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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 3)*
Dynamic Healthcare Technologies, Inc.
- ------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- ------------------------------------------------------------------------------
(Title of Class of Securities)
267927101
------------------------------------------------
(CUSIP Number)
BRET R. MAXWELL, 233 S. WACKER DRIVE, SUITE 9500, CHICAGO, IL 60606
(312)258-1400
and Daniel Raynor, 405 Lexington Avenue, 54th Floor, New York, NY 10175
(212) 949-6262
- ------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
July 29, 1998
------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Sections 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box / /.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Section
240.13d-7(b) for other parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which
would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 ("Act") or otherwise subject to the liabilities of that section
of the Act but shall be subject to all other provisions of the Act (however,
see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 2 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Riverside Partnership 36-405-1881
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
AF, BK
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Illinois
7 SOLE VOTING POWER
2,542,200 *
NUMBER OF 8 SHARED VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 2,542,200 *
REPORTING
PERSON WITH
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,542,200 *
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.5%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
*SEE ITEM 5 HEREOF.
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 3 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Environmental Private Equity Fund II, L.P. 36-383-0765
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not applicable.
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
0
NUMBER OF 8 SHARED VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 0
REPORTING
PERSON WITH
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 4 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
The Productivity Fund III, L.P. 51-036-9223
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
0
NUMBER OF
SHARES 8 SHARED VOTING POWER
BENEFICIALLY 0
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 0
PERSON WITH
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.0%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 5 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Argentum Capital Partners, L.P. 13-3444776
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
WC
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
7 SOLE VOTING POWER
1,155,750 *
8 SHARED VOTING POWER
NUMBER OF 0
SHARES
BENEFICIALLY 9 SOLE DISPOSITIVE POWER
OWNED BY
EACH 1,155,750 *
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,155,750 *
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
6.3%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
PN
*SEE ITEM 5 HEREOF.
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 6 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Walter Barandiaran
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Peru
7 SOLE VOTING POWER
84,000 *
NUMBER OF 8 SHARED VOTING POWER
SHARES 2,601,850 *
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH 84,000 *
REPORTING
PERSON WITH 10 SHARED DISPOSITIVE POWER
2,601,850 *
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,685,850 *
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.1%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
*SEE ITEM 5 HEREOF.
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 7 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Daniel Raynor
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
41,900 *
NUMBER OF 8 SHARED VOTING POWER
SHARES 2,601,850 *
BENEFICIALLY
OWNED BY 9 SOLE DISPOSITIVE POWER
EACH
REPORTING 41,900 *
PERSON WITH
10 SHARED DISPOSITIVE POWER
2,601,850 *
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,643,750 *
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.9%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
*SEE ITEM 5 HEREOF.
<PAGE>
SCHEDULE 13D
CUSIP No. 267927101 Page 8 of 106 Pages
1 NAME OF REPORTING PERSONS.
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Bret R. Maxwell
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (SEE INSTRUCTIONS)
(a) / /
(b) /X/
3 SEC USE ONLY
4 SOURCE OF FUNDS (SEE INSTRUCTIONS)
Not Applicable
5 CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS
2(D) OR 2(E) / /
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States
7 SOLE VOTING POWER
46,300 *
NUMBER OF 8 SHARED VOTING POWER
SHARES 2,542,200 *
BENEFICIALLY
OWNED BY
EACH 9 SOLE DISPOSITIVE POWER
REPORTING 46,300 *
PERSON WITH
10 SHARED DISPOSITIVE POWER
2,542,200 *
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,588,500 *
12 CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES (SEE
INSTRUCTIONS) / /
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
13.7%
14 TYPE OF REPORTING PERSON (SEE INSTRUCTIONS)
IN
*SEE ITEM 5 HEREOF.
<PAGE> Page 9 of 106 Pages
THIS SCHEDULE AMENDS A SCHEDULE 13D DATED DECEMBER 5, 1995, AS AMENDED BY
AMENDMENT NO. 1 TO SCHEDULE 13D DATED DECEMBER 29, 1995, AND AMENDMENT NO. 2
TO SCHEDULE 13D DATED SEPTEMBER 26, 1996.
Item 1. Security and Issuer
This Schedule 13D is filed with respect to shares of Common Stock
("Common Stock") of Dynamic Healthcare Technologies, Inc., a Florida
corporation (the "Company"). The Company's principal executive offices are
located at 101 Southhall Lane, Suite 210, Maitland, Florida 32751.
Item 2. Identity and Background.
This Schedule 13D is filed on behalf of Argentum Capital Partners, L.P.,
a Delaware limited partnership ("ACP"), The Productivity Fund III, L.P., a
Delaware limited partnership ("PF III"), Environmental Private Equity Fund
II, L.P., a Delaware limited partnership ("EPEF"), Riverside Partnership, an
Illinois general partnership ("Riverside"), Walter Barandiaran
("Barandiaran"), Bret R. Maxwell ("Maxwell"), and Daniel Raynor ("Raynor").
(ACP, PF III, EPEF and Riverside will be referred to collectively as the
"Entity Filing Parties" and the Entity Filing Parties, Barandiaran, Maxwell
and Raynor will be referred to collectively as the "Filing Parties"). PF
III, Maxwell, EPEF and Riverside maintain their principal offices at 233
South Wacker Drive, 9500 Sears Tower, Chicago, Illinois 60606 ("Suite 9500").
ACP, Barandiaran and Raynor maintain their principal offices at 405
Lexington Avenue, 54th Floor, New York, New York 10174 ("405 Lexington").
The principal business of each of the Filing Parties is venture capital and
private equity investment.
Riverside has seven general partners, including Riverside L.L.C., an
Illinois limited liability company ("RLLC"), PF III and EPEF. The other
general partners have no economic beneficial interest in the equity
securities of the Company, nor do they have any right to control the voting
or disposition thereof. Each of the general partners of Riverside is
controlled through one or more partnerships, except RLLC, which is also
controlled by its manager, First Analysis Corporation, a Delaware corporation
("FAC").
In this Schedule 13D, the persons who have or share control of a
partnership after looking through one or more intermediate partnerships will
be referred to as "ultimate general partners." The ultimate general partners
of PF III are FAC and Maxwell. The ultimate general partners of EPEF are
FAC, Maxwell, BancAmerica Robertson, Stephens & Co. ("BARS"), Argentum
Environmental Corporation ("AEC") (which is in turn controlled by Barandiaran
and Raynor) and Schneur Z. Genack, Inc. ("SZG"). ACP is controlled by its
general partner, BR Associates, Inc., which is controlled by Barandiaran and
Raynor. Barandiaran and Raynor each own 50% of and serve as the sole
directors of BR Associates, Inc. Raynor is Chairman and Barandiaran is
President of BR Associates, Inc. The ultimate general partners of RLLC are
FAC, Maxwell, BARS, AEC and SZG.
(a), (b) and (c). The following information is furnished with respect to
each person who takes executive actions on behalf of FAC with respect to its
functioning as an ultimate general partner of PF III,
<PAGE> Page 10 of 106 Pages
EPEF and Riverside, and on behalf of Maxwell personally, each of whom
maintains Suite 9500 as his principal business address:
<TABLE>
<CAPTION>
Name Affiliation with FAC
---- --------------------
<S> <C>
F. Oliver Nicklin President, Chief Executive Officer and Director
Bret R. Maxwell Vice Chairman
</TABLE>
Each of the above is principally employed as an executive of FAC. FAC's
principal business is participation in venture capital partnerships and the
provision of research investment services. Its principal business address is
Suite 9500.
(a), (b) and (c) (con't). Each of AEC and SZG maintains its business
address at 405 Lexington. The persons who take actions on behalf of AEC and
SZG with respect to their functioning as ultimate general partners of EPEF
and Riverside are Schneur Z. Genack ("Genack"), Raynor and Barandiaran. Each
of Raynor and Barandiaran is principally employed as an executive of The
Argentum Group ("TAG") and maintains his business address at 405 Lexington.
TAG's principal business is merchant banking. Genack is principally employed
as a private investor and maintains his business address at 18 East 48th
Street, Suite 1800, New York, New York 10017.
(a), (b) and (c) (con't). BARS maintains its business address at 555
California Street, San Francisco, California 94111 (the "BARS Address"). The
person who takes actions on behalf of BARS with respect to its functioning as
an ultimate general partner of EPEF and Riverside is Charles R. Hamilton
("Hamilton"). Hamilton is principally employed as a partner of BARS.
Hamilton maintains his principal business address at the BARS Address. BARS'
principal business is investment banking.
(d) and (e) None of the Filing Parties or their general partners and,
to the best of each Filing Party's knowledge, none of the persons listed in
the responses to Items 2(a), (b) or (c) above has, during the last five
years, been (i) convicted in a criminal proceeding (excluding traffic
violations or similar misdemeanors) or (ii) a party to a civil proceeding of
a judicial or administrative body of competent jurisdiction and as a result
of such civil proceeding was or is subject to a judgment, decree or final
order enjoining future violations of or prohibiting activities subject to,
federal or state securities laws or finding any violation of such laws.
(f) Each of F. Oliver Nicklin, Maxwell and Raynor is a citizen of the
United States. Barandiaran is a citizen of Peru. To the best of each Filing
Party's knowledge, each of the other natural persons listed in the responses
to Items 2(a), (b) or (c) above is a citizen of the United States
Item 3. Source and Amount of Funds or Other Consideration.
All of the funds invested by the Entity Filing Parties (other than
Riverside) in the Company were obtained from capital contributions made by
their respective partners. All of the funds invested by Barandiaran, Maxwell
and Raynor in the Company were personal funds or funds in personal retirement
<PAGE> Page 11 of 106 Pages
plans. EPEF and PF III contributed the shares of Common Stock previously
owned by them to Riverside in consideration of their receipt of a partnership
interest in Riverside.
All of the funds invested by Riverside in the Company were obtained
through loans (the "Loans") from LaSalle National Bank, a national banking
association (the "Bank"), pursuant to a Secured Revolving Loan Agreement
dated November 17, 1995, as amended on November 17, 1997 and March __, 1998,
between the Bank and RLLC, a copy of which is attached to this Schedule as
Exhibit E. Repayment of the Loans is guaranteed pursuant to guarantees (the
"Guarantees") made by each of EPEF and PF III, copies of which are attached
to this Schedule as Exhibits F-1 and F-2. Certain of the other general
partners of Riverside also guaranteed repayment of the Loans. However, the
partnership agreement of Riverside provides for indemnification of such
partners for any losses incurred pursuant to the guarantees. Riverside
pledged its interest in the Company's securities to secure repayment of the
Loans. The loaned funds were contributed to Riverside by RLLC in
consideration of a preferred partnership interest in Riverside.
Item 4. Purpose of Transaction.
The securities of the Company held by the Filing Parties were purchased
as an investment. One or more of the Filing Parties may, in the future,
purchase additional securities of the Company or dispose of securities of the
Company.
None of the Filing Parties has any present plans or proposals that
relate to or would result in transactions of the kind described in paragraphs
(a) through (j) of Item 4 of Rule 13D-101 promulgated under the Securities
Exchange Act of 1934, as amended (the "1934 Act"). In the future, however,
each of the Filing Parties reserves the right to adopt such plans or
proposals, subject to applicable regulatory requirements, if any.
Item 5. Interest in Securities of the Issuer.
(a) (i) As of the date of this Schedule, EPEF and PF III own no shares of
the Common Stock and may not be deemed to directly beneficially own any shares
of Common Stock. Each of the other Filing Parties owns the number of shares of
Common Stock and other securities of the Company described below:
(A) Riverside - 1,710,200 shares of Common Stock; Warrants expiring
July 29, 2003 to purchase shares of Common Stock at $2.25 per share
("Warrants") currently exercisable with respect to 192,000 shares of Common
Stock, subject to certain anti-dilution protections; and 640,000 shares of
the Company's Series C 8% Redeemable Convertible Preferred Stock (the
"Series C Preferred"), each share of which is convertible into one share of
Common Stock, subject to certain anti-dilution protections. Subject to the
assumptions described below, Riverside owns 13.5% of the Common Stock.
<PAGE> Page 12 of 106 Pages
(B) ACP - 778,750 shares of Common Stock; 87,000 Warrants; and
290,000 shares of Series C Preferred. Subject to the assumptions described
below, ACP owns 6.3% of the Common Stock.
(C) Barandiaran - 42,000 shares of Common Stock through an individual
retirement account. Barandiaran controls the voting and disposition of an
additional 42,000 shares of Common Stock held in an individual retirement
account for the benefit of his spouse pursuant to a power of attorney.
Subject to the assumptions described below, Barandiaran owns 14.1% of the
Common Stock.
(D) Raynor - 21,500 shares of Common Stock, and a stock purchase
warrant that currently is 80% exercisable to purchase 25,500 shares of
Common Stock at an exercise price of $6.0625 per share ("Raynor Warrant").
The Raynor Warrant expires on the earlier of May 21, 2001 or the date he is
no longer a member of the Board of the Company. Subject to the assumptions
described below, Raynor owns 13.9% of the Common Stock.
(E) Maxwell - 25,900 shares of Common Stock, and a stock purchase
warrant that currently is 80% exercisable to purchase 25,500 shares of
Common Stock at an exercise price of $6.0625 per share ("Maxwell Warrant").
The Maxwell Warrant expires on the earlier of May 21, 2001 or the date he
is no longer a member of the Board of the Company. Subject to the
assumptions described below, Maxwell owns 13.7% of the Common Stock.
In addition, TAG holds a currently exercisable warrant to purchase
175,000 shares of Common Stock at an exercise price of $1.00 per share (the
"TAG Warrant"). The TAG Warrant expires on December 4, 2002. Subject to the
assumptions described below, TAG owns 1.0% of the Common Stock.
All of the above percentages are computed assuming the exercise of the
Warrants and the TAG Warrant, the exercise of 80% of the Raynor Warrant, the
exercise of 80% of the Maxwell Warrant, and the conversion into Common Stock
of the Series C Preferred held by the particular Filing Party but no exercise
of warrants or options or conversion of any convertible security by any other
Filing Party or any other person.
(ii) By reason of its status as an ultimate general partner of
Riverside, FAC may be deemed to be the indirect beneficial owner of 2,542,200
shares of Common Stock, or 13.5% of such shares. By reason of his status as
an ultimate general partner of Riverside, Maxwell may also be deemed to be
the indirect beneficial owner of such shares. By reason of his status as the
majority stockholder of FAC, F. Oliver Nicklin may also be deemed to be the
indirect beneficial owner of such shares. When the 2,542,200 shares referred
to in the first sentence of this paragraph are combined with the 25,900
shares owned by Maxwell directly and the 20,400 shares purchasable under the
Maxwell Warrant of which Maxwell is deemed to be the beneficial owner,
Maxwell may be deemed to be the beneficial owner of 2,588,500 shares of
Common Stock, or 13.7% of such shares.
<PAGE> Page 13 of 106 Pages
By reason of their status as controlling persons of ACP, TAG and AEC and
by reason of AEC's status as an ultimate general partner of Riverside (and
its beneficial interest in the securities of the Company pursuant to the
partnership agreement of Riverside), each of Barandiaran and Raynor may be
deemed to be the indirect beneficial owners of 2,601,850 shares of Common
Stock, or 13.7% of such shares. When these shares are combined with the
42,000 shares of Common Stock owned by Barandiaran through his individual
retirement account and the 42,000 shares of Common Stock held by an
individual retirement account for the benefit of his spouse and controlled by
Barandiaran pursuant to a power of attorney, Barandiaran may be deemed to be
the beneficial owner (directly with respect to the shares owned by his
individual retirement account and indirectly as to the balance) of 2,685,850
shares of Common Stock, or 14.1% of such shares. When the 2,601,850 shares
referred to in the first sentence of this paragraph are combined with the
21,500 shares owned by Raynor directly and the 20,400 shares purchasable
under the Raynor Warrant of which Raynor is deemed to be the beneficial
owner, Raynor may be deemed to be the beneficial owner of 2,643,750 shares of
Common Stock, or 13.9% of such shares.
By reason of BARS', AEC's and SZG's status as ultimate general partners
of Riverside (and their beneficial interest in the securities of the Company
pursuant to the partnership agreement of Riverside), BARS, AEC, SZG and their
controlling persons may be deemed to be the indirect beneficial owners of
1,271,100 shares of Common Stock, or 6.9% of such shares.
(iii) Each of the Filing Parties disclaims beneficial ownership of all
shares described herein except those shares that are owned by the Filing
Party directly or through an individual retirement account for his benefit.
The Filing Parties understand that each of the other persons named as an
officer, director, partner or other affiliate of any Filing Party herein
disclaims beneficial ownership of all of the shares described herein.
Each of the Filing Parties disclaims the existence of a "group" among
any or all of them and further disclaims the existence of a "group" among any
or all of them and any or all of the other persons named as an officer,
director, partner or other affiliate of any Filing Party, in each case within
the meaning of Section 13(d)(3) of the 1934 Act.
(b) (i) Subject to the conversion of the Series C Preferred and the
exercise of the Warrants, ACP has the sole power to dispose of and to vote
1,155,750 shares of Common Stock. Subject to the exercise of the TAG
Warrant, TAG has the sole power to dispose of and to vote 175,000 shares of
Common Stock.. Barandiaran and Raynor may be deemed to share the power to
dispose of and to vote such shares of Common Stock.
(ii) Subject to the conversion of the Series C Preferred and the
exercise of the Warrants, Riverside has the sole power to dispose of and to
vote 2,542,200 shares of Common Stock. FAC and Maxwell may be deemed to share
the power to dispose of and to vote all of such shares and BARS, NEC and SZG
may be deemed to share the power to dispose of and to vote 1,271,100 of such
shares.
(iii) EPEF and PF III have no sole power to dispose of or to vote any
shares of Common Stock.
<PAGE> Page 14 of 106 Pages
(iv) Barandiaran has the sole power to vote and dispose of the 42,000
shares of Common Stock held by his individual retirement account and the
42,000 shares of Common Stock held by the individual retirement account for
the benefit of his spouse.
(v) Raynor has the sole power to vote and dispose of the 21,500 shares
of Common Stock held by him individually and the sole power to dispose of the
Raynor Warrant.
(vi) Maxwell has the sole power to vote and dispose of the 25,900
shares of Common Stock held by him individually and the sole power to dispose
of the Maxwell Warrant.
(c) (i) On July 29, 1998, EPEF and PF III each transferred the 855,100
shares of Common Stock previously held by each of them to Riverside in
exchange for a partnership interest in Riverside.
(ii) On July 29, 1998 Riverside purchased from the Company in a private
placement transaction 64 Units at a purchase price of $20,000 per Unit. Each
Unit consisted of 10,000 shares of Series C Preferred and Warrants to
purchase 3,000 shares of Common Stock.
(iii) On July 29, 1998 ACP purchased from the Company in a private
placement transaction 29 Units at a purchase price of $20,000 per Unit. Each
Unit consisted of 10,000 shares of Series C Preferred and Warrants to
purchase 3,000 shares of Common Stock.
(d) None.
(e) On July 29, 1998, EPEF and PF III ceased to be the direct beneficial
owner of more than five percent of the Common Stock.
Item 6. Contracts, Arrangements, Understandings or Relationships
With Respect to Securities of the Issuer.
ACP and Riverside are holders of certain rights to require registration
of the shares of Common Stock underlying their shares of Series C Preferred.
The Company has agreed to file a registration statement within 75 days of the
closing of the sale of the Series C Preferred, and to cause the registration
statement to become effective within 180 days and to remain effective through
July 29, 2000. ACP and Riverside have unlimited "piggyback" registration
rights with respect to Common Stock on terms and conditions that are
customary in transactions of this nature. The Warrants also contain demand
and "piggyback" registration rights on substantially the same terms and
conditions as the Series C Preferred. The TAG Warrant contains "piggyback"
registration rights with respect to the underlying shares of Common Stock on
terms and conditions that are customary in transactions of this nature.
Pursuant to the partnership agreement of Riverside, EPEF and PF III have
agreed to hold the other general partners of Riverside harmless if they
suffer a loss in connection with Riverside's investment in the Company. As
between EPEF and PF III and the other partners, PF III and EPEF have 100% of
the economic risk of the investment in Company stock made by Riverside. See
Item 4 hereof for a description of certain other arrangements made in
connection with the Loans.
<PAGE> Page 15 of 106 Pages
Item 7. Material to be Filed as Exhibits.
<TABLE>
<CAPTION>
<S> <C>
Exhibit A. Agreement with respect to joint filing of Schedule 13D dated
December __, 1995.
Exhibit B. Irrevocable Proxies dated as of December 4, 1995.
Exhibit C. Agreement with respect to joint filing of Schedule 13D dated
January ___, 1996.
Exhibit D. Agreement with respect to joint filing of Schedule 13D dated
August ___, 1998. Page 18 of 106 pages.
Exhibit E. Secured Revolving Loan Agreement dated November 17, 1995 between
the Bank and RLLC, as amended by First Amendment to Secured
Revolving Loan Agreement dated November 17, 1997, and Second
Amendment to Secured Revolving Loan Agreement dated March __,
1998. Page 20 of 106 pages.
Exhibit F-1. Guarantee dated November 17, 1995 made by EPEF to the Bank, and
Reaffirmation and Amendment dated November 17, 1997 and
Reaffirmation and Amendment dated March __, 1998. Page 71of 106
pages.
Exhibit F-2. Guarantee dated November 17, 1995 made by PF III to the Bank, and
Reaffirmation and Amendment dated November 17, 1997 and
Reaffirmation and Amendment dated March __, 1998. Page 88 of 106
pages.
</TABLE>
<PAGE> Page 16 of 106 Pages
After reasonable inquiry and to the best of the undersigned's knowledge and
belief, the undersigned certify that the information set forth in this statement
is true, complete and correct.
Dated: August 21, 1998 ARGENTUM CAPITAL PARTNERS, L.P.
By: BR Associates, Inc., General Partner of
Argentum Capital Partners, L.P.
By: /s/ Walter Barandiaran
---------------------------------------------
Title: President
/s/ Walter Barandiaran
------------------------------------------------
Walter Barandiaran
/s/ Daniel Raynor
------------------------------------------------
Daniel Raynor
/s/ Bret R. Maxwell
------------------------------------------------
Bret R. Maxwell
ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P., a
Delaware limited partnership
By: Environmental Private Equity Management II,
L.P., General Partner of Environmental
Private Equity Fund II, L.P.
By: First Analysis EPEF Management Company II,
General Partner of Environmental Private
Equity Management II, L.P.
By: First Analysis Corporation, General Partner
of First Analysis EPEF Management Company II
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
<PAGE> Page 17 of 106 Pages
THE PRODUCTIVITY FUND III, L.P., a Delaware
limited partnership
By: First Analysis Management Company III,
L.L.C., General Partner of The Productivity
Fund III, L.P.
By: First Analysis Corporation, Member of First
Analysis Management Company III, L.L.C.
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
RIVERSIDE PARTNERSHIP, an Illinois general
partnership
By: Riverside L.L.C., Managing General Partner of
Riverside Partnership
By: First Analysis Corporation, Manager of
Riverside L.L.C.
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
<PAGE> Page 18 of 106 Pages
EXHIBIT D
AGREEMENT
The undersigned agree as follows:
(i) Each of them is individually eligible to use the Schedule 13D to
which this Agreement is attached, and such Schedule 13D is filed on behalf of
each of them;
(ii) Each of them is responsible for the timely filing of such Schedule
13D and any amendments thereto, and for the completeness and accuracy of the
information concerning such person contained therein; but none of them is
responsible for the completeness or accuracy of the information concerning
the other persons making the filing, unless such person knows or has reason
to believe that such information is inaccurate;
(iii) Such Schedule 13D identifies each such person, contains the
required information with regard to such person and indicates that it is
filed on behalf of all such persons; and
(iv) The execution and delivery of this Agreement does and shall not
constitute an admission by the undersigned that they constitute a "group" for
the purposes of Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended, and the undersigned hereby disclaim such status.
Dated: August 21, 1998 ARGENTUM CAPITAL PARTNERS, L.P.
By: BR Associates, Inc., General Partner of
Argentum Capital Partners, L.P.
By: /s/ Walter Barandiaran
---------------------------------------------
Title: President
/s/ Walter Barandiaran
------------------------------------------------
Walter Barandiaran
/s/ Daniel Raynor
------------------------------------------------
Daniel Raynor
/s/ Bret R. Maxwell
------------------------------------------------
Bret R. Maxwell
<PAGE> Page 19 of 106 Pages
ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P., a
Delaware limited partnership
By: Environmental Private Equity Management II,
L.P., General Partner of Environmental
Private Equity Fund II, L.P.
By: First Analysis EPEF Management Company II,
General Partner of Environmental Private
Equity Management II, L.P.
By: First Analysis Corporation, General Partner
of First Analysis EPEF Management Company II
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
THE PRODUCTIVITY FUND III, L.P., a Delaware
limited partnership
By: First Analysis Management Company III,
L.L.C., General Partner of The Productivity
Fund III, L.P.
By: First Analysis Corporation, Member of First
Analysis Management Company III, L.L.C.
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
RIVERSIDE PARTNERSHIP, an Illinois general
partnership
By: Riverside L.L.C., Managing General Partner of
Riverside Partnership
By: First Analysis Corporation, Manager of
Riverside L.L.C.
By: /s/ Bret R. Maxwell
---------------------------------------------
Title: Vice Chairman
<PAGE> Page 20 of 106 Pages
EXHIBIT E
SECURED REVOLVING LOAN AGREEMENT
THIS SECURED REVOLVING LOAN AGREEMENT (this "Agreement"), dated as of
November 17, 1995, is by and between RIVERSIDE L.L.C., an Illinois limited
liability company (hereinafter, together with its successors and permitted
assigns, the "Borrower"), and LASALLE NATIONAL BANK, a national banking
association (hereinafter, together with its successors and assigns, the
"Bank").
R E C I T A L S:
A. The Borrower has requested that the Bank provide the Borrower with
revolving loans in an aggregate principal amount not exceeding Five Million
Dollars ($5,000,000) at any one time outstanding.
B. The Bank is prepared to make such revolving loans on the terms and
subject to the conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual agreements contained
herein, and for other good and valuable consideration, the receipt, adequacy
and sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
SECTION 1. CERTAIN DEFINITIONS
1.1 TERMS DEFINED IN THIS AGREEMENT. When used herein the following
terms shall have the following respective meanings:
"AFFILIATE" means, with respect to any Person, any other Person directly
or indirectly controlling (including, without limitation, all shareholders,
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through ownership of voting
securities, by contract or otherwise.
