
application.
114
<PAGE>
(c) Notwithstanding the foregoing, no Lender shall institute
or commence any proceeding to collect any amounts owed to it hereunder or shall
otherwise exercise any remedies (including setoff) with respect to the amounts
owed to it unless such Lender shall provide at least five Business Days' (or
such shorter period as may be consented to by the General Administrative Agent)
prior written notice thereof to the General Administrative Agent.
14.8 COUNTERPARTS. This Agreement may be executed by one or
more of the parties to this Agreement on any number of separate counterparts
(including by facsimile transmission), and all of said counterparts taken
together shall be deemed to constitute one and the same instrument. A set of the
copies of this Agreement signed by all the parties shall be lodged with the
Company and each Administrative Agent.
14.9 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
14.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Borrowers, the Administrative Agents, and the
Lenders with respect to the subject matter hereof, and there are no promises,
undertakings, representations or warranties by the Administrative Agents or any
Lender relative to subject matter hereof not expressly set forth or referred to
herein or in the other Loan Documents.
14.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
14.12 SUBMISSION TO JURISDICTION; WAIVERS. (a) Each Borrower
hereby irrevocably and unconditionally:
(i) submits for itself and its property in any legal
action or proceeding relating to this Agreement and the other Loan
Documents to which it is a party, or for recognition and enforcement of
any judgment in respect thereof, to the non-exclusive general
jurisdiction of the courts of the State of New York, the courts of the
United States of America for the Southern District of New York, and
appellate courts from any thereof;
(ii) consents that any such action or proceeding may be
brought in such courts and waives any objection that it may now or
hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an
inconvenient court and agrees not to plead or claim the same;
115
<PAGE>
(iii) agrees that service of process in any such action or
proceeding may be effected by mailing a copy thereof by registered or
certified mail (or any substantially similar form of mail), postage
prepaid, to such Borrower at its address set forth in Section 14.2 or
at such other address of which each Administrative Agent shall have
been notified pursuant thereto;
(iv) agrees that nothing herein shall affect the right to
effect service of process in any other manner permitted by law or shall
limit the right to sue in any other jurisdiction; and
(v) waives, to the maximum extent not prohibited by law,
any right it may have to claim or recover in any legal action or
proceeding referred to in this subsection any special, exemplary,
punitive or consequential damages.
(b) The Canadian Borrower hereby irrevocably appoints the
Company as its agent for service of process in any proceeding referred to in
Section 14.2(a) and agrees that service of process in any such proceeding may be
made by mailing or delivering a copy thereof to it care of the Company at its
address for notice set forth in Section 14.2(a).
14.13 ACKNOWLEDGMENTS. Each Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Loan Documents;
(b) neither Administrative Agent nor any Lender has any
fiduciary relationship with or duty to such Borrower arising out of or
in connection with this Agreement or any of the other Loan Documents,
and the relationship between Administrative Agents and Lenders, on one
hand, and such Borrower, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions
contemplated hereby among the Lenders or among such Borrower and the
Lenders.
14.14 WAIVERS OF JURY TRIAL. EACH OF THE BORROWERS, THE
ADMINISTRATIVE AGENTS AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY
WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
116
<PAGE>
14.15 JUDGMENT. (a) If for the purpose of obtaining judgment
in any court it is necessary to convert a sum due hereunder in one currency into
another currency, the parties hereto agree, to the fullest extent that they may
effectively do so, that the rate of exchange used shall be that at which in
accordance with normal banking procedures the General Administrative Agent could
purchase the first currency with such other currency in the city in which it
normally conducts its foreign exchange operation for the first currency on the
Business Day preceding the day on which final judgment is given.
(b) The obligation of each Borrower in respect of any sum due
from it to any Lender hereunder shall, notwithstanding any judgment in a
currency (the "JUDGMENT CURRENCY") other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
"AGREEMENT CURRENCY"), be discharged only to the extent that on the Business Day
following receipt by such Lender of any sum adjudged to be so due in the
Judgment Currency such Lender may in accordance with normal banking procedures
purchase the Agreement Currency with the Judgment Currency; if the amount of
Agreement Currency so purchased is less than the sum originally due to such
Lender in the Agreement Currency, such Borrower agrees notwithstanding any such
judgment to indemnify such Lender against such loss, and if the amount of the
Agreement Currency so purchased exceeds the sum originally due to any Lender,
such Lender agrees to remit to such Borrower such excess.
14.16 CONFIDENTIALITY. Each Lender agrees to keep confidential
all non-public information provided to it by the Company pursuant to this
Agreement that is designated by the Company in writing as confidential; PROVIDED
that nothing herein shall prevent any Lender from disclosing any such
information (i) to its affiliates, the Administrative Agents or any other
Lender, (ii) to any Transferee which agrees to comply with the provisions of
this subsection, (iii) to its employees, directors, agents, attorneys,
accountants and other professional advisors, or to direct or indirect
contractual counterparts in swap agreements relating to swaps with a Borrower or
such contractual counterparties' professional advisors provided that any such
contractual counterparty or its professional advisors shall agree to keep such
confidential information confidential, (iv) upon the request or demand of any
Governmental Authority having jurisdiction over such Lender, (v) in response to
any order of any court or other Governmental Authority or as may otherwise be
required pursuant to any Requirement of Law, (vi) which has been publicly
disclosed other than in breach of this Agreement, or is currently publicly
available or is in the possession of a Lender on a nonconfidential basis or is
disclosed to a Lender on a nonconfidential basis by a person who in so doing has
not violated a duty of confidentiality owing to the Company (vii) to the
National Association of Insurance Commissioners or any similar organization or
any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender or (viii) in connection with the exercise of any remedy
hereunder.
14.17 EFFECT OF AMENDMENT AND RESTATEMENT. On the Closing
Date, the Existing Credit Agreement and the Guarantee and Collateral Agreement
(as defined in the Existing Credit Agreement) shall be amended, restated and
superseded in their entirety, and the Mortgages and Canadian Collateral
Documents (as such terms are defined in the Existing Credit Agreement) are
117
<PAGE>
being amended and/or affirmed as provided herein. The parties hereto acknowledge
and agree that (a) this Agreement and the other Loan Documents, whether executed
and delivered in connection herewith or otherwise, do not constitute a novation
or termination of the obligations of the Loan Parties (as defined in the
Existing Credit Agreement) under the Existing Credit Agreement as in effect
prior to the Closing Date; (b) such obligations are in all respects continuing
(as amended and restated hereby) with only the terms thereof being modified as
provided in this Agreement; (c) the Liens, guarantees and security interests as
granted under the Security Documents (as defined in this Agreement) securing
payment of such obligations are in all respects continuing and in full force and
effect and secure the payment of the obligations of the Loan Parties under (and
as defined) in this Agreement; and (d) upon the effectiveness of this Agreement,
all loans outstanding under the Existing Credit Agreement immediately before the
effectiveness of this Agreement will be continued as Loans hereunder or will be
repaid in accordance with the Existing Credit Agreement on the Closing Date and
reborrowed hereunder as provided herein, and, except as provided herein with
respect to the Specified Acceptances, all outstanding letters of credit and
bankers' acceptances under the Existing Credit Agreement will be continued as
Letters of Credit and Acceptances, respectively, hereunder, in each case on the
terms and conditions set forth in this Agreement.
118
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly authorized
officers as of the day and year first above written.
LES, INC.
By:
------------------------------------
Title:
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
------------------------------------
Title:
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent and Lender
By:
------------------------------------
Title:
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent
By:
------------------------------------
Title:
TD SECURITIES (USA) INC.,
as Arranger
By:
------------------------------------
Title:
119
<PAGE>
THE TORONTO-DOMINION BANK,
as a Lender
By:
------------------------------------
Title:
By:
------------------------------------
Title:
THE BANK OF NOVA SCOTIA,
as Managing Agent, Co-Documentation Agent
and Lender
By:
------------------------------------
Title:
THE FIRST NATIONAL BANK OF CHICAGO,
as Managing Agent, Co-Documentation Agent
and Lender
By:
------------------------------------
Title:
NATIONSBANK, N.A.,
as Syndication Agent, Managing Agent and
Lender
By:
------------------------------------
Title:
WACHOVIA BANK, N.A.,
as Managing Agent and Lender
By:
------------------------------------
Title:
120
<PAGE>
VAN KAMPEN MERRITT AMERICAN
CAPITAL PRIME RATE INCOME TRUST
By:
------------------------------------
Title:
OAK HILL SECURITIES FUND, L.P.
By: OAK HILL SECURITIES GENPAR, L.P., its
General Partner
By: OAK HILL SECURITIES MGP, INC., its
General Partner
By:
--------------------------------
Title: Vice President
PILGRIM AMERICA PRIME RATE TRUST
By:
------------------------------------
Title:
KZH HOLDING CORPORATION III
By:
------------------------------------
Title:
121
<PAGE>
JACKSON NATIONAL LIFE INSURANCE
COMPANY
By: PPM AMERICA, INC., as attorney in fact,
on behalf of Jackson National Life
Insurance Company
By:
------------------------------------
Title:
AMERICAN GENERAL ANNUITY
INSURANCE COMPANY
By:
-----------------------------------
Title:
METROPOLITAN LIFE INSURANCE
COMPANY
By:
------------------------------------
Title:
KZH-CRESCENT CORPORATION
By:
------------------------------------
Title:
KZH-CRESCENT 2 CORPORATION
By:
------------------------------------
Title:
122
<PAGE>
CRESCENT/MACH I PARTNERS, L.P.
By: TCW ASSET MANAGEMENT COMPANY,
as its Investment Manager
By:
---------------------------------
Title:
ARCHIMEDES FUNDING LLC
By: ING CAPITAL ADVISORS, INC., as
Collateral Manager
By:
--------------------------------
Title:
CYPRESSTREE INVESTMENT
MANAGEMENT COMPANY, INC.
AS: Attorney-in-Fact and on behalf of FIRST
ALLMERICA FINANCIAL LIFE
INSURANCE COMPANY as Portfolio
By:
---------------------------------
Title:
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
By: ING CAPITAL ADVISORS, INC., as
Investment Advisor
By:
--------------------------------
Title: Vice President &
Portfolio Manager
123
<PAGE>
KZH-ING-1-CORPORATION
By:
------------------------------------
Title:
INDOSUEZ CAPITAL FUNDING III, LIMITED
By: INDOSUEZ CAPITAL LUXEMBOURG, as
Collateral Manager
By:
---------------------------------
Title:
KZH-ING-2-CORPORATION
By:
------------------------------------
Title:
KZH SOLEIL CORPORATION
By:
------------------------------------
Title:
DELANO COMPANY
By: PACIFIC INVESTMENT MANAGEMENT
COMPANY, as its Investment Advisor
By:
--------------------------------
Title:
124
<PAGE>
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
By: TCW ASSET MANAGEMENT COMPANY,
as Attorney-in-Fact
By:
---------------------------------
Title:
ROYALTON COMPANY
By: PACIFIC INVESTMENT MANAGMENT
COMPANY, as its Investment Advisor
By:
--------------------------------
Title:
DEEPROCK & COMPANY
By: EATON VANCE MANAGEMENT, as
Investment Advisor
By:
---------------------------------
Title:
125
<PAGE>
<TABLE>
<CAPTION>
ANNEX A
-------
<S> <C> <C> <C> <C>
PRICING GRID
===================================================================================================================
Applicable
Margin Applicable
for LIBOR Applicable Margin for
Loans/ Margin for Canadian
Consolidated Total Leverage Ratio Stamping Base Rate Term Commitment
Fee Rate Loans Loans Fee Rate
===================================================================================================================
Greater than or equal to 4:00:1.00 2.375% 1.375% 1.375% 0.500%
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal to 3.50:1.00, but less 2.250% 1.250% 1.250% 0.500%
than 4.00:1.00
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal 3.25:1.00, but less than 2.000% 1.000% 1.000% 0.375%
3.50:1.00
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal to 3.00:1.00, but less 1.875% 0.875% 0.875% 0.375%
than 3.25:1.00
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.50:1.00, but less 1.500% 0.500% 0.500% 0.375%
than 3.00:1.00
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal to 2.00:1.00, but less 1.125% 0.125% 0.125% 0.250%
than 2.50:1.00
- -------------------------------------------------------------------------------------------------------------------
Greater than or equal to 1.50:1.00, but less 0.875% 0% 0% 0.250%
than 2.00:1.00
- -------------------------------------------------------------------------------------------------------------------
Less than 1.50:1.00 0.625% 0% 0% 0.150%
===================================================================================================================
</TABLE>
Changes in the Applicable Margin or in the Commitment Fee Rate resulting from
changes in the Consolidated Total Leverage Ratio shall become effective on the
date (the "ADJUSTMENT DATE") on which financial statements are received by the
General Administrative Agent and the Canadian Administrative Agent pursuant to
Section 9.1(a) or 9.1(b) (but in any event not later than the 45th day after the
end of each of the first three quarterly periods of each fiscal year or the 90th
day after the end of each fiscal year, as the case may be) and shall remain in
effect until the next change to be effected pursuant to this paragraph. If any
financial statements referred to above are not delivered within the time periods
specified above, then, until such financial statements are delivered, the
Consolidated Total Leverage Ratio as at the end of the fiscal period that would
have been covered thereby shall for the purposes of this definition be deemed to
be greater than 4.00 to 1.00. Each determination of the Consolidated Total
Leverage Ratio pursuant to this definition shall be made with respect to the
period of four consecutive fiscal quarters of the Company ending at the end of
the period covered by the relevant financial statements.
Notwithstanding the foregoing, until the first Adjustment Date occurring
following the end of the first two full fiscal quarters to be completed after
the Closing Date, the Applicable Margins and Commitment Fee Rate will be as set
forth above opposite Consolidated Total Leverage Ratio greater than or equal to
4.00 to 1:00.
1
<PAGE>
SCHEDULE 1.1A to
CREDIT AGREEMENT
----------------
<TABLE>
<CAPTION>
U.S. LENDER COMMITMENTS /1/
--------------------------
Tranche A Term Tranche B Term Tranche C Term Revolving
U.S. Lender Loan Commitment Loan Commitment Loan Commitment Credit Commitment
- ----------- --------------- --------------- --------------- -----------------
<S> <C> <C> <C> <C>
Toronto Dominion (Texas), Inc....... US $170,322,580.64 US $281,500,000 US $281,500,000 US $159,677,419.36
The Bank of Nova Scotia............. 77,419,354.84 72,580,645.16
The First National Bank of Chicago..
77,419,354.84 7,500,000 7,500,000 72,580,645.16
NationsBank, N.A.................... 77,419,354.84 15,000,000 15,000,000 72,580,645.16
Wachovia Bank of South Carolina, N.A.
77,419,354.84 72,580,645.16
Van Kampen Merritt American Capital
Prime Rate Income Trust.......
60,000,000 60,000,000
Oak Hill Securities Fund, LP........ 37,500,000 37,500,000
Pilgrim America Prime Rate Trust.... 20,000,000 20,000,000
KZH Holding Corporation III......... 15,000,000 15,000,000
Jackson National Life Insurance
Company......................... 12,500,000 12,500,000
American General Annuity Life
Insurance Company............... 10,000,000 10,000,000
Metropolitan Life Insurance Company
10,000,000 10,000,000
KZH-Crescent Corporation........... 9,375,000 9,375,000
KZH-Crescent 2 Corporation......... 9,375,000 9,375,000
Crescent/Mach I Partners, L.P...... 9,125,000 9,125,000
Archimedes Funding LLC............. 7,500,000 7,500,000
First Allmerica Financial Life 7,500,000 7,500,000
Insurance Company...............
ING High Income Principal 7,500,000 7,500,000
Preservation Fund Holding LDC...
KZH-ING-1-Corp..................... 7,500,000 7,500,000
Indosuez Capital Funding, III 5,000,000 5,000,000
Limited.........................
KZH-ING-2-Corp..................... 5,000,000 5,000,000
KZH Soleil Corp.................... 5,000,000 5,000,000
Delano Company..................... 3,000,000 3,000,000
Continental Assurance Company...... 2,125,000 2,125,000
Royalton Company................... 2,000,000 2,000,000
Deeprock & Company................. 1,000,000 1,000,000
--------------- --------------- --------------- ---------------
$480,000,000.00 $550,000,000.00 $550,000,000.00 $450,000,000.00
=============== =============== =============== ===============
/1/ Each Tranch B Term Loan Lender and Tranche C Term Loan Lender holds a pro rata share of the
Tranche B-1 Term Loan Commitment and the Tranche C-1 Term Loan Commitment, respectively
</TABLE>
<PAGE>
SCHEDULE 1.1B to
CREDIT AGREEMENT
----------------
CANADIAN LENDER COMMITMENTS
---------------------------
Canadian Lender Commitment
--------------- ----------
The Toronto-Dominion Bank US $70,000,000.00
70,000,000.00
---------------
US $140,000,000.00
===============
<PAGE>
<TABLE>
SCHEDULE 1.1C
-------------
EXISTING LETTERS OF CREDIT
--------------------------
<CAPTION>
Applicant Date Issued Expiry Date L/C Number Beneficiary L/C Amount
- --------- ----------- ----------- --------- ----------- ----------
<S> <C> <C> <C> <C> <C>
Laidlaw Environmental Services for
Chemwaste 16-Jan-98 26-Jul-98 1474 Barnett Bank of Lee County, NA $3,000,000.00
LES, Inc. 06-Nov-97 30-Nov-98 1452 Frontier Insurance Company $28,500,000.00
LES, Inc. 01-Feb-98 01-Feb-99 1477 CNA Risk Management $4,250,000.00
LES, Inc. for Laidlaw Environmental Trustees under the Re-Solve Site Trust
North East 03-Jul-97 05-Aug-98 1433 Fund $651,597.00
LES, Inc. for Laidlaw Environmental Utah Dept. of Environmental Quality/
(Aragonite) 03-Jul-97 03-Jul-98 1435 Division of Solid $10,023,576.00
LES, Inc. for Laidlaw Chem-Waste Inc. 21-May-97 21-May-98 1424 Bank One as Trustee of Bayour-Sorrell
Trust Fund $278,201.94
LES, Inc. for Laidlaw Environmental
(Bartow) 02-Mar-98 02-Mar-99 1491 Regional Administrator - EPA - Atlanta $53,041.00
LES, Inc. for Laidlaw Environmental
Services, Inc. 10-Dec-97 10-Dec-98 1461 Reliance Insurance Company of Illinois $2,500,000.00
LES, Inc. for Laidlaw Environmental
10-Dec-97 10-Dec-98 1459 Reliance Insurance Company of Illinois $10,000,000.00
Services, Inc.
LES, Inc. for Laidlaw Environmental
Services, Inc. 10-Dec-97 10-Dec-98 1460 Reliance Insurance Company of Illinois 2,500,000.00
LES, Inc. for Laidlaw Environmental Pennsylvania Dept. of Environmental
(TG), Inc. 20-Oct-97 19-Oct-98 1451 Protection $10,000.00
LES, Inc. to TES 30-Sep-97 30-Sep-98 1446 Regional Administrator, EPA - Dallas $480,282.00
TOTAL: $62,246,697.94
</TABLE>
<PAGE>
<TABLE>
SCHEDULE 1.1D
"EXISTING ACCEPTANCES"
----------------------
<CAPTION>
Total
Maturity Date: Amount:
-------------- -------
<S> <C> <C> <C> <C> <C>
April 9, 1998 The Toronto-Dominion Bank Cdn $3,100,000 Cdn $11,400,000
The Bank of Nova Scotia Cdn $1,900,000
First Chicago NBD Bank, Canada Cdn $2,600,000
Credit Lyonnais Canada Cdn $2,400,000
Sanwa Bank Canada Cdn $1,300,000
The Sumitomo Bank of Canada Cdn $100,000
April 16, 1998 The Toronto-Dominion Bank Cdn $2,100,000 Cdn $8,800,000
The Bank of Nova Scotia Cdn $1,700,000
First Chicago NBD Bank, Canada Cdn $2,100,000
Credit Lyonnais Canada Cdn $1,800,000
Sanwa Bank Canada Cdn $800,000
The Sumitomo Bank of Canada Cdn $300,000
April 20, 1998 The Toronto-Dominion Bank Cdn $2,100,000 Cdn $8,800,000
The Bank of Nova Scotia Cdn $1,700,000
First Chicago NBD Bank, Canada Cdn $2,100,000
Credit Lyonnais Canada Cdn $1,800,000
Sanwa Bank Canada Cdn $800,000
The Sumitomo Bank of Canada Cdn $300,000
April 23, 1998 The Toronto-Dominion Bank Cdn $2,000,000 Cdn $8,900,000
The Bank of Nova Scotia Cdn $1,700,000
First Chicago NBD Bank, Canada Cdn $2,100,000
Credit Lyonnais Canada Cdn $2,000,000
Sanwa Bank Canada Cdn $800,000
The Sumitomo Bank of Canada Cdn $300,000
April 27, 1998 The Toronto-Dominion Bank Cdn $2,000,000 Cdn $8,800,000
The Bank of Nova Scotia Cdn $1,700,000
First Chicago NBD Bank, Canada Cdn $2,100,000
Credit Lyonnais Canada Cdn $1,900,000
Sanwa Bank Canada Cdn $800,000
The Sumitomo Bank of Canada Cdn $300,000
April 30, 1998 The Toronto-Dominion Bank Cdn $2,000,000 Cdn $8,800,000
The Bank of Nova Scotia Cdn $1,700,000
First Chicago NBD Bank, Canada Cdn $2,100,000
Credit Lyonnais Canada Cdn $1,900,000
Sanwa Bank Canada Cdn $800,000
The Sumitomo Bank of Canada Cdn $300,000
TOTAL: Cdn $55,500,000
</TABLE>
<PAGE>
SCHEDULE 1.lE
-------------
"SPECIFIED ACCEPTANCES"
-----------------------
Maturity Date: Amount:
-------------- -------
April 9, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,500,000
April 16, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,200,000
April 20, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,200,000
April 23, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,100,000
April 27, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,200,000
April 30, 1998 The Bank of Tokyo-Mitsubishi (Canada) Cdn $1,200,000
TOTAL: Cdn $7,400,000
<PAGE>
SCHEDULE 1.1F to
CREDIT AGREEMENT
----------------
ADDRESSES FOR NOTICES
TORONTO DOMINION (TEXAS), INC.
909 Fannin, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Telephone: 713-653-8231
Facsimile: 713-951-9921
THE TORONTO-DOMINION BANK
TD Tower
Toronto Dominion Centre
9th Floor
Toronto, Ontario M5K 1A2
Attention: David Pankhurst
Telephone: 416-982-2375
Facsimile: 416-982-4468
TD SECURITIES (USA) INC.
31 West 52nd Street
New York, New York 10019
Attention: Bill Evenson
Telephone: 212-927-7593
Facsimile: 212-262-1926
THE BANK OF NOVA SCOTIA
600 Peachtree St., N.E.
Suite 2700
Atlanta, GA 30308
Attn: Willam Zarrett
Tel: 404-877-1504
Fax: 404-888-8998
Attn: Carmen Malizia
Tel: 404-877-1521
Fax: 404-888-8998
1
<PAGE>
with a copy to:
THE BANK OF NOVA SCOTIA
Corporate Credit East
44 King St. W.
Toronto, Ontario M5H 1H1
Canada
Attn: Stephen Eisen
Tel: 416-866-4766
Attn: Jean Hopkins
Tel: 416-866-7094
Fax: 416-866-2009
THE FIRST NATIONAL BANK OF CHICAGO
1 First National Plaza
Mail Suite 0167, 1-10
Chicago, IL 60670
Attn: Courtenay Wood
Tel: 312-732-1563
Fax: 312-732-5435
NATIONSBANK, N.A.
100 North Tyron St.
Charlotte, NC 28255
Attn: David Sachsenmaier
NC1-007-12-04
Tel: 704-386-3160
Fax: 704-388-9215
Attn: Grant Harbrecht
NC1-007-20-01
Tel: 704-386-0507
Fax: 704-388-6453
WACHOVIA BANK
1401 Main Street
Suite 705
Columbia, SC 29226
Attn: Gene Sellers
Tel: 803-765-3130
Fax: 803-765-3232
2
<PAGE>
with a copy to:
WACHOVIA BANK
400 South Tryon Street
31st Floor
Charlotte, NC 28202-1915
Attn: Paul Grube
Tel: 704-378-5078
Fax: 704-378-5035
and:
WACHOVIA BANK
191 Peachtree
26th Floor
Atlanta, GA 30303
Attn: Mark Abraham
Tel: 404-332-1253
Fax: 404-332-4005
and:
WOMBLE, CARLYLE
3300 One First Union Center
301 South College Street
Charlotte, NC 28202-6025
Attn: Bill McMillin
Tel: 910-331-4972
Fax: 910-331-4955
VAN KAMPEN AMERICAN CAPITAL PRIME RATE INCOME TRUST
One Parkview Plaza
Oakbrook Terrace, IL 60181
Attn: Jeff Maillet
Tel: 630-684-6438
Fax: 630-684-6741
with a copy to:
HOPKINS & SUTTER
3 First National Plaza
43rd Floor
Chicago, IL 60602
Attn: John Powers, Esq.
Fax: 312-558-6538
3
<PAGE>
OAK HILL SECURITIES FUND, LP
65 East 55th Street
32nd Floor
New York, NY 10022
Attn: Scott Krase
Tel: 212-326-1551
Fax: 212-593-3956
PILGRIM AMERICA PRIME RATE TRUST
2 Renaissance Square
40 North Central Avenue
Suite 1200
Phoenix, AZ 85004-4424
Attn: Dan Norman
Tel: 602-417-8112
Fax: 602-417-8301
KZH HOLDING III CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
JACKSON NATIONAL LIFE INSURANCE COMPANY
c/o PPM America, Inc.
225 W. Wacker Drive
Suite 1200
Chicago, IL 60606
Attn: Michael DiRe
Tel: 312-634-2509
Fax: 312-634-0054
4
<PAGE>
AMERICAL GENERAL ANNUITY INSURANCE COMPANY
2929 Allen Parkway, A37-01
Houston, TX 77019
Attn: Victoria Chin
Tel: 713-831-1261
Fax: 713-831-1366
METROPOLITAN LIFE INSURANCE COMPANY
1 Madison Avenue
Area 7H
New York, NY 10010
Attn: Jennifer Kalb
Tel: 212-578-8716
Fax: 212-578-3916
with a copy to:
METROPOLITAN LIFE INSURANCE COMPANY
334 Madison Avenue
Convent Station, NJ 07961
Attn: Frank MonFalcone
Tel: 973-254-3228
973-254-3204
Fax: 973-254-3050
KZH-CRESCENT CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
5
<PAGE>
KZH-CRESCENT 2 CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
CRESCENT/MACH I PARTNERS, L.P.
c/o TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Attn: Mark L. Gold/Justin Driscoll
Tel: 212-297-4000
Fax: 212-297-4159
with a copy to:
CRESCENT/MACH I PARTNERS, L.P.
c/o State Street Bank & Trust Co.
Two International Place
Boston, MA 02110
Attn: Howie Gortman
Tel: 617-664-5282
Fax: 617-664-5367
ARCHIMEDES FUNDING, L.L.C.
c/o ING Capital Advisors
333 S. Grand Avenue, Suite 4250
Los Angeles, CA 90071
Attn: Michael Hatley
Tel: 213-346-3972
Fax: 213-346-3995
6
<PAGE>
FIRST ALLMERICA FINANCIAL LIFE
INSURANCE COMPANY
c/o CypressTree Investment Managment Company, Inc.
125 High Street, 14th Floor
Boston, MA 02110
Attn: Peter Merrill
Tel: 617-946-0600
Fax: 617-946-5681
ING HIGH INCOME PRINCIPAL PRESERVATION
FUND HOLDINGS, LDC
c/o ING Capital Advisors
333 S. Grand Avenue, Suite 4250
Los Angeles, CA 90071
Attn: Michael Hatley
Tel: 213-346-3972
Fax: 213-346-3995
KZH-ING-1-CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
INDOSUEZ CAPITAL FUNDING III, LIMITED
1211 Avenue of the Americas
7th Floor
New York, NY 10036
Attn: Francois Berthelot
Tel: 212-278-2213
Fax: 212-278-2254
7
<PAGE>
with a copy to:
INDOSUEZ CAPITAL FUNDING III, LIMITED
c/o Queensgate Bank & Trust Company Limited
P.O. Box 30464 SMB/South Church Street
Ugland House, 5th Floor
George Town
Grand Cayman, Cayman Islands
British West Indies
KZH-ING-2-CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
KZH SOLEIL CORPORATION
c/o The Chase Manhattan Bank
450 West 33rd Street
15th Floor
New York, NY 10011
Attn: Virginia Conway
Tel: 212-946-7575
Fax: 212-946-7776
with a copy to:
GIBSON, DUNN & CRUTCHER
200 Park Avenue
New York, NY 10166
Attn: Lee Ann Duffy
Tel: 212-351-3809
Fax: 212-351-5311
8
<PAGE>
DELANO COMPANY
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92660
Attn: Melissa Fedjasz
Tel: 714-717-5169
Fax: 714-718-2623
CONTINENTAL ASSURANCE COMPANY
c/o TCW Asset Management Company
200 Park Avenue, Suite 2200
New York, NY 10166-0228
Attn: Mark L. Gold/Justin Driscoll
Tel: 212-297-4000
Fax: 212-297-4159
ROYALTON COMPANY
c/o Pacific Investment Management Co.
840 Newport Center Drive
Newport Beach, CA 92660
Attn: Melissa Fedjasz
Tel: 714-717-5169
Fax: 714-718-2623
DEEPROCK & COMPANY
c/o Eaton Vance Management
24 Federal Street
6th Floor
Boston, MA 02110
Attn: Payson Swaffield
Tel: 617-654-8486
Fax: 617-695-9594
with a copy to:
MAYER BROWN & PLATT
1675 Broadway
New York, NY 10019
Attn: Andrew Mattei
Tel: 212-506-2572
Fax: 212-262-1910
9
<PAGE>
SCHEDULE 2 to
CREDIT AGREEMENT
----------------
Properties Mortgaged
--------------------
1. Lot 18, Research Park, as recorded in Liber 15 of Plats, pages 56-57,
Washtenaw County Records, commonly known as 3985 Research Park Drive, Ann
Arbor, Michigan.
2. Lot 15, Research Park, as recorded in Liber 15 of Plats, pages 56-57,
Washtenaw County Records, commonly known as 3985 Research Park Drive, Ann
Arbor, Michigan.
3. Approximately 3,685 Acres in 11 parcels of land located seven miles east of
Mojave in Kern County, California.
<PAGE>
SCHEDULE 3 to
CREDIT AGREEMENT
----------------
Mortgage Recording Jurisdictions
--------------------------------
1. Mortgage to be recorded in Washtenaw County, Michigan.
2. Deed of Trust to be recorded in Kern County, California.
<PAGE>
SCHEDULE 4 to
CREDIT AGREEMENT
----------------
INITIAL CANADIAN COLLATERAL DOCUMENTS
DOCUMENTS RELATING TO THE CANADIAN BORROWER
- -------------------------------------------
1. Share Pledge Agreement of the U.S. Borrower in respect of 35% of shares
held in the Canadian Borrower.
2. General Security Agreement of the Canadian Borrower.
3. Share Pledge Agreement of the Canadian Borrower in respect of all shares
held in Laidlaw Environmental Services Ltd.
DOCUMENTS RELATING TO THE CANADIAN SUBSIDIARIES
- -----------------------------------------------
4. Guarantees of each of the following Canadian Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
(c) [I.W.M. Disposal Inc./1/]
(d) Laidlaw Environmental Services (Sarnia) Ltd.
(e) 1197296 Ontario Inc.
(f) Laidlaw Environmental Services (Ryley) Ltd.
(g) Laidlaw Environmental Services (Atlantic) Ltd.
(h) Laidlaw Environmental Services (Guelph), Inc. (formerly known as PPM
Canada Inc.;
5. Limited Guarantees of each of the Quebec incorporated Canadian
Subsidiaries:
(a) Laidlaw Environmental Services (Quebec) Ltd.
(b) Les Enterprises D'Incineration Industrielle Tricil Inc.
(c) Laidlaw Environmental Services (Mercier) Ltd.;
- -------
/1/ Prior to the Closing Date, this subsidiary was dissolved.
/2/ Prior to the Closing Date, this subsidiary was dissolved.
1
<PAGE>
6. General Security Agreement of each of the following Canadian Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
(c) [I.W.M. Disposal Inc.(2)]
(d) Laidlaw Environmental Services (Sarnia) Ltd.
(e) 1197296 Ontario Inc.
(f) Laidlaw Environmental Services (Ryley) Ltd.
(g) Laidlaw Environmental Services (Atlantic) Ltd.
(h) Laidlaw Environmental Services (Guelph), Inc. (formerly known as PPM
Canada Inc.;
7. Hypothec of each of the Quebec incorporated Canadian Subsidiaries:
(a) Laidlaw Environmental Services (Quebec) Ltd.
(b) Les Enterprises D'Incineration Industrielle Tricil Inc.
(c) Laidlaw Environmental Services (Mercier) Ltd.
8. Fixed and Floating Charge Debentures of each of the following Canadian
Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (Atlantic) Ltd.
(c) Laidlaw Environmental Services (Guelph), Inc. (formerly known as PPM
Canada Inc.;
9. General Assignments of Receivables of each of the following Canadian
Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (Atlantic) Ltd.
(c) Laidlaw Environmental Services (Guelph), Inc. (formerly known as PPM
Canada Inc.;
2
<PAGE>
10. Share Pledge Agreement of each of the following Canadian Subsidiaries in
respect of all shares held in other Canadian Subsidiaries:
(a) Laidlaw Environmental Services Ltd.
(b) Laidlaw Environmental Services (B.C.) Ltd.
(c) Laidlaw Environmental Services (Sarnia) Ltd.
(d) Laidlaw Environmental Services (Quebec) Ltd.
3
<PAGE>
Schedule 7.9
------------
1. Lawsuit styled Douglas K. Dieter v. The Regents of The University of
California, et al. (including Solvent Services, Inc. "SSI") filed in the
United States District Court for The Eastern District of California
(Case No.: CIV-S-95-686 DFL GGH) relative to patent rights in an
in-situ, steam injection, remedial technology patent claimed by
Plaintiff, a former employee of SSI while a student at the University of
California at Berkeley.
2. Lawsuit styled Frank Manchak, Jr. v. Chemical Waste Management, Inc. et
al. (including Laidlaw Environmental Services, Inc. and Rollins
Environmental Services (TX) Inc.) filed in the U.S. District Court for
the District of Delaware (Case No.: 95-709) relative to patent rights
claimed by the Plaintiff in a stabilization process involving the
combination of sludge and a calcium oxide containing material through a
mixer.
3. Letter to USPCI dated 2/14/97 from Harding, Earley, Follmer & Frailey
representing Nittany Tarp, owner of US Patent No. 4,948,193, claiming
that USPCI is infringing upon the patent, offering opportunity to enter
into licensing agreement. Responded that letter was routed to our
supplier. Supplier's attorney, Laubscher & Laubscher responded by letter
dated 3/26/97 denying infringement, declining offer for license, stated
that matter considered closed.
4. Letter to Laidlaw Environmental Services, Inc. ("LESI") dated April 12,
1996 from McBride Baker & Coles, representing Software Publishers
Association ("SPA") claiming that LESI is utilizing unlicensed copies of
software on personal computers. Various correspondence has ensued.
Latest correspondence from LESI dated 10/9/96 offering to settle claims
on a reasonable basis. No response from SPA attorney.
5. Letter to LESI dated May 1, 1996 from Donahue, Gallagher, Woods & Wood
representing Business Software Alliance, alleging that LESI may have
installed more copies of software programs on its personal computers
than it is authorized to use. Various correspondence has ensued. LESI is
considering settlement offer presented by BSA.
<PAGE>
Schedule 7.16 to
Credit Agreement
----------------
<TABLE>
<CAPTION>
-------------------------------------------------------------------------
The following list sets forth the subsidiaries of LES, Inc. as of April
3, 1998. Parent subsidiary relations are indicated by indentations.
Unless otherwise indicated, 100% of the voting securities of each
subsidiary is owned by the indicated parent of such subsidiary.
--------------------------------------------------------------------------
=============================================================================================================
<S> <C>
State of
Incorporation
- -------------------------------------------------------------------------------------------- ----------------
Laidlaw Environmental Services (US), Inc. Delaware
- ---- ----------------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Lone and Grassy Mountain), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tulsa), Inc. Oklahoma
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (San Antonio), Inc. Texas
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Wichita), Inc. Kansas
- ---- ---- ---- ---- ------------------------------------------------------------------------- --- ----------
USPCI of Mississippi, Inc. (50%) Mississippi
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Delaware, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
ECDC East, L.C. (80%) Utah
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
ECDC Services, L.C. (80%) Utah
- ---- ---- --------- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Rosemount), Inc. Minnesota
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Sawyer), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tucker), Inc. Georgia
- ---- ---- ------------------------------------------------------------------------------------ --------------
Ninth Street Properties, Inc. Missouri
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (San Jose), Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Chemclear, Inc. of Los Angeles Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
USPCI, Inc. of Georgia Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
LES Holding=s, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
East Carbon Development Financial Partners, Inc. Utah
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Imperial Valley), Inc. (50%) California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Lokern), Inc. (23%) California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (North East), Inc. New Hampshire
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Recovery), Inc. Louisiana
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TES), Inc. Texas
- ---- ---- ------------------------------------------------------------------------------------ --------------
Corsan Trucking, Inc. (25%) Louisiana
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (TG), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TOC), Inc. South Carolina
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TS), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Thermal Treatment), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Corsan Trucking, Inc. (75%) Louisiana
- ---- ---- ------------------------------------------------------------------------------------ --------------
GSX Chemical Services of Ohio, Inc. Ohio
- ---- ---- ------------------------------------------------------------------------------------ --------------
LEMC, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Chemical Services, Inc. Massachusetts
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Altair), Inc. Texas
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (FS), Inc. (13%) Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (BDT), Inc. New York
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (FS), Inc. (86%) Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
1
<PAGE>
- --------------------------------------------------------------------------------------------------------------
Laidlaw Environmental Services (GS), Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Clive), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (WT), Inc. Ohio
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw OSCO Holdings, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of Nashville, Inc. Tennessee
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
OSCO Treatment Systems of Mississippi, Inc. (50%) Tennessee
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Bartow, Inc. Florida
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of California, Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Lokern), Inc. (77%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Imperial Valley), Inc. (50% California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Chattanooga, Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of Illinois, Inc. Illinois
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of South Carolina, Inc. South Carolina
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of White Castle, Inc. Colorado
- ---- ---- ------------------------------------------------------------------------------------ --------------
LES Merger, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Puerto Rico), Inc. Puerto Rico
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Bridgeport), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Deer Park), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Baton Rouge), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Plaquemine), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Custom Transport), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Los Angeles), Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tipton), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Gloucester), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Deer Trail), Inc. Colorado
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Mt. Pleasant), Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Minneapolis), Inc. Minnesota
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Aragonite), Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Sussex), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental, Inc. Delaware
==============================================================================================================
LES Acquisition, Inc. Delaware
==== ==== ==================================================================================== ==============
SAFETY-KLEEN CORP.(1) Wisconsin
==== ==== ==================================================================================== ==============
Curbside, Inc. (49%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Dirt Magnet, Inc. Colorado
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
The Midway Gas & Oil Company Colorado
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Canada, Inc. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Environnement Services et Machineries, Inc. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Elgint Corp. Nevada
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Ilium B.V. Dutch
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Espana S.A. (50%) Spain
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Espana S.A. (50%) Spain
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
- --------
<FN>
1 On the Merger Date Safety-Kleen Corp. will merge with LES Acqusition,
Inc. with the surviving corporation being Safety-Kleen Corp.
</FN>
2
<PAGE>
- --------------------------------------------------------------------------------------------------------------
Membrex, Inc. (6%) Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Nucer, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Envirosystems Company California
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Envirosystems Company of Puerto Rico, Inc. Indiana
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Petrocon, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------ --------------
Phillips Acqusition Corp. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Aviation, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
SK Insurance Company Vermont
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
SK Real Estate, Inc. Illinois
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Belgium, S.A. Belgium
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Beteiligungs - GmbH Germany
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Grundbesitz GmbH Germany
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Deutschland GmbH Germany
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Orm-Bergold Chemie GmbH & Co. KG (50%) German Ptnsp.
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Orm-Chemie GmbH Germany
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Orm-Bergold Chemie GmbH & Co. KG (50%) German Ptnsp.
- ---- ---- ---- ---- ---- ---- ---------------------------------------------------------------- --------------
Safety-Kleen (France) S.A. French
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen International, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen U.K. Limited UK
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Ireland Limited Ireland
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Italia S.p.A. Italy
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Oil Recovery Co. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Oil Services, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
The Solvents Recovery Service of New Jersey, Inc. New Jersey
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
3E Company Environmental, Ecological and Engineering (80%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
- ---------------------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Canada) Ltd. Canada
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services Ltd. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (B.C.) Ltd. Canada
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Sarnia) Ltd. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
1197296 Ontario Inc. Ontario
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Quebec) Ltd. Quebec
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Mercier) Ltd. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Les Entreprises D'Incineration Industrielle Tricil Inc. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Ryley) Ltd. Alberta
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Atlantic) Limited Nova Scotia
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Guelph), Inc. Ontario
==============================================================================================================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 7.20 to
the Credit Agreement
--------------------
- ---------------------------------------------------------------------------------------------
Jurisdiction Document(s) Filed Act(s) Document Filing Authority
- ------------ ----------------- Filed Under ----------------
---------------
<S> <C> <C> <C>
- ----------------------- --------------------- ----------------------- --------------------
Northwest Territories Debenture and COMPANIES ACT Companies Registry
Affidavits of Bona (Northwest and Documents
Fides and Execution Territories)and Registry
CORPORATION
SECURITIES
REGISTRATION ACT
(Northwest
Territories)
General Assignment ASSIGNMENT OF BOOK
of Accounts DEBTS ACT
Receivables and (Northwest
Affidavit of Bona Territories)
Fides
- ----------------------- --------------------- ----------------------- --------------------
Newfoundland Debenture and REGISTRATION OF Registry of Deeds
Affidavit of DEEDS ACT and Registry of
Execution (Newfoundland) Assignment of Book
Debts
General Assignment ASSIGNMENT OF BOOK
of Accounts DEBTS ACT
Receivables and (Newfoundland)
Affidavit of
Execution
- ----------------------- --------------------- ----------------------- --------------------
Prince Edward Island Debenture and CORPORATIONS Registry office,
Affidavits of Bona SECURITIES ACT (PEI) Charlottetown
Fides and Execution
General Assignment ASSIGNMENT OF BOOK
of Accounts DEBTS ACT (PEI)
Receivables and
Affidavit of Bona
Fide
- ----------------------- --------------------- ----------------------- --------------------
Nova Scotia Debenture and CORPORATIONS Registry office,
Affidavits of Bona SECURITIES ACT (Nova Halifax
Fides and Execution Scotia)
General Assignment ASSIGNMENT OF BOOK
of Accounts DEBTS ACT (Nova
Receivables and Scotia)
Affidavit of Bona
Fides
- ---------------------------------------------------------------------------------------------
1
<PAGE>
- ---------------------------------------------------------------------------------------------
Jurisdiction Document(s) Filed Act(s) Document Filing Authority
- ------------ ----------------- Filed Under ----------------
---------------
- ----------------------- --------------------- ----------------------- --------------------
New Brunswick Financing Statement PERSONAL PROPERTY Personal Property
SECURITY ACT (New Registry
Brunswick)
- ----------------------- --------------------- ----------------------- --------------------
Quebec Hypothec CIVIL CODE OF QUEBEC Register of Personal
and Movable Real
Rights
- ----------------------- --------------------- ----------------------- --------------------
Ontario Financing Statement PERSONAL PROPERTY Personal Property
SECURITY ACT Registry
(Ontario)
- ----------------------- --------------------- ----------------------- --------------------
Manitoba Financial Statement PERSONAL PROPERTY Personal Property
SECURITY ACT Registry
(Manitoba)
- ----------------------- --------------------- ----------------------- --------------------
Saskatchewan Financing Statement PERSONAL PROPERTY Personal Property
SECURITY ACT Registry
(Saskatchewan)
- ----------------------- --------------------- ----------------------- --------------------
Alberta Financing Statement PERSONAL PROPERTY Personal Property
SECURITY ACT Registry
(Alberta)
- ----------------------- --------------------- ----------------------- --------------------
British Columbia Financing Statement PERSONAL PROPERTY Personal Property
SECURITY ACT Registry
(Columbia)
- --------------------------------------------------- -----------------------------------------
2
</TABLE>
<PAGE>
SCHEDULE 8.2(g) to
CREDIT AGREEMENT
------------------
Safety-Kleen Outstanding Debt
-----------------------------
1. 9.25% Notes due September 15, 1999 in the aggregate principal amount of up
to $100,000,000.
