<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ----------- SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED OCTOBER 1, 1995
---------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
- ----------- SECURITIES EXCHANGE ACT OF 1934
Commission file number 0-14618
------------
VECTRA TECHNOLOGIES, INC.
------------------------------------------
(Exact name of registrant as specified in its charter)
Washington 91-1160888
----------------------------------------------------------------------
(State or other jurisdiction of (IRS Employer
Incorporation or Organization Identification No.)
5000 Executive Parkway, Suite 500, San Ramon, CA 94583
----------------------------------------------------------------------
(Address of principal executive offices)
(510) 275-4500
----------------------------------------------------------------------
(Registrant's telephone number, including area code)
----------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
-------
There were 7,833,627 shares of common stock outstanding as of November 10, 1995.
See accompanying notes
<PAGE>
VECTRA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
October 1, 1995 and January 1, 1995
(In thousands)
<TABLE>
<CAPTION>
October 1 January 1
--------- ---------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
------
Current Assets:
Cash and cash equivalents $4,250 $3,427
Securities available for sale 1,102 919
Accounts receivable, net 22,301 26,211
Costs and estimated earnings in excess of
billings on uncompleted contracts 3,968 3,076
Inventories 1,605 1,426
Prepaid expenses 631 931
---------- ----------
Total current assets 33,857 35,990
Property and equipment, at cost, less accumulated depreciation of
$11,446 at October 1 and $15,027 at January 1 12,839 11,304
Costs in excess of net assets acquired,
net of accumulated amortization 26,153 28,638
Licenses, patents and other intangibles at cost,
net of accumulated amortization 4,592 5,270
Investments and long-term prepaid costs 888 2,647
Other assets 257 316
---------- ----------
78,586 $84,165
---------- ----------
---------- ----------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Note payable to bank $11,889 $15,200
Accounts payable 9,696 5,060
Accrued payroll and related
expenses 7,771 7,014
Other accrued liabilities 7,924 6,153
Billings in excess of costs and estimated earnings
on uncompleted contracts 2,506 9,122
Long-term debt due within one year 1,748 2,712
---------- ----------
Total current liabilities 41,534 45,261
Long-term debt 2,171 8,617
Deferred lease incentive 440 487
Shareholders' equity:
Class A preferred stock, 4,100,000 authorized -- --
Common stock, 30,000,000 authorized,
7,833,627 issued and outstanding (7,848,627 in 1994) 45,894 45,212
Accumulated deficit (11,453) (15,412)
---------- ----------
Total shareholders' equity 34,441 29,800
---------- ----------
78,586 $84,165
---------- ----------
---------- ----------
</TABLE>
See accompanying notes 1
<PAGE>
VECTRA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months Nine Months Nine Months
Ended Ended Ended Ended
October 1, 1995 October 2, 1994 October 1, 1995 October 2, 1994
--------------- --------------- --------------- ---------------
<S> <C> <C> <C> <C>
Revenues 24,047 $32,494 96,776 $107,662
Operating costs 17,649 20,762 68,671 71,422
--------------- --------------- --------------- ---------------
Gross profit 6,398 11,732 28,105 36,240
Research and
development expenses 39 752 94 1,244
Selling, general and
administrative expenses 8,170 10,221 31,652 33,879
--------------- --------------- --------------- ---------------
Operating income (loss) (1,811) 759 (3,641) 1,117
Other income (expense):
Interest income (expense), net (639) (716) (2,198) (2,044)
Gain on sale of subsidiary -- -- 10,752 --
--------------- --------------- --------------- ---------------
Income (loss) before taxes (2,450) 43 4,913 (927)
Income tax provision (benefit) (532) 20 912 130
--------------- --------------- --------------- ---------------
Net income (loss) $(1,918) $23 $4,001 $(1,057)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Net income (loss) per share $(0.24) $0.00 $0.51 $(0.14)
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
Average shares outstanding 7,898,000 7,859,000 7,898,000 7,784,000
--------------- --------------- --------------- ---------------
--------------- --------------- --------------- ---------------
</TABLE>
See accompanying notes 2
<PAGE>
VECTRA TECHNOLOGIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Nine Months Ended
October 1, 1995 October 2, 1994
--------------- ---------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $4,001 $(1,057)
Adjustments to reconcile net income (loss)
to net cash provided by operations:
Depreciation and amortization 4,096 4,657
Gain on sale of subsidiary (10,752) --
Loss on sale of investments 156 --
Writedown of fixed assets and intangibles 2,220 --
Changes in operating
working capital:
Accounts receivable and billings (3,286) 4,801
Inventories and prepaid expenses 84 (65)
Accounts payable and accrued expenses 8,024 (2,065)
----------- -----------
Net cash provided by operating activities 4,543 6,271
----------- -----------
Cash flows from investing activities:
Payments related to Impell acquisition 559 (23,386)
Proceeds from sale of subsidiary 14,173 --
Proceeds from sale of investments 1,150
Capital expenditures (9,120) (3,229)
Increases in securities available for sale (150)
Other 609 (563)
----------- -----------
Net cash provided by (used in) investing activities 6,662 (28,511)
----------- -----------
Cash flows from financing activities:
Net borrowing (repayment) under short-term
loans (3,311) 11,871
Proceeds from long-term debt 2,000 13,962
Payments on long-term loans (9,071) (4,664)
Proceeds from issuance of common stock
and warrants -- 2,006
----------- -----------
Net cash provided by (used in) financing activities (10,382) 23,175
----------- -----------
Net increase (decrease) in cash 823 935
Cash at beginning of period 3,427 572
----------- -----------
Cash at end of period $4,250 $1,507
----------- -----------
----------- -----------
Cash paid for interest $1,790 $1,100
Cash paid for income taxes $712 $210
</TABLE>
See accompanying notes 3
<PAGE>
VECTRA TECHNOLOGIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management, all adjustments considered necessary for a fair presentation
have been included. Operating results for the three- and nine-month
periods ended October 1, 1995 are not necessarily indicative of the results
that may be expected for the full year. The unaudited condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and footnotes thereto included in the
Company's fiscal 1994 Annual Report on Form 10-K.
2. SALE OF SUBSIDIARY
Effective June 30, 1995, the Company sold all of the outstanding shares of
its wholly owned subsidiary, Plant Services, Inc. to Westinghouse Electric
Corporation. The sale price was $19 million less approximately $1.8
million in adjustments for billings in excess of costs and estimated
earnings on uncompleted contracts and changes in equity.. Of the $19
million sale price, $2 million was placed in an escrow account to finance
an environmental remediation plan. Management expects that at least $1
million of this amount will be released from escrow and any such amounts
will be recognized as income when released. In addition, there is an
earnout provision with a minimum payout of $0.5 million and a maximum
payout of $3.6 million over the three years following the sale. The
proceeds from the sale were used to reduce the note payable and long-term
debt, pay retained liabilities, and pay expenses associated with the
transaction.
3. NOTE PAYABLE AND LONG-TERM DEBT
In conjunction with the sale of the plant services business the banks
reduced the limit on the revolving credit facility from $22.5 million to
$12.5 million. In September the company negotiated a $3.0 million addition
to the long-term debt facility to be used for capital expenditures and
working capital. As of October 1, 1995 the company borrowed $2.0 million
of this facility.
4. EARNINGS PER SHARE
Net income (loss) per share is based upon the weighted average number of
common shares outstanding during each period plus the dilutive effect of
stock options and warrants. Net income (loss) per share on a fully diluted
basis was the same as the primary income (loss) per share.
4
<PAGE>
5. CONTINGENCIES
The Company is self-insured for general liability risk for $1 million per
occurrence and $2 million in the aggregate. As of October 1, the Company
has accrued approximately $548,000 for unreported and/or potential losses.
Coverage above the self-insured limits is provided for under an umbrella
policy with a commercial insurance company.
The radioactive materials handled by the Company are the legal
responsibility of the Company's utility customers. The Company does not
take title to such materials. In the event of an accident or incident
involving such material, the Company is covered under insurance carried by
and provided to operators of nuclear plants or transporters of nuclear
materials.
6. RECLASSIFICATIONS
Certain reclassifications have been made to the 1994 financial statements
to conform to the current year presentation.
5
<PAGE>
ITEM 1. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIONS
ACQUISITION AND DIVESTITURE
On January 6, 1994 the Company's shareholders approved the purchase of all of
the stock of ABB Impell Corporation, ABB Government Services Inc. and ABB Impell
Ltd. (the "Impell Companies") from affiliates of ABB Asea Brown Boveri Ltd. of
Zurich, Switzerland (the "Seller"). The acquisition, effective as of midnight
December 31, 1993, was completed on January 7, 1994 and was accounted for as a
purchase in 1994. The Company also changed its name from Pacific Nuclear
Systems, Inc. to VECTRA Technologies, Inc. ("VECTRA" or "the Company"). The
purchase price of $31.9 million together with the direct costs of the
acquisition were allocated to the fair value of the assets acquired and
liabilities assumed. The seller received $14 million in common stock (1,714,503
shares) and the remainder of the purchase price in cash. The purchase price of
$31.9 million reflects a reduction of $480,000 for ABB Impell Corporation and
ABB Government Services, Inc. that was paid in cash by the Seller in April, 1995
pursuant to an arbitration proceeding. The final purchase price for ABB Impell
Ltd. is subject to a further adjustment which is not material.