"AGREEMENT" means this Secured Revolving Loan Agreement as the same may
be modified, supplemented or amended from time to time.
"AUTHORIZED OFFICER" means the Managing Member or any other Member of
the Manager of the Borrower. References herein to officer or officers or to
specific officers shall include members of limited liability companies and
general partners of partnerships.
"BANK PARTIES" has the meaning contained in SECTION 13.5 hereto.
"BORROWING REQUEST" has the meaning contained in SECTION 8.1.12 hereof.
<PAGE> Page 21 of 106 Pages
"BUSINESS DAY" means any day (other than Saturday or Sunday) of the year
that (a) in the case of a Business Day which relates to a Eurodollar Rate
Loan, banks are open for business in Chicago, Illinois and New York, New York
and on which dealings are carried on in the interbank eurodollar market, and
(b) in the case of a Business Day which relates to a Prime Rate Loan, banks
are open for business in Chicago, Illinois.
"CAPITALIZED LEASE OBLIGATIONS" means any amount payable with respect to
any lease of any tangible or intangible property, however denoted, which is
required by GAAP to be reflected as a liability on the balance sheet of the
lessee thereunder.
"CLOSING DATE" means the date of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, and any
successor statute of similar import, together with the regulations
thereunder, in each case as in effect from time to time.
"COLLATERAL" means all assets, property and rights on or in which a Lien
is granted to the Bank pursuant to the Pledge Agreement, any other Collateral
Document or any other Related Document.
"COLLATERAL DOCUMENTS" means, collectively, the Pledge Agreement and any
and all other documents and agreements provided for in SECTION 10 hereof, if
any, or pursuant to which a Lien is granted to the Bank from time to time as
security for any of the Liabilities, as any of the foregoing documents and
agreements may be amended, modified or supplemented from time to time.
"COMPLIANCE CERTIFICATE" has the meaning contained in SECTION 8.1.3
hereof.
"CONTINUATION/CONVERSION NOTICE" - see SECTION 2.4.
"CURRENT MARKET VALUE" as to any Stock means, (a) if quotations are
available, the closing sale price of such Stock on the preceding Business Day
on which trades were made, as appearing on any regularly published reporting
or quotation service, provided that no material adverse change has occurred
which would render such closing sale price an unreasonable estimate of the
market value of such Stock; or (b) if there is no such closing sale price,
the reasonable estimate of the market value of such Stock as of the close of
business on the preceding Business Day (such estimate to be satisfactory to
the Bank), it being understood that for purposes of this clause (b), if
Current Market Value is being determined at the time a Revolving Loan is
being made to finance the purchase of Stock, Current Market Value of such
Stock shall be deemed to mean the cost of purchase of such Stock (excluding
all brokers fees and other commissions), absent a good faith determination by
the Bank that such purchase price is unreasonable.
"DEFAULT" means any event, act or condition which, with lapse of time or
notice or lapse of time and notice, would constitute an Event of Default.
<PAGE> Page 22 of 106 Pages
"ENVIRONMENTAL LAWS" means any and all federal, state or local laws,
statutes, ordinances, rules, regulations, judgments, orders, decrees,
permits, concessions, agreements, licenses, or other governmental
restrictions or requirements relating to health, safety, the environment or
the release or discharge, or dumping or disposing (whether intentional or
unintentional) of any materials regulated under such laws or regulations
(including, without limitation, hazardous and toxic substances) into the
environment, now or hereafter in effect in any and all jurisdictions in which
the Borrower is or from time to time may be doing business, including,
without limitation, the Comprehensive Environmental Response, Compensation
and Liability Act, 42 U.S.C. Sections 9601 et seq., the Resource Conservation
and Recovery Act, 42 U.S.C. Sections 6901 et seq., the Clean Air Act, 42
U.S.C. Sections 7401 et seq., the Occupational Safety and Health Act, 29
U.S.C. Sections 651 et seq., and the Hazardous Materials Transportation Act,
49 U.S.C. Sections 1801 et seq., as amended or hereafter amended.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute, together with the regulations thereunder,
as in effect from time to time.
"ERISA AFFILIATE" means any corporation, trade or business which
together with the Borrower is a member of a controlled group of corporations
or trades or businesses as described in Sections 414(b) and 414(c) of the
Code, or any corporation, trade or business which together with the Borrower
is otherwise treated as a single employer under Section 4001 of ERISA.
"EUROCURRENCY RESERVE PERCENTAGE" shall mean, with respect to any
Eurodollar Rate Loan for any Interest Period, a percentage (expressed as a
decimal) equal to the daily average during such Interest Period, as
prescribed by the Federal Reserve Board, for determining the aggregate
maximum reserve requirements (including all basic, supplemental, marginal and
other reserves) applicable to "Eurocurrency liabilities" pursuant to
Regulation D or any other then-applicable regulation of the Federal Reserve
Board which prescribes reserve requirements applicable to "Eurocurrency
liabilities," as defined in Regulation D, as applicable to the class of banks
of which the Bank is a member. Without limiting the effect of the foregoing,
the Eurocurrency Reserve Percentage shall reflect any other reserves required
to be maintained by the Bank against (a) any category of liabilities that
includes deposits by reference to which the Eurodollar Rate (Reserve
Adjusted) is to be determined, or (b) any category of extensions of credit or
other assets that includes Eurodollar Rate Loans. For purposes of this
Agreement, any Eurodollar Rate Loan hereunder shall be deemed to be
"Eurocurrency liabilities," as defined in Regulation D, and, as such, shall
be deemed to be subject to such reserve requirements without the benefit of,
or credit for, proration, exceptions or offsets which may be available to the
Bank from time to time under Regulation D.
"EURODOLLAR RATE LOAN" shall mean any Revolving Loan which bears
interest at a rate determined by reference to the Eurodollar Rate (Reserve
Adjusted).
"EURODOLLAR RATE" shall mean, with respect to any Eurodollar Rate Loan
for any Interest Period, the rate of interest equal to the average (rounded
upward, if necessary, to the next higher 1/16 of 1%) rate per annum at which
Dollar deposits in immediately available funds are offered to the Lending
Office of the Bank two (2) Business Days prior to the beginning of such
Interest
<PAGE> Page 23 of 106 Pages
Period by prime banks in the interbank eurodollar market as at or about the
relevant local time of such Lending Office, for delivery on the first day of
such Interest Period, for the number of days comprised therein and in an
amount equal or comparable to the amount of the Revolving Loan of the Bank
for such Interest Period. As used herein, "relevant local time" shall mean
10:00 A.M., Chicago time.
"Eurodollar Rate (Reserve Adjusted)" shall mean, with respect to any
Eurodollar Rate Loan for any Interest Period, a rate per annum (rounded
upward, if necessary, to the nearest 1/100 of 1%) determined pursuant to the
following formula:
<TABLE>
<CAPTION>
<S> <C>
Eurodollar Rate = EURODOLLAR RATE
---------------
(Reserve Adjusted) 1-Eurocurrency
Reserve Percentage
</TABLE>
"EVENT OF DEFAULT" means any of the events or conditions described in
SECTION 12.1 hereof.
"EXCESS INTEREST" has the meaning contained in SECTION 4.15 hereof.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or any successor
authority) that are applicable to the circumstances as of the date of
determination.
"GUARANTEES" means collectively, and "GUARANTEE" means individually each
of, those certain Guarantees executed in connection with this Agreement,
dated the date hereof, in favor of the Bank, pursuant to which each of (i)
Environmental Private Equity Fund II, L.P., a Delaware limited partnership,
and (ii) Productivity Fund III, L.P., a Delaware limited partnership
collectively guarantee payment of that portion of the Liabilities equal to
twenty percent (20%) of the total cost of purchase of the Stock, the form of
which is attached hereto as EXHIBIT F.
"GUARANTORS" means collectively, and "GUARANTOR" means individually each
of, those parties executing a Guarantee.
"INDEBTEDNESS" with respect to any Person means, as of the date of
determination thereof, (i) all of such Person's indebtedness for borrowed
money, (ii) all indebtedness of such Person or any other Person secured by
any Lien with respect to any property or asset owned or held by such Person,
regardless whether the indebtedness secured thereby shall have been assumed
by such Person, (iii) all indebtedness of other Persons which such Person has
directly or indirectly guaranteed (whether by discount or otherwise),
endorsed (otherwise than for collection or deposit in the ordinary course of
business), discounted with recourse to such Person or with respect to which
such Person is otherwise directly or indirectly liable, including, without
limitation, indebtedness in effect guaranteed by such Person through any
agreement (contingent or
<PAGE> Page 24 of 106 Pages
otherwise) to (A) purchase, repurchase or otherwise acquire such Indebtedness
or any security therefor, (B) provide funds for the payment or discharge of
such indebtedness or any other liability of the obligor of such indebtedness
(whether in the form of loans, advances, stock purchases, capital
contribution or otherwise), (C) maintain the solvency of any balance sheet or
other financial condition of the obligor of such indebtedness, or (D) make
payment for any products, materials or supplies or for any transportation or
services regardless of the nondelivery or non-furnishing thereof, if in any
such case the purpose or intent of such agreement is to provide assurance
that such indebtedness will be paid or discharged or that any agreements
relating thereto will be complied with or that the holders of such
indebtedness will be protected against loss in respect thereof, (iv) all of
such Person's Capitalized Lease Obligations, (v) all actual or contingent
reimbursement obligations with respect to letters of credit issued for such
Person's account, and (vi) all other obligations and liabilities of such
Person (including, without limitation, all debts, claims and indebtedness)
whether primary, secondary, direct, contingent, fixed or otherwise,
heretofore, now and/or from time to time hereafter owing, due or payable,
however evidenced, created, incurred, acquired or owing and however arising,
whether under written or oral agreement, by operation of law, or otherwise.
"INDEMNIFIED LIABILITIES" has the meaning contained in SECTION 13.5
hereof.
"ISSUERS" means collectively, and "ISSUER" means individually each of,
the issuers of the Stock.
"INTEREST PERIOD" - see SECTION 4.4.
"LENDING OFFICE" shall mean any office designated by the Bank in its
sole discretion beneath its signature hereto or otherwise from time to time
by written notice to the Borrower, as a Lending Office for purposes
hereunder. The Bank may designate separate Lending Offices for the purposes
of making, maintaining or continuing Prime Rate Loans or Eurodollar Rate
Loans and, with respect to Eurodollar Rate Loans, such Lending Office may be
a foreign branch or an Affiliate of the Bank or the Bank's holding company.
"LIABILITIES" means any and all of the Borrower's obligations,
liabilities and indebtedness to the Bank, howsoever created, arising or
evidenced, whether direct or indirect, absolute or contingent, now or
hereafter existing or arising, or due or to become due, which arise out of or
in connection with this Agreement or the Related Documents (including,
without limitation, all principal, interest, fees, costs and expenses), and
any refinancings, substitutions, extensions, renewals, replacements and
modifications for or of any or all of the foregoing.
"LIEN" means any mortgage, pledge, lien, hypothecation, security
interest or other charge or encumbrance.
"LOAN TO VALUE RATIO" has the meaning contained in SECTION 8.7 hereof.
"MANAGER OF THE BORROWER" means First Analysis Management Company III,
L.L.C., a Delaware limited liability company.
<PAGE> Page 25 of 106 Pages
"MARGIN STOCK" has the meaning given to such term in Regulation U.
"MAXIMUM COMMITMENT" means Five Million Dollars ($5,000,000).
"MAXIMUM LOAN VALUE" as applied to the Stock, means fifty percent (50%)
of the Current Market Value of such Stock.
"MULTIEMPLOYER PLAN" means a Plan which is a "multiemployer plan" as
defined in ERISA.
"NON-MARGIN STOCK" means all stock and other securities which are not
considered as Margin Stock.
"PARTNERSHIP" means Riverside Partnership, and Illinois general
partnership.
"PERMITTED INDEBTEDNESS" has the meaning contained in SECTION 9.2 hereof.
"PERMITTED LIENS" is defined in SECTION 9.3 hereof.
"PERSON" means any individual, sole proprietorship, corporation, limited
liability company, partnership, trust, incorporated or unincorporated
association, joint venture, joint stock company, government (or any agency or
political subdivision thereof) or other entity of any kind.
"PLAN" means a "pension plan", as such term is defined in ERISA, that is
subject to Title IV of ERISA and to which the Borrower or any ERISA Affiliate
may have any liability.
"PLEDGE AGREEMENT" has the meaning contained in SECTION 10.1 hereof.
"PRIME RATE" means the rate of interest announced from time to time by
the Bank as its "Prime Rate." The Prime Rate is one of the Bank's rates and
is not intended to be the Bank's lowest or best rate in effect at any time.
Any change in the Prime Rate shall be effective as of the effective date
stated in the announcement by the Bank of such change.
"PRIME RATE LOAN" shall mean any Revolving Loan which bears interest at
or by reference to the Prime Rate.
"QUARTERLY PAYMENT DATE" shall mean the last day of each March, June,
September and December or, if any such day is not a Business Day, the next
succeeding Business Day.
"REGULATION U" means Regulation U of the Board of Governors of the
Federal Reserve System and any successor rule or regulation of similar import
as in effect from time to time.
"RELATED DOCUMENTS" means, collectively, the Revolving Note, the
Collateral Documents, the Guarantees and all other documents, instruments and
agreements executed or delivered by the Borrower or any other Person pursuant
to or in connection with this Agreement or the foregoing
<PAGE> Page 26 of 106 Pages
documents, agreements and instruments, as the same may be amended,
supplemented or modified from time to time.
"REVOLVING LOAN COMMITMENT" has the meaning contained in SECTION 2.1
hereof.
"REVOLVING LOAN(S)" has the meaning contained in SECTION 2.1 hereof.
"REVOLVING NOTE" has the meaning contained in SECTION 3.1 hereof.
"STOCK" means all Margin Stock and Non-Margin Stock which is purchased
in part with the proceeds of a Revolving Loan and which is pledged to the
Bank pursuant to the terms of the Pledge Agreement.
"SUBSIDIARY" of any Person shall mean another Person of which such
Person owns, directly or indirectly, more than 50% of (a) the combined voting
power of all classes of stock having general voting power under ordinary
circumstances to elect a majority of the board of directors of such Person,
if it is a Corporation, (b) the capital interest or profits interest of such
Person, if it is a partnership, joint venture or similar entity, or (c) the
beneficial interest of such Person, if it is a trust, association or other
unincorporated organization.
"TERMINATION DATE" means the earlier of (i) November 16, 1997, (ii) such
other date on which the Revolving Loan Commitment shall terminate pursuant to
SECTION 12.2 hereof, or (iii) such other date as is mutually agreed in
writing between the Borrower and the Bank, it being understood that the Bank
will annually review its Revolving Loan Commitment to consider a one year
extensions of the Termination Date, but under no circumstance shall the Bank
be obligated to grant such extension and any such extensions shall be in the
Bank's sole and absolute discretion.
1.2 ACCOUNTING TERMS. Any accounting terms used in this Agreement
which are not specifically defined herein shall have the meanings customarily
given to such terms in accordance with GAAP.
1.3 OTHERS DEFINED IN U.C.C.. All terms contained in this Agreement
(and which are not otherwise specifically defined herein) shall have the
meanings provided by the U.C.C. to the extent the same are used or defined
therein.
SECTION 2. REVOLVING LOAN COMMITMENT; REVOLVING LOAN BORROWING PROCEDURES
2.1 REVOLVING LOAN COMMITMENT. On the terms and subject to the
conditions set forth in this Agreement, the Bank agrees to make revolving
loans (collectively, "REVOLVING LOANS", and individually a "REVOLVING LOAN")
to the Borrower from time to time on and after the Closing Date and before
the Termination Date in such aggregate amounts as the Borrower may from time
to time request but not exceeding the lesser of (a) an amount, which when
added to the
<PAGE> Page 27 of 106 Pages
aggregate Revolving Loans which are then outstanding equals the Maximum
Commitment, or (b) the Maximum Loan Value of the Stock to be purchased with
the proceeds of such Revolving Loan. The Borrower shall have the right to
repay and reborrow any of the Revolving Loans; PROVIDED, HOWEVER, that it
shall be a condition precedent to any reborrowing that as of the date of any
reborrowing all of the conditions to borrowing set forth in this Agreement
shall be satisfied and all representations and warranties made herein shall
be true and correct in all material respects as of such reborrowing date.
The Bank's commitment hereunder to make Revolving Loans is hereinafter called
the "REVOLVING LOAN COMMITMENT".
2.2 VARIOUS TYPES OF REVOLVING LOANS. Each Revolving Loan shall be
either a Prime Rate Loan or a Eurodollar Rate Loan (each being herein called
a "Type" of Loan), as the Borrower shall specify in the related Borrowing
Request or Continuation/Conversion Notice pursuant to SECTION 2.3 or SECTION
2.4. Prime Rate Loans and Eurodollar Rate Loans may be outstanding at the
same time; PROVIDED, that (a) in the case of Eurodollar Rate Loans, not more
than five different Interest Periods shall be outstanding at any one time for
all such Revolving Loans, and (b) the Borrower shall specify Revolving Loans
and Interest Periods such that no payment or prepayment of any principal on
any Revolving Loan shall result in a break-up of any Interest Period.
2.3 REVOLVING LOAN BORROWING PROCEDURES. Whenever the Borrower desires
to borrow a Revolving Loan hereunder, the Borrower shall give the Bank
irrevocable telephonic notice of such proposed Revolving Loan borrowing no
later than 12:00 noon, Chicago, Illinois time, on a day which in the case of
a Prime Rate Loan is at least one Business Day prior to the proposed date of
such borrowing, and in the case of a Eurodollar Rate Loan is at least three
Business Days prior to the proposed date of such borrowing. In no event shall
the Borrower request Eurodollar Rate Loans in an aggregate principal amount
of less than $250,000 or any larger integral multiple of $50,000. Each such
notice shall be effective upon receipt by the Bank and shall specify the date
and the amount of the borrowing. Each request for a Revolving Loan shall
automatically constitute a representation and warranty by the Borrower that,
as of the date of such requested Revolving Loan, all conditions precedent to
the making of such Revolving Loan set forth in SECTION 11 hereof shall be
satisfied. Each borrowing of a Revolving Loan shall be on a Business Day.
Concurrently with the above-described telephonic notice, the Borrower shall
deliver to the Bank, via facsimile, a Borrowing Request prepared in
accordance with SECTION 8.1.12 hereof.
2.4 CONVERSION AND CONTINUATION OF REVOLVING LOANS. The Borrower may,
by delivery to the Bank of a Continuation/ Conversion Notice (herein called a
"Continuation/Conversion Notice") in the form of EXHIBIT G attached hereto
with appropriate insertions, before 1:00 P.M., Chicago time, three (3)
Business Days prior to conversion or continuation, convert or continue
Revolving Loans as follows:
(a) convert Eurodollar Rate Loans into Prime Rate Loans,
(b) convert Prime Rate Loans into Eurodollar Rate Loans, and
<PAGE> Page 28 of 106 Pages
(c) continue any such Revolving Loan into a subsequent Interest
Period of the same duration or of any other duration permitted
hereunder, subject to the following:
(i) the Interest Period applicable to any Eurodollar
Rate Loan resulting from a conversion shall be specified
by the Borrower in the Continuation/ Conversion Notice
delivered pursuant to this Section; PROVIDED, HOWEVER,
that if no such Interest Period shall be specified, the
Borrower shall be deemed to have selected an Interest
Period, in the case of a Eurodollar Rate Loan, of one
(1) month's duration. If the Borrower shall not have
given timely notice to continue any Revolving Loan into
a subsequent Interest Period and shall not otherwise
have given notice to convert such Revolving Loan, such
Revolving Loan unless repaid pursuant to the terms
hereof shall automatically be converted into a Prime
Rate Loan;
(ii) in the case of a conversion or continuation of
less than all Revolving Loans, the aggregate principal
amount of such Revolving Loans converted or continued
shall be not less than $100,000 or any larger integral
multiple of $50,000;
(iii) if any Eurodollar Rate Loan is converted at a
time other than the last day of an Interest Period
applicable thereto, the Borrower shall at the time of
conversion pay any loss or expense (including, without
limitation, breakage losses and expenses) associated
therewith pursuant to SECTION 4.11;
(iv) any portion of a Revolving Loan maturing or
required to be repaid in less than one (1) month may not
be converted into, or continued as, a Eurodollar Rate
Loan; and
(v) any portion of a Eurodollar Rate Loan required to
be paid on any principal payment date occurring in less
than one (1) month after the end of the then-current
Interest Period applicable to such Loan shall be
automatically converted at the end of such Interest
Period into a Prime Rate Loan.
Notwithstanding the foregoing, so long as any Default shall exist, no Revolving
Loans shall be converted to or continued as Eurodollar Rate Loans.
<PAGE> Page 29 of 106 Pages
SECTION 3. REVOLVING NOTE
3.1 REVOLVING NOTE. The Revolving Loans shall be evidenced by a
promissory note (hereinafter, as the same may be amended, modified or
supplemented from time to time, and together with any renewals or extensions
thereof or exchanges or substitutions therefor, the "REVOLVING NOTE"), duly
executed and delivered by the Borrower, substantially in the form set forth
in EXHIBIT A attached hereto, with appropriate insertions, dated the Closing
Date, payable to the order of the Bank in the original principal amount of
Five Million Dollars ($5,000,000). The date and amount of each Revolving
Loan made by the Bank and of each repayment of principal thereon received by
the Bank shall be recorded by the Bank in its records. The aggregate unpaid
principal amount so recorded shall be rebuttable presumptive evidence of the
principal amount owing and unpaid on the Revolving Note. The failure so to
record any such amount or any error in so recording any such amount, however,
shall not limit or otherwise affect the Borrower's obligations hereunder or
under the Revolving Note to repay the principal amount of the Revolving Loans
together with all interest accruing thereon.
3.2 INTEREST; DUE DATE EXTENSION. The Revolving Note shall provide for
the payment of interest as provided in SECTION 4 hereof. If any payment of
principal of, or interest on, the Revolving Note falls due on a day that is
not a Business Day, then such due date shall be extended to the next
following Business Day, and additional interest shall accrue and be payable
for the period of such extension.
SECTION 4. INTEREST AND FEES; CHANGE IN CIRCUMSTANCE
4.1 INTEREST RATES ON REVOLVING LOANS. The Borrower hereby promises to
pay interest on the unpaid principal amount of each Revolving Loan for the
period commencing on the date of disbursement of such Revolving Loan until
such loan is paid in full, as follows:
(a) At all times while such Revolving Loan is a Prime Rate
Loan, at a rate per annum equal to the Prime Rate from time to time in
effect PLUS one-half percent (1/2%);
(b) At all times while such Revolving Loan is a Eurodollar Rate
Loan, for each Interest Period, at a rate per annum equal to the
Eurodollar Rate (Reserve Adjusted) applicable to such Interest Period,
PLUS two and one-half percent (2 1/2%).
4.2 DEFAULT INTEREST RATE. Notwithstanding the provisions of SECTION 4.1,
in the event that any Default under SECTION 12.1.4 or any Event of Default shall
occur hereunder, the Borrower hereby promises to pay interest on the unpaid
principal amount of each Revolving Loan for the period commencing on the date of
such Default or Event of Default until such Default or Event of Default is cured
or waived at a rate per annum equal to the interest rate
<PAGE> Page 30 of 106 Pages
otherwise in effect hereunder from time to time (but not less than the
applicable rate in effect as at such due date), plus two percent (2.0%) per
annum.
4.3 INTEREST PAYMENT DATES. Accrued interest on each Prime Rate Loan
shall be payable on each Quarterly Payment Date and at maturity, commencing
with the first of such date to occur after the Closing Date. Accrued
interest on each Eurodollar Rate Loan shall be payable on the last day of
each Interest Period relating to such Revolving Loan and if such Interest
Period exceeds three months, on the date which is three months after the
beginning of such Interest Period, and at maturity. After maturity, accrued
interest on all Revolving Loans shall be payable on demand.
4.4 INTEREST PERIODS. Each "Interest Period" for a Eurodollar Rate Loan
shall commence on the date such Eurodollar Rate Loan was made or converted
from a Revolving Loan of a different Type, or on the expiration of the
immediately preceding Interest Period for such Eurodollar Rate Loan, and
shall end on the date which is one (1), two (2), three (3) or six (6) months
thereafter, as the Borrower may specify pursuant to SECTION 2.2 or SECTION
2.3 hereof. Each "Interest Period" for a Eurodollar Rate Loan which would
otherwise end on a day which is not a Business Day shall end on the next
succeeding Business Day (unless such next succeeding Business Day is the
first Business Day of a calendar month, in which case with respect to a
Eurodollar Rate Loan such Interest Period shall end on the next preceding
Business Day).
4.5 COMPUTATION OF INTEREST. Interest on each Revolving Loan shall be
computed for the actual number of days elapsed on the basis of a three
hundred sixty (360) day year. The applicable Eurodollar Rate for each
Interest Period shall be determined by the Bank, and notice thereof shall be
given by the Bank to the Borrower. Each determination of the applicable
Eurodollar Rate by the Bank shall be conclusive and binding upon the parties
hereto, in the absence of demonstrable error. The interest rate applicable
to each Prime Rate Loan shall change simultaneously with each change in the
Prime Rate.
4.6 COMMITMENT FEE. The Borrower agrees to pay to the Bank, for the
period commencing on the Closing Date and continuing through the Termination
Date, a commitment fee at the rate of one-quarter percent (1/4%) per annum on
the sum of the average daily unused portion of the Maximum Commitment. Such
commitment fees shall be payable by the Borrower in arrears on each Quarterly
Payment Date, commencing with the first such date to occur after the Closing
Date.
4.7 TAXES. All payments by the Borrower under this Agreement shall be
made free and clear of, and without deduction for, any present or future
income, excise, stamp or other taxes, fees, levies, duties, withholdings or
other charges of any nature whatsoever, now or hereafter imposed by any
taxing authority, other than franchise taxes and taxes imposed on or measured
by the Bank's net income or receipts (such non-excluded items being called
"TAXES"). In the event that any withholding or deduction from any payment to
be made by the Borrower hereunder is required in respect of any Taxes
pursuant to any applicable law, rule or regulation, then the Borrower will:
<PAGE> Page 31 of 106 Pages
(a) pay directly to the relevant authority the full amount
required to be so withheld or deducted;
(b) promptly forward to the Bank an official receipt or other
documentation satisfactory to the Bank evidencing such payment to such
authority; and
(c) pay to the Bank such additional amount or amounts as is
necessary to ensure that the net amount actually received by the Bank will
equal the full amount the Bank would have received had no such withholding
or deduction been required.