2. Miscellaneous mortgages in the United Stated in the aggregate principal
amount of $593,000.
3. Loans made under a working capital line of credit with Deutsche Bank,
Bochum, Germany, in the aggregate principal amount of $151,000.
4. $46,000,000 Demand Note payable to LES, Inc.
<PAGE>
3
Schedule 10.2(f)
----------------
Existing Indebtedness
Tax Exempt Bonds:
Hazardous Waste Disposal Revenue Bonds 0,000,000
Tooele County, Utah
Due August 1, 2010
Industrial Development Revenue Refunding and Improvement Bonds 15,700,000
The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County (Tennessee)
Due May 1, 2003
Pollution Control Revenue Bonds 19,500,000
California Pollution Control Financing Authority
Due July 1, 2007
Hazardous Waste Treatment Revenue Bonds 45,700,000
Tooele County, Utah
Due July 1, 2027
County of Lexington, South Carolina 2,700,000
Industrial Revenue Bonds
Due December 1, 2009
City of Denton, Texas Industrial Development Authority 2,430,000
Industrial Revenue Bonds
Due December 1, 2009
Total 96,030,000
Amounts held in Trust relating to the above tax exempt bonds:
Hazardous Waste Disposal Revenue Bonds 1,349,317
Tooele County, Utah
Due August 1, 2010
Industrial Development Revenue Refunding and Improvement Bonds 8,659,230
The Industrial Development Board of The Metropolitan Government of
Nashville and Davidson County (Tennessee)
Due May 1, 2003 _________
10,008,547
==========
Net Amount of Tax Exempt Bonds: 86,021,453
==========
1
<PAGE>
Capital Leases:
GE Capital 484,842
Xerox 19,156
503,998
Notes:
Bryson (Davis) 146,745
Grassy Mountain (Semnani) 158,436
Miscellaneous Mortgages 593,000
Deutsche Bank, Bochum 151,000
Safety-Kleen Corporation Senior Debenture 9.25% 100,000,000
Due September 15, 1999
-----------
101,049,181
===========
2
<PAGE>
Schedule 10.3(f)
----------------
EXISTING LIENS
1) The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County has a lien on all machinery, equipment,
furniture and similar property of Laidlaw Environmental Services of
Nashville, Inc. by agreement dated May 1, 1993.
2) The limited liability company interests of ECDC East, L.C. held by
Laidlaw Environmental Services of Delaware, Inc. are encumbered
pursuant to the limited liability company agreement between Laidlaw
Environmental Services of Delaware, Inc. and the minority interest
holder.
3) The limited liability company interests of ECDC Services, L.C. held by
Laidlaw Environmental Services Delaware, Inc. are encumbered pursuant
to the limited liability company agreement between Laidlaw
Environmental Services of Delaware, Inc. and the minority interest
holder.
4) The equity of USPCI of Mississippi, Inc. held by Laidlaw Environmental
Services (Lone and Grassy Mountain), Inc. is encumbered pursuant to an
agreement between Laidlaw Environmental Services (Lone and Grassy
Mountain), Inc. and the minority equity holder.
<PAGE>
Schedule 10.4
-------------
EXISTING GUARANTEE OBLIGATIONS
------------------------------
Guaranty by Laidlaw Environmental Services, Inc. guaranteeing performance of JTM
Industries, Inc. obligations pursuant to Master Equipment Lease with Cargill
Leasing Corporation; Lease is dated 9/18/93; Guaranty dated 1/19/96. Second
Lease dated April 22, 1997; Guaranty dated April 22, 1997.
Guaranty dated March 2, 1992 by USPCI, Inc. to Union Camp Corporation to
guaranty JTM's obligations under a contract for the purpose of sale of
Marketable By-Products generated by Union Camp Corporation.
LES, Inc. has a letter of credit in favor of Barnett Bank in the amount of
$3,000,000 which may be drawn on in the event ViroGroup, Inc. (50% owned by
Laidlaw Osco Holdings, Inc.) does not pay its obligations to Barnett Bank by
June 26, 1998. The letter of credit will expire July 26, 1998.
Guaranty of Laidlaw Environmental Services, Inc. (LESI) and certain of its
subsidiaries to General Motors Corporation dated on or about November 30, 1997
guaranteeing performance by Allied Waste Systems of certain waste management and
disposal obligations of LESI and certain of its present and/or former
subsidiaries under a contract with General Motors Corporation designated
Contract Number 4070 as amended.
<PAGE>
SCHEDULE 10.8 to
CREDIT AGREEMENT
----------------
EXISTING LOANS TO OFFICERS
None
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT A-1
FORM OF DRAFT
- ---------------------------------------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C>
BANKER'S ACCEPTANCE No.
--------------
TO: Due 19
--------------------------------------------- ---------------------- ---------------------------- -----
Bank
days after the date (without grace)
----------------------
-------------------------------------------------
Address
For value received pay to the order of the undersigned drawer the
ACCEPTED sum of $
--------------------------------------------------------
-------------------------------------------------
Payable at
------------- --------------- -------------------
Value Received, and Charge to the Account of:
------------- --------------- -------------------
For
-------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
- -------------------------------------------------------
Authorized Signature Per:
- ------------------------------------------------------- -------------------------------------------------------------
Authorized Signature Per:
Form 8411
(7-88)
- ---------------------------------------------------------------------------------------------------------------------------------
--------------------------------------
--------------------------------
Per: --------------------------
Per: ----------- ----------
--------------------------------------
</TABLE>
<PAGE>
EXHIBIT A-2
FORM OF REQUEST FOR ACCEPTANCES
Date:___________________
The Toronto-Dominion Bank,
as Canadian Administrative Agent
9th Floor, Toronto Dominion Bank Tower
55 West King Street
Toronto Dominion Centre
Toronto, Ontario M5K 1A2
Attn: Manager Agency
Dear Sirs:
We refer to the Amended and Restated Credit Agreement, dated as of
April 3, 1998 (as amended, modified, extended or restated from time to time, the
"CREDIT AGREEMENT"), among LES, Inc., Laidlaw Environmental Services (Canada)
Ltd., the Lenders from time to time parties thereto, Toronto Dominion (Texas)
Inc., as General Administrative Agent, The Toronto-Dominion Bank, as Canadian
Administrative Agent, TD Securities (USA) Inc., as Arranger, The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago, and Wachovia
Bank, N.A., as Managing Agents, The Bank of Nova Scotia and The First National
Bank of Chicago, as Co-Documentation Agents, and NationsBank, N.A., as
Syndication Agent. Capitalized terms used herein and not otherwise defined
herein shall have the meanings assigned to such terms in the Credit Agreement.
We request the creation and purchase of the following Acceptances:
Total Face Value: _____________________________
Date of Issue:.________________________________
Term in Months: _______________________________
Please debit our account at The Toronto-Dominion Bank, Toronto Dominion
Centre Branch, Toronto #______________ for the difference between (i) the face
amount of maturing Acceptances/the Canadian Term Loan balance (as applicable)
and (ii) the Acceptance Purchase Price LESS the stamping fee on the Acceptances
to be created.
Very truly yours,
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.
By:___________________________________
Title:
<PAGE>
EXHIBIT B-1
- --------------------------------------------------------------------------------
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
made by
LES, INC.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
and certain of its Subsidiaries
in favor of
TORONTO DOMINION (TEXAS), INC.
as General Administrative Agent
- --------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
SECTION 1. DEFINED TERMS.......................................................2
1.1 Definitions..........................................................2
1.2 Other Definifional Provisions........................................7
SECTION 2. GUARANTEE...........................................................7
2.1 Guarantee............................................................7
2.2 Right of Contribution................................................8
2.3 No Subrogation.......................................................8
2.4 Amendments, etc. with respect to the Borrower Obligations............9
2.5 Guarantee Absolute and Unconditional.................................9
2.6 Reinstatement.......................................................10
2.7 Payments............................................................10
SECTION 3. GRANT OF SECURITY INTEREST.........................................11
SECTION 4. REPRESENTATIONS AND WARRANTEES.....................................12
4.1 Representations in Credit Agreement; Holdings Representations.......13
4.2 Title; No Other Liens...............................................13
4.3 Perfected First Priority Liens......................................13
4.4 Chief Execufive Office..............................................13
4.5 Inventory and Equipment.............................................13
4.6 Farm Products.......................................................14
4.7 Pledged Securities..................................................14
4.8 Receivables.........................................................14
4.9 Contracts...........................................................15
4.10 Intellectual Property...............................................16
SECTION 5. COVENANTS..........................................................16
5.1 Covenants in Credit Agreement.......................................16
5.2 Delivery of Instruments and Chattel Paper...........................16
5.3 Maintenance of Insurance............................................16
5.4 Payment of Obligations..............................................17
5.5 Maintenance of Perfected Security Interest; Further Documentation...17
5.6 Changes in Locations, Name, etc.....................................17
5.7 Notices.............................................................18
5.8 Pledged Securities..................................................18
5.9 Receivables.........................................................19
5.10 Contracts...........................................................20
5.11 Intellectual Property...............................................20
i
<PAGE>
PAGE
5.12 Special Covenants of Holdings.......................................22
SECTION 6. REMEDIAL PROVISIONS................................................23
6.1 Certain Matters Relating to Receivables.............................23
6.2 Communications with Obligors; Grantors Remain Liable................23
6.3 Pledged Stock.......................................................24
6.4 Proceeds to be Turned Over To General Administrative Agent..........25
6.5 Application of Proceeds.............................................25
6.6 Code and Other Remedies.............................................26
6.7 Registration Rights.................................................27
6.8 Waiver; Deficiency..................................................28
SECTION 7. THE GENERAL ADMINISTRATIVE AGENT...................................28
7.1 General Administrative Agent's Appointment as
Attomey-in-Fact, etc................................................28
7.2 Duty of General Administrative Agent................................30
7.3 Execution of Financing Statements...................................30
7.4 Authority of General Administrative Agent...........................30
SECTION 8. MISCELLANEOUS......................................................31
8.1 Amendments in Writing...............................................31
8.2 Notices ............................................................31
8.3 No Waiver by Course of Conduct; Cumulative Remedies.................31
8.4 Enforcement Expenses; Indemnification...............................31
8.5 Successors and Assigns..............................................32
8.6 Set-Off.............................................................32
8.7 Counterparts........................................................32
8.8 Severability........................................................33
8.9 Section Headings....................................................33
8.10 Integration.........................................................33
8.11 GOVERNING LAW.......................................................33
8.12 Submission To Jurisdiction; Waivers.................................33
8.13 Acknowledgements....................................................34
8.14 WAIVER OF JURY TRIAL................................................34
8.15 Additional Grantors ................................................34
8.16 Releases............................................................34
ii
<PAGE>
SCHEDULES
Schedule 1 Notice Addresses of Guarantors
Schedule 2 Description of Pledged Securities
Schedule 3 Filings and Other Actions Required to Perfect Security Interests
Schedule 4 Location of Jurisdiction of Organization and Chief Executive Office
Schedule 5 Location of Inventory and Equipment
Schedule 6 Intellectual Property
Schedule 7 Contracts
Schedule 8 Existing Prior Liens
ANNEXES
Annex I Assumption Agreement
iii
<PAGE>
AMENDED AND RESTATED
GUARANTEE AND COLLATERAL AGREEMENT
AMENDED AND RESTATED GUARANTEE AND COLLATERAL AGREEMENT, dated as of
April 3, 1998 (amending and restating the Guarantee and Collateral Agreement,
dated as of May 15, 1997), made by each of the signatories hereto (together with
any other entity that may become a party hereto as provided herein, the
"GRANTORS"), in favor of TORONTO DOMINION (TEXAS), INC., as General
Administrative Agent (in such capacity, the "GENERAL ADMINISTRATIVE AGENT") for
the banks and other financial institutions or entities (the "Lenders") from time
to time parties to the Amended and Restated Credit Agreement, dated as of April
3, 1998 (as amended, supplemented or otherwise modified from time to time, the
"CREDIT AGREEMENT"), among LES, INC., a Delaware corporation (the "COMPANY"),
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD. (the "CANADIAN BORROWER"; together
with the Company, the "BORROWERS"), the Lenders, the General Administrative
Agent, The Toronto-Dominion Bank, as Canadian Administrative Agent, TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank, N.A.,
The First National Bank of Chicago and Wachovia Bank, N.A., as Managing Agents,
The Bank of Nova Scotia and The First National Bank of Chicago, as
Co-Documentation Agents, and NationsBank, N.A., as Syndication Agent.
W I T N E S S E T H:
--------------------
WHEREAS, the Borrowers entered into the Credit Agreement, dated as of
May 15, 1997 (the "EXISTING CREDIT AGREEMENT"), with the General Administrative
Agent, the Canadian Administrative Agent, the Manger, certain of the Managing
Agents, the Syndication Agent and the banks and other financial institutions
from time to time parties thereto;
WHEREAS, in connection with the Existing Credit Agreement, the
Borrowers have executed the Guarantee and Collateral Agreement, dated as of May
15, 1997 (the "EXISTING COLLATERAL AGREEMENT"), in favor of the General
Administrative Agent for the ratable benefit of the lenders under the Existing
Credit Agreement, as the same may be amended, supplemented or otherwise modified
from time to time;
WHEREAS. the Borrowers, the Agent and the Lenders have entered into
the Credit Agreement to amend and restate the Existing Credit Agreement;
WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrowers to provide for financing
of the Exchange Offer and the Merger (each as defined in the Credit Agreement)
and related costs and expenses, and for the refinancing of certain existing
indebtedness of Safety-Kleen Corp.;
WHEREAS, the Borrowers are members of an affiliated group of companies
that includes each other Grantor;
1
<PAGE>
WHEREAS, the Borrowers and the other Grantors are engaged in related
businesses, and each Grantor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement, the
Exchange Offer and the Merger; and
WHEREAS, it is a condition precedent to the obligations of the Lenders
to make their respective Extensions of Credit to the Borrowers under the Credit
Agreement, for the parties hereto to amend and restate the Existing Collateral
Agreement in order to confirm and continue the provision of the collateral
security to secure the due and prompt payment and performance of all the
Borrowers' obligations now or hereafter arising under or referred to in the
Credit Agreement;
NOW, THEREFORE, in consideration of the premises and to induce the
General Administrative Agent and the Lenders to enter into the Credit Agreement
and the Working Capital Lender to enter into the Working Capital Facility and to
induce the Lenders and the Working Capital Lender to make their respective
extensions of credit to the Borrowers thereunder, the parties hereto agree that
the Existing Collateral Agreement is hereby amended and restated in its entirety
as follows:
SECTION 1. DEFINED TERMS
1.1 DEFINITIONS. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them
in the Credit Agreement, and the following terms which are defined in the
Uniform Commercial Code in effect in the State of New York on the date
hereof are used herein as so defined: Accounts, Chattel Paper, Documents,
Equipment, Farm Products, Instruments and Inventory.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated Guarantee and Collateral
Agreement, as the same may be amended, supplemented or otherwise modified
from time to time.
"BORROWER OBLIGATIONS": the collective reference to the unpaid
principal of and interest on the Loans, Reimbursement Obligations,
Acceptance Reimbursement Obligations and Acceptance Notes, the Company's
guarantee obligations under Section 13 of the Credit Agreement and all
other obligations and liabilities of the Borrowers (including, without
limitation, interest accruing at the then applicable rate provided in the
Credit Agreement after the maturity of the Loans, Reimbursement
Obligations, Acceptance Reimbursement Obligations and Acceptance Notes and
interest accruing at the then applicable rate provided in the Credit
Agreement after the filing of any petition in bankruptcy, or the
commencement of any insolvency, reorganization or like proceeding, relating
to any Borrower, whether or not a claim for post-filing or post-petition
interest is allowed in such proceeding) to the General Administrative Agent
2
<PAGE>
or any Lender (or, in the case of any Hedging Agreement referred to below,
any Affiliate of any Lender), whether direct or indirect, absolute or
contingent, due or to become due, or now existing or hereafter incurred,
which may arise under, out of, or in connection with, the Credit Agreement,
this Agreement, the other Loan Documents, any Letter of Credit or any
Hedging Agreement entered into by any Borrower with any Person which, at
the time such Hedging Agreement is entered into, is a Lender (or any
Affiliate of any Lender) or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, guarantee obligations, fees,
indemnities, costs, expenses or otherwise (including, without limitation,
all fees and disbursements of counsel to the General Administrative Agent
or to the Lenders that are required to be paid by any Borrower pursuant to
the terms of any of the foregoing agreements).
"CALIFORNIA BONDS": the 6.70% California Pollution Control Financing
Authority Pollution Control Refunding Revenue Bonds 1997 Series A due July 1,
2007 in the aggregate principal amount of $19,500,000.
"COLLATERAL": as defined in Section 3.
"COLLATERAL ACCOUNT": any collateral account established by the
General Administrative Agent as provided in Section 6.1 or 6.4.
"CONTRACTS": the contracts and agreements listed in Schedule 7, as the
same may be amended, supplemented or otherwise modified from time to time,
including, without limitation, (i) all rights of any Grantor to receive moneys
due and to become due to it thereunder or in connection therewith, (ii) all
rights of any Grantor to damages arising thereunder and (iii) all rights of any
Grantor to perform and to exercise all remedies thereunder.
"COPYRIGHTS": (i) all copyrights arising under the laws of the United
States, any other country or any political subdivision thereof, whether
registered or unregistered and whether published or unpublished (including,
without limitation, those listed in Schedule 6), all registrations and
recordings thereof, and all applications in connection therewith, including,
without limitation, all registrations, recordings and applications in the United
States Copyright Office, and (ii) the right to obtain all renewals thereof.
"COPYRIGHT LICENSES": any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in SCHEDULE
6), granting any right under any Copyright, including, without limitation, the
grant of rights to manufacture, distribute, exploit and sell materials derived
from any Copyright.
"GENERAL INTANGIBLES": all "general intangibles" as such term is
defined in Section 9106 of the Uniform Commercial Code in effect in the State of
New York on the date hereof and, in any event, including, without limitation,
with respect to any Grantor, all contracts, agreements, instruments and
indentures in any form, and portions thereof, to which such Grantor is a party
or under which such Grantor has any right, title or interest or to which such
Grantor or any property
3
<PAGE>
of such Grantor is subject, as the same may from time to time be amended,
supplemented or otherwise modified, including, without limitation, (i) all
rights of such Grantor to receive moneys due and to become due to it thereunder
or in connection therewith, (ii) all rights of such Grantor to damages arising
thereunder and (iii) all rights of such Grantor to perform and to exercise all
remedies thereunder, in each case to the extent the grant by such Grantor of a
security interest pursuant to this Agreement in its right, title and interest in
such contract, agreement, instrument or indenture is not prohibited by such
contract, agreement, instrument or indenture without the consent of any other
party thereto, would not give any other party to such contract, agreement,
instrument or indenture the right to terminate its obligations thereunder, or is
permitted with consent if all necessary consents to such grant of a security
interest have been obtained from the other parties thereto (it being understood
that the foregoing shall not be deemed to obligate such Grantor to obtain such
consents); PROVIDED, that the foregoing limitation shall not affect, limit
restrict or impair the grant by such Grantor of a security interest pursuant to
this Agreement in any Receivable or any money or other amounts due or to become
due under any such contract, agreement, instrument or indenture.
"GUARANTOR OBLIGATIONS": with respect to any Guarantor; the collective
reference to (i) the Borrower Obligations, (ii) the Working Capital Obligations
and (iii) all obligations and liabilities of such Guarantor which may arise
under or in connection with this Agreement or any other Loan Document to which
such Guarantor is a party, in each case whether on account of guarantee
obligations, reimbursement obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the General Administrative Agent or to the Lenders that are required to be
paid by such Guarantor pursuant to the terms of this Agreement or any other Loan
Document).
"GUARANTORS": the collective reference to each Grantor other than the
Company.
"HOLDINGS": Laidlaw Environmental Services, Inc. (formerly known as
Rollins Environmental Services, Inc.), a Delaware corporation.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, the Copyrights, the Copyright Licenses, the Patents, the
Patent Licenses, the Trademarks and the Trademark Licenses, and all rights to
sue at law or in equity for any infringement or other impairment thereof,
including the right to receive all proceeds and damages therefrom.
"INTERCOMPANY NOTE": any promissory note evidencing loans MADE by any
Grantor to Holdings or any of its Subsidiaries.
"INVESTMENT PROPERTY": the collective reference to (i) all "investment
property" as such term is defined in Section 9-115 of the New York UCC on the
date hereof and (ii) whether or not constituting "investment property" as so
defined, all Pledged Securities.
"ISSUERS": the collective reference to each issuer of a Pledged
Security.
4
<PAGE>
"LENDERS": as defined in the preambles to this Agreement and
including, unless the context otherwise requires, each Affiliate of any Lender
that has entered into any Hedging Agreement with either Borrower.
"NEW YORK UCC": the Uniform Commercial Code as from time to time in
effect in the State of New York.
"OBLIGATIONS": (i) in the case of the Company, the Borrower
Obligations and the Working Capital Obligations, and (ii) in the case of each
Guarantor, its Guarantor Obligations.
"PATENTS": (i) all letters patent of the United States, any other
country or any political subdivision thereof, all reissues and extensions
thereof, including, without limitation, any of the foregoing referred to in
SCHEDULE 6, (ii) all applications for letters patent of the United States or any
other country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any of the foregoing referred to in
SCHEDULE 6 and (iii) all rights to obtain any reissues or extensions of the
foregoing.
"PATENT LICENSE": all agreements, whether written or oral, providing
for the grant by or to any Grantor of any right to manufacture, use or sell any
invention covered in whole or in part by a Patent, including, without
limitation, any of the foregoing referred to in Schedule 6.
"PLEDGED NOTES": all promissory notes listed on SCHEDULE 2, all
Intercompany Notes at any time issued to any Grantor and all other promissory
notes issued to or held by any Grantor (other than promissory notes issued in
connection with extensions of trade credit by any Grantor in the ordinary course
of business).
"PLEDGED SECURITIES": the collective reference to the Pledged Notes
and the Pledged Stock.
"PLEDGED STOCK": the shares of Capital Stock listed on SCHEDULE 2,
together with any other shares, stock certificates, options or rights of any
nature whatsoever in respect of the Capital Stock of any Person (other than each
of ECDC East, L.C., ECDC Services, L.C., OSCO Treatment Systems of Mississippi,
Inc., USPCI of Mississippi, Inc., so long as such entity is not, directly or
indirectly, a wholly-owned subsidiary of Holdings or the Company) that may be
issued or granted to, or held by, any Grantor while this Agreement is in effect.
"PROCEEDS": all "proceeds" as such term is defined in Section 9-306(l)
of the Uniform Commercial Code in effect in the State of New York on the date
hereof and, in any event, shall include without limitation, all dividends or
other income from the Pledged Securities, collections thereon or distributions
or payments with respect thereto.
"RECEIVABLE": any right to payment for goods sold or leased or for
services rendered, whether or not such right is evidenced by an Instrument or
Chattel Paper and whether or not it has been earned by performance (including,
without limitation, any Account).
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"SECURITIES ACT": the Securities Act of 1933, as amended.
"SUBSIDIARY GUARANTOR": each of the Guarantors other than Holdings.
"TRADEMARKS": (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles, service
marks, logos and other source or business identifiers, and all goodwill
associated therewith, now existing or hereafter adopted or acquired, all
registrations and recordings thereof, and all applications in connection
therewith, whether in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof or any other
country or any political subdivision thereof, or otherwise, and all common-law
rights related thereto, including, without limitation, any of the foregoing
referred to in SCHEDULE 6, and (ii) the right to obtain all renewals thereof.
"TRADEMARK LICENSE": any agreement, whether written or oral, providing
for the grant by or to any Grantor of any right to use any Trademark, including,
without limitation, any of the foregoing referred to in SCHEDULE 6.
"UTAH BONDS": the 7.55% Tooele County, Utah, Pollution Control
Refunding Revenue Bonds 1997 Series A due July 1, 2007 in the aggregate
principal amount of $45,700,000.
"WESTINGHOUSE DEBT AGREEMENT": the collective to (i) the Promissory
Note, dated May 15, 1997 made by Hold' o Westinghouse Electric Corporation in
the initial principal amount of $60,000,000 and (ii) the Stock Purchase
Agreement, dated as of March 7, 1990, as amended, between Holdings and
Westinghouse Electric Corporation.
"WORKING CAPITAL FACILITY": the working capital credit facility
evidenced by the letter agreement, dated as of March 31, 1998, between
NationsBank of Texas, N.A., as lender, and the Company, as borrower, as the same
may be amended, modified, supplemented, restated or replaced (but not increased)
from time to time; PROVIDED that, after giving effect to each such amendment,
modification, supplement, restatement or replacement, such working capital
credit facility shall be permitted under the Credit Agreement.
"WORKING CAPITAL LENDER": NationsBank of Texas, N.A., as lender, under
the Working Capital Facility, and any Person that is a Lender under the Credit
Agreement and that replaces NationsBank, N.A. under the Working Capital
Facility.
"WORKING CAPITAL OBLIGATIONS": all of the obligations, liabilities and
indebtedness of the Company (including, without limitation, interest accruing at
the then applicable rate provided in the Working Capital Facility after the
maturity of the extensions of credit thereunder and interest accruing at the
then applicable rate provided in the Working Capital Facility after the filing
of any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Company, whether or not a
claim for post-filing or post-petition interest is allowed in
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such proceeding) to the Working Capital Lender whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, the Working
Capital Facility or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, guarantee obligations, fees, indemnities, costs, expenses or
otherwise (including, without limitation, all fees and disbursements of counsel
to the Working Capital Lender that are required to be paid by any Borrower
pursuant to the terms of any of the foregoing agreements).
1.2 Other DEFINIFIONAL PROVISIONS. (a) The words "hereof', "herein",
"hereto" and "hereunder" and words of similar import when used in this Agreement
shall refer to this Agreement as a whole and not to any particular provision of
this Agreement, and Section and Schedule references are to this Agreement unless
otherwise specified.
(b) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
(c) Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Grantor, shall refer to such
Grantor's Collateral or the relevant part thereof.
SECTION 2. GUARANTEE
2.1 GUARANTEE. (a) Each of the Guarantors hereby, jointly and
severally, unconditionally and irrevocably, guarantees to the General
Administrative Agent, for the ratable benefit of the Lenders and the Working
Capital Lender and their respective successors, indorsees, transferees and
assigns, the prompt and complete payment and performance by the Borrowers when
due (whether at the stated maturity, by acceleration or otherwise) of the
Borrower Obligations and the Working Capital Obligations.
(b) Anything herein or in any other Loan Document to the contrary
notwithstanding, the maximum liability of each Guarantor hereunder and under the
other Loan Documents shall in no event exceed the amount which can be guaranteed
by such Guarantor under applicable federal and state laws relating to the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).
(c) Each Guarantor agrees that the Borrower Obligations or the
Working Capital Obligations may at any time and from time to time exceed the
amount of the liability of such Guarantor hereunder without impairing the
guarantee contained in this Section 2 or affecting the rights and remedies of
the General Administrative Agent or any Lender hereunder.
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(d) The guarantee contained in this Section 2 shall remain in full
force and effect until all the Borrower Obligations and the Working Capital
Obligations and the obligations of each Guarantor under the guarantee contained
in this Section 2 shall have been satisfied by payment in full, no Letter of
Credit shall be outstanding and the Commitments shall be terminated,
notwithstanding that from time to time during the term of the Credit Agreement
the Borrowers may be free from any Borrower Obligations or the Working Capital
Obligations.
(e) No payment made by either Borrower," or any of the Guarantors,
any other guarantor or any other Person or received or collected by the General
Administrative Agent or any Lender from either Borrower, any of the Guarantors,
any other guarantor or any other Person by virtue of any action or proceeding or
any set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Borrower Obligations or the Working Capital
Obligations shall be deemed to modify, reduce, release or otherwise affect the
liability of any Guarantor hereunder which shall, notwithstanding any such
payment (other than any payment made by such Guarantor in respect of the
Borrower Obligations or the Working Capital Obligations or any payment received
or collected from such Guarantor in respect of the Borrower Obligations and the
Working Capital Obligations), remain liable for the Borrower Obligations and the
Working Capital Obligations up to the maximum liability of such Guarantor
hereunder until the Borrower Obligations and the Working Capital Obligations are
paid in full, no Letter of Credit shall be outstanding and the Commitments are
terminated.
2.2 RIGHT OF CONTRIBUTION. Each Subsidiary Guarantor hereby agrees
that to the extent that a Subsidiary Guarantor shall have paid more than its
proportionate share of any payment made hereunder, such Subsidiary Guarantor
shall be entitled to seek and receive contribution from and against any other
Subsidiary Guarantor hereunder which has not paid its proportionate share of
such payment. Each Subsidiary Guarantor's right of contribution shall be subject
to the terms and conditions of Section 2.3. The provisions of this Section 2.2
shall in no respect limit the obligations and liabilities of any Subsidiary
Guarantor to the General Administrative Agent and the Lenders, and
each Subsidiary Guarantor shall remain liable to the General Administrative
Agent and the Lenders for the full amount guaranteed by such Subsidiary
Guarantor hereunder.
2.3 NO SUBROGATION, Notwithstanding any payment made by any Guarantor
hereunder or any set-off or application of funds of any Guarantor by the General
Administrative Agent or any Lender, no Guarantor shall be entitled to be
subrogated to any of the rights of the General Administrative Agent or any
Lender against either Borrower or any other Guarantor or any collateral security
or guarantee or right of offset held by the General Administrative Agent or any
Lender for the payment of the Borrower Obligations or the Working Capital
Obligations, nor shall any Guarantor seek or be entitled to seek any
contribution or reimbursement from either Borrower or any other Guarantor in
respect of payments made by such Guarantor hereunder, until all amounts owing to
the General Administrative Agent and the Lenders by the Borrowers on account of
the Borrower Obligations and the Working Capital Obligations are paid in full,
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no Letter of Credit shall be outstanding and the Commitments are terminated. If
any amount shall be paid to any Guarantor on account of such subrogation rights
at any time when all of the Borrower Obligations and the Working Capital
Obligations shall not have been paid in full, such amount shall be held by such
Guarantor in trust for the General Administrative Agent and the Lenders,
segregated from other funds of such Guarantor, and shall, forthwith upon receipt
by such Guarantor, be turned over to the General Administrative Agent in the
exact form received by such Guarantor (duly indorsed by such Guarantor to the
General Administrative Agent, if required), to be applied against the Borrower
Obligations and the Working Capital Obligations, whether matured or unmatured,
in such order as the General Administrative Agent may determine.
2.4 AMENDMENTS, ETC. WITH RESPECT TO THE BORROWER OBLIGATIONS. Each
Guarantor shall remain obligated hereunder notwithstanding that, without any
reservation of rights against any Guarantor and without notice to or further
assent by any Guarantor, any demand for payment of any of the Borrower
Obligations or the Working Capital Obligations made by the General
Administrative Agent or any Lender may be rescinded by the General
Administrative Agent or such Lender and any of the Borrower Obligations or the
Working Capital Obligations continued, and the Borrower Obligations or the
Working Capital Obligations, or the liability of any other Person upon or for
any part thereof, or any collateral security or guarantee therefor or right of
offset with respect thereto, may, from time to time, in whole or in part, be
renewed, extended, amended, modified, accelerated, compromised, waived,
surrendered or released by the General Administrative Agent or any Lender, and
the Credit Agreement and the other Loan Documents and any other documents
executed and delivered in connection therewith may be amended, modified,
supplemented or terminated, in whole or in part, as the General Administrative
Agent (or the Required Lenders or all Lenders, as the case may be) may deem
advisable from time to time, and any collateral security, guarantee or right of
offset at any time held by the General Administrative Agent or any Lender for
the payment of the Borrower Obligations or the Working Capital Obligations may
be sold, exchanged, waived, surrendered or released. Neither the General
Administrative Agent nor any Lender shall have any obligation to protect,
secure, perfect or insure any Lien at any time held by it as security for the
Borrower Obligations or the Working Capital Obligations or for the guarantee
contained in this Section 2 or any property subject thereto.
2.5 GUARANTEE ABSOLUTE AND UNCONDITIONAL. Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the Borrower
Obligations or the Working Capital Obligations and notice of or proof of
reliance by the General Administrative Agent or any Lender upon the guarantee
contained in this Section 2 or acceptance of the guarantee contained in this
Section 2; the Borrower Obligations and the Working Capital Obligations, and any
of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee contained in this Section 2; and all dealings between either Borrower
and any of the Guarantors, on the one hand, and the General Administrative Agent
and the Lenders, on the other hand, likewise shall be conclusively presumed to
have been had or consummated in reliance upon the guarantee contained in this
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Section 2. Each Guarantor waives diligence, presentment, protest, demand for
payment and notice of default or nonpayment to or upon either Borrower or any of
the Guarantors with respect to the Borrower Obligations or the Working Capital
Obligations. Each Guarantor understands and agrees that the guarantee contained
in this Section 2 shall be construed as a continuing, absolute and unconditional
guarantee of payment without regard to (a) the validity or enforceability of the
Credit Agreement or any other Loan Document, any of the Borrower Obligations or
the Working Capital Obligations or any other collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the General Administrative Agent or any Lender, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by either Borrower or any other
Person against the General Administrative Agent or any Lender, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of either
Borrower or such Guarantor) which constitutes, or might be construed to
constitute, an equitable or legal discharge of either Borrower for the Borrower
Obligations or the Working Capital Obligations, or of such Guarantor under the
guarantee contained in this Section 2, in bankruptcy or in any other instance.
When making any demand hereunder or otherwise pursuing its rights and remedies
hereunder against any Guarantor, the General Administrative Agent or any Lender
may, but shall be under no obligation to, make a similar demand on or otherwise
pursue such rights and remedies as it may have against either Borrower, any
other Guarantor or any other Person or against any collateral security or
guarantee for the Borrower Obligations or the Working Capital Obligations or any
right of offset with respect thereto, and any failure by the General
Administrative Agent or any Lender to make any such demand, to pursue such other
rights or remedies or to collect any payments from either Borrower, any other
Guarantor or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of either
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability hereunder, and shall not impair or affect the rights and
remedies, whether express, implied or available as a matter of law, of the
General Administrative Agent or any Lender against any Guarantor. For the
purposes hereof "demand" shall include the commencement and continuance of any
legal proceedings.
2.6 REINSTATEMENT. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations or the Working
Capital Obligations is rescinded or must otherwise be restored or returned by
the General Administrative Agent or any Lender upon the insolvency, bankruptcy,
dissolution, liquidation or reorganization of either Borrower or any Guarantor,
or upon or as a result of the appointment of a receiver, intervenor or
conservator of, or trustee or similar officer for, either Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.
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2.7 PAYMENTS. Each Guarantor hereby guarantees that payments hereunder
will be paid to the General Administrative Agent without set-off or counterclaim
in U.S. Dollars at the office of the General Administrative Agent referred to in
Section 14.2 of the Credit Agreement.
SECTION 3. GRANT OF SECURITY INTEREST
Each Grantor hereby assignes and transfers to the General
Administrative Agent, and hereby grants to the General Administrative Agent, for
the ratable benefit of the Lenders and the Working Capital Lender, a security
interest in, all of the following property now owned or at any time hereafter
acquired by such Grantor or in which such Grantor now has or at any time in the
future may acquire any right, title or interest (collectively, the
"COLLATERAL"), as collateral security for the prompt and complete payment and
performance when due (whether at the stated maturity, by acceleration or
otherwise) of such Grantor's Obligations:
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts;
(d) all Documents;
(e) all Equipment;
(f) all General Intangibles;
(g) all Instruments;
(h) all Intellectual Property;
(i) all Inventory;
0) all Pledged Securities;
(k) all Investment Property;
(l) all books and records pertaining to the Collateral; and
(m) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security
and guarantees given by any Person with respect to any of the
foregoing.
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SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the General Administrative Agent and the Lenders to enter
into the Credit Agreement and to induce the Lenders to make their respective
extensions of credit to the Borrowers thereunder, each Grantor hereby represents
and warrants to the General Administrative Agent and each Lender that:
4.1 REPRESENTATIONS IN CREDIT AGREEMENT, HOLDINGS REPRESENTATIONS. (a)
In the case of each Guarantor, the representations and warranties set forth in
Section 7 of the Credit Agreement as they relate to such Guarantor or to the
Loan Documents to which such Guarantor is a party, each of which is hereby
incorporated herein by reference, are true and correct, and the General
Administrative Agent and each Lender shall be entitled to rely on each of them
as if they were fully set forth herein, PROVIDED that each reference in each
such representation and warranty to a Borrower's knowledge shall, for the
purposes of this Section 4. 1 (a), be deemed to be a reference to such
Guarantor's knowledge.
(b) In the case of Holdings:
(i) Holdings (w) is duly organized, validly existing and in good
standing under the laws of the State of Delaware, (x) has the corporate power
and authority, and the legal right, to own and operate its property, to lease
the property it operates as lessee and to conduct the business in which it is
currently engaged, (y) is duly qualified as a foreign corporation and in good
standing under the laws of each jurisdiction where its ownership, lease or
operation of property or the conduct of its business requires such qualification
and (z) is in compliance with all Requirements of Law except to the extent that
the failure to comply therewith could not, in the aggregate, reasonably be
expected to have a Material Adverse Effect.
(ii) Holdings has the corporate power and authority, and the legal
right, to make, deliver and perform the Loan Documents to which it is a party
and has taken all necessary corporate action to authorize the execution,
delivery and performance of the Loan Documents to which it is a party. No
consent or authorization of, filing with, notice to or other act by or in
respect of, any Governmental Authority or any other Person is required in
connection with the execution, delivery, performance, validity or enforceability
of the Loan Documents to which Holdings is a party. This Agreement has been, and
each other Loan Document to which it is a party will be, duly executed and
delivered on behalf of Holdings. This Agreement constitutes, and each other Loan
Document to which it is a party when executed and delivered will constitute, a
legal, valid and binding obligation of Holdings enforceable against Holdings in
accordance with its terms, subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
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(iii) The execution, delivery and performance of the Loan Documents to
which Holdings is a party will not violate any Requirement of Law or Contractual
Obligation of Holdings or of any of its Subsidiaries and will not result in, or
require, the creation or imposition of any Lien on any of its or their
respective properties or revenues pursuant to any such Requirement of Law or
Contractual Obligation (other than pursuant to this Agreement).
(iv) No litigation, investigation or proceeding of or before any
arbitrator or Governmental Authority is pending or, to the knowledge of
Holdings, threatened by or against Holdings or any of its Subsidiaries or
against any of its or their respective properties or revenues (x) with respect
to any of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (y) which could reasonably be expected to have a Material Adverse
Effect.
(v) Holdings has no material assets other than the stock of the
Company.
4.2 TITLE; NO OTHER LIENS. Except for the security interest granted to
the General Administrative Agent for the ratable benefit of the Lenders pursuant
to this Agreement and the other Liens permitted to exist on the Collateral by
the Credit Agreement, such Grantor owns each item of the Collateral free and
clear of any and all Liens or claims of others. No financing statement or other
public notice with respect to all or any part of the Collateral is on file or of
record in any public office, except such as have been filed in favor of the
General Administrative Agent, for the ratable benefit of the Lenders, pursuant
to this Agreement or as are permitted by the Credit Agreement.
4.3 PERFECTED FIRST PRIORITY LIENS. The security interests granted
pursuant to this Agreement (a) upon completion of the filings and other actions
specified on Schedule 3 (which, in the case of all filings and other documents
referred to on said Schedule, have been delivered to the General Administrative
Agent in completed and duly executed form) will constitute valid perfected
security interests in all of the Collateral in favor of the General
Administrative Agent, for the ratable benefit of the Lenders, as collateral
security for such Grantor's Obligations, enforceable in accordance with the
terms hereof against all creditors of such Grantor and any Persons purporting to
purchase any Collateral from such Grantor and (b) are prior to all other Liens
on the Collateral in existence on the date hereof except for (i) unrecorded
Liens permitted by the Credit Agreement which have priority over the Liens on
the Collateral by operation of law and (ii) Liens described on Schedule 8.
4.4 CHIEF EXECUTIVE Office. On the date hereof, such Grantor's
jurisdiction of organization and the location of such Grantor's chief executive
office or sole place of business are specified on Schedule 4.
4.5 INVENTORY AND EQUIPMENT. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on SCHEDULE
5
4.6 Farm Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
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4.7 PLEDGED SECURITIES. (a) The shares of Pledged Stock pledged by
such Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor (or, in the
case of any Issuer that is a Foreign Subsidiary, if less, 65% of the issued and
outstanding shares of Capital Stock of such Issuer).
(b) All the shares of the Pledged Stock have been duly and validly
issued and are fully paid and nonassessable.
(c) Each of the Pledged Notes constitutes the legal, valid and binding
obligation of the obligor with respect thereto, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other similar laws relating to or
affecting creditors' rights generally, general equitable principles (whether
considered in a proceeding in equity or at law) and an implied covenant of good
faith and fair dealing.
(d) Such Grantor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Securities pledged by it hereunder, free of
any and all Liens or options in favor of, or claims of, any other Person, except
the security interest created by this Agreement.
4.8 RECEIVABLES. (a) No amount payable to such Grantor under or in
connection with any Receivable is evidenced by any Instrument or Chattel Paper
which has not been delivered to the General Administrative Agent.
(b) The amounts represented by such Grantor to the Lenders from time
to time as owing to such Grantor in respect of the Receivables will at such
times be accurate.
4.9 CONTRACTS. (a) No consent of any party (other than such Grantor)
to any Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes a valid
and legally enforceable obligation of the parties thereto, subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act by or in
respect of any Governmental Authority is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect and do not subject the scope of
any such Contract to any material adverse limitation, either specific or general
in nature.
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(d) Neither such Grantor nor (to the best of such Grantor's knowledge)
any of the other parties to the Contracts is in default in the performance or
observance of any of the terms thereof in any manner that, in the aggregate,
could reasonably be expected to have a Material Adverse Effect.
(e) The right, title and interest of such Grantor in, to and under the
Contracts are not subject to any defenses, offsets, counterclaims or claims
that, in the aggregate, could reasonably be expected to have a Material Adverse
Effect.
(f) Such Grantor has delivered to the Administrative Agent a complete
and correct copy of each Contract, including all amendments, supplements and
other modifications thereto.
(g) No amount payable to such Grantor under or in connection with any
Contract is evidenced by any Instrument or Chattel Paper which has not been
delivered to the Administrative Agent.
(h) None of the parties to any Contract is a Governmental Authority.
4.10 INTELLECTUAL PROPERTY. (a) SCHEDULE 6 LISTS all Intellectual
Property owned by such Grantor in its own name on the date hereof.
(b) On the date hereof, all material Intellectual Property is valid,
subsisting, unexpired and enforceable, has not been abandoned and does not
infringe the intellectual property rights of any other Person.
(c) Except as set forth in SCHEDULE 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.
(d) No holding, decision or judgment has been rendered by any
Governmental Authority which would limit, cancel or question the validity of, or
such Grantor's rights in, any Intellectual Property in any respect that could
reasonably be expected to have a Material Adverse Effect.
(e) No action or proceeding is pending, or, to the knowledge of such
Grantor, threatened, on the date hereof (i) seeking to limit, cancel or question
the validity of any Intellectual Property or such Grantor's ownership interest
therein, or (ii) which, if adversely determined, would have a material adverse
effect on the value of any Intellectual Property.