On June 30, 1995, the Company sold all the outstanding shares of Plant Services,
Inc., its chemical cleaning and chemical decontamination business, to
Westinghouse Electric Corporation. The sale price was $19 million less
adjustments for billings in excess of costs and estimated earnings on
uncompleted contracts and changes in equity of approximately $1.8 million. In
addition, the cash received at closing was reduced by $2 million which the
parties agreed to deposit into an escrow account in order to finance an
environmental remediation plan. Any excess funds in the escrow will be
distributed to the Company and used to pay down the term loan. Cash will be
retained in the escrow account until further work is completed. In addition,
there is an earnout provision with a minimum payout of $0.5 million and a
maximum payout of $3.6 million over the three years following the sale. The
proceeds from the sale were used to reduce the note payable and long-term debt,
pay retained liabilities, and pay expenses associated with the transaction.
RESULTS OF OPERATIONS
REVENUES
Revenues decreased 10% or $10.9 million from $107.7 million in the first nine
months of 1994 to $96.8 million in the first nine months of 1995. For the three
month period, revenues decreased by 26% or $8.5 million from $32.5 million in
1994 to $24.0 million in 1995. The decrease in revenues for the nine month
period is attributable to a substantial decrease in nuclear engineering
activity, the sale of the plant services business, and lower sales in the waste
services business relating to the completion of a large contract with a client
in Korea during 1994 offset in part by higher revenues from a spent fuel storage
system contract.
For the three month period ended October 1, 1995, the revenue decrease is due to
the decrease in nuclear engineering services and the sale of the plant services
business partially offset by increases in low-level waste processing activity
and the spent fuel storage system contract.
6
<PAGE>
Most of the Company's contracts are awarded by the competitive bidding process
in which a number of firms submit proposals in response to a request for
proposals to provide specific products or services. The Company operates in a
very competitive industry, and in recent quarters utilities have limited or
deferred spending. Consequently, management is unable to comment on the outlook
for future contracts. The Company's ongoing marketing activities include
identifying prospective bid requests and requests for proposals. In its target
market areas, the Company aggressively pursues such requests.
GROSS PROFIT
Each of the Company's contracts is negotiated independently and varies as to
profitability. The timing and actual performance by the Company on its major
contracts also affect the Company's gross profit.
Gross profit decreased by 22% or $8.1 million for the first nine months of 1995
compared to the first nine months of 1994. For the three months ended October
1, 1995, gross profit decreased $5.3 million or 45% from the comparable period
in 1994. Gross profit as a percent of revenues was 29% for the first nine
months of 1995 compared to 34% in the first nine months of 1994. For the three
months ended October 1, 1995, gross profit was 27% of revenues compared to 36%
in 1994.
The decline in gross profits for the nine month period is primarily due to lower
revenues and lower gross profit as a percent of revenues in the nuclear
engineering business plus lower gross profit as a percent of revenue in the
waste processing business. The lower gross profitin the nuclear engineering
business reflects competitive pricing pressures plus the impact of a temporary
salary reduction in 1994. For the three month period ended October 1, 1995, the
decrease in gross profit is primarily due to lower revenues and gross as a
percent of revenues in nuclear engineering and the sale of the plant services
business as well as lower gross profitas a percent of revenues in the low-level
waste services and spent fuel storage system businesses.
EXPENSES
Research and development expenses were down for both the nine month and three
month periods in 1995 compared to 1994. The majority of the 1994 expense was
related to development of the Company's vitrification process, Enviroglass-
Registered Trademark-, which features thermal treatment and volume reduction of
low level radioactive waste into an environmentally stable glass form. In 1995,
the Company has moved from research and development activity to the fabrication
of vitrification equipment to support client contracts.
Selling, general and administrative expenses decreased to $8.2 million for the
three month period ended October 1, 1995, compared to $10.2 million for the
comparable period in 1994. For the nine month period in 1995, selling, general
and administrative expense decreased to $31.7 million from $33.9 million in
1994. These decreases reflect the lower level of overhead expense in the
engineering services business resulting from the reductions in staff at the end
of 1994 and in mid 1995.
7
<PAGE>
Selling, general and administrative expense, as a percentage of revenues,
increased to 33% from 31% for the first nine months of 1995 compared to the same
period in 1994. For the three month period ended October 1, 1995, selling,
general and administrative expense, as a percentage of revenues, increased to
34% from 31% for the comparable period in 1994. In both instances, these
increases reflect revenue declines more than offsetting the decreases in expense
levels.
Net interest expense for the nine months ended October 1, 1995, increased by
$154,000 or 8% over the comparable period in 1994. For the three months ended
October 1, 1995 interest expense decreased by $77,000 or 11%. These variances
reflect higher interest rates in 1995 versus 1994 and lower average borrowing
levels in 1995, especially in the third quarter as a result of the partial
repayment of the long-term and the revolving credit facilities with the proceeds
of the plant services sale. Interest expense includes interest on the long-term
debt and the revolving credit facility as well as amortization of bank fees and
warrant-related debt discount.
The effective income tax rate is lower than the statutory tax rate for the nine
months ended October 1, 1995 due to the use of net operating loss carryforwards.
The benefit for income taxes for the three months ended October 1, 1995 reflects
the company's updated 1995 forecast and the resultant tax liability. The
effective income tax rate is higher than the statutory rate for the comparable
periods in 1994 due to provisions for state income taxes.
GAIN/(LOSS) ON SALE OF ASSETS
Effective June 30, 1995, the Company sold its wholly owned subsidiary, Plant
Services, Inc., to Westinghouse Electric Corporation for $19 million less
approximately $1.8 million in adjustments. The Company also established an
environmental escrow in the amount of $2 million. Expenses for the transaction
totaled approximately $980,000. Any excess funds from the escrow will be
distributed to the Company and will increase the gain on sale. Management
expects that at least $1 million of this amount will be released from escrow and
any such amounts will be recognized as income when released.
In September 1995 the company sold its 10% ownership in Recytec America, Inc. to
Recytec, S.A. for $1.15 million resulting in a loss of $156,000 which is
included in the third quarter 1995 selling, general and administrative expense.
These shares had been issued to VECTRA in connection with the sale of Alaron
Corporation to Recytec S.A. in August 1991.
NET INCOME (LOSS)
Net loss of $1.1 million in the first nine months of 1994 improved to net income
of $4 million in the first nine months of 1995. Net income of $23,000 in the
three months ended October 2, 1994 declined to a net loss of $1.9 million in the
three months ended October 1, 1995. The increase in income for the nine month
period is due primarily to the sale of the plant services business and the cost
reduction measures taken in the fourth quarter of 1994 offset in part by the
employee severance, asset write-offs and other charges taken in June 1995. The
decrease in earnings in the third quarter of 1995 compared to the third quarter
of 1994 reflects the lower revenues and lower gross margin as a percent of
revenues offset partially by lower selling, general and administrative expense
and the reversal of $0.5 million of income tax accrual.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operations was $4.5 million in the nine months ended
October 1, 1995 compared to net cash provided by operations of $6.3 million in
the nine months ended October 2, 1994.
Accounts receivable and billings balances differ from period to period as a
result of varying contractual terms that relate to the timing and amount of
progress payments for some of the Company's multi-year, multi-million dollar
contracts. This variability is expected to continue in future periods.
Capital expenditures were $9.1 million in the nine months ended October 1, 1995
compared to $3.2 million in the nine months ended October 2, 1994. Capital
expenditures were $3.7 million in the three months ended October 1, 1995
compared to $1.2 million in the same period of 1994. The Company's agreement
with its banks allows a maximum of $10.8 million in capital expenditures and
commitments during the first nine months of 1995. The majority of the Company's
capital expenditures are for processing equipment for radioactive waste volume
reduction, dewatering, and vitrification systems in waste services. Fuel
services has capital requirements primarily for licenses and high-level waste
transportation equipment. Engineering services has modest capital requirements
mainly for computer equipment. The largest capital expenditure is to support
the Company's vitrification technology, Enviroglass-Registered Trademark-. The
Company anticipates that it will need to devote significant capital resources to
technology development in the future in order to remain competitive. The
Company had contractual commitments of $2.5 million as of October 1, 1995 for
capital acquisitions to be made during the remainder of 1995. Depending on the
capital resources available to the Company, it may make additional capital
expenditures during 1995.
The Company has financed its operations, development, and growth primarily from
bank debt, currently in the form of a revolving credit line secured by
receivables and a long term loan. The long-term debt matures in January, 1999
and the revolving credit facility matures in January, 1996. The interest rate
for both loans is the bank's base rate plus 1.0% to 1.5% or the Eurodollar rate
plus from 2.0% to 2.5%. The Company also issued warrants to the banks in
conjunction with the debt to purchase 830,060 shares of common stock at $8.17
per share which are exercisable through January 1999. These warrants were
repriced to $2.9375 per share in March, 1995. On June 30, 1995 the company used
the proceeds of the plant services transaction to repay $7.3 million of the
long-term debt and $6.6 million of the revolving credit facility. In connection
with this transaction, the banks received a fee of $100,000 and reduced the
maximum amount which can be borrowed under the revolving credit facility to
$12.5 million.