Moreover, if any Taxes are directly asserted against the Bank with respect to
any payment received by the Bank hereunder, the Bank may pay such Taxes and the
Borrower will promptly pay such additional amounts (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
the Bank after the payment of such Taxes (including any Taxes on such additional
amount) shall equal the amount the Bank would have received had not such Taxes
been asserted.
4.8 INCREASED COSTS; CAPITAL ADEQUACY.
4.8.1 INCREASED COSTS. If (i) Regulation D of the Board of
Governors of the Federal Reserve System, or (ii) after the date hereof, the
adoption of any applicable law, rule or regulation, or any change therein,
or any change in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by the Bank (or any
Lending Office of the Bank) with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency issued after the date hereof,
(a) shall subject the Bank (or any Lending Office of the Bank)
to any tax, duty or other charge with respect to any Revolving Loan,
the Revolving Note or its obligation to make or maintain any
Revolving Loan, or shall change the basis of taxation of payments to
the Bank of the principal of or interest on any Revolving Loan or
any other amounts due under this Agreement in respect of any
Revolving Loan or its obligation to make or maintain any Revolving
Loan (except for changes in the rate of tax on the overall net
income of the Bank imposed by the jurisdiction in which the Bank's
principal executive office is located); or
(b) shall impose, modify or deem applicable any reserve
(including, without limitation, any reserve imposed by the Board of
Governors of the Federal Reserve System), special deposit or similar
requirement against assets of, deposits with or for the account of,
or credit extended by, the Bank (or any Lending Office of the Bank);
or
<PAGE> Page 32 of 106 Pages
(c) shall impose on the Bank (or its Lending Office) any other
condition affecting any Revolving Loan, the Revolving Note or its
obligation to make or maintain any Revolving Loan;
and the result of any of the foregoing is to increase the cost to (or to
impose a cost on) the Bank (or any Lending Office of the Bank) of making or
maintaining any Revolving Loan, or to reduce the amount of any sum received
or receivable by the Bank (or its Lending Office) under this Agreement or
under the Revolving Note with respect thereto, then upon demand by the Bank
(which demand shall be accompanied by a statement setting forth the basis
of such demand), the Borrower shall pay directly to the Bank from time to
time such additional amount or amounts as the Bank reasonably determines
will compensate the Bank for such increased cost or such reduction.
4.8.2 CAPITAL ADEQUACY. If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or
(ii) compliance by the Bank with any guideline or request from any central
bank or other governmental authority (whether or not having the force of
law) affects or would affect the amount of capital required or expected to
be maintained by the Bank or any Person controlling the Bank and the Bank
determines that the amount of such capital is increased by or based upon
the existence of the Bank's commitment to lend hereunder, then, upon demand
by the Bank, the Borrower shall immediately pay to the Bank, from time to
time as specified by the Bank, additional amounts sufficient to compensate
the Bank in the light of such circumstances, to the extent that the Bank
reasonably determines such increase in capital to be allocable to the
existence of the Bank's commitment to lend hereunder.
4.9 BASIS FOR DETERMINING INTEREST RATE INADEQUATE OR UNFAIR. If with
respect to any Interest Period:
(a) the Bank determines that deposits in Dollars (in the
applicable amounts) are not being offered to it in the relevant market
for such Interest Period, or the Bank otherwise determines (which
determination shall be binding and conclusive on all parties) that by
reason of circumstances affecting the interbank eurodollar market
adequate and reasonable means do not exist for ascertaining the
applicable Eurodollar Rate; or
(b) the Eurodollar Rate (Reserve Adjusted), as determined by
the Bank, will not adequately and fairly reflect the cost to the Bank
of maintaining or funding such Revolving Loans for such Interest
Period, or that the making or funding of Eurodollar Rate Loans has
become impracticable as a result of an event occurring after the date
of this Agreement which in the opinion of the Bank materially changes
such Revolving Loans,
then, so long as such circumstances shall continue:
<PAGE> Page 33 of 106 Pages
(i) the Bank shall promptly notify the Borrower
thereof,
(ii) The Bank shall be under no obligation to make or
convert into Eurodollar Rate Loans so affected, and
(iii) on the last day of the then current Interest Period
for Eurodollar Rate Loans so affected, such Revolving Loans
shall, unless then repaid in full, automatically convert to
Prime Rate Loans.
If conditions subsequently change so that the foregoing conditions no longer
exist, the Bank will promptly notify the Borrower thereof, and upon the
receipt of such notice, the obligations of the Bank to make or continue
Eurodollar Rate Loans shall be reinstated.
4.10 CHANGES IN LAW RENDERING CERTAIN LOANS UNLAWFUL. In the event that
any change in (including the adoption of any new) applicable laws or
regulations, or any change in the interpretation of applicable laws or
regulations by any governmental or other regulatory body charged with the
administration thereof, should make it unlawful for the Bank or the Lending
Office of the Bank to make, maintain or fund Eurodollar Rate Loans, then (a)
the Bank shall promptly notify the Borrower, (b) the obligation of the Bank
to make or convert into Eurodollar Rate Loans made unlawful for the Bank
shall, upon the effectiveness of such event, be suspended for the duration of
such unlawfulness, and (c) on the last day of the current Interest Period for
Eurodollar Rate Loans (or, in any event, if the Bank so requests, on such
earlier date as may be required by the relevant law, regulation or
interpretation), the Eurodollar Rate Loans shall, unless then repaid in full,
automatically convert to Prime Rate Loans. If conditions subsequently change
so that the foregoing conditions no longer exist, the Bank will promptly
notify the Borrower thereof, and upon the receipt of such notice, the
obligations of the Bank to make or continue Eurodollar Rate Loans shall be
reinstated.
4.11 FUNDING LOSSES. The Borrower hereby agrees that upon demand by the
Bank (which demand shall be accompanied by a statement setting forth the
basis for the calculations of the amount being claimed) the Borrower will
indemnify the Bank against any net loss or expense which the Bank may sustain
or incur (including, without limitation, any net loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired
by the Bank to fund or maintain Eurodollar Rate Loans), as reasonably
determined by the Bank, as a result of (a) any payment or prepayment or
conversion of any Eurodollar Rate Loan of the Bank on a date other than the
last day of an Interest Period for such Revolving Loan, or (b) any failure of
the Borrower to borrow or convert any Revolving Loans on a date specified
therefor in a Borrowing Request or Continuation/Conversion request pursuant
to this Agreement. For this purpose, all notices to the Bank pursuant to this
Agreement shall be deemed to be irrevocable.
4.12 RIGHT OF BANK TO FUND THROUGH OTHER OFFICES. The Bank may, if it
so elects, fulfill its Commitment as to any Eurodollar Rate Loan by causing
its Lending Office to make such Revolving Loan; PROVIDED, that in such event
for the purposes of this Agreement, such
<PAGE> Page 34 of 106 Pages
Revolving Loan shall be deemed to have been made by the Bank and the
obligation of the Borrower to repay such Loan shall nevertheless be to the
Bank and shall be deemed held by it, to the extent of such Loan, for the
account of such branch or affiliate.
4.13 DISCRETION OF BANK AS TO MANNER OF FUNDING. Notwithstanding any
provision of this Agreement to the contrary, the Bank shall be entitled to
fund and maintain its funding of all or any part of the Revolving Loans in
any manner it sees fit, it being understood, however, that for the purposes
of this Agreement all determinations hereunder shall be made as if the Bank
had actually funded and maintained each Eurodollar Rate Loan during each
Interest Period for such Revolving Loan through the purchase of deposits
having a maturity corresponding to such Interest Period and bearing an
interest rate equal to the Eurodollar Rate for such Interest Period.
4.14 CONCLUSIVENESS OF STATEMENTS; SURVIVAL OF PROVISIONS.
Determinations and statements of the Bank pursuant to SECTION 4.8.1, SECTION
4.8.2, SECTION 4.9, SECTION 4.10 or SECTION 4.11 shall be conclusive absent
demonstrable error. The provisions of SECTIONS 4.8.1, 4.8.2 and 4.10 shall
survive termination of this Agreement.
4.15 MAXIMUM INTEREST. It is the intention of the Bank and the Borrower
to comply with the laws of the State of Illinois, and, notwithstanding any
provision to the contrary contained herein or in the other Related Documents,
the Borrower shall not be required to pay, and the Bank shall not be
permitted to collect, any amount in excess of the maximum amount of interest
permitted by applicable law ("EXCESS INTEREST"). If any Excess Interest is
provided for or determined to have been provided for by a court of competent
jurisdiction in this Agreement or in any of the other Related Documents, then
in such event (i) the provisions of this SECTION 4.15 shall govern and
control; (ii) the Borrower shall not be obligated to pay any Excess Interest;
(iii) any Excess Interest that the Bank may have received hereunder shall be,
at the Bank's sole option, (A) applied as a credit against either the
outstanding principal balance of the Revolving Loans or accrued and unpaid
interest hereon, (B) refunded to the payor thereof, or (C) any combination of
the foregoing; (iv) the interest rate(s) provided for herein shall be
automatically reduced to the maximum rate allowed under applicable law, and
this Agreement and the other Related Documents shall be deemed to have been,
and shall be, reformed and modified to reflect such reduction; and (v) the
Borrower shall not have any action against the Bank for any damages arising
out of the payment or collection of any Excess Interest. Notwithstanding the
foregoing, if any interest payment or other charge or fee payable hereunder
or under any of the other Related Documents exceeds the maximum amount then
permitted by applicable law, then to the extent permitted by law, the
Borrower shall be obligated to pay the maximum amount then permitted by
applicable law and the Borrower shall continue to pay the maximum amount from
time to time permitted by applicable law until all such interest payments and
other charges and fees otherwise due hereunder or under any of the other
Related Documents (in the absence of such restraint imposed by applicable
law) have been paid in full.
<PAGE> Page 35 of 106 Pages
SECTION 5. REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENT; PREPAYMENTS
5.1 REDUCTION OR TERMINATION OF REVOLVING LOAN COMMITMENT BY THE
BORROWER. The Borrower may from time to time on at least five (5) Business
Days' prior written notice received by the Bank permanently reduce the amount
of the Maximum Commitment but only upon first repaying the amount, if any, by
which the aggregate unpaid principal amount of the Revolving Note exceeds the
then reduced amount of the Maximum Commitment. The Borrower may at any time
on like notice terminate the Revolving Loan Commitment upon payment in full
of the Revolving Note; PROVIDED, HOWEVER, that no such termination of the
Revolving Loan Commitment shall terminate or otherwise affect the obligations
of the Borrower hereunder or require the Bank to release any of the
Collateral.
5.2 OPTIONAL PREPAYMENT OF REVOLVING LOANS. The Borrower may prepay at
any time any Revolving Loans in whole or in part without penalty except to
the extent any amounts are owed pursuant to SECTION 4.11 as a result of such
prepayment; PROVIDED, that (a) the Borrower shall give the Bank not less than
one (1) Business Days' prior notice thereof for Prime Rate Loans and not less
than three (3) Business Days' prior notice thereof for Eurodollar Rate Loans,
specifying the Revolving Loans to be prepaid, and the date and amount of
prepayment, (b) subject to SECTION 4.9, Eurodollar Rate Loans shall be
prepaid only on the last day of the Interest Period relating thereto, (c)
each partial prepayment shall be in a principal amount of $100,000 or an
integral multiple thereof, and (d) any prepayment of the entire principal
amount of all Revolving Loans shall include accrued interest to the date of
prepayment.
5.3 MANDATORY PREPAYMENTS. If, on any date, the Partnership shall sell
any of the Stock, the Borrower shall promptly notify the Bank of such sale,
including the amount of net proceeds to be received by the Partnership in
respect of such sale and in return for the release of the Stock being sold,
the Borrower shall promptly repay in full any Revolving Loans then
outstanding, the proceeds of which were used to purchase such Stock.
5.4 TERMINATION OF REVOLVING LOAN COMMITMENT BY THE BANK. On the
Termination Date, all Revolving Loans and other Liabilities shall become
immediately due and payable, without presentment, demand or notice of any
kind.
5.5 INTEREST ON PRINCIPAL PREPAID. Any prepayment of any Revolving
Loan shall include accrued interest to the date of prepayment on the
principal amount being prepaid.
5.6 USE OF PROCEEDS; REGULATION U. The proceeds of the Revolving Loans
shall be used by the Borrower to purchase Stocks for investment purposes.
Borrower understands that for purposes of this Agreement, all Stock (whether
Margin Stock or Non-Margin Stock) will be treated as Margin Stock and the
Bank will comply with Regulation U in connection therewith.
<PAGE> Page 36 of 106 Pages
Notwithstanding the foregoing, the Borrower may request and the Bank shall
make Revolving Loans for the payment of interest hereunder, provided that
each of the conditions to borrowing set forth in SECTION 11 hereof is
satisfied both before and after giving effect to such Revolving Loan.
SECTION 6. MAKING OF PAYMENTS
6.1 MAKING OF PAYMENTS. All payments of principal of, or interest on,
the Revolving Note and of any fees shall be made in lawful money of the
United States of America in immediately available funds by the Borrower to
the Bank. All such payments shall be made to the Bank at its principal office
in Chicago, Illinois not later than 2:00 p.m., Chicago, Illinois time, on the
date due; and funds received after that hour shall be deemed to have been
received by the Bank on the next following Business Day.
6.2 DEPOSITS TO THE BORROWERS' ACCOUNT. The Bank shall have the right
to deposit all proceeds of the Revolving Loans to the Borrower's operating
account, if any, with the Bank and shall have the right to charge such
account (or any other account in the Borrower's name) for all other
Liabilities due from and payable by the Borrower hereunder.
6.3 SET-OFF.
(a) The Borrower agrees that, if at any time (i) any amount
owing by it under this Agreement or any Related Document is then due and
payable to the Bank, or (ii) any Default or Event of Default shall have
occurred and be continuing, then the Bank, in its sole discretion, may set
off against and apply to the payment of any and all Liabilities any and all
balances, credits, deposits, accounts, moneys or other assets of the
Borrower then or thereafter with the Bank, including, without limitation,
all negotiable instruments, documents of title, chattel paper, securities
or certificates of deposit. The Borrower hereby grants to the Bank a
continuing security interest in, any and all such balances, credits,
deposits, accounts, moneys or other assets of the Borrower then or
thereafter maintained with the Bank.
(b) Without limitation of SECTION 6.3(a) hereinabove, the
Borrower agrees that, upon and after the occurrence of any Default or Event
of Default, the Bank is hereby authorized, in its sole discretion, at any
time and from time to time, without notice to the Borrower, (i) to set off
against and to appropriate and apply to the payment of any and all
Liabilities any and all amounts which the Bank is obligated to pay over to
the Borrower, and (ii) pending any such action, to the extent necessary, to
deposit such amounts with the Bank as Collateral to secure such Liabilities
and to dishonor any and all checks and other items drawn against any
deposits so held as the Bank in its sole discretion may elect.
<PAGE> Page 37 of 106 Pages
(c) The rights of the Bank under this SECTION 6.3 are in
addition to all other rights and remedies that the Bank may otherwise have.
6.4 APPOINTMENT AS ATTORNEY-IN-FACT. The Borrower hereby irrevocably
constitutes and appoints the Bank (and any of the Bank's officers, employees or
agents designated by the Bank), with full power of substitution by the Bank, as
the Borrower's true and lawful agent and attorney, with power to endorse the
Borrower's name on any checks, notes, acceptances, money orders, drafts or other
forms of payment or security that may come into the Bank's possession and to do
any and all acts and things necessary or desirable in the Bank's sole
determination to carry out this Agreement and the Collateral Documents. The
Borrower hereby ratifies and approves all acts under such power of attorney and
neither the Bank nor any other Person acting as Borrower's attorney hereunder
will be liable for any acts or omissions or for any error of judgment or mistake
of fact or law made in good faith except as result of gross negligence or
willful misconduct. The appointment of the Bank (and any of the Bank's
officers, employees or agents designated by the Bank) as the Borrower's
attorney, and each and every one of the Bank's rights and powers, being coupled
with an interest, are irrevocable until all of the Liabilities have been fully
repaid and this Agreement shall have expired or been terminated in accordance
with the terms hereof.
SECTION 7. REPRESENTATIONS AND WARRANTIES
To induce the Bank to enter into this Agreement and to make Revolving
Loans hereunder, the Borrower hereby represents and warrants to the Bank that:
7.1 ORGANIZATION. The Borrower is a limited liability company duly
organized, validly existing and in good standing under the laws of the
jurisdiction of its formation; and the Borrower is duly qualified and in good
standing as a foreign limited liability company authorized to do business in
each jurisdiction where such qualification is required because of the nature
of its activities or properties. First Analysis Management Company III,
L.L.C., a Delaware limited liability company is the sole Manager of Borrower.
First Analysis Management Company III, L.L.C. and Environmental Private
Equity Management II, L.P. are the sole members of the Borrower. The
Borrower is the sole Managing General Partner of the Partnership. The
Borrower and each of the Guarantors are the sole partners of the Partnership.
7.2 AUTHORIZATION; NO CONFLICT. The Borrower's execution, delivery and
performance of this Agreement and each Related Document to which it is a
party and the consummation of the transactions contemplated by this Agreement
and each Related Document are within the Borrower's limited liability company
powers, have been duly authorized by all necessary limited liability company
action, require no governmental, regulatory or other approval, and do not and
will not contravene or conflict with any provision of (i) any law, statute or
regulation, (ii) any judgment, decree or order, or (iii) the Borrower's
Certificate of Formation or Operating Agreement, and do not and will not
contravene or conflict with, or cause any Lien
<PAGE> Page 38 of 106 Pages
(other than to the Bank) to arise under, any provision of any agreement or
document binding upon the Borrower, or upon any property of the Borrower.
7.3 VALIDITY; BINDING NATURE; APPROVALS. This Agreement and the
Related Documents to which the Borrower is a party are the legal, valid and
binding obligations of the Borrower enforceable against the Borrower in
accordance with their respective terms. No order, consent, license or
exemption of, or filing or registration with, any court or governmental
department, agency, instrumentality or regulatory body, or any other approval
which has not been obtained or taken and is not in full force and effect, is
required to authorize, or is required in connection with the execution,
delivery and performance by the Borrower of this Agreement and each of the
Related Documents to which it is a party.
7.4 FINANCIAL STATEMENTS. All income statements, balance sheets, cash
flow statements, statements of operations and other financial data that have
been or shall hereafter be furnished to the Bank for the purposes of or in
connection with this Agreement do and will present fairly in accordance with
GAAP, consistently applied, the financial condition of the Borrower as of the
dates thereof and the results of operations for the period(s) covered
thereby. There is no liability, direct or indirect, contingent or otherwise,
of the Borrower that is not reflected on these financial statements.
7.5 MATERIAL ADVERSE CHANGE.
(a) Since the date of the most recent financial statements
submitted pursuant to SECTIONS 8.1.1 and 8.1.2 there has been no material
adverse change in the financial condition, operations, assets, business, or
properties of the Borrower.
(b) To the Borrower's knowledge, since the date of the most
recent financial statements submitted pursuant to SECTIONS 8.1.5, 8.1.6,
8.1.7 and 8.1.8 there has been no material adverse change in the financial
condition, operations, assets, business, or properties of either of the
Issuers or the Guarantors.
7.6 LITIGATION AND CONTINGENT LIABILITIES. No litigation, arbitration
proceedings, governmental or quasi-governmental proceedings or investigations
are pending or threatened against the Borrower, or to Borrower's knowledge
the Issuers or the Guarantors, nor does the Borrower know of any basis for
any of the foregoing. The Borrower has obtained all licenses, permits,
franchises and other governmental authorizations necessary to the ownership
of its properties or to the conduct of its business and all of the foregoing
are valid and in full force and effect.
7.7 LIENS. None of the assets of the Borrower is subject to any Lien,
except Permitted Liens.
<PAGE> Page 39 of 106 Pages
7.8 EMPLOYEE BENEFIT PLANS. Neither the Borrower nor any ERISA
Affiliate maintains any Plan nor any Multiemployer Plan.
7.9 BROKER'S FEES. The Borrower has no obligation to any Person in
respect of any finder's, brokers or similar fee in connection with the
Revolving Loans or this Agreement.
7.10 OTHER AGREEMENTS. The Borrower is not in default, and will not be
in default upon the consummation of the transactions contemplated hereby, or
under any agreement, document, instrument, or mortgage to which the Borrower
is a party or by which it is bound.
7.11 ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of the Borrower to the Bank for
purposes of or in connection with this Agreement or any transaction
contemplated hereby is, and all other factual information hereafter furnished
by or on behalf of the Borrower to the Bank will be, true and accurate in
every material respect on the date as of which such information is dated or
certified, and the Borrower has not omitted and will not omit any material
fact necessary to prevent such information from being false or misleading.
The Borrower has disclosed to the Bank all facts which might materially and
adversely affect the business, credit, operations, financial condition or
prospects of the Borrower or the Borrower's ability to perform its
obligations under this Agreement or the Related Documents.
7.12 TAX STATUS. Borrower has made or filed all income and other tax
returns, reports and declarations required by any jurisdiction to which it
is, or was, subject, and has paid all taxes, assessments and other charges
shown or determined to be due on such returns, reports and declarations.
Neither the Borrower, nor to the Borrower's knowledge either of the issuers
of the Stock is currently undergoing any audit or investigation by any
federal, state or local taxing authority or agency, nor is any audit or
investigation pending or anticipated.
7.13 NO DEFAULT. No event has occurred and no condition exists which,
upon the execution and delivery of, or consummation of any transaction
contemplated by, this Agreement or any Related Document, or upon the funding
of any Revolving Loan, will constitute a Default or an Event of Default.
7.14 COMPLIANCE WITH APPLICABLE LAWS. The Borrower is in compliance
with the requirements of all applicable laws, rules, regulations, and orders
of all governmental authorities, including, without limitation, Environmental
Laws.
7.15 PLACES OF BUSINESS. As of the date hereof the chief executive
office and principal place of business of the Borrower is 9500 Sears Tower,
Chicago, Illinois 60606. The Borrower conducts no business at any other
location.
<PAGE> Page 40 of 106 Pages
7.16 INVESTMENT COMPANY ACT. The Borrower is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
7.17 PUBLIC UTILITY HOLDING COMPANY ACT. The Borrower is not a "holding
company", or a "subsidiary company" of a "holding company", or an "affiliate"
of a "holding company" or of a "subsidiary company" of a "holding company",
within the meaning of the Public Utility Holding Company Act of 1935, as
amended.
7.18 SOLVENCY. The Borrower is solvent, is and will be able to pay its
debts as they become due and has capital sufficient to carry on its business
and all businesses in which it is about to engage, and owns property having a
value both at fair valuation and at present fair saleable value greater than
the amount required to pay the Borrower's debts. The Borrower will not be
rendered insolvent by the execution and delivery of this Agreement or any
document executed incidental to or in connection herewith, or by completion
of the transactions contemplated hereunder.
7.19 LICENSES. The Borrower has obtained all licenses, permits,
franchises and other governmental authorizations necessary to the ownership
of its respective properties or to the conduct of its business.
7.20 SUBSIDIARIES. The Borrower has no Subsidiaries.
7.21 SURVIVAL. The representations and warranties set forth in this
SECTION 7 shall survive until all Liabilities have been satisfied.
SECTION 8. AFFIRMATIVE COVENANTS
Until the expiration or termination of the Revolving Loan Commitment and
thereafter until all Liabilities are paid in full, the Borrower covenants and
agrees that it will:
8.1 REPORTS, CERTIFICATES AND OTHER INFORMATION. Furnish or cause to be
furnished to the Bank:
8.1.1 BORROWER FINANCIAL STATEMENTS. On or before the one hundred
twentieth (120th) day after each of the Borrower's fiscal years, a copy of
the annual consolidated financial statements of the Borrower consisting of,
at least, a balance sheet and statement of income and cash flow for such
period, prepared in accordance with GAAP, consistently applied, signed by
an Authorized Officer.
8.1.2 BORROWER INTERIM REPORTS. On or before the sixtieth (60th)
day after the end of each fiscal quarter of the Borrower, a copy of
unaudited consolidated financial
<PAGE> Page 41 of 106 Pages
statements of the Borrower prepared in accordance with GAAP, consistently
applied, signed by an Authorized Officer and consisting of, at least, a
balance sheet and statement of income and cash flow as at the close of
such fiscal quarter and for the period from the beginning of such calendar
year to the close of such fiscal quarter.
8.1.3 CERTIFICATES. On or before the tenth (10th) calendar day of
each calendar month, or if such day is not a Business Day, on the next such
Business Day, a duly completed certificate in the form of EXHIBIT B
attached hereto (a "COMPLIANCE CERTIFICATE") dated as of the last Business
Day of the preceding calendar month and signed by an Authorized Officer.
8.1.4 REPORTS FROM ACCOUNTANTS. Promptly upon receipt thereof,
copies of each report submitted to the Borrower by independent accountants
in connection with any annual, interim or other financial review made by
them of the books of the Borrower.
8.1.5 ISSUER FINANCIAL STATEMENTS. On or before the one hundred
twentieth (120th) day after each of the Issuers' fiscal years, a copy of
the annual consolidated financial statements of such Issuer consisting of,
at least, a balance sheet and statement of income and cash flow for such
period, prepared in accordance with GAAP, consistently applied, audited by
independent certified public accountants of recognized standing; provided,
that if such Issuer obtains a filing extension from the Securities and
Exchange Commission ("SEC"), such financial statements shall only be
required to be delivered within fifteen (15) days of the filing of such
financial statements with the SEC.
8.1.6 ISSUER INTERIM REPORTS. On or before the sixtieth (60th) day
after the end of each of the Issuers' fiscal quarters, a copy of unaudited
consolidated financial statements of such Issuer prepared in accordance
with GAAP, consistently applied, signed by an authorized officer of such
Issuer and consisting of, at least, a balance sheet and statement of income
and cash flow as at the close of such fiscal quarter and for the period
from the beginning of such calendar year to the close of such fiscal
quarter; provided, that if such Issuer obtains a filing extension from the
SEC, such financial statements shall only be required to be delivered
within fifteen (15) days of the filing of such financial statements with
the SEC.