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SECTION 5. COVENANTS
Each Grantor covenants and agrees with the General Administrative
Agent and the Lenders that, from and after the date of this Agreement until the
Obligations shall have been paid in full, no Letter of Credit shall be
outstanding and the Commitments shall have terminated:
5.1 COVENANTS IN CREDIT AGREEMENT. In the case of each Guarantor, such
Guarantor shall take, or shall refrain from taking, as the case may be, each
action that is necessary to be taken or not taken, as the case may be, so that
no Default or Event of Default is caused by the failure to take such action or
to refrain from taking such action by such Guarantor or any of its Subsidiaries.
5.2 DELIVERY OF INSTRUMENTS AND CHATTEL PAPER. If any amount payable
under or in connection with any of the Collateral shall be or become evidenced
by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be
immediately delivered to the General Administrative Agent, duly indorsed in a
manner satisfactory to the General Administrative Agent, to be held as
Collateral pursuant to this Agreement.
5.3 MAINTENANCE OF INSURANCE. (a) Such Grantor will maintain, with
financially sound and reputable companies, insurance policies (i) insuring the
Inventory and Equipment against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the General Administrative Agent
and (ii) insuring such Grantor, the General Administrative Agent and the Lenders
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts and having
such coverage as may be reasonably satisfactory to the General Administrative
Agent and the Lenders.
(b) All such insurance shall (i) provide that no cancellation,
material reduction in amount or material change in coverage thereof shall be
effective until at least 30 days after receipt by the General Administrative
Agent of written notice thereof, (ii) name the General Administrative Agent as
insured party or joint loss payee, (iii) if reasonably requested by the General
Administrative Agent, include a breach of warranty clause and (iv) be reasonably
satisfactory in all other respects to the General Administrative Agent.
(c) The Company shall deliver to the General Administrative Agent and
the Lenders a report of a reputable insurance broker with respect to such
insurance during the month of April in each calendar year and such supplemental
reports with respect thereto as the General Administrative Agent may from time
to time reasonably request.
5.4 PAYMENT OF OBLIGATIONS. Such Grantor will pay and discharge or
otherwise satisfy at or before maturity or before they become delinquent, as the
case may be, all taxes, assessments and governmental charges or levies imposed
upon the Collateral or in respect of income or profits therefrom, as well as all
claims of any kind (including, without limitation, claims for labor, materials
and supplies) against or with respect to the Collateral, except that no
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such charge need be paid if the amount or validity thereof is currently being
contested in good faith by appropriate proceedings, reserves in conformity with
GAAP with respect thereto have been provided on the books of such Grantor and
such proceedings could not reasonably be expected to result in the sale,
forfeiture or loss of any material portion of the Collateral or any interest
therein.
5.5 MAINTENANCE OF PERFECTED SECURITY INTEREST; FURTHER DOCUMENTATION.
(a) Such Grantor shall maintain the security interest created by this Agreement
as a perfected security interest having at least the priority described in
Section 4.3 and shall defend such security interest against the claims and
demands of all Persons whomsoever.
(b) Such Grantor will furnish to the General Administrative Agent and
the Lenders from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as the General Administrative Agent may reasonably request, all in
reasonable detail.
(c) At any time and from time to time, upon the written request of the
General Administrative Agent, and at the sole expense of such Grantor, such
Grantor will promptly and duly execute and deliver, and have recorded, such
further instruments and documents and take such further actions as the General
Administrative Agent may reasonably request for the purpose of obtaining or
preserving the full benefits of this Agreement and of the rights and powers
herein granted, including, without limitation, the filing of any financing or
continuation statements under the Uniform Commercial Code (or other similar
laws) in effect in any Jurisdiction with respect to the security interests
created hereby.
5.6 CHANGES IN LOCATIONS, NAME, etc. Such Grantor will not, except
upon 15 days' prior written notice to the General Administrative Agent and
delivery to the General Administrative Agent of (a) all additional executed
financing statements and other documents reasonably requested by the General
Administrative Agent to maintain the validity, perfection and priority of the
security interests provided for herein and (b) if applicable, a written
supplement to SCHEDULE 5 showing any additional location at which Inventory or
Equipment shall be kept:
(i) permit any of the Inventory or Equipment to be kept at a
location other than those listed on .SCHEDULE 5;
(ii) change the location of its chief executive office or sole place
of business from that referred to in Section 4.4; or
(iii) change its name, identity or corporate structure to such an
extent that any financing statement filed by the General Administrative Agent in
connection with this Agreement would become misleading.
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5.7 NOTICES. Such Grantor will advise the General Administrative Agent
and the Lenders promptly, in reasonable detail, of-
(a) any Lien (other than security interests created hereby or
Liens permitted under the Credit Agreement) on any of the Collateral
which would adversely affect the ability of the General Administrative
Agent to exercise any of its remedies hereunder; and
(b) of the occurrence of any other event which could reasonably
be expected to have a material adverse effect on the aggregate value of
the Collateral or on the security interests created hereby.
5.8 PLEDGED SECURITIES. (a) If such Grantor shall become entitled to
receive or shall receive any stock certificate (including, without limitation,
any certificate representing a stock dividend or a distribution in connection
with any reclassification, increase or reduction of capital or any certificate
issued. in connection with any reorganization), option or rights in respect of
the Capital Stock of any Issuer, whether in addition to, in substitution of, as
a conversion of, or in exchange for, any shares of the Pledged Stock, or
otherwise in respect thereof, such Grantor shall accept the same as the agent of
the General Administrative Agent and the Lenders, hold the same in trust for the
General Administrative Agent and the Lenders and deliver the same forthwith to
the General Administrative Agent in the exact form received, duly indorsed by
such Grantor to the General Administrative Agent, if required, together with an
undated stork power covering such certificate duly executed in blank by such
Grantor and with, if the General Administrative Agent so requests, signature
guaranteed, to be held by the General Administrative Agent, subject to the terms
hereof, as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Securities upon the liquidation or dissolution
of any Issuer shall be paid over to the General Administrative Agent to be held
by it hereunder as additional collateral security for the Obligations, and in
case any distribution of capital shall be made on or in respect of the Pledged
Securities or any property shall be distributed upon or with respect to the
Pledged Securities pursuant to the recapitalization or reclassification of the
capital of any Issuer or pursuant to the reorganization thereof, the property so
distributed shall, unless otherwise subject to a perfected security interest in
favor of the General Administrative Agent, be delivered to the General
Administrative Agent to be held by it hereunder as additional collateral
security for the Obligations. If any sums of money or property so paid or
distributed in respect of the Pledged Securities shall be received by such
Grantor, such Grantor shall, until such money or property is paid or delivered
to the General Administrative Agent, hold such money or property in trust for
the Lenders, segregated from other funds of such Grantor, as additional
collateral security for the Obligations. Notwithstanding anything to the
contrary contained herein, in no event shall any Grantor be required to pledge
more than 65% of the outstanding Capital Stock of any Foreign Subsidiary.
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(b) Without the prior written consent of the General Administrative
Agent, such Grantor will not (i) vote to enable, or take any other action to
permit, any Issuer to issue any stock or other equity securities of any nature
or to issue any other securities convertible into or granting the right to
purchase or exchange for any stock or other equity securities of any nature of
any Issuer, (ii) sell, assign, transfer, exchange, or otherwise dispose of, or
grant any option with respect to, the Pledged Securities or Proceeds thereof
(except pursuant to a transaction expressly permitted by the
(iii) create, incur or permit to exist any Lien or option in favor of,
or any claim of any Person with respect to, any of the Pledged Securities or
Proceeds thereof, or any interest therein, except for the security interests
created by this Agreement or (iv) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the General Administrative
Agent to sell, assign or transfer any of the Pledged Securities or Proceeds
thereof.
(c) In the case of each Grantor which is an Issuer, such Issuer agrees
that (i) it will be bound by the terms of this Agreement relating to the Pledged
Securities issued by it and will comply with such terms insofar as such terms
are applicable to it, (ii) it will notify the General Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) with respect to the Pledged Securities issued by it and (iii) the terms
of Sections 6.3(c) and 6.7 shall apply to it, MUTATIS MUTANDIS, with respect to
all actions that may be required of it pursuant to Section 6.3(c) or 6.7 with
respect to the Pledged Securities issued by it.
5.9 RECEIVABLES. (a) Other than in the ordinary course of business
consistent with its past practice, such Grantor will not (i) grant any extension
of the time of payment of any Receivable, (ii) compromise or settle any
Receivable for less than the full amount thereof, (iii) release, wholly or
partially, any Person liable for the payment of any Receivable, (iv) allow any
credit or discount whatsoever on any Receivable or (v) amend, supplement or
modify any Receivable in any manner that could adversely affect the value
thereof.
(b) Such Grantor will deliver to the General Administrative Agent a
copy of each material demand, notice or document received by it that questions
or calls into doubt the validity or enforceability of more than 5% of the
aggregate amount of the then outstanding Receivables.
(c) If at any time the aggregate amount owing on all Accounts of all
Grantors as to which a Governmental Authority is an obligor (collectively,
"Total Government Accounts"), exceeds 10% (or, if an Event of Default shall have
occurred and be continuing, 5%) of the aggregate amount owing on all Accounts of
all Grantors (collectively, "Total Accounts"), such Grantor shall, if requested
by the General Administrative Agent, at such Grantor's sole cost and expense,
from and after the date on which such aggregate amount first exceeds such
percentage (regardless of whether the aggregate amount owing on the Total
Government Accounts shall equal less than 10% (or 5%, as the case may be) of the
aggregate amount owing on the Total Accounts at any subsequent time), deliver to
the General Administrative Agent such
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assignments, notices of assignment and other documents or information as shall
be necessary or otherwise requested by the General Administrative Agent to
permit the assignment hereunder of all Accounts as to which a Governmental
Authority is an obligor pursuant to all applicable Requirements of Law
(including, without limitation, the Assignment of Claims Act of 1940, as
amended).
5.10 CONTRACTS. (a) Such Grantor will perform and comply in all
material respects with all its obligations under the Contracts.
(b) Such Grantor will not amend, modify, terminate or waive any
provision of any Contract in any manner which could reasonably be expected to
materially adversely affect the value of such Contract as Collateral.
(c) Such Grantor will exercise promptly and diligently each and every
material right which it may have under each Contract (other than any right of
termination).
(d) Such Grantor will deliver to the Administrative Agent a copy of
each material demand, notice or document received by it relating in any way to
any Contract that questions the validity or enforceability of such Contract.
5.11 INTELLECTUAL PROPERTY. (a) Such Grantor (either itself or through
licensees) will (i) continue to use each material Trademark on each and every
trademark class of goods applicable to its current line as reflected in its
current catalogs, brochures and price lists in order to maintain such Trademark
in full force free from any claim of abandonment for non-use, (ii) maintain as
in the past the quality of products and services offered under such Trademark,
(iii) use such Trademark with the appropriate notice of registration and all
other notices and legends required by applicable Requirements of Law, (iv) not
adopt or use any mark which is confusingly similar or a colorable imitation of
such Trademark unless the General Administrative Agent, for the ratable benefit
of the Lenders, shall obtain a perfected security interest in such mark pursuant
to this Agreement, and (v) not (and not permit any licensee or sublicensee
thereof to) do any act or knowingly omit to do any act whereby such Trademark
may become invalidated or impaired in any way.
(b) Such Grantor (either itself or through licensees) will not do any
act, or omit to do any act, whereby any material Patent may become forfeited,
abandoned or dedicated to the public.
(c) Such Grantor (either itself or through licensees) (i) will employ
each material Copyright and (ii) will not (and will not permit any licensee or
sublicensee thereof to) do any act or knowingly omit to do any act whereby any
material portion of the Copyrights may become invalidated or otherwise impaired.
Such Grantor will not (either itself or through licensees) do any act whereby
any material portion of the Copyrights may fall into the public domain.
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(d) Such Grantor (either itself or through licensees) will not do any
act that knowingly uses any material Intellectual Property to infringe the
intellectual property rights of any other Person.
(e) Such Grantor will notify the General Administrative Agent and the
Lenders immediately if it knows, or has reason to know, that any application or
registration relating to any material Intellectual Property may become
forfeited, abandoned or dedicated to the public, or of any adverse determination
or development (including, without limitation, the institution of, or any such
determination or development in, any proceeding in the United States Patent and
Trademark Office, the United States Copyright Office or any court or tribunal in
any country) regarding such Grantor's ownership of, or the validity of, any
material Intellectual Property or such Grantor's right to register the same or
to own and maintain the same.
(f) Whenever such Grantor, either by itself or through any agent,
employee, licensee or designee, shall file an application for the registration
of any Intellectual Property with the United States Patent and Trademark Office,
the United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, such Grantor shall report such
filing to the General Administrative Agent within five Business Days after the
last day of the fiscal quarter in which such filing occurs. Upon request of the
General Administrative Agent, such Grantor shall execute and deliver, and have
recorded, any and all agreements, instruments, documents, and papers as the
General Administrative Agent may request to evidence the General Administrative
Agent's and the Lenders' security interest in any Copyright, Patent or Trademark
and the goodwill and general intangibles of such Grantor relating thereto, or
represented thereby.
(g) Such Grantor will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States Patent
and Trademark Office, the United States Copyright Office or any similar office
or agency in any other country or any political subdivision thereof, to maintain
and pursue each application (and to obtain the relevant registration) and to
maintain each registration of the material Intellectual Property, including,
without limitation, filing of applications for renewal, affidavits of use and
affidavits of incontestability.
(h) In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, such Grantor shall (i) take such
actions as such Grantor shall reasonably deem appropriate under the
circumstances to protect such Intellectual Property and (ii) if such
Intellectual Property is of material economic value, promptly notify the General
Administrative Agent after it learns thereof and sue for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and to
recover any and all damages for such infringement, misappropriation or dilution.
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5.12 SPECIAL COVENANTS OF HOLDINGS. Holdings hereby covenants and
agrees that:
(a) The terms of each of subsections 9.3, 9.4, 9.5, 9.6, 9.7,
9.8, 9.9 and 9. 1 0 of the Credit Agreement shall apply to Holdings,
MUTATIS MUTANDIS, to the same extent as if the references to a Borrower
therein were references to Holdings, and Holdings will perform and
satisfy all such covenants as so applied to it.
(b) Holdings shall take, or shall refrain from taking, as the
case may be, all actions that are necessary to be taken or not taken so
that no violation of any provision, covenant or agreement contained in
Section 9 or 10 of the Credit Agreement, and so that no Default or
Event of Default, is caused by any act or failure to act of Holdings.
(c) Holdings shall not incur any Indebtedness or Guarantee
Obligations, or make any investments in, or loans or advances to any
Person, or merge or consolidate with any Person, or conduct, transact
or otherwise engage, or commit to transact, conduct or otherwise
engage, in any business or operations other than (i) the ownership of
the capital stock of the Company and the exercise of rights and
performance of obligations in connection therewith, (ii) the entry
into, and exercise of rights and performance of obligations in respect
of, this Agreement, the Seller Note, the California Bonds, Utah Bonds,
the Westinghouse Debt Agreement, the Stock Purchase Agreement, equity
subscription agreements, registration rights agreements, voting and
other stockholder agreements, engagement letters, underwriting
agreements and other agreements in respect of its equity securities or
any offering, issuance or sale thereof, (iii) the offering, issuance
and sale of its equity securities to the extent such offering, issuance
or sale does not constitute a Change of Control or would be otherwise
inconsistent with the provisions of the Credit Agreement, (iv) the
entry into, and exercise of rights and performance of obligations in
respect of, indentures, engagement letters, underwriting agreements
and. other agreements in respect of Indebtedness permitted under clause
(iii) above or any offering, issuance or sale thereof, and the
offering, issuance and sale of its debt securities representing such
Indebtedness, (v) the incurrence of Guarantee Obligations in the
ordinary course of business in respect of the obligations of the
Company and its Subsidiaries incurred in the ordinary course of
business, (vi) the filing of registration statements, and compliance
with applicable reporting and other obligations, under federal, state
or other securities laws, (vii) the listing of its equity securities
and compliance with applicable reporting and other obligations in
connection therewith, (viii) the retention of transfer agents, private
placement agents, underwriters, counsel, accountants and other advisors
and consultants, (ix) the performance of obligations under and in
compliance with its certificate of incorporation and bylaws, or any
applicable law, ordinance, regulation, rule, order, judgment, decree or
permit, including, without limitation, as a result of or in connection
with the activities of the Company, (x) the incurrence and payment of
any taxes for which it may be liable and (xi) other activities directly
related to the foregoing.
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(d) Holdings shall not (i) amend the subordination provisions
of the Seller Note or the Westinghouse Debt Agreement or (ii) pay cash
interest on the Seller Note prior to the second anniversary of the
Closing Date.
SECTION 6. REMEDIAL PROVISIONS
6.1 CERTAIN MATTERS RELATING TO RECEIVABLES. (a) The General
Administrative Agent shall have the right to make test verifications of the
Receivables in any manner and through any medium that it reasonably considers
advisable, and each Grantor shall furnish all such assistance and information as
the General Administrative Agent may require in connection with such test
verifications. At any time and from time to time, upon the General
Administrative Agent's request and at the expense of the relevant Grantor, such
Grantor shall cause independent public accountants or others satisfactory to the
General Administrative Agent to furnish to the General Administrative Agent
reports showing reconciliations, aging and test verifications of, and trial
balances for, the Receivables.
(b) The General Administrative Agent hereby authorizes each Grantor to
collect such Grantor's Receivables, subject to the General Administrative
Agent's direction and control, and the General Administrative Agent may curtail
or terminate said authority at any time after the occurrence and during the
continuance of an Event of Default. If required by the General Administrative
Agent at any time after the occurrence and during the continuance of an Event of
Default, any payments of Receivables, when collected by any Grantor, (i) shall
be forthwith (and, in any event, within two Business Days) deposited by such
Grantor in the exact form received, duly indorsed by such Grantor to the General
Administrative Agent if required, in a Collateral Account maintained under the
sole dominion and control of the General Administrative Agent, subject to
withdrawal by the General Administrative Agent for the account of the Lenders
only as provided in Section 6.5, and (ii) until so turned over, shall be held by
such Grantor in trust for the General Administrative Agent and the Lenders,
segregated from other funds of such Grantor. Each such deposit of Proceeds of
Receivables shall be accompanied by a report identifying in reasonable detail
the nature and source of the payments included in the deposit.
(c) At the General Administrative Agent's request, each Grantor shall
deliver to the General Administrative Agent all original and other documents
evidencing, and relating to, the agreements and transactions which gave rise to
the Receivables, including, without limitation, all original orders, invoices
and shipping receipts.
6.2 COMMUNICATIONS WITH OBLIGORS; GRANTORS REMAIN LIABLE. (a) The
General Administrative Agent in its own name or in the name of others may at any
time after the occurrence and during the continuance of an Event of Default
communicate with obligors under the Receivables and parties to the Contracts to
verify with them to the General Administrative Agent's satisfaction the
existence, amount and terms of any Receivables or Contracts.
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(b) Upon the request of the General Administrative Agent at any time
after the occurrence and during the continuance of an Event of Default, each
Grantor shall notify obligors on the Receivables and parties to the Contracts
that the Receivables and the Contracts have been assigned to the General
Administrative Agent for the ratable benefit of the Lenders and that payments in
respect thereof shall be made directly to the General Administrative Agent.
(c) Anything herein to the contrary notwithstanding, each Grantor
shall remain liable under each of the Receivables and the Contracts to observe
and perform all the conditions and obligations to be observed and performed by
it thereunder, all in accordance with the terms of any Agreement giving rise
thereto. Neither the General Administrative Agent nor any Lender shall have any
obligation or liability under any Receivable (or any agreement giving rise
thereto) or Contract by reason of or arising out of this Agreement or the
receipt by the General Administrative Agent or any Lender of any payment
relating thereto, nor shall the General Administrative Agent or any Lender be
obligated in any manner to perform any of the obligations of any Grantor under
or pursuant to any Receivable (or any agreement giving rise thereto) or
Contract, to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts which
may have been assigned to it or to which it may be entitled at any time or
times.
6.3 PLEDGED STOCK. (a) Unless an Event of Default shall have occurred
and be continuing and the General Administrative Agent shall have given notice
to the relevant Grantor of the General Administrative Agent's intent to exercise
its corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock and
all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice, to the extent permitted in the Credit Agreement, and to exercise all
voting and corporate rights with respect to the Pledged Securities; PROVIDED,
however that no vote shall be cast or corporate right exercised or other action
taken which, in the General Administrative Agent's reasonable judgment, would
impair the Collateral or which would be inconsistent with or result in any
violation of any provision of the Credit Agreement, this Agreement or any other
Loan Document.
(b) If an Event of Default shall occur and be continuing and the
General Administrative Agent shall give notice of its intent to exercise such
rights to the relevant Grantor or Grantors, (i) the General Administrative Agent
shall have the right to receive any and all cash dividends, payment's or other
Proceeds paid in respect of the Pledged Securities and make application thereof
to the Obligations in such order as the General Administrative Agent may
determine, and (ii) any or all of the Pledged Securities shall be registered in
the name of the General Administrative Agent or its nominee, and the General
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner
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thereof (including, without limitation, the right to exchange at its discretion
any and all of the Pledged Securities upon the merger, consolidation,
reorganization, recapitalization or other fundamental change in the corporate
structure of any Issuer, or upon the exercise by any Grantor or the General
Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the General Administrative Agent may determine), all without
liability except to account for property actually received by it, but the
General Administrative Agent shall have no duty to any Grantor to exercise any
such right, privilege or option and shall not be responsible for any failure to
do so or delay in so doing.
(c) Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to (i) comply with any
instruction received by it from the General Administrative Agent in writing that
(x) states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each Issuer
shall be fully protected in so complying, and (ii) unless otherwise expressly
permitted hereby, pay any dividends or other payments with respect to the
Pledged Securities directly to the General Administrative Agent.
6.4 PROCEEDS TO BE TURNED OVER TO GENERAL ADMINISTRATIVE AGENT. In
addition to the rights of the General Administrative Agent and the Lenders
specified in Section 6.1 with respect to payments of Receivables, if an Event of
Default shall occur and be continuing, all Proceeds received by any Grantor
consisting of cash, checks and other near-cash items shall be held by such
Grantor in trust for the General Administrative Agent and the Lenders,
segregated from other funds of such Grantor, and shall, forthwith upon receipt
by such Grantor, be turned over to the General Administrative Agent in the exact
form received by such Grantor (duly indorsed by such Grantor to the General
Administrative Agent, if required). All Proceeds received by the General
Administrative Agent hereunder shall be held by the General Administrative Agent
in a Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the General Administrative Agent in a Collateral Account
(or by such Grantor in trust for the General Administrative Agent and the
Lenders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 6.5.
6.5 APPLICATION OF PROCEEDS. At such intervals as may be agreed upon
by the Company and the General Administrative Agent, or, if an Event of Default
shall have occurred and be continuing, at any time at the General Administrative
Agent's election, the General Administrative Agent may apply all or any part of
Proceeds held in any Collateral Account in payment of the Obligations in such
order as the General Administrative Agent may elect, and any part of such funds
which the General Administrative Agent elects not so to apply and deems not
required as collateral security for the Obligations shall be paid over from time
to time by the General Administrative Agent to the Company or to whomsoever may
be lawfully entitled to receive the same. Any balance of such Proceeds remaining
after the Obligations shall have been
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paid in full, no Letters of Credit or Acceptance Notes shall be outstanding and
the Commitments shall have terminated shall be paid over to the Company or to
whomsoever may be lawfully entitled to receive the same.
6.6 CODE AND OTHER REMEDIES. If an Event of Default shall occur and be
continuing, the General Administrative Agent, on behalf of the Lenders, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality of
the foregoing, the General Administrative Agent, without demand of performance
or other demand, presentment, protest, advertisement or notice of any kind
(except any notice required by law referred to below) to or upon any Grantor or
any other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase, or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, at any exchange, broker's board or office of the General Administrative
Agent or any Lender or elsewhere upon such terms and conditions as it may deem
advisable and at such prices as it may deem best, for cash or on credit or for
future delivery without assumption of any credit risk. The General
Administrative Agent or any Lender shall have the right upon any such public
sale or sales, and, to the extent permitted by law, upon any such private sale
or sales, to purchase the whole or any part of the Collateral so sold, free of
any right or equity of redemption in any Grantor, which right or equity is
hereby waived and released. Each Grantor further agrees, at the General
Administrative Agent's request, to assemble the Collateral and make it available
to the General Administrative Agent at places which the General Administrative
Agent shall reasonably select, whether at such Grantor's premises or elsewhere.
The General Administrative Agent shall apply the net proceeds of any action
taken by it pursuant to this Section 6.6, after deducting all reasonable costs
and expenses of every kind incurred in connection therewith or incidental to the
care or safekeeping of any of the Collateral or in any way relating to the
Collateral or the rights of the General Administrative Agent and the Lenders
hereunder, including, without limitation, reasonable attorneys' fees and
disbursements, to the payment in whole or in part of the Obligations, in such
order as the General Administrative Agent may elect, and only after such
application and after the payment by the General Administrative Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-504(l)(c) of the New York UCC, need the General Administrative Agent
account for the surplus, if any, to any Grantor. To the extent permitted by
applicable law, each Grantor waives all claims, damages and demands it may
acquire against the General Administrative Agent or any Lender arising out of
the exercise by them of any rights hereunder. If any notice of a proposed sale
or other disposition of Collateral shall be required by law, such notice shall
be deemed reasonable and proper if given at least 10 days before such sale or
other disposition.
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6.7 REGISTRATION RIGHts. (a) If the General Administrative Agent shall
determine to exercise its right to sell any or all of the Pledged Stock pursuant
to Section 6.6, and if in the opinion of the General Administrative Agent it is
necessary or advisable to have the Pledged Stock, or that portion thereof to be
sold, registered under the provisions of the Securities Act, the relevant
Grantor will cause the Issuer thereof to (i) execute and deliver, and cause the
directors and officers of such Issuer to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the General Administrative Agent, necessary or advisable
to register the Pledged Stock, or that portion thereof to be sold, under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold, and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
General Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the
Securities and Exchange Commission applicable thereto. Each Grantor agrees to
cause such Issuer to comply with the provisions of the securities or "Blue Sky"
laws of any and all Jurisdictions which the General Administrative Agent shall
designate and to make available to its security holders, as soon as practicable,
an earnings statement (which need not be audited) which will satisfy the
provisions of Section II (a) of the Securities Act.
(b) Each Grantor recognizes that the General Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. Each
Grantor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The General
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.
(c) Each Grantor agrees to use its best efforts to do or cause to be
done all such other acts as may be necessary to make such sale or sales of all
or any portion of the Pledged Stock pursuant to this Section 6.7 valid and
binding and in compliance with any and all other applicable Requirements of Law.
Each Grantor further agrees that a breach of any of the covenants contained in
this Section 6.7 will cause irreparable injury to the General Administrative
Agent and the Lenders, that the General Administrative Agent and the Lenders
have no adequate remedy at law in respect of such breach and, as a consequence,
that each and every covenant contained in this Section 6.7 shall be specifically
enforceable against such
27
<PAGE>
Grantor, and such Grantor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants except for a
defense that no Event of Default has occurred under the Credit Agreement.
6.8 WAIVER; DEFICIENCY. Each Grantor waives and agrees not to assert
any rights or privileges which it may acquire under Section 9-112 of the New
York UCC. Each Grantor shall remain liable for any deficiency if the proceeds of
any sale or other disposition of the Collateral are insufficient to pay its
Obligations and the fees and disbursements of any attorneys employed by the
General Administrative Agent or any Lender to collect such deficiency.
SECTION 7. THE GENERAL ADMINISTRATIVE AGENT
7.1 GENERAL ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT,
ETC. (a) Each Grantor hereby irrevocably constitutes and appoints the General
Administrative Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of such Grantor and in the name of
such Grantor or in its own name, for the purpose of carrying out the terms of
this Agreement, to take any and all appropriate action and to execute any and
all documents and instruments which may be necessary or desirable to accomplish
the purposes of this Agreement, and, without limiting the generality of the
foregoing, each Grantor hereby gives the General Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:
(i) in the name of such Grantor or its own name, or otherwise, take
possession of and indorse and collect any checks, drafts, notes, acceptances or
other instruments for the payment of moneys due under any Receivable or Contract
or with respect to any other Collateral and file any claim or take any other
action or proceeding in any court of law or equity or otherwise deemed
appropriate by the General Administrative Agent for the purpose of collecting
any and all such moneys due under any Receivable or Contract or with respect to
any other Collateral whenever payable;
(ii) in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and papers as
the General Administrative Agent may request to evidence the General
Administrative Agent's and the Lenders' security interest in such Intellectual
Property and the goodwill and general intangibles of such Grantor relating
thereto or represented thereby;
(iii) pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance called
for by the terms of this Agreement and pay all or any part of the premiums
therefor and the costs thereof,
(iv) execute, in connection with any sale provided for in Section 6.6
or 6.7, any endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral; and
28
<PAGE>
(v) (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due thereunder
directly to the General Administrative Agent or as the General Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment of and
receipt for, any and all moneys, claims and other amounts due or to become due
at any time in respect of or arising out of any Collateral; (3) sign and indorse
any invoices, freight or express bills, bills of lading, storage or warehouse
receipts, drafts against debtors, assignments, verifications, notices and other
documents in connection with any of the Collateral; (4) commence and prosecute
any suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any portion thereof and to enforce any
other right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any Collateral; (6)
settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, give such discharges or releases as the General
Administrative Agent may deem appropriate; (7) assign any Copyright, Patent or
Trademark (along with the goodwill of the business to which any such Copyright,
Patent or Trademark pertains), throughout the world for such term or terms, on
such conditions, and in such manner, as the General Administrative Agent shall
in its sole discretion determine; and (8) generally, sell, transfer, pledge and
make any agreement with respect to or otherwise deal with any of the Collateral
as fully and completely as though the General Administrative Agent were the
absolute owner thereof for all purposes, and do, at the General Administrative
Agent's option and such Grantor's expense, at any time, or from time to time,
all acts and things which the General Administrative Agent deems necessary to
protect, preserve or realize upon the Collateral and the General Administrative
Agent's and the Lenders' security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do.
Anything in this Section 7.1(a) to the contrary notwithstanding, the
General Administrative Agent agrees that it will not exercise any rights under
the power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.
(b) If any Grantor fails to perform or comply with any of its
agreements contained herein, the General Administrative Agent, at its option,
but without any obligation so to do, may perform or comply, or otherwise cause
performance or compliance, with such agreement.
(c) The expenses of the General Administrative Agent incurred in
connection with actions undertaken as provided in this Section 7.1, together
with interest thereon at a rate per annum equal to the rate per annum at which
interest would then be payable on past due Revolving Credit Loans that are Base
Rate Loans under the Credit Agreement, from the date of payment by the General
Administrative Agent to the date reimbursed by the relevant Grantor, shall be
payable by such Grantor to the General Administrative Agent on demand.
29
<PAGE>
(d) Each Grantor hereby ratifies all that said attorneys shall
lawfully do or cause to be done by virtue hereof All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until this Agreement is terminated and the security interests
created hereby are released.
7.2 DUTY OF GENERAL ADMINISTRATIVE AGENT. The General Administrative
Agent's sole duty with respect to the custody, safekeeping and physical
preservation of the Collateral in its possession, under Section 9-207 of the New
York UCC or otherwise, shall b- to deal with it in the same manner as the
General Administrative Agent deals with similar property for its own account.
Neither the General Administrative Agent, any Lender nor any of their respective
officers, directors, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of any Grantor or any other Person or to take any other action
whatsoever with regard to the Collateral or any part thereof. The powers
conferred on the General Administrative Agent and the Lenders hereunder are
solely to protect the General Administrative Agent's and the Lenders' interests
in the Collateral and shall not impose any duty upon the General Administrative
Agent or any Lender to exercise any such powers. The General Administrative
Agent and the Lenders shall be accountable only for amounts that they actually
receive as a result of the exercise of such powers, and neither they nor any of
their officers, directors, employees or agents shall be responsible to any
Grantor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
7.3 EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the New York UCC and any other applicable law, each Grantor authorizes the
General Administrative Agent to file or record financing statements and other
filing or recording documents or instruments with respect to the Collateral
without the signature of such Grantor in such form and in such offices as the
General Administrative Agent reasonably determines appropriate to perfect the
security interests of the General Administrative Agent under this Agreement. A
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.
7.4 AUTHORITY OF GENERAL ADMINISTRATIVE A2ENT. Each Grantor
acknowledges that the rights and responsibilities of the General Administrative
Agent under this Agreement with respect to any action taken by the General
Administrative Agent or the exercise or non-exercise by the General
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the General Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the General
Administrative Agent and the Grantors, the General Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement, to make any inquiry respecting such authority.
30
<PAGE>
SECTION 8. MISCELLANEOUS
8.1 AMENDMENTS IN WRITING. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 14.1 of the Credit Agreement.
8.2 Notices. All notices, requests and demands to or upon the General
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 14.2 of the Credit Agreement; PROVIDED that any such
notice, request or demand to or upon any Guarantor shall be addressed to such
Guarantor at its notice address set forth on SCHEDULE 1.
8.3 NO WAIVER BY COURSE OF CONDUCT; CUMULATIVE REMEDIES. Neither the
General Administrative Agent nor any Lender shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the General Administrative Agent or any
Lender, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the General Administrative
Agent or any Lender of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the General
Administrative Agent or such Lender would otherwise have on any future occasion.
The rights and remedies herein provided are cumulative, may be exercised singly
or concurrently and are not exclusive of any other rights or remedies provided
by law.
8.4 ENFORCEMENT EXPENSES-, INDEMNIFICATION. (a) Each Guarantor agrees
to pay or reimburse each Lender and the General Administrative Agent for all its
costs and expenses incurred in collecting against such Guarantor under the
guarantee contained in Section 2 or otherwise enforcing or preserving any rights
under this Agreement and the other Loan Documents to which such Guarantor is a
party, including, without litnitation, the fees and disbursements of counsel
(including the allocated fees and expenses of in-house counsel) to each Lender
and of counsel to the General Administrative Agent.
(b) Each Guarantor agrees to pay, and to save the General
Administrative Agent and the Lenders harmless from, any and all liabilities with
respect to, or resulting from any delay in paying, any and all stamp, excise,
sales or other taxes which may be payable or determined to be payable with
respect to any of the Collateral or in connection with any of the transactions
contemplated by this Agreement.
31
<PAGE>
(c) Each Guarantor agrees to pay, and to save the General
Administrative Agent and the Lenders harmless from, any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever with respect to the
execution, delivery, enforcement, performance and administration of this
agreement to the extent the Company would be required to do so pursuant to
subsection 14.5 of the Credit Agreement.
(d) The agreements in this Section 8.4 shall survive repayment of the
Obligations and all other amounts payable under the Credit Agreement and the
other Loan Documents.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
General Administrative Agent and the Lenders and their successors and assigns;
PROVIDED that no Grantor may assign, transfer or delegate any of its rights or
obligations under this Agreement without the prior written consent of the
General Administrative Agent.
8.6 Set Off. Each Grantor hereby irrevocably authorizes the General
Administrative Agent and each Lender at any time and from time to time, without
notice to such Grantor or any other Grantor, any such notice being expressly
waived by each Grantor, to set-off and appropriate and apply any and all
deposits (general or special, time or demand, provisional or final), in any
currency, and any other credits, indebtedness or claims, in any currency, in
each case whether direct or indirect, absolute or contingent, matured or
unmatured, at any time held or owing by the General Administrative Agent or such
Lender to or for the credit or the account of such Grantor, or any part thereof
in such amounts as the General Administrative Agent or such Lender may elect,
against and on account of the obligations and liabilities of such Grantor to the
General Administrative Agent or such Lender hereunder and claims of every nature
and description of the General Administrative Agent or such Lender against such
Grantor, in any currency, whether arising hereunder, under the Credit Agreement,
any other Loan Document or otherwise, as the General Administrative Agent or
such Lender may elect, whether or not the General Administrative Agent or any
Lender has made any demand for payment and although such obligations,
liabilities and claims may be contingent or unmatured. The General
Administrative Agent and each Lender shall notify such Grantor promptly of any
such set-off and the application made by the General Administrative Agent or
such Lender of the proceeds thereof, PROVIDED that the failure to give such
notice shall not affect the validity of such setoff and application. The rights
of the General Administrative Agent and each Lender under this Section 8.6 are
in addition to other rights and remedies (including, without limitation, other
rights of -set-off) which the General Administrative Agent or such Lender may
have.
8.7 COUNTERPARTS. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts (including by
telecopy), and all of said counterparts taken together shall be deemed to
constitute one and the same instrument.
32
<PAGE>
8.8 SEVERABILITY,. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
8.9 SECTION HEADINGS. The Section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
8.10 INTEGRATION. This Agreement and the other Loan Documents
represent the agreement of the Grantors, the General Administrative Agent and
the Lenders with respect to the subject matter hereof and thereof, and there are
no promises, undertakings, representations or warranties by the General
Administrative Agent or any Lender relative to subject matter hereof and thereof
not expressly set forth or referred to herein or in the other Loan Documents.
8.11 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
8.12 SUBMISSION TO JURISDICTION; Waivers. Each Grantor hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which it
is a party, or for recognition and enforcement of any judgment in respect
thereof, to the non-exclusive general jurisdiction of the Courts of the State of
New York, the courts of the United States of America for the Southern District
of New York, and appellate courts from any thereof-,
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or claim
the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail (or
any substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the General
Administrative Agent shall have been notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the right
to sue in any other jurisdiction; and
33
<PAGE>
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to in
this Section any special, exemplary, punitive or consequential damages.
8.13 ACKNOWLEDGEMENTS. Each Grantor hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents to which it is a party;
(b) neither the General Administrative Agent nor any Lender has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the General
Administrative Agent and Lenders, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
8.14 WAIVER OF JURY TRIAL. EACH GRANTOR HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
8.15 ADDITIONAL Grantors. Each Subsidiary of the Company that is
required to become a party to this Agreement pursuant to subsection 9. 1 0(b) of
the Credit Agreement shall become a Grantor for all purposes of this Agreement
upon execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto.
8.16 RELEASES. (a) At such time as the Loans, the Reimbursement
Obligations, the Acceptance Reimbursement Obligations and the other Obligations
shall have been paid in full, the Commitments have been terminated and no
Letters of Credit or Acceptance Notes shall be outstanding, the Collateral shall
be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the General Administrative Agent and each Grantor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Grantors. At the request and
sole expense of any Grantor following any such termination, the General
Administrative Agent shall deliver to such Grantor any Collateral held by the
General Administrative Agent hereunder, and execute and deliver to such Grantor
such documents as such Grantor shall reasonably request to evidence such
termination.
(b) If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the General Administrative Agent, at the request and sole expense of such
Grantor, shall execute and deliver
34
<PAGE>
to such Grantor all releases or other documents reasonably necessary or
desirable for the release of the Liens created hereby on such Collateral. At the
request and sole expense of the Company, a Subsidiary Guarantor shall be
released from its obligations hereunder in the event that all the Capital Stock
of such Subsidiary Guarantor shall be sold, transferred or otherwise disposed of
in a transaction permitted by the Credit Agreement; PROVIDED that the Company
shall have delivered to the General Administrative Agent, at least ten Business
Days prior to the date of the proposed release, a written request for release
identifying the relevant Subsidiary Guarantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Company stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.
IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee
and Collateral Agreement to be duly executed and delivered as of the date first
above written.
LES, INC.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (US),
INC.
LES MERGER, INC.
LES ACQUISITION, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
ILLINOIS, INC.
GSX CHEMICAL SERVICES OF OHIO, INC.
LAIDLAW ENVIRONMENTAL SERVICES (BDT),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (FS),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (GS),
INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
CHATTANOOGA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
WHITE CASTLE, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(RECOVERY), INC.
LAIDLAW ENVIRONMENTAL SERVICES (TS),
INC.
LAIDLAW ENVIRONMENTAL SERVICES
(IMPERIAL VALLEY), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(LOKERN), INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
CALIFORNIA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
SOUTH CAROLINA, INC.
LAIDLAW ENVIRONMENTAL SERVICES (
NORTH EAST), INC.
LAIDLAW ENVIRONMENTAL SERVICES (TES),
INC.
LAIDLAW CHEMICAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (TOC),
INC.
35
<PAGE>
LAIDLAW ENVIRONMENTAL SERVICES (TG),
INC.
LAIDLAW ENVIRONMENTAL SERVICES
(ALTAIR), INC.
LAIDLAW ENVIRONMENTAL SERVICES (WT),
INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
BARTOW, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(THERMAL TREATMENT), INC.
LEMC, INC.
LAIDLAW OSCO HOLDINGS, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
NASHVILLE, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(CLIVE), INC.
LAIDLAW ENVIRONMENTAL SERVICES (LONE
AND GRASSY MOUNTAIN), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TULSA), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(SAN ANTONIO), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(WICHITA), INC.
LAIDLAW ENVIRONMENTAL SERVICES
OF DELAWARE, INC.
CORSAN TRUCKING, INC.
USPCI, INC. OF GEORGIA
LAIDLAW ENVIRONMENTAL SERVICES (SAN
JOSE), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(SAWYER), INC.
CHEMCLEAR, INC. OF LOS ANGELES
LAIDLAW ENVIRONMENTAL SERVICES
(ROSEMOUNT), INC.
LES HOLDING'S, INC.
EAST CARBON DEVELOPMENT FINANCIAL
PARTNERS, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TUCKER), INC.
NINTH STREET PROPERTIES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (MT.
PLEASANT), INC.
LAIDLAW ENVIRONMENTAL SERVICES (DEER
TRAIL), INC.
36
<PAGE>
LAIDLAW ENVIRONMENTAL SERVICES
(MINNEAPOLIS), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(LOS ANGELES), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(BATON ROUGE), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(PLAQUEMINE), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(BRIDGEPORT), INC.
LAIDLAW ENVIRONMENTAL SERVICES (DEER
PARK), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(TIPTON), INC.
LAIDLAW ENVIRONMENTAL, INC.
LAIDLAW ENVIRONMENTAL SERVICES
(SUSSEX), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(GLOUCESTER), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(CUSTOM TRANSPORT), INC.
LAIDLAW ENVIRONMENTAL SERVICES
(ARAGONITE), INC.
LAIDLAW ENVIRONMENTAL SERVICES DE
MEXICO, S.A. DE C.V.
LAIDLAW ENVIRONMEN.-AL SERVICES
(PUERTO RICO), INC.
Acknowledged and Agreed to as
of the date hereof by:
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent
By: ________________________________
Name:
Title:
37
<PAGE>
SCHEDULE I
----------
NOTICE ADDRESSES OF GUARANTORS
The notice address for each of the Guarantors is:
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
<PAGE>
<TABLE>
<CAPTION>
Schedule 2 to
GUARANTEE AND COLLATERAL AGREEMENT
----------------------------------
DESCRIPTION OF PLEDGED SECURITIES
Pledged Stock:
<S> <C> <C> <C> <C>
No. of
Class of Stock Shares
Issuer Stock Cert. No. Issued Shareholder
- ------ ----- --------- ------ -----------
LES, Inc. (fka Laidlaw Chem- Common 6 & 7 212 Laidlaw Environmental
Waste, Inc.) Services, Inc. (fka Rollins
Environmental Services, Inc.)
WHOLLY-OWNED SUBSIDIARIES
LES Acquisition, Inc. Common 001 1 LES, Inc.
Laidlaw Environmental Common 3 & 4 205 LES, Inc.
Services (US), Inc. /1/
LES Merger, Inc. Common 1 1000 Laidlaw Environmental
Services (US), Inc.
Laidlaw Environmental Common 2 500 Laidlaw Environmental
Services of Illinois, Inc. Services (US), Inc.
GSX Chemical Services of Common 4 500 Laidlaw Environmental
Ohio, Inc. Services (US), Inc.
Laidlaw Environmental Common 12 7,510 Laidlaw Environmental
Services (BDT), Inc. Services (US), Inc.
1
<PAGE>
Laidlaw Environmental Common 2 6,500 6,500 common shares (87%)
(FS), Inc. Services issued to Laidlaw
Environmental Services
(US), Inc.