In September, 1995 the Company negotiated a $3.0 million addition to the term
loan to be used for capital expenditures and working capital. This additional
facility matures March 31, 1996 and carries an interest rate of the bank's base
rate plus 3%. This facility requires the payment of a $150,000 fee to the banks
to be made at the earlier of raising sufficient new capital to repay the long-
term debt or March 31, 1996 and carries a .25% per annum unused facility fee.
The banks will also receive warrants equal to 2% of the Company's outstanding
common stock for each $1
9
<PAGE>
million borrowed under this facility for a possible total of 6% of the company's
stock. The company can reduce this amount to a total of 3% through accelerated
repayment of borrowings under this facility. The exercise price of these
additional warrants is $0.01 per share. As of October 1, 1995 the Company had
recorded the issuance of warrants to purchase 313,944 shares of common stock in
connection with borrowings of $2 million under this facility. In addition, if
the company a) has not repaid the outstanding balance under the long-term debt
facility by March 31, 1996 or b) has not signed a letter of intent or equivalent
by December 31, 1995 to generate sufficient cash to repay its outstanding
balance, then the exercise price of the bank's previously issued warrants will
be reduced to $0.01 per share.
The agreements with the banks specify certain negative, affirmative and
financial covenants, including without limitation, covenants with respect to
debt/capital ratio, interest coverage, fixed charge coverage and minimum net
worth, and restrictions on dividends and activities of the Company. The Company
renegotiated the requirements with the banks and established new ratios for the
quarter ended October 1, 1995 with which it complied.
Borrowings under the revolving credit facility are limited by eligible
receivables in the accounts receivable borrowing base. At the end of the
quarter, the Company had an unused revolving credit facility of $0.7 million all
of which was available based on the accounts receivable borrowing base. The
amount of availability is subject to fluctuation.
Lower than projected cash flows, lower borrowing availability under the
revolving credit facility and the requirement to utilize a substantial amount of
the proceeds from the sale of the plant services business to repay the long-term
debt have restricted the Company's ability to fund expenditures and develop its
technology. As previously disclosed, operations in 1995 will not generate
sufficient cash to continue operations including certain capital expenditures
which are contractually committed as well as concurrently invest in necessary
expenditures for technology development. The sale of the plant services
business enabled the company to reduce the note payable and long-term debt and
provided much of the cash required for operations and technology development.
Additional cash will be needed; however, management anticipates that sufficient
cash will be provided through additional reductions in operating expenses,
entering into a joint venture or strategic partnership, or the sale of other
assets. The company also intends to explore alternatives for raising capital
through preferred stock or a rights offering.
10
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Nuclear Assurance Corp. ("NAC") has filed suit against VECTRA Technologies,
Inc. ("VECTRA") in federal district court in Georgia alleging infringement
of certain patents held by NAC. The lawsuit alleges that VECTRA's NUHOMS-
Registered Trademark- system and its NUHOMS MP-187 cask system infringe
upon NAC's design and utility patents. VECTRA has filed an answer to the
complaint denying infringement and challenging the validity of the NAC
patents. VECTRA had previously received an opinion from patent counsel
that VECTRA's NUHOMS systems do not infringe on NAC's utility patent. The
company continues to believe that its NUHOMS and NUHOMS MP-187 casks do not
infringe upon NAC's patents and intends to vigorously contest the lawsuit.
ITEM 2. CHANGES IN SECURITIES Not applicable.
ITEM 3. DEFAULT UPON SENIOR SECURITIES Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable.
ITEM 5. OTHER INFORMATION
Lynne M. Heitman, Vice President and Chief Financial Officer, has resigned
from the Company effective November 18, 1995. The Company has initiated a
search to fill this position. John R. Holding, a former Chief Financial
Officer of the company, has agreed to serve as Chief Financial Officer in
the interim.
ITEM 6. EXHIBITS
(a) Exhibits
10.1 Amended and Restated Term Loan Agreement among VECTRA Technologies,
Inc. the banks named herein and Banque Paribas as Agent and Banque
Nationale de Paris as Managing Agent.
10.2 First Amendment to Amended and Restated Term Loan Agreement.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
VECTRA TECHNOLOGIES, INC.
DATED NOVEMBER 14, 1995 By /s/ Ray A. Fortney
------------------------------
Ray A. Fortney
President
Chief Executive Officer
DATED NOVEMBER 14, 1995 By /s/ Lynne M. Heitman
------------------------------
Lynne M. Heitman
Vice President, Finance
Chief Financial Officer
12
<PAGE>
- -------------------------------------------------------------------------------
AMENDED AND RESTATED
TERM LOAN AGREEMENT
AMONG
VECTRA TECHNOLOGIES, INC.
THE BANKS NAMED HEREIN
AND
BANQUE PARIBAS
AS AGENT
AND
BANQUE NATIONALE DE PARIS
AS MANAGING AGENT
DATED AS OF SEPTEMBER 20, 1995
- -------------------------------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
PAGE
1. DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . 1
2. AMOUNT AND TERMS OF CREDIT FACILITIES . . . . . . . . . . . . . . . . 18
2.1 Tranche-A Facility . . . . . . . . . . . . . . . . . . . . . . 18
(a) General Provisions Relating to Tranche-A Loans. . . . . . 18
(b) Minimum Amount of Eurodollar Tranche-A Loan . . . . . . . 18
(c) Conversion or Continuation of Tranche-A Loans . . . . . . 18
2.2 Tranche-B Facility . . . . . . . . . . . . . . . . . . . . . . 19
(a) General Provisions Relating to Tranche-B Loans. . . . . . 19
(b) Permitted Uses of Tranche-B Loans . . . . . . . . . . . . 19
(c) Notice of Borrowing for Tranche-B Loans . . . . . . . . . 20
(d) Disbursement of Funds for Tranche-B Loans . . . . . . . . 20
2.3 Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
(a) Tranche-A Loan Notes. . . . . . . . . . . . . . . . . . . 21
(b) Tranche-B Loan Notes. . . . . . . . . . . . . . . . . . . 21
2.4 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.5 Interest Periods . . . . . . . . . . . . . . . . . . . . . . . 22
2.6 Voluntary Prepayments. . . . . . . . . . . . . . . . . . . . . 23
2.7 Method and Place of Payment. . . . . . . . . . . . . . . . . . 23
2.8 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9 Interest Rate Unascertainable, Increased Costs, Illegality . . 24
2.10 Funding Losses . . . . . . . . . . . . . . . . . . . . . . . . 25
2.11 Increased Capital. . . . . . . . . . . . . . . . . . . . . . . 26
2.12 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
2.13 Statement from Banks . . . . . . . . . . . . . . . . . . . . . 27
3. CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . 28
3.1 Conditions Precedent to Loans. . . . . . . . . . . . . . . . . 28
(a) Loan Documents. . . . . . . . . . . . . . . . . . . . . . 28
(i) Amended and Restated Term Loan Agreement. . . . . . 28
(ii) Notes.. . . . . . . . . . . . . . . . . . . . . . . 28
(iii) Reaffirmation of Security Agreement and Pledge. . . 28
(iv) Reaffirmation of Guaranty . . . . . . . . . . . . . 28
(v) Mortgages . . . . . . . . . . . . . . . . . . . . . 28
(vi) Reaffirmation of Obligations. . . . . . . . . . . . 28
(vii) Side Letter Agreement . . . . . . . . . . . . . . . 29
(viii)Intercompany Security Agreement . . . . . . . . . . 29
(ix) Waste Services Guaranty . . . . . . . . . . . . . . 29
(x) Waste Services Security Agreement . . . . . . . . . 29
i.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
(xi) Financing Statement . . . . . . . . . . . . . . . . 29
(b) Opinions of Counsel . . . . . . . . . . . . . . . . . . . 29
(c) Corporate Documents . . . . . . . . . . . . . . . . . . . 29
(d) Certified Resolutions, etc. . . . . . . . . . . . . . . . 29
(e) Officer's Certificate . . . . . . . . . . . . . . . . . . 30
(f) Receivables Facility. . . . . . . . . . . . . . . . . . . 30
(g) Insurance . . . . . . . . . . . . . . . . . . . . . . . . 30
(h) Lien Search Reports . . . . . . . . . . . . . . . . . . . 30
(i) Solvency Certificate. . . . . . . . . . . . . . . . . . . 30
(j) Title Insurance . . . . . . . . . . . . . . . . . . . . . 30
(k) Environmental Matters . . . . . . . . . . . . . . . . . . 30
(l) Fees and Expenses . . . . . . . . . . . . . . . . . . . . 31
(m) Consents, Licenses, Approval, etc . . . . . . . . . . . . 31