8.1.7 GUARANTOR FINANCIAL STATEMENTS. On or before the one hundred
twentieth (120th) day after each of the Guarantors' fiscal years, a copy of
the annual consolidated financial statements of such Guarantor consisting
of, at least, a balance sheet and statement of income and cash flow for
such period, prepared in accordance with GAAP, consistently applied,
audited by independent certified public accountants of recognized standing.
8.1.8 GUARANTOR INTERIM REPORTS. On or before the sixtieth (60th)
day after the end of each of the Guarantors' fiscal quarters, a copy of
unaudited consolidated financial
<PAGE> Page 42 of 106 Pages
statements of such Guarantor prepared in accordance with GAAP, consistently
applied, signed by an authorized officer of such Guarantor and consisting
of, at least, a balance sheet and statement of income and cash flow as at
the close of such fiscal quarter and for the period from the beginning of
such calendar year to the close of such fiscal quarter.
8.1.9 PARTNERSHIP FINANCIAL STATEMENTS. On or before the one
hundred twentieth (120th) day after each of the Partnership's fiscal years,
a copy of the annual consolidated financial statements of the Partnership
consisting of, at least, a balance sheet and statement of income and cash
flow for such period, prepared in accordance with GAAP, consistently
applied, signed by an authorized officer of the general partner of the
Partnership.
8.1.10 PARTNERSHIP INTERIM REPORTS. On or before the sixtieth
(60th) day after the end of each fiscal quarter of the Partnership, a copy
of unaudited consolidated financial statements of the Partnership prepared
in accordance with GAAP, consistently applied, signed by an authorized
officer of the general partner of the Partnership and consisting of, at
least, a balance sheet and statement of income and cash flow as at the
close of such fiscal quarter and for the period from the beginning of such
calendar year to the close of such fiscal quarter.
8.1.11 NOTICE OF DEFAULT; LITIGATION. Forthwith upon learning of the
occurrence of any of the following, written notice thereof which describes
the same and the steps being taken by the Borrower with respect thereto:
(i) the occurrence of a Default or an Event of Default, and (ii) the
institution of, or any adverse determination in, any litigation,
arbitration proceeding or governmental proceeding in which any injunctive
relief is sought or in which money damages in excess of Twenty-Five
Thousand Dollars ($25,000) are sought.
8.1.12 BORROWING REQUEST. Upon each request by the Borrower for a
Revolving Loan hereunder, a duly completed borrowing request in the form of
EXHIBIT C attached hereto (the "BORROWING REQUEST"), in form and substance
satisfactory to the Bank and signed by an Authorized Officer.
8.1.13 OTHER INFORMATION. Such other information, certificates,
schedules, exhibits or documents (financial or otherwise) concerning the
Borrower, the Issuers or the Guarantors as the Bank may reasonably request
from time to time.
8.2 EXISTENCE. Maintain in full force and effect its existence as a
limited liability company in good standing under the laws of its State of
formation, and all rights, licenses, leases and franchises necessary to the
conduct of its business, and qualify and remain qualified to do business in
each jurisdiction in which such qualification is required.
<PAGE> Page 43 of 106 Pages
8.3 BOOKS, RECORDS AND INSPECTIONS. Maintain complete and accurate
books and records, the Bank to have access to such books and records, and
permit the Bank and any officers and designated agents or representatives of
the Bank to visit, audit, examine, copy and inspect, and verify the
Borrower's books and records, offices, properties, Collateral and operations,
at such times as the Bank may reasonably request, at the sole cost and
expense of the Bank, unless there is a Default or an Event of Default, in
which case such visit, audit, examination and inspection shall be upon the
Bank's demand and at the sole cost and expense of the Borrower.
8.4 TAXES AND LIABILITIES. Promptly pay when due all taxes, duties,
assessments and other liabilities.
8.5 COMPLIANCE WITH APPLICABLE LAWS. Comply with the requirements of
all applicable laws, rules, regulations, and orders of all governmental
authorities, including, without limitation, Environmental Laws.
8.6 USE OF PROCEEDS. Only use or permit the direct or indirect use of
any proceeds of or with respect to the Revolving Loans for "purchasing or
carrying" (within the meaning of Regulation U) Stock for investment purposes
and in all cases consistent with applicable laws and statutes.
8.7 LOAN TO VALUE RATIO. Maintain at all times a Loan to Value Ratio
equal to or less than .65 to 1.0; PROVIDED, that the Borrower agrees that if
at any time the Loan to Value Ratio is greater than .65 to 1.0, the Borrower
will, on or before the next Business Day, either (a) make a mandatory
prepayment of principal of the Revolving Loans (any such mandatory prepayment
shall be without premium or penalty) or (b) pledge to the Bank additional
Stock, each in an amount necessary to reduce the Loan to Value Ratio to equal
to or less than .65 to 1.0. For purposes of this Section, "LOAN TO VALUE
RATIO" means at any time the ratio obtained by dividing the aggregate
outstanding amount of the Revolving Loans by the aggregate Current Market
Value of the Stocks.
SECTION 9. NEGATIVE COVENANTS
Until the expiration or termination of the Revolving Loan Commitment and
thereafter until all Liabilities are paid in full, Borrower covenants and
agrees that, unless at any time the Bank shall otherwise expressly consent in
writing, it will not:
9.1 LIMITS ON REVOLVING LOAN COMMITMENT. Permit the aggregate
outstanding principal amount of the Revolving Loans to exceed the
then-current Maximum Commitment from time to time in effect.
<PAGE> Page 44 of 106 Pages
9.2 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness EXCEPT (i) the Revolving Loans or other Liabilities, and (ii)
other Indebtedness outstanding on the date hereof as set forth on SCHEDULE
9.2 attached hereto (collectively, the "PERMITTED INDEBTEDNESS").
9.3 LIENS. Create, incur, assume or suffer to exist any Lien with
respect to any assets now owned or hereafter acquired by the Borrower, EXCEPT
the following Liens (the "PERMITTED LIENS"): (a) Liens in favor of the Bank,
(b) Liens incurred in the ordinary course of business in connection with
workers' compensation, unemployment insurance and other types of social
security, (c) Liens of carriers, materialmen and mechanics and other like
statutory Liens arising in the ordinary course of business, (d) Liens for
current taxes not delinquent or taxes being contested in good faith and by
appropriate proceedings and as to which such reserves or other appropriate
provisions as may be required by GAAP are being maintained, (e) Liens arising
in the ordinary course of business for sums being contested in good faith and
by appropriate proceedings and with respect to which adequate reserves are
being maintained in accordance with GAAP, or for sums not due, and in either
case not involving any deposits or advances for borrowed money or the
deferred purchase price of property or services; or (f) Liens consented to in
writing by the Bank.
9.4 SUBSIDIARIES. Not create any Subsidiary or other affiliated entity
nor enter into any joint venture (other than the Partnership) with any other
entity, without the Bank's prior written consent.
9.5 CHANGE IN NATURE OF BUSINESS. Make any material change in the
nature of its business carried on as of the Closing Date.
9.6 MERGERS, CONSOLIDATIONS, SALES. Without the Bank's prior written
consent, be a party to any merger, consolidation, or exchange of stock, or
purchase or otherwise acquire all or substantially all of the assets or stock
of any class of, or any partnership or joint venture interest in, any other
Person, or sell, transfer, convey or lease all or any substantial part of its
assets, or sell or assign, with or without recourse, any receivables.
9.7 TRANSACTIONS WITH AFFILIATES. Not enter into, or cause, suffer or
permit to exist any arrangement or contract with any of its other Affiliates
unless such arrangement (a) is fair and equitable to the Borrower,(b) is of a
sort which would be entered into by a prudent Person in the position of the
Borrower with a Person which is not one of its Affiliates, and (c) is on
terms which are not less favorable to the Borrower than are obtainable from a
Person which is not one of its Affiliates.
9.8 OTHER AGREEMENTS. Enter into any agreement containing any provision
which would be violated or breached by the performance of its obligations
hereunder or under any Related Document or which would violate or breach any
provision hereof or of any Related Document.
<PAGE> Page 45 of 106 Pages
9.9 EMPLOYEE BENEFIT PLANS. Establish or permit any ERISA Affiliate to
establish any Plan or Multiemployer Plan without the prior written consent of
the Bank.
SECTION 10. COLLATERAL SECURITY
10.1 COLLATERAL DOCUMENTS. Payment and performance of all of the
Liabilities shall be secured pursuant to a Pledge Agreement, substantially in
the form of EXHIBIT D attached hereto, pursuant to which the Partnership
grants a security interest in the Stock owned by it to the Bank as collateral
security for the Liabilities of the Borrower to the Bank (as the same may be
amended, modified or supplemented from time to time, the "PLEDGE AGREEMENT").
10.2 DELIVERIES; FURTHER ASSURANCES. The Borrower agrees that it will,
at its sole expense, upon the Bank's request, forthwith execute and deliver,
or cause to be executed and delivered to the Bank, in due form for filing or
recording (the Borrower hereby agreeing to pay the cost of filing or
recording the same in all public offices deemed necessary by the Bank), such
assignments, security agreements, warehouse receipts, bailee letters,
consents, waivers, financing statements, and other documents, and do such
other acts and things, all as the Bank may from time to time reasonably
request, to establish and maintain to the satisfaction of the Bank a valid,
first perfected security interest in all of the present and/or future
Collateral (free of all other Liens whatsoever, except Permitted Liens) to
secure payment of the Liabilities, including, without limitation, all things
necessary to enable the Bank to have a first priority perfected security
interest in the Collateral as required by Article 8 and Article 9 of the
Illinois Uniform Commercial Code, as amended.
SECTION 11. CONDITIONS OF LENDING
The Bank's obligation to make any Revolving Loan is subject to the
following conditions precedent:
11.1 INITIAL LOANS. The Bank's obligation to make the initial Revolving
Loan hereunder is, in addition to the conditions precedent specified in
SECTION 11.2 hereof, subject to the satisfaction of each of the following
conditions precedent:
11.1.1 DOCUMENTS. The Bank shall have received all of the
following, each duly executed and delivered and dated the Closing Date, or
such earlier date as shall be satisfactory to the Bank, in form and
substance satisfactory to the Bank:
(a) RELATED DOCUMENTS. This Agreement, the Revolving Note, the
Pledge Agreement, the Guarantees and such other Collateral Documents
and Related Documents as the Bank may require.
<PAGE> Page 46 of 106 Pages
(b) CERTIFICATE OF THE MANAGER OF THE BORROWER. A certificate
of the Secretary of the Manager of the Borrower certifying as to:
(1) Borrower's Certificate of Formation, certified by the
Secretary of State of the Borrower's State of formation as of a
recent date;
(2) Operating Agreement of the Borrower;
(3) Resolutions of the Borrower's Members and/or Managers
authorizing the execution, delivery and performance of this
Agreement and the Related Documents to which the Borrower is a
party;
(4) The names of the officer or officers of the Manager of
the Borrower authorized to sign this Agreement and the Related
Documents together with a sample of the true signature of each
such officer. The Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any
changes therein.
(c) CERTIFICATE OF EXISTENCE. A good standing certificate from
the Secretary of State of Illinois and a good standing certificate
from the Secretaries of State of each other State in which the
Borrower is required to be qualified to transact business.
(d) CERTIFICATE OF THE GENERAL PARTNER OF THE PARTNERSHIP. A
certificate of the Secretary of the General Partner of the
Partnership certifying as to:
(1) Partnership Agreement of the Partnership;
(2) Resolutions of the Partnership authorizing the
execution, delivery and performance of the Pledge Agreement;
(3) The names of the officer or officers of the General
Partner of the Borrower authorized to sign the Pledge Agreement
together with a sample of the true signature of each such
officer. The Bank may conclusively rely on each such certificate
until formally advised by a like certificate of any changes
therein.
(e) CERTIFICATE OF THE GENERAL PARTNER OF THE EACH OF THE
GUARANTORS. A certificate of the Secretary of the General Partner
of each of the Guarantors certifying as to:
<PAGE> Page 47 of 106 Pages
(1) Certificate of Limited Partnership of such Guarantor,
certified by the Secretary of State of such Guarantor's State of
formation as of a recent date;
(2) Partnership Agreement of such Guarantor;
(3) Resolutions authorizing the execution, delivery and
performance of such Guarantor's Guarantee;
(4) The names of the officer or officers of the General
Partner of such Guarantor authorized to sign the Guarantee of
such Guarantor together with a sample of the true signature of
each such officer. The Bank may conclusively rely on each such
certificate until formally advised by a like certificate of any
changes therein.
(f) CERTIFICATE OF EXISTENCE OF GUARANTORS. A good standing
certificate from the Secretary of State of Illinois and a good
standing certificate from the Secretaries of State of each other
State in which each of the Guarantors is required to be qualified to
transact business.
(g) CONSENTS. Certified copies of all documents evidencing any
necessary limited liability company action, consents and
governmental approvals, if any, with respect to this Agreement and
the Related Documents.
(h) LEGAL OPINION. An opinion of McDermott, Will & Emery, the
legal counsel of the Borrower, the Partnership and the Guarantors
substantially in the form of EXHIBIT E attached hereto.
(i) REGULATION U. Form FR U-1 (OMB No. 7100-0115) executed by
an Authorized Officer.
(j) STOCK. All certificates representing shares of the Stock to
be held by the Partnership, together with assignments thereof
endorsed in blank duly executed by the Partnership and/or the
Borrower, as applicable.
(k) CUSTODY AGREEMENT. A custody agreement from each securities
intermediary having a security entitlement to any of the Stock, in
form and substance reasonably satisfactory to the Bank.
(l) FORMS UCC-1. UCC-1 Financing Statements naming the Borrower
as debtor (under its limited liability company and trade names) and
the Bank as secured party with respect to the Collateral and other
documents as the
<PAGE> Page 48 of 106 Pages
Bank deems necessary or appropriate shall have been filed in all
jurisdictions that the Bank deems necessary or advisable.
(m) FINANCIAL STATEMENTS. A copy of (i) each of the Issuers'
most recent quarterly financial statements, including, at a minimum,
a balance sheet and related statements of income, retained earnings
and cash flows and (iii) each of the Guarantors' most recent
quarterly financial statements, including, at a minimum, a balance
sheet and related statements of income, retained earnings and cash
flows.
(n) OTHER. Such other certificates, schedules, exhibits,
instruments, agreements and documents as the Bank may reasonably
request.
11.1.2 FEES AND EXPENSES. The Borrower shall have paid all fees
owed to the Bank and reimbursed the Bank for all costs and expenses due and
payable hereunder on or before the Closing Date.
11.1.3 DUE DILIGENCE. The Bank shall have completed its
examinations of the books and records of the Issuers, which examinations
will be satisfactory to the Bank in its sole and absolute discretion.
11.1.4 CERTIFICATE. The Bank shall have received a certificate
signed by an Authorized Officer and dated the Closing Date certifying
satisfaction of the conditions specified in SECTION 11.1 hereof and that
all the conditions to lending pursuant to SECTIONS 11.2 hereof have been
satisfied.
11.1.5 COMPLIANCE CERTIFICATE. The Bank shall have received
certificates duly executed by each of the Guarantors, in the form attached
to the Guarantees as Annex I and Annex II.
11.2 ALL REVOLVING LOANS. The Bank's obligation to make the initial
Revolving Loan and each subsequent Revolving Loan is subject to the following
conditions precedent:
11.2.1 NO DEFAULT. (a) No Default or Event of Default shall have
occurred and be continuing or will result from the making of such Revolving
Loan, (b) the representations and warranties contained in SECTION 7 hereof
shall be true and correct as of the Closing Date, and shall be true and
correct as of the date of any subsequently requested Revolving Loan with
the same effect as though made on the date thereof, (c) the aggregate
amount of the outstanding aggregate principal amount of the Revolving Loans
shall not exceed the then-current Maximum Commitment or other limit
applicable to such Revolving Loan, and (d) there shall have been no
material adverse change with respect to the business, credit, operations,
or financial condition of the Borrower since the date of the
<PAGE> Page 49 of 106 Pages
previous Revolving Loan made hereunder or notice of any prospective
material adverse change with respect to any insurance maintained by the
Borrower.
11.2.2 LITIGATION. (a) The Borrower shall have disclosed in
writing to the Bank all existing or threatened claims, litigation,
arbitration proceedings or governmental proceedings pending or threatened
against the Borrower not previously disclosed in writing to Bank before the
date of the last previous Revolving Loan (or, in the case of the initial
Revolving Loan(s), since the date of this Agreement), (b) the Borrower
shall have disclosed any and all material developments that have occurred
with respect to any previously disclosed claims, litigation, arbitration
proceedings or governmental proceedings and (c) the Bank shall not have
determined that any existing or threatened claim, litigation, arbitration
proceeding or governmental proceeding is likely to have a material adverse
impact on the business, credit, operations, financial condition or
prospects of the Borrower or on the ability of the Borrower to perform its
obligations hereunder or under any Related Document.
11.2.3 BORROWING REQUEST/LETTER OF DIRECTION. A Borrowing Request,
certified by an Authorized Officer, together with a letter of direction as
to the payment of the proceeds of the Revolving Loan to be made.
11.2.4 REGULATION U COMPLIANCE.
(a) Both before and after giving effect to such Revolving Loan,
the aggregate principal amount of all outstanding Revolving Loans
shall not exceed the Maximum Loan Value of all of the Stock.
(b) The Borrower shall have provided to the Bank a current list
of all Stock which is Collateral for the Revolving Loans, including,
without limitation, the Stock to be purchased with the proceeds of
such Revolving Loan, together with the Borrower's good faith
estimate of the Current Market Value of each such Stock.
11.2.5 ISSUER INFORMATION. The Borrower shall have provided the
Bank with a copy of the most recent quarterly financial statements,
including, at a minimum, a balance sheet and related statements of income,
retained earnings and cash flows of the Issuer of the Stock to be purchased
with the proceeds of such Revolving Loan at least ten (10) Business Days
prior to the date of the making of such Revolving Loan and such Stock shall
be acceptable to the Bank in its sole and absolute discretion.
11.2.6 PERFECTED INTEREST. The Bank shall have received all pledge
agreements, stock or other certificates, assignments, financing statements,
agreements, opinions and other documents which it deems reasonable and
necessary in its sole discretion to provide it with a first priority
perfected security interest in the Stock being purchased with the
<PAGE> Page 50 of 106 Pages
proceeds of such Revolving Loan, including, without limitation, a revised
Schedule I to the Pledge Agreement.
11.2.7 OTHER. The Bank shall have received such other
certificates, instruments, exhibits, schedules, agreements and documents as
the Bank may reasonably request in support of such requested Revolving
Loan.
SECTION 12.EVENTS OF DEFAULT AND THEIR EFFECT
12.1 EVENTS OF DEFAULT. Each of the following shall constitute an Event
of Default under this Agreement:
12.1.1 NONPAYMENT OF AMOUNTS DUE HEREUNDER. (a) Default in the
payment when due of the principal on any Revolving Loan; or (b) default in
the payment when due of interest on any Revolving Loan, or the payment when
due of any fees or any other amounts payable by the Borrower under this
Agreement, the Revolving Note or any Collateral Document or any Related
Document, which default shall continue and not be cured within five (5)
days.
12.1.2 NONPAYMENT OF OTHER INDEBTEDNESS. Default in the payment
when due, whether by acceleration or otherwise, of any other Indebtedness
of the Borrower or default in the performance or observance of any
obligation or condition with respect to any such other Indebtedness if the
effect of such default is to accelerate the maturity of any such
Indebtedness or cause any of such Indebtedness to be prepaid, purchased or
redeemed.
12.1.3 OTHER MATERIAL OBLIGATIONS. Default in the payment when
due, or in the performance or observance of, any material obligation of, or
condition agreed to by, the Borrower with respect to any material purchase
or lease of goods or services.
12.1.4 BANKRUPTCY OR INSOLVENCY. The Borrower, the Partnership or
either Guarantor becomes insolvent or generally fails to pay, or admits in
writing its inability to pay, debts as they become due; or the Borrower,
the Partnership or either Guarantor applies for, consents to, or acquiesces
in the appointment of, a trustee, receiver or other custodian for itself or
any of its property, or makes a general assignment for the benefit of its
creditors; or, in the absence of such application, consent or acquiescence,
a trustee, receiver or other custodian is appointed for the Borrower, the
Partnership or either Guarantor; or any bankruptcy, reorganization, debt
arrangement, or other case or proceeding under any bankruptcy or insolvency
law, or any dissolution or liquidation proceeding, is commenced in respect
of the Borrower, the
<PAGE> Page 51 of 106 Pages
Partnership or either Guarantor, and if such case or proceeding is not
commenced by the Borrower, the Partnership or either Guarantor, it is
consented to or acquiesced in by the Borrower, the Partnership or either
Guarantor, as applicable; or the Borrower, the Partnership or either
Guarantor takes any limited liability company or partnership action, as
applicable to authorize, or in furtherance of, any of the foregoing.
12.1.5 SPECIFIED NONCOMPLIANCE WITH THIS AGREEMENT. Failure by the
Borrower to comply with or to perform under any of SECTION 8.6, SECTION 8.7
and SECTION 9.
12.1.6 OTHER NONCOMPLIANCE WITH THIS AGREEMENT. Failure by the
Borrower to comply with or to perform any provision or covenant of this
Agreement (and not constituting an Event of Default under any of the other
provisions of this SECTION 12) and continuance of such failure for thirty
(30) days after notice thereof to the Borrower from the Bank or the holder
of the Revolving Note.
12.1.7 REPRESENTATIONS AND WARRANTIES. Any representation or
warranty made by the Borrower, the Partnership or either Guarantor herein
or in any Related Document is breached or is false or misleading in any
respect, or any schedule, exhibit, certificate, financial statement,
report, notice, or other writing or document furnished by the Borrower, the
Partnership or either Guarantor to the Bank is false or misleading in any
respect on the date as of which the facts therein set forth are stated or
certified.
12.1.8 RELATED DOCUMENTS.
(a) The Borrower, the Partnership or either Guarantor shall fail to
comply with or to perform any provision of any of the Related Documents; or
any of the Related Documents shall fail to remain in full force and effect;
or any action shall be taken to discontinue any of the Collateral Documents
or to assert the invalidity of any thereof.
(b) A default shall occur under any of the Related Documents,
including, without limitation, a default by any Guarantor of its covenants
under its applicable Guarantee.
12.1.9 JUDGMENTS. There shall be entered against the Borrower one
or more judgments or decrees in excess of Fifty Thousand Dollars ($50,000)
in the aggregate at any one time outstanding for the Borrower.
12.1.10 IMPAIRMENT OF SECURITY. Any Lien securing the Liabilities
shall, in whole or in part, cease to be a perfected first priority Lien
(subject only to the Permitted Liens); this Agreement or any of the Related
Documents or any Lien granted under the Pledge Agreement, shall terminate,
cease to be effective or cease to be the legally valid, binding and
enforceable obligations of the Borrower, the Partnership or either
Guarantor, as applicable; or the Borrower, the Partnership or either
Guarantor shall directly or indirectly, contest in any manner such
effectiveness, validity, binding nature or enforceability.
<PAGE> Page 52 of 106 Pages
12.1.11 CHANGE IN OWNERSHIP. There shall be any change in the
ownership of any of the outstanding equity securities of the Borrower, the
result of which is to cause the Borrower to be controlled, either directly
or indirectly, by a Person other than First Analysis Corporation or any of
its Affiliates.
12.2 EFFECT OF EVENT OF DEFAULT. If any Event of Default described in
SECTION 12.1.4 hereof shall occur, the Revolving Loan Commitment (if it has
not theretofore terminated) shall automatically and immediately terminate and
all Revolving Loans, the Revolving Note and all other Liabilities shall
become immediately due and payable, all without presentment, demand, protest,
diligence or notice of any kind, all of which are hereby expressly waived by
the Borrower; and, in the case of any other Event of Default in this
Agreement, the Bank may declare the Revolving Loan Commitment (if it is not
theretofore terminated) to be terminated and all Revolving Loans, the
Revolving Note and all other Liabilities to be immediately due and payable,
whereupon the Revolving Loan Commitment shall immediately terminate and all
Revolving Loans, the Revolving Note and all other Liabilities shall become
immediately due and payable, all without presentment, demand, protest,
diligence or notice of any kind, all of which are hereby expressly waived by
the Borrower.
SECTION 13. GENERAL
13.1 WAIVER; OTHER REMEDIES; AMENDMENTS. No delay on the part of the
Bank or the holder of any Revolving Note in the exercise of any right, power
or remedy hereunder or under any Related Document shall operate as a waiver
hereof or thereof, nor shall any single or partial exercise by any of them of
any right, power or remedy hereunder or under any Related Document preclude
other or further exercise hereof or thereof, or the exercise of any other
right, power or remedy. The rights and remedies herein expressly provided
are cumulative and not exclusive of any rights or remedies which the Bank or
the holder of the Revolving Note would otherwise have, whether arising under
this Agreement, any Collateral Document or other Related Document, or under
applicable law, or otherwise. No amendment, modification or waiver of, or
consent with respect to, any provision of this Agreement, the Revolving Note
or any Related Document shall in any event be effective unless the same shall
be in writing and signed and delivered by the Bank, and then any such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
13.2 NOTICES. Except as otherwise provided herein, all notices
hereunder shall be in writing. Notices given by mail shall be deemed to have
been given three days after the date sent if sent by certified mail, postage
prepaid, and: (a) IF TO THE BORROWER, addressed to the Borrower at its
address shown beside its signature hereto; (b) IF TO THE BANK, addressed to
the Bank at the address shown beside its signature hereto; or in the case of
each party, such other address as such party, by written notice received by
the other party to this Agreement, may have designated as its address for
notices. Notices given by personal delivery shall be deemed to have been
given when delivered. The Bank shall be entitled to rely upon all telephonic
notices given pursuant to
<PAGE> Page 53 of 106 Pages
SECTION 2.2 hereof and the Borrower shall hold the Bank harmless from any
loss, cost or expense ensuing from any such reliance.