2 1,000 1,000 common shares (13%)
issued to Laidlaw
Environmental Services
(Altair), Inc.
Laidlaw Environmental Common 12 10 Laidlaw Environmental
Services (GS), Inc. Services (US), Inc.
Laidlaw Environmental Common 2 100 Laidlaw Environmental
Services of Chattanooga, Inc. Services (US), Inc.
Laidlaw Environmental Common 1 17,280 Laidlaw Environmental
Services of White Castle, Inc. Services (US), Inc.
Laidlaw Environmental Common 2 105 Laidlaw Environmental
Services (Recovery), Inc. Services (US), Inc.
Laidlaw Environmental Common 2 100 Laidlaw Environmental
Services (TS), Inc. Services (US), Inc.
Laidlaw Environmental Common 1 20 10 common shares (50%)
Services (Imperial Valley), Inc. issued to Laidlaw Environmental
Services of California, Inc.
2 10 10 common shares (50%)
issued to Laidlaw Environmental
Services (US), Inc
Laidlaw Environmental Common 2 13 3 common shares (23%)
Services (Lokern), Inc. issued to Laidlaw Environmental
Services (US), Inc.
Common 1 10 common shares (77%)
issued to Laidlaw Environmental
Services of California, Inc.
Laidlaw Environmental Common 3 100 Laidlaw Environmental Services
Services of California, Inc. /2/ (US), Inc.
2
<PAGE>
Laidlaw Environmental Common 222 1 Laidlaw Environmental Services
Services of South Carolina, Inc. (US), Inc.
Laidlaw Environmental Common 5 100 Laidlaw Environmental Services
Services (North East), Inc. (US), Inc.
Corsan Trucking, Inc. Common 4 1000 750 common shares (75%)
issued to Laidlaw
Environmental Services
(US), Inc.
250 common shares (25%)
issued to Laidlaw
Environmental Services
(US), Inc.
Laidlaw Environmental Services Common 7 10,000 Laidlaw Environmental Services
(US), Inc.
Laidlaw Chemical Services, Common 7 3,000 Laidlaw Environmental Services
Inc. (US), Inc.
Laidlaw Environmental Common 3 100 Laidlaw Environmental Services
Services (TOC), Inc. (US), Inc.
Laidlaw Environmental Common 3 1,000 Laidlaw Environmental Services
Services (TG), Inc. (US), Inc.
Laidlaw Environmental Common 3 1,000 Laidlaw Environmental Services
Services (Altair), Inc. (US), Inc.
Laidlaw Environmental Common C-1 201,000 Laidlaw Environmental Services
Services (WT), Inc. (US), Inc.
Laidlaw Environmental Common 2 1,000 Laidlaw Environmental Services
Services of Bartow, Inc. (US), Inc.
Laidlaw Environmental Common 1 100 Laidlaw Environmental Services
Services (Thermal Treatment), (US), Inc.
Inc.
LEMC, Inc. Common 1 10 Laidlaw Environmental Services
(US), Inc.
3
<PAGE>
Laidlaw Osco Holdings, Inc. /3/ Common 1 100 Laidlaw Environmental Services
(US), Inc.
Laidlaw Environmental Common 2 1,000 Laidlaw Osco Holdings, Inc.
Services of Nashville, Inc.
Laidlaw Environmental Common 11 1,000 Laidlaw Environmental Services
Services (Clive), Inc. fka (US), Inc.
USPCI Clive Incineration
Facility, Inc.
Laidlaw Environmental Common 9 3,076,872 Laidlaw Environmental Services
Services (Lone and Grassy (US), Inc.
Mountain), Inc. fka United
States Pollution Control, Inc.
Laidlaw Environmental Common C-1 10,000 Laidlaw Environmental Services
Services (Tulsa), Inc. fka (US), Inc.
Hydrocarbon Recyclers, Inc.
Laidlaw Environmental Common 2 3,402 Laidlaw Environmental Services
Services (San Antonio), Inc. (US), Inc.
fka Hydrocarbon Recyclers, Inc.
of San Antonio
Laidlaw Environmental Common 2 100 Laidlaw Environmental Services
Services (Wichita), Inc. (US), Inc.
fka Hydrocarbon Recyclers, Inc.
of Wichita
Laidlaw Environmental Common 1 1,000 Laidlaw Environmental Services
Services of Delaware, Inc. (US), Inc.
fka Northeastern Remedial
Corporation
USPCI, Inc. of Georgia Common 1 100 Laidlaw Environmental Services
(US), Inc.
Laidlaw Environmental Common C-1 100 Laidlaw Environmental Services
Services (San Jose), Inc. fka (US), Inc.
Solvent Service Co., Inc.
4
<PAGE>
Laidlaw Environmental Common C-1 100 Laidlaw Environmental Services
Services (Sawyer), Inc. fka (US), Inc.
Municipal Services Corporation
Chemclear, Inc. of Los Common 1 1,000 Laidlaw Environmental Services
Angeles, Inc. (US), Inc.
Laidlaw Environmental Common 1 5,000 Laidlaw Environmental Services
Services (Rosemount), Inc. (US), Inc.
fka Minnesota Industrial
Containment Facility, Inc.
/4/
LES Holdings, Inc. fka Common 1 1,000 Laidlaw Environmental Services
McDuffie County (US), Inc.
Environmental Facility, Inc.
East Carbon Development Common 1 1,000 Laidlaw Environmental Services
Financial Partners, Inc. (US), Inc.
Laidlaw Environmental Common 1 100 Laidlaw Environmental Services
Services (Tucker), Inc. fka (US), Inc.
PPM, Inc. of Georgia
Ninth Street Properties, Inc. Common 1 1,000 Laidlaw Environmental Services
(Tucker), Inc.
Laidlaw Environmental Common 2 1,000 LES, Inc.
Services (Mt. Pleasant), Inc.
fka Allworth of Tennessee, Inc.
Laidlaw Environmental Common 5 500 LES, Inc.
Services (Deer Trail), Inc. fka
Highway 36 Land
Development Co.
Laidlaw Environmental Common 11 3,000 LES, Inc.
Services (Minneapolis), Inc.
fka National Electric, Inc.
(Parent of Laidlaw
Environmental Services
(Aragonite), Inc.)
5
<PAGE>
Laidlaw Environmental Common 4 1,000 LES, Inc.
Services (Los Angeles), Inc.
fka Rollins O.P.C. Inc.
Laidlaw Environmental Common 2 1,000 LES, Inc.
Services (Baton Rouge), Inc.
fka Rollins Environmental
Services (LA) Inc.
Laidlaw Environmental Common 2 1,000 LES, Inc.
Services (Plaquemine), Inc.
fka Rollins Environmental
Services of Louisiana, Inc.
Laidlaw Environmental Common 7 1,000 LES, Inc.
Services (Bridgeport), Inc. fka
Rollins Environmental
Services (NJ) Inc.
Laidlaw Environmental Common 2 1,000 LES, Inc.
Services (Deer Park), Inc. fka
Rollins Environmental
Services (TX) Inc.
Laidlaw Environmental Common 3 1,000 LES, Inc.
Services (Tipton), Inc. fka
Tipton Environmental
Technology, Inc.
Laidlaw Environmental, Inc. Common 2 1,000 LES, Inc.
fka Rollins Environmental, Inc.
Laidlaw Environmental Common 2 500 LES, Inc.
Services Sussex), Inc. fka
Sussex Contractors, Inc.
Laidlaw Environmental Common 3 1,000 LES, Inc.
Services (Gloucester), Inc. fka
Gloucester County
Construction Co.
Laidlaw Environmental Common 2 1,000 LES, Inc.
Services (Custom Transport),
Inc. fka Custom Environmental
Transport, Inc.
Laidlaw Environmental Common 3 1,000 Laidlaw Environmental Services
Services (Aragonite), Inc. fka (Minneapolis), Inc.
Aptus, Inc.
6
<PAGE>
OTHER U.S. SUBSIDIARIES AND
INVESTMENTS
/5/
/6/
/7/
Safety-Kleen Corp. Common 97086 600100 issued to LES, Inc.
95677 1000 issued to LES, Inc..
ViroGroup, Inc. Common 795,214 397,607 common shares (50%)
issued to Laidlaw Osco
Holdings, Inc.
FOREIGN SUBSIDIARIES:
/8/
Laidlaw Environmental Common 4 1 issued to Laidlaw Chem-Waste
Services (Puerto Rico), Inc. Inc. now known as LES, Inc.
Laidlaw Environmental Class A 3 1600 1040 Class A shares issued to
Services (Canada) Ltd. LES, Inc.
Class B B-2 7300 4745 Class B shares issued to
LES, Inc.
7
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
PLEDGED NOTES:
ISSUER PAYEE PRINCIPAL AMOUNT
------ ----- ----------------
<S> <C> <C>
Safety-Kleen Corp. LES, Inc. 46,000,000
ViroGroup, Inc. LES, Inc. 3,000,000
LES Acquisition, Inc. Laidlaw Environmental Services, Inc. 575,325,906,409 /9/
LES Acquisition, Inc. LES, Inc. 911,557,469.55
Sutton Street Realty Trust Dizzy Bridge Realty Trust 546,893.82 (as of January 1998)
</TABLE>
8
<PAGE>
/1/ UPC Holding Corp. was merged into Laidlaw Environmental Services (US), Inc.
on May 23, 1997. UPC Holding Corp. formerly had 100 common shares issued
to Laidlaw Environmental Services (US), Inc. on certificate number 3.
USPCI, Inc. was also merged in Laidlaw Environmental Services (US), Inc.
on May 23, 1997. USPCI, Inc. formerly had 1000 common shares issued to UPC
Holding Corp. on stock certificate A. Redox, Inc. was merged into Laidlaw
Environmental Services (US), Inc. on August 22, 1997. Redox, Inc. formerly
had 100 common shares issued to Laidlaw Environmental Services (US), Inc.
on stock certificate number 3.
/2/ Greenfield Services Corporation was merged into Laidlaw Environmental
Services of California, Inc. on July 30, 1997, Greenfield Services
Corporation formerly had 100,000 shares of common stock issued to Laidlaw
Environmental Services (US), Inc.. on certificate number 2. Master Wash
Products, Inc.. formerly had 5,100,000 shares of common stock issued to
Laidlaw Environmental Services (US) on certificate number C101.
/3/ Osco Environmental Services, Inc. was merged into Laidlaw Osco Holdings,
Inc. on August 21, 1997, Osco Environmental Services, Inc. formerly had 100
shares of common stock issued to Laidlaw Osco Holdings, Inc. on certificate
number 2.
/4/ USPCI of Pennsylvania, Inc. was dissolved on August 15, 1997.
/5/ USPCI of Mississippi, Inc. has 2,000 common shares, certificate number 1R,
previously pledged to John L. Maxey II as Escrow Agent under terms of First
Amendment of Shareholder Agreement pursuant to Merger governing the USPCI
of Mississippi, Inc. stock dated January 5, 1996.
/6/ Osco Treatment Systems of Mississippi, Inc. has 1,000 common shares,
certificate number 13, previously pledged on 1/5/96 to Jon L. Maxey II as
Escrow Agent under the terms of Shareholder Agreement governing OSCO
Treatment Systems of Mississippi, Inc., stock made 1/5/96.
/7/ ECDC Environmental, L.C. was sold to Allied Waste Industries, Inc. on
November 30, 1997.
/8/ Laidlaw Environmental Services of Mexico, S.A. de C.V. was removed since it
is not now and was not previously a subsidiary of Laidlaw Environmental
Services, Inc. Shares of this corporation are owned by Laidlaw Investments
Ltd., a subsidiary of Laidlaw Inc.
/9/ A portion of the indebtedness evidenced by these promissory notes will be
contributed by the Company, at the time of the Merger, to the capital of
Safety-Kleen (as surviving corporation of the Merger); accordingly, on the
Merger Date, these promissory notes will be released by the General
administrative Agent and replaced by promissory notes in a lesser principal
amount.
9
<PAGE>
Schedule 3
UCC FILING JURISDICTIONS
LAIDLAW ENVIRONMENTAL SERVICES, INC.
COMPANY NAME JURISDICTION
- ------------ ------------
Chemclear, Inc. of Los Angeles Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
Corsan Trucking, Inc. Louisiana*
East Baton Rouge Parish
South Carolina
Secretary of State
Richland County
East Carbon Development Financial Partners, Inc. South Carolina
Secretary of State
Richland County
Utah*
Secretary of State
GSX Chemical Services of Ohio, Inc. Ohio*
Secretary of State
Cuyahoga County
South Carolina
Secretary of State
Richland County
Laidlaw Chemical Services, Inc. Massachusetts*
Secretary of State
Essex County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental, Inc. Delaware*
Secretary of State
Michigan
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Altair), Inc. South Carolina
Secretary of State
Richland County
Texas*
Secretary of State
Laidlaw Environmental Services (Aragonite), Inc. Delaware*
Secretary of State
Kansas
Secretary of State
1
<PAGE>
South Carolina
Secretary of State
Richland County
Utah
Secretary of State
Laidlaw Environmental Services (Baton Rouge), Inc. Delaware*
Secretary of State
Louisiana
East Baton Rouge Parish
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (BDT), Inc. New York*
Secretary of State
Erie County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Bridgeport), Inc. Delaware*
Secretary of State
New Jersey
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Clive) Oklahoma*
Secretary of State
South Carolina
Secretary of State
Richland County
Utah
Secretary of State
Laidlaw Environmental Services (Custom Delaware*
Transport), Inc. Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Deer Park), Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
2
<PAGE>
Texas
Secretary of State
Laidlaw Environmental Services (Deer Trail), Inc. Colorado*
Secretary of State
Arapahoe County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (FS), Inc. Delaware*
Secretary of State
Indiana
Secretary of State
Madison County
Louisiana
Calcasieu Parish
East Baton Rouge Parish
Iberville Parish
St. Charles Parish
Michigan
Secretary of State
South Carolina
Secretary of State
Richland County
Texas
Secretary of State
Laidlaw Environmental Services (Gloucester), Inc. Delaware*
Secretary of State
Louisiana
East Baton Rouge Parish
New Jersey
Secretary of State
South Carolina
Secretary of State
Richland County
Texas
Secretary of State
Laidlaw Environmental Services (GS), Inc. Alaska
Secretary of State
Anchorage County
Fairbanks North County
California
Secretary of State
3
<PAGE>
Alameda County
Orange County
Sacramento County
San Diego County
Santa Barbara County
Santa Clara County
Colorado
Secretary of State
Georgia
Bibb County
Kansas
Secretary of State
Oklahoma
Oklahoma County
Pennsylvania
Secretary of State
Dauphin County
South Carolina
Secretary of State
Richland County
Tennessee*
Secretary of State
Utah
Secretary of State
Laidlaw Environmental Services (Imperial California*
Valley), Inc. Secretary of State
Imperial County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Lokern), Inc. California*
Secretary of State
Kern County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Lone and Grassy Colorado
Mountain), Inc. Secretary of State
Oklahoma*
Secretary of State
Woods County
South Carolina
Secretary of State
4
<PAGE>
Richland County
Utah
Secretary of State
Laidlaw Environmental Services (Los Angeles), Inc. California*
Secretary of State
Los Angeles County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Minneapolis), Inc. Minnesota*
Secretary of State
Dakota County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Mt. Pleasant), Inc. South Carolina
Secretary of State
Richland County
Tennessee*
Secretary of State
Laidlaw Environmental Services (North East), Inc. Connecticut
Secretary of State
New Haven County
Massachusetts
Secretary of State
Essex County
New Hampshire*
Secretary of State
Rockingham County
New York
Secretary of State
Onondaga County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Plaquemine), Inc. Delaware*
Secretary of State
Louisiana
Iberville Parish
South Carolina
Secretary of State
Richland County
5
<PAGE>
Laidlaw Environmental Services (Recovery), Inc. Louisiana*
Acadia Parish
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Rosemount), Inc. Minnesota*
Secretary of State
Dakota County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (San Antonio), Inc. South Carolina
Secretary of State
Richland County
Texas*
Secretary of State
Laidlaw Environmental Services (San Jose), Inc. California*
Secretary of State
Santa Clara County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Sawyer), Inc. North Dakota
Secretary of State
Ward County
Oklahoma*
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Sussex), Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (TES), Inc. Louisiana
East Baton Rouge Parish
South Carolina
Secretary of State
Richland County
Texas*
Secretary of State
6
<PAGE>
Laidlaw Environmental Services (TG), Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Lexington County
Richland County
Spartanburg County
Laidlaw Environmental Services (Thermal Delaware*
Treatment), Inc. Secretary of State
Louisiana
Grant Parish
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Tipton), Inc. Delaware*
Secretary of State
Missouri
Secretary of State
Moniteau County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (TOC), Inc. South Carolina*
Secretary of State
Richland County
Spartanburg County
Laidlaw Environmental Services (TS), Inc. Alabama
Secretary of State
Delaware*
Secretary of State
Florida
Secretary of State
Duval County
Pinellas County
Georgia
Dekalb County
Maryland
Secretary of State
Missouri
Secretary of State
St. Louis County
7
<PAGE>
New Jersey
Secretary of State
North Carolina
Secretary of State
Rockingham County
Ohio
Secretary of State
Montgomery County
Pennsylvania
Secretary of State
Delaware County
South Carolina
Lexington County
Richland County
Tennessee
Secretary of State
Virginia
Secretary of State
Montgomery County
West Virginia
Secretary of State
Ohio County
Laidlaw Environmental Services (Tucker), Inc. Georgia*
De Kalb County
Kansas
Secretary of State
Missouri
Secretary of State
Jackson County
Ohio
Secretary of State
Ashtabula County
Summit County
Pennsylvania
Secretary of State
Philadelphia County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (Tulsa), Inc. Oklahoma*
Secretary of State
Tulsa County
8
<PAGE>
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (US), Inc. Delaware*
Secretary of State
Massachusetts
Secretary of State
Essex County
Oklahoma
Oklahoma County
Tulsa County
South Carolina
Secretary of State
Richland County
Texas
Secretary of State
Utah
Secretary of State
Laidlaw Environmental Services (Wichita), Inc. Colorado
Denver County
Kansas*
Secretary of State
Sedgwick County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services (WT), Inc. Ohio*
Secretary of State
Franklin County
South Carolina
Secretary of State
Richland County
Tennessee
Secretary of State
Laidlaw Environmental Services, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services of Bartow, Inc. Florida*
Secretary of State
Polk County
South Carolina
Secretary of State
Richland County
9
<PAGE>
Laidlaw Environmental Services of California, Inc. Arizona
Secretary of State
Maricopa County
California*
Secretary of State
Contra Costa County
San Diego County
Santa Clara County
Nevada
Secretary of State
Washoe County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services of Chattanooga, Inc. South Carolina
Secretary of State
Richland County
Tennessee*
Secretary of State
Laidlaw Environmental Services of Delaware, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services of Illinois, Inc. Illinois*
Secretary of State
Winnebago County
Michigan
Secretary of State
Minnesota
Secretary of State
Dakota County
South Carolina
Secretary of State
Richland County
Laidlaw Environmental Services of Nashville, Inc. South Carolina
Secretary of State
Richland County
Tennessee*
Secretary of State
10
<PAGE>
Laidlaw Environmental Services of South South Carolina*
Carolina, Inc. Secretary of State
Richland County
Sumter County
Laidlaw Environmental Services of White Colorado*
Castle, Inc. Secretary of State
Louisiana
Iberville Parish
South Carolina
Secretary of State
Richland County
LEMC, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
Laidlaw OSCO Holdings, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
LES Acquisition, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
LES Holding's, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
LES, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
LES Merger, Inc. Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
11
<PAGE>
Ninth Street Properties, Inc. Missouri*
Secretary of State
South Carolina
Secretary of State
Richland County
USPCI, Inc. of Georgia Delaware*
Secretary of State
South Carolina
Secretary of State
Richland County
* Denotes State of Incorporation
12
<PAGE>
<TABLE>
<CAPTION>
FIXTURE FILING JURISDICTION
COMPANY NAME JURISDICTION
- ------------ ------------
<S> <C>
GSX Chemical Services of Ohio, Inc. Cuyahoga County, OH
Laidlaw Chemical Services, Inc. Essex County, MA
Laidlaw Environmental Services (Altair), Inc. Colorado County, TX
Laidlaw Environmental Services (Aragonite), Inc. Montgomery County, KS
Dakota County, MN
Tooele County, UT
Laidlaw Environmental Services (Baton Rouge), Inc. East Baton Rouge Parish, LA
Laidlaw Environmental Services (BDT), Inc. Erie County, NY
Laidlaw Environmental Services (Bridgeport), Inc. Gloucester County, NJ
Laidlaw Environmental Services (Clive) Tooele County, UT
Laidlaw Environmental Services (Deer Park), Inc. Harris County, TX
Laidlaw Environmental Services (Deer Trail), Inc. Adams County, CO
Laidlaw Environmental Services (FS), Inc. Iberville Parish, LA
Webster Parish, LA
Genesee County, MI
Harris County, TX
Jefferson County, TX
Laidlaw Environmental Services (GS), Inc. Shelby County, TN
Ozaukee County, WI
Laidlaw Environmental Services (Imperial Valley), Inc. Imperial County, CA
Laidlaw Environmental Services (Lokern), Inc. Kern County, CA
Laidlaw Environmental Services (Lone and Grassy Mountain), Inc. Tooele County, UT
Major County, OK
Laidlaw Environmental Services (Los Angeles), Inc. Los Angeles County, CA
Laidlaw Environmental Services (Mt. Pleasant), Inc. Maury County, TN
Laidlaw Environmental Services (North East), Inc. Essex County, MA
Hartford County, CT
Laidlaw Environmental Services (Plaquemine), Inc. Iberville Parish, LA
Laidlaw Environmental Services (Recovery), Inc. Acadia Parish, LA
Laidlaw Environmental Services (Rosemount), Inc. Dakota County, MN
Laidlaw Environmental Services (Sawyer), Inc. Ward County, ND
Laidlaw Environmental Services (TES), Inc. Dallas County, TX
Harris County, TX
Laidlaw Environmental Services (Thermal Treatment), Inc. Parish of Grant, LA
Laidlaw Environmental Services (TOC), Inc. Spartanburg County, SC
Laidlaw Environmental Services (TS), Inc. Pinellas County, FL
Prince Georges County, MD
Essex County, NJ
Rockingham County, NC
Montgomery County, OH
Robertson County, TN
Montgomery County, VA
Ohio County, WV
13
<PAGE>
Laidlaw Environmental Services (Tucker), Inc. De Kalb County, GA
Jackson County, MO
Ashtabula County. OH
Summit County, OH
Philadelphia County, PA
Johnson County, KS
Laidlaw Environmental Services (Tulsa), Inc. Tulsa County, OK
Laidlaw Environmental Services (WT), Inc. Franklin County, OH
Davidson County, TN
Laidlaw Environmental Services of Bartow, Inc. Polk County, FL
Laidlaw Environmental Services of California, Inc. Maricopa County, AZ
Contra Costa County, CA
Los Angeles County, CA
Sacramento County, CA
San Bernadino County, CA
San Diego County, CA
Santa Clara County, CA
Washoe County, NV
Laidlaw Environmental Services of Chattanooga, Inc. Hamilton County, TN
Laidlaw Environmental Services of Illinois, Inc. Winnebago County, IL
Laidlaw Environmental Services of Nashville, Inc. Davidson County, TN
Laidlaw Environmental Services of South Carolina, Inc. Sumter County, SC
Laidlaw Environmental Services of White Castle, Inc. Iberville Parish, LA
Laidlaw Environmental Services (San Antonio), Inc. Bexar County, TX
El Paso County, TX
Laidlaw Environmental Services (Wichita), Inc. Sedgwick County, KS
14
</TABLE>
<PAGE>
Schedule 4 to
Guarantee and Collateral Agreement
----------------------------------
<TABLE>
<CAPTION>
LAIDLAW ENVIRONMENTAL SERVICES, INC.
CORPORATE ORGANIZATIONAL STRUCTURE
----------------------------------
-------------------------------------------------------------------------
The following list sets forth the subsidiaries of Laidlaw Environmental
Services, Inc. as of APRIL 3, 1998. Parent subsidiary relations are
indicated by indentations. Unless otherwise indicated, 100% of the
voting securities of each subsidiary is owned by the indicated parent of
such subsidiary.
-------------------------------------------------------------------------
The Chief Executive Office for each company is 1301 Gervais Street, Suite 300, Columbia, South Carolina 29201
=============================================================================================================
State of
Incorporation
<S> <C>
- -------------------------------------------------------------------------------------------- ----------------
Laidlaw Environmental Services (US), Inc. Delaware
- ---- ----------------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Lone and Grassy Mountain), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tulsa), Inc. Oklahoma
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (San Antonio), Inc. Texas
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Wichita), Inc. Kansas
- ---- ---- ---- ---- ------------------------------------------------------------------------- --- ----------
USPCI of Mississippi, Inc. (50%) Mississippi
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Delaware, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
ECDC East, L.C. (80%) Utah
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
ECDC Services, L.C. (80%) Utah
- ---- ---- --------- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Rosemount), Inc. Minnesota
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Sawyer), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tucker), Inc. Georgia
- ---- ---- ------------------------------------------------------------------------------------ --------------
Ninth Street Properties, Inc. Missouri
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (San Jose), Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Chemclear, Inc. of Los Angeles Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
USPCI, Inc. of Georgia Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
LES Holdings, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
East Carbon Development Financial Partners, Inc. Utah
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Imperial Valley), Inc. (50%) California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Lokern), Inc. (23%) California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (North East), Inc. New Hampshire
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Recovery), Inc. Louisiana
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TES), Inc. Texas
- ---- ---- ------------------------------------------------------------------------------------ --------------
Corsan Trucking, Inc. (25%) Louisiana
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (TG), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TOC), Inc. South Carolina
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (TS), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Thermal Treatment), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Corsan Trucking, Inc. (75%) Louisiana
- ---- ---- ------------------------------------------------------------------------------------ --------------
GSX Chemical Services of Ohio, Inc. Ohio
- ---- ---- ------------------------------------------------------------------------------------ --------------
LEMC, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Chemical Services, Inc. Massachusetts
- ---- ---- ------------------------------------------------------------------------------------ --------------
1
<PAGE>
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Altair), Inc. Texas
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (FS), Inc. (13%) Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (BDT), Inc. New York
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (FS), Inc. (86%) Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (GS), Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Clive), Inc. Oklahoma
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (WT), Inc. Ohio
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw OSCO Holdings, Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of Nashville, Inc. Tennessee
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
OSCO Treatment Systems of Mississippi, Inc. (50%) Tennessee
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Bartow, Inc. Florida
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of California, Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Lokern), Inc. (77%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Imperial Valley), Inc. (50% California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services of Chattanooga, Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of Illinois, Inc. Illinois
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of South Carolina, Inc. South Carolina
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services of White Castle, Inc. Colorado
- ---- ---- ------------------------------------------------------------------------------------ --------------
LES Merger, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Puerto Rico), Inc. Puerto Rico
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Bridgeport), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Deer Park), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Baton Rouge), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Plaquemine), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Custom Transport), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Los Angeles), Inc. California
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Tipton), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Gloucester), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Deer Trail), Inc. Colorado
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Mt. Pleasant), Inc. Tennessee
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Minneapolis), Inc. Minnesota
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services (Aragonite), Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Sussex), Inc. Delaware
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental, Inc. Delaware
==============================================================================================================
LES Acquisition, Inc. Delaware
==== ==== ==================================================================================== ==============
SAFETY-KLEEN CORP. /1/ Wisconsin
==== ==== ==================================================================================== ==============
Curbside, Inc. (49%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Dirt Magnet, Inc. Colorado
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
The Midway Gas & Oil Company Colorado
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
/1/ On the Merger Date Safety-Kleen Corp. will merge with LES Acquisition, Inc. with the
surviving corporation being Safety-Kleen Corp.
2
<PAGE>
Safety-Kleen Canada, Inc. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Environment Services et Machineries, Inc. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Elgint Corp. Nevada
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Ilium B.V. Dutch
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Espana S.A. (50%) Spain
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Espana S.A. (50%) Spain
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Membrex, Inc. (6%) Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Nucer, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Envirosystems Company California
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Envirosystems Company of Puerto Rico, Inc. Indiana
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Petrocon, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------ --------------
Phillips Acqusition Corp. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Aviation, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
SK Insurance Company Vermont
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
SK Real Estate, Inc. Illinois
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Belgium, S.A. Belgium
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Beteiligungs - GmbH Germany
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Grundbesitz GmbH Germany
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Deutschland GmbH Germany
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Orm-Bergold Chemie GmbH & Co. KG (50%) German Ptnsp.
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Orm-Chemie GmbH Germany
- ---- ---- ---- ---- ---- --------------------------------------------------------------------- --------------
Orm-Bergold Chemie GmbH & Co. KG (50%) German Ptnsp.
- ---- ---- ---- ---- ---- ---- ---------------------------------------------------------------- --------------
Safety-Kleen (France) S.A. French
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen International, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen U.K. Limited UK
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Ireland Limited Ireland
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Safety-Kleen Italia S.p.A. Italy
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Oil Recovery Co. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Safety-Kleen Oil Services, Inc. Delaware
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
The Solvents Recovery Service of New Jersey, Inc. New Jersey
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
3E Company Environmental, Ecological and Engineering (80%) California
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
- ---------------------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Canada) Ltd. Canada
- ---- ---- ------------------------------------------------------------------------------------ --------------
Laidlaw Environmental Services Ltd. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (B.C.) Ltd. Canada
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Sarnia) Ltd. Ontario
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
1197296 Ontario Inc. Ontario
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Quebec) Ltd. Quebec
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Mercier) Ltd. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Les Entreprises D'Incineration Industrielle Tricil Inc. Quebec
- ---- ---- ---- ---- -------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Ryley) Ltd. Alberta
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Atlantic) Limited Nova Scotia
- ---- ---- ---- ------------------------------------------------------------------------------- --------------
Laidlaw Environmental Services (Guelph), Inc. Ontario
==============================================================================================================
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 5 LOCATION OF INVENTORY AND EQUIPMENT
========================================================== ============================================================== ==========
NAME OF GRANTOR LOCATION OF INVENTORY AND EQUIPMENT OTHER LOCATIONS
(ADDRESS)
<S> <C> <C>
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
GSX Chemical Services of Ohio, Inc. 7415 Bessemer Avenue 2516 Train Ave.
Cleveland, OH 44127 Cleveland OH 44113
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tulsa), Inc. 5324 W 46th Str South None
Tulsa, OK 74107
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (San Antonio), Inc. 4303 Profit Drive 4403 Dividend Ste 101
San Antonio, TX 78219 San Antonio TX 78219
---------------------------------
11520 Confederate Drive
El Paso TX 79936
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Wichita), Inc. 2549 N New York Street 4770 Forest Street, Suite E
Wichita, KS 67219 Denver, CO 80216
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Chemical Services, Inc. 221 Sutton Street 300 Canal Street
North Andover, MA 01845 Lawrence, MA 01845
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Altair), Inc. P.O. Box 226 None
Altair, TX 77412
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Atlantic ) Limited P.O. Box 188 10 Thornhill Drive Unit #2
640 McElmon Rd Dartmouth, Nova Scotia B3B 1F1
Debert, Nova Scotia B0M 1G0
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (B.C.) Ltd. 7483 Progress Way 7842 Progress Way
Delta, British Columbia V4G 1A3 Delta, BC V4G 1A4
---------------------------------
9842 Milwaukee Way
Prince George, BC V2I 2C2
---------------------------------
2789 Highway 97N
Kelowna, BC V1X 4J8
---------------------------------
7783 Progress Way
Delta, BC V4G 1A3
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (BDT), Inc. 4255 Research Parkway None
Clarence, NY 14031
<PAGE>
2
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services de Mexico, S.A. de C.V. Blbd. Miguel de la Madrid, S/N None
Jardines del Aeropuerto
Cuidad Juarez, Chih., Mexico
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (FS), Inc. 2202 Genoa Red Bluff Road 4475 Dort Highway
Houston, TX 77034 Burton MI 48529
---------------------------------
* 12501 Strang Road
La Porte, TX 77571
---------------------------------
*Hwy 225
Deer Park, TX
---------------------------------
*Hwy 35 South & FM 524
Sweeny, TX 77480
---------------------------------
*Tidal Road
Deer Park, TX
---------------------------------
*Hwy 3142
Taft, LA 70057
---------------------------------
2027 Battleground Road
La Porte, TX 77571
---------------------------------
13351 Scenic Hwy
Baton Rouge, LA 70807-1021
---------------------------------
518 Andover Road
Anderson IN 46013
---------------------------------
130 Production Drive
Sulphur, LA 70663
---------------------------------
52735 Clark Road
White Castle LA 70788
----------------------------------
<PAGE>
3
P. O. Box 5618 (77640-0618)
Highway #73
Port Arthur TX 77640
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (GS), Inc. 902 South Main Street 76 Cobb Street
Saukville, WI 53080 Atoka, TN 38004
---------------------------------
3528 Industrial Way
Fairbanks AK 99701
---------------------------------
6414 South Eastern Ave.
Oklahoma City, OK 73149-5134
---------------------------------
Contractor Trailer Yard
Corner of Dean and Kilzer
McClellan AFB
North Highlands, CA 95652
---------------------------------
3536 Fite Road
Millington, TN 38053
---------------------------------
11770 E. Warner Ave. Suite 226
Fountain Valley, CA 92708
---------------------------------
2381 Mariner Square Dr. Suite 175
Alameda CA 94501
---------------------------------
155 West 1st Avenue
Anchorage AK 99501
---------------------------------
2732 South 3600 West Suite H
West Valley City UT 84119
---------------------------------
Stark Road Bldg. 6672/CHWSF
Dugway, UT 84022
---------------------------------
3902 Northside Dr. Suite B-5
Macon GA 31210
---------------------------------
1031 Bay Blvd. Suite K
Chula Vista, CA 91911
---------------------------------
<PAGE>
4
Golden Sands Building #8, Suite 4
Dubai, UAE
---------------------------------
NASA Ames Research
Mail Stop 19-21
Moffett Field CA 94035-1000
---------------------------------
8th Floor SISMO Bldg.
P.O. Box 1082
Damman, Saudi Arabia 31431
---------------------------------
8437 Quivira Road
Lenexa, KS 66215
---------------------------------
270 Storke Road, Suite 6
Goleta, CA 93117
---------------------------------
6130 Old Jonestown Rd, Suite A
Harrisburg, PA 17112
---------------------------------
72nd & Quebec Street Bldg 785
Commerce City, CO 80022
---------------------------------
401 Ponce de Leon Ave.
Puerta de la Tierra
San Juan, PR 00906
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Imperial Valley), Inc. 5295 South Garvey Rd None
Westmorland, CA 92281
---------------------------------
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Lokern), Inc. 2500 West Lokern Rd None
Buttonwillow, CA 93206
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services Ltd. 7483 Progress Way 7842 Progress Way
Delta, British Columbia V4G 1A3 Delta, BC V4G 1A4
---------------------------------
1790 Ironstone Drive
Burlington, Ontario L7L 5V3
---------------------------------
<PAGE>
5
4090 Telfer Rd RR#1
Corunna, Ontario N0N 1G0
---------------------------------
2128 River Road
London, Ontario N6A 4C3
---------------------------------
551 Avonhead Road
Mississauga, Ontario L5J 4B1
---------------------------------
1831 Allanport Road
Thorold, Ontario L2V 3Y9
---------------------------------
1829 Allanport Road
Thorold, Ontario L2V 3Y9
---------------------------------
5369 Maingate Drive
Mississauga, Ontario L4W 1G6
---------------------------------
12851 No. 5 Road
Richmond, BC V7A 4E9
---------------------------------
265 North Front Street Ste 502
Sarnia, Ontario N7T 7X1
---------------------------------
331 Andover Park East
Tukwilla, WA 98188
---------------------------------
1147 Henry Avenue
Winnipeg, Manitoba R3E 1V6
---------------------------------
333 McPhillips
Winnipeg, Manitoba R3E 2K9
---------------------------------
935B Henry Avenue
Winnipeg, Manitoba R3E 3L3
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Mercier) Ltd./Services 1294 boul. Ste-Marguerite None
Environnementaux Laidlaw (Mercier) Ltee Ville Mercier, Quebec J6R 2L1
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
<PAGE>
6
Laidlaw Environmental Services (North East), Inc. 221 Sutton Street 69 Eastern Steel Road
North Andover, MA 01845 Milfort, CT 06460
---------------------------------
360 Merrimack Street
Lawrence MA 01843
---------------------------------
8E Industrial Way
Salem NH 03079
---------------------------------
300 Canal Street
Lawrence, MA 01843
---------------------------------
18 Corporate Circle
E. Syracuse, NY 13057
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Bartow, Inc. 170 Bartow Municipal Airport None
Bartow, FL 33830
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of California, Inc. 1040 Commercial Street, Ste 101 4501 Pacheco Blvd.
San Jose, CA 95112 Martinez, CA 94553
---------------------------------
750 Design Court Suite 105
Chula Vista, CA 91911
---------------------------------
1340 West Lincoln Street
Phoenix, AZ 85007
---------------------------------
1335 W. Lincoln Street
Phoenix, AZ 85007
---------------------------------
1343 W. Lincoln Street
Phoenix, AZ 85007
---------------------------------
1200 Marietta Way
Sparks, NV 89431
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Chattanooga, Inc. 3300 Cummings Rd None
Chattanooga, TN 37419
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Illinois, Inc. 6125 N. Pecatonica Rd 12333 Belden Court
Pecatonica, IL 61063 Livonia, MI 48150
---------------------------------
<PAGE>
7
21750 Cedar Avenue
Lakeville, Minnesota 55044
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of Nashville, Inc. 7140 Centennial Place 7230 Centennial Place
Nashville, TN 37209 Nashville, TN 37209
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of South Carolina, Inc. Rte 1 Box 255 None
Pinewood, SC 29125
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services of White Castle, Inc. 52735 Clark Road None
White Castle, LA 70788
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Puerto Rico), Inc. 401 Ponce de Leon Avenue None
San Juan, PR 00906-6561
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Quebec) Ltd./ Services 7305 boul. Marie Victorin Bureau 20 6785 Route 132
Environnementaux Laidlaw (Quebec) Ltee Brossard, Quebec J4W 1A6 Ste. Catherine, Quebec J0L 1E0
---------------------------------
400 rue Gallipeau, Rang 5
Thurso, Quebec J0X 3B0
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Recovery), Inc. 2029 Bayou Plaquemine Rd None
Rayne, LA 70578
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Ryley), Inc. PO Box 390, 1 mile north of None
Hwy 14 on SR-854
Ryley, Alberta T0B 4A0
- ----------------------------------------------------------- -------------------------------------- ------------------
Laidlaw Environmental Services (TES), Inc. 500 Battleground Rd 8004 Chancellor Row
LaPorte, TX 77571 Dallas, TX 75247
---------------------------------
13351 Scenic Highway
Baton Rouge, LA 70807
- ----------------------------------------------------------- -------------------------------------- -----------------
Laidlaw Environmental Services (TG), Inc. 350 Railroad Street Route 1, Box 256
Roebuck, SC 29376 Pinewood, SC 29376
---------------------------------
<PAGE>
8
411 Burton Road
Lexington, SC 29072
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Thermal Treatment), Inc. 3763 Highway 471 None
Colfax, LA 71417
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (TOC), Inc. 301 Railroad Street None
Roebuck, SC 29376
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (TS), Inc. 208 Watlington Industrial Dr. 3527 Whiskey Bottom Rd
Reidsville, NC 27320 Laurel, MD 20724
---------------------------------
1875 Forge Street
Tucker, GA 30084
---------------------------------
411 Burton Road
Lexington, SC 29072
---------------------------------
2903 Commerce Street, Suite C
Blacksburg, VA 24060
---------------------------------
5303 126th Avenue North
Clearwater, FL 34620
---------------------------------
4296 Rider Rail North
Bldg. E
Earth City, Missouri 63045
---------------------------------
1608 13th Avenue South Suite 312
Birmingham, AL 35205
---------------------------------
175 Route 46 West Unit D
Fairfield, NJ 07004
---------------------------------
2815 Old Greenbrier Pike
Greenbrier, TN 37073-4514
---------------------------------
7755 Paragon Rd Ste 108
Dayton, OH 45459
---------------------------------
<PAGE>
9
5150 West 12th Street
Jacksonville, FL 32254
---------------------------------
Dutton's Mill Business Park
385 Turner Way
Aston, PA 19014
---------------------------------
99 Murray Hill Parkway
East Rutherford, NJ 07073
---------------------------------
Route 1, Box 137
Valley Grove, WV 26060
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (WT), Inc. 3670 Lacon Road 1640 Antioch Pike
Hilliard, OH 43026-1221 Antioch, TN 37013-2799
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Rosemount), Inc. 13425 Courthouse Blvd. None
Rosemount, MN 55068
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Sawyer), Inc. PO Box 1568 None
Sawyer, ND 58781
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Guelph), Inc. 520 Southgate Drive 145 Henderson Drive
Guelph, Ontario N1G 4P5 Regina, Saskatchewan S4N 5W4
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tucker), Inc. 806 Genessee 4105 Whitaker Ave.
Kansas City, MO 64101 Philadelphia, PA 19124
---------------------------------
1302 West 38th Street &
1312 West 38th Street
Ashtabula, OH 44004
---------------------------------
1875 Forge Street
Tucker, GA 30084
---------------------------------
4720-B Stone Drive
Tucker, GA 30084
---------------------------------
1672 E. Highland Rd
Twinsburg, OH 44087
---------------------------------
<PAGE>
10
19930 West 157th Street
Olathe, KS 66062
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (San Jose), Inc. 1040 Commercial Str, Ste 109 660 Lenfest Road
San Jose, CA 95112 San Jose, CA 95133
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Lone and Grassy 5665 Flatiron Parkway Rte 2, Box 170
Mountain), Inc. Boulder, CO 80301 Waynoka, OK 73860-9622
---------------------------------
PO Box 22750
Salt Lake City, UT 84122
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Clive), Inc. PO Box 22285 None
Clive, UT 84122-0285
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (US), Inc. 1301 Gervais Street 1301 South Broadway Suite 201
Columbia, SC 29201 Edmond, OK 73034-3953
---------------------------------
8960 North Highway 40
Lake Point, UT 84074
---------------------------------
4322 South 49th West Ave.
Tulsa, OK 74107
---------------------------------
515 West Greens Rd Suite 600
Houston TX 77067
---------------------------------
127 South 500 East, Suite 675
Salt Lake City UT 84102
---------------------------------
221 Sutton Street
North Andover MA 01845
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Deer Park), Inc. 2027 Battleground Road Leacon - Sun Belt
Deer Park, TX 77536 9231 Lambright Road
Houston, TX 77075
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
<PAGE>
11
Laidlaw Environmental Services (Baton Rouge), Inc. 13351 Scenic Highway None
Baton Rouge, LA 70807
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Plaquemine), Inc. 32655 Gracie Lane None
Plaquemine, LA 70764
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Los Angeles), Inc. 5756 Alba Street 1820 48th Place
Los Angeles, CA 90058 Los Angeles, CA 90058
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Tipton), Inc. 1 mile East Hwy 50 Box 849 None
Tipton, MO 65081
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Deer Trail), Inc. 10855 East Highway 36 None
Deer Trail, CO 80105
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Mt. Pleasant), Inc. 101 South Park Drive None
Mt. Pleasant, TN 38474
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Aragonite), Inc. 11600 North Aptus Road Hwy 169 North
Aragonite, UT 84029 Coffeyville Industrial Park
Coffeyville, KS 67337
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Minneapolis), Inc. 21750 Cedar Ave. South None
Lakeville, MN 55044
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Bridgeport), Inc. Route 322 & I-295 None
Bridgeport, NJ 08014
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental, Inc. 3985 Research Park Drive 3965 Research Park Drive
Ann Arbor, MI 48108 Ann Arbor, MI 48108
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
- ----------------------------------------------------------- -------------------------------------- ---------------------------------
Laidlaw Environmental Services (Gloucester), Inc. Route 322 & I-295 2027 Battleground Road
Bridgeport, NJ 08014 Deer Park, TX 88537
---------------------------------
---------------------------------
13351 Scenic Highway
Baton Rouge, LA 70807-1021
---------------------------------
---------------------------------
Corsan Trucking, Inc. 1301 Gervais Street
Columbia, SC 29201
---------------------------------
</TABLE>
* Customer owned facility. Laidlaw Environmental operating under a long term
contract (over 1 year).