(n) Representations and Warranties. . . . . . . . . . . . . . 31
(p) No Injunction . . . . . . . . . . . . . . . . . . . . . . 31
(q) No Material Adverse Change. . . . . . . . . . . . . . . . 32
(r) Other Documents . . . . . . . . . . . . . . . . . . . . . 32
3.2 All Tranche-B Loans. . . . . . . . . . . . . . . . . . . . . . 32
(a) Notice of Borrowing . . . . . . . . . . . . . . . . . . . 32
(b) No Default or Event of Default. . . . . . . . . . . . . . 32
4. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . 32
4.1 Corporate Status . . . . . . . . . . . . . . . . . . . . . . . 32
4.2 Corporate Power and Authority. . . . . . . . . . . . . . . . . 33
4.3 No Violation . . . . . . . . . . . . . . . . . . . . . . . . . 33
4.6 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.7 Projections. . . . . . . . . . . . . . . . . . . . . . . . . . 34
4.8 Material Adverse Change. . . . . . . . . . . . . . . . . . . . 34
4.9 Use of Proceeds; Margin Regulations. . . . . . . . . . . . . . 34
4.10 Governmental Approvals . . . . . . . . . . . . . . . . . . . . 34
4.11 Security Interests and Liens . . . . . . . . . . . . . . . . . 34
4.12 Tax Returns and Payments . . . . . . . . . . . . . . . . . . . 34
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
4.14 Investment Company Act; Public Utility Holding Company Act . . 35
4.15 True and Complete Disclosure . . . . . . . . . . . . . . . . . 35
4.16 Corporate Structure; Capitalization. . . . . . . . . . . . . . 36
4.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . 36
4.18 Patents, Trademarks, etc . . . . . . . . . . . . . . . . . . . 37
ii.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
4.19 Ownership of Property. . . . . . . . . . . . . . . . . . . . . 37
4.20 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.21 Licenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . 37
4.22 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 37
4.23 No Burdensome Restrictions . . . . . . . . . . . . . . . . . . 37
4.24 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . 38
4.25 Nuclear Insurance Matters; etc . . . . . . . . . . . . . . . . 38
5. AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . 38
5.1 Information Covenants. . . . . . . . . . . . . . . . . . . . . 38
(a) Quarterly Financial Statements. . . . . . . . . . . . . . 38
(b) Annual Financial Statement. . . . . . . . . . . . . . . . 38
(c) Monthly Financial Statements. . . . . . . . . . . . . . . 38
(d) Management Letters. . . . . . . . . . . . . . . . . . . . 39
(e) Budgets . . . . . . . . . . . . . . . . . . . . . . . . . 39
(f) Officer's Certificates. . . . . . . . . . . . . . . . . . 39
(g) Notice of Default or Litigation . . . . . . . . . . . . . 40
(h) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 40
(i) SEC Filings . . . . . . . . . . . . . . . . . . . . . . . 41
(j) Environmental . . . . . . . . . . . . . . . . . . . . . . 41
(k) Operating Performance Report. . . . . . . . . . . . . . . 42
(l) Press Releases. . . . . . . . . . . . . . . . . . . . . . 42
(m) Other Reports . . . . . . . . . . . . . . . . . . . . . . 42
(n) Change of Executive Officers. . . . . . . . . . . . . . . 42
(o) Approval Proceedings. . . . . . . . . . . . . . . . . . . 42
(p) Revocation, etc . . . . . . . . . . . . . . . . . . . . . 42
(q) Other Information . . . . . . . . . . . . . . . . . . . . 42
(r) Monthly Reports . . . . . . . . . . . . . . . . . . . . . 42
(s) Weekly Reports. . . . . . . . . . . . . . . . . . . . . . 43
5.2 Books, Records and Inspections . . . . . . . . . . . . . . . . 43
5.3 Maintenance of Insurance . . . . . . . . . . . . . . . . . . . 43
5.4 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.5 Corporate Franchises . . . . . . . . . . . . . . . . . . . . . 44
5.6 Compliance with Law. . . . . . . . . . . . . . . . . . . . . . 44
5.7 Performance of Obligations . . . . . . . . . . . . . . . . . . 44
5.8 Maintenance of Properties. . . . . . . . . . . . . . . . . . . 45
5.9 Additional Collateral. . . . . . . . . . . . . . . . . . . . . 45
iii.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
6. NEGATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . 46
6.1 Financial Covenants. . . . . . . . . . . . . . . . . . . . . . 46
(a) Leverage Ratio. . . . . . . . . . . . . . . . . . . . . . 46
(b) Interest Coverage Ratio . . . . . . . . . . . . . . . . . 47
(c) Fixed Charge Coverage Ratio . . . . . . . . . . . . . . . 47
(d) Minimum Consolidated Net Worth. . . . . . . . . . . . . . 48
(e) Capital Expenditures. . . . . . . . . . . . . . . . . . . 48
6.2 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.3 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.4 Restriction on Fundamental Change. . . . . . . . . . . . . . . 51
6.5 Sale of Assets . . . . . . . . . . . . . . . . . . . . . . . . 51
6.6 Contingent Obligations . . . . . . . . . . . . . . . . . . . . 52
6.7 Dividends. . . . . . . . . . . . . . . . . . . . . . . . . . . 52
6.8 Advances, Investments and Loans. . . . . . . . . . . . . . . . 52
6.9 Transactions with Affiliates . . . . . . . . . . . . . . . . . 53
6.10 Limitation on Voluntary Patents and Modifications of
Certain Documents. . . . . . . . . . . . . . . . . . . . . . . 54
6.11 Changes in Business. . . . . . . . . . . . . . . . . . . . . . 54
6.12 Certain Restrictions . . . . . . . . . . . . . . . . . . . . . 54
6.13 Lease Payments . . . . . . . . . . . . . . . . . . . . . . . . 54
6.14 Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . 54
6.15 Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.16 Fiscal Year; Fiscal Quarter. . . . . . . . . . . . . . . . . . 55
6.17 Provident. . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . 55
(a) Failure to Make Payments. . . . . . . . . . . . . . . . . 55
(c) Breach of Representation or Warranty. . . . . . . . . . . 55
(d) Breach of Covenants . . . . . . . . . . . . . . . . . . . 56
(e) Default Under Other Agreements. . . . . . . . . . . . . . 56
(f) Bankruptcy, etc . . . . . . . . . . . . . . . . . . . . . 56
(g) ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . 57
(h) Security Documents. . . . . . . . . . . . . . . . . . . . 57
(i) Guaranty. . . . . . . . . . . . . . . . . . . . . . . . . 57
(j) Change of Control etc . . . . . . . . . . . . . . . . . . 57
(k) Judgments . . . . . . . . . . . . . . . . . . . . . . . . 57
(l) Environmental Matters . . . . . . . . . . . . . . . . . . 58
(m) Regulatory. . . . . . . . . . . . . . . . . . . . . . . . 58
iv.
<PAGE>
TABLE OF CONTENTS
(CONTINUED)
PAGE
7.2 Rights and Remedies. . . . . . . . . . . . . . . . . . . . . . 58
8. THE AGENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . 58
8.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . 59
8.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . 59
8.4 Reliance by Agent. . . . . . . . . . . . . . . . . . . . . . . 59
8.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . 60
8.6 Non-Reliance on Agent and Other Banks. . . . . . . . . . . . . 60
8.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . 61
8.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . 61
8.9 Successor Agent. . . . . . . . . . . . . . . . . . . . . . . . 61
9. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
9.1 Payment of Expenses, Indemnity, etc. . . . . . . . . . . . . . 62
9.2 Right of Setoff. . . . . . . . . . . . . . . . . . . . . . . . 63
9.3 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
9.4 Successors and Assigns; Participation; Assignments . . . . . . 63
(a) Successors and Assigns. . . . . . . . . . . . . . . . . . 63
(b) Participation . . . . . . . . . . . . . . . . . . . . . . 63
(c) Assignments . . . . . . . . . . . . . . . . . . . . . . . 64
(d) Assignments to Purchasing Banks . . . . . . . . . . . . . 64
(e) Disclosure of Information . . . . . . . . . . . . . . . . 65
9.5 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . 65
9.6 No Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . 66
9.7 Sharing of Payments. . . . . . . . . . . . . . . . . . . . . . 66
9.8 Governing Law; Submission to Jurisdiction. . . . . . . . . . . 66
9.9 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.10 Effectiveness. . . . . . . . . . . . . . . . . . . . . . . . . 67
9.11 Headings Descriptive . . . . . . . . . . . . . . . . . . . . . 67
9.12 Marshalling; Recapture . . . . . . . . . . . . . . . . . . . . 67
9.13 Severability . . . . . . . . . . . . . . . . . . . . . . . . . 67
9.14 Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.15 Domicile of Loans. . . . . . . . . . . . . . . . . . . . . . . 68
9.16 Limitation of Liability. . . . . . . . . . . . . . . . . . . . 68
9.17 Calculations; Computations . . . . . . . . . . . . . . . . . . 68
9.18 Waiver of Trial by Jury. . . . . . . . . . . . . . . . . . . . 68
9.19 Washington Notice. . . . . . . . . . . . . . . . . . . . . . . 68
v.