13.3 COMPUTATIONS. Where the character or amount of any asset or
liability or item of income or expense is required to be determined, or any
consolidation or other accounting computation is required to be made, for
purposes of this Agreement such determination or calculation shall, to the
extent applicable and except as otherwise specified in this Agreement, be
made in accordance with GAAP applied on a basis consistent with GAAP as GAAP
is in effect as of the date of the first financial statements delivered
pursuant to SECTION 8.1 hereof.
13.4 COSTS, EXPENSES AND TAXES.
(a) The Borrower agrees to pay on demand all of the
out-of-pocket costs and expenses of the Bank (including the fees and
out-of-pocket expenses of the Bank's counsel and of local counsel, if any,
who may be retained by said counsel) in connection with the preparation,
negotiation, execution and delivery of this Agreement, the Related
Documents and all other instruments or documents provided for herein or
delivered or to be delivered hereunder or in connection herewith
(including, without limitation, all amendments, supplements and waivers
executed and delivered pursuant hereto or in connection herewith). The
Borrower further agrees that the Bank, in its sole discretion, may deduct
all such unpaid amounts from the aggregate proceeds of the Revolving Loans.
(b) The costs and expenses that the Bank incurs in any manner or
way with respect to the following shall be part of the Liabilities, payable
by the Borrower on demand if at any time after the date of this Agreement
the Bank: (i) employs counsel for advice or other representation (A) with
respect to the amendment or enforcement of this Agreement or the Related
Documents, or with respect to any Collateral securing the Liabilities
hereunder, (B) to represent the Bank in any work-out or any type of
restructuring of the Revolving Loans, or any litigation, contest, dispute,
suit or proceeding or to commence, defend or intervene or to take any other
action in or with respect to any litigation, contest, dispute, suit or
proceeding (whether instituted by the Bank, the Borrower or any other
Person) in any way or respect relating to this Agreement, the Related
Documents, the Borrower's affairs or any collateral securing the
Liabilities hereunder or (C) to enforce any of the rights of the Bank with
respect to the Borrower; (ii) takes any action to protect, collect, sell,
liquidate or otherwise dispose of any collateral securing the Liabilities
hereunder; and/or (iii) seeks to enforce or enforces any of the rights and
remedies of the Bank with respect to the Borrower. Without limiting the
generality of the foregoing, such expenses, costs, charges and fees
include: fees, costs and expenses of attorneys, accountants and
consultants; court costs and expenses; court reporter fees, costs and
expenses; long distance telephone charges; telegram and telecopier charges;
and expenses for travel, lodging and food.
<PAGE> Page 54 of 106 Pages
(c) The Borrower further agrees to pay, and to save the Bank
harmless from all liability for, any stamp or other taxes which may be
payable in connection with or related to the execution or delivery of this
Agreement, the Related Documents, the borrowings hereunder, the issuance of
the Revolving Note or of any other instruments or documents provided for
herein or delivered or to be delivered hereunder or in connection herewith.
(d) All of the Borrower's obligations provided for in this
SECTION 13.4 shall be Liabilities and shall survive repayment of the
Revolving Loans, cancellation of the Revolving Note, termination of this
Agreement or any Related Document.
13.5 INDEMNIFICATION. In consideration of the execution and delivery of
this Agreement by the Bank and the Bank's agreement to extend the Revolving
Loan Commitment, the Borrower hereby agrees to indemnify, exonerate, defend
and hold the Bank and each of its officers, directors, employees and agents
(hereinafter collectively called the "BANK PARTIES" and individually called a
"BANK PARTY") free and harmless from and against any and all actions, causes
of action, suits, losses, penalties, costs (including, without limitation,
all documentary or other stamp taxes or duties), liabilities and damages, and
expenses in connection therewith of any kind or nature whatsoever
(irrespective of whether the Bank Party is a party to the action for which
indemnification hereunder is sought) (hereinafter, the "INDEMNIFIED
LIABILITIES"), including, without limitation, attorneys' fees and
disbursements, incurred by the Bank Parties or any of them as a result of, or
arising out of, or relating to:
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Revolving Loan;
(b) the execution, delivery, performance, administration or
enforcement of this Agreement and the Related Documents in accordance with
their respective terms by any of the Bank Parties; or
(c) any misrepresentation or breach of any warranty or covenant
herein or in any certificate delivered pursuant hereto.
If and to the extent that the foregoing agreements described in this SECTION
13.5 may be unenforceable for any reason, the Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable law. All of
the Borrower's obligations under this SECTION 13.5 shall survive repayment of
the Revolving Loans, cancellation of the Revolving Note, or any termination
of this Agreement or any Related Document.
13.6 SURVIVAL. The obligations of the Borrower under SECTIONS 13.4 and
13.5 hereof shall in each case survive any termination of this Agreement, the
payment in full of all Liabilities and the termination of the Revolving Loan
Commitment.
<PAGE>
Page 55 of 106 Pages
13.7 SEVERABILITY. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any such provision shall be prohibited by, or invalid
under, such law, such provision shall be ineffective only to the extent of
such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of
the Borrower and rights of the Bank, which obligations and rights are
described herein, shall be in addition to, and not in limitation of, those
provided by applicable law. If and to the extent any provision of any
Collateral Document is inconsistent with the provisions of this Agreement,
the provisions of this Agreement shall control.
13.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties on separate counterparts, and each
such counterpart shall be deemed to be an original, and all such counterparts
shall together constitute but one and the same Agreement.
13.9 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
Borrower and the Bank and their respective successors and assigns, and shall
inure to the benefit of the Bank and the Bank's successors and assigns. The
Borrower shall have no right to assign its rights or delegate its duties
under this Agreement.
13.10 PRIOR AGREEMENTS. The terms and conditions set forth in this
Agreement and the Related Documents shall supersede all prior agreements,
discussions, correspondence, memoranda and understandings (whether written or
oral) of the Borrower and the Bank concerning or relating to the subject
matter of this Agreement (including, without limitation, the terms set forth
in any term sheet or commitment letter).
13.11 ASSIGNMENTS; PARTICIPATIONS.
(a) The Bank shall have the right to assign to one or more banks
or other financial institutions all or a portion of its rights and
obligations under this Agreement (including, without limitation, all or a
portion of the Revolving Loan Commitment, the Revolving Loans and the
Revolving Note) and the Collateral Documents. Upon any such assignment,
(i) the assignee shall become a party hereto and, to the extent of such
assignment, have all rights and obligations of the Bank hereunder and under
the Collateral Documents and (ii) the Bank shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
hereunder and under the Collateral Documents. The Borrower hereby agrees
to execute and deliver such agreements and documents, and to take such
other actions, as the Bank may reasonably request to accomplish the
foregoing.
(b) In addition to the assignments permitted in clause (a) of
this SECTION 13.11, the Bank and any assignee pursuant to clause (a) above
shall have the right to grant participations to one or more banks or other
financial institutions in or to any Revolving Loan hereunder (and the
Collateral Documents) and the Revolving Note held by the Bank
<PAGE>
Page 56 of 106 Pages
or such assignee without notice to or consent from the Borrower. No
holder of a participation in all or any part of the Revolving Loans (and
the Collateral Documents) or the Revolving Note shall have any rights
under this Agreement; PROVIDED, HOWEVER, that, to the extent permitted
by applicable law, each holder of a participation shall have the same
rights as the Bank under SECTION 6.3 hereof.
(c) The Borrower hereby consents to the disclosure of any
information obtained in connection herewith (i) by the Bank, to any bank or
other financial institution which is an assignee or potential assignee
pursuant to CLAUSE (a) above, and (ii) by the Bank and any assignee
pursuant to CLAUSE (a) above, to any bank or other financial institution
which is a participant or potential participant pursuant to CLAUSE (b)
above, it being understood that the Bank and each assignee shall advise any
such bank or other financial institution of its obligation to keep
confidential any non-public information disclosed to it pursuant to this
SECTION 13.11. The Bank shall advise the Borrower of each bank or other
financial institution which becomes an assignee pursuant to CLAUSE (a)
above, and the Bank and each assignee, as applicable, shall advise the
Borrower of each bank or other financial institution which becomes a
participant pursuant to CLAUSE (b) above.
13.12 MARSHALLING; RECAPTURE. The Bank shall not be under any
obligation to marshall any assets in favor of the Borrower or any Person or
any other party or against or in payment of any or all of the Liabilities.
To the extent the Bank receives any payment by or on behalf of the Borrower,
which payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to the
Borrower or its estate, trustee, receiver, custodian or any other party under
any bankruptcy law, state or federal law, common law or equitable cause, then
to the extent of such payment or repayment, the obligation or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the
Liabilities of the Borrower to the Bank as of the date such initial payment,
reduction or satisfaction occurred.
13.13 CAPTIONS. Section captions in this Agreement are for convenience
only, and shall not affect the construction of this Agreement.
13.14 GOVERNING LAW. THIS AGREEMENT AND THE RELATED DOCUMENTS AND THE
RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE
CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF
ILLINOIS, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES.
13.15 JURY TRIAL; VENUE. THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING (I) TO ENFORCE OR DEFEND
ANY RIGHTS UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE RELATED
DOCUMENTS, OR (II) ARISING FROM
<PAGE>
Page 57 of 106 Pages
ANY DISPUTE OR CONTROVERSY IN CONNECTION WITH THIS AGREEMENT OR THE RELATED
DOCUMENTS, AND AGREES THAT ANY SUCH ACTION OR COUNTERCLAIM SHALL BE TRIED
BEFORE A COURT AND NOT BEFORE A JURY.
THE BORROWER IRREVOCABLY AGREES THAT, SUBJECT TO THE BANK'S SOLE AND
ABSOLUTE ELECTION, ANY ACTION OR PROCEEDING IN ANY WAY, MANNER OR RESPECT
ARISING OUT OF THIS AGREEMENT, THE RELATED DOCUMENTS, OR ARISING FROM ANY
DISPUTE OR CONTROVERSY ARISING IN CONNECTION WITH THIS AGREEMENT OR THE
RELATED DOCUMENTS, SHALL BE LITIGATED ONLY IN THE COURTS HAVING SITUS WITHIN
THE CITY OF CHICAGO, THE STATE OF ILLINOIS, AND BORROWER HEREBY CONSENTS AND
SUBMITS TO THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURT LOCATED
WITHIN SUCH CITY AND STATE. THE BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE
TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION BROUGHT AGAINST BORROWER BY
THE BANK IN ACCORDANCE WITH THIS SECTION 13.15.
[SIGNATURE PAGE FOLLOWS]
<PAGE>
Page 58 of 106 Pages
IN WITNESS WHEREOF, the undersigned have duly executed and delivered
this Secured Revolving Loan Agreement as of the date first above written.
RIVERSIDE L.L.C.
By: FIRST ANALYSIS MANAGEMENT
COMPANY III, L.L.C.,
as Manager
By: /s/ Bret R. Maxwell
___________________
Bret R. Maxwell,
its Managing Member
9500 Sears Tower
Chicago, Illinois 60606
Attention: Mark Koulogeorge
Telephone: (312) 258-1400
Facsimile: (312) 258-0334
LASALLE NATIONAL BANK
By: /s/ Michael Foster
__________________
Michael Foster, Senior Vice President
Lending Office (Prime Rate Loans)
120 South LaSalle Street
Chicago, Illinois 60603
Attention: Michael Foster
Telephone: (312) 904-2791
Facsimile: (312) 904-8544
Lending Office (Eurodollar Rate Loans)
120 South LaSalle Street
Chicago, Illinois 60603
Attention: Michael Foster
Telephone: (312) 904-2791
Facsimile: (312) 904-8544
<PAGE>
Page 59 of 106 Pages
FIRST AMENDMENT TO
SECURED REVOLVING LOAN AGREEMENT
This FIRST AMENDMENT TO SECURED REVOLVING LOAN AGREEMENT dated as of
November 17, 1997 (this "Amendment"), is by and between RIVERSIDE L.L.C., an
Illinois limited liability company (the "Borrower"), and LASALLE NATIONAL
BANK, a national banking association (together with its successors and
assigns, the "Bank").
RECITALS
WHEREAS, the Borrower and the Bank are parties to that certain Secured
Revolving Loan Agreement, dated as of November 17, 1995 (the "Loan
Agreement"), pursuant to which the Bank has agreed to make certain loans to
the Borrower;
WHEREAS, the Borrower and the Bank desire to amend the Loan Agreement in
order to: (a) extend the Termination Date (as defined in the Loan Agreement),
(b) add Infrastructure and Environmental Private Equity Fund III, L.P., a
Delaware limited partnership, as a guarantor of the payment and performance
of the Liabilities (as defined in the Loan Agreement), (c) amend EXHIBIT F to
the Loan Agreement, and (d) limit the Borrower's ability to purchase certain
amounts of Stock (as defined in the Loan Agreement) with the proceeds of the
loans made by the Bank pursuant to the Loan Agreement.
NOW, THEREFORE, in consideration of the premises herein contained, the
loans and other financial accommodations heretofore or hereafter made to the
Borrower by the Bank, and for other good and valuable consideration (the
receipt, sufficiency and adequacy of which are hereby acknowledged), the
parties hereto hereby agree as follows:
1. DEFINITIONS. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT.
(a) TERMINATION DATE. Subject to the terms and conditions contained herein,
the definition of "Termination Date" is hereby deleted in its entirety and
the following language is inserted in lieu thereof:
"'TERMINATION DATE' means the earlier of (i) December 31, 1999,
(ii) such other date on which the Revolving Loan Commitment shall
terminate pursuant to SECTION 12.2 hereof, or (iii) such other date
as is mutually agreed in writing between the Borrower and the Bank,
it being understood that the Bank will annually review its Revolving
Loan Commitment to consider one year extensions of the Termination
Date, but under no circumstance shall the Bank be obligated to
<PAGE>
Page 60 of 106 Pages
grant such extension and any such extensions shall be in the Bank's
sole and absolute discretion."
(b) GUARANTEES. Subject to the terms and conditions contained herein, the
definition of "Guarantees" is hereby deleted in its entirety and the following
language is inserted in lieu thereof:
"'GUARANTEES' means collectively, and 'GUARANTEE' means
individually each of, those certain Guarantees executed in
connection with this Agreement in favor of the Bank, pursuant to
which each of (i) Environmental Private Equity Fund II, L.P., a
Delaware limited partnership, (ii) Productivity Fund III, L.P., a
Delaware limited partnership, and (iii) Infrastructure and
Environmental Private Equity Fund III, L.P., a Delaware limited
partnership, collectively guarantee payment of that portion of the
Liabilities equal to twenty percent (20%) of the total cost of
purchase of the Stock, the form of which is attached hereto as
EXHIBIT F, as such Guarantees may be amended, modified or reaffirmed
from time to time."
(c) EXHIBIT F. Subject to the terms and conditions contained herein, Annex
I and Annex II attached to EXHIBIT F-1 and EXHIBIT F-2 of the Loan Agreement
are hereby deleted in their entirety and the form of Annex I and Annex II
attached hereto shall be inserted in lieu thereof.
(d) STOCK LIMITATION. Subject to the terms and conditions contained herein,
the following new Section 9.10 is hereby added to the Loan Agreement:
"9.10 LIMIT ON USE OF PROCEEDS. Use the proceeds of the
Revolving Loans in an amount greater than sixty percent (60%) of the
Maximum Commitment to purchase margin stock or non-margin stock of
any one entity or related entities.
3. CONDITIONS PRECEDENT. The effectiveness of the amendments
contained in SECTION 2 above is subject to, and contingent upon, satisfaction
of each of the following conditions:
(a) The Bank shall have received duly executed counterparts hereof
signed by the Borrower;
(b) The Bank shall have received a duly executed First Modification to
Revolving Note of even date herewith (the "Note Modification");
(c) The Bank shall have received a duly executed Reaffirmation and
Amendment of Guarantee of even date hereof from each of Environmental Private
Equity Fund II, L.P. and Productivity Fund III, L.P., in form and substance
satisfactory to the Bank (the "Reaffirmations of Guarantee");
<PAGE>
Page 61 of 106 Pages
(d) The Bank shall have received a duly executed Reaffirmation of
Pledge Agreement of even date hereof from Riverside Partnership, in form and
substance satisfactory to the Bank (the "Reaffirmation of Pledge");
(e) The Bank shall have received a duly executed Guarantee of even date
hereof from Infrastructure and Environmental Private Equity Fund III, L.P., a
Delaware limited partnership ("IEPEF"), in form and substance satisfactory to
the Bank (the "Guarantee");
(f) The Bank shall have received a duly executed General Partner's
Certificate of IEPEF certifying: (i) Certificate of Limited Partnership; (ii)
Limited Partnership Agreement; (iii) resolution of IEPEF authorizing
execution, delivery and performance of the Guarantee; and (iv) incumbency, in
form and substance satisfactory to the Bank (the "Certificate"); and
(g) The Bank shall have received a duly executed Legal Opinion of
counsel for IEPEF in form and substance satisfactory to the Bank (the "Legal
Opinion").
4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT.
(a) Except as expressly provided herein, the Loan Agreement and the
Related Documents shall remain unmodified and in full force and effect and
are hereby ratified and confirmed.
(b) Except as expressly provided herein, the execution, delivery and
effectiveness of this Amendment shall not operate as a waiver of (i) any
right, power or remedy of the Bank under the Loan Agreement or any of the
Related Documents, or (ii) any Default or Event of Default under the Loan
Agreement.
5. COSTS, EXPENSES AND TAXES. Without limiting the obligation of the
Borrower to reimburse the Bank for costs, fees, disbursements and expenses
incurred by the Bank pursuant to the Loan Agreement, the Borrower agrees to
pay on demand all reasonable costs, fees, disbursements and expenses of the
Bank in connection with the preparation, execution and delivery of this
Amendment, the Note Modification, the Reaffirmations of Guarantee, the
Reaffirmation of Pledge, the Guarantee, the Certificate, the Legal Opinion
and the other agreements, instruments and documents contemplated hereby,
including, without limitation, the reasonable fees, disbursements and
out-of-pocket expenses of counsel for the Bank with respect thereto.
6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank that:
(a) this Amendment and the actions on the Borrower's part contemplated
hereby have been duly approved by all requisite action on the part of the
Borrower;
<PAGE>
Page 62 of 106 Pages
(b) this Amendment and the Note Modification and each of the other
documents executed and delivered by the Borrower in connection herewith have
been duly executed and delivered and constitute the legal, valid, and binding
obligations of the Borrower, enforceable in accordance with their respective
terms, subject to the effect of any applicable bankruptcy, insolvency,
reorganization, receivership, fraudulent conveyance or transfer, moratorium
or similar law and the effect of general principles of equity;
(c) the execution, delivery and performance of this Amendment and the
Note Modification and each of the other documents executed and delivered by
the Borrower in connection herewith do not and will not violate or conflict
with any provision of the Borrower's Certificate of Formation or Operating
Agreement, as amended and in effect on the date hereof, or any material
contracts or agreements to which the Borrower is a party or by which any of
the Borrower's assets are bound (except for those agreements for which the
Borrower has obtained a consent);
(d) the representations and warranties of the Borrower contained in the
Loan Agreement and the Related Documents, as amended, supplemented and
modified, are true and correct in all material respects on and as of the date
hereof to the same extent as though made on and as of the date hereof except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they are true and correct as of such earlier
date; and
(e) after giving effect to this Amendment, no Default or Event of
Default exists and is continuing.
7. MISCELLANEOUS.
(a) This Amendment shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; PROVIDED,
HOWEVER, the Borrower may not assign this Amendment or any of its rights or
obligations hereunder without the prior written consent of the Bank.
(b) This Amendment (together with the Loan Agreement and each of the
Related Documents, all as amended or otherwise supplemented or modified prior
to the date hereof) constitutes the entire agreement between the parties with
respect to the subject matter hereof, and supersedes all prior negotiations,
representations, warranties, commitments, offers, letters of interest or
intent, proposal letters, contracts, writings or other agreements or
understandings with respect thereto.
(c) No waiver and no modification or amendment of any provision of this
Amendment shall be effective unless specifically made in writing and duly
signed by the party to be bound thereby.
<PAGE>
Page 63 of 106 Pages
(d) Paragraph and subparagraph titles, captions and headings herein are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Amendment or the intent
of any provision hereof.
(e) No failure or delay on the part of any party hereto to exercise any
right, power or privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver nor shall any single or partial exercise of
any right, power or privilege preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
(f) The Borrower affirms and acknowledges that this Amendment, the Note
Modification, the Reaffirmations of Guarantee, the Reaffirmation of Pledge,
the Guarantee and the Certificate shall each be a Related Document for all
purposes of the Loan Agreement.
(g) Any reference to the Loan Agreement contained in the Loan
Agreement, any Related Document or any notice, request, certificate or other
document shall be deemed to include this Amendment unless the context shall
otherwise specify.
(h) Any reference to the Revolving Note contained in the Loan
Agreement, any Related Document or any notice, request, certificate or other
document shall be deemed to include the Note Modification unless the context
shall otherwise specify.
(i) Notwithstanding anything contained herein, the terms of this
Amendment are not intended to and do not serve to effect a novation as to the
Loan Agreement. The parties hereto expressly do not intend to extinguish the
Loan Agreement. Instead, it is the express intention of the parties hereto
to reaffirm the Loan Agreement and the indebtedness created under the Loan
Agreement which is evidenced by certain promissory notes and secured by
certain collateral. The Loan Agreement, as amended hereby, and each of the
other Related Documents, remain in full force and effect.
(j) This Amendment may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
taken together shall constitute but one and the same instrument.
(k) THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS.
<PAGE>
Page 64 of 106 Pages
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment
to Secured Revolving Loan Agreement to be executed by their respective
officers thereunto duly authorized as of the date first above written.
RIVERSIDE L.L.C.
By: FIRST ANALYSIS MANAGEMENT COMPANY III,
L.L.C., as Manager
By: /s/ Bret R. Maxwell
___________________
Name: Bret R. Maxwell
Its: Managing Member
LASALLE NATIONAL BANK
By: /s/_________________________
Name:
Its:
<PAGE>
Page 65 of 106 Pages
SECOND AMENDMENT TO
SECURED REVOLVING LOAN AGREEMENT
This SECOND AMENDMENT TO SECURED REVOLVING LOAN AGREEMENT dated as of
March ___, 1998 (this "Second Amendment"), is by and between RIVERSIDE
L.L.C., an Illinois limited liability company (the "Borrower"), and LASALLE
NATIONAL BANK, a national banking association (together with its successors
and assigns, the "Bank").
RECITALS
WHEREAS, the Borrower and the Bank are parties to that certain Secured
Revolving Loan Agreement dated as of November 17, 1995 and that certain First
Amendment to Secured Revolving Loan Agreement dated as of November 17, 1997
(collectively, the "Loan Agreement"), pursuant to which the Bank has agreed
to make certain loans to the Borrower;
WHEREAS, the Borrower and the Bank desire to further amend the Loan
Agreement in order to: (a) add Environmental & Information Technology Private
Equity Fund III, Gesellschaft burgarlichen Rechts (mit Haftungsbesch--nkung),
a civil partnership with limitation of liability established under the laws
of the Federal Republic of Germany ("Environmental"), Apex Investment Fund
III, L.P., a Delaware limited partnership ("Apex Investment"), and Apex
Strategic Partners, LLC, a Delaware limited liability company ("Apex
Strategic") as guarantors of the payment and performance of the Liabilities
(as defined in the Loan Agreement), and (b) amend Exhibit F to the Loan
Agreement.
NOW, THEREFORE, in consideration of the premises herein contained, the
loans and other financial accommodations heretofore or hereafter made to the
Borrower by the Bank, and for other good and valuable consideration (the
receipt, sufficiency and adequacy of which are hereby acknowledged), the
parties hereto hereby agree as follows:
1. DEFINITIONS. Terms capitalized herein and not otherwise defined
herein shall have the meanings ascribed to such terms in the Loan Agreement.
2. AMENDMENTS TO LOAN AGREEMENT.
(a) GUARANTEES. Subject to the terms and conditions contained herein,
the definition of "Guarantees" is hereby deleted in its entirety and the
following language is inserted in lieu thereof:
"'GUARANTEES' means collectively and 'GUARANTEE' means
individually each of those certain Guarantees executed in connection
with this Loan Agreement in favor of the Bank, pursuant to which
each of (i) Environmental & Information Technology Private Equity
Fund, III, Gesellschaft burgarlichen Rechts (mit
<PAGE>
Page 66 of 106 Pages
Haftungsbeschankung), (ii) Apex Investment Fund III, L.P., (iii)
Apex Strategic Partners, LLC, (iv) Environmental Private Equity Fund
II, L.P., (v) The Productivity Fund III, L.P., and (vi)
Infrastructure and Environmental Private Equity Fund III, L.P.,
collectively guarantee payment of that portion of the Liabilities
equal to twenty percent (20%) of the total cost of purchase of the
Stock, the form of which is attached hereto as EXHIBIT F, as such
Guarantees may be amended, modified or reaffirmed from time to
time."
(b) EXHIBIT F. Subject to the terms and conditions contained
herein, Annex I and Annex II attached to EXHIBIT F-1 and EXHIBIT F-2 of the
Loan Agreement are hereby deleted in their entirety and the form of Annex I
and Annex II attached hereto shall be inserted in lieu thereof.
3. CONDITIONS PRECEDENT. The effectiveness of the amendments
contained in SECTION 2 above is subject to, and contingent upon, satisfaction
of each of the following conditions:
(a) The Bank shall have received duly executed counterparts hereof
signed by the Borrower;
(b) The Bank shall have received a duly executed Guarantee of even date
hereof from Environmental, in form and substance satisfactory to the Bank
(the "Environmental Guarantee");
(c) The Bank shall have received a duly executed Guarantee of even date
hereof from Apex Investment, in form and substance satisfactory to the Bank
(the "Apex Investment Guarantee");
(d) The Bank shall have received a duly executed Guarantee of even date
hereof from Apex Strategic, in form and substance satisfactory to the Bank
(the "Apex Strategic Guarantee");
(e) The Bank shall have received a duly executed Reaffirmation and
Amendment of Guarantee of even date here of from each of The Productivity
Fund III, L.P., Environmental Private Equity Fund II, L.P., and
Infrastructure and Environmental Private Equity Fund III, L.P.;
(f) The Bank shall have received a duly executed Investment Manager's
Certificate of Environmental certifying: (i) Partnership Agreement; (ii)
resolution of Environmental authorizing execution, delivery and performance
of the Environmental Guarantee; and (iii) incumbency, in form and substance
satisfactory to the Bank (the "Environmental Certificate");
(g) The Bank shall have received a duly executed General Partner's
Certificate of Apex Investment certifying: (i) Certificate of Limited
Partnership; (ii) Limited Partnership Agreement; (iii) resolution of Apex
Investment authorizing execution, delivery and performance
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of the Apex Investment Guarantee; and (iv) incumbency, in form and substance
satisfactory to the Bank (the "Apex Investment Certificate");
(h) The Bank shall have received a duly executed Manager's Certificate
of Apex Strategic certifying: (i) limited liability company operating
agreement; (ii) resolution of Apex Strategic authorizing execution, delivery
and performance of the Apex Strategic Guarantee; and (iii) incumbency, in
form and substance satisfactory to the Bank (the "Apex Strategic
Certificate"); and
(i) The Bank shall have received a duly executed Legal Opinions of
counsel for Environmental, Apex Investment and Apex Strategic in form and
substance satisfactory to the Bank (the "Legal Opinion").