<PAGE>
<TABLE>
<CAPTION>
Schedule 6
PATENTS, COPYRIGHTS & TRADEMARKS
* = ABANDONED
- ----------------------------------------------------------------------------------------------------------------------------
Item Number Country Issued Title Assignee Managed By
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
a. Canada applied for "ENCORE" Trademark Laidlaw Inc.
b. US "Accupak" Service Mark USPCI?
c. US "HRI" Service Marks USPCI?
d. US "MUST" Service Mark USPCI?
e. US "SAFEWASTE" Service Mark USPCI?
f. US "TRANSCORE"Service Mark USPCI?
g. US "PPM"Trademark USPCI?
h. US "The Generator's Journal" Trademark USPCI?
i. US "Trans-End" Copyright PPM, Inc. of Georgia
j. 491,058 EPO 6/24/92 Improvements In Vapor Solvent Decontam PCB PPM, Inc. of Georgia
Transformer C
k. 1,520,147 US 01/10/89 "RES" and Design Trademark/Service Mark RESI Inhouse
l. 1.561,373 US 10/17/89 "APTUS" Trademark/Service Mark Aptus. Inc. Inhouse
m. 1,628,656 US 12/18/90 "Trans-End" Service Mark PPM. Inc. of Georgia?
n. 1,700,864 US 7/14/92 "TES" Service Mark TES?
o. 1,894,484 US 5/16/95 "Earth Academy" Name Trademark/Service Mark LESI Inhouse
p. 1,908,234 US 08/01/95 "Earth Academy" Logo Trademark/ServiceMark LESI Inhouse
q. 2,052,342 US 04/15/97 "Rollins Environmental Services" Trademark/ RESI Inhouse
Service Mark
r. 2,092,741 Canada 05/14/92 Improvements In Vapor Solvent Decontam PCB PPM, Inc. of Georgia
Transformer C
s. 4,186,605 Japan 07/03/96 Improvements in Vapor Solvent Decontam PCB PPM. Inc. of Georgia
Transformer C
t. 4,373,958 US Road Base Stabilization Method Using Lime
Kiln Dust
u. 4,464,081 US 08/07/84 Process and Structure for Storing and RESI Finnegan,
Isolating hazardous Henderson
v. 4,530,292 US Treatment of Acidic Organic and Alkaline
Inorganic Wastes
w. 4,637,928 US Method and Apparatus for Neutralizing BDT?
Reactive Materials Suc
x. 4,943,165 US 7/24/90* Improved Sludge Stabilizing Method and U.S. Poll Contr Biebel & French
Apparatus
y. 4.983,222 US 1/8/91 Improvements in Vapor Solvent Decontam PCB PPM. Inc. of Georgia
Transformer C
z. 5,009,266 US 4/23/91 Method for In Silu Contaminant Extraction Solvent Services Inhouse
From Soil
aa. 5,040,900 US 8/20/91 Sludge Stabilizing Method and Apparatus U.S. Poll Contr Biebel & French
bb. 5,040,973 US 08/20/91 Rotary Reactor and Lifter Assembly RES (TX) Thompson, Hine
& Flory
cc. 5,091,157 US 2/25/92 Recycle Conduit Insulation Assembly RES (TX) Thompson, Hine
& Flory
dd. 5,190,406 US 3/2/93 Callonic Treatment Landfill Municipal Service Biebel & French
ee. 5,196,620 US 6/13/91 Fixation and Utilization of Ash Residue Municipal Service Biebel & French
from the Incineration
ff. 5,228,398 US 07/20/93 Kiln Control for Incinerating Waste RESI Inhouse
gg. 5,238,401 US 08/24/93 Stagging Rotary Kiln Aptus, Inc. Inhouse
hh. 5,264,078 US 11/23/93 Apparatus and Method for Spray Drying Aptus, Inc. Inhouse
Solids-Laden High
ii. 5,301,621 US 04/12/94 Slag Viscosity Control by Image Analysis of RESI Inhouse
Dripping Slag w/
jj. 5,353,722 US 10/11/94 Preventive Slag Viscosity Control by RESI Inhouse
Detection of Alkali Meta
kk. 5,360,511 US 11/01/94 Apparatus and Method for Spray Drying Aptus. Inc. Inhouse
Solids-Laden High
ll. 5,388,931 US 02/14/95 Cutoff Wall System to Isolate Contaminated RESI Inhouse
Soil
mm. 5,427,037 US 06/27/95 Methods and Apparatus Using Relative Power RESI Inhouse
Factor In lncl
nn. 5,549,472 US 08/27/96 Control of Protective Layer Thickness in RESI Inhouse
Kilns by Utilizing Tw
oo. 5,566,626 US 10/22/96 Incineration Kiln Devices and Methods of RESI Inhouse
Protecting the Sa
pp. 0130773 EPO 06/25/84 Installation and Method for Containing RESI Finnegan,
Hazardous Waste Henderson
qq. 4-244310 Japan 8/20/92 Fixation and Utilization of Ash Residuefrom LES (Sawyer) Biebel & French
the Incineration
rr. 2,062,818-9 Canada 01/22/93 Recycle Conduit Insulation Assembly RES (TX) Thompson. Hine
& Flory
ss. 2,063,387-5 Canada 1/22/93 Rotary Reactor and Lifer Assembly RES(TX) Thompson, Hine
& Flory
tt. 2,071,139-6 Canada 6/12/92 Fixation and Utilization of Ash Residue LES (Sawyer) Biebel & French
from the Incineration
- ----------------------------------------------------------------------------------------
Item Current Next Maintenance Notes
Reg Exp
- ----------------------------------------------------------------------------------------
a.
b.
c.
d.
e.
f.
g.
h.
i.
j. related to US #4,983,222
k. 1/10/09 File 10 Year Renewal B/4 Expiration Date Has 20 year license - uncontestable
l. 10/17/99 File 10 Year Renewal B4 Expiration Date
m.
n. 7/14/02 File affidavit of use betw 7/14/98 - 99
o. 5/16/05 File Use Affidavit betw 5/16/00 - 2001
p. 8/16/05 File Use Affidavit between 8/1/00 - 2001
q. 4/15/07 File Use Affidavit between 4/16/02 - 2003
r. related to US #4,983,222
s. related to US #4,983,222
t.
u. 8/7/0l 17 year expiration 8/01
v.
w.
x. Jan-98 DROPPED 10/31/97per Dschwieg -- no longer needed
y. see related EPO, Canada & Japanese patents
z. Pay 7-1/2 Yr Maintenance Fee 4/98 (prov Note: See Dieter litigation file)
1
<PAGE>
aa. 2/2O/99 Pay 7-1/2 Yr Maintenance Fee 2/99
bb. 2/2O/99 Pay 7-1/2 Yr Maintenance Fee 8/98 also see 2,063,387-5 Canada
cc. 2/28/97 Pay 7-1/2-Yr Maintenance Fee 8/97 also see 2,062,818-9 Canada
dd. 9/2/00 Pay 7-1/2 Yr Maintenance Fee 9/00
ee. 9/23/00 Pay 7-1/2 Yr MaintenanceFee 9/00 also see 2,071,139-6 Canada & 4-244310 Japan
ff. 1/20/01 Pay 7-1/2 Yr Maintenance Fee 7/00
gg. 2/24/01 Pay 7-1/2 Yr Maintenance Fee 8/00
hh. 5/23/01 Pay 7-1/2 Yr Maintenance Fee 11/00*
ii. 10/12/01 Pay 7-1/2 Yr Maintenance Fee 4/01
jj. 4/11/02 Pay 7-1/2 Yr Maintenance Fee 10/01
kk. 5/1/98 Pay 3-1/2 Yr Maintenance Fee 11/97
ll. 8/14/98 Pay 3-1/2 Yr Maintenance Fee 2/98
mm. 12/27/98 Pay 3-1/2 Yr Maintenance Fee 6/98
nn. 8/27/00 Pay 3-1/2 Yr Maintenance Fee 2/00
oo. 10/22/00 Pay 3-1/2 Yr Maintenance Fee 4/00
pp. 6/25/04 Pay Annual Renewal Fr/Gr/uK 6-25-99 (98 paid 2/98 $2,075)
qq. 8/20/99 related to US #5,196,620
rr. 4/28/98 Request Examination by 4/98 filed in related to US# 5,091,157
ss. 4/28/98 Request Examination by 4/98 filed in related to US# 5,040,973
tt. 6/20/99 Pay An Tax 6/98, Request Exam 6/99 related to US #5,196,620
Note: "INSITE" Servicemafk Application abandoned
TM was previously registered & application was contested
R:IFILESIPATENT (I. E@cel (oittiat)
UPDATED: 3110198SA
2
<PAGE>
</TABLE>
<PAGE>
SCHEDULE 7
----------
CONTRACTS
Stock Purchase Agreement, dated February 6, 1997, among Rollins Environmental
Services, Inc., Laidlaw Inc. and Laidlaw Transportation, Inc.
Agreement and Plan of Merger, dated as of March 16, 1998, among Laidlaw
Environmental Services, Inc., LES Acquisition Inc. and Safety-Kleen Corp.
<PAGE>
1
SCHEDULE 8
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EXISTING LIENS
1. The Industrial Development Board of the Metropolitan Government of
Nashville and Davidson County has a Hen on all machinery, equipment,
furniture and similar property of Laidlaw Environmental Services of
Nashville, Inc., by agreement dated May 1, 1993.
2. Various liens on vehicles and office equipment (computers, printers,
servers, photocopiers, etc.) from various leasing companies for operating
leases.
<PAGE>
Annex I to
GUARANTEE AND COLLATERAL AGREEMENT
----------------------------------
ASSUMPTION AGREEMENT, dated as of ___________________. made by
________________________________, a __________________ a corporation (the
"ADDITIONAL Grantor"), in favor of TORONTO DOMINION (TEXAS) INC., as general
administrative agent (in such capacity, the "GENERAL ADMINISTRATIVE AGENT") for
the banks and other financial institutions, (the "Lenders") parties to the
Credit Agreement referred to below. All capitalized terms not defined herein
shall have the meaning ascribed to them in such Credit Agreement.
W I T N E S S E T H:
--------------------
WHEREAS, LES, Inc. (the "COMPANY"), Laidlaw Environmental Services
(Canada) Ltd. (the "CANADIAN BORROWER"; together with the Company, the
"BORROWERS"), the Lenders, the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, and certain other
Agents named therein have entered into a Amended and Restated Credit Agreement,
dated as of April 3, 1998 (as amended, supplemented or otherwise modified from
time to time, the "CREDIT AGREEMENT");
WHEREAS, in connection with the Credit Agreement, the Company and
certain of its Affiliates (other than the Additional Grantor) have entered into
the Amended and Restated Guarantee and Collateral Agreement, dated as of April
3, 1998 (as amended, supplemented or otherwise modified from time to time, the
"GUARANTEE AND COLLATERAL AGREEMENT") in favor of the General Administrative
Agent for the benefit of the Lenders;
WHEREAS, the Credit Agreement requires the Additional Grantor to
become a party to the Guarantee and Collateral Agreement; and
WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;
NOW, THEREFORE, IT IS AGREED:
1. GUARANTEE AND COLLATERAL AGREEMENT. By executing and delivering
this Assumption Agreement, the Additional Grantor, as provided in Section 8.15
of the Guarantee and Collateral Agreement, hereby becomes a party to the
Guarantee and Collateral Agreement as a Grantor thereunder with the same force
and effect as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby
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added to the information set forth in Schedules ___________** to the Guarantee
and Collateral Agreement. The Additional Grantor hereby represents and warrants
that each of the representations and warranties contained in Section 4 of the
Guarantee and Collateral Agreement is true and correct on and as the date hereof
(after giving effect to this Assumption Agreement) as if made on and as of such
date.
2. GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
IN WITNESS WHEREOF, the undersigned has caused this Assumption
Agreement to be duly executed and delivered as of the date first above written.
[ADDITIONAL GRANTOR]
By: _____________________________
Name:
Title:
** Refer to each Schedule which needs to be supplemented.
2
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended
and Restated Guarantee and Collateral Agreement dated as of April 3, 1998 (the
"AGREEMENT"), made by the Grantors parties thereto for the benefit of Toronto
Dominion (Texas), Inc., as General Administrative Agent. The undersigned agrees
for the benefit of the General Administrative Agent and the Lenders as follows:
1. The undersigned will be bound by the terms of the Agreement and
will comply with such terms insofar as such terms are applicable to the
undersigned.
2. The undersigned will notify the General Administrative Agent
promptly in writing of the occurrence of any of the events described in Section
5.8(a) of the Agreement.
3. The terms of Sections 6.3(a) and 6.7 of the Agreement shall apply
to it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
pursuant to Section 6.3(a) or 6.7 of the Agreement.
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA), INC.
By ___________________________
Title ___________________________
Address for Notices:
1301 Gervais Street, Suite 300
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: 803-933-4346
<PAGE>
ACKNOWLEDGMENT AND CONSENT
The undersigned hereby acknowledges receipt of a copy of the Amended and
Restated Guarantee and Collateral Agreement dated as of April 3, 1998 (the
"Agreement"), made by the Grantors parties thereto for the benefit of Toronto
Dominion (Texas), Inc., as General Administrative Agent. The undersigned agrees
for the benefit of the General Administrative Agent and the Lenders as follows:
1. The undersigned will notify the General Administrative Agent
promptly in writing of the occurrence of any of the events described in
Section 5.8(a) of the Agreement.
VIROGROUP, INC.
By: _____________________________
Title: ____________________________
ADDRESS FOR NOTICES:
5217 Linbar Drive, Suite 309
Nashville, Tennessee 37211
Fax: 615-832-2549
<PAGE>
GUARANTEE AND COLLATERAL SUPPLEMENT
This Guarantee and Collateral Supplement, dated as of April 9, 1998,
is delivered pursuant to the Guarantee and Collateral Agreement referred to
below.. The undersigned hereby agree that this Guarantee and Collateral
Supplement may be attached to the Guarantee and Collateral Agreement dated as of
April 3, 1998 among Laidlaw Environmental Services, Inc., LES, Inc., certain
subsidiaries of LES, Inc. and Toronto Dominion (Texas), Inc., as General
Administrative Agent (the "Guarantee and Collateral Agreement", capitalized
terms defined therein being used herein as therein defined) and that the Pledged
Notes listed on Annex I to this Guarantee and Collateral Supplement shall be
deemed to be part of the Pledged Notes and shall become part of the Collateral
and shall secure all Obligations. LES, Inc. hereby grants to the General
Administrative Agent, for the ratable benefit of the Lenders, a security
interest in the Pledged Notes listed on Annex I hereto.
LES, INC.
LAIDLAW ENVIRONMENTAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (US), INC.
LES MERGER, INC.
LES ACQUISITION, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF ILLINOIS,
INC.
GSX CHEMICAL SERVICES OF OHIO, INC.
LAIDLAW ENVIRONMENTAL SERVICES (BDT), INC.
LAIDLAW ENVIRONMENTAL SERVICES (FS), INC.
LAIDLAW ENVIRONMENTAL SERVICES (GS), INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
CHATTANOOGA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF WHITE
CASTLE, INC.
LAIDLAW ENVIRONMENTAL SERVICES (RECOVERY),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (TS), INC.
LAIDLAW ENVIRONMENTAL SERVICES (IMPERIAL
VALLEY), INC.
LAIDLAW ENVIRONMENTAL SERVICES (LOKERN),
INC.
LAIDLAW ENVIRONMENTAL SERVICES OF
CALIFORNIA, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF SOUTH
CAROLINA, INC.
LAIDLAW ENVIRONMENTAL SERVICES (NORTH EAST),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (TES), INC.
LAIDLAW CHEMICAL SERVICES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (TOC), INC.
LAIDLAW ENVIRONMENTAL SERVICES (TG), INC.
LAIDLAW ENVIRONMENTAL SERVICES (ALTAIR),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (WT), INC.
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LAIDLAW ENVIRONMENTAL SERVICES OF BARTOW,
INC.
LAIDLAW ENVIRONMENTAL SERVICES (THERMAL
TREATMENT), INC.
LEMC, INC.
LAIDLAW OSCO HOLDINGS, INC.
LAIDLAW ENVIRONMENTAL SERVICES OF NASHVILLE,
INC.
LAIDLAW ENVIRONMENTAL SERVICES (CLIVE), INC.
LAIDLAW ENVIRONMENTAL SERVICES (LONE AND
GRASSY MOUNTAIN), INC.
LAIDLAW ENVIRONMENTAL SERVICES (TULSA), INC.
LAIDLAW ENVIRONMENTAL SERVICES (SAN
ANTONIO), INC.
LAIDLAW ENVIRONMENTAL SERVICES (WICHITA),
INC.
LAIDLAW ENVIRONMENTAL SERVICES OF DELAWARE,
INC.
CORSAN TRUCKING, INC.
USPCI, INC. OF GEORGIA
LAIDLAW ENVIRONMENTAL SERVICES (SAN JOSE),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (SAWYER),
INC.
CHEMCLEAR, INC. OF LOS ANGELES
LAIDLAW ENVIRONMENTAL SERVICES (ROSEMOUNT),
INC.
LES HOLDING'S, INC.
EAST CARBON DEVELOPMENT FINANCIAL PARTNERS,
INC.
LAIDLAW ENVIRONMENTAL SERVICES (TUCKER),
INC.
NINTH STREET PROPERTIES, INC.
LAIDLAW ENVIRONMENTAL SERVICES (MT.
PLEASANT), INC.
LAIDLAW ENVIRONMENTAL SERVICES (DEER TRAIL),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (
MINNEAPOLIS), INC.
LAIDLAW ENVIRONMENTAL SERVICES (LOS
ANGELES), INC.
LAIDLAW ENVIRONMENTAL SERVICES (BATON
ROUGE), INC.
LAIDLAW ENVIRONMENTAL SERVICES (PLAQUEMINE),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (BRIDGEPORT),
INC.
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LAIDLAW ENVIRONMENTAL SERVICES (DEER PARK),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (TIPTON),
INC.
LAIDLAW ENVIRONMENTAL, INC.
LAIDLAW ENVIRONMENTAL SERVICES (SUSSEX),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (GLOUCESTER),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (CUSTOM
TRANSPORT), INC.
LAIDLAW ENVIRONMENTAL SERVICES (ARAGONITE),
INC.
LAIDLAW ENVIRONMENTAL SERVICES (PUERTO
RICO), INC.
By: __________________________________
Name:
Title:
Acknowledged and Agreed to as
of the date hereof by:
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent
By: _____________________________________
Name:
Title:
3
<PAGE>
Annex I to
Guarantee and Collateral
Supplement
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Pledged Notes:
ISSUER PAYEE PRINCIPAL AMOUNT
------ ----- ----------------
LES Acquisition, Inc. Laidlaw Environmental $68,603,931.00
Services, Inc. and duly
indorsed to LES, Inc.
LES Acquisition, Inc. LES, Inc. $108,702,075.00
Safety-Kleen Corp. LES, Inc. $14,000,000.00
Safety-Kleen Corp. LES, Inc. $6,000,000.00
<PAGE>
EXHIBIT B-2
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ACQUISITION CORP. PLEDGE AGREEMENT
ACQUISITION CORP. PLEDGE AGREEMENT, dated as of April 1998, made
by LES ACQUISITION, INC., a Delaware corporation (the "PLEDGOR"), in favor of
TORONTO DOMINION (TEXAS), INC., as general administrative agent (in such
capacity, the "GENERAL ADMINISTRATIVE AGENT') for the Lenders parties to the
Credit Agreement referred to below.
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, LES Inc., a Delaware corporation (the "COMPANY"), and Laidlaw
Environmental Services (Canada) Ltd., a Canadian corporation (the "CANADIAN
BORROWER"; together with the Company, the "BORROWERS") are parties to the
Amended and Restated Credit Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
with the several banks and other financial institutions from time to time
parties thereto (the "LENDERS"), the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, and the Managing Agents, Co-Documentation Agents and
Syndication Agents named therein;
WHEREAS, pursuant to the Credit Agreement and the other Loan Documents
(as defined in the Credit Agreement), the Lenders have agreed to make their
respective extensions of credit to the Borrowers;
WHEREAS, the Pledgor, is a wholly owned subsidiary of the Company;
WHEREAS, the proceeds of the extensions of credit to the Company under
the Credit Agreement will be used in part to enable the Pledgor to CONSUMMATE
the Exchange Offer and the Merger;
WHEREAS, the Pledgor and the Borrower are engaged in related
businesses, and the Pledgor will derive substantial direct and indirect benefit
from the making of the extensions of credit under the Credit Agreement;
WHEREAS, it is a condition precedent to the obligation of the Lenders
to make their respective extensions of credit under the Credit Agreement that
the Pledgor shall have executed and delivered this Pledge Agreement to the
General Administrative Agent for the ratable benefit of the Agents and the
Lenders;
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WHEREAS, pursuant to the Exchange Offer, on the Closing Date the
Pledgor is acquiring shares of common stock, with par value $0.10, of
Safety-Kleen Corp., a Wisconsin corporation ("SAFETY-KLEEN"), as more
particularly described on Schedule I hereto (all such shares of stock, together
with all stock certificates, options or rights of any nature whatsoever that may
be granted by Safety-Kleen to the Pledgor in respect of such shares of stock
being hereinafter called the "INITIALLY PLEDGED STOCK");
WHEREAS, pursuant to the Credit Agreement, on the date of this Pledge
Agreement, the Pledgor is pledging to the General Administrative Agent, for the
ratable benefit of the Lenders, the Initially Pledged Stock to provide security
for the Obligations; and
WHEREAS, pursuant to the Credit Agreement, on each date after the
Closing Date on which the Pledgor purchases additional shares of capital stock
of Safety-Kleen, the Pledgor shall execute and deliver a Pledge Agreement
Supplement in the form of Exhibit A hereto, pledging the capital stock of
Safety-Kleen being purchased on such date by the Pledgor (such additional shares
of stock together with all stock certificates, options or rights of any nature
whatsoever that may be granted by the Issuer to the Pledgor in respect of such
shares of stock being hereinafter called the "ADDITIONAL PLEDGED STOCK," and
together with the Initially Pledged Stock, the "PLEDGED STOCK");
NOW, THEREFORE, in consideration of the premises contained herein and
to induce the Agents and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make the Loans under the Credit Agreement, the Pledgor
hereby agrees with the General Administrative Agent, for the ratable benefit of
the Agents and the Lenders, as follows:
1. DEFINED Terms. (a) Unless otherwise defined herein, terms which are
defined in the Credit Agreement and used herein shall have the meanings given to
them in the Credit Agreement.
(b) The following terms shall have the following meanings:
"BORROWERS" has the meaning given such term in the recitals hereto.
"CLEARING CORPORATION" means a clearing corporation within the meaning
of Section 8-102(5) of the Code at which the General Administrative Agent,
or a designee or nominee on its behalf, maintains a securities account.
"CODE" means the Uniform Commercial Code from time to time in effect
in the State of New York.
"COLLATERAL" has the meaning given such term in Section 2 hereof
"CREDIT AGREEMENT" has the meaning given such term in the recitals
hereto.
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"EXCHANGE AGENT" means IBJ Schroder Bank & Trust Company, as
Exchange Agent in respect of the Exchange Offer.
"EXCHANGE AGENT AGENCY AGREEMENT" means the Exchange Agent
Agency Agreement, dated as of the date hereof, among the Exchange
Agent, the General Administrative Agent and the Pledgor.
"GENERAL ADMINISTRATIVE AGENT" has the meaning given such term in the
preamble.
"LENDERS" has the meaning given such term in the preamble hereto.
"OBLIGATIONS" means the Obligations of the Pledgor under (and as
defined in) the Guarantee and Collateral Agreement.
"PLEDGE AGREEMENT" means this Acquisition Corp. Pledge Agreement, as
amended, supplemented or otherwise modified from time to time.
"PLEDGED STOCK". has the meaning given such term in the preamble
hereto.
"PLEDGOR" has the meaning given such term in the preamble hereto.
"PROCEEDS" means all "proceeds" as such term is defined in Section
9-306(l) of the Code in effect in the State of New York on the date hereof
and, in any event, shall include, without limitation, all dividends or
other income from the Pledged Stock, collections thereon and distributions
with respect thereto.
"SAFETY-KLEEN" has the meaning given such term in the preamble hereto.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Pledge Agreement shall refer to this Pledge Agreement
as a whole and not to any particular provision of this Pledge Agreement, and
Section, paragraph and Schedule references are to this Pledge Agreement unless
otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
2. PLEDGE; GRANT OF SECURITY INTEREST. The Pledgor hereby delivers to
the General Administrative Agent, for the ratable benefit of the Lenders, all
the Pledged Stock and hereby grants to General Administrative Agent, for the
ratable benefit of the Agents and the Lenders, a first priority security
interest in the following (collectively, the "COLLATERAL") as collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations:
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(a) all of the Initially Pledged Stock, including without limitation,
the shares of capital stock of Safety-Kleen delivered to the General
Administrative Agent or its agent by the Exchange Agent pursuant to
instructions of the Pledgor contained in the Exchange Agent Agency
Agreement and all Book-Entry Shares (as hereinafter defined);
(b) all Additional Pledged Stock from time to time acquired by the
Pledgor in any manner, including, without limitation, by the book-entry
delivery thereof;
(c) the certificates representing the shares referred to in clauses
(a) and (b) above; and
(d) all rights and privileges of the Pledgor with respect to the
Pledged Stock, all Proceeds of the Pledged Stock, all income and profits
therefrom and all property received in addition thereto or in exchange or
substitution therefor.
3. STOCK POWERS, BOOK-ENTRY TRANSFER. (a) The Pledgor shall promptly
deliver or cause to be delivered to the General Administrative Agent or the
Exchange Agent all stock certificates representing the Pledged Stock, together
with duly executed blank undated stock powers. The Pledgor shall promptly
deliver to the General Administrative Agent, or cause Safety-Kleen to deliver
directly to the General Administrative Agent, share certificates or other
documents, representing any Collateral acquired or received after the date of
this Pledge Agreement duly endorsed or with appropriate transfer documents duly
executed in blank by the Pledgor. If at any time the General Administrative
Agent notifies the Pledgor that additional stock powers or other transfer
documents endorsed in blank with respect to the Collateral held by the General
Administrative Agent are required, the Pledgor shall promptly execute the same
in blank and deliver such stock powers or other transfer documents as the
General Administrative Agent may request.
(b) In the event that a financial institution that is a participant in
The Depositary Trust Company (the "BOOK-ENTRY TRANSFER FACILITY"), in accordance
with the procedures set forth in the Exchange Offer Documents, makes a
book-entry delivery of any shares of common stock of Safety-Kleen tendered for
exchange in the Exchange Offer by causing the Book-Entry Transfer Facility to
transfer such shares into the account of the Exchange Agent at the Book-Entry
Transfer Facility (each such share being a "BOOK-ENTRY SHARE"), the Pledgor
hereby authorizes the Exchange Agent to, and shall cause the Exchange Agent to,
hold such shares as securities intermediary for the General Administrative Agent
in accordance with the Exchange Agent Agency Agreement.
4. REPRESENTATIONS AND WARRANTIES. The Pledgor represents and warrants
that:
(a) the shares of Pledged Stock constitute all the issued and
outstanding shares of all classes of the capital stock of Safety-Kleen
owned by the Pledgor or any of its Affiliates;
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(b) to the best knowledge of the Pledgor, all the shares of the
Pledged Stock have been duly and validly issued and are fully paid and
nonassessable;
(c) the Pledgor is the record and beneficial owner of, and has good
and marketable title to, the Pledged Stock, free of any and all Liens or
options in favor of, or claims of, any other Person, except the Lien
created by this Pledge Agreement; and
(d) upon compliance with the provisions of Sections 3(a) and (b)
hereof, all actions required to create and perfect the security interest
of the General Administrative Agent in the Collateral will have been taken,
and the delivery to the General Administrative Agent or the Exchange Agent,
as the case may be, of the Collateral is effective to create a valid,
perfected first priority security interest in the Collateral in favor of
the General Administrative Agent.
5. COVENANTS. The Pledgor covenants and agrees with the
General Administrative Agent and the Lenders that, from and after the date of
this Pledge Agreement until the Obligations have been paid in full and the
Commitments have been terminated:
(a) If the Pledgor shall, as a result of its ownership of the
Pledged Stock, become entitled to receive or shall receive any stock
certificate (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate
issued in connection with any reorganization), option or rights,
whether in addition to, in substitution of, as a conversion of, or in
exchange for any shares of the Pledged Stock, or otherwise in respect
thereof, the Pledgor shall accept the same as the agent of the General
Administrative Agent and the Lenders, hold the same in trust for the
General Administrative Agent and the Lenders and deliver the same
forthwith to the General Administrative Agent in the exact form
received, duly indorsed by the Pledgor to the General Administrative
Agent, if required, together with an undated stock power covering such
certificate duly executed in blank by the Pledgor and with, if the
General Administrative Agent so requests, signature guaranteed, to be
held by the General Administrative Agent, subject to the terms hereof,
as additional collateral security for the Obligations. Any sums paid
upon or in respect of the Pledged Stock upon the liquidation or
dissolution of Safety-Kleen shall unless consent to the contrary is
obtained from the General Administrative Agent within ten days of such
payment be paid over to the General Administrative Agent to be held by
it hereunder as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect
of the Pledged Stock or any property shall be distributed upon or with
respect to the Pledged Stock pursuant to the recapitalization or
reclassification of the capital of Safety-Kleen or pursuant to the
reorganization thereof, the property so distributed shall unless
consent to the contrary is otherwise obtained from the General
Administrative Agent be delivered to the General Administrative Agent
within ten days of such payment to be held by it hereunder as
additional collateral security for the Obligations. If any sums of
money or property so paid or distributed in respect of the Pledged
Stock shall be received by the Pledgor, the Pledgor shall, until such
money or property is paid or delivered to the General Administrative
Agent, hold such money or
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property in trust for the General Administrative Agent and the
Lenders, segregated from other funds of the Pledgor, as additional
collateral security for the Obligations.
(b) Without the prior written consent of the General
Administrative Agent, the Pledgor will not (i) vote to enable, or take
any other action to permit, Safety-Kleen to issue any stock or other
equity securities of any nature or to issue any other securities
convertible into or granting the right to purchase or exchange for any
stock or other equity securities of any nature of Safety-Kleen, (ii)
sell, assign, transfer, exchange, or otherwise dispose of, or grant
any option with respect to, the Collateral or (iii) create, incur or
permit to exist any Lien or option in favor of, or any claim of any
Person with respect to, any of the Collateral, or any interest
therein, except for the Lien provided for by this Pledge Agreement.
Notwithstanding the foregoing, the Merger may be consummated; PROVIDED
that simultaneously with the Merger the stock of the surviving
corporation of the Merger shall be pledged to the General
Administrative Agent in a manner satisfactory to it. The Pledgor will
defend the right, title and interest of the General Administrative
Agent and the Lenders in and to the Collateral against the claims and
demands of all Persons whomsoever.
(c) At any time and from time to time, upon the written request
of the General Administrative Agent, and at the sole expense of the
Pledgor, the Pledgor will promptly and duly execute and deliver such
further instruments and documents and take such further actions as the
General Administrative Agent may reasonably request for the purposes
of obtaining or preserving the full benefits of this Pledge Agreement
and of the rights and powers herein granted. If any amount payable
under or in connection with any of the Collateral shall be or become
evidenced by any promissory note, other instrument or chattel paper,
such note, instrument or chattel paper shall be promptly delivered
(unless the prior consent of the General Administrative Agent is
obtained) to the General Administrative Agent, duly endorsed in a
manner satisfactory to the General Administrative Agent, to be held as
Collateral pursuant to this Pledge Agreement.
(d) The Pledgor agrees to pay, and to save the General
ADMINISTRATIVE Agent and the Lenders harmless from, any and all
liabilities with respect to, or resulting from any delay in paying,
any and all stamp, excise, sales or other taxes which may be payable
or determined to be payable with respect to any of the Collateral or
in connection with any of the transactions contemplated by this Pledge
Agreement.
(e) Pursuant to Section 9.13 of the Credit Agreement, the Pledgor
hereby agrees that on each date it acquires additional shares of
capital stock of Safety-Kleen, the Pledgor will execute a Pledge
Agreement Supplement and deliver or cause to be delivered to the
General Administrative Agent the share certificates representing such
capital stock being purchased by the Pledgor on such date, together
with the appropriate undated stock powers duly executed in blank by
the Pledgor.
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6. CASH DIVIDENDS; VOTING RIGHTS. Unless an Event of Default shall
have occurred and be continuing and the General Administrative Agent shall have
given notice to the Pledgor of the General Administrative Agent's intent to
exercise its corresponding rights pursuant to Section 7 below, the Pledgor shall
be permitted to receive all cash dividends paid in the normal course of business
of Safety-Kleen, to the extent permitted in the Credit Agreement, in respect of
the Pledged Stock and to exercise all voting and corporate rights with respect
to the Pledged Stock; PROVIDED, HOWEVER, that no vote shall be cast which would
result in any violation of any provision of the Credit Agreement or any other
Loan Document.
7. RIGHTS OF THE LENDERS AND THE GENERAL ADMINISTRATIVE AGENT. (a) If
an Event of Default shall occur and be continuing and the General Administrative
Agent shall give notice to the Pledgor of the General Administrative Agent's
intent to exercise such rights (i) the General Administrative Agent shall have
the right to receive any and all cash dividends paid in respect of the Pledged
Stock and make application thereof to the Obligations in such order as the
General Administrative Agent may determine and (ii) all shares of the Pledged
Stock shall be registered in the name of the General Administrative Agent or its
nominee, and the General Administrative Agent or its nominee may thereafter
exercise (A) all voting, corporate and other rights pertaining to such shares of
the Pledged Stock at any meeting of shareholders of Safety-Kleen or otherwise
and (B) any and all rights of conversion, exchange, subscription and any other
rights, privileges or options pertaining to such shares of the Pledged Stock as
if it were the absolute owner thereof (including, without limitation, the right
to exchange at its discretion any and all of the Pledged Stock upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of Safety-Kleen, or upon the exercise by the Pledgor or
the General Administrative Agent of any right, privilege or option pertaining to
such shares of the Pledged Stock, and in connection therewith, the right to
deposit and deliver any and all of the Pledged Stock with any committee,
depositary, transfer agent, registrar or other designated agency upon such terms
and conditions as it may determine), all without liability except to account for
property actually received by it, but the General Administrative Agent shall
have no duty to the Pledgor to exercise any such right, privilege or option and
shall not be responsible for any failure to do so or delay in so doing.
(b) The rights of the General Administrative Agent and the Lenders
hereunder shall not be conditioned or contingent upon the pursuit by the General
Administrative Agent or any Lender of any right or remedy against any other
Person which may be or become liable in respect of all or any part of the
Obligations or against any collateral security therefor, guarantee therefor or
right of offset with respect thereto. Neither the General Administrative Agent
nor any Lender shall be liable for any failure to demand, collect or realize
upon all or any part of the Collateral or for any delay in doing so, nor shall
the General Administrative Agent be under any obligation to sell or otherwise
dispose of any Collateral upon the request of the Pledgor or any other Person or
to take any other action whatsoever with regard to the Collateral or any part
thereof.
7
<PAGE>
8. REMEDIES. If an Event of Default shall occur and be continuing, the
General Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted in this Pledge Agreement and
in any other instrument or agreement securing, evidencing or relating to the
Obligations, all rights and remedies of a secured party under the Code. Without
limiting the generality of the foregoing, the General Administrative Agent,
without demand of performance or other demand, presentment, protest,
advertisement or notice of any kind (except any notice required by law referred
to below or by the Credit Agreement) to or upon the Pledgor, Safety-Kleen or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, assign, give an option or options to purchase or
otherwise dispose of and deliver the Collateral or any part thereof (or contract
to do any of the foregoing), in one or more parcels at public or private sale or
sales, in the over the counter market, at any exchange or broker's board or
office of the General Administrative Agent or any Lender or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The General Administrative Agent or any Lender shall have the right
upon any such public sale or sales, and, to the extent permitted by law, upon
any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the Pledgor,
which right or equity is hereby waived or released. The General Administrative
Agent shall apply any Proceeds from time to time held by it and the net proceeds
of any such collection, recovery, receipt, appropriation, realization or sale,
after deducting all reasonable costs and expenses of every kind incurred in
respect thereof or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the General
Administrative Agent and the Lenders hereunder, including, without limitation,
attorneys' fees and disbursements of counsel to the General Administrative
Agent, to the payment in whole or in part of the Obligations, in such order as
the General Administrative Agent may elect, and only after such application and
after the payment by the General Administrative Agent of any other amount
required by any provision of law, including, without limitation, Section
9-504(l)(c) of the Code, need the General Administrative Agent account for the
surplus, if any, to the Pledgor. To the extent permitted by applicable law, the
Pledgor waives all claims, damages and demands it may acquire against the
General Administrative Agent or any Lender arising out of the exercise by them
of any rights hereunder. If any notice of a proposed sale or other disposition
of Collateral shall be required by law, such notice shall be deemed reasonable
and proper if given at least ten days before such sale or other disposition. The
Pledgor shall remain liable for any deficiency if the proceeds of any sale or
other disposition of Collateral are insufficient to pay the Obligations and the
fees and disbursements of any attorneys employed by the General Administrative
Agent or any Lender to collect such deficiency. Nothing herein shall be deemed
to authorize the General Administrative Agent or the Lenders to take action in
violation of applicable law.
8
<PAGE>
9. REGISTRATION RIGHTS; PRIVATE SALES. (a) If the General
Administrative Agent shall determine to exercise its right to sell any or all of
the Pledged Stock pursuant to Section 8 hereof, and if in the reasonable opinion
of the General Administrative Agent it is necessary or reasonably advisable to
have the Pledged Stock, or that portion thereof to be sold, registered under the
provisions of the Securities Act of 1933, as amended (the "SECURITIES ACT'), the
Pledgor will cause Safety-Kleen to (i) execute and deliver, and cause the
directors and officers of Safety-Kleen to execute and deliver, all such
instruments and documents, and do or cause to be done all such other acts as may
be, in the opinion of the General Administrative Agent, necessary or advisable
to register the Pledged Stock, or that portion thereof to be sold under the
provisions of the Securities Act, (ii) use its best efforts to cause the
registration statement relating thereto to become effective and to remain
effective for a period of one year from the date of the first public offering of
the Pledged Stock, or that portion thereof to be sold and (iii) make all
amendments thereto and/or to the related prospectus which, in the opinion of the
General Administrative Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations of the SEC
applicable thereto. The Pledgor agrees to cause Safety-Kleen to comply with the
provisions of the securities or "Blue Sky" laws of any and all jurisdictions
which the General Administrative Agent shall designate and to make available to
its security holders, as soon as practicable, an earnings statement (which need
not be audited) which will satisfy the provisions of Section I 1 (a) of the
Securities Act.
(b) The Pledgor recognizes that the General Administrative Agent may
be unable to effect a public sale of any or all the Pledged Stock, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws or otherwise, and may be compelled to resort to one or more
private sales thereof to a restricted group of purchasers which will be obliged
to agree, among other things, to acquire such securities for their own account
for investment and not with a view to the distribution or resale thereof. The
Pledgor acknowledges and agrees that any such private sale may result in prices
and other terms less favorable than if such sale were a public sale and,
notwithstanding such circumstances, agrees that any such private sale shall be
deemed to have been made in a commercially reasonable manner. The General
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit Safety-Kleen to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if Safety-Kleen would agree to do so.
(c) The Pledgor further agrees to use its best efforts to do or cause
to be done all such other acts as may be necessary to make such sale or sales of
all or any portion of the Pledged Stock pursuant to this Section 9 valid and
binding and in compliance with any and all other applicable Requirements of Law.
The Pledgor further agrees that a breach of any of the covenants contained in
this Section 9 will cause irreparable injury to the General Administrative Agent
and the Lenders, that the General Administrative Agent and the Lenders have no
adequate remedy at law in respect of such breach and, as a consequence, that
each and every covenant contained in this Section 9 shall be specifically
enforceable against the Pledgor, and the Pledgor hereby waives and agrees not to
assert any defenses against an action for specific performance of such covenants
except for a defense that no Event of Default has occurred under the Credit
Agreement.
9
<PAGE>
10. IRREVOCABLE AUTHORIZATION AND INSTRUCTION TO ISSUERS. The Pledgor
hereby authorizes and instructs Safety-Kleen to comply with any instruction
received by it from the General Administrative Agent in writing that (a) states
that an Event of Default has occurred and is continuing and (b) is otherwise in
accordance with the terms of this Pledge Agreement, without any other or further
instructions from the Pledgor, and the Pledgor agrees that Safety-Kleen shall be
fully protected in so complying.
11. GENERAL ADMINISTRATIVE AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
(a) The Pledgor hereby irrevocably constitutes and appoints the General
Administrative Agent and any officer or agent of the General Administrative
Agent, with fall power of substitution, as its true and lawful attorney-in-fact
with full irrevocable power and authority in the place and stead of the Pledgor
and in the name of the Pledgor or in the General Administrative Agent's own
name, from time to time in the General Administrative Agent's discretion, for
the purpose of carrying out the terms of this Agreement, to take any and all
appropriate action and to execute any and all documents and instruments which
may be necessary or desirable to accomplish the purposes of this Pledge
Agreement, including, without limitation, any financing statements,
endorsements, assignments or other instruments of transfer. The General
Administrative Agent agrees that it will not exercise any rights under the power
of attorney provided for in this Section I l (a) unless an Event of Default
shall have occurred and be continuing, and the power of attorney will be
executed in a manner intended to give effect to the intent of this Pledge
Agreement and the other Loan Documents and in accordance with applicable law.
(b) The Pledgor hereby ratifies all that said attorneys shall lawfully
do or cause to be done pursuant to the power of attorney granted in Section I l
(a). All powers, authorizations and agencies contained in this Agreement are
coupled with an interest and are irrevocable until this Agreement is terminated
and the security interests created hereby are released.
12. LIMITATION ON DUTIES REGARDING Collateral. The General
Administrative Agent's sole duty with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession, under Section 9-207
of the Code or otherwise, shall be to deal with it in the same manner as the
General Administrative Agent deals with similar securities and property for its
own account. Neither the General Administrative Agent, any Lender nor any of
their respective directors, officers, employees or agents shall be liable for
failure to demand, collect or realize upon any of the Collateral or for any
delay in doing so or shall be under any obligation to sell or otherwise dispose
of any collateral upon the request of the Pledgor or otherwise.
13. EXECUTION OF FINANCING STATEMENTS. Pursuant to Section 9-402 of
the Code, the Pledgor authorizes the General Administrative Agent to file
financing statements with respect to the Collateral without the signature of the
Pledgor in such form and in such filing offices as the General Administrative
Agent reasonably determines appropriate to perfect the security interests of the
General Administrative Agent under this Pledge Agreement. A carbon, photographic
or other reproduction of this Pledge Agreement shall be sufficient as a
financing statement for filing in any jurisdiction.
10
<PAGE>
14. AUTHORITY OF GENERAL ADMINISTRATIVE AGENT. The Pledgor
acknowledges that the rights and responsibilities of the General Administrative
Agent under this Pledge Agreement with respect to any action taken by the
General Administrative Agent or the exercise or non-exercise by the General
Administrative Agent of any option, voting right, request, judgment or other
right or remedy provided for herein or resulting or arising out of this Pledge
Agreement shall, as between the General Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the General
Administrative Agent and the Pledgor, the General Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and neither the Pledgor nor
Safety-Kleen shall be under any obligation, or entitlement, to make any inquiry
respecting such authority.