<PAGE>
AMENDED AND RESTATED TERM LOAN AGREEMENT
THIS AMENDED AND RESTATED TERM LOAN AGREEMENT is entered into as of
September 20, 1995 by and among VECTRA TECHNOLOGIES, INC. (formerly known as
Pacific Nuclear Systems, Inc.), a Washington corporation (together with its
successors and assigns, the "BORROWER"), the Banks (as hereinafter defined),
BANQUE PARIBAS, not in its individual capacity but solely in its capacity as the
Agent, and BANQUE NATIONALE DE PARIS, not in its individual capacity but solely
in its capacity as the Managing Agent.
RECITALS
A. The Borrower, the Banks, the Agent and the Managing Agent have entered
into a Term Loan Agreement dated as of January 6, 1994, as amended by the First
Amendment and Waiver to Term Loan Agreement dated as of March 29, 1994, the
Amendment and Limited Waiver dated as of August __, 1994, the Third Amendment
dated as of March 10, 1995, the Fourth Amendment dated as of May 23, 1995, the
Fifth Amendment to Term Loan Agreement and First Amendment to Security Agreement
and Intellectual Property Security Agreement dated as of June 30, 1995 and the
Sixth Amendment to Term Loan Agreement and Limited Waiver dated as of August 8,
1995 (as so amended, the "Term Loan Agreement") pursuant to which the Banks
advanced to the Borrower a term loan in the aggregate principal amount of
$15,000,000 for the purpose of financing a portion of the purchase price of the
Acquisition (as defined in the Term Loan Agreement).
B. The Borrower has requested that the Banks make available an additional
$3,000,000, in the form of a non-revolving bridge line, for the purpose of
financing capital expenditures and, subject to the Required Bank's consent as
set forth below, certain working capital needs.
C. The Banks have agreed to make such credit available to the Borrower
but only upon the terms and subject to the conditions and in reliance on the
representations and warranties set forth below.
D. This Agreement amends, restates and supersedes the Term Loan Agreement
in its entirety.
1.
<PAGE>
1. DEFINITIONS.
1.1 DEFINITIONS. As used herein, the following terms shall have the
meanings herein specified unless the context otherwise requires. Defined terms
in this Agreement shall include in the singular number the plural and in the
plural number the singular.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all 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 a corporation if
such Person possesses, directly or indirectly, the power to (i) vote 5% or more
of the securities having ordinary voting power for the election of directors of
such corporation or (ii) direct or cause the direction of the management and
policies of such corporation, whether through the ownership of voting
securities, by contract or otherwise.
"AGENT" shall mean Banque Paribas acting in its capacity as agent for the
Banks and any successor agent appointed in accordance with SECTION 8.9.
"AGENT'S OFFICE" shall mean the office of the Agent located at 2029 Century
Park East, Suite 3900, Los Angeles, California 90067, or such other office as
the Agent may hereafter designate in writing as such to the other parties
hereto.
"AGREEMENT" shall mean this Amended and Restated Term Loan Agreement as the
same may from time to time hereafter be modified, supplemented or amended.
"APPLICABLE MARGIN" for Tranche-A Loans shall mean, during any period for
which the Applicable Leverage Ratio is within a range of Applicable Leverage
Ratios set forth below, the following rates per annum applicable for the
following Types of Loans (or portion thereof) opposite the range in which such
Applicable Leverage Ratio appears:
APPLICABLE MARGIN
APPLICABLE LEVERAGE RATIO BASE RATE LOAN EURODOLLAR
TRANCHE-A LOAN
Greater than or
equal to 1.0 : 1 1.5% 2.5%
Less than 1.0 : 1 1.0% 2.0%
As used in this definition, the term "APPLICABLE LEVERAGE RATIO" shall mean
the Leverage Ratio as set forth and certified in the most recent
certificate delivered by the chief financial officer of the Borrower
pursuant to SECTION 5.1(f) hereof, and the Applicable
2.
<PAGE>
Leverage Ratio shall change as and when the Leverage Ratio of the Borrower
as so certified changes;
and, for Tranche-B Loans, shall mean 3.0% PER ANNUM for all Base Rate Loans.
"APPROVALS" shall have the meaning provided in SECTION 4.21.
"ASSIGNEE" shall have the meaning provided in SECTION 9.4(c).
"BANKRUPTCY CODE" shall mean the Federal Bankruptcy Reform Act of 1978, as
codified under Title 11 of the United States Code and the Bankruptcy Rules
promulgated thereunder.
"BANKS" shall mean the persons listed on Schedule 1 hereto and the persons
which from time to time become a party hereto in accordance with SECTION 9.4(d).
"BASE RATE" shall mean, at any particular date, the per annum rate of
interest equal to the greater of (i) the rate of interest publicly announced by
the Agent from time to time as its base rate or prime rate of interest and
(ii) the Federal Funds Rate plus 1/2 of 1% per annum.
"BASE RATE LOAN" means a Loan that bears interest based on the Base Rate.
"BASE RATE TRANCHE-A LOAN" shall mean the Tranche-A Loans (or a portion
thereof) being maintained at a rate of interest based upon the Base Rate.
"BASE RATE TRANCHE-B LOAN" shall mean the Tranche-B Loans being maintained
at a rate of interest based upon the Base Rate.
"BORROWER" shall have the meaning provided in the preamble to this
Agreement.
"BORROWING" shall mean the incurrence of the Loan and any conversion or
continuation of the Loan or any portion thereof, having, in the case of
Eurodollar Loans, the same Interest Period.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day excluding Saturday, Sunday and any day which shall be
in New York City and Los Angeles, California on a legal holiday or a day on
which banking institutions are authorized or required by law or other government
actions to close and (ii) with respect to all notices and determinations in
connection with, and payments of principal and interest on, Eurodollar Loans,
any day which is a Business Day described in clause (i) and which is also a day
for trading by and between banks for U.S. dollar deposits in the relevant
interbank Eurodollar market.
"CAPITAL EXPENDITURES" shall mean, for any period, the sum of
(i) expenditures (whether paid in cash or accrued as a liability, including the
portion of Capitalized Leases originally incurred during such period that is
capitalized on the consolidated balance sheet of the Borrower
3.
<PAGE>
and its Subsidiaries) by the Borrower and its Subsidiaries during such period
that, in conformity with GAAP, are included in "CAPITAL EXPENDITURES" "additions
to property, plant or equipment" or comparable items in the consolidated
financial statements of the Borrower and its Subsidiaries, and (ii) to the
extent not included in clause (i), the aggregate of all net non-current assets
of businesses acquired by the Borrower and its Subsidiaries during that period,
including all purchase price adjustments and all expenditures accounted for by
the Borrower and its Subsidiaries as purchases of intangibles and licenses.
"CAPITALIZED LEASE" shall mean (i) any lease of property, real or personal,
the obligations under which are capitalized on the consolidated balance sheet of
the Borrower and its Subsidiaries, and (ii) any other such lease to the extent
that the then present value of the minimum rental commitment thereunder should,
in accordance with GAAP, be capitalized on a balance sheet of the lessee.
"CAPITALIZED LEASE OBLIGATIONS" shall mean all obligations of the Borrower
and its Subsidiaries under or in respect of Capitalized Leases.
"CASH EQUIVALENTS" shall mean (i) securities issued or directly and fully
guaranteed or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof) having maturities of not more
than ninety (90) days from the date of acquisition, (ii) time deposits and
certificates of deposit of any Bank or any domestic commercial bank of
recognized standing having capital and surplus in excess of $500,000,000 with
maturities of not more than ninety (90) days from the date of acquisition,
(iii) fully secured repurchase obligations with a term of not more than seven
(7) days for underlying securities of the types described in clause (i) entered
into with any bank meeting the qualifications specified in clause (ii) above,
and (iv) commercial paper issued by the parent corporation of any Bank or any
domestic commercial bank of recognized standing having capital and surplus in
excess of $500,000,000 and commercial paper rated at least A-1 or the equivalent
thereof by Standard & Poor's Corporation or at least P-1 or the equivalent
thereof by Moody's Investor Services, Inc. and in each case maturing within
ninety (90) days after the date of acquisition.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from time
to time, and any successor statute and the Treasury Regulations proposed
thereunder (to the extent Agent, in its sole discretion, reasonably determines
that such proposed regulations set forth the regulations that apply in the
circumstances).
"COLLATERAL" shall mean all property and interests in property now owned or
hereafter acquired in or upon which a Lien has been or is purported or intended
to have been granted to the Agent or any Bank under any of the Security
Documents.
"COMMITMENT" shall mean, for each Bank at any given time, its Tranche-A
Commitment and its Tranche-B Commitment.
4.
<PAGE>
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any fiscal period of the
Borrower, the total interest expense (including, without limitation, capitalized
interest, interest paid in kind and interest expense attributable to Capitalized
Leases in accordance with GAAP) of the Borrower and its Subsidiaries for such
period determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED NET INCOME" for any period, means the net income (or loss) of
the Borrower and its Subsidiaries on a consolidated basis for such period (taken
as a single accounting period) determined in accordance with GAAP; PROVIDED,
that in determining Consolidated Net Income, there shall be excluded (i) gains
(but not losses) resulting from the sale, exchange, transfer of other
disposition of property or assets not in the ordinary course of business of the
Borrower and its Subsidiaries and (ii) any other extraordinary or nonrecurring
gains (but not losses) of the Borrower and its Subsidiaries.