4. REFERENCE TO AND EFFECT ON THE LOAN AGREEMENT.
(a) Except as expressly provided herein, the Loan Agreement and the
Related Documents shall remain unmodified and in full force and effect and
are hereby ratified and confirmed.
(b) Except as expressly provided herein, the execution, delivery
and effectiveness of this Second Amendment shall not operate as a waiver
of (i) any right, power or remedy of the Bank under the Loan Agreement
or any of the Related Documents, or (ii) any Default or Event of Default
under the Loan Agreement.
5. COSTS, EXPENSES AND TAXES. Without limiting the obligation of the
Borrower to reimburse the Bank for costs, fees, disbursements and expenses
incurred by the Bank pursuant to the Loan Agreement, the Borrower agrees to
pay on demand all reasonable costs, fees, disbursements and expenses of the
Bank in connection with the preparation, execution and delivery of this
Second Amendment, the Environmental Guarantee, the Apex Investment Guarantee,
the Apex Strategic Guarantee, and the other agreements, instruments and
documents contemplated hereby, including, without limitation, the reasonable
fees, disbursements and out-of-pocket expenses of counsel for the Bank with
respect thereto.
6. REPRESENTATIONS AND WARRANTIES. The Borrower hereby represents and
warrants to the Bank that:
(a) this Second Amendment and the actions on the Borrower's part
contemplated hereby have been duly approved by all requisite action on the
part of the Borrower;
(b) this Second Amendment and each of the other documents executed and
delivered by the Borrower in connection herewith have been duly executed and
delivered and constitute the legal, valid, and binding obligations of the
Borrower, enforceable in accordance with their respective terms, subject to
the effect of any applicable bankruptcy, insolvency, reorganization,
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receivership, fraudulent conveyance or transfer, moratorium or similar law
and the effect of general principles of equity;
(c) the execution, delivery and performance of this Second Amendment
and each of the other documents executed and delivered by the Borrower in
connection herewith do not and will not violate or conflict with any
provision of the Borrower's Certificate of Formation or Operating Agreement,
as amended and in effect on the date hereof, or any material contracts or
agreements to which the Borrower is a party or by which any of the Borrower's
assets are bound (except for those agreements for which the Borrower has
obtained a consent);
(d) the representations and warranties of the Borrower contained in the
Loan Agreement and the Related Documents, as amended, supplemented and
modified, are true and correct in all material respects on and as of the date
hereof to the same extent as though made on and as of the date hereof except
to the extent such representations and warranties specifically relate to an
earlier date, in which case they are true and correct as of such earlier
date; and
(e) after giving effect to this Amendment, no Default or Event of
Default exists and is continuing.
7. MISCELLANEOUS.
(a) This Second Amendment shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and assigns;
PROVIDED, HOWEVER, the Borrower may not assign this Second Amendment or any
of its rights or obligations hereunder without the prior written consent of
the Bank.
(b) This Second Amendment (together with the Loan Agreement and each of
the Related Documents, all as amended or otherwise supplemented or modified
prior to the date hereof) constitutes the entire agreement between the
parties with respect to the subject matter hereof, and supersedes all prior
negotiations, representations, warranties, commitments, offers, letters of
interest or intent, proposal letters, contracts, writings or other agreements
or understandings with respect thereto.
(c) No waiver and no modification or amendment of any provision of this
Second Amendment shall be effective unless specifically made in writing and
duly signed by the party to be bound thereby.
(d) Paragraph and subparagraph titles, captions and headings herein are
inserted only as a matter of convenience and for reference, and in no way
define, limit, extend or describe the scope of this Second Amendment or the
intent of any provision hereof.
(e) No failure or delay on the part of any party hereto to exercise any
right, power or privilege hereunder or under any instrument executed pursuant
hereto shall operate as a waiver
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nor shall any single or partial exercise of any right, power or privilege
preclude any other or further exercise thereof or the exercise of any other
right, power or privilege.
(f) The Borrower affirms and acknowledges that this Second Amendment,
the Environmental Guarantee, the Apex Investment Guarantee, and the Apex
Strategic Guarantee shall each be a Related Document for all purposes of the
Loan Agreement.
(g) Any reference to the Loan Agreement contained in the Loan
Agreement, any Related Document or any notice, request, certificate or other
document shall be deemed to include this Second Amendment unless the context
shall otherwise specify.
(h) Notwithstanding anything contained herein, the terms of this Second
Amendment are not intended to and do not serve to effect a novation as to the
Loan Agreement. The parties hereto expressly do not intend to extinguish the
Loan Agreement. Instead, it is the express intention of the parties hereto
to reaffirm the Loan Agreement and the indebtedness created under the Loan
Agreement which is evidenced by certain promissory notes and secured by
certain collateral. The Loan Agreement, as amended hereby, and each of the
other Related Documents, remain in full force and effect.
(i) This Second Amendment may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each
of which when so executed and delivered shall be deemed to be an original
and all of which taken together shall constitute but one and the same
instrument.
(j) THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS.
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Page 70 of 106 Pages
IN WITNESS WHEREOF, the parties hereto have caused this Second Amendment
to Secured Revolving Loan Agreement to be executed by their respective
officers thereunto duly authorized as of the date first above written.
RIVERSIDE L.L.C.
By: FIRST ANALYSIS MANAGEMENT COMPANY III,
L.L.C., as Manager
By: /s/ Bret R. Maxwell
___________________
Name: Bret R. Maxwell
Its: Managing Member
LASALLE NATIONAL BANK
By: /s/______________________________
Name:
Its:
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Page 71 of 106 Pages
EXHIBIT F-1
GUARANTEE
THIS GUARANTEE (this "Guarantee") is made as of this 17th day of
November, 1995, by ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P., a Delaware
limited partnership (hereinafter, together with its successors and permitted
assigns, the "Guarantor") to and for the benefit of LASALLE NATIONAL BANK, a
national banking association (hereinafter, together with its successors and
assigns, the "Bank").
R E C I T A L S:
A. Riverside L.L.C., an Illinois limited liability company (the
"Borrower") and the Bank are parties to that certain Secured Revolving Loan
Agreement of even date herewith (as the same may be amended, supplemented or
modified from time to time, the "Loan Agreement"), providing for revolving
loans to be made to the Borrower by the Bank for the purchase of the Stock,
as described in the Loan Agreement.
B. Concurrently with the purchase of such Stock, the Borrower will
contribute such Stock to Riverside Partnership, an Illinois general
partnership of which Guarantor is a general partner.
C. It is in the best interests of the Guarantor to cause this
Guarantee to be executed on its behalf inasmuch as the Guarantor will derive
substantial direct and indirect benefits from the revolving loans to be made
pursuant to the Loan Agreement.
D. The Bank has required that the Guarantor execute this Guarantee in
connection with the Bank's agreement to enter into the Loan Agreement.
NOW, THEREFORE FOR VALUE RECEIVED, and in consideration of advances,
credit or other financial accommodations heretofore, now or that may
hereafter at any time be extended to the Borrower by the Bank, the Guarantor
hereby unconditionally guarantees, irrespective of the validity, regularity
or enforceability of any instrument, writing or agreement relating to or the
subject of any such financial accommodation, and whether or not due or to
become due before or after any bankruptcy or insolvency proceeding involving
the Borrower or would have become due but for the Borrower's bankruptcy
proceeding, the full and prompt payment to the Bank at maturity, to the
extent of the amount to which this Guarantee is limited, whether by
acceleration or otherwise, and at all times thereafter of any and all
indebtedness, obligations and liabilities of every kind and nature of the
Borrower to the Bank which arise out of or in connection with the Loan
Agreement or any Related Document, howsoever evidenced, whether now existing
or hereafter created or arising, directly or indirectly, primary or
secondary, absolute or contingent, due or to become due, or joint or several,
and howsoever owned, held or acquired, whether through discount, overdraft,
purchase, direct loan or as collateral, or otherwise, and the prompt, full
and faithful performance and discharge by the Borrower of each and every of
the terms, conditions, agreements, representations and warranties on the part
of the Borrower contained in the Loan Agreement or any Related Document, or
in any modification or addenda thereto or substitution thereof; and the
Guarantor further agrees to pay all expenses legal and/or otherwise,
(including court costs and attorneys' fees), paid or
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Page 72 of 106 Pages
incurred by the Bank in endeavoring to collect such indebtedness, or any part
thereof, or in enforcing this Guarantee or in defending any suit based on any
act of commission or omission of the Bank with respect to such indebtedness,
collateral, or this Guarantee or in connection with any recovery claim
hereinbelow defined (all of the aforesaid indebtedness, obligations and
liabilities plus interest and all expenses herein mentioned are hereinafter
collectively called the "Guaranteed Obligations").
The amount of recovery, however, against the Guarantor is limited to a
percentage of the aggregate cost of purchase of the Stock (as defined in the
Loan Agreement) currently held as Collateral (the "Maximum Guaranteed
Amount"), such percentage to be certified to the Bank by the Guarantor from
time to time in the form attached hereto as Annex II, plus all costs of
collection and other expenses (including court costs and attorneys' fees)
described herein. Notwithstanding the foregoing, in no event shall the sum of
the percentages guaranteed by each of the Guarantor and Productivity Fund
III, L.P., a Delaware limited partnership be less than 20%. If at any time
the sum of the percentages certified by the Guarantor and Productivity Fund
III, L.P., a Delaware limited partnership shall be less than 20%, such
percentages shall be deemed to be increased on a pro rata basis to a
percentage equal to 20% collectively.
The Guarantor hereby further agrees as follows:
1. CONTINUING GUARANTEE. This Guarantee includes any Guaranteed
Obligations arising under successive transactions continuing, compromising,
extending, increasing, modifying, releasing, or renewing the Guaranteed
Obligations, changing the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guaranteed Obligations
after prior Guaranteed Obligations have been satisfied in whole or in part.
To the maximum extent permitted by law, the Guarantor hereby waives any right
to revoke this Guarantee as to future indebtedness. If such a revocation is
effective notwithstanding the foregoing waiver, the Guarantor acknowledges
and agrees that (a) no such revocation shall be effective until written
notice thereof has been received by the Bank, (b) no such revocation shall
apply to any Guaranteed Obligations in existence on such date (including any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Guaranteed Obligations made or created
after such date to the extent made or created pursuant to a legally binding
commitment of the Bank in existence on the date of such revocation, (d) no
payment by the Guarantor, the Borrower, or from any other source, prior to
the date of such revocation shall reduce the maximum obligation of the
Guarantor hereunder, and (e) any payment by the Borrower or from any source
other than the Guarantor, subsequent to the date of such revocation, shall
first be applied to that portion of the Guaranteed Obligations as to which
the revocation is effective and which are not, therefore, guaranteed
hereunder, and to the extent so applied shall not reduce the maximum
obligation of the Guarantor thereunder. The agreements and obligations of the
undersigned under this Guarantee shall remain in full force and effect until
all Liabilities (as defined in the Loan Agreement) shall have been paid in
full and the Bank's Revolving Loan Commitment (as defined in the Loan
Agreement) has terminated.
2. PERFORMANCE UNDER THIS GUARANTEE. In the event that the Borrower
fails to make any payment of any Guaranteed Obligations on or before the due
date thereof, or if the Borrower shall fail to perform, keep, observe, or
fulfill any other obligation referred to in any instrument, writing or
agreement relating to the Guaranteed Obligations, the Guarantor immediately
shall cause
<PAGE>
Page 73 of 106 Pages
such payment to be made to the extent of the amount to which this Guarantee
is limited, and shall cause each of such obligations to be performed, kept,
observed, or fulfilled.
3. PRIMARY OBLIGATIONS. This Guarantee is a primary and original
obligation of the Guarantor, is not merely the creation of a surety
relationship, and is an absolute, unconditional, and continuing guarantee of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions, including any change of law or any
invalidity or irregularity with respect to the issuance of any instrument,
writing or agreement relating to the Guaranteed Obligations. The Guarantor
agrees that he is directly, jointly and severally with any other guarantor of
the Guaranteed Obligations, liable to the Bank, that the obligations of the
Guarantor hereunder are independent of the obligations of the Borrower or any
other guarantor, and that a separate action may be brought against the
Guarantor whether such action is brought against the Borrower or any other
guarantor or whether the Borrower or any such other guarantor is joined in
such action. The Guarantor agrees that his liability hereunder shall be
immediate and shall not be contingent upon the exercise or enforcement of any
lien or realization upon any security or collateral the Bank may at any time
possess. The Guarantor agrees that any release which may be given by the Bank
to the Borrower or any other guarantor shall not release the Guarantor. The
Guarantor consents and agrees that the Bank shall be under no obligation to
marshal any assets of the Borrower or any other guarantor in favor of the
Guarantor, or against or in payment of any or all of the Guaranteed
Obligations.
4. WAIVERS.
(a) The Guarantor hereby waives: (1) notice of acceptance
hereof; (2) notice of any loans or other financial accommodations made or
extended to the Borrower or the creation or existence of any Guaranteed
Obligations; (3) notice of the amount of the Guaranteed Obligations,
subject, however, to the Guarantor's right to make inquiry of the Bank to
ascertain the amount of the Guaranteed Obligations at any reasonable time;
(4) notice of any adverse change in the financial condition of the Borrower
or of any other fact that might increase the Guarantor's risk hereunder;
(5) notice of presentment for payment, demand, protest, and notice thereof
as to any promissory notes or other instruments, writing or agreements
evidencing Guaranteed Obligations; (6) notice of any event of default by
the Borrower under any instrument, writing or agreement with the Bank; and
(7) all other notices (except if such notice is specifically required to be
given to the Guarantor hereunder) and demands to which the Guarantor might
otherwise be entitled.
(b) The Guarantor hereby waives the right by statute or
otherwise to require the Bank to institute suit against the Borrower; or to
exhaust any rights and remedies which the Bank has or may have against the
Borrower. In this regard, the Guarantor agrees that he is bound to the
payment of all Guaranteed Obligations to the extent of the amount to which
this Guarantee is limited, whether now existing or hereafter accruing, as
fully as if such Guaranteed Obligations were directly owing to the Bank by
the Guarantor. The Guarantor further waives any defense arising by reason
of any disability or other defense (other than the defense that the
Guaranteed Obligations shall have been fully and finally performed and
indefeasibly paid) of the Borrower or by reason of the cessation from any
cause whatsoever of the liability of the Borrower in respect thereof.
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Page 74 of 106 Pages
(c) The Guarantor hereby waives: (1) any rights to assert against
the Bank any defense (legal or equitable), set-off, counterclaim, or
claim which the Guarantor may now or at any time hereafter have against
the Borrower or any other party liable to the Bank; (2) any defense,
set-off, counterclaim, or claim, of any kind or nature, arising directly
or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations
or any security therefor; (3) the benefit of any statute of limitations
affecting the Guarantor's liability hereunder or the enforcement
thereof, and any act which shall defer or delay the operation of any
statute of limitations applicable to the Guaranteed Obligations shall
similarly operate to defer or delay the operation of such statute of
limitations applicable to the Guarantor's liability hereunder.
(d) The Guarantor hereby waives any right of subrogation the
Guarantor has or may have as against the Borrower with respect to the
Guaranteed Obligations. In addition, the Guarantor hereby waives any right
to proceed against the Borrower, now or hereafter, for contribution,
indemnity, reimbursement, and any other suretyship rights and claims,
whether direct or indirect, liquidated or contingent, whether arising under
express or implied contract or by operation of law, which the Guarantor may
now have or hereafter have as against the Borrower with respect to the
Guaranteed Obligations. The Guarantor also hereby waives any rights of
recourse to or with respect to any asset of the Borrower. The Guarantor
agrees that in light of the immediately foregoing waivers, the execution of
this Guarantee shall not be deemed to make the Guarantor a "creditor" of
the Borrower, and that, for purposes of Sections 547 and 550 of the United
States Bankruptcy Code, the Guarantor shall not be deemed a "creditor" of
the Borrower.
5. RELEASES. No release or discharge of the Borrower or any one or
more of the guarantors, or of any other person, whether primarily or secondarily
liable for and obligated with respect to the Guaranteed Obligations, or the
institution of bankruptcy, receivership, insolvency, reorganization, dissolution
or liquidation proceedings by or against any guarantor or person, or the entry
of any restraining or other order in any such proceeding, shall release or
discharge the Guarantor or any other guarantor of the Guaranteed Obligations, or
any other person, firm or corporation liable to the Bank for the Guaranteed
Obligations, unless and until all of the Guaranteed Obligations shall have been
fully paid.
6. RIGHT OF SETOFF AND SECURITY INTEREST. Any and all moneys, credits
or other property belonging to the Guarantor in transit to, or in the possession
or under the control of, the Bank, or any agent or bailee of the Bank, may,
without prior notice and opportunity to be heard, be appropriated and applied
against the liability of the Guarantor hereunder to the extent of the amount to
which this Guarantee is limited. The Guarantor does hereby assign and transfer
to the Bank any and all cash, negotiable instruments, documents of title,
chattel paper, securities, certificates of deposit, deposit accounts, other cash
equivalents and other assets of the Guarantor in transit to, or in the
possession or control of the Bank, or any agent or bailee of the Bank for any
purpose and to apply the same on any or all of the Guaranteed Obligations to the
extent of the amount to which this Guarantee is limited. To secure payment of
the Guaranteed Obligations, the Guarantor grants to the Bank a security interest
in all property (including but not limited to all of the property described
above) of the Guarantor delivered concurrently herewith, or now or at any time
hereafter in the possession or control of the Bank, and all proceeds of all such
property. The undersigned agrees that the Bank shall
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have the rights and remedies of a secured party under the Uniform Commercial
Code of Illinois with respect to all of the aforesaid property, including,
without limitation thereof, the right to sell or otherwise dispose of any or
all of such property. The Bank may without notice to anyone, apply or set off
any balances, credits, deposits, accounts, moneys or other indebtedness at
any time credited by or due from the Bank to the Guarantor against the
amounts due hereunder. Any notification of intended disposition of any
property required by law shall be deemed reasonably and properly given if
given at least five (5) calendar days before such disposition.
7. RECOVERY CLAIM. Should a claim ("Recovery Claim") be made upon the
Bank at any time for recovery of any amount received by the Bank in payment
of the Guaranteed Obligations (whether received from the Borrower, the
Guarantor pursuant hereto, or otherwise) and should the Bank repay all or
part of said amount by reason of (1) any judgment, decree, or order of any
court or administrative body having jurisdiction over the Bank or any of its
property; or (2) any settlement or compromise of any such Recovery Claim
effected by the Bank with the claimant (including the Borrower), the
Guarantor shall remain jointly and severally liable to the Bank for the
amount so repaid to the same extent as if such amount had never originally
been received by the Bank, notwithstanding any termination hereof or the
return of this document to or the cancellation of any note or other
instrument evidencing any of the indebtedness.
8. ASSIGNMENTS. In the event the Bank shall sell, assign or transfer
the Guaranteed Obligations, or any part thereof, or grant participation
therein, each and every immediate or remote successive assignee, transferee,
holder of or participant therein, of all or any part of the Guaranteed
Obligations shall have the right to enforce this Guarantee by suit or
otherwise for the benefit of such assignee, transferee holder or participant,
as fully as if such assignee, transferee holder or participant were herein by
name specifically given such rights, powers and benefits; but the Bank shall
have an unimpaired, prior and superior right to enforce this Guarantee for
its benefit as to so much of the Guaranteed Obligations as it has not sold,
assigned or transferred.
9. FINANCIAL CONDITION OF THE BORROWER. The Guarantor represents and
warrants to the Bank that the Guarantor is currently ~informed of the
financial condition of the Borrower and of all other circumstances which a
diligent inquiry would reveal and which would bear upon the risk of
nonpayment of the Guaranteed Obligations. The Guarantor further represents
and warrants to the Bank that the Guarantor will continue to keep informed of
the Borrower's financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk
of nonpayment or nonperformance of the Guaranteed Obligations.
10. FINANCIAL STATEMENTS OF GUARANTOR.
10.1 REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Bank that:
(a) All income statements, balance sheets, cash flow statements,
statements of operations and other financial data that have been or shall
hereafter be furnished to the Bank for the purposes of or in connection
with this Guarantee do and will present fairly in accordance with GAAP,
consistently applied, the financial condition of the Guarantor as of the
dates thereof and the results of operations for the period(s) covered
thereby. There is no
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Page 76 of 106 Pages
liability, direct or indirect, contingent or otherwise, of the Guarantor
that is not reflected on these financial statements.
(b) The balance sheet of the Guarantor, dated September 30,
1995, and the related statements of income, retained earnings and cash
flows for the calendar period then ended, respectively, copies of which
have been furnished to the Bank, fairly present the financial condition of
the Guarantor, at such dates and the results of each of their operations
for the period ended on such respective dates, all in accordance with GAAP,
consistently applied.
(c) Since September 30, 1995, there has been no material adverse
change in the financial condition, operations, assets, business, or
properties of the Guarantor.
10.2 COVENANTS. The Guarantor covenants that so long as this Guarantee
shall remain outstanding the Guarantor shall:
(a) GUARANTOR FINANCIAL STATEMENTS. Furnish to the Bank on or
before the one hundred twentieth (120th) day after the Guarantor's fiscal
years, a copy of the annual consolidated financial statements of Guarantor
consisting of, at least, a balance sheet and statement of income and cash
flow for such period, prepared in accordance with GAAP, consistently
applied, audited by independent certified public accountants of recognized
standing.
(b) GUARANTOR INTERIM STATEMENTS. Furnish to the Bank on or
before the sixtieth (60th) day after the end of each fiscal quarter of the
Guarantor, a copy of unaudited consolidated financial statements of the
Guarantor prepared in accordance with GAAP, consistently applied, signed by
an authorized officer of Guarantor and consisting of, at least, a balance
sheet and statement of income and cash flow as at the close of such fiscal
quarter and for the period from the beginning of such calendar year to the
close of such fiscal quarter.
(c) LIQUIDITY COVENANT. Maintain liquid assets, including cash,
cash equivalents and/or undrawn capital commitments in an amount at least
equal to the Maximum Guaranteed Amount. The sum of the percentages of the
aggregate cost of purchase of the Stock (as defined in the Loan Agreement)
currently held as Collateral guaranteed by each of the Guarantor and
Productivity Fund III, L.P., a Delaware limited partnership shall at all
time be equal to or greater than 20%.
(d) CERTIFICATE. Contemporaneously with the furnishing of each
of the financial statements described in SECTIONS (a) and (b) above,
furnish to the Bank a duly completed certificate in the form of ANNEX I
attached hereto (a "COMPLIANCE CERTIFICATE") dated the date of such
financial statement and signed by an authorized officer of the Guarantor.
11. SUBORDINATION. The Guarantor hereby agrees that any and all present
and future indebtedness of the Borrower owing to the Guarantor is, and shall be,
subordinated in all~respects to the Guaranteed Obligations. Notwithstanding the
foregoing, the Guarantor may receive from the Borrower regularly scheduled
payments of principal and interest in connection with such
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Page 77 of 106 Pages
subordinated indebtedness so long as a Default or an Event of Default (as
such terms are defined in the Loan Agreement) under the Loan Agreement has
not occurred and is continuing.
12. PAYMENTS; APPLICATION. All payments to be made hereunder by the
Guarantor shall be made in lawful money of the United States of America,
shall be made in immediately available funds, and shall be made without
deduction (whether for taxes or otherwise) or offset. All payments made by
the Guarantor hereunder shall be applied as follows; first, to all costs and
expenses (including attorneys' fees and costs) incurred by the Bank in
enforcing this Guarantee or in collecting the Guaranteed Obligations; second,
to all accrued and unpaid interest and fees owing to the Bank constituting
Guaranteed Obligations; and third, to the balance of the Guaranteed
Obligations, all such payments to be limited to the amount to which this
Guarantee is limited.
13. INDEMNIFICATION. Subject to the limitations set forth herein, or
in any other instruments, writings and agreements between the Borrower and
the Bank, the Guarantor agrees to indemnify the Bank and hold the Bank
harmless against all obligations, demands, or liabilities asserted by any
party and against all losses in any way suffered, incurred, or paid by the
Bank as a result of or in any way arising out of, following, or consequential
to the Bank~s transactions with the Borrower.
14. NOTICES. All notices or demands by the Guarantor or the Bank to
the other relating to this Guarantee shall be in writing and either
personally served or sent by certified mail, postage prepaid, return receipt
requested, or by prepaid telefacsimile or telegram, and shall be deemed to be
given for purposes of this Guarantee on the day that such writing is received
by the party to whom it is sent. Unless otherwise specified in a notice sent
or delivered in accordance with the provisions of this SECTION 14, such
writing shall be sent, if to the Guarantor, at the Guarantor's address set
forth on the signature page hereof, and if to the Bank, then to 120 South
LaSalle Street, Chicago, Illinois 60603, Attn.: Michael Foster.
15. CUMULATIVE REMEDIES. No remedy under this Guarantee is intended
to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given hereunder and
those provided by law or in equity. No delay or omission by the Bank to
exercise any right under this Guarantee shall impair any such right nor be
construed to be a waiver thereof. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right.
16. BOOKS AND RECORDS. The Guarantor agrees that the Bank's books and
records showing the indebtedness between the Bank and the Borrower shall be
admissible in any action or proceeding and shall be binding upon the
Guarantor for the purpose of establishing the items therein set forth and
shall constitute prima facie proof thereof.