15. NOTICES. All notices, requests and demands to or upon the General
Administrative Agent, any Lender or the Pledgor to be effective shall be in
writing (or by telegraph or telecopy confirmed in writing) and shall be deemed
to have been duly given or made (a) when delivered by hand or (b) if given by
mail, five days after being deposited in the mails by certified mail, return
receipt requested or (c) if by telecopy, when sent and receipt has been
confirmed, addressed at its address or transmission number for notices, in the
case of the Lenders, provided in Section 10.2 of the Credit Agreement and, in
the case of the Pledgor and the General Administrative Agent, at its address set
forth below:
Pledgor: LES Acquisition, Inc.
c/o LES, Inc.
1301 Gervais Street, 3rd Floor
Columbia, South Carolina 29201
Attention: Paul Humphreys
Fax: (803) 933-4346
General Administrative
Agent: Toronto Dominion (Texas), Inc.
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Fax: (416) 982-5535
The General Administrative Agent, each Lender and the Pledgor may change its
address and transmission numbers for notices by notice in the manner provided in
this Section or in the Credit Agreement.
16. SEVERABILITY, Any provision of this Pledge Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11
<PAGE>
17. SECTION HEADINGS. The Section headings used in this Pledge
Agreement are for convenience of reference only and are not to affect the
construction hereof or be taken into consideration in the interpretation hereof.
18. AMENDMENTS IN WRITING; NO WAIVER; PLEDGE CUMULATIVE REMEDIES. (a)
None of the terms or provisions of this Pledge Agreement may be waived, amended,
supplemented or otherwise modified except by a written instrument executed by
the Pledgor and the General Administrative Agent in accordance with Section 14.1
of the Credit Agreement, PROVIDED that any provision of this Pledge Agreement
may be waived by the General Administrative Agent and the Lenders in a letter or
agreement executed by the General Administrative Agent or by telecopy from the
General Administrative Agent.
(b) Neither the General Administrative Agent nor any Lender shall by
any act (except by a written instrument pursuant to Section 18(a) hereof),
delay, indulgence, omission or otherwise be deemed to have waived any right or
remedy hereunder or to have acquiesced in any Default or Event of Default or in
any breach of any of the terms and conditions hereof. No failure to exercise,
nor any delay in exercising, on the part of the General Administrative Agent or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof No single or partial exercise of any right, power or privilege hereunder
shall preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. A waiver by the General Administrative Agent or
any Lender of any right or remedy hereunder on any one occasion shall not be
construed as a bar to any right or remedy which the General Administrative Agent
or such Lender would otherwise have on any future occasion.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
19. SUCCESSORS AND ASSIGNS. This Pledge Agreement shall be binding
upon the successors and assigns of the Pledgor and shall inure to the benefit of
the General Administrative Agent and the Lenders and their successors and
assigns.
20. GOVERNING LAW. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK
21. Release. At such time as the Loans and the other Obligations shall
have been paid in full and the Commitments have been terminated, the Collateral
shall be released from the Liens created hereby, and this Agreement and all
obligations (other than those expressly stated to survive such termination) of
the General Administrative Agent and the Pledgor hereunder shall terminate, all
without delivery of any instrument or performance of any act by any party, and
all rights to the Collateral shall revert to the Pledgor. At the request and
sole expense of the. Pledgor following any such termination, the Administration
Agent shall deliver to the Pledgor any Collateral held by the General
Administrative Agent hereunder, and promptly execute and deliver to the Pledgor
such documents as the Pledgor shall reasonably request to evidence such
termination.
12
<PAGE>
22. EFFECTIVENESS. All provisions of this Agreement relating to the
Collateral will become effective upon the earliest delivery of any Collateral
hereunder. All Pledged Stock pledged hereunder shall be described on a
supplement to Schedule I delivered at such time. This Agreement shall
automatically be deemed to be supplemented upon delivery of such supplement to,
and acceptance by, the General Administrative Agent. All such Collateral
described on any such supplement to Schedule I shall be deemed to be Collateral
under this Agreement.
IN WITNESS WHEREOF, the undersigned has caused this Pledge Agreement
to be duly executed and delivered as of the date first above written.
LES ACQUISITION, INC.
By:_________________________________
Title:
13
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned Safety-Kleen Corp. whose common stock is pledged
pursuant to the Acquisition Corp. Pledge Agreement, dated as of April 3, 1998
(the "Pledge Agreement"), made by LES Acquisition, Inc. in favor of the General
Administrative Agent, hereby acknowledges receipt of a copy thereof and agrees
to be bound thereby and to comply with the terms thereof insofar as such terms
are applicable to it. The undersigned agrees to notify the General
Administrative Agent promptly in writing of the occurrence of any of the events
described in paragraph 5(a) of the Pledge Agreement. The undersigned further
agrees that the terms of paragraph 9(c) of the Pledge Agreement shall apply to
it, MUTATIS MUTANDIS, with respect to all actions that may be required of it
under or pursuant to or arising out of Section 10 of the Pledge Agreement.
SAFETY-KLEEN CORP.
By:_________________________________
Title:
<PAGE>
Schedule I
To Pledge
Agreement
----------
DESCRIPTION OF PLEDGED STOCK
Common Stock, with par value $0.10, of Safety-Kleen Corp., a
Wisconsin corporation, either (i) represented by stock certificates as follows:
Certificate Certificate No. of
No. Date Shares
----------- ----------- ------
97089 March 31, 1998 268,425
97075 March 31, 1998 49,543,416
or (ii) _______ shares of which have been transferred by book-entry delivery
thereof to an account of [ ] for the benefit of the General Administrative Agent
with __________________ - [a Clearing Corporation] pursuant to Section 3(b) of
the Pledge Agreement.
<PAGE>
EXHIBIT A
---------
FORM OF
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT, dated as of ____________, 1998
(this "SUPPLEMENT"), made by LES ACQUISITION, INC. (the "PLEDGOR"), in favor of
TORONTO-DOMINION (TEXAS), INC., as General Administrative Agent (the "GENERAL
ADMINISTRATIVE AGENT"), under the Amended and Restated Credit Agreement, dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), with LES Inc., a Delaware corporation (the
"COMPANY"), and Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation (the "CANADIAN BORROWER"; together with the Company, the
"BORROWERS"), the several banks and other financial institutions from time to
time parties thereto (the "LENDERS"), the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, and the Managing Agents, Co-Documentation Agents and
Syndication Agents identified therein.
1. This Supplement is executed and delivered pursuant to the
terms of that certain Acquisition Pledge Agreement, dated as of April 3, 1998
(as supplemented by this Supplement and as the same has been and may hereafter
be supplemented by any other Pledge Agreement Supplement, amended by any
amendment or otherwise modified, the "PLEDGE AGREEMENT"), made by the Pledgor in
favor of the General Administrative Agent.
Terms defined in the Pledge Agreement and used herein are so used as so defined.
2. The Pledgor confirms and reaffirms the security interest in
the Pledged Stock granted to the General Administrative Agent under the Pledge
Agreement and, as additional collateral security for the prompt and complete
payment and performance when due of all the Pledgor's Obligations and in order
to induce the Lenders to make additional Loans to the Borrowers in accordance
with the terms of the Credit Agreement, the Pledgor hereby pledges to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the General Administrative Agent, for the ratable benefit of the
Lenders, a first priority hen on, and security interest in, all of the Pledgor's
right, title and interest in the Additional Pledged Stock listed on Schedule I
annexed hereto and all proceeds thereof.
3. The Pledgor hereby represents and warrants that the
representations and warranties contained in Section 4 of the Pledge Agreement
are true and correct on the date of this Supplement with references therein to
"Pledged Stock" to include the Additional Pledged Stock listed on Schedule I
hereto.
4. This Supplement is supplemental to the Pledge Agreement,
forms a part thereof and is subject to all the terms thereof. Pledged Stock
does, and shall be deemed to, include each item listed on Schedule I hereto and
each such item shall be and is included within the meaning of the term
"Additional Pledged Stock" as such term is used in the Pledge Agreement.
1
<PAGE>
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to
be duly executed and delivered by its duly authorized officer on the date first
set forth above.
LES ACQUISITION, INC.
By:___________________________
Title:
2
<PAGE>
Schedule I
To Pledge
Agreement Supplement
--------------------
DESCRIPTION OF ADDITIONAL PLEDGED STOCK
COMMON Stock, with par value $0.10, of Safety-Kleen Corp., a
Wisconsin corporation, either (i) represented by stock certificates as follows:
Certificate Certificate No. of
No. Date Shares
----------- ----------- ------
or (ii)_________ shares of which have been transferred by book-entry delivery
thereof to an account of [ ] for the benefit of the General Administrative Agent
with _________________________- [a Clearing Corporation] pursuant to Section
3(b) of the Pledge Agreement.
3
<PAGE>
ACKNOWLEDGEMENT AND CONSENT
The undersigned Safety-Kleen Corp. whose common stock is pledged
pursuant to the Acquisition Corp. Pledge Agreement, dated as of April 3, 1998
(the "Pledge Agreement"), made by LES Acquisition, Inc. in favor of the General
Administrative Agent, hereby acknowledges receipt of a copy thereof. The
undersigned agrees to notify the General Administrative Agent promptly in
writing of the occurrence of any of the events described in paragraph 5(a) of
the Pledge Agreement. The undersigned further agrees that the terms of paragraph
9(c) of the Pledge Agreement shall apply to it, MUTATIS MUTANDIS, with respect
to all actions that may be required of it under or pursuant to or arising out of
Section 10 of the Pledge Agreement.
SAFETY-KLEEN CORP.
By: _________________________
Title: Assistant General Counsel and
Secretary
<PAGE>
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT, dated as of April 7, 1998 (this
"SUPPLEMENT"), made by LES ACQUISITION, INC. (the "PLEDGOR"), in favor of
TORONTODOMINION (TEXAS), INC., as General Administrative Agent (the "GENERAL
ADMINISTRATIVE AGENT"), under the Amended and Restated Credit Agreement, dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), with LES Inc., a Delaware corporation (the
"COMPANY"), and Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation (the "CANADIAN BORROWER"; together with the Company, the
"BORROWERS"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, and the Managing Agents, Co-Documentation Agents and
Syndication Agents identified therein.
1. This Supplement is executed and delivered pursuant to the terms of
that certain Acquisition Pledge Agreement, dated as of April 3, 1998 (as
supplemented by this Supplement and as the same has been and may hereafter be
supplemented by any other Pledge Agreement Supplement, amended by any amendment
or otherwise modified, the "PLEDGE AGREEMENT"), made by the Pledgor in favor of
the General Administrative Agent. Terms defined in the Pledge Agreement and used
herein are so used as so defined.
2. The Pledgor confirms and reaffirms the security interest in the
Pledged Stock granted to the General ADMINISTRATIVE Agent under the Pledge
Agreement and, as additional collateral security for the prompt and complete
payment and performance when due of all the Pledgor's Obligations and in order
to induce the Lenders to make additional Loans to the Borrowers in accordance
with the terms of the Credit Agreement, the Pledgor hereby pledges to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the General Administrative Agent, for the ratable benefit of the
Lenders, a first priority lien on, and security interest in, all of the
Pledgor's right, title and interest in the Additional Pledged Stock listed on
Schedule I annexed hereto and all proceeds thereof.
3. The Pledgor hereby represents and warrants that the representations
and warranties contained in Section 4 of the Pledge Agreement are true and
correct on the date of this Supplement with references therein to "Pledged
Stock" to include the Additional Pledged Stock listed on Schedule I hereto.
4. This Supplement is supplemental to the Pledge Agreement, forms a
part thereof and is subject to all the terms thereof. Pledged Stock does, and
shall be deemed to, include each item listed on Schedule I hereto and each such
item shall be and is included within the meaning of the term "Additional Pledged
Stock" as such term is used in the Pledge Agreement.
1
<PAGE>
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed and delivered by its duly authorized officer on the date first set
forth above.
LES ACQUISITION, INC.
By:________________________
Title: Secretary
2
<PAGE>
Schedule I
To Pledge
Agreement Supplement
--------------------
DESCRIPTION OF ADDITIONAL PLEDGED STOCK
Common Stock, with par value $0.10, of Safety-Kleen Corp., a Wisconsin
corporation, represented by stock certificates as follows:
Certificate Certificate No. of
No. Date Shares
----------- ----------- ------
97103 April 7, 1998 5,923,652
97104 April 7, 1998 15,830
3
<PAGE>
PLEDGE AGREEMENT SUPPLEMENT
PLEDGE AGREEMENT SUPPLEMENT, dated as of April 10, 1998 (this
"SUPPLEMENT"), made by LES ACQUISITION, INC. (the "PLEDGOR"), in favor of
TORONTODOMINION (TEXAS), INC., as General Administrative Agent (the "GENERAL
ADMINISTRATIVE AGENT"), under the Amended and Restated Credit Agreement, dated
as of April 3, 1998 (as amended, supplemented or otherwise modified from time to
time, the "CREDIT AGREEMENT"), with LES Inc., a Delaware corporation (the
"COMPANY"), and Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation (the "CANADIAN BORROWER"; together with the Company, the
"BORROWERS"), the several banks and other financial institutions from time to
time parties thereto (the "Lenders"), the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, and the Managing Agents, Co-Documentation Agents and
Syndication Agents identified therein.
1. This Supplement is executed and delivered pursuant to the terms of
that certain Acquisition Pledge Agreement, dated as of April 3, 1998 (as
supplemented by this Supplement and as the same has been and may hereafter be
supplemented by any other Pledge Agreement Supplement, amended by any amendment
or otherwise modified, the "PLEDGE AGREEMENT"), made by the Pledgor in favor of
the General Administrative Agent. Terms defined in the Pledge Agreement and used
herein are so used as so defined.
2. The Pledgor confirms and reaffirms the security interest in the
Pledged Stock granted to the General Administrative Agent under the Pledge
Agreement and, as additional collateral security for the prompt and complete
payment and performance when due of all the Pledgor's Obligations and in order
to induce the Lenders to make additional Loans to the Borrowers in accordance
with the terms of the Credit Agreement, the Pledgor hereby pledges to the
General Administrative Agent, for the ratable benefit of the Lenders, and hereby
grants to the General Administrative Agent, for the ratable benefit of the
Lenders, a first priority lien on, and security interest in, all of the
Pledgor's right title and interest in the Additional Pledged Stock listed on
Schedule I annexed hereto and all proceeds thereof.
3. The Pledgor hereby represents and warrants that the representations
and warranties contained in Section 4 of the Pledge Agreement are true and
correct on the date of this Supplement with references therein to "Pledged
Stock" to include the Additional Pledged Stock listed on Schedule I hereto.
4. This Supplement is supplemental to the Pledge Agreement, forms a
part thereof and is subject to all the terms thereof. Pledged Stock does, and
shall be deemed to, include each item listed on Schedule I hereto and each such
item shall be and is included within the meaning of the term "Additional Pledged
Stock" as such term is used in the Pledge Agreement.
1
<PAGE>
IN WITNESS WHEREOF, the Pledgor has caused this Supplement to be duly
executed and delivered by its DAILY authorized officer on the date first set
forth above.
LES ACQUISITION, INC.
By:___________________________
Title: Secretary
2
<PAGE>
Schedule I
To Pledge
Agreement Supplement
--------------------
DESCRIPTION OF ADDITIONAL PLEDGED STOCK
COMMON Stock, with par value $0.10, of Safety-Kleen Corp., a Wisconsin
corporation, represented by stock certificates as follows:
Certificate Certificate No. of
No. Date Shares
97115 April 3, 1998 3
97106 April 3, 1998 256
3
<PAGE>
EXHIBIT C
---------
FORM OF
REVOLVING CREDIT NOTE
U.S.$ New York, New York
-----------------
April __, 1998
FOR VALUE RECEIVED, the undersigned, LES, INC., a Delaware corporation
(the "COMPANY"), hereby unconditionally promises to pay to the order of (the
"LENDER") at the office of _______________, located at ____________________, New
York, New York ________, in lawful money of the United States of America and in
immediately available funds, on the Revolving Credit Termination Date (as
defined in the Credit Agreement referred to below) the principal amount of (a)
UNITED STATES DOLLARS (U.S.$ ), or, if less, (b) the aggregate unpaid principal
amount of all Revolving Credit Loans made by the Lender to the Company pursuant
to Section 2.4 of such Credit Agreement. The Company further agrees to pay
interest in like money at such office on the unpaid principal amount hereof from
time to time outstanding at the rates and on the dates specified in Section 6.6
of such Credit Agreement.
The holder of this Note is authorized to record on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of each
Revolving Credit Loan made by the Lender pursuant to such Credit Agreement and
the date and amount of each payment or prepayment of principal thereof, each
continuation thereof, each conversion of all or a portion thereof to another
Type and, in the case of LIBOR Loans, the length of each Interest Period and the
applicable LIBOR Rate with respect thereto. Each such recordation shall
constitute PRIMA FACIE evidence of the accuracy of the information so recorded,
PROVIDED that the failure to make any such recordation or any error in any such
recordation shall not affect the obligations of the Company under such Credit
Agreement or this Note.
This Note (a) is one of the Revolving Credit Notes referred to in the
Amended and Restated Credit Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Company, Laidlaw Environmental Services (Canada) Ltd., the Lender, the
other banks and financial institutions or entities from time to time parties
thereto, Toronto Dominion (Texas), Inc., as General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, The Bank of Nova Scotia, NationsBank, N.A., The First
National Bank of Chicago and Wachovia Bank, N.A., as Managing Agents, The Bank
of Nova Scotia and The First National Bank of Chicago, as Co-Documentation
Agents, and NationsBank, N.A., as Syndication Agent, (b) is subject to the
provisions of the Credit Agreement and (c) is subject to optional and mandatory
prepayment in whole or in part as provided in the Credit Agreement. This
Revolving Credit Note is secured and guaranteed as provided in the Loan
1
<PAGE>
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
This Note and the other Revolving Credit Notes issued of even date
herewith have been issued as replacements and in exchange for (but not in
payment or satisfaction of) the Revolving Credit Notes dated May 15, 1997 in the
aggregate principal amount of $275,000,000.
Upon the occurrence of any one or more Events of Default specified in
the Credit Agreement, all amounts then remaining unpaid on this Note shall
become, or may be declared to be, immediately due and payable, all as provided
in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
LES, INC.
By: ______________________
Title:
2
<PAGE>
<TABLE>
<CAPTION>
Schedule A
To Revolving Credit Note
------------------------
BASE RATE LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Amount Amount of Principal Amount of Base Rate Unpaid Principal
Amount of Converted to of Base Rate Loans Loans Converted to Balance of
Date Base Rate Loans Base Rate Loans Repaid LIBOR Loans Base Rate Loans Notation Made By
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule B
To Revolving Credit Note
------------------------
LIBOR LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Amount Interest Period Amount of Principal Amount of LIBOR Unpaid Principal
Amount of Converted to and LIBOR Rate of LIBOR Loans Repaid Loans Converted Balance of LIBOR Notation
Date LIBOR Loans LIBOR Loans with Respect Thereto to Base Rate Loans Loans Made By
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT D
---------
FORM OF
U.S. TERM NOTE
U.S.$______________________ New York, New York
April __, 1998
FOR VALUE RECEIVED, the undersigned, LES, INC., a Delaware corporation
(the "COMPANY"), hereby, unconditionally promises to pay to the order of
________________________ (the "LENDER"), at the office of _______________,
located at _______________________, New York, New York ______, in lawful money
of the United States of America and in immediately available funds, the
principal amount of _____________ UNITED STATES DOLLARS (U.S.$________), or, if
less, the unpaid principal amount of the Tranche [A] [B] [C] Term Loan of the
Lender made to the Company pursuant to Section 2.1 of the Credit Agreement (as
hereinafter defined). The principal amount of this Note shall be payable in the
amounts and on the dates specified in Section 2.3[(a)] [(b)] [(c)] of the Credit
Agreement. The Company further agrees to pay interest in like money at such
office on the unpaid principal amount hereof from time to time outstanding at
the rates and on the dates specified in Section 6.6 of the Credit Agreement.
The holder of this Note is authorized to record on the schedules
annexed hereto and made a part hereof or on a continuation thereof which shall
be attached hereto and made a part hereof the date, Type and amount of the
Tranche [A] [B] [C] Term Loan of the Lender and the date and amount of each
payment or prepayment of principal with respect thereto, each conversion of all
or a portion thereof to another Type, each continuation of all or a portion
thereof as the same Type and, in the case of LIBOR Loans, the length of each
Interest Period with respect thereto. Each such recordation shall constitute
PRIMA FACIE evidence of the accuracy of the information so recorded. The failure
to make any such recordation (or any error therein) shall not affect the
obligations of the Company in respect of the Credit Agreement or this Note.
This Note (a) is one of the U.S. Term Notes referred to in the Amended
and Restated Credit Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Company, Laidlaw Environmental Services (Canada) Ltd., the Lender, the
several other banks and financial institutions or entities from time to time
parties thereto, Toronto Dominion (Texas), Inc., as General Administrative
Agent, The Toronto-Dominion Bank, as Canadian Administrative Agent, TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank, N.A.,
The First National Bank of Chicago and Wachovia Bank, N.A., as Managing Agents,
The Bank of Nova Scotia and The First National Bank of Chicago, as
Co-Documentation Agents, and NationsBank, N.A., as Syndication Agent, (b) is
subject to the provisions of the Credit Agreement and (c) is subject to
1
<PAGE>
optional and mandatory prepayment in whole or in part as provided in the Credit
Agreement. This Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
This Note and the other Tranche [A] [B] [C] Term Notes issued of even
date herewith have been issued as replacements and in exchange for (but not in
payment or satisfaction of) the Tranche [A] [B] [C] Term Notes dated May 15,
1997 in the aggregate principal amount of $______________.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
LES, INC.
By:
-----------------------
Title:
2
<PAGE>
<TABLE>
<CAPTION>
Schedule A
To U.S.Term Note
----------------
LOANS, CONVERSIONS AND REPAYMENTS OF BASE RATE LOANS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Amount Amount of Principal Amount of Base Rate Unpaid Principal
Amount of Converted to of Base Rate Loans Loans Converted to Balance of
Date Base Rate Loans Base Rate Loans Repaid LIBOR Loans Base Rate Loans Notation Made By
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
- ---------- ------------------ ------------------ ---------------------- --------------------- ------------------- ------------------
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Schedule B
To U.S.Term Note
----------------
LOANS, CONTINUATIONS, CONVERSIONS AND REPAYMENTS OF LIBOR LOANS
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Amount Interest Period Amount of Principal Amount of LIBOR Unpaid Principal
Amount of Converted to and LIBOR Rate of LIBOR Loans Repaid Loans Converted Balance of LIBOR Notation
Date LIBOR Loans LIBOR Loans with Respect Thereto to Base Rate Loans Loans Made By
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
- ---------- ----------- ------------- -------------------- ---------------------- ------------------- ------------ ----- ------------
====================================================================================================================================
</TABLE>
<PAGE>
EXHIBIT E
---------
FORM OF
CANADIAN TERM NOTE
C$______________________ New York, New York
April__, 1998
FOR VALUE RECEIVED, the undersigned, LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD., a Canadian corporation (the "CANADIAN BORROWER"), hereby,
unconditionally promises to pay to the order of
____________________________________ (the "Lender"), at the office of
_____________________ located at ________________________, in the lawful money
of Canada and in immediately available funds, the principal amount of
_____________ CANADIAN DOLLARS (C$________), or, if less, the unpaid principal
amount of the Canadian Term Loan of the Lender made to the Canadian Borrower
pursuant to Section 4.1 of the Credit Agreement (as hereinafter defined). The
principal amount of this Note shall be payable in the amounts and on the dates
specified in Section 4.3 of the Credit Agreement. The Canadian Borrower further
agrees to pay interest in like money at such office on the unpaid principal
amount hereof from time to time outstanding at the rates and on the dates
specified in Section 6.6 of the Credit Agreement.
The holder of this Note is authorized to record on the schedule annexed
hereto and made a part hereof or on a continuation thereof which shall be
attached hereto and made a part hereof the date and amount of the Canadian Term
Loan of the Lender and the date and amount of each payment or prepayment of
principal thereof. Each such recordation shall constitute prima FACIE evidence
of the accuracy of the information endorsed. The failure to make any such
recordation (or any error therein) shall not affect the obligations of the
Canadian Borrower under the Credit Agreement or this Note.
This Note (a) is one of the Canadian Term Notes referred to in the
Amended and Restated Credit Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among LES, Inc., the Canadian Borrower, the Lender, the several other banks and
financial institutions or entities from time to time parties thereto, Toronto
Dominion (Texas), Inc., as General Administrative Agent, The Toronto-Dominion
Bank, as Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger,
The Bank of Nova Scotia, NationsBank, N.A., The First National Bank of Chicago
and Wachovia Bank, N.A., as Managing Agents, The Bank of Nova Scotia and The
First National Bank of Chicago, as Co-Documentation Agents, and NationsBank,
N.A., as Syndication Agent, (b) is subject to the provisions of the Credit
Agreement and (c) is subject to optional and mandatory prepayment in whole or in
part as provided in the Credit Agreement. This Note is secured and guaranteed as
provided in the Loan Documents. Reference is hereby made to the Loan Documents
for a description of the properties and assets in which a security interest has
1
<PAGE>
been granted, the nature and extent of the security and the guarantees, the
terms and conditions upon which the security interests and each guarantee were
granted and the rights of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all
amounts then remaining unpaid on this Note shall become, or may be declared to
be, immediately due and payable, all as provided in the Credit Agreement.
All parties now and hereafter liable with respect to this Note, whether
maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
Unless otherwise defined herein, terms defined in the Credit Agreement
and used herein shall have the meanings given to them in the Credit Agreement.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
-------------------------
Title:
2
<PAGE>
Schedule A
To Canadian Term Note
---------------------
CANADIAN TERM LOANS AND REPAYMENTS OF CANADIAN TERM LOANS
- --------------------------------------------------------------------------------
Amount of Amount of Principal Unpaid Principal
Canadian Term of Canadian Term of Balance of Notation
Date Loans Loans Repaid Canadian Term Loans Made By
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
- ----------- -------------- --------------------- -------------------- ----------
================================================================================
<PAGE>
EXHIBIT G
---------
FORM OF
ACCEPTANCE NOTE
C$ Toronto, Ontario
-----
---------, ---
FOR VALUE RECEIVED, the undersigned, LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD., a corporation incorporated, organized and existing under the laws
of the Province of [Ontario], Canada (the "CANADIAN BORROWER"), hereby
unconditionally promises to pay to the order of [INSERT NAME OF LENDER] (the
"LENDER") at the office of The Toronto-Dominion Bank, located at
_______________________, in lawful money of Canada and in immediately available
funds, the principal amount of [ ] CANADIAN DOLLARS (C$ ). The undiscounted
principal amount hereof shall be repaid on ___________ ___, ____. The Canadian
Borrower further agrees that interest shall be paid herein, in advance, by the
Lender discounting the face amount of this Acceptance Note in the manner
described in Sections 5.3 and 5.7 of the Credit Agreement described below
(capitalized terms used herein without definition being defined as set forth
therein).
This Acceptance Note (a) is one of the Acceptance Notes referred to in
the Amended and Restated Credit Agreement, dated as of April 3, 1998 (as
amended, supplemented or otherwise modified from time to time, the "CREDIT
Agreement"), among LES, Inc., the Canadian Borrower, the Lender, the several
other banks and financial institutions or entities from time to time parties
thereto, Toronto Dominion (Texas), Inc., as General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, The Bank of Nova Scotia, NationsBank, N.A., The First
National Bank of Chicago and Wachovia Bank, N.A., as Managing Agents, The Bank
of Nova Scotia and The First National Bank of Chicago, as Co-Documentation
Agents, and NationsBank, N.A., as Syndication Agent, and (b) is subject to the
provisions of the Credit Agreement.
This Acceptance Note is secured and guaranteed as provided in the Loan
Documents. Reference is hereby made to the Loan Documents for a description of
the properties and assets in which a security interest has been granted, the
nature and extent of the security and the guarantees, the terms and conditions
upon which the security interests and each guarantee were granted and the rights
of the holder of this Note in respect thereof.
Upon the occurrence of any one or more of the Events of Default, all amounts
then remaining unpaid on this Note shall become, or may be declared to be,
immediately due and payable, all as provided in the Credit Agreement.
/ Insert maturity date for Acceptances created simultaneously herewith.
1
<PAGE>
All parties now and hereafter liable with respect to this Note,
whether maker, principal, surety, guarantor, endorser or otherwise, hereby waive
presentment, demand, protest and all other notices of any kind.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
LAIDLAW ENVIRONMENTAL SERVICES
(CANADA) LTD.
By:
Name:
Title:
2
<PAGE>
EXHIBIT H
---------
FORM OF
PREPAYMENT OPTION NOTICE
Attention of [ ]
Telecopy No. [ ]
[Date]
Ladies and Gentlemen:
The undersigned, Toronto Dominion (Texas), Inc., as general
administrative agent (in such capacity, the "GENERAL ADMINISTRATIVE AGENT") for
the Lenders, refers to the Amended and Restated Credit Agreement, dated as of
April 3, 1998 (as amended, modified, extended or restated from time to time, the
"CREDIT AGREEMENT"), among LES, Inc., Laidlaw Environmental Services (Canada)
Ltd., the Lenders from time to time parties thereto, the General Administrative
Agent, The Toronto-Dominion Bank, as Canadian Administrative Agent, TD
Securities (USA) Inc., as Arranger, The Bank of Nova Scotia, NationsBank, N.A.,
The First National Bank of Chicago and Wachovia Bank, N.A., as Managing Agents,
The Bank of Nova Scotia and The First National Bank of Chicago, as
Co-Documentation Agents, and NationsBank, N.A., as Syndication Agent.
Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Credit Agreement. The General
Administrative Agent hereby gives notice of an offer of prepayment made by the
Company pursuant to Section 6.3(i) of the Credit Agreement of the Tranche [B]
[C] Prepayment Amount. Amounts applied to prepay the Tranche [B] [C] Term Loans
shall be applied pro rata to the Tranche [B] [C] Term Loan held by you. The
portion of the prepayment amount to be allocated to the Tranche [B] [C] Term
Loan held by you and the date on which such prepayment will be made to you
(should you elect to receive such prepayment) are set forth below:
(A) Total Tranche [B] [C] Term Loan Prepayment
Amount ----------
(B) Portion of Tranche [B] [C] Term Loan
Prepayment Amount to be received by you ----------
(C) Mandatory Prepayment Date (10 Business Days
after the date of this Prepayment Option Notice) ----------
1
<PAGE>
If you wish to receive the portion of the Tranche [B] [C] Term Loan
Prepayment Amount to be allocated to you on the Mandatory Prepayment Date
indicated in paragraph (B) above, please sign this notice in the space provided
below as evidence of your acceptance and return it via telecopy to the attention
of [___________________] at Toronto Dominion (Texas), Inc., NO LATER THAN
[10:00] A.M., NEW YORK CITY TIME, on the Mandatory Prepayment Date, at Telecopy
No. [________________].
TORONTO DOMINION (TEXAS), INC., as General
Administrative Agent
By:
-----------------------------------
Name:
Title:
[Lender]
By:
-----------------------------------
Name:
Title:
2
<PAGE>
EXHIBIT I
---------
FORM OF
CLOSING CERTIFICATE
Pursuant to Section 8.1(i)of the Amended and Restated Credit Agreement,
dated as of April 3, 1998 (the "CREDIT AGREEMENT"), among LES, Inc., a Delaware
corporation, Laidlaw Environmental Services (Canada) Ltd., a Canadian
corporation, the several banks and other financial institutions or entities from
time to time parties thereto (the "LENDERS"), Toronto Dominion (Texas), Inc., as
General Administrative Agent, The Toronto-Dominion Bank , as Canadian
Administrative Agent, TD Securities (USA) Inc., as Arranger, The Bank of Nova
Scotia, NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank,
N.A., as Managing Agents, The Bank of Nova Scotia and The First National Bank of
Chicago, as Co-Documentation Agents, and NationsBank, N.A., as Syndication
Agent, the undersigned, ____________________ of [Loan Party] (the "COMPANY"),
hereby certifies as follows:
1. The representations and warranties of the Company set forth in the
Credit Agreement and each of the other Loan Documents to which it is a
party or which are contained in any certificate, document or financial or
other statement furnished pursuant to or in connection with the Credit
Agreement or any Loan Document are true and correct on and as of the date
hereof with the same effect as if made on the date hereof, except for
representations and warranties expressly stated to relate to a specific
earlier date, in which case such representations and warranties are true
and correct as of such earlier date;
2. No Default or Event of Default has occurred and is continuing as of
the date hereof or will occur after giving effect to the making of the
Loans and the issuance of the Letters of Credit requested to be made and/or
issued on the date hereof or the consummation of each of the transactions
contemplated by the Loan Documents; and
3. _________________ is and at all times since ________________, 199_,
has been the duly elected and qualified [Assistant] Secretary of the
Company the signature set forth on the signature line for such officer
below is such officer's true and genuine signature;
and the undersigned [Assistant] Secretary of the Company hereby certifies as
follows:
4. There are no liquidation or dissolution proceedings pending or to
the knowledge of the [Assistant] Secretary of the Company threatened
against the Company or any of its Subsidiaries, nor has any other event
occurred affecting or threatening the corporate existence of the Company or
any of its Subsidiaries;
5. The Company is a _________________ duly organized, validly existing
and in good standing under the laws of _________________;
1
<PAGE>
6. (a) Attached hereto as EXHIBIT A is a true and complete copy of
resolutions duly adopted by the Board of Directors of the Company on
__________ __, 1998; such resolutions have not in any way been amended,
modified, revoked or rescinded and have been in full force and effect since
their adoption to and including the date hereof and are now in full force
and effect; such resolutions are the only corporate proceedings of the
Company now in force relating to or affecting the matters referred to
therein;
(b) attached hereto as EXHIBIT B is a true and complete copy of the
By-laws of the Company as in effect at all times since __________ __, 19__,
to and including the date hereof; and
(c) attached hereto as EXHIBIT C is a true and complete copy of the
Certificate of Incorporation of the Company as in effect at all times since
__________ __, 19__, to and including the date hereof; and
7. The following persons are now duly elected and qualified officers
of the Company, holding the offices indicated next to their respective
names below, and such officers have held such offices with the Company at
all times since __________ __, 19__, to and including the date hereof, and
the signatures appearing opposite their respective names below are the true
and genuine signatures of such officers, and each of such officers is duly
authorized to execute and deliver on behalf of the Company, the Loan
Documents to which it is a party and any certificate or other document to
be delivered by the Company pursuant to any such Loan Document:
NAME OFFICE SIGNATURE
----------- ----------- ---------------
----------- ----------- ---------------
Unless otherwise defined herein, capitalized terms which are defined in
the Credit Agreement and used herein are so used as so defined.
IN WITNESS WHEREOF, the undersigned have hereunto set our names.
[NAME OF COMPANY] [NAME OF COMPANY]
By:____________________________ By:____________________________
Name: Name:
Title: Title:
Date: _____________, 1998
2
<PAGE>
EXHIBIT L
---------
FORM OF
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Amended and Restated Credit Agreement, dated
as of April 3, 1998 (as amended, modified, extended or restated from time to
time, the "CREDIT AGREEMENT"), among LES, Inc., Laidlaw Environmental Services
(Canada) Ltd., the Lenders from time to time parties thereto, Toronto Dominion
(Texas) Inc., as the General Administrative Agent, The Toronto-Dominion Bank, as
Canadian Administrative Agent, TD Securities (USA) Inc., as Arranger, The Bank
of Nova Scotia, NationsBank, N.A., The First National Bank of Chicago, and
Wachovia Bank, N.A., as Managing Agents, The Bank of Nova Scotia and The First
National Bank of Chicago, as Co-Documentation Agents, and NationsBank, N.A., as
Syndication Agent. Unless otherwise defined herein, terms defined in the Credit
Agreement and used herein shall have the meanings given to them in the Credit
Agreement.
The Assignor identified on Schedule 1 hereto (the "ASSIGNOR") and the
Assignee identified on Schedule 1 hereto (the "ASSIGNEE") agree as follows:
1. The Assignor hereby irrevocably sells and assigns to the Assignee
without recourse to the Assignor, and the Assignee hereby irrevocably purchases
and assumes from the Assignor without recourse to the Assignor, as of the
Effective Date (as defined below), the interest set forth on Schedule 1 hereto
(the "ASSIGNED INTEREST") in and to the Assignor's rights and obligations under
the Credit Agreement with respect to those credit facilities contained in the
Credit Agreement as are set forth on Schedule 1 hereto (individually, an
"ASSIGNED FACILITY"; collectively, the "ASSIGNED FACILITIES"), in a principal
amount and/or commitment amount for each Assigned Facility as set forth on
Schedule 1 hereto.
2. The Assignor (a) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or with respect to the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of the Credit Agreement, any other Loan Document or any other instrument or
document furnished pursuant thereto, other than that the Assignor has not
created any adverse claim upon the interest being assigned by it hereunder and
that such interest is free and clear of any such adverse claim; (b) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrowers, any of their respective Subsidiaries, any
other Loan Party or any other obligor or the performance or observance by the
Borrowers, any of their respective Subsidiaries, any other Loan Party or any
other obligor of any of their respective obligations under the Credit Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto or thereto; and (c) attaches any Notes held by it evidencing the
Assigned Facilities and (i) requests that the Administrative Agents, upon
request by the Assignee, exchange any attached Notes for a new Note or
1
<PAGE>
Notes payable to the Assignee and (ii) if the Assignor has retained any interest
in the Assigned Facility, requests that the Administrative Agents exchange any
attached Notes for a new Note or Notes payable to the Assignor, in each case in
amounts which reflect the assignment being made hereby (and after giving effect
to any other assignments which have become effective on the Effective Date).
3. The Assignee (a) represents and warrants that it is legally
authorized to enter into this Assignment and Acceptance; (b) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements delivered pursuant to Section 9.1 thereof, the other Loan
Documents and such other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into this Assignment and
Acceptance; (c) agrees that it will, independently and without reliance upon the
Assignor, the Administrative Agents or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement, the other Loan Documents or any other instrument or document
furnished pursuant hereto or thereto; (d) appoints and authorizes the
Administrative Agents to take such action as agent on its behalf and to exercise
such powers and discretion under the Credit Agreement, the other Loan Documents
or any other instrument or document furnished pursuant hereto or thereto as are
delegated to the Administrative Agents by the terms thereof, together with such
powers as are incidental thereto; and (e) agrees that it will be bound by the
provisions of the Credit Agreement and will perform in accordance with its terms
all the obligations which by the terms of the Credit Agreement are required to
be performed by it as a Lender including, if it is organized under the laws of a
jurisdiction outside the United States, its obligation pursuant to Section
6.12(b) of the Credit Agreement.
4. The effective date of this Assignment and Acceptance shall be the
date set forth on Schedule 1 hereto (the "EFFECTIVE DATE"). Following the
execution of this Assignment and Acceptance, it will be delivered to the
[General Administrative Agent] for acceptance by it and recording by the
Administrative Agents pursuant to the Credit Agreement, effective as of the
Effective Date (which shall not, unless otherwise agreed to by the
Administrative Agents, be earlier than five Business Days after the date of such
acceptance and recording by the Administrative Agents).
5. Upon such acceptance and recording, from and after the Effective
Date, the Administrative Agents shall make all payments in respect of the
Assigned Interest (including payments of principal, interest, fees and other
amounts) to the Assignee whether such amounts have accrued prior to the
Effective Date or accrue subsequent to the Effective Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments by the
Administrative Agents for periods prior to the Effective Date or with respect to
the making of this assignment directly between themselves.
2
<PAGE>
6. From and after the Effective Date, (a) the Assignee shall be a party
to the Credit Agreement and, to the extent provided in this Assignment and
Acceptance, have the rights and obligations of a Lender thereunder and under the
other Loan Documents and shall be bound by the provisions thereof and (b) the
Assignor shall, to the extent provided in this Assignment and Acceptance,
relinquish its rights and be released from its obligations under the Credit
Agreement.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed as of the date first above written by their respective
duly authorized officers on Schedule 1 hereto.
3
<PAGE>
SCHEDULE 1
- -----------------------------------------------------------------
Name of Assignor:
Name of Assignee:
Notices Address:
Payment Instructions:
Effective Date of Assignment:
Credit Principal/Commitment Commitment Percentage
Facility Assigned Amount Assigned Assigned
---------------------------------------------------------------------------
$ %
--------- ---------
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By: By:
---------------------------- ----------------------------
Title: Title:
Accepted: Consented To:
[TORONTO DOMINION (TEXAS) INC., LES, INC.
as General Administrative Agent]
[THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent]
By: By:
----------------------------- ------------------------
Title: Title:
- --------
/ Calculate the Commitment Percentage that is assigned to at least 15 decimal
places and show as a percentage of the
aggregate commitments of all Lenders.
/ The Company's consent is required in the event that the Assignee is not a
Lender or an Affiliate of a Lender prior to effectiveness hereof.
<PAGE>
EXHIBIT M
---------
[MICHIGAN]
AMENDMENT TO MORTGAGE
LAIDLAW ENVIRONMENTAL, INC.
(formerly known as Rollins Environmental, Inc.), Mortgagor
to
TORONTO DOMINION (TEXAS), INC., Mortgagee
This Instrument was prepared by and
after recording should be returned to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Erin L. Rothfuss, Esq.
<PAGE>
AMENDMENT TO MORTGAGE
THIS AMENDMENT TO MORTGAGE, ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (the "AMENDMENT"), dated as of April 3, 1998 is made by
Laidlaw Environmental, Inc. (formerly known as Rollins Environmental, Inc.),
a Delaware corporation ("MORTGAGOR"), whose address is 1301 Gervais Street,
Suite 300, Columbia, South Carolina 29201, to Toronto Dominion (Texas),
Inc., a Delaware corporation, as general administrative agent for the
Lenders referred to below (in such capacity, "MORTGAGEE"), whose address is
909 Fannin Street, Suite 1700, Houston, Texas 77010. References to this
"Amendment" shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Unless
otherwise defined herein, capitalized terms shall have the meanings ascribed
to them in the Credit Agreement (as defined below).
BACKGROUND
WHEREAS, immediately prior to the date hereof, LES, Inc. (formerly
known as Laidlaw Chem-Waste, Inc.), Laidlaw Environmental Services (Canada)
Ltd., the several banks and other financial institutions or entities from
time to time parties thereto (the "PRIOR LENDERS"), Toronto Dominion
(Texas), Inc., as general administrative agent, The Toronto-Dominion Bank,
as Canadian administrative agent, TD Securities (USA) Inc., as advisor to
the Borrowers and arranger of the commitments described herein, and The Bank
of Nova Scotia, NationsBank, N.A. and The First National Bank of Chicago, as
managing agents and NationsBank, N.A., as syndication agent were parties to
the Credit Agreement dated as of May 9, 1997 (as amended, supplemented or
otherwise modified from time to time prior to the date hereof, the "PRIOR
CREDIT AGREEMENT") pursuant to which certain loans and other extensions of
credit were outstanding;
WHEREAS, LES, Inc., a Delaware corporation (the "COMPANY"), Laidlaw
Environmental Services (Canada) Ltd., a Canadian corporation and a wholly
owned Subsidiary of the Company (the "CANADIAN BORROWER", together with the
Company, the "BORROWERS"), the several banks and other financial
institutions or entities from time to time parties thereto (the "LENDERS"),
Toronto Dominion (Texas), Inc., as general administrative agent (as
hereinafter defined, the "GENERAL ADMINISTRATIVE AGENT"), The
Toronto-Dominion Bank, as Canadian administrative agent (as hereinafter
defined, the "CANADIAN ADMINISTRATIVE AGENT"), TD Securities (USA) Inc., as
advisor to the Borrowers and arranger of the commitments (in such
capacities, the "ARRANGER"), and The Bank of Nova Scotia, NationsBank, N.A.,
The First National Bank of Chicago and Wachovia Bank, N.A., as managing
agents (each, in such capacity, a "MANAGING AGENT"), The Bank of Nova Scotia
and The First National Bank of Chicago, as co-documentation agent (each, in
such capacity, a "CO-DOCUMENTATION AGENT"), and NationsBank, N.A., as
syndication agent (in such capacity, the "SYNDICATION AGENT") have
1
<PAGE>
amended and restated the Prior Credit Agreement to (a) increase the amount of
the credit available thereunder and (b) otherwise amend and restate the Prior
Credit Agreement in its entirety as more FULLY set forth in the Credit
Agreement;
WHEREAS, by reason of the amendment and restatement effects of the
Credit Agreement, the Lenders have succeeded to the Prior Lenders' rights and
obligations under the Prior Credit Agreement on the terms and conditions set
forth in the Credit Agreement and after having given effect to such amendment
and restatement, the Commitments of and the amount of the Loans owing to each of
the Lenders are as set forth on Schedule 1. 1A and 1. 1B of the Credit
Agreement;
WHEREAS, a certain Mortgage as more particularly described on Schedule B
attached hereto (the "MORTGAGE") given by Mortgagor to Mortgagee encumbers real
property owned in fee by Mortgagor, together with the improvements located
thereon (the "IMPROVEMENTS") and is more particularly described on Schedule A
attached hereto (the "REAL ESTATE"); and
WHEREAS, Mortgagee, the Canadian Administrative Agent, the Syndication
Agent, the Co-Documentation Agents, the Arranger, the Managing Agents and the
Lenders have entered into the Credit Agreement on the condition (among others)
that Mortgagor execute this Amendment;
NOW THEREFORE, in consideration of the premises and for the sum of Ten
Dollars ($10.00), the receipt and sufficiency of which is hereby acknowledged,
Mortgagor hereby agrees as follows:
1. The "Background" section of the Mortgage is hereby deleted in its
entirety and amended by substituting the following therewith:
BACKGROUND
A. Mortgagor is the owner of the parcels of real property described on
Schedule A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"IMPROVEMENTS"), being collectively referred to as the "REAL ESTATE").