"CONSOLIDATED NET WORTH" shall mean, at any time, the sum of the amount by
which the Consolidated Total Assets of the Borrower and its Subsidiaries exceeds
the Consolidated Total Liabilities of the Borrower and its Subsidiaries at such
time.
"CONSOLIDATED TOTAL ASSETS" shall mean, at any time, all assets of the
Borrower and its Subsidiaries on a consolidated basis at such time, as
determined in accordance with GAAP.
"CONSOLIDATED TOTAL INDEBTEDNESS" shall mean, at any time, all Indebtedness
of the Borrower and its Subsidiaries on a consolidated basis at such time.
"CONSOLIDATED TOTAL LIABILITIES" shall mean, at any time, all liabilities
of the Borrower and its Subsidiaries on a consolidated basis at such time, as
determined in accordance with GAAP.
"CONTINGENT OBLIGATION" as to any Person shall mean any obligation of such
Person guaranteeing or intended to guarantee any Indebtedness, leases, dividends
or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the "PRIMARY
OBLIGOR") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation, (iv) to make payment for any products, materials or supplies or for
any transportation or services regardless of the nondelivery or non-furnishing
thereof or (v) otherwise to assure or hold harmless the owner of such primary
obligation against loss in respect thereof; PROVIDED, HOWEVER, that the term
Contingent Obligation shall not include endorsements of instruments for deposit
or collection in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the
5.
<PAGE>
primary obligation in respect of which such Contingent Obligation is made or, if
not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"CREDIT EXPOSURE" shall have the meaning provided in SECTION 9.4(b).
"DEFAULT" shall mean any event, act or condition which with notice or lapse
of time, or both, would constitute an Event of Default.
"DEFAULT RATE" shall have the meaning provided in SECTION 2.4(c).
"DIVIDENDS" shall have the meaning provided in SECTION 6.7.
"DOMESTIC LENDING OFFICE" shall mean, as to any Bank, the office of such
Bank designated as such on Schedule 1 hereto, or such other office designated by
such Bank from time to time by written notice to the Agent and the Borrower.
"EARNINGS AVAILABLE FOR FIXED CHARGES" shall mean, with respect to any
fiscal period of the Borrower, (i) EBITDA for such period, PLUS (ii) Operating
Lease Rentals during such period MINUS (iii) Capital Expenditures of the
Borrower and its Subsidiaries during such period (excluding capital investments
in equipment or machinery made by the Borrower or one of its Subsidiaries in
connection with a specific contract as long as such contract sets forth a
specific amount to be paid to the Borrower or such Subsidiary to fully reimburse
the Borrower or such Subsidiary for such capital investment).
"EBITDA" shall mean, with respect to any fiscal period of the Borrower, the
sum of (i) Consolidated Net Income for such fiscal period, PLUS (ii)
depreciation and amortization expense to the extent deducted in determining
Consolidated Net Income for such fiscal period, PLUS (iii) Consolidated
Interest Expense during such fiscal period, PLUS (iv) all income taxes paid
or accrued during such fiscal period with respect to Consolidated Net Income
for such period.
"ENVIRONMENTAL AFFILIATE" shall mean, with respect to any Person, any other
Person whose liability for any Environmental Claim such Person has or may have
retained, assumed or otherwise become liable for (contingently or otherwise),
either contractually or by operation of law.
"ENVIRONMENTAL APPROVALS" shall mean any permit, license, approval, ruling,
variance, exemption or other authorization required under applicable
Environmental Laws.
"ENVIRONMENTAL CLAIM" shall mean, with respect to any Person, any notice,
claim, demand or similar communication (written or oral) by any other Person
alleging potential liability for investigatory costs, cleanup costs,
governmental response costs, natural resources damages, property damages,
personal injuries, fines or penalties arising out of, based on or resulting from
(i) the presence, or release into the environment, of any Material of
Environmental Concern at any location, whether or not owned by such Person or
6.
<PAGE>
(ii) circumstances forming the basis of any violation, or alleged violation, of
any Environmental Law.
"ENVIRONMENTAL ESCROW AGREEMENT" shall mean that Escrow Agreement entered
into as of July 31, 1995 among Borrower and Westinghouse Electric Corporation
through its Nuclear Services Division.
"ENVIRONMENTAL LAWS" shall mean all federal, state, local and foreign laws
and regulations relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including without limitation, laws
and regulations relating to emissions, discharges, releases or threatened
releases of Materials of Environmental Concern, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA CONTROLLED GROUP" means a group consisting of any ERISA person and
all members of a controlled group of corporations and all trades or businesses
(whether or not incorporated) under common control with such Person that,
together with such Person, are treated as a single employer under regulations of
the PBGC.
"ERISA PERSON" shall have the meaning set forth in Section 3(9) of ERISA
for the term "PERSON."
"ERISA PLAN" means (i) any Plan that (x) is not a Multiemployer Plan and
(y) has Unfunded Benefit Liabilities in excess of $10,000 and (ii) any Plan that
is a Multiemployer Plan.
"EUROCURRENCY RESERVE REQUIREMENTS" shall mean, with respect to each day
during an Interest Period for Eurodollar Loans, that percentage (expressed as a
decimal) which is in effect on such day, as prescribed by the Federal Reserve
Board or other governmental authority or agency having jurisdiction with respect
thereto for determining the maximum reserves (including, without limitation,
basic, supplemental, marginal and emergency reserves) for eurocurrency funding
(currently referred to as "EUROCURRENCY LIABILITIES" in Regulation D) maintained
by a member bank of the Federal Reserve System.
"EURODOLLAR BASE RATE" shall mean, with respect to each day during an
Interest Period for Eurodollar Loans, the rate PER ANNUM (rounded upwards to the
nearest whole multiple of one-sixteenth of one percent) equal to the offered
quotation to first class banks in the interbank Eurodollar market by the
Reference Bank two (2) Business Days prior to the beginning of such Interest
Period at or about 11:00 A.M., Los Angeles time, for delivery on the first day
of such
7.
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Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the Eurodollar Loan of the Reference Bank to be
outstanding during such Interest Period.
"EURODOLLAR LENDING OFFICE" shall mean, as to any Bank, the office of such
Bank designated as such on SCHEDULE 1 hereto, or such other office designated by
such Bank from time to time by written notice to the Agent and the Borrower.
"EURODOLLAR LOAN" means a Loan that bears interest based on the Eurodollar
Rate.
"EURODOLLAR RATE" shall mean with respect to each day during an Interest
Period for Eurodollar Loans, a rate per annum determined for such day in
accordance with the following formula (rounded upwards to the nearest whole
multiple of 1/100th of one percent):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE-A LOANS" shall mean the Tranche-A Loans (or a portion
thereof) being maintained at a rate of interest based on the Eurodollar Rate.
"EVENT OF DEFAULT" shall have the meaning provided in SECTION 7.
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"FEDERAL RESERVE BOARD" shall mean the Board of Governors of the Federal
Reserve System as constituted from time to time.
"FEES" shall mean all amounts payable pursuant to SECTION 2.8.
"FIXED CHARGES" shall mean, without duplication, for any period, the sum of
(i) all Consolidated Interest Expense for such period, PLUS (ii) scheduled
payments due in such period for principal of the Loans and other permitted
Indebtedness, PLUS (iii) all Capitalized Lease Obligations accrued during such
period, PLUS (iv) Operating Lease Rentals during such period, PLUS (v) all
income taxes paid in cash during such period PLUS (vi) all Dividends, if any,
paid or payable by the Borrower with respect to Preferred Stock of the Borrower
during such period.
8.
<PAGE>
"GAAP" shall mean United States generally accepted accounting principles as
in effect on the date hereof and consistent with those utilized in the
preparation of the financial statements referred to in SECTION 4.5.
"GSI" shall mean VECTRA Government Services Inc., a Delaware corporation
and its successors.
"GSI PURCHASE AGREEMENT" means that certain Receivables Purchase Agreement,
dated as of January 6, 1994, between GSI and Receivableco, as the same has been
and may be amended, modified, restated or supplemented from time to time with
the consent of the Required Banks.
"GUARANTORS" shall mean (a) each Subsidiary of the Borrower which may from
time to time execute and deliver a counterpart of the Guaranty and (b) Waste
Services as a party to the Waste Services Guaranty.
"GUARANTY" means the Guaranty, dated as of January 6, 1994, among the
Subsidiaries of the Borrower party thereto, in favor of the Agent, for the
ratable benefit of the Banks, the Agent and the Managing Agent and the Interest
Rate Providers
"INDEBTEDNESS" of any Person shall mean, without duplication, (i) all
indebtedness of such Person for borrowed money or for the deferred purchase
price of property or services (other than trade payables on terms of thirty (30)
days or less incurred in the ordinary course of business of such Person),
(ii) all indebtedness of such Person evidenced by a note, bond, debenture or
similar instrument, (iii) the principal component of all Capitalized Lease
Obligations of such Person, (iv) the face amount of all letters of credit issued
for the account of such Person and, without duplication, all unreimbursed
amounts drawn thereunder, (v) all indebtedness of any other Person secured by
any Lien on any property owned by such Person, whether or not such indebtedness
has been assumed, (vi) all Contingent Obligations of such Person, (vii) Unfunded
Benefit Liabilities of the Borrower and its Subsidiaries and (viii) all payment
obligations of such Person under any interest rate protection agreement
(including, without limitation, any interest rate swaps, caps, floors, collars
and similar agreements) and currency swaps and similar agreements.
"INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean the Intellectual
Property Security Agreement, dated as of January 6, 1994, as amended by the
Fifth Amendment to Term Loan Agreement and First Amendment to Security Agreement
and Intellectual Property Security Agreement, dated as of June 30, 1995, between
the Borrower and the Agent, for the ratable benefit of the Banks, the Agent and
the Managing Agent and the Interest Rate Providers.
"INTERCOMPANY ACQUISITION DEMAND NOTE" shall have the meaning provided in
SECTION 6.8(i).
9.
<PAGE>
"INTERCOMPANY DEMAND NOTES" shall mean the Intercompany Demand Notes, dated
as of January 7, 1994, delivered by each Subsidiary of the Borrower (other than
Receivableco, VECTRA (U.K.), Provident and Waste Services) to the Borrower and
indorsed and delivered to the Agent.
"INTERCOMPANY SECURITY AGREEMENT" shall mean the Intercompany Security
Agreement, dated as of January 6, 1994, as amended by that First Amendment to
Intercompany Security Agreement, dated as of June 30, 1995, entered into by the
Assignors (as defined therein) in favor of the Agent, as the assignee of the
Borrower.
"INTEREST PERIOD" shall have the meaning provided in SECTION 2.5(a).
"INTEREST RATE PROVIDERS" shall mean each Bank which may from time to time
provide interest rate protection to the Borrower that is permitted pursuant to
SECTION 6.2(d) hereof.
"LEASEHOLD DOCUMENTS" shall mean all landlord consents, leasehold mortgages
and other documents relating to the leasehold interests of the Borrower and its
Subsidiaries delivered pursuant to the terms of the Security Agreement or the
Subsidiary Security Agreement, in each case duly executed and delivered by each
party thereto.
"LEVERAGE RATIO" shall have the meaning provided in SECTION 6.1(a).
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), or preference, priority or
other security agreement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, any
financing lease having substantially the same effect as any of the foregoing and
the filing of any financing statement or similar instrument under the Uniform
Commercial Code or comparable law of any jurisdiction, domestic or foreign.
"LOANS" shall mean an extension of credit made by any Bank pursuant to
SECTION 2 and may be a Base Rate Loan or Eurodollar Loan depending on the
context.
"LOAN DOCUMENTS" shall mean this Agreement, the Notes, the Guaranty, the
Waste Services Guaranty, the Rate Hedging Agreements, the Side Letter Agreement
and the Security Documents, as the same may from time to time have been, or may
hereafter be, amended, modified, supplemented, renewed, extended, replaced or
restated.
"LOAN PARTY" shall mean and include the Borrower and each Guarantor.
"MANAGING AGENT" shall mean Banque Nationale de Paris acting in its
capacity as managing agent for the Banks.
"MARGIN STOCK" shall have the meaning provided such term in Regulation U
and Regulation G of the Federal Reserve Board.
10.
<PAGE>
"MATERIAL ADVERSE EFFECT" shall mean a material adverse effect upon (i) the
business, operations, properties, profits, prospects or financial condition of
the Borrower and its Subsidiaries taken as a whole or (ii) the ability of any
Loan Party to perform, or of the Agent or any of the Banks to enforce, any of
the Obligations.
"MATERIALS OF ENVIRONMENTAL CONCERN" shall mean and include chemicals,
pollutants, contaminants, wastes, toxic substances, radioactive materials and
products, petroleum and petroleum products.
"MORTGAGES" shall mean the Mortgage, Security Agreement, Assignment of
Leases, Rents and Profits, Financing Statement and Fixture Filing, dated as of
January 6, 1994, as the same has been or may be amended, and any and all
replacements, extensions, substitutions and renewals thereof, executed by
Services in favor of Agent, for the ratable benefit of the Banks, the Agent and
the Managing Agent.
"MULTIEMPLOYER PLAN" shall mean a Plan which is a "MULTIEMPLOYER PLAN" as
defined in Section 4001(a)(3) of ERISA.
"NET ISSUANCE PROCEEDS" shall mean, in respect of any issuance of debt or
equity, cash proceeds and non-cash proceeds received or receivable in connection
therewith, net of reasonable out-of-pocket costs and expenses paid or incurred
in connection therewith in favor of any Person not an Affiliate of the Borrower,
except as are paid or payable to any such Affiliate upon fair and reasonable
terms that are duly approved by the disinterested members of the Borrower's
board of directors, fully disclosed to the Agent and no less favorable to the
Borrower than would obtain in a comparable arm's length transaction with a
Person not an Affiliate of the Borrower, such costs and expenses to be
consistent with standard investment bank practices for similar issuances.
"NOTE" shall mean any Tranche-A Note or any Tranche-B Note, and any and all
replacements, extensions, substitutions and renewals of any such notes.
"NOTICE OF CONVERSION OR CONTINUATION" shall have the meaning provided in
SECTION 2.1(c)(II).
"OBLIGATIONS" shall mean all obligations, liabilities and indebtedness of
every nature of the Borrower and each Subsidiary of the Borrower from time to
time owing to the Agent, the Managing Agent or any Bank under or in connection
with this Agreement or any other Loan Document.
"OPERATING LEASE" shall mean any lease of any property (whether real
personal or mixed) which is not a Capitalized Lease.
"OPERATING LEASE RENTALS" shall mean all minimum or guaranteed net rental
payments payable by the Borrower or any of its Subsidiaries under any Operating
Lease, which payments
11.
<PAGE>
are properly charged or chargeable to Consolidated Net Income during such period
in accordance with GAAP.
"PARTICIPANT" shall have the meaning provided in SECTION 9.4(b).
"PAYMENT DATE" shall mean the last day of each March, June, September and
December of each year.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
under ERISA, or any successor thereto.
"PERMITTED JOINT VENTURE" shall mean a joint venture entered into by the
Borrower or its Subsidiaries which is created to develop or exploit the
Enviroglass technology described on SCHEDULE 1.1 hereto.
"PERMITTED LIEN" shall have the meaning provided in SECTION 6.3 hereof.
"PERSON" shall mean and include any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or agency, department or instrumentality thereof.
"PLAN" means any employee benefit plan covered by Title IV of ERISA, the
funding requirements of which:
(2) were the responsibility of the Borrower or a member of its
ERISA Controlled Group at any time within the five years immediately preceding
the date hereof,
(3) are currently the responsibility of the Borrower or a member
of its ERISA Controlled Group, or
(4) hereafter become the responsibility of the Borrower or a
member of its ERISA Controlled Group,
including any such plans as may have been, or may hereafter be, terminated for
whatever reason.
"PLANT SERVICES" means Plant Services, Inc., a Washington corporation.
"PLANT SERVICES PURCHASE AGREEMENT" means the Stock Purchase Agreement
dated as of June 30, 1995, among the Borrower, Services and Westinghouse
Electric Corporation, through its Nuclear Services Division.
"PLEDGE AGREEMENT" shall mean the Pledge Agreement, dated as of January 6,
1994, between the Borrower and the Agent, for the ratable benefit of the Banks,
the Agent and the Managing Agent and the Interest Rate Providers.
12.
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"PREFERRED STOCK" shall mean, with respect to any corporation, shares of
such corporation which shall be entitled to preference or priority over any
other shares of such corporation in respect Of either the payment of dividends
or the distribution of assets upon liquidation.
"PRO RATA SHARE" as to any Bank shall mean a fraction (expressed as a
percentage), the numerator of which shall be the aggregate amount of such Bank's
Commitments and the denominator of which shall be the Total Commitment.
"PROVIDENT" shall mean Provident Union Insurance Company Limited, a Bermuda
corporation and a wholly-owned Subsidiary of the Borrower, and its successors.
"PURCHASED ASSETS" shall mean, collectively, "PURCHASED ASSETS" as defined
in each of the Receivables Purchase Agreements.
"PURCHASING BANKS" shall have the meaning provided in SECTION 9.4(d).
"RATE HEDGING AGREEMENTS" shall mean any and all agreements, documents and
instruments entered into between one or more Banks and the Borrower pursuant to
which such Bank or Banks provide interest rate Protection to the Borrower
permitted pursuant to SECTION 6.2(d) hereof.
"REAFFIRMATION OF GUARANTY" shall mean the Acknowledgement of Amendment and
Restatement of the Term Loan Agreement and Reaffirmation of Guaranty, dated as
of even date with this Agreement, executed by the Guarantors party thereto, in
favor of the Banks, the Agent, the Managing Agent and the Interest Rate
Providers, reaffirming the validity and enforceability of the Guaranty.