17. SEVERABILITY OF PROVISIONS. Any provision of this Guarantee which
is prohibited or unenforceable under applicable law, shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
<PAGE>
Page 78 of 106 Pages
18. ENTIRE AGREEMENT: AMENDMENTS. This Guarantee constitutes the
entire agreement between the Guarantor and the Bank pertaining to the subject
matter contained herein, and may not be altered, amended, or modified, nor
may any provision hereof be waived or noncompliance therewith consented to,
except by means of a writing executed by both the Guarantor and the Bank. Any
such alteration, amendment, modification, waiver, or consent shall be
effective only to the extent specified therein and for the specific purpose
for which given. No course of dealing and no delay or waiver of any right or
default under this Guarantee shall be deemed a waiver of any other similar or
dissimilar right or default or otherwise prejudice the rights and remedies
hereunder.
19. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon the
Guarantor's successors, and assigns and shall inure to the benefit of the
successors and assigns of the Bank.
20. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS GUARANTEE, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE
GUARANTOR AND THE BANK SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS GUARANTEE SHALL BE TRIED AND DETERMINED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS,
OR, AT THE SOLE OPTION OF THE BANK IN ANY OTHER COURT IN WHICH THE BANK SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, THE GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 21.
21. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT
TO THIS GUARANTEE, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE DEALINGS OF THE GUARANTOR AND THE BANK WITH RESPECT TO THIS GUARANTEE, OR
THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY AGREES THAT ANY
SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING SHALL BE DECIDED
BY A COURT TRIAL WITHOUT A JURY AND THAT THE BANK MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION 22 WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF THE GUARANTOR TO THE WAIVER OF HIS RIGHT TO TRIAL
BY JURY.
[SIGNATURE PAGE(S) FOLLOW]
<PAGE>
Page 79 of 106 Pages
IN WITNESS WHEREOF, the Guarantor has executed and delivered this Guarantee
as of the date set forth above.
GUARANTOR:
ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P.
By: ENVIRONMENTAL PRIVATE EQUITY MANAGEMENT II,
L.P., its General Partner
By: FIRST ANALYSIS EPEF MANAGEMENT COMPANY II,
its General Partner
By: /s/ Bret R. Maxwell
___________________
Bret R. Maxwell,
Its Coordinating General Partner
Address:
9500 Sears Tower
Chicago, Illinois 60606
<PAGE>
Page 80 of 106 Pages
REAFFIRMATION AND AMENDMENT OF GUARANTEE
THIS REAFFIRMATION AND AMENDMENT OF GUARANTEE dated as of November 17,
1997 (this "Reaffirmation"), is made by ENVIRONMENTAL PRIVATE EQUITY FUND II,
L.P., a Delaware limited partnership (the "Guarantor"), in favor of LASALLE
NATIONAL BANK, a national banking association (together with its successors
and assigns, the "Bank").
RECITALS
WHEREAS, Riverside L.L.C. (the "Borrower") and the Bank are parties to
that certain Secured Revolving Loan Agreement dated as of November 17, 1995
(the "Loan Agreement");
WHEREAS, pursuant to the Loan Agreement, the Bank has made and will
continue to make Revolving Loans to the Borrower for the purposes of
purchasing certain Stock, as described in the Loan Agreement;
WHEREAS, concurrently with the purchase of such Stock by the Borrower,
the Borrower has contributed and will continue to contribute such Stock to
Riverside Partnership, an Illinois general partnership of which the Guarantor
is a general partner;
WHEREAS, the Guarantor guaranteed the payment and performance of the
indebtedness, obligations and liabilities of the Borrower to the Bank under
the Loan Agreement and the instruments, agreements, and documents executed
and/or delivered in connection therewith (collectively, the "Guaranteed
Obligations"), pursuant to that certain Guarantee dated November 17, 1995,
made by the Guarantor in favor of the Bank (the "Guarantee");
WHEREAS, the Borrower and the Bank have agreed to amend certain terms
and provisions of the Loan Agreement upon the terms and subject to the
conditions contained in that certain First Amendment to Loan Agreement dated
of even date herewith (the "Amendment"), by and among the Borrower and the
Bank;
WHEREAS, the Bank is unwilling to execute the Amendment unless, among
other things, the Guarantor reaffirms and amends the Guarantee and reaffirms
its guaranty of the payment and performance of the Guaranteed Obligations, as
such Guaranteed Obligations are being modified by the terms of the Amendment;
and
WHEREAS, the Guarantor expects to derive direct and indirect benefits
from the execution and delivery of the Amendment, and the Guarantor desires
to reaffirm and amend the Guarantee in order to induce the Bank to execute
the Amendment.
NOW, THEREFORE, in consideration of the premises herein contained and
for the purpose of inducing the Bank to execute the Amendment and for other
good and valuable consideration (the receipt, sufficiency and adequacy of
which are hereby acknowledged), the parties hereto hereby agree as follows:
<PAGE>
Page 81 of 106 Pages
1. Subject to the terms and conditions contained herein, the second
(2nd) sentence of the first (1st) full paragraph of page two (2) of the
Guarantee is hereby deleted in its entirety and the following language is
inserted in lieu thereof:
"Notwithstanding the foregoing, in no event shall the sum of the
percentages guaranteed by each of the Guarantor, Infrastructure and
Environmental Private Equity Fund III, L.P., a Delaware limited
partnership, and Productivity Fund III, L.P., a Delaware limited
partnership, be less than 20%. If at any time the sum of the percentages
certified by the Guarantor, Infrastruture and Environmental Private Equity
Fund III, L.P., a Delaware limited partnership, and Productivity Fund III,
L.P., a Delaware limited partnership shall be less than 20%, such
percentages shall be deemed to be increased on a pro rata basis to a
percentage equal to 20% collectively."
2. Subject to the terms and conditions contained herein, Annex I and
Annex II attached to the Guarantee are hereby deleted in their entirety and
the form of Annex I and Annex II attached hereto shall be inserted in lieu
therof.
3. Subject to the terms and conditions contained herein, the second
(2nd) sentence of Section 10.2(c) of the Guarantee is hereby deleted in its
entirety and the following language is inserted in lieu thereof:
"The sum of the percentages of the aggregate cost of purchase of the
Stock (as defined in the Loan Agreement) currently held as Collateral
guaranteed by each of the Guarantor, Infrastruture and Environmental
Private Equity Fund III, L.P., a Delaware limited partnership, and
Productivity Fund III, L.P., a Delaware limited partnership, shall at all
times be equal to or greater than 20%."
4. The Guarantee remains in full force and effect, and the Guarantor
hereby reaffirms its unconditional, absolute, and irrevocable guaranty
(subject to the terms and conditions of the Guarantee) of (i) the due and
punctual payment of all of the Guaranteed Obligations, as such Guaranteed
Obligations are being modified by the terms of the Amendment and this
Reaffirmation, and (ii) the due and punctual performance and observance by
the Borrower of all of the other terms, covenants, agreements, and
obligations of the Loan Agreement and each of the other instruments,
agreements, and documents executed and/or delivered in connection therewith
to which the Borrower is a party.
5. The Guarantor acknowledges receipt of a copy of the Amendment, and
any and all other documents executed and/or delivered in connection
therewith, and by such Guarantor's execution hereof expressly agrees to any
and all changes, modifications, extensions and amendments in the terms of the
Guaranteed Obligations as set forth in the Amendment. The Guarantor agrees
and acknowledges that all other terms, provisions and conditions of the
Guarantee, except as modified pursuant hereto, are hereby confirmed and
remain in full force and effect.
6. The Guarantor certifies and warrants that the Guarantee, as
reaffirmed hereby, is the legal, valid and binding obligation of the
Guarantor, enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, receivership,
fraudulent
<PAGE>
Page 82 of 106 Pages
conveyance or transfer, moratorium or similar law and the effect of general
principles of equity, and that the liability of the Guarantor hereunder and
under the Guarantee shall continue in full force and effect until the
Guaranteed Obligations and all other amounts and obligations guaranteed
pursuant to the Guarantee, are paid to the Bank in full.
7. This Reaffirmation shall be attached to and made a part of the
Guarantee. This Reaffirmation may be executed in counterparts and said
counterparts when taken together shall constitute one and the same
Reaffirmation.
8. THIS REAFFIRMATION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS.
[Signatures on next page.]
<PAGE>
Page 83 of 106 Pages
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Reaffirmation and Amendment of Guarantee as of the date first written above.
ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P.
By: ENVIRONMENTAL PRIVATE EQUITY
MANAGEMENT II, L.P., its
General Partner
By: FIRST ANALYSIS EPEF MANAGEMENT COMPANY II,
its General Partner
By: /s/ Bret R. Maxwell
___________________
Name: Bret R. Maxwell
Its: Coordinating General Partner
<PAGE>
Page 84 of 106 Pages
REAFFIRMATION AND AMENDMENT OF GUARANTEE
THIS REAFFIRMATION AND AMENDMENT OF GUARANTEE dated as of March __, 1998
(this "Reaffirmation"), is made by ENVIRONMENTAL PRIVATE EQUITY FUND II,
L.P., a Delaware limited partnership (the "Guarantor"), in favor of LASALLE
NATIONAL BANK, a national banking association (together with its successors
and assigns, the "Bank").
RECITALS
WHEREAS, Riverside L.L.C., an Illinois limited liability company (the
"Borrower") and the Bank are parties to that certain Secured Revolving Loan
Agreement dated as of November 17, 1995, which was amended by that certain
First Amendment to Secured Revolving Loan Agreement dated as of November 17,
1997 by and between the Borrower and the Bank (collectively hereinafter
referred to as the "Loan Agreement");
WHEREAS, pursuant to the Loan Agreement, the Bank has made and will
continue to make Revolving Loans to the Borrower for the purposes of
purchasing certain Stock, as described in the Loan Agreement;
WHEREAS, concurrently with the purchase of such Stock by the Borrower,
the Borrower has contributed and will continue to contribute such Stock to
Riverside Partnership, an Illinois general partnership of which the Guarantor
is a general partner;
WHEREAS, the Guarantor guaranteed the payment and performance of the
indebtedness, obligations and liabilities of the Borrower to the Bank under
the Loan Agreement and the instruments, agreements, and documents executed
and/or delivered in connection therewith (collectively, the "Guaranteed
Obligations"), pursuant to that certain Guarantee dated as of November 17,
1995 made by the Guarantor in favor of the Bank, and the Guarantor reaffirmed
its obligations pursuant to that certain Reaffirmation and Amendment of
Guarantee dated as of November 17, 1997 made by the Guarantor in favor of the
Bank (collectively hereinafter referred to as the "Guarantee");
WHEREAS, the Borrower and the Bank have agreed to amend certain terms
and provisions of the Loan Agreement upon the terms and subject to the
conditions contained in that certain Second Amendment to Secured Revolving
Loan Agreement dated as of the date hereof by and between the Borrower and
the Bank (the "Second Amendment");
WHEREAS, the Bank is unwilling to execute the Second Amendment unless,
among other things, the Guarantor reaffirms its guaranty of the payment and
performance of the Guaranteed Obligations, as such Guaranteed Obligations are
being modified by the terms of the Second Amendment; and
WHEREAS, the Guarantor expects to derive direct and indirect benefits
from the execution and delivery of the Second Amendment, and the Guarantor
desires to reaffirm and amend the Guarantee in order to induce the Bank to
execute the Second Amendment.
<PAGE>
Page 85 of 106 Pages
NOW, THEREFORE, in consideration of the premises herein contained and
for the purpose of inducing the Bank to execute the Second Amendment and for
other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Subject to the terms and conditions contained herein, the second
(2nd) sentence of the first (1st) full paragraph of page two (2) of the
Guarantee is hereby deleted in its entirety and the following language is
inserted in lieu thereof:
"Notwithstanding the foregoing, in no event shall the sum of the
percentages guaranteed by each of the Guarantor, Infrastructure and
Environmental Private Equity Fund III, L.P., a Delaware limited partnership
("IEPEF"), The Productivity Fund III, L.P., a Delaware limited partnership
("Productivity"), Environmental & Information Technology Private Equity
Fund III, Gesellschaft burgarlichen Rechts (mit Haftungsbeschankung)
("Environmental"), Apex Investment Fund III, L.P., a Delaware limited
partnership ("Apex Investment"), and Apex Strategic Partners, LLC, a
Delaware limited liability company ("Apex Strategic"), be less than 20%.
If at any time the sum of the percentages certified by the Guarantor,
Productivity, IEPEF, Environmental, Apex Investment and Apex Strategic
shall be less than 20%, such percentages shall be deemed to be increased on
a pro rata basis to a percentage equal to 20% collectively."
2. Subject to the terms and conditions contained herein, Annex I and
Annex II attached to the Reaffirmation are hereby deleted in their entirety
and the form of Annex I and Annex II attached hereto shall be inserted in
lieu thereof.
3. Subject to the terms and conditions contained herein, the second
(2nd) sentence of Section 10.2(c) of the Guarantee is hereby deleted in its
entirety and the following language is inserted in lieu thereof:
"The sum of the percentages of the aggregate cost of purchase of the
Stock (as defined in the Loan Agreement) currently held as Collateral
guaranteed by each of the Guarantor, IEPEF, Productivity, Environmental,
Apex Investment and Apex Strategic shall at all times be equal to or
greater than 20%."
4. The Guarantee remains in full force and effect, and the Guarantor
hereby reaffirms its unconditional, absolute, and irrevocable guaranty
(subject to the terms and conditions of the Guarantee) of (i) the due and
punctual payment of all of the Guaranteed Obligations, as such Guaranteed
Obligations are being modified by the terms of the Second Amendment and this
Reaffirmation, and (ii) the due and punctual performance and observance by
the Borrower of all of the other terms, covenants, agreements, and
obligations of the Loan Agreement and each of the other instruments,
agreements, and documents executed and/or delivered in connection therewith
to which the Borrower is a party.
5. The Guarantor acknowledges receipt of a copy of the Second
Amendment, and any and all other documents executed and/or delivered in
connection therewith, and by such Guarantor's execution hereof expressly
agrees to any and all changes, modifications, extensions and amendments
<PAGE>
Page 86 of 106 Pages
in the terms of the Guaranteed Obligations as set forth in the Second
Amendment. The Guarantor agrees and acknowledges that all other terms,
provisions and conditions of the Guarantee, except as modified pursuant
hereto, are hereby confirmed and remain in full force and effect.
6. The Guarantor certifies and warrants that the Guarantee, as
reaffirmed hereby, is the legal, valid and binding obligation of the
Guarantor, enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance or transfer, moratorium or similar law and the effect
of general principles of equity, and that the liability of the Guarantor
hereunder and under the Guarantee shall continue in full force and effect
until the Guaranteed Obligations and all other amounts and obligations
guaranteed pursuant to the Guarantee, are paid to the Bank in full.
7. This Reaffirmation shall be attached to and made a part of the
Guarantee. This Reaffirmation may be executed in counterparts and said
counterparts when taken together shall constitute one and the same Amendment.
8. THIS REAFFIRMATION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS.
[Signature on next page.]
<PAGE>
Page 87 of 106 Pages
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Reaffirmation and Amendment of Guarantee as of the date first written above.
ENVIRONMENTAL PRIVATE EQUITY FUND II, L.P.
By: ENVIRONMENTAL PRIVATE EQUITY
MANAGEMENT II, L.P., its
General Partner
By: FIRST ANALYSIS EPEF MANAGEMENT
COMPANY II, its General Partner
By: /s/ Bret R. Maxwell
_____________________
Name: Bret R. Maxwell
Its: Coordinating General Partner
<PAGE>
Page 88 of 106 Pages
EXHIBIT F-2
GUARANTEE
THIS GUARANTEE (this "Guarantee") is made as of this 17th day of
November, 1995, by PRODUCTIVITY FUND III, L.P., a Delaware limited
partnership (hereinafter, together with its successors and permitted assigns,
the "Guarantor") to and for the benefit of LASALLE NATIONAL BANK, a national
banking association (hereinafter, together with its successors and assigns,
the "Bank").
R E C I T A L S:
A. Riverside L.L.C., an Illinois limited liability company (the
"Borrower") and the Bank are parties to that certain Secured Revolving Loan
Agreement of even date herewith (as the same may be amended, supplemented or
modified from time to time, the "Loan Agreement"), providing for revolving
loans to be made to the Borrower by the Bank for the purchase of the Stock,
as described in the Loan Agreement.
B. Concurrently with the purchase of such Stock, the Borrower will
contribute such Stock to Riverside Partnership, an Illinois general
partnership of which Guarantor is a general partner.
C. It is in the best interests of the Guarantor to cause this
Guarantee to be executed on its behalf inasmuch as the Guarantor will derive
substantial direct and indirect benefits from the revolving loans to be made
pursuant to the Loan Agreement.
D. The Bank has required that the Guarantor execute this Guarantee in
connection with the Bank's agreement to enter into the Loan Agreement.
NOW, THEREFORE FOR VALUE RECEIVED, and in consideration of advances,
credit or other financial accommodations heretofore, now or that may
hereafter at any time be extended to the Borrower by the Bank, the Guarantor
hereby unconditionally guarantees, irrespective of the validity, regularity
or enforceability of any instrument, writing or agreement relating to or the
subject of any such financial accommodation, and whether or not due or to
become due before or after any bankruptcy or insolvency proceeding involving
the Borrower or would have become due but for the Borrower's bankruptcy
proceeding, the full and prompt payment to the Bank at maturity, to the
extent of the amount to which this Guarantee is limited, whether by
acceleration or otherwise, and at all times thereafter of any and all
indebtedness, obligations and liabilities of every kind and nature of the
Borrower to the Bank which arise out of or in connection with the Loan
Agreement or any Related Document, howsoever evidenced, whether now existing
or hereafter created or arising, directly or indirectly, primary or
secondary, absolute or contingent, due or to become due, or joint or several,
and howsoever owned, held or
<PAGE>
Page 89 of 106 Pages
acquired, whether through discount, overdraft, purchase, direct loan or as
collateral, or otherwise, and the prompt, full and faithful performance and
discharge by the Borrower of each and every of the terms, conditions,
agreements, representations and warranties on the part of the Borrower
contained in the Loan Agreement or any Related Document, or in any
modification or addenda thereto or substitution thereof; and the Guarantor
further agrees to pay all expenses legal and/or otherwise, (including court
costs and attorneys' fees), paid or incurred by the Bank in endeavoring to
collect such indebtedness, or any part thereof, or in enforcing this
Guarantee or in defending any suit based on any act of commission or omission
of the Bank with respect to such indebtedness, collateral, or this Guarantee
or in connection with any recovery claim hereinbelow defined (all of the
aforesaid indebtedness, obligations and liabilities plus interest and all
expenses herein mentioned are hereinafter collectively called the "Guaranteed
Obligations").
The amount of recovery, however, against the Guarantor is limited to a
percentage of the aggregate cost of purchase of the Stock (as defined in the
Loan Agreement) currently held as Collateral (the "Maximum Guaranteed
Amount"), such percentage to be certified to the Bank by the Guarantor from
time to time in the form attached hereto as Annex II, plus all costs of
collection and other expenses (including court costs and attorneys' fees)
described herein. Notwithstanding the foregoing, in no event shall the sum of
the percentages guaranteed by each of the Guarantor and Environmental Private
Equity Fund II, L.P., a Delaware limited partnership be less than 20%. If at
any time the sum of the percentages certified by the Guarantor and
Environmental Private Equity Fund II, L.P., a Delaware limited partnership
shall be less than 20%, such percentages shall be deemed to be increased on a
pro rata basis to a percentage equal to 20% collectively.
The Guarantor hereby further agrees as follows:
1. CONTINUING GUARANTEE. This Guarantee includes any Guaranteed
Obligations arising under successive transactions continuing, compromising,
extending, increasing, modifying, releasing, or renewing the Guaranteed
Obligations, changing the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guaranteed Obligations
after prior Guaranteed Obligations have been satisfied in whole or in part.
To the maximum extent permitted by law, the Guarantor hereby waives any right
to revoke this Guarantee as to future indebtedness. If such a revocation is
effective notwithstanding the foregoing waiver, the Guarantor acknowledges
and agrees that (a) no such revocation shall be effective until written
notice thereof has been received by the Bank, (b) no such revocation shall
apply to any Guaranteed Obligations in existence on such date (including any
subsequent continuation, extension, or renewal thereof, or change in the
interest rate, payment terms, or other terms and conditions thereof), (c) no
such revocation shall apply to any Guaranteed Obligations made or created
after such date to the extent made or created pursuant to a legally binding
commitment of the Bank in existence on the date of such revocation, (d) no
payment by the Guarantor, the Borrower, or from any other source, prior to
the date of such revocation shall reduce the maximum obligation of the
Guarantor hereunder, and (e) any payment by the
<PAGE>
Page 90 of 106 Pages
Borrower or from any source other than the Guarantor, subsequent to the date
of such revocation, shall first be applied to that portion of the Guaranteed
Obligations as to which the revocation is effective and which are not,
therefore, guaranteed hereunder, and to the extent so applied shall not
reduce the maximum obligation of the Guarantor thereunder. The agreements and
obligations of the undersigned under this Guarantee shall remain in full
force and effect until all Liabilities (as defined in the Loan Agreement)
shall have been paid in full and the Bank's Revolving Loan Commitment (as
defined in the Loan Agreement) has terminated.
2. PERFORMANCE UNDER THIS GUARANTEE. In the event that the Borrower
fails to make any payment of any Guaranteed Obligations on or before the due
date thereof, or if the Borrower shall fail to perform, keep, observe, or
fulfill any other obligation referred to in any instrument, writing or
agreement relating to the Guaranteed Obligations, the Guarantor immediately
shall cause such payment to be made to the extent of the amount to which this
Guarantee is limited, and shall cause each of such obligations to be
performed, kept, observed, or fulfilled.
3. PRIMARY OBLIGATIONS. This Guarantee is a primary and original
obligation of the Guarantor, is not merely the creation of a surety
relationship, and is an absolute, unconditional, and continuing guarantee of
payment and performance which shall remain in full force and effect without
respect to future changes in conditions, including any change of law or any
invalidity or irregularity with respect to the issuance of any instrument,
writing or agreement relating to the Guaranteed Obligations. The Guarantor
agrees that he is directly, jointly and severally with any other guarantor of
the Guaranteed Obligations, liable to the Bank, that the obligations of the
Guarantor hereunder are independent of the obligations of the Borrower or any
other guarantor, and that a separate action may be brought against the
Guarantor whether such action is brought against the Borrower or any other
guarantor or whether the Borrower or any such other guarantor is joined in
such action. The Guarantor agrees that his liability hereunder shall be
immediate and shall not be contingent upon the exercise or enforcement of any
lien or realization upon any security or collateral the Bank may at any time
possess. The Guarantor agrees that any release which may be given by the Bank
to the Borrower or any other guarantor shall not release the Guarantor. The
Guarantor consents and agrees that the Bank shall be under no obligation to
marshal any assets of the Borrower or any other guarantor in favor of the
Guarantor, or against or in payment of any or all of the Guaranteed
Obligations.
4. WAIVERS.
(a) The Guarantor hereby waives: (1) notice of acceptance
hereof; (2) notice of any loans or other financial accommodations made or
extended to the Borrower or the creation or existence of any Guaranteed
Obligations; (3) notice of the amount of the Guaranteed Obligations,
subject, however, to the Guarantor's right to make inquiry of the Bank to
ascertain the amount of the Guaranteed Obligations at any reasonable time;
(4) notice of any adverse change in the financial condition of the Borrower
or of any other
<PAGE>
Page 91 of 106 Pages
fact that might increase the Guarantor's risk hereunder; (5) notice of
presentment for payment, demand, protest, and notice thereof as to any
promissory notes or other instruments, writing or agreements evidencing
Guaranteed Obligations; (6) notice of any event of default by the
Borrower under any instrument, writing or agreement with the Bank; and
(7) all other notices (except if such notice is specifically required to
be given to the Guarantor hereunder) and demands to which the Guarantor
might otherwise be entitled.
(b) The Guarantor hereby waives the right by statute or
otherwise to require the Bank to institute suit against the Borrower; or to
exhaust any rights and remedies which the Bank has or may have against the
Borrower. In this regard, the Guarantor agrees that he is bound to the
payment of all Guaranteed Obligations to the extent of the amount to which
this Guarantee is limited, whether now existing or hereafter accruing, as
fully as if such Guaranteed Obligations were directly owing to the Bank by
the Guarantor. The Guarantor further waives any defense arising by reason
of any disability or other defense (other than the defense that the
Guaranteed Obligations shall have been fully and finally performed and
indefeasibly paid) of the Borrower or by reason of the cessation from any
cause whatsoever of the liability of the Borrower in respect thereof.
(c) The Guarantor hereby waives: (1) any rights to assert against
the Bank any defense (legal or equitable), set-off, counterclaim, or
claim which the Guarantor may now or at any time hereafter have against
the Borrower or any other party liable to the Bank; (2) any defense,
set-off, counterclaim, or claim, of any kind or nature, arising directly
or indirectly from the present or future lack of perfection,
sufficiency, validity, or enforceability of the Guaranteed Obligations
or any security therefor; (3) the benefit of any statute of limitations
affecting the Guarantor's liability hereunder or the enforcement
thereof, and any act which shall defer or delay the operation of any
statute of limitations applicable to the Guaranteed Obligations shall
similarly operate to defer or delay the operation of such statute of
limitations applicable to the Guarantor's liability hereunder.
(d) The Guarantor hereby waives any right of subrogation the
Guarantor has or may have as against the Borrower with respect to the
Guaranteed Obligations. In addition, the Guarantor hereby waives any right
to proceed against the Borrower, now or hereafter, for contribution,
indemnity, reimbursement, and any other suretyship rights and claims,
whether direct or indirect, liquidated or contingent, whether arising under
express or implied contract or by operation of law, which the Guarantor may
now have or hereafter have as against the Borrower with respect to the
Guaranteed Obligations. The Guarantor also hereby waives any rights of
recourse to or with respect to any asset of the Borrower. The Guarantor
agrees that in light of the immediately foregoing waivers, the execution of
this Guarantee shall not be deemed to make the Guarantor a "creditor" of
the Borrower, and that, for purposes of Sections 547 and 550 of the United
States Bankruptcy Code, the Guarantor shall not be deemed a "creditor" of
the Borrower.