B. Mortgagor is a subsidiary of LES, Inc., a Delaware corporation
("BORROWER"). Borrower (formerly known as Laidlaw Chem-Waste, Inc.) is a party
to that certain Credit Agreement (the "PRIOR CREDIT AGREEMENT") dated as of May
9, 1997 with Laidlaw Environmental Services (Canada) Ltd., Mortgagee and the
financial institutions described and defined therein, which Prior Credit
Agreement has been amended and restated by that certain Amended and Restated
Credit Agreement dated as of April 3, 1998 (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"CREDIT AGREEMENT") among Borrower, the several banks and other financial
institutions from time to time parties thereto (the "LENDERS"), Mortgagee,
Laidlaw Environmental Services (Canada) Ltd. (the "CANADIAN BORROWER"), The
Toronto-Dominion Bank, as Canadian administrative agent, TD Securities (USA)
Inc., as arranger, NationsBank, N.A., as syndication agent, and The Bank of
2
<PAGE>
Nova Scotia, NationsBank, N.A., The First National Bank of Chicago and
Wachovia Bank, N.A., as managing agents. All defined terms used and not defined
herein shall have the meanings assigned thereto in the Credit Agreement.
C. Pursuant to the Credit Agreement, (i) certain of the Lenders have
agreed to make revolving credit loans to Borrower (the "REVOLVING CREDIT
LOANS"); (ii) Certain of the Lenders have agreed to make term loans to Borrower
(the "TERM LOANS"; together with the Revolving Credit Loans, the "LOANS"); (iii)
the Issuing Lender has agreed to issue letters of credit for the account of
Borrower and (iv) pursuant to the Credit Agreement, Borrower has guaranteed term
loans to be made by certain of the Lenders to the Canadian Borrower under the
Credit Agreement and certain loans by The Toronto-Dominion Bank to the Canadian
Borrower pursuant to a separate loan agreement (the "CANADIAN OPERATING FACILITY
LOANS") (the collective obligations of Borrower thereunder, the "GUARANTOR
OBLIGATIONS"). The maximum aggregate principal amount of the Loans, the L/C
Obligations and the Canadian Operating Facility Loans outstanding at any one
time shall not exceed $2,100,000,000.
D. Pursuant to a letter agreement dated as of March 31, 1998,
NationsBank of Texas, N.A. has agreed to make loans to Borrower (the "WORKING
CAPITAL LOANS").
E. The Loans may be evidenced by promissory notes of Borrower made
payable to the order of the relevant Lender (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"NOTES"). Each Loan bears interest at the rate stated in the Credit Agreement;
references in this Mortgage to the "Default Rate" shall mean, at any time, the
interest rate applicable to overdue principal amounts of the Loans as provided
in the Credit Agreement. The obligation of Borrower to reimburse the Issuing
Lender for amounts drawn under Letters of Credit (the "REIMBURSEMENT
OBLIGATIONS") is governed by the section of the Credit Agreement entitled
"Letters of Credit."
F. Mortgagee is the general administrative agent for the Lenders
pursuant to the Credit Agreement and the Guarantee and Collateral Agreement (as
defined in the Credit Agreement). Mortgagor will benefit, as a subsidiary of
Borrower, from Borrower entering into the Credit Agreement. In recognition of
the benefits conferred on Mortgagor, Mortgagor has executed the Guarantee and
Collateral Agreement (the "GUARANTEE"), under which Mortgagor guarantees to
Mortgagee, as general administrative agent for the Lenders, the prompt and
complete payment and performance by Borrower when due of the Borrower
Obligations and the Working Capital Obligations (each as defined in the
Guarantee).
G. It is a condition precedent to the obligation of the Lenders to make
their respective Loans to Borrower and the Canadian Borrower, of the Issuing
Lender to issue the Letters of Credit for the account of Borrower and of
NationsBank, N.A. to make the Working Capital Loans to Borrower that Mortgagor
shall have executed and delivered this Mortgage to Mortgagee for the benefit of
Mortgagee and the other Lenders, and Mortgagor is willing to so execute and
deliver this Mortgage in order to obtain the benefits available to it from
Borrower entering into the Credit Agreement.
3
<PAGE>
NOW, THEREFORE, in consideration of the premises and to induce
Mortgagee and the other Lenders to make their respective Loans to LES, Inc. and
the Canadian Borrower and the Issuing Lender to issue the Letters of Credit for
the account of LES, Inc., Mortgagor hereby agrees with Mortgagee, for the
benefit of Mortgagee and the other Lenders as follows:
i. All references in the Mortgage to the "Credit Agreement"
shall be deemed to mean the Prior Credit Agreement as
amended and restated by the Credit Agreement, and as it may
be further amended, restated, supplemented or otherwise
modified from time to time.
ii. All references in the Mortgage to the "Lenders" shall be
deemed to mean the Lenders under the Credit Agreement.
iii. All references in the Mortgage to the "Notes" shall be
deemed to mean the Notes as defined in the Credit Agreement.
5. The Mortgage, as amended hereby, secures up to the maximum principal
amount of $2,100,000,000. Such future obligations and advances (i) may be
obligatory or may be made at the option of Mortgagee and the Lenders, and (ii)
may be made after a reduction to zero or any other balance or otherwise, to the
same extent as if the future obligations and advances were made on the date of
this Amendment.
iv. The Mortgage, as amended hereby, is hereby ratified
and confirmed and is and shall remain in full force
and effect.
4
<PAGE>
This Amendment has been duly executed by Mortgagor and Mortgagee as of
the date first above written.
LAIDLAW ENVIRONMENTAL, INC.
(formerly known as Rollins Environmental, Inc.)
By:________________________________________
Name:
Title:
In the Presence of:
- ----------------------------
Name:
- ----------------------------
Name:
TORONTO DOMINION (TEXAS), INC.
By:________________________________________
Name:
Title:
In the Presence of:
- ----------------------------
Name:
- ----------------------------
Name:
5
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ____ day of
April 1998, by______________________, the [ ] President of LAIDLAW
ENVIRONMENTAL, INC. (formerly known as Rollins Environmental, Inc.), a Delaware
corporation, on behalf of the corporation.
----------------------------
Notary Public
My Commission Expires
[seal]
<PAGE>
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
The foregoing instrument was acknowledged before me this ____ day of April 1998,
by______________________, the [ ] President of TORONTO DOMINION (TEXAS), INC., a
Delaware corporation, on behalf of the corporation.
----------------------------
Notary Public
My Commission Expires
[seal]
<PAGE>
Schedule A
----------
Description of the Premises
Land in the City of Ann Arbor, Washtenaw County, Michigan described as:
Lots 15 and 18, RESEARCH PARK, according to the plat thereof as recorded in
Liber 15 of Plats, Pages 56 and 57, Washtenaw County Records.
Tax Code No. 12-09-301-005 (Lot 18)
Tax Code No. 12-09-302-003 (Lot 15)
<PAGE>
EXHIBIT N
---------
[CALIFORNIA]
AMENDMENT TO DEED OF TRUST
LAIDLAW ENVIRONMENTAL, INC.
(formerly known as Rollins Environmental, Inc.), Grantor
to
FIRST AMERICAN TITLE INSURANCE COMPANY, Trustee
for the use and benefit of
TORONTO DOMINION (TEXAS), INC., Beneficiary
This Instrument was prepared by and
after recording should be returned to:
Simpson Thacher & Bartlett
425 Lexington Avenue
New York, New York 10017
Attention: Erin L. Rothfuss, Esq.
<PAGE>
AMENDMENT TO DEED OF TRUST
THIS AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES AND
SECURITY AGREEMENT (the "AMENDMENT"), dated as of April ___, 1998 is made by
Laidlaw Environmental, Inc. (formerly known as Rollins Environmental, Inc.), a
Delaware corporation ("GRANTOR"), whose address is 1301 Gervais Street, Suite
300, Columbia, South Carolina 29201, to First American Title Insurance Company,
a California corporation ("TRUSTEE"), whose address is 4540 California Avenue,
Suite 100, Bakersfield, California 93309, for the use and benefit of Toronto
Dominion (Texas), Inc., a Delaware corporation, as general administrative agent
for the Lenders referred to below (in such capacity, "BENEFICIARY"), whose
address is 909 Fannin Street, Suite 1700, Houston, Texas 77010. References to
this "Amendment" shall mean this instrument and any and all renewals,
modifications, amendments, supplements, extensions, consolidations,
substitutions, spreaders and replacements of this instrument. Unless otherwise
defined herein, capitalized terms shall have the meanings ascribed to them in
the Credit Agreement (as defined below).
BACKGROUND
WHEREAS, immediately prior to the date hereof, LES, Inc. (formerly
known as Laidlaw Chem-Waste, Inc.), Laidlaw Environmental Services (Canada)
Ltd., the several banks and other financial institutions or entities from time
to time parties to thereto (the "PRIOR LENDERS"), Toronto Dominion (Texas),
Inc., as general administrative agent, The Toronto-Dominion Bank, as Canadian
administrative agent, TD Securities (USA) Inc., as advisor to the Borrowers and
arranger of the commitments described herein, and The Bank of Nova Scotia,
NationsBank, N.A. and The First National Bank of Chicago, as managing agents and
NationsBank, N.A., as syndication agent were parties to the Credit Agreement
dated as of May 9, 1997 (as amended, supplemented or otherwise modified from
time to time prior to the date hereof, the "PRIOR CREDIT AGREEMENT") pursuant to
which certain loans and other extensions of credit were outstanding;
WHEREAS, LES, Inc., a Delaware corporation (the "COMPANY"), Laidlaw
Environmental Services (Canada) Ltd., a Canadian corporation and a wholly owned
Subsidiary of the Company (the "CANADIAN BORROWER"; together with the Company,
the "BORROWERS"), the several banks and other financial institutions or entities
from time to time parties thereto (the "LENDERS"), Toronto Dominion (Texas),
Inc., as general administrative agent (as hereinafter defined, the "GENERAL
ADMINISTRATIVE AGENT"), The Toronto-Dominion Bank, as Canadian administrative
agent (as hereinafter defined, the "CANADIAN ADMINISTRATIVE AGENT"), TD
Securities (USA) Inc., as advisor to the Borrowers and arranger of the
commitments (in such capacities, the "ARRANGER"), and The Bank of Nova Scotia,
NationsBank, N.A., The First National Bank of Chicago and Wachovia Bank, N.A.,
as managing agents (each, in such capacity, a "MANAGING AGENT"), The Bank of
Nova Scotia and The First National Bank of Chicago, as co-documentation agent
(each, in such capacity, a "CO-DOCUMENTATION AGENT"), and NationsBank, N.A., as
syndication agent (in such capacity, the "SYNDICATION AGENT") have
1
<PAGE>
amended and restated the Prior Credit Agreement to (a) increase the amount of
the credit available thereunder and (b) otherwise amend and restate the Prior
Credit Agreement in its entirety as more fully set forth in the Credit
Agreement;
WHEREAS, by reason of the amendment and restatement effects of the
Credit Agreement, the Lenders have succeeded to the Prior Lenders' rights and
obligations under the Prior Credit Agreement on the terms and conditions set
forth in the Credit Agreement and after having given effect to such amendment
and restatement, the Commitments of and the amount of the Loans owing to each of
the Lenders are as set forth on Schedule 1.1A and 1.1B of the Credit Agreement;
WHEREAS, a certain Deed of Trust as more particularly described on
Schedule B attached hereto (the "DEED OF TRUST") given by Grantor to Beneficiary
encumbers real property owned in fee by Grantor, together with the improvements
located thereon (the "IMPROVEMENTS") and is more particularly described on
Schedule A attached hereto (the "REAL ESTATE"); and
WHEREAS, Beneficiary, the Canadian Administrative Agent, the
Syndication Agent, the Co-Documentation Agents, the Arranger, the Managing
Agents and the Lenders have entered into the Credit Agreement on the condition
(among others) that Grantor execute this Amendment;
NOW THEREFORE, in consideration of the premises and for the sum of Ten
Dollars ($10.00), the receipt and sufficiency of which is hereby acknowledged,
Grantor hereby agrees as follows:
1. The "Background" section of the Deed of Trust is hereby deleted in
its entirety and amended by substituting the following therewith:
BACKGROUND
A. Grantor is the owner of the parcels of real property described on
Schedule A attached (such real property, together with all of the buildings,
improvements, structures and fixtures now or subsequently located thereon (the
"IMPROVEMENTS"), being collectively referred to as the "REAL ESTATE").
B. Grantor is a subsidiary of LES, Inc., a Delaware corporation
("BORROWER"). Borrower (formerly known as Laidlaw Chem-Waste, Inc.) is a party
to that certain Credit Agreement (the "PRIOR CREDIT AGREEMENT") dated as of May
9, 1997 with Laidlaw Environmental Services (Canada) Ltd., Beneficiary and
the financial institutions described and defined therein, which Prior Credit
Agreement has been amended and restated by that certain Amended and Restated
Credit Agreement dated as of April __, 1998 (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"CREDIT AGREEMENT") among Borrower, the several banks and other financial
institutions from time to time parties thereto (the "LENDERS"), Beneficiary,
Laidlaw Environmental Services (Canada) Ltd. (the "CANADIAN BORROWER"), The
Toronto-Dominion Bank, as Canadian administrative agent, TD
2
<PAGE>
Securities (USA) Inc., as arranger, NationsBank, N.A., as syndication agent, and
The Bank of Nova Scotia, NationsBank, N.A., The First National Bank of Chicago
and Wachovia Bank, N.A., as managing agents. All defined terms used and not
defined herein shall have the meanings assigned thereto in the Credit Agreement.
C. Pursuant to the Credit Agreement, (i) certain of the Lenders have
agreed to make revolving credit loans to Borrower (the "REVOLVING CREDIT
LOANS"); (ii) Certain of the Lenders have agreed to make term loans to Borrower
(the "TERM LOANS"; together with the Revolving Credit Loans, the "LOANS"); (iii)
the Issuing Lender has agreed to issue letters of credit for the account of
Borrower and (iv) pursuant to the Credit Agreement, Borrower has guaranteed term
loans to be made by certain of the Lenders to the Canadian Borrower under the
Credit Agreement and certain loans by The Toronto-Dominion Bank to the Canadian
Borrower pursuant to a separate loan agreement (the "CANADIAN OPERATING FACILITY
LOANS") (the collective obligations of Borrower thereunder, the "GUARANTOR
OBLIGATIONS"). The maximum aggregate principal amount of the Loans, the L/C
Obligations and the Canadian Operating Facility Loans outstanding at any one
time shall not exceed $2,100,000,000.
D. Pursuant to a letter agreement dated as of March 31, 1998,
NationsBank of Texas, N.A. has agreed to make loans to Borrower (the "WORKING
CAPITAL LOANS").
E. The Loans may be evidenced by promissory notes of Borrower made
payable to the order of the relevant Lender (as the same may be amended,
supplemented, modified, extended, restated or replaced from time to time, the
"NOTES"). Each Loan bears interest at the rate stated in the Credit Agreement;
references in this Deed of Trust to the "Default Rate" shall mean, at any time,
the interest rate applicable to overdue principal amounts of the Loans as
provided in the Credit Agreement. The obligation of Borrower to reimburse the
Issuing Lender for amounts drawn under Letters of Credit (the "REIMBURSEMENT
OBLIGATIONS") is governed by the section of the Credit Agreement entitled
"Letters of Credit."
F. Beneficiary is the general administrative agent for the Lenders
pursuant to the Credit Agreement and the Guarantee and Collateral Agreement (as
defined in the Credit Agreement). Grantor will benefit, as a subsidiary of
Borrower, from Borrower entering into the Credit Agreement. In recognition of
the benefits conferred on Grantor, Grantor has executed the Guarantee and
Collateral Agreement (the "GUARANTEE"), under which Grantor guarantees to
Beneficiary, as general administrative agent for the Lenders, the prompt and
complete payment and performance by Borrower when due of the Borrower
Obligations and the Working Capital Obligations (each as defined in the
Guarantee).
3
<PAGE>
G. It is a condition precedent to the obligation of the Lenders to
make their respective Loans to Borrower and the Canadian Borrower, of the
Issuing Lender to issue the Letters of Credit for the account of Borrower and of
NationsBank, N.A. to make the Working Capital Loans to Borrower that Grantor
shall have executed and delivered this Deed of Trust to Beneficiary for the
benefit of Beneficiary and the other Lenders, and Grantor is willing to so
execute and deliver this Deed of Trust in order to obtain the benefits available
to it from Borrower entering into the Credit Agreement.
NOW, THEREFORE, in consideration of the premises and to induce
Beneficiary and the other Lenders to make their respective Loans to LES, Inc.
and the Canadian Borrower and the Issuing Lender to issue the Letters of Credit
for the account of LES, Inc., Grantor hereby agrees with Trustee, for the
benefit of Beneficiary and the other Lenders as follows:
2. All references in the Deed of Trust to the "Credit Agreement" shall
be deemed to mean the Prior Credit Agreement as amended and restated by the
Credit Agreement, and as it may be further amended, restated, supplemented or
otherwise modified from time to time.
3. All references in the Deed of Trust to the "Lenders" shall be
deemed to mean the Lenders under the Credit Agreement.
4. All references in the Deed of Trust to the "Notes" shall be deemed
to mean the Notes as defined in the Credit Agreement.
5. The Deed of Trust, as amended hereby, secures up to the maximum
principal amount of $2,100,000,000. Such future obligations and advances (i) may
be obligatory or may be made at the option of Beneficiary and the Lenders, and
(ii) may be made after a reduction to zero or any other balance or otherwise, to
the same extent as if the future obligations and advances were made on the date
of this Amendment.
6. The Deed of Trust, as amended hereby, is hereby ratified and
confirmed and is and shall remain in full force and effect.
This Amendment has been duly executed by Grantor and Beneficiary as
of the date first above written.
LAIDLAW ENVIRONMENTAL, INC.
(formerly known as Rollins Environmental, Inc.)
By:________________________________________
Name:
Title:
TORONTO DOMINION (TEXAS), INC.
By:________________________________________
Name:
Title:
4
<PAGE>
EXHIBIT 0
AMENDED AND RESTATED
INTERCREDITOR AGREEMENT
AMENDED AND RESTATED INTERCREDITOR AGREEMENT, dated as of April 3, 1998
(amended and restating the Intercreditor Agreement, dated as of May 15, 1997),
among TORONTO DOMINION (TEXAS) INC., as General Administrative Agent (as
hereinafter defined), THE TORONTO-DOMINION BANK, as Canadian Administrative
Agent (as hereinafter defined), THE TORONTO-DOMINION BANK, as Canadian Operating
Facility Agent (as hereinafter defined), and NATIONSBANK OF TEXAS, N.A., as
Working Capital Lender (as hereinafter defined).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, LES, Inc. (formerly known as Laidlaw Chem-Waste, Inc.), a
Delaware corporation (together with its successors and assigns, the "COMPANY"),
and Laidlaw Environmental Services (Canada) Ltd., a Canadian corporation
(together with its successors and assigns, the "CANADIAN BORROWER"; together
with the Company, the "BORROWERS"), are parties to the Credit Agreement, dated
as of May 9, 1997 (as heretofore amended, supplemented or otherwise modified,
the "EXISTING CREDIT AGREEMENT"), with the lenders from time to time parties
thereto, Toronto Dominion (Texas), Inc., as general administrative agent, The
Toronto-Dominion Bank, as Canadian administrative agent, TD Securities (USA)
Inc., as arranger, The Bank of Nova Scotia, NationsBank, N.A. and The First
National Bank of Chicago, as managing agents, and NationsBank, N.A., as
syndication agent;
WHEREAS, the Borrowers have entered into the Amended and Restated
Credit Agreement, dated as of April 3, 1998 (as the same may be amended,
supplemented or otherwise modified from time to time, the "CREDIT AGREEMENT"),
among the Borrowers, the several banks and other financial institutions or
entities from time to time parties thereto (the "Lenders"), Toronto Dominion
(Texas), Inc., as general administrative agent (in such capacity, the "General
ADMINISTRATIVE AGENT"), The Toronto-Dominion Bank, as Canadian administrative
agent (in such capacity, the "CANADIAN ADMINISTRATIVE AGENT"), TD Securities
(USA) Inc., as advisor to the Borrowers and arranger of the commitments
described herein (in such capacities, the "ARRANGER"), the Managing Agents named
therein, the Co-Documentation agents named therein and the Syndication Agent
named therein, which (i) amends and restates the Existing Credit Agreement and
(ii) provides that the Borrower Obligations (as hereinafter defined) shall be
secured and supported pursuant to the U.S. Security Documents (as hereinafter
defined);
WHEREAS, included in the Borrower Obligations is the Company's
guarantee, pursuant to Section 13 of the Credit Agreement, of the Canadian
Borrower Obligations (as hereinafter defined) and the Canadian Operating
Facility Obligations (as hereinafter defined);
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<PAGE>
WHEREAS, the Loan Parties, the Lenders and the Administrative Agents
have agreed that the Security Documents shall, in addition to providing
collateral security and credit support for the Borrower Obligations, provide
collateral security and credit support for the Working Capital Obligations (as
hereinafter defined);
WHEREAS, the obligations of the Canadian Borrower in respect of the
Canadian Borrower Obligations and the Canadian Operating Facility Obligations
are secured and supported pursuant to the Canadian Security Documents (as
hereinafter defined);
WHEREAS, the Canadian Administrative Agent has entered into an agency
agreement, dated as of May 15, 1997 (as the same may be amended, supplemented or
otherwise modified from time to time, the "AGENCY AGREEMENT"), with The Toronto
Dominion Bank, in its capacity as Canadian Operating Facility Lender (as
hereinafter defined), pursuant to which the Canadian Administrative Agent has
agreed that, in addition to acting as Canadian Administrative Agent under the
Canadian Security Documents, it will act as collateral agent for the Canadian
Operating Facility Lender under the Canadian Security Documents (in such
capacity, the "CANADIAN OPERATING FACILITY AGENT"; together with the
Administrative Agents, the "AGENTS");
WHEREAS, in connection with the Existing Credit Agreement, the Agents,
the lenders under the Existing Credit Agreement, the Canadian Operating Facility
Lender and NationsBank, N.A. entered into the Intercreditor Agreement, dated as
of May 15, 1997 (the "EXISTING INTERCREDITOR AGREEMENT"), the purpose of which
was to establish the procedure for the disbursement of the proceeds of, or other
monies received by any of the Agents, such lenders, the Canadian Operating
Facility Lender and the Working Capital Lender in connection with, the Security
Documents; and
WHEREAS, it is a condition precedent to the Lenders' agreement to make
Extensions of Credit under the Credit Agreement that the parties to the Existing
Intercreditor Agreement amend and restate the Existing Intercreditor Agreement
in order to confirm and continue the procedure for the disbursement of the
proceeds of, or other monies received by any of the Agents, the Lenders, the
Canadian Operating Facility Lender and the Working Capital Lender in connection
with the Amended and Restated Credit Agreement and the Security Documents;
NOW THEREFORE, in consideration of the premises and for other good and
valuable consideration receipt of which is hereby acknowledged, the Agents, the
Working Capital Lender and the Borrowers hereby agree as follows:
1. DEFINITIONS. (a) Unless otherwise defined herein, terms defined in
the Credit Agreement and used herein shall have the meanings given to them in
the Credit Agreement.
(b) The following terms shall have the following meanings:
"AGREEMENT": this Amended and Restated Intercreditor Agreement, as
the same may be amended, modified or otherwise supplemented from time to time.
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<PAGE>
"BORROWER OBLIGATIONS": as defined in the Guarantee and Collateral
Agreement. "CANADIAN BORROWER OBLIGATIONS": as defined in the Credit Agreement.
"CANADIAN OPERATING FACILITY": as defined in the Credit Agreement.
"CANADIAN OPERATING FACILITY LENDER": The Toronto-Dominion Bank in
its capacity as lender under the Canadian Operating Facility.
"CANADIAN OPERATING FACILITY OBLIGATIONS": as defined in the Credit
Agreement.
"CANADIAN SECURITY DOCUMENTS": the "Canadian Collateral Documents"
described in the Credit Agreement.
"GUARANTEE AND COLLATERAL AGREEMENT": as defined in the Credit
Agreement.
"SECURED CANADIAN OBLIGATIONS": the collective reference to (a) the
Canadian Borrower Obligations, and (b) the Canadian Operating Facility
Obligations, including in each case, without duplication, the Company's
guarantee of such obligations pursuant to Section 13 of the Credit Agreement.
"SECURED OBLIGATIONS": the collective reference to (a) Secured U.S.
Obligations, and (b) Secured Canadian Obligations.
"SECURED U.S. OBLIGATIONS": the collective reference to (a) the
Borrower Obligations, and (b) the Working Capital Obligations.
"U.S. SECURITY DOCUMENTS": the collective reference to all Security
Documents other than the Canadian Security Documents.
"WORKING CAPITAL FACILITY": as defined in the Guarantee and
Collateral Agreement.
"WORKING CAPITAL LENDER": as defined in the Guarantee and Collateral
Agreement.
"WORKING CAPITAL OBLIGATIONS": as defined in the Guarantee and
Collateral Agreement.
(c) The words "hereof," "herein" and "hereunder" and words of similar
import when used in this Agreement shall refer to this Agreement as a whole and
not to any particular provision of this Agreement, and section and paragraph
references are to this Agreement unless otherwise specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
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<PAGE>
2. DISTRIBUTION OF Proceeds. (a) Any money, property or securities
realized upon the sale, disposition or other realization upon all or any part of
the Canadian Security Documents shall be applied in the following order:
(1) FIRST, the amount equal to all costs and expenses (including,
without limitation, attorneys' fees and disbursements) paid or incurred
by the Canadian Administrative Agent in connection with such sale,
disposition or other realization or the protection of its rights and
interests therein, shall be distributed to the Canadian Administrative
Agent;
(2) SECOND, from any surplus then remaining, an amount equal to the
unpaid Secured Canadian Obligations consisting of principal and accrued
interest in the nature of Indebtedness for borrowed money and fees
thereon and unpaid reimbursement obligations in respect of Acceptances,
whether matured or unmatured, contingent or otherwise, shall be
distributed to the respective Persons to whom such amounts are owed (or
their respective agents), with such distribution to be made pro rata in
accordance with the aggregate unpaid amounts of such Secured Canadian
Obligations and without priority of any one over any other;
(3) THIRD, from any surplus then remaining, an amount equal to the
other unpaid Secured Canadian Obligations then outstanding, whether
matured or unmatured, contingent or otherwise, shall be distributed to
the respective Persons to whom such amounts are owed (or their
respective agents), with such distribution to be made PRO RATA in
accordance with the unpaid amounts thereof and without priority of any
one over any other; and
(4) FOURTH, from any surplus then remaining shall be distributed to
the applicable Loan Party or as otherwise may be required by applicable
law.
(c) The Agents shall consult in any sale, disposition or other
realization of or upon any Security Documents, and with respect to the order of
the application of proceeds thereof, with a view to causing all such sales,
dispositions or other realizations to result in the repayment of the maximum
possible amount of Secured Obligations. In furtherance of the foregoing, the
Agents may apply all proceeds of the Canadian Security Documents in accordance
with paragraph (a) above before applying any proceeds of the U.S. Security
Documents to the Canadian Borrower Obligations or the Canadian Operating
Facility Obligations.
3. AMOUNTS OF SECURED OBLIGATIONS. Whenever a distribution pursuant to
the provisions of Section 2 hereof is to be made, the Agents will make such
distribution on the basis of the unpaid amounts thereof based upon the amount of
Secured U.S. Obligations or Secured Canadian Obligations, as the case may be,
determined as provided in Section 5 hereof; PROVIDED, however, that during the
pendency of a bankruptcy proceeding with respect to any Loan Party at the time
of such distribution, the unpaid amounts of Secured Obligations of such Loan
Party shall mean all amounts allowed by the bankruptcy court in respect of such
Secured Obligations as a basis for distributions (including estimated amounts,
if any, allowed in respect of contingent claims) but only to the extent that
prior distributions have not been made in respect thereof.
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<PAGE>
Notwithstanding anything to the contrary contained herein, the Agents shall be
under no obligation to determine if any Secured Obligations are allowed in a
bankruptcy proceeding.
4. TIME AND MANNER OF MAKING PAYMENTS. All payments of such monies
under Section 2 shall be made at such time as the relevant Agent may in its sole
discretion determine.
5. DETERMINATION OF AMOUNTS OF SECURED OBLIGATIONS. (a) Whenever an
Agent is required to determine the existence or amount (including, without
limitation, the principal amount) of any of the Secured Obligations for any
purpose of this Agreement, it shall (unless otherwise directed by a court of
competent jurisdiction) be entitled (but not obligated) to determine such
amounts on the basis of a certification to it of such amounts by the Borrowers;
PROVIDED, however, that if, upon the request of any Agent, a Borrower shall fail
to provide the certification as to the existence or amount of any Secured
Obligation as contemplated above within a reasonable period of time, such Agent
shall be entitled to determine such existence or amount by such method as such
Agent may, in its sole discretion, determine.
(b) The Agents may rely conclusively, and shall be fully protected
in relying, on any determination made by it in accordance with the provisions of
Section 5(a) hereof (or as otherwise directed by a court of competent
jurisdiction) and shall have no liability to the Borrowers, any other Loan
Party, any holder of any Secured Obligation or any other Person as a result of
such determination.
(c) Upon any request of any Agent from time to time, the Borrowers
will furnish a certificate to such Agent as to the existence or amount of any
Secured Obligation and, if so requested, such certificate shall set forth all
the Secured Obligations. Any certificate by a Borrower under this Section 5(c)
shall be in form and substance reasonably satisfactory to the relevant Agent.
(d) Upon any request of any Agent from time to time, each holder of
Secured Obligations will furnish a certificate to such Agent as to the existence
or amount of any Secured Obligation held by it and, if so requested, such
certificate shall set forth all the Secured Obligations held by it. Any
certificate by such holder of Secured Obligations under this Section 5 shall be
in form and substance reasonably satisfactory to the relevant Agent.
(e) If when calculating the amount of Secured Obligations it is
necessary to convert Canadian Dollar amounts outstanding into U.S. Dollar
amounts, such amounts shall be converted at the rate of exchange quoted by the
General Administrative Agent as its spot rate of exchange for the conversion of
Canadian Dollars to U.S. Dollars at approximately noon (New York time) on such
day.
6. No REPRESENTATION BY AGENT. No Agent shall be responsible in any
manner whatsoever for the correctness of any recitals, statements,
representations or warranties contained herein or in any of the other Security
Documents, all of which are made solely by the Borrowers or other Loan Party
thereto, as the case may be. No Agent makes any representations as to the value
of any collateral held by it or any part thereof or as to the title of the
Borrowers or any other Loan Party thereto, or as to the security afforded by the
Security Documents or this
5
<PAGE>
Agreement or as to the validity, execution (except its own execution),
enforceability, legality or sufficiency of this Agreement or any of the other
Security Documents or of the sufficiency of the Secured Obligations, and no
Agent shall incur any liability or responsibility in respect of any such
matters.
7. POWERS COUPLED WITH AN INTEREST. All powers, authorizations and
agencies contained in this Agreement are coupled with an interest and are
irrevocable until the Secured Obligations are paid in full and the Commitments
under the Credit Agreement are terminated.
8. Notices. All notices, requests and demands to or upon the Agents or
the Borrowers to be effective shall be in writing (or by telex, fax or similar
electronic transfer confirmed in writing) and shall be deemed to have been duly
given or made (i) when delivered by hand or (ii) if given by mail, when
deposited in the mails by certified mail, return receipt requested, or (iii) if
by telex, fax or similar electronic transfer, when sent and receipt has been
confirmed, addressed as follows:
If to the General Administrative Agent: Toronto Dominion (Texas) Inc.
909 Fannin Street, Suite 1700
Houston, Texas 77010
Attention: Jano Mott
Fax: (713) 951-9921
If to the Canadian Administrative Agent or
the Canadian Operating Facility Agent: The Toronto-Dominion Bank
9th Floor, Toronto Dominion Bank
TowerToronto Dominion Centre
55 King Street West Toronto,
Ontario M5K IA2
Attention: Manager Agency
Fax:(416) 982-5535
If to the Working Capital Lender c/o NationsBank, N.A.
100 North Tryon Street
NCI-007-12-04
Charlotte, North Carolina 28255
Attention: David Sachsenmaier
Fax:(704) 388-9215
If to either Borrower, at the addresses provided in Section 14.2 of the Credit
Agreement. The parties hereto may change their addresses and transmission
numbers for notices by notice in the manner provided in this Section.
9. COUNTERPARTS. This Agreement may be executed by one or more of the
parties on any number of separate counterparts, and all of said counterparts
taken together shall be deemed to constitute one and the same instrument. A set
of the counterparts of this Agreement signed by all the parties shall be lodged
with each Agent.
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<PAGE>
10. SEVERABILITY. Any provision of this Agreement which is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
11. INTEGRATION. This Agreement represents the agreement of the parties
hereto with respect to the subject matter hereof and there are no promises or
representations by the Agents or any such lender relative to the subject matter
hereof not reflected herein.
12. AMENDMENTS IN WRITING; NO WAIVER; CUMULATIVE REMEDIES. (a) None of
the terms or provisions of this Agreement may be waived, amended, supplemented
or otherwise modified except by a written instrument executed by the parties
hereto.
(b) No failure to exercise, nor any delay in exercising, on the
part of any Agent, any right, power or privilege hereunder shall operate as a
waiver thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege.
(c) The rights and remedies herein provided are cumulative, may be
exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.
13. SECTION HEADINGS. The section headings used in this Agreement are
for convenience of reference only and are not to affect the construction hereof
or be taken into consideration in the interpretation hereof.
14. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Borrowers, each other Loan Party, the Agents and each holder
of Secured Obligations and their respective successors and assigns, and nothing
herein is intended or shall be construed to give any other Person any right,
remedy or claim under, to or in respect of this Agreement.
15. GOVERNING LAW. This Agreement shall be governed by, and construed
and interpreted in accordance with, the law of the State of New York.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
TORONTO-DOMINION BANK, as Canadian
Administrative Agent
By: _________________________________
Title:_______________________________
TORONTO-DOMINION BANK, as Canadian
Operating Facility Agent
By: _________________________________
Title:_______________________________
TORONTO DOMINION (TEXAS) INC., as
General Administrative Agent
By: _________________________________
Title:_______________________________
NATIONSBANK OF TEXAS, N.A., as Working
Capital Lender
By: _________________________________
Title:_______________________________
Consented and Agreed:
LES, INC.
By: ____________________________________
Title:__________________________________
LAIDLAW ENVIRONMENTAL SERVICES (CANADA) LTD.
By: ____________________________________
Title:__________________________________
8
<PAGE>
EXHIBIT P
---------
EXCHANGE AGENT AGENCY AGREEMENT
EXCHANGE AGENT AGENCY AGREEMENT, dated as of April 3, 1998, among IBJ
SCHRODER BANK & TRUST COMPANY, as exchange agent (in its capacity as exchange
agent, the "EXCHANGE AGENT"), TORONTO DOMINION (TEXAS) INC., as general
administrative agent under the Credit Agreement referred to below (in such
capacity the "GENERAL ADMINISTRATIVE AGENT"), and LES ACQUISITION, INC., a
Delaware corporation (the "Pledgor").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, LES Inc., a Delaware corporation (the "Company"), and Laidlaw
Environmental Services (Canada) Ltd., a Canadian corporation (the "Canadian
Borrower"; together with the Company, the "Borrowers") are parties to the
Amended and Restated Credit Agreement, dated as of April 3, 1998 (as amended,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
with the several banks and other financial institutions from time to time
parties thereto (the "Lenders"), the General Administrative Agent, The
Toronto-Dominion Bank, as Canadian Administrative Agent, TD Securities (USA)
Inc., as Arranger, and the Managing Agents, Co-Documentation Agents and
Syndication Agents named therein;
WHEREAS, the Pledgor is a wholly owned subsidiary of the Company;
WHEREAS, the Pledgor has executed and delivered the Acquisition Corp.
Pledge Agreement, dated as of the date hereof (as amended, supplemented or
otherwise modified from time to time, the "Pledge Agreement"), in favor of the
General Administrative Agent (unless otherwise defined herein or the context
otherwise requires, all capitalized terms used herein shall have the meanings
assigned thereto in the Credit Agreement or the Pledge Agreement, as the case
may be);
WHEREAS, the Exchange Agent has received (and hereby acknowledges
receipt of) a copy of the Credit Agreement and the Pledge Agreement;
WHEREAS, pursuant to the Depositary Agency Agreement, dated as of
February 1998 (the "Depositary Agency Agreement"), between the Pledgor and the
Exchange Agent, the Exchange Agent will be receiving common stock, with par
value $0. 10 (the "Shares"), of Safety-Kleen Corp., a Wisconsin corporation
("Safety-Kleen"), tendered by the holders thereof for exchange in an exchange
offer (the "Exchange Offer") made pursuant to and in accordance with the
Exchange Offer Documents;
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<PAGE>
WHEREAS, the Lenders are willing to make Loans to finance in part the
acquisition of Shares in the Exchange Offer (all Shares so acquired being
"Purchased Shares") upon simultaneous satisfaction of the condition, among
others, that the General Administrative Agent obtain a perfected first priority
security interest (the "Security Interest") in the Purchased Shares pursuant to
the Pledge Agreement; and
WHEREAS, pursuant to the requirement set forth in Section 8. 1 (a) of
the Credit Agreement, it is a condition precedent to the making of the Loans
under the Credit Agreement that this Exchange Agent Agency Agreement shall have
been duly executed and delivered by the parties hereto;
NOW, THEREFORE, the parties hereto hereby agree as follows:
1. Pursuant to the Depositary Agency Agreement, the Pledgor has
appointed the Exchange Agent to accept delivery of Shares tendered for exchange
in the Exchange Offer. The Pledgor hereby designates the Exchange Agent to
receive, on behalf of the Pledgor, delivery (within the meaning of Section 8-301
of the Uniform Commercial Code as in effect in the State of New York (the "New
York UCC")) of security certificates representing the Shares by the holders
thereof simultaneously with the payment for the Purchased Shares, and the
Exchange Agent hereby accepts such designation.
2. The Pledgor hereby instructs the Exchange Agent to deliver to the
General Administrative Agent on behalf of the Pledgor and pursuant to Section
3(a) of the Pledge Agreement stock certificates representing the Purchased
Shares that are held from time to time by the Exchange Agent on behalf of the
Pledgor. While the Exchange Agent is in possession of any such stock
certificates, the Exchange Agent agrees that it holds such stock certificates as
agent, and not as securities intermediary (within the meaning of Section 8-102
of the New York UCC), for the General Administrative Agent for purposes of
delivery (within the meaning of Section 8-301 of the New York UCC) of such stock
certificates to the General Administrative Agent.
3. The Pledgor hereby instructs the Exchange Agent as follows: on the
Closing Date, with respect to any Purchased Shares which are not evidenced by
stock certificates in the possession of the Exchange Agent on such date and are
held in the account of the Exchange Agent at The Depositary Trust Company, the
Exchange Agent shall hold such Purchased Shares as securities intermediary
(within the meaning of Section 8-102 of the New York UCC) of the General
Administrative Agent and shall, if at any time so instructed by the General
Administrative Agent, cause such shares to be transferred by book-entry to an
account maintained in the name of the General Administrative Agent or its
securities intermediary with The Depositary Trust Company or a Clearing
Corporation as specified by the General Administrative Agent; pending such
transfer the Exchange Agent hereby agrees that it holds such Purchased Shares as
securities intermediary for the account of the General Administrative Agent as
entitlement holder (within the meaning of Section 8-102 of the New York UCC).
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<PAGE>
4. The General Administrative Agent hereby designates the Exchange
Agent as its agent to, and the Exchange Agent shall use reasonable efforts to,
as expeditiously as possible (a) exchange on behalf of the General
Administrative Agent all certificates representing Purchased Shares for
certificates registered in the name of the Pledgor by delivering such
certificates to The First National Bank of Chicago, as transfer agent (the
"Transfer Agency"), and (b) request from the Transfer Agent possession of the
certificates representing the Purchased Shares which have been registered in the
name of the Pledgor within the period specified in Section 9-304(5) of the New
York UCC (such period currently being 21 days) for transferring a security for
the sole purpose of exchange or registration of transfer; PROVIDED, that prior
to delivering any Purchased Shares to the Transfer Agent, the Exchange Agent
shall have received from the Transfer Agent a duly executed agreement, in
substantially the form of Annex I hereto, with respect to such Purchased Shares.
5. The Exchange Agent shall promptly deliver to the General
Administrative Agent, upon receipt thereof from the Transfer Agent, all
certificates representing Purchased Shares registered in the name of the
Pledgor. The Pledgor shall, upon the request of the General Administrative
Agent, promptly deliver to the General Administrative Agent an undated stock
power for each such certificate executed in blank.
6. The Exchange Agent agrees to be the General Administrative Agent's
designated agent pursuant to the Pledge Agreement for purposes of perfecting the
General Administrative Agent's security interest in the Purchased Shares
represented by security certificates with respect to any such shares which are
not, for any reason, delivered to the General Administrative Agent pursuant to
paragraph 2 hereof.
Further, the Exchange Agent (i) agrees to act as the securities
intermediary of the General Administrative Agent in respect of any further
shares transferred to the Exchange Agent by book-entry and any security
entitlement (within the meaning of Section 8-102 of the New York UCC) of the
Pledgor relating to financial assets pledged under the Pledge Agreement, (ii)
agrees that upon payment for such Purchased Shares it will comply with
entitlement orders (within the meaning of Section 8-102 of the New York UCC)
from the General Administrative Agent with respect to all such Purchased Shares
without further consent by the Pledgor; and (iii) agrees that it will transfer
such Purchased Shares as provided in Section 3 above.
7. The Exchange Agent waives all rights of offset and bank liens
afforded it by law, agreement or otherwise against any funds and amounts
deposited by the Pledgor with it for the purpose of purchasing Purchased Shares
but which at any time shall not have then been paid to the former holder(s) or
any other authorized payee(s) of Purchased Shares.
8. (a) The Exchange Agent represents and warrants to the General
Administrative Agent, each Lender and the Pledgor that (i) it has full power and
authority to enter into this Exchange Agent Agency Agreement and perform its
obligations hereunder; (ii) the execution, delivery and performance of this
Exchange Agent Agency Agreement by the Exchange Agent has been duly authorized
by all necessary corporate action; and (iii) this Exchange Agent
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<PAGE>
Agency Agreement is the legal, valid and binding obligation of the Exchange
Agent, enforceable against the Exchange Agent in accordance with its terms,
provided, however, that the Exchange Agent makes no representation or warranty
as to the validity, priority or effectiveness of any security interest or as to
title to any property.