<PAGE>
Page 92 of 106 Pages
5. RELEASES. No release or discharge of the Borrower or any one or
more of the guarantors, or of any other person, whether primarily or
secondarily liable for and obligated with respect to the Guaranteed
Obligations, or the institution of bankruptcy, receivership, insolvency,
reorganization, dissolution or liquidation proceedings by or against any
guarantor or person, or the entry of any restraining or other order in any
such proceeding, shall release or discharge the Guarantor or any other
guarantor of the Guaranteed Obligations, or any other person, firm or
corporation liable to the Bank for the Guaranteed Obligations, unless and
until all of the Guaranteed Obligations shall have been fully paid.
6. RIGHT OF SETOFF AND SECURITY INTEREST. Any and all moneys, credits
or other property belonging to the Guarantor in transit to, or in the
possession or under the control of, the Bank, or any agent or bailee of the
Bank, may, without prior notice and opportunity to be heard, be appropriated
and applied against the liability of the Guarantor hereunder to the extent of
the amount to which this Guarantee is limited. The Guarantor does hereby
assign and transfer to the Bank any and all cash, negotiable instruments,
documents of title, chattel paper, securities, certificates of deposit,
deposit accounts, other cash equivalents and other assets of the Guarantor in
transit to, or in the possession or control of the Bank, or any agent or
bailee of the Bank for any purpose and to apply the same on any or all of the
Guaranteed Obligations to the extent of the amount to which this Guarantee is
limited. To secure payment of the Guaranteed Obligations, the Guarantor
grants to the Bank a security interest in all property (including but not
limited to all of the property described above) of the Guarantor delivered
concurrently herewith, or now or at any time hereafter in the possession or
control of the Bank, and all proceeds of all such property. The undersigned
agrees that the Bank shall have the rights and remedies of a secured party
under the Uniform Commercial Code of Illinois with respect to all of the
aforesaid property, including, without limitation thereof, the right to sell
or otherwise dispose of any or all of such property. The Bank may without
notice to anyone, apply or set off any balances, credits, deposits, accounts,
moneys or other indebtedness at any time credited by or due from the Bank to
the Guarantor against the amounts due hereunder. Any notification of intended
disposition of any property required by law shall be deemed reasonably and
properly given if given at least five (5) calendar days before such
disposition.
7. RECOVERY CLAIM. Should a claim ("Recovery Claim") be made upon the
Bank at any time for recovery of any amount received by the Bank in payment
of the Guaranteed Obligations (whether received from the Borrower, the
Guarantor pursuant hereto, or otherwise) and should the Bank repay all or
part of said amount by reason of (1) any judgment, decree, or order of any
court or administrative body having jurisdiction over the Bank or any of its
property; or (2) any settlement or compromise of any such Recovery Claim
effected by the Bank with the claimant (including the Borrower), the
Guarantor shall remain jointly and severally liable to the Bank for the
amount so repaid to the same extent as if such amount had never originally
been received by the Bank, notwithstanding any termination hereof or the
return of this document to or the cancellation of any note or other
instrument evidencing any of the indebtedness.
<PAGE>
Page 93 of 106 Pages
8. ASSIGNMENTS. In the event the Bank shall sell, assign or transfer
the Guaranteed Obligations, or any part thereof, or grant participation
therein, each and every immediate or remote successive assignee, transferee,
holder of or participant therein, of all or any part of the Guaranteed
Obligations shall have the right to enforce this Guarantee by suit or
otherwise for the benefit of such assignee, transferee holder or participant,
as fully as if such assignee, transferee holder or participant were herein by
name specifically given such rights, powers and benefits; but the Bank shall
have an unimpaired, prior and superior right to enforce this Guarantee for
its benefit as to so much of the Guaranteed Obligations as it has not sold,
assigned or transferred.
9. FINANCIAL CONDITION OF THE BORROWER. The Guarantor represents and
warrants to the Bank that the Guarantor is currently ~informed of the
financial condition of the Borrower and of all other circumstances which a
diligent inquiry would reveal and which would bear upon the risk of
nonpayment of the Guaranteed Obligations. The Guarantor further represents
and warrants to the Bank that the Guarantor will continue to keep informed of
the Borrower's financial condition, the financial condition of other
guarantors, if any, and of all other circumstances which bear upon the risk
of nonpayment or nonperformance of the Guaranteed Obligations.
10. FINANCIAL STATEMENTS OF GUARANTOR.
10.1 REPRESENTATIONS AND WARRANTIES. The Guarantor represents and
warrants to the Bank that:
(a) All income statements, balance sheets, cash flow statements,
statements of operations and other financial data that have been or shall
hereafter be furnished to the Bank for the purposes of or in connection
with this Guarantee do and will present fairly in accordance with GAAP,
consistently applied, the financial condition of the Guarantor as of the
dates thereof and the results of operations for the period(s) covered
thereby. There is no liability, direct or indirect, contingent or
otherwise, of the Guarantor that is not reflected on these financial
statements.
(b) The balance sheet of the Guarantor, dated September 30,
1995, and the related statements of income, retained earnings and cash
flows for the calendar period then ended, respectively, copies of which
have been furnished to the Bank, fairly present the financial condition of
the Guarantor, at such dates and the results of each of their operations
for the period ended on such respective dates, all in accordance with GAAP,
consistently applied.
(c) Since September 30, 1995, there has been no material adverse
change in the financial condition, operations, assets, business, or
properties of the Guarantor.
<PAGE>
Page 94 of 106 Pages
10.2 COVENANTS. The Guarantor covenants that so long as this
Guarantee shall remain outstanding the Guarantor shall:
(a) GUARANTOR FINANCIAL STATEMENTS. Furnish to the Bank on or
before the one hundred twentieth (120th) day after the Guarantor's fiscal
years, a copy of the annual consolidated financial statements of Guarantor
consisting of, at least, a balance sheet and statement of income and cash
f~ow for such period, prepared in accordance with GAAP, consistently
applied, audited by independent certified public accountants of recognized
standing.
(b) GUARANTOR INTERIM STATEMENTS. Furnish to the Bank on or
before the sixtieth (60th) day after the end of each fiscal quarter of the
Guarantor, a copy of unaudited consolidated financial statements of the
Guarantor prepared in accordance with GAAP, consistently applied, signed by
an authorized officer of Guarantor and consisting of, at least, a balance
sheet and statement of income and cash flow as at the close of such fiscal
quarter and for the period from the beginning of such calendar year to the
close of such fiscal quarter.
(c) LIQUIDITY COVENANT. Maintain liquid assets, including cash,
cash equivalents and/or undrawn capital commitments in an amount at least
equal to the Maximum Guaranteed Amount. The sum of the percentages of the
aggregate cost of purchase of the Stock (as defined in the Loan Agreement)
currently held as Collateral guaranteed by each of the Guarantor and
Environmental Private Equity Fund II, L.P., a Delaware limited partnership
shall at all time be equal to or greater than 20%.
(d) CERTIFICATE. Contemporaneously with the furnishing of each
of the financial statements described in SECTIONS (A) and (B) above,
furnish to the Bank a duly completed certificate in the form of ANNEX I
attached hereto (a "COMPLIANCE CERTIFICATE") dated the date of such
financial statement and signed by an authorized officer of the Guarantor.
11. SUBORDINATION. The Guarantor hereby agrees that any and all present
and future indebtedness of the Borrower owing to the Guarantor is, and shall be,
subordinated in all~respects to the Guaranteed Obligations. Notwithstanding the
foregoing, the Guarantor may receive from the Borrower regularly scheduled
payments of principal and interest in connection with such subordinated
indebtedness so long as a Default or an Event of Default (as such terms are
defined in the Loan Agreement) under the Loan Agreement has not occurred and is
continuing.
12. PAYMENTS; APPLICATION. All payments to be made hereunder by the
Guarantor shall be made in lawful money of the United States of America, shall
be made in immediately available funds, and shall be made without deduction
(whether for taxes or otherwise) or offset.
<PAGE>
Page 95 of 106 Pages
All payments made by the Guarantor hereunder shall be applied as follows;
first, to all costs and expenses (including attorneys' fees and costs)
incurred by the Bank in enforcing this Guarantee or in collecting the
Guaranteed Obligations; second, to all accrued and unpaid interest and fees
owing to the Bank constituting Guaranteed Obligations; and third, to the
balance of the Guaranteed Obligations, all such payments to be limited to the
amount to which this Guarantee is limited.
13. INDEMNIFICATION. Subject to the limitations set forth herein, or
in any other instruments, writings and agreements between the Borrower and
the Bank, the Guarantor agrees to indemnify the Bank and hold the Bank
harmless against all obligations, demands, or liabilities asserted by any
party and against all losses in any way suffered, incurred, or paid by the
Bank as a result of or in any way arising out of, following, or consequential
to the Bank~s transactions with the Borrower.
14. NOTICES. All notices or demands by the Guarantor or the Bank to
the other relating to this Guarantee shall be in writing and either
personally served or sent by certified mail, postage prepaid, return receipt
requested, or by prepaid telefacsimile or telegram, and shall be deemed to be
given for purposes of this Guarantee on the day that such writing is received
by the party to whom it is sent. Unless otherwise specified in a notice sent
or delivered in accordance with the provisions of this SECTION 14, such
writing shall be sent, if to the Guarantor, at the Guarantor's address set
forth on the signature page hereof, and if to the Bank, then to 120 South
LaSalle Street, Chicago, Illinois 60603, Attn.: Michael Foster.
15. CUMULATIVE REMEDIES. No remedy under this Guarantee is intended
to be exclusive of any other remedy, but each and every remedy shall be
cumulative and in addition to any and every other remedy given hereunder and
those provided by law or in equity. No delay or omission by the Bank to
exercise any right under this Guarantee shall impair any such right nor be
construed to be a waiver thereof. No failure on the part of the Bank to
exercise, and no delay in exercising, any right hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of
any other right.
16. BOOKS AND RECORDS. The Guarantor agrees that the Bank's books and
records showing the indebtedness between the Bank and the Borrower shall be
admissible in any action or proceeding and shall be binding upon the
Guarantor for the purpose of establishing the items therein set forth and
shall constitute prima facie proof thereof.
17. SEVERABILITY OF PROVISIONS. Any provision of this Guarantee which
is prohibited or unenforceable under applicable law, shall be ineffective to
the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof.
<PAGE>
Page 96 of 106 Pages
18. ENTIRE AGREEMENT: AMENDMENTS. This Guarantee constitutes the
entire agreement between the Guarantor and the Bank pertaining to the subject
matter contained herein, and may not be altered, amended, or modified, nor
may any provision hereof be waived or noncompliance therewith consented to,
except by means of a writing executed by both the Guarantor and the Bank. Any
such alteration, amendment, modification, waiver, or consent shall be
effective only to the extent specified therein and for the specific purpose
for which given. No course of dealing and no delay or waiver of any right or
default under this Guarantee shall be deemed a waiver of any other similar or
dissimilar right or default or otherwise prejudice the rights and remedies
hereunder.
19. SUCCESSORS AND ASSIGNS. This Guarantee shall be binding upon the
Guarantor's successors, and assigns and shall inure to the benefit of the
successors and assigns of the Bank.
20. CHOICE OF LAW AND VENUE. THE VALIDITY OF THIS GUARANTEE, ITS
CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE RIGHTS OF THE
GUARANTOR AND THE BANK SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
THE GUARANTOR HEREBY AGREES THAT ALL ACTIONS OR PROCEEDINGS ARISING IN
CONNECTION WITH THIS GUARANTEE SHALL BE TRIED AND DETERMINED ONLY IN THE
STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF COOK, STATE OF ILLINOIS,
OR, AT THE SOLE OPTION OF THE BANK IN ANY OTHER COURT IN WHICH THE BANK SHALL
INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS SUBJECT MATTER
JURISDICTION OVER THE MATTER IN CONTROVERSY. TO THE MAXIMUM EXTENT PERMITTED
BY LAW, THE GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT IT MAY HAVE TO ASSERT
THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO THE EXTENT ANY
PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 21.
21. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE
GUARANTOR HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY ACTION,
CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING UNDER OR WITH RESPECT
TO THIS GUARANTEE, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR INCIDENTAL TO
THE DEALINGS OF THE GUARANTOR AND THE BANK WITH RESPECT TO THIS GUARANTEE, OR
THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO
THE MAXIMUM EXTENT PERMITTED BY LAW, THE GUARANTOR HEREBY AGREES THAT ANY
SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING SHALL BE DECIDED
BY A COURT TRIAL WITHOUT A JURY AND THAT THE BANK MAY FILE AN ORIGINAL
COUNTERPART OF THIS SECTION 22 WITH ANY COURT
<PAGE>
Page 97 of 106 Pages
OR OTHER TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE GUARANTOR TO THE
WAIVER OF HIS RIGHT TO TRIAL BY JURY.
[SIGNATURE PAGE(S) FOLLOW]
<PAGE>
Page 98 of 106 Pages
IN WITNESS WHEREOF, the Guarantor has executed and delivered this
Guarantee as of the date set forth above.
GUARANTOR:
PRODUCTIVITY FUND III, L.P.
By: FIRST ANALYSIS MANAGEMENT COMPANY III, L.L.C.
its General Partner
By: /s/ Bret R. Maxwell
___________________
Bret R. Maxwell,
Its Managing Member
Address:
9500 Sears Tower
Chicago, Illinois 60606
<PAGE>
Page 99 of 106 Pages
REAFFIRMATION AND AMENDMENT OF GUARANTEE
THIS REAFFIRMATION AND AMENDMENT OF GUARANTEE dated as of November 17,
1997 (this "Reaffirmation"), is made by PRODUCTIVITY FUND III, L.P., a
Delaware limited partnership (the "Guarantor"), in favor of LASALLE NATIONAL
BANK, a national banking association (together with its successors and
assigns, the "Bank").
RECITALS
WHEREAS, Riverside L.L.C. (the "Borrower") and the Bank are parties to
that certain Secured Revolving Loan Agreement dated as of November 17, 1995
(the "Loan Agreement");
WHEREAS, pursuant to the Loan Agreement, the Bank has made and will
continue to make Revolving Loans to the Borrower for the purposes of
purchasing certain Stock, as described in the Loan Agreement;
WHEREAS, concurrently with the purchase of such Stock by the Borrower,
the Borrower has contributed and will continue to contribute such Stock to
Riverside Partnership, an Illinois general partnership of which the Guarantor
is a general partner;
WHEREAS, the Guarantor guaranteed the payment and performance of the
indebtedness, obligations and liabilities of the Borrower to the Bank under
the Loan Agreement and the instruments, agreements, and documents executed
and/or delivered in connection therewith (collectively, the "Guaranteed
Obligations"), pursuant to that certain Guarantee dated November 17, 1995,
made by the Guarantor in favor of the Bank (the "Guarantee");
WHEREAS, the Borrower and the Bank have agreed to amend certain terms
and provisions of the Loan Agreement upon the terms and subject to the
conditions contained in that certain First Amendment to Loan Agreement dated
of even date herewith (the "Amendment"), by and among the Borrower and the
Bank;
WHEREAS, the Bank is unwilling to execute the Amendment unless, among
other things, the Guarantor reaffirms and amends the Guarantee and reaffirms
its guaranty of the payment and performance of the Guaranteed Obligations, as
such Guaranteed Obligations are being modified by the terms of the Amendment;
and
WHEREAS, the Guarantor expects to derive direct and indirect benefits
from the execution and delivery of the Amendment, and the Guarantor desires
to reaffirm and amend the Guarantee in order to induce the Bank to execute
the Amendment.
NOW, THEREFORE, in consideration of the premises herein contained and
for the purpose of inducing the Bank to execute the Amendment and for other
good and valuable
<PAGE>
3
Page 100 of 106 Pages
consideration (the receipt, sufficiency and adequacy of which are hereby
acknowledged), the parties hereto hereby agree as follows:
1. Subject to the terms and conditions contained herein, the second
(2nd) sentence of the first (1st) full paragraph of page two (2) of the
Guarantee is hereby deleted in its entirety and the following language is
inserted in lieu thereof:
"Notwithstanding the foregoing, in no event shall the sum of the
percentages guaranteed by each of the Guarantor, Infrastructure and
Environmental Private Equity Fund III, L.P., a Delaware limited
partnership, and Environmental Private Equity Fund II, L.P., a Delaware
limited partnership, be less than 20%. If at any time the sum of the
percentages certified by the Guarantor, Infrastruture and Environmental
Private Equity Fund III, L.P., a Delaware limited partnership, and
Environmental Private Equity Fund II, L.P., a Delaware limited partnership
shall be less than 20%, such percentages shall be deemed to be increased on
a pro rata basis to a percentage equal to 20% collectively."
2. Subject to the terms and conditions contained herein, Annex I and
Annex II attached to the Guarantee are hereby deleted in their entirety and
the form of Annex I and Annex II attached hereto shall be inserted in lieu
therof.
3. Subject to the terms and conditions contained herein, the second
(2nd) sentence of Section 10.2(c) of the Guarantee is hereby deleted in its
entirety and the following language is inserted in lieu thereof:
"The sum of the percentages of the aggregate cost of purchase of the
Stock (as defined in the Loan Agreement) currently held as Collateral
guaranteed by each of the Guarantor, Infrastruture and Environmental
Private Equity Fund III, L.P., a Delaware limited partnership, and
Environmental Private Equity Fund II, L.P., a Delaware limited partnership,
shall at all times be equal to or greater than 20%."
4. The Guarantee remains in full force and effect, and the Guarantor
hereby reaffirms its unconditional, absolute, and irrevocable guaranty
(subject to the terms and conditions of the Guarantee) of (i) the due and
punctual payment of all of the Guaranteed Obligations, as such Guaranteed
Obligations are being modified by the terms of the Amendment and this
Reaffirmation, and (ii) the due and punctual performance and observance by
the Borrower of all of the other terms, covenants, agreements, and
obligations of the Loan Agreement and each of the other instruments,
agreements, and documents executed and/or delivered in connection therewith
to which the Borrower is a party.
5. The Guarantor acknowledges receipt of a copy of the Amendment, and
any and all other documents executed and/or delivered in connection
therewith, and by such Guarantor's execution hereof expressly agrees to any
and all changes, modifications, extensions and
<PAGE>
Page 101 of 106 Pages
amendments in the terms of the Guaranteed Obligations as set forth in the
Amendment. The Guarantor agrees and acknowledges that all other terms,
provisions and conditions of the Guarantee, except as modified pursuant
hereto, are hereby confirmed and remain in full force and effect.
6. The Guarantor certifies and warrants that the Guarantee, as
reaffirmed hereby, is the legal, valid and binding obligation of the
Guarantor, enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance or transfer, moratorium or similar law and the effect
of general principles of equity, and that the liability of the Guarantor
hereunder and under the Guarantee shall continue in full force and effect
until the Guaranteed Obligations and all other amounts and obligations
guaranteed pursuant to the Guarantee, are paid to the Bank in full.
7. This Reaffirmation shall be attached to and made a part of the
Guarantee. This Reaffirmation may be executed in counterparts and said
counterparts when taken together shall constitute one and the same
Reaffirmation.
8. THIS REAFFIRMATION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS.
[Signatures on next page.]
<PAGE>
Page 102 of 106 Pages
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Reaffirmation and Amendment of Guarantee as of the date first written above.
PRODUCTIVITY FUND III, L.P.
By: FIRST ANALYSIS MANAGEMENT COMPANY III,
L.L.C., its General Partner
By: /s/ Bret R. Maxwell
_____________________
Name: Bret R. Maxwell
Its: Managing Member
<PAGE>
Page 103 of 106 Pages
REAFFIRMATION AND AMENDMENT OF GUARANTEE
THIS REAFFIRMATION AND AMENDMENT OF GUARANTEE dated as of March __, 1998
(this "Reaffirmation"), is made by THE PRODUCTIVITY FUND III, L.P., a
Delaware limited partnership (the "Guarantor"), in favor of LASALLE NATIONAL
BANK, a national banking association (together with its successors and
assigns, the "Bank").
RECITALS
WHEREAS, Riverside L.L.C., an Illinois limited liability company (the
"Borrower") and the Bank are parties to that certain Secured Revolving Loan
Agreement dated as of November 17, 1995, which was amended by that certain
First Amendment to Secured Revolving Loan Agreement dated as of November 17,
1997 by and between the Borrower and the Bank (collectively hereinafter
referred to as the "Loan Agreement");
WHEREAS, pursuant to the Loan Agreement, the Bank has made and will
continue to make Revolving Loans to the Borrower for the purposes of
purchasing certain Stock, as described in the Loan Agreement;
WHEREAS, concurrently with the purchase of such Stock by the Borrower,
the Borrower has contributed and will continue to contribute such Stock to
Riverside Partnership, an Illinois general partnership of which the Guarantor
is a general partner;
WHEREAS, the Guarantor guaranteed the payment and performance of the
indebtedness, obligations and liabilities of the Borrower to the Bank under
the Loan Agreement and the instruments, agreements, and documents executed
and/or delivered in connection therewith (collectively, the "Guaranteed
Obligations"), pursuant to that certain Guarantee dated as of November 17,
1995 made by the Guarantor in favor of the Bank, and the Guarantor reaffirmed
its obligations pursuant to that certain Reaffirmation and Amendment of
Guarantee dated as of November 17, 1997 made by the Guarantor in favor of the
Bank (collectively hereinafter referred to as the "Guarantee");
WHEREAS, the Borrower and the Bank have agreed to amend certain terms
and provisions of the Loan Agreement upon the terms and subject to the
conditions contained in that certain Second Amendment to Secured Revolving
Loan Agreement dated as of the date hereof by and between the Borrower and
the Bank (the "Second Amendment");
WHEREAS, the Bank is unwilling to execute the Second Amendment unless,
among other things, the Guarantor reaffirms its guaranty of the payment and
performance of the Guaranteed Obligations, as such Guaranteed Obligations are
being modified by the terms of the Second Amendment; and
<PAGE>
Page 104 of 106 Pages
WHEREAS, the Guarantor expects to derive direct and indirect benefits
from the execution and delivery of the Second Amendment, and the Guarantor
desires to reaffirm and amend the Guarantee in order to induce the Bank to
execute the Second Amendment.
NOW, THEREFORE, in consideration of the premises herein contained and
for the purpose of inducing the Bank to execute the Second Amendment and for
other good and valuable consideration, the receipt, sufficiency and adequacy
of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Subject to the terms and conditions contained herein, the second
(2nd) sentence of the first (1st) full paragraph of page two (2) of the
Guarantee is hereby deleted in its entirety and the following language is
inserted in lieu thereof:
"Notwithstanding the foregoing, in no event shall the sum of the
percentages guaranteed by each of the Guarantor, Infrastructure and
Environmental Private Equity Fund III, L.P., a Delaware limited partnership
("IEPEF"), Environmental Private Equity Fund II, L.P., a Delaware limited
partnership ("EPEF"), Environmental & Information Technology Private Equity
Fund III, Gesellschaft burgarlichen Rechts (mit Haftungsbesch--nkung)
("Environmental"), Apex Investment Fund III, L.P., a Delaware limited
partnership ("Apex Investment"), and Apex Strategic Partners, LLC, a
Delaware limited liability company ("Apex Strategic"), be less than 20%.
If at any time the sum of the percentages certified by the Guarantor, EPEF,
IEPEF, Environmental, Apex Investment and Apex Strategic shall be less than
20%, such percentages shall be deemed to be increased on a pro rata basis
to a percentage equal to 20% collectively."
2. Subject to the terms and conditions contained herein, Annex I and
Annex II attached to the Reaffirmation are hereby deleted in their entirety
and the form of Annex I and Annex II attached hereto shall be inserted in
lieu thereof.
3. Subject to the terms and conditions contained herein, the second
(2nd) sentence of Section 10.2(c) of the Guarantee is hereby deleted in its
entirety and the following language is inserted in lieu thereof:
"The sum of the percentages of the aggregate cost of purchase of the
Stock (as defined in the Loan Agreement) currently held as Collateral
guaranteed by each of the Guarantor, IEPEF, EPEF, Environmental, Apex
Investment and Apex Strategic shall at all times be equal to or greater
than 20%."
4. The Guarantee remains in full force and effect, and the Guarantor
hereby reaffirms its unconditional, absolute, and irrevocable guaranty
(subject to the terms and conditions of the Guarantee) of (i) the due and
punctual payment of all of the Guaranteed Obligations, as such Guaranteed
Obligations are being modified by the terms of the Second
<PAGE>
Page 105 of 106 Pages
Amendment and this Reaffirmation, and (ii) the due and punctual performance
and observance by the Borrower of all of the other terms, covenants,
agreements, and obligations of the Loan Agreement and each of the other
instruments, agreements, and documents executed and/or delivered in
connection therewith to which the Borrower is a party.
5. The Guarantor acknowledges receipt of a copy of the Second
Amendment, and any and all other documents executed and/or delivered in
connection therewith, and by such Guarantor's execution hereof expressly
agrees to any and all changes, modifications, extensions and amendments in
the terms of the Guaranteed Obligations as set forth in the Second Amendment.
The Guarantor agrees and acknowledges that all other terms, provisions and
conditions of the Guarantee, except as modified pursuant hereto, are hereby
confirmed and remain in full force and effect.
6. The Guarantor certifies and warrants that the Guarantee, as
reaffirmed hereby, is the legal, valid and binding obligation of the
Guarantor, enforceable in accordance with its terms, subject to the effect of
any applicable bankruptcy, insolvency, reorganization, receivership,
fraudulent conveyance or transfer, moratorium or similar law and the effect
of general principles of equity, and that the liability of the Guarantor
hereunder and under the Guarantee shall continue in full force and effect
until the Guaranteed Obligations and all other amounts and obligations
guaranteed pursuant to the Guarantee, are paid to the Bank in full.
7. This Reaffirmation shall be attached to and made a part of the
Guarantee. This Reaffirmation may be executed in counterparts and said
counterparts when taken together shall constitute one and the same Amendment.
8. THIS REAFFIRMATION SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICTS OF LAW PROVISIONS) OF THE
STATE OF ILLINOIS.
[Signature on next page.]
<PAGE>
Page 106 of 106 Pages
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Reaffirmation and Amendment of Guarantee as of the date first written above.
THE PRODUCTIVITY FUND III, L.P.
By: FIRST ANALYSIS MANAGEMENT COMPANY III,
L.L.C., its General Partner
By: /s/ Bret R. Maxwell
Name: Bret R. Maxwell
Its: Managing Member