(b) The Pledgor represents and warrants to the General Administrative
Agent, each Lender and the Exchange Agent that (i) it has full power and
authority to enter into this Exchange Agent Agency Agreement and perform its
obligations hereunder; (ii) the execution, delivery and performance of this
Exchange Agent Agency Agreement by the Pledgor has been duly authorized by all
necessary corporate action; and (iii) this Exchange Agent Agency Agreement is
the legal, valid and binding obligation of the Pledgor, enforceable against the
Pledgor in accordance with its terms.
9. By its execution hereof in the space provided below, the Pledgor
hereby (a) agrees to and authorizes the applicable provisions hereof and (b)
agrees to indemnify and hold free and harmless each of the Exchange Agent, the
Transfer Agent and the General Administrative Agent from and against any and all
actions, losses, costs, liabilities and damages in connection with or arising
out of or relating to, with respect to the Exchange Agent, this Exchange Agent
Agency Agreement, the Pledge Agreement, the Credit Agreement and the Depositary
Agency Agreement, and, with respect to the Transfer Agent and the General
Administrative Agent, the Transfer Agent's or the General Administrative Agent's
obligations hereunder or performance hereof, in each case, other than arising
out of the gross negligence or willful misconduct of the indemnified person. The
indemnification obligation set forth in this paragraph shall survive termination
of this Exchange Agent Agency Agreement, the Depositary Agency Agreement, the
Credit Agreement and the Pledge Agreement.
10. (a) The duties and obligations of the Exchange Agent hereunder
shall be determined solely by the express provisions of this Exchange Agent
Agency Agreement, and the Exchange Agent shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Exchange Agent Agency Agreement, and no implied covenants or obligations shall
be read into this Exchange Agent Agency Agreement against the Exchange Agent. If
the Credit Agreement or the Pledge Agreement as in effect on the date hereof is
amended, supplemented or otherwise modified in a manner which affects the rights
and obligations of the Exchange Agent hereunder, the Exchange Agent's rights and
obligations hereunder shall not be so affected without the Exchange Agent's
prior consent.
(b) The Exchange Agent assumes no responsibility or liability for and
makes no representations as to the validity or sufficiency of this Exchange
Agent Agency Agreement (other than as specified in paragraph 8 above), the
Credit Agreement or the Pledge Agreement, including with respect to the
sufficiency of such agreements to perfect the Security Interest.
11. The Pledgor shall pay the reasonable out-of-pocket expenses and
reasonable administrative fees of the Exchange Agent in connection with the
Exchange Agent's obligations pursuant to this Exchange Agent Agency Agreement,
including the reasonable fees and disbursements of counsel.
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<PAGE>
12. The Exchange Agent and the Pledgor agree that the "jurisdiction"
(within the meaning of Section 8-110(b) of the New York UCC) of the Exchange
Agent, in its capacity as securities intermediary for the General Administrative
Agent, is the State of New York.
13. This Exchange Agent Agency Agreement may be amended, modified or
supplemented only pursuant to a written instrument executed by all parties. THIS
EXCHANGE AGENT AGENCY AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, INCLUDING,
WITHOUT LIMITATION, FOR THE PURPOSES OF SECTION 8-110 OF THE NEW YORK UCC.
IN WITNESS WHEREOF, each of the undersigned has caused this Exchange
Agent Agency Agreement to be duly executed and delivered as of the date first
written above.
IBJ SCHRODER BANK & TRUST
COMPANY, as Exchange Agent
By: ___________________________________
Title:_________________________________
TORONTO DOMINION (TEXAS) INC.,
as General Administrative Agent
By: __________________________________
Title: ________________________________
LES ACQUISITION, INC.
By:____________________________________
Title: ________________________________
5
<PAGE>
Annex I
April ___, 1998
Toronto Dominion (Texas) Inc.,
as General Administrative Agent
Attention:
Ladies and Gentlemen:
The First National Bank of Chicago ("Transfer Agent") is acting as the
transfer agent for Safety-Kleen Corp., a Wisconsin corporation ("Safety-Kleen"),
with .respect to shares of common stock, with par value $0. 1 0, of Safety-Kleen
("Shares"). The Transfer Agent has been informed that LES Acquisition, Inc., a
Delaware corporation (the "Pledgor") has made an exchange offer (the "Exchange
Offer") for Shares pursuant to an Offer to Exchange, dated January 26, 1998, and
that IBJ Bank & Trust Company is acting as exchange agent (in such capacity, the
"Exchange Agent") in connection with the Exchange Offer.
The Pledgor has requested that the Transfer Agent execute and deliver
this letter and has agreed to indemnify the Transfer Agent in the Exchange Agent
Agency Agreement for any claims which might result from the Transfer Agent's
signing of or any action taken pursuant to this letter.
The Transfer Agent hereby confirms that with respect to all
certificates which the Exchange Agent has advised the Transfer Agent represent
Shares purchased by the Pledgor (the "Purchased Shares") and are delivered to
the Transfer Agent for transfer, properly completed and in good form for
transfer, or for which the Transfer Agent has been instructed by the Exchange
Agent to transfer without regard to the appropriateness of the request and for
which the Transfer Agent shall have been indemnified by the Exchange Agent, the
Transfer Agent shall promptly transfer such Purchased Shares into the name of
the Pledgor and return all newly issued certificates representing such Purchased
Shares to the Exchange Agent. The Exchange Agent shall have no obligation to
instruct the Transfer Agent to transfer Purchased Shares without regard to the
appropriateness of the request and to indemnify the Transfer Agent, unless the
Exchange Agent has been itself indemnified to the Exchange Agent's satisfaction
by the Pledgor.
Very truly yours,
THE FIRST NATIONAL BANK OF CHICAGO
as Transfer Agent
By:_______________________________
Title:
SECOND AMENDMENT
SECOND AMENDMENT (this "Amendment"), dated as of November 20, 1998,
to the Amended and Restated Credit Agreement, dated as of April 3, 1998
(as the same may be amended, supplemented or otherwise modified, the "CREDIT
AGREEMENT"), among SAFETY-KLEEN SERVICES, INC. (formerly known as LES, Inc.), a
Delaware corporation (the "COMPANY"), SAFETY-KLEEN (CANADA) LTD. (formerly known
as Laidlaw Environmental Services (Canada) Ltd.), a Canadian corporation and a
wholly owned subsidiary of the Company (the "CANADIAN BORROWER"; together with
the Company, the "BORROWERS"), the several banks and other financial
institutions or entities from time to time parties thereto (the "LENDERS"),
TORONTO DOMINION (TEXAS), INC., as general administrative agent (in such
capacity, the "GENERAL ADMINISTRATIVE AGENT"), THE TORONTO-DOMINION BANK, as
Canadian administrative agent (in such capacity, the "CANADIAN ADMINISTRATIVE
AGENT"; together with the General Administrative Agent, the "ADMINISTRATIVE
AGENTS"), TD SECURITIES (USA) INC., as advisor to the Borrowers and arranger of
the commitments described in the Credit Agreement, THE BANK OF NOVA SCOTIA,
NATIONSBANK, N.A., THE FIRST NATIONAL BANK OF CHICAGO and WACHOVIA BANK, N.A.,
as managing agents (each, in such capacity, a "MANAGING AGENT"), THE BANK OF
NOVA SCOTIA and THE FIRST NATIONAL BANK OF CHICAGO, as co-documentation agent
(each, in such capacity, a "CO-DOCUMENTATION AGENT"), and NATIONSBANK, N.A., as
syndication agent (in such capacity, the "SYNDICATION AGENT").
W I T N E S S E T H :
WHEREAS, the Borrowers have requested that the Administrative
Agents and the Lenders agree to amend certain provisions of the Credit Agreement
upon the terms and subject to the conditions set forth herein; and
WHEREAS, the Administrative Agents and the Lenders have agreed to
such waivers and amendments only upon the terms and subject to the conditions
set forth herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained herein, the parties hereto hereby agree as follows:
1. DEFINED TERMS. Terms defined in the Credit Agreement are used
in this Amendment with the meanings set forth in the Credit Agreement unless
otherwise defined herein.
2. AMENDMENT OF SECTION 1.1 OF THE CREDIT AGREEMENT. Section 1.1
of the Credit Agreement is hereby amended by:
(a) inserting the words "or Exhibit A-3" after the reference to
"Exhibit A-1" as it appears in the first line of the definition of
"Draft";
<PAGE>
2
(b) inserting at the end of the definition of "Reference Discount
Rate" the following sentence:
"With respect to any Canadian Lender that is not a Schedule 1
Canadian Lender or a Schedule 2 Canadian Lender on the date on
which a Draft is requested to be accepted by such Lender, the
"Reference Discount Rate" shall be deemed to be the rate
described in clause (b) above."
(c) inserting the following definition in correct alphabetical
order:
"ELGIN OFFICE BUILDING DISPOSITION": the sale by the
Company or its Subsidiary of the office building located at 1000
North Randall Road, Elgin, Illinois and the subsequent lease by
Company or its Subsidiary of all or a portion of such facility
from the purchaser thereof to meet the Company's local office
space requirements.
3. AMENDMENT OF SECTION 2.5 OF THE CREDIT AGREEMENT. Section 2.5
of the Credit Agreement is hereby amended by inserting before the period at the
end of the first sentence thereof the following: ", which notice shall be
accompanied by a certificate of the chief financial officer of the Company
certifying that such requested borrowings under the Revolving Credit
Commitments, at the time made, will not violate the provisions of the indenture
governing the High Yield Notes (including, without limitation, Section 10.10 of
such indenture)".
4. AMENDMENT OF SECTION 6 OF THE CREDIT AGREEMENT. (a) Section
6.3(f) of the Credit Agreement is hereby amended by deleting "Section
6.2(c)," as it appears in the second line of such section; and
(b) Section 6.12(b)(ii) of the Credit Agreement is hereby amended
by deleting "6.11(b)(i)" as it appears in the third line of such section
and inserting in lieu thereof "6.12(b)(i)".
5. AMENDMENT OF SECTION 10 OF THE CREDIT AGREEMENT. (a) Section
10.6 of the Credit Agreement is hereby amended by deleting clause (b) of such
section in its entirety and inserting in lieu thereof the following:
"(b) the sale or other Disposition of any property (other than
inventory), PROVIDED that the aggregate book value of all assets so sold
or disposed of (other than the Elgin Office Building Disposition) in any
period of twelve consecutive months shall not exceed 5% of consolidated
total assets of the Company and its Subsidiaries as at the beginning of
such twelve-month period;"
(b) Section 10.11 of the Credit Agreement is hereby amended by
deleting such section in its entirety and inserting in lieu thereof the
following:
<PAGE>
3
"10.11 LIMITATION ON SALES AND LEASEBACKS. Enter into any
arrangement with any Person providing for the leasing by the Company or
any Subsidiary of real or personal property which has been or is to be
sold or transferred by the Company or such Subsidiary to such Person or
to any other Person to whom funds have been or are to be advanced by
such Person on the security of such property or rental obligations of
the Company or such Subsidiary, except for any such arrangements with
respect to (i) the Elgin Office Building Disposition, (ii) the sale and
leaseback of any transportation equipment in the ordinary course of
business, provided that such sale and leaseback transactions occur
within six months of the purchase of such transportation equipment (or,
with respect to such transportation equipment purchased prior to
February 15, 1998, within six months of the date hereof) and, without
duplication, (iii) real or personal property with respect to which the
aggregate sales price shall not exceed $25,000,000."
6. NEW EXHIBIT TO THE CREDIT AGREEMENT. The Credit Agreement is
hereby amended by attaching thereto, in correct order, a new "Exhibit A-3" in
the form attached hereto as Annex A.
7. CONDITIONS TO EFFECTIVENESS. This Amendment shall become
effective (the actual date of such effectiveness, the "AMENDMENT EFFECTIVE
DATE") as of the date first above written when counterparts hereof shall have
been duly executed and delivered by each of the Borrowers and the Required
Lenders and acknowledged by each of the Grantors (as defined in the Guarantee
and Collateral Agreement).
8. BORROWER REPRESENTATIONS. Each of the Borrowers represents and
warrants that:
(a) this Amendment has been duly authorized, executed and delivered by
each of the Borrowers;
(b) each of this Amendment, and the Credit Agreement as amended by this
Amendment, constitutes the legal, valid and binding obligation of each
of the Borrowers;
(c) each of the representations and warranties set forth in Section 7 of
the Credit Agreement are true and correct as of the Amendment Effective
Date; provided that references in the Credit Agreement to this
"Agreement" shall be deemed references to the Credit Agreement as
amended to date and by this Amendment; and
(d) after giving effect to this Amendment, there does not exist any
Default or Event of Default.
9. CONTINUING EFFECTS. Except as expressly amended hereby, the
Credit Agreement shall continue to be and shall remain in full force and effect
in accordance with its terms.
10. EXPENSES. The Company agrees to pay and reimburse the General
Administrative Agent for all of its out-of-pocket costs and expenses incurred in
<PAGE>
4
connection with the negotiation, preparation, execution, and delivery of this
Amendment, including the reasonable fees and expenses of counsel to such Agent.
11. COUNTERPARTS. This Amendment may be executed on any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
12. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
<PAGE>
5
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and delivered by their proper and duly authorized officers as of
the day and year first above written.
SAFETY-KLEEN SERVICES, INC. (formerly
known as LES, Inc.)
By: /S/ Paul Humphreys
---------------------------------------
Title: Senior Vice President & CFO
SAFETY-KLEEN (CANADA) LTD. (formerly
known as Laidlaw Environmental Services
(Canada) Ltd.)
By: /S/ Paul Humphreys
---------------------------------------
Title: Senior Vice President & CFO
<PAGE>
6
TORONTO DOMINION (TEXAS), INC.,
as General Administrative Agent and Lender
By: /S/ Jano Mott
---------------------------------------
Title: Vice President
THE TORONTO-DOMINION BANK,
as Canadian Administrative Agent
By:
---------------------------------------
Title:
TD SECURITIES (USA) INC.,
as Arranger
By:
---------------------------------------
Title:
THE TORONTO-DOMINION BANK,
as a Lender
By:
---------------------------------------
Title:
By:
---------------------------------------
Title:
THE BANK OF NOVA SCOTIA,
as Managing Agent, Co-Documentation Agent
and Lender
By: /S/ William E. Zarrett
---------------------------------------
Title: Senior Relationship Manager
THE FIRST NATIONAL BANK OF CHICAGO,
as Managing Agent, Co-Documentation Agent
and Lender
By: /S/ Gaye C. Plunkett
---------------------------------------
Title: Vice President
NATIONSBANK, N.A.,
as Syndication Agent, Managing Agent and
Lender
By: /S/ David Sachsenmajer
---------------------------------------
Title: Vice President
WACHOVIA BANK, N.A.,
as Managing Agent and Lender
By: /S/ Donald E. Sellers
---------------------------------------
Title: Vice President
<PAGE>
7
THE CIT GROUP/BUSINESS CREDIT, INC.
By: /S/ Dean Chakalos
---------------------------------------
Title: Vice President
GENERAL ELECTRIC CAPITAL
CORPORATION
By: /S/ Janet K. Williams
---------------------------------------
Title: Duly Authorized Signatory
COMERICA BANK
By: /S/ Marian Enright
---------------------------------------
Title: Vice President
FLEET NATIONAL BANK
By: /S/ Jeffrey Lynch
---------------------------------------
Title: Senior Vice President
ROYAL BANK OF CANADA
By: /S/ Michael Korine
---------------------------------------
Title: Senior Manager
<PAGE>
8
COMPAGNIE FINANCIERE DE CIC ET DE
L'UNION EUROPEENNE
By: /S/ Sean Mounier
---------------------------------------
Title: First Vice President
By:
---------------------------------------
Title:
MARINE MIDLAND BANK
By: /S/ Gina Sidorsky
---------------------------------------
Title: Authorized Signatory
THE LONG-TERM CREDIT BANK OF JAPAN,
LTD.
By: /S/ A. Haruyama
---------------------------------------
Title: Head of Southeast Region Atlanta CEO
MITSUBISHI TRUST AND BANKING
CORPORATION
By: /S/ Toshihiro Hayashi
---------------------------------------
Title: Senior Vice President
SANWA BUSINESS CREDIT CORPORATION
By: /S/ Stan Kaminski
---------------------------------------
Title: Vice President
<PAGE>
9
SOCIETE GENERALE
By: /S/ Ralph Saheb
---------------------------------------
Title: Vice President
SOUTHERN PACIFIC BANK
By: /S/ Cheryl A. Wasilewski
--------------------------------------
Title: Vice President
CREDIT LYONNAIS ATLANTA AGENCY
By: /S/ David M. Cawrse
---------------------------------------
Title: First Vice President
COOPERATIEVE CENTRALE RAIFEISEN-
BOERENLEENBANK B.A., "RABOBANK
NEDERLAND" NEW YORK BRANCH
By: /S/ Ian Reece
---------------------------------------
Title: Senior Credit Officer
By: /S/ Alistair Turnbum
---------------------------------------
Title: Vice President
COMMERCIAL LOAN FUNDING TRUST I
By: /S/ Michele Swanson
---------------------------------------
Title: Authorized Signatory
FREMONT FINANCIAL CORPORATION
By: /S/ Maria Chachere
---------------------------------------
Title: Vice President
<PAGE>
10
THE SAKURA BANK, LTD.
By:
---------------------------------------
Title:
STAR BANK, NATIONAL ASSOCIATION
By: /S/ Mark A. Whitson
---------------------------------------
Title: Vice President
BANK OF HAWAII
By: /S/ Donna R. Parker
---------------------------------------
Title: Vice President
CITIBANK N.A.
By: /S/ David Harris
---------------------------------------
Title: Vice President
THE DAI-ICHI KANGYO BANK, LTD.
By: /S/ Robert Gallagher
---------------------------------------
Title: Vice President
SKANDINAVISKA ENSKILDA BANKEN AB
(PUBL.) NY BRANCH
By: /S/ Philip Montemurro
---------------------------------------
Title: Vice President
By: /S/ Sverker Johansson
---------------------------------------
Title: Vice President
<PAGE>
11
THE SUMITOMO BANK, LIMITED
By:
---------------------------------------
Title:
THE SUMITOMO TRUST & BANKING CO.,
LTD., NEW YORK BRANCH
By: /S/ Stephen Stratico
---------------------------------------
Title: Vice President
NATIONAL CITY BANK
By: /S/ Lisa B. Lisi
---------------------------------------
Title: Vice President
BHF-BANK AKTIENGESELLSCHAFT
By: /S/ Hans J. Scholz
---------------------------------------
Title: Assistant Vice President
By: /S/ Thomas Scifo
---------------------------------------
Title: Assistant Vice President
THE FUJI BANK, LTD., ATLANTA AGENCY
By:
---------------------------------------
Title:
<PAGE>
12
CAISSE DE DEPOT ET PLACEMENT DU
QUEBEC
By: /S/ Normand Provost
---------------------------------------
Title: Coordinating Vice President
By: /S/ Michel Nadeau
---------------------------------------
Title: Senior Vice President
KZH CORP III
By:
---------------------------------------
Title:
WEBSTER BANK
By: /S/ Juliana B. Dalton
---------------------------------------
Title: Vice President
BANQUE WORMS CAPITAL CORPORATION
By: /S/ Constace DeKlerck
---------------------------------------
Title: Vice President
By: /S/ Frederic Gamet
---------------------------------------
Title: Senior Vice President
IMPERIAL BANK
By: /S/ Mark Campbell
---------------------------------------
Title: Senior Vice President
THE PRUDENTIAL INSURANCE COMPANY
OF AMERICA
By: /S/ Thomas J. Cecka
---------------------------------------
Title: Vice President
<PAGE>
13
GPSF SECURITIES, INC.
By:
---------------------------------------
Title:
KZH CNC LLC
By: /S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
SUMMIT BANK
By: /S/ Seiji P. Nakamura
---------------------------------------
Title: Assistant Vice President
METROPOLITAN LIFE INSURANCE
COMPANY
By: /S/ James R. Dingler
---------------------------------------
Title: Director
FIRSTRUST BANK
By: /S/ Kent Nelson
---------------------------------------
Title: Vice President
BANCO ESPIRITO SANTO
By: /S/ Andrew M. Orsen
---------------------------------------
Title: Vice President
By: /S/ Terry R. Hull
---------------------------------------
Title: Senior Vice President
<PAGE>
14
CITY NATIONAL BANK
By: /S/ Scott Kelly
---------------------------------------
Title: Vice President
VAN KAMPEN AMERICAN CAPITAL PRIME
RATE INCOME TRUST
By: /S/ Jeffrey W. Maillet
---------------------------------------
Title: Senior Vice President & Director
OAK HILL SECURITIES FUND, L.P.
BY: OAK HILL SECURITIES GENPAR, L.P.,
its General Partner
BY: OAK HILL SECURITIES MGP, INC., its
General Partner
By: /S/ Scott D. Krase
---------------------------------------
Title: Vice President
SENIOR DEBT PORTFOLIO
BY: BOSTON MANAGEMENT AND RESEARCH,
as Investment Advisor
By: /S/ Payson F. Swaffield
-------------------------------------
Title: Vice President
<PAGE>
15
VAN KAMPEN CLO I, LIMITED
BY: VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT INC., as Collateral Manager
By: /S/ Jeffrey W. Maillet
-------------------------------------
Title: Senior Vice President & Director
OCTAGON LOAN TRUST
BY: OCTAGON CREDIT INVESTORS, as
Manager
By: /S/ Joyce C. Delucca
-------------------------------------
Title: Managing Director
THE CHASE MANHATTAN BANK
By:
---------------------------------------
Title:
AG CAPITAL FUNDING PARTNERS, L.P.
BY: ANGELO, GORDON & CO., L.P.,
as Investment Advisor
By: /S/ Jeffrey H. Aronson
-------------------------------------
Title: Managing Director
FIRST DOMINION FUNDING I
By: -------------------------------------
Title:
<PAGE>
16
JACKSON NATIONAL LIFE INSURANCE
COMPANY
BY: PPM AMERICA, INC., as attorney in fact on
behalf of Jackson National Life Insurance
Company
By: /S/ Michael DiRe
-------------------------------------
Title: Managing Director
ML CBO IV (CAYMAN) LTD.
BY: HIGHLAND CAPITAL MANAGEMENT,
L.P.
COMPANY, as Collateral Manager
By: /S/ James Dondero, CFA, CP
---------------------------------------
Title: President
WESTERN NATIONAL LIFE INSURANCE
COMPANY
By:
---------------------------------------
Title:
KZH CRESCENT LLC
By:
---------------------------------------
Title:
KZH CRESCENT-2 LLC
By:
---------------------------------------
Title:
<PAGE>
17
CRESCENT/MACH I PARTNERS, L.P.
BY: TCW ASSET MANAGEMENT COMPANY,
as its Investment Manager
By:
-------------------------------------
Title:
PAM CAPITAL FUNDING LP
BY: HIGHLAND CAPITAL MANAGEMENT,
as Collateral Manager
By: /S/ James Dondero, CFA, CPA
-------------------------------------
Title: President
KZH CYPRESSTREE-1 LLC
By: /S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
PAMCO CAYMAN LTD.
BY: HIGHLAND CAPITAL MANAGEMENT,
as Collateral Manager
---------------------------------------
By: /S/ James Dondero, CFA, CPA
--------------------------------------
Title: President
ARCHIMEDES FUNDING, LLC
BY: ING CAPITAL ADVISORS, INC. as
Collateral Manager
By: /S/ Michael D. Hatley
--------------------------------------
Title: Senior Vice President
<PAGE>
18
ING HIGH INCOME PRINCIPAL
PRESERVATION FUND HOLDINGS, LDC
BY: ING CAPITAL ADVISORS, INC., as
Investment Advisor
By:-------------------------------------
Title: Vice President & Portfolio Manager
KZH III LLC
By: /S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
KZH ING-1 LLC
By: S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
KZH PAMCO LLC
By: /S/ Virginia Conway
---------------------------------------
Title: Authorized Agent
PACIFICA PARTNERS I, L.P.
BY: IMPERIAL CREDIT ASSET
MANAGEMENT, as its Investment Manager
By: /S/ Michael J. Bacevich
-------------------------------------
Title: Senior Vice President
<PAGE>
19
KZH RIVERSIDE LLC
By: /S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
PILGRIM AMERICAN HIGH INCOME
INVESTMENTS LTD.
BY: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /S/ Michel Prince, CFA
-------------------------------------
Title: Vice President
KZH ING-2 LLC
By: /S/ Michael Wong
---------------------------------------
Title: Authorized Agent
PILGRIM AMERICA PRIME RATE TRUST
BY: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /S/ Michel Prince, CFA
-------------------------------------
Title: Vice President
INDOSUEZ CAPITAL FUNDING IIA, LIMITED
BY: INDOSUEZ CAPITAL LUXEMBOURG, as
Collateral Manager
By: /S/ Francoise Berthelot
-------------------------------------
Title: Authorized Signatory
<PAGE>
20
DELANO COMPANY
BY: PACIFIC INVESTMENT MANAGEMENT
COMPANY, as its Investment Advisor
---------------------------------------
By: PIMCO MANAGEMENT INC., a
General Partner
By: /S/ Bradley W. Paulson
-------------------------------------
Title: Vice President
KZH CRESCENT-3 LLC
By:
---------------------------------------
Title:
BALANCED HIGH-YIELD FUND I LTD.
BY: BHF-BANK AKTIENGESELLSCHAFT
acting through its New York Branch, as its
attorney-in-fact
By: /S/ Hans J. Scholz
-------------------------------------
Title: Assistant Vice President
By: /S/ Thomas Scifo
-------------------------------------
Title: Assistant Vice President
GENERAL MOTORS CASH MANAGEMENT
MASTER TRUST
By:
---------------------------------------
Title:
<PAGE>
21
INDOSUEZ CAPITAL FUNDING III, LIMITED
BY: INDOSUEZ CAPITAL LUXEMBOURG, as
Collateral Manager
By: /S/ Francoise Berthelot
-------------------------------------
Title: Authorized Signatory
KZH SOLEIL LLC
By:
---------------------------------------
Title:
ML CLO XII PILGRIM AMERICA (CAYMAN)
LTD.
BY: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /S/ Michel Prince, CFA
-------------------------------------
Title: Vice President
ML CLO XV PILGRIM AMERICA (CAYMAN)
LTD.
BY: PILGRIM AMERICA INVESTMENTS, INC.,
as its Investment Manager
By: /S/ Michel Prince, CFA
-------------------------------------
Title: Vice President
MOUNTAIN CLO TRUST
By:
---------------------------------------
Title:
<PAGE>
22
CERES FINANCE LTD.
By: /S/ David Egglishaw
---------------------------------------
Title: Director
GENERAL MOTORS BENEFITS TRUST
BY: STATE STREET BANK AND TRUST
COMPANY, as Trustee for General Motors
Benefits Trust
By:
-------------------------------------
Title:
BALANCED HIGH-YIELD FUND II LTD.
BY: BHF-BANK AKTIENGESELLSCHAFT
acting through its New York Branch, as its
attorney-in-fact
By:
-------------------------------------
Title:
By:
-------------------------------------
Title:
CAPTIVA III FINANCE, LTD.
as advised by, PACIFIC INVESTMENT
MANAGEMENT COMPANY
By: /s/Jennifer Dilbert
---------------------------------------
Title: Director
<PAGE>
23
EATON VANCE SENIOR INCOME TRUST
BY: EATON VANCE MANAGEMENT, as
Investment Advisor
By: /S/ Payson F. Swaffield
-------------------------------------
Title: Vice President
VAN KAMPEN CLO II, LIMITED
BY: VAN KAMPEN AMERICAN CAPITAL
MANAGEMENT INC., as Collateral Manager
By: /S/ Jeffrey W. Maillet
-------------------------------------
Title: Senior Vice President & Director
CREDIT SUISSE FIRST BOSTON
By:
---------------------------------------
Title:
KZH LANGDALE LLC
By: /S/ Michael M. Wong
---------------------------------------
Title: Authorized Agent
CYPRESSTREE INVESTMENT MANAGEMENT
COMPANY, INC.
AS: Attorney-in Fact and on behalf of FIRST
ALLMERICA FINANCIAL LIFE
INSURANCE COMPANY, as Portfolio
Manager
By: /S/ Timothy M. Barns
---------------------------------------
Title: Managing Director
<PAGE>
24
ARCHIMEDES FUNDING II, LTD.
BY: ING CAPITAL ADVISORS, INC., as
Collateral Manager
By: /S/ Michael D. Hatley
---------------------------------------
Title: Senior Vice President
ALLIANCE CAPITAL FUNDING, L.L.C.
BY: ALLIANCE CAPITAL MANAGEMENT
L.P., as Manager on behalf of ALLIANCE
CAPITAL FUNDING, L.L.C.
BY: ALLIANCE CAPITAL MANAGEMENT
CORPORATION, General Partner of Alliance
Capital Management L.P.
By:
-------------------------------------
Title:
FIRST ALLAMERICA FINANCIAL LIFE
INSURANCE COMPANY
By:
---------------------------------------
Title:
MERRILL LYNCH, PIERCE FENNER & SMITH
INCORPORATED
By:
---------------------------------------
Title:
<PAGE>
25
CAPTIVA II FINANCE LTD.
By: /S/ David Egglishaw
---------------------------------------
Title: Director
STRATA FUNDING LTD.
By: /S/ David Egglishaw
---------------------------------------
Title: Director
VAN KAMPEN AMERICAN CAPITAL SENIOR
FLOATING RATE FUND
By: /S/ Jeffrey W. Maillet
---------------------------------------
Title: Senior Vice President & Director
CONTINENTAL ASSURANCE COMPANY
SEPARATE ACCOUNT (E)
BY: TCW ASSET MANAGEMENT COMPANY,
as Attorney-in-Fact
By:
-------------------------------------
Title:
By:
-------------------------------------
Title:
AMARA-2 FINANCE LTD.
By: /S/ Andrew Wignall
---------------------------------------
Title: Director
<PAGE>
26
ROYALTON COMPANY
BY: PACIFIC INVESTMENT MANAGEMENT
COMPANY, as its Investment Advisor
By: PIMCO MANAGEMENT INC.,
a General Partner
By: /S/ Bradley W. Paulson
-------------------------------------
Title: Vice President
FLOATING RATE PORTFOLIO
BY: INVESCO SENIOR SECURED
MANAGEMENT INC., as attorney in fact
By: /S/ Joseph Rotondo
-------------------------------------
Title: Authorized Signatory
AMARA-1 FINANCE LTD.
By: /S/ Andrew Wignall
---------------------------------------
Title: Director
KISLAK NATIONAL BANK
BY: ING CAPITAL ADVISORS, INC., as
Investment Advisor
By: /S/ Michael D. Hatley
-------------------------------------
Title: Senior Vice President
<PAGE>
27
DEEPROCK & COMPANY
BY: EATON VANCE MANAGEMENT, as
Investment Advisor
By: /S/ Payson F. Swaffield
-------------------------------------
Title: Vice President
<PAGE>
ACKNOWLEDGMENT AND CONSENT
The undersigned does hereby acknowledge and consent to the
foregoing Amendment. The undersigned does hereby confirm and agree that, after
giving effect to such Amendment, the Guarantee and Collateral Agreement and
other Collateral Documents in favor of the General Administrative Agent or the
Canadian Administrative Agent, as the case may be, to which it is a party are
and shall continue to be in full force and effect and are hereby confirmed and
ratified in all respects.
SAFETY-KLEEN SERVICES, INC. (formerly
known as LES, Inc.)
LAIDLAW ENVIRONMENTAL SERVICES,
INC.
LES MERGER, INC.
SAFETY-KLEEN (PECATONICA), INC.
(formerly known as Laidlaw Environmental
Services of Illinois, Inc.)
GSX CHEMICAL SERVICES OF OHIO, INC.
SAFETY-KLEEN (BDT), INC. (formerly known
as Laidlaw Environmental Services (BDT), Inc.)
SAFETY-KLEEN (FS), INC. (formerly known as
Laidlaw Environmental Services (FS), Inc.)
SAFETY-KLEEN (GS), INC. (formerly known as
Laidlaw Environmental Services (GS), Inc.)
SAFETY-KLEEN (CHATTANOOGA), INC.
(formerly known as Laidlaw Environmental
Services of Chattanooga, Inc.)
SAFETY-KLEEN (WHITE CASTLE), INC.
(formerly known as Laidlaw Environmental
Services of White Castle, Inc.)
SAFETY-KLEEN (CROWLEY), INC. (formerly
known as Laidlaw Environmental Services
(Recovery), Inc.)
SAFETY-KLEEN (TS), INC. (formerly known as
Laidlaw Environmental Services (TS), Inc.)
SAFETY-KLEEN (WESTMORLAND), INC.
(formerly known as Laidlaw Environmental
Services (Imperial Valley), Inc.)
SAFETY-KLEEN (BUTTONWILLOW), INC.
(formerly known as Laidlaw Environmental
Services (Lokern), Inc.)
SAFETY-KLEEN (CALIFORNIA), INC.
(formerly known as Laidlaw Environmental
of California, Inc.)
SAFETY-KLEEN (PINEWOOD), INC.(formerly
known as Laidlaw Environmental Services of
South Carolina, Inc.)
SAFETY-KLEEN (NE), INC.(formerly known as
Laidlaw Environmental Services
(North East), Inc.)
<PAGE>
2
SAFETY-KLEEN (LAPORTE), INC. (formerly
known as Laidlaw Environmental Services
(TES), Inc.)
SAFETY-KLEEN CHEMICAL SERVICES, INC.
(formerly known as Laidlaw Environmental
Services, Inc.)
SAFETY-KLEEN (ROEBUCK), INC.(formerly
known as Laidlaw Environmental Services
(TOC), Inc.)
SAFETY-KLEEN (TG), INC. (formerly known as
Laidlaw Environmental Services (TG), Inc.)
SAFETY-KLEEN (ALTAIR), INC. (formerly
known as Laidlaw Environmental Services
(Altair), Inc.)
SAFETY-KLEEN (WT), INC. (formerly known as
Laidlaw Environmental Services (WT), Inc.)
SAFETY-KLEEN (BARTOW), INC. (formerly
known as Laidlaw Environmental Services of
Bartow, Inc.)
SAFETY-KLEEN (COLFAX), INC. (formerly
known as Laidlaw Environmental Services
(Thermal Treatment), Inc.)
LEMC, INC.
SAFETY-KLEEN OSCO HOLDINGS, INC.
(formerly known as Laidlaw OSCO Holdings,
Inc.)
SAFETY-KLEEN (NASHVILLE), INC. (formerly
known as Laidlaw Environmental Services of
Nashville, Inc.)
SAFETY-KLEEN (CLIVE), INC. (formerly
known as Laidlaw Environmental Services
(Clive), Inc.)
SAFETY-KLEEN (LONE AND GRASSY
MOUNTAIN), INC. (formerly known as
Laidlaw Environmental Services
(Lone and Grassy Mountain), Inc.)
SAFETY-KLEEN (TULSA), INC. (formerly
known as Laidlaw Environmental Services
(Tulsa), Inc.)
SAFETY-KLEEN (SAN ANTONIO), INC.
(formerly known as Laidlaw Environmental
Services (San Antonio), Inc.)
SAFETY-KLEEN (WICHITA), INC. (formerly
known as Laidlaw Environmental Services
(Wichita), Inc.)
SAFETY-KLEEN (DELAWARE), INC. (formerly
<PAGE>
3
known as Laidlaw Environmental Services of
Delaware, Inc.)
USPCI, INC. OF GEORGIA
SAFETY-KLEEN (SAN JOSE), INC. (formerly
known as Laidlaw Environmental Services
(San Jose), Inc.)
SAFETY-KLEEN (SAWYER), INC. (formerly
known as Laidlaw Environmental Services
(Sawyer), Inc.)
CHEMCLEAR, INC. OF LOS ANGELES
SAFETY-KLEEN (ROSEMOUNT), INC.
(formerly known as Laidlaw Environmental
Services (Rosemount), Inc.)
SAFETY-KLEEN HOLDING'S, INC. (formerly
known as LES Holding's, Inc.)
SAFETY-KLEEN (PPM), INC. (formerly known
as Laidlaw Environmental Services (Tucker),
Inc.)
NINTH STREET PROPERTIES, INC.
SAFETY-KLEEN (MT. PLEASANT), INC.
(formerly known as Laidlaw Environmental
Services (Mt. Pleasant), Inc.)
SAFETY-KLEEN (DEER TRAIL), INC.
(formerly known as Laidlaw Environmental
Services (Deer Trail), Inc.)
SAFETY-KLEEN (MINNEAPOLIS), INC.
(formerly known as Laidlaw Environmental
Services (Minneapolis), Inc.)
SAFETY-KLEEN (LOS ANGELES), INC.
(formerly known as Laidlaw Environmental
Services (Los Angeles), Inc.)
SAFETY-KLEEN (BATON ROUGE), INC.
(formerly known as Laidlaw Environmental
Services (Baton Rouge), Inc.)
SAFETY-KLEEN (PLAQUEMINE), INC.
(formerly known as Laidlaw Environmental
Services (Plaquemine), Inc.)
SAFETY-KLEEN (BRIDGEPORT), INC.
(formerly known as Laidlaw Environmental
Services (Bridgeport), Inc.)
SAFETY-KLEEN (DEER PARK), INC. (formerly
known as Laidlaw Environmental Services
(Deer Park), Inc.)
SAFETY-KLEEN (TIPTON), INC.
(formerly known as Laidlaw Environmental
Services (Tipton), Inc.)
<PAGE>
4
SAFETY-KLEEN (ENCOTEC), INC. (formerly
known as Laidlaw Environmental, Inc.)
SAFETY-KLEEN (SUSSEX), INC. (formerly
known as Laidlaw Environmental Services
(Sussex), Inc.)
SAFETY-KLEEN (GLOUCESTER), INC.
(formerly known as Laidlaw Environmental
Services (Gloucester), Inc.)
SAFETY-KLEEN (CUSTOM TRANSPORT),
INC. (formerly known as Laidlaw Environmental
Services (Custom Transport), Inc.)
SAFETY-KLEEN (ARAGONITE), INC. (formerly
known as Laidlaw Environmental Services
(Aragonite), Inc.)
SAFETY-KLEEN (PUERTO RICO), INC.
(formerly known as Laidlaw Environmental
Services (Puerto Rico), Inc.)
SAFETY-KLEEN SYSTEMS, INC. (formerly
known as Safety-Kleen Corp.)
DIRT MAGNET, INC.
THE MIDWAY GAS & OIL CO.
ELGINT CORP.
SAFETY-KLEEN ENVIROSYSTEMS
COMPANY
SAFETY-KLEEN ENVIROSYSTEMS
COMPANY OF PUERTO RICO, INC.
PETROCON, INC.
PHILLIPS ACQUISITION CORP.
SAFETY-KLEEN AVIATION, INC.
SK INSURANCE COMPANY
SK REAL ESTATE, INC.
SAFETY-KLEEN INTERNATIONAL, INC.
SAFETY-KLEEN OIL RECOVERY CO.
SAFETY-KLEEN OIL SERVICES, INC.
3E COMPANY ENVIRONMENTAL,
ECOLOGICAL AND ENGINEERING
THE SOLVENTS RECOVERY SERVICE OF
NEW JERSEY, INC.
SAFETY-KLEEN (EUROPE), INC.
By: /s/Henry H. Taylor
-------------------------------------
Name: Henry H. Taylor
Title: Secretary
<PAGE>
ANNEX A
EXHIBIT A-3
-----------------------
BANKERS' ACCEPTANCE No. BA
-----------------------
THIS IS A DEPOSITORY BILL SUBJECT TO THE DEPOSITORY BILLS AND NOTES ACT
To Due Date
--------------------------------- --------------------- -------------
BANK
- -------------------------------------
ADDRESS
ACCEPTED FOR VALUE RECEIVED PAY TO CDS & CO
SUM OF $
- ------------------------------------- -----------------------------------
PAYABLE AT
------------------------- Dollars $
THIS IS A DEPOSITORY BILL SUBJECT TO THE
DEPOSITORY BILLS AND NOTES ACT
VALUE RECEIVED, AND CHARGE TO
THE ACCOUNT OF
--------------------------------------
Per:
- ------------------------------------- --------------------------------
AUTHORIZED SIGNATURE
Per:
- ------------------------------------- --------------------------------
AUTHORIZED SIGNATURE
<TABLE>
<CAPTION>
EXHIBIT 11
Safety-Kleen Corp.
Statement of Computation of Per Share Earnings
($ in Thousands, Except Per Share Amounts)
(Unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
------------------- -------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Basic:
Income available to common stockholders ........ $ 18,245 $ 3,556 $ 46,017 $ 13,700
======== ======== ======== ========
Weighted average common stock outstanding (000s) 88,386 45,571 88,120 45,381
======== ======== ======== ========
Income per share ............................... $ 0.21 $ 0.08 $ 0.53 $ 0.30
======== ======== ======== ========
Diluted:
Net income ..................................... $ 18,245 $ 3,556 $ 46,017 $ 13,700
Add back: interest expense on conversion of
subordinated convertible debenture ........... 2,625 -- 5,250 5,171
-------- -------- -------- --------
Income available to common stockholders, plus
assumed conversions .......................... $ 20,870 $ 3,556 $ 51,267 $ 18,871
======== ======== ======== ========
Weighted average common stock outstanding (000s) 88,386 45,571 88,120 45,381
Dilutive effect of stock options ............... 31 90 49 113
Dilutive effect of conversion of $350,000,000
subordinated convertible debenture at $15.00 . 23,333 -- 23,333 23,333
-------- -------- -------- --------
Diluted average shares outstanding ............. 111,750 45,661 111,502 68,827
======== ======== ======== ========
Diluted income per share ....................... $ 0.19 $ 0.08 $ 0.46 $ 0.27
======== ======== ======== ========
All per share amounts have been restated to effect the one-for-four reverse
stock split effective the close of business on November 30, 1998.
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 12
Safety-Kleen Corp.
Ratio of Earnings to Fixed Charges
($ in Thousands)
(Unaudited)
Three Months Ended Six Months Ended
February 28, February 28,
------------------- -------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Income from continuing operations before
income taxes ......................................... $ 32,580 $ 5,884 $ 79,672 $ 23,255
Add:
Portion of rents representative of the interest factor 4,780 2,251 10,279 5,135
Interest on indebtedness, including amortization of
deferred financing charges ......................... 44,445 14,350 89,705 29,489
-------- -------- -------- --------
Income as adjusted ..................................... $ 81,805 $ 22,485 $179,656 $ 57,879
======== ======== ======== ========
Fixed charges:
Portion of rents representative of the interest factor $ 4,780 $ 2,251 $ 10,279 $ 5,135
Interest on indebtedness, including amortization of
deferred financing charges ......................... 44,445 14,350 89,705 29,489
-------- -------- -------- --------
Total fixed charges .................................... $ 49,225 $ 16,601 $ 99,984 $ 34,624
======== ======== ======== ========
Ratio of earnings to fixed charges ..................... 1.66x 1.35x 1.80x 1.67x
======== ======== ======== ========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1999
<PERIOD-START> SEP-01-1998
<PERIOD-END> FEB-28-1999
<CASH> 10,949
<SECURITIES> 0
<RECEIVABLES> 367,397
<ALLOWANCES> 10,070
<INVENTORY> 55,435
<CURRENT-ASSETS> 543,399
<PP&E> 2,911,985
<DEPRECIATION> 360,452
<TOTAL-ASSETS> 4,312,393
<CURRENT-LIABILITIES> 424,771
<BONDS> 0
0
0
<COMMON> 88,387
<OTHER-SE> 981,115
<TOTAL-LIABILITY-AND-EQUITY> 4,312,393
<SALES> 869,154
<TOTAL-REVENUES> 869,154
<CGS> 0
<TOTAL-COSTS> 705,112
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 85,472
<INCOME-PRETAX> 79,672
<INCOME-TAX> 33,655
<INCOME-CONTINUING> 46,017
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46,017
<EPS-PRIMARY> 0.53
<EPS-DILUTED> 0.46
</TABLE>