"REAFFIRMATION OF OBLIGATIONS" shall mean the Reaffirmation of Obligations,
dated as of even date with this Agreement, executed by the Subsidiaries party
thereto, in favor of the Banks, the Agent, the Managing Agent and the Interest
Rate Providers, reaffirming the Subsidiaries' obligations under the Intercompany
Demand Notes, the Intercompany Acquisition Demand Note, and the Security
Documents to which each such subsidiary is a party.
"REAFFIRMATION OF SECURITY AGREEMENT AND PLEDGE AGREEMENT" shall mean the
Reaffirmation of Security Agreement and Pledge Agreement, dated as of even date
with this Agreement, executed by the Borrower, in favor of the Banks, the Agent,
the Managing Agent and the Interest Rate Providers, reaffirming the validity and
enforceability of the Security Agreement and the Pledge Agreement.
"RECEIVABLECO" shall mean VECTRA Nevada, Inc., a Nevada corporation, and
its successors and assigns.
13.
<PAGE>
"RECEIVABLECO BANKS" shall mean the "BANKS" as such term is defined in the
Receivables Facility.
"RECEIVABLES AGREEMENTS" shall mean the collective reference to the
Receivables Purchase Agreement, the GSI Purchase Agreement and the Services
Purchase Agreement.
"RECEIVABLES FACILITY" shall mean that certain Credit Agreement, dated as
of January 6, 1994, among Receivableco, the Banks party thereto, Banque Paribas,
as Agent, and Banque Nationale de Paris, as Managing Agent, as the same has been
and may be amended, modified, supplemented or restated from time to time with
the consent of the Required Banks required pursuant to SECTION 6.10(b) hereof.
"RECEIVABLES FACILITY DOCUMENTS" shall mean the "LOAN DOCUMENTS" as such
term is defined in the Receivables Facility and as in effect on the Tranche-B
Closing Date, in each case as the same may be amended, modified, supplemented or
restated from time to time with the consent of the Required Banks required
pursuant to SECTION 6.10(b) hereof.
"RECEIVABLES NOTES" shall mean those two promissory notes, each dated
January 6, 1994, made by Receivableco to the order of GSI and to the order of
Services, which promissory notes evidence amounts payable by Receivableco to GSI
and Services under the terms of the GSI Purchase Agreement or the Services
Purchase Agreement, respectively, as each such promissory note may be amended,
modified, restated, replaced or supplemented from time to time with the consent
of the Required Banks.
"RECEIVABLES PURCHASE AGREEMENT" means that certain Receivables Purchase
Agreement, dated as of January 6, 1994, between the Borrower and Receivableco,
as the same has been and may be amended, modified, restated or supplemented from
time to time with the consent of the Required Banks.
"RECYTEK OPTION" shall mean the Recytek put option obtained by Borrower as
part of the sale price of the Alaron waste processing business.
"REFERENCE BANK" shall mean Banque Paribas.
"REGULATION D" shall mean Regulation D of the Federal Reserve Board as from
time to time in effect and any successor to all or any portion thereof.
"REPORTABLE EVENT" has the meaning set forth in Section 4043(b) of ERISA
(other than a Reportable Event as to which the provision of thirty (30) days
notice to the PBGC is waived under applicable regulations), or is the occurrence
of any of the events described in Section 4068(f) or 4063(a) of ERISA.
14.
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"REQUIRED BANKS" shall mean Banks holding more than 66 2/3% of the
principal amount of Loans outstanding or, if no Loans are outstanding, more than
66 2/3% of the Total Commitments.
"SECURITY AGREEMENT" shall mean the Security Agreement, dated as of January
6, 1994, as Amended by the Fifth Amendment to Term Loan Agreement and First
Amendment to Security Agreement and Intellectual Property Security Agreement,
dated as of June 30, 1995, between the Borrower and the Agent for the ratable
benefit of the Banks, the Agent and the Managing Agent, and the Interest Rate
Providers.
"SECURITY DOCUMENTS" shall mean and include the Security Agreement, the
Pledge Agreement, the Subsidiary Security Agreement, the Subsidiary Pledge
Agreement, the Intellectual Property Security Agreement, the Subsidiary
Intellectual Property Security Agreement, the Waste Services Security Agreement,
the Leasehold Documents, the Intercompany Security Agreement, the Intercompany
Demand Notes, the Intercompany Acquisition Demand Notes, the Mortgages, the
Reaffirmation of Obligations and the Reaffirmation of Security Agreement and
Pledge Agreement.
"SERVICES" shall mean VECTRA Services, Inc., a Washington corporation and a
wholly owned Subsidiary of Borrower.
"SERVICES PURCHASE AGREEMENT" means that Receivables Purchase Agreement
dated as of January 6, 1994, between Services and Waste Services and
Receivableco, as the same may be amended, modified, restated or supplemented
from time to time with the consent of Required Banks.
"SIDE LETTER AGREEMENT" shall mean the letter agreement, dated as of even
date with this Agreement, among the Borrower, the Agent, the Managing Agent and
the other parties thereto and all documents and instruments executed or
delivered pursuant thereto or in connection therewith, as each of the same has
been or may be amended, modified, restated or supplemented from time to time.
"SOLVENT" as to any Person shall mean that (i) the sum of the assets of
such Person, both at a fair valuation and at present fair salable value, will
exceed its liabilities, including contingent liabilities, (ii) such Person will
have sufficient capital with which to conduct its business as presently
conducted and as proposed to be conducted and (iii) such Person has not incurred
debts, and does not intend to incur debts, beyond its ability to pay such debts
as they mature. For purposes of this definition, "DEBT" means any liability on
a claim, and "CLAIM" means (x) a right to payment, whether or not such right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured, or (y)
a right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured, or unsecured. With respect to any such contingent liabilities, such
liabilities shall be computed at the amount which,
15.
<PAGE>
in light of all the facts and circumstances existing at the time, represents the
amount which can reasonably be expected to become an actual or matured
liability.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation a
majority of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person directly or
indirectly through Subsidiaries and (ii) any partnership, association, joint
venture or other entity in which such Person, directly or indirectly through
Subsidiaries, is either a general partner or has a majority equity interest at
the time.
"SUBSIDIARY INTELLECTUAL PROPERTY SECURITY AGREEMENT" shall mean that
Subsidiary Intellectual Property Security Agreement, dated as of January 6,
1994, as amended by that First Amendment to Subsidiary Security Agreement and
consent and waiver to Subsidiary Pledge Agreement, dated as of June 30, 1995,
among the Subsidiaries of the Borrower party thereto, in favor of the Agent, for
the ratable benefit of the Banks, the Agent and the Managing Agent and the
Interest Rate Providers.
"SUBSIDIARY PLEDGE AGREEMENT" shall mean that Subsidiary Pledge Agreement,
dated as of January 6, 1994, as amended by that First Amendment to Subsidiary
Security Agreement and consent and waiver to Subsidiary Pledge Agreement, dated
as of June 30, 1995, among the Subsidiaries of the Borrower party thereto, in
favor of the Agent, for the ratable benefit of the Banks, the Agent and the
Managing Agent and the Interest Rate Providers.
"SUBSIDIARY SECURITY AGREEMENT" shall mean that Subsidiary Security
Agreement, dated as of January 6, 1994, as amended by that First Amendment to
Subsidiary Security Agreement and Subsidiary Intellectual Property Security
Agreement and Consent and Waiver to Subsidiary Pledge Agreement, dated as of
June 30, 1995, among the Subsidiaries of the Borrower party thereto, in favor of
the Agent, for the ratable benefit of the Banks, the Agent and the Managing
Agent and the Interest Rate Providers.
"TERMINATION EVENT" shall mean (i) a Reportable Event, or (ii) the
initiation of any action by the Borrower, any member of the Borrower's ERISA
Controlled Group or any ERISA Plan fiduciary to terminate an ERISA Plan or the
treatment of an amendment to an ERISA Plan as a termination under ERISA, or
(iii) the institution of proceedings by the PBGC under Section 4042 of ERISA to
terminate an ERISA Plan or to appoint a trustee to administer any ERISA Plan.
"TITLE INSURANCE" shall mean a paid policy of mortgage title insurance with
respect to any Mortgaged Premises (as defined in each Mortgage), in an amount
satisfactory to the Banks and issued by a title insurance company satisfactory
to the Agent and the Banks.
"TOTAL COMMITMENT" shall mean, at any time, the sum of the Commitments of
all of the Banks at such time.
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"TRANCHE-A COMMITMENT" shall mean the amount set forth opposite such Bank's
name in SCHEDULE 1 hereto under the heading "TRANCHE-A COMMITMENT."
"TRANCHE-A FACILITY" means the Three Million Two Hundred Fourteen Thousand
Four Hundred Forty Two Dollar ($3,214,442) amortizing term loan maturing on the
Tranche-A Maturity Date.
"TRANCHE-A LOAN" shall have the meaning set forth in SECTION 2.1.
"TRANCHE-A MATURITY DATE" shall mean December 31, 1998.
"TRANCHE-A NOTES" means the separate promissory note, dated as of January
7, 1994, each executed by the Borrower and payable to the order of a Bank, in
the original amount of such Bank's Tranche-A Commitment.
"TRANCHE-B CLOSING DATE" shall mean the date at which each of the
conditions precedent set forth in SECTION 3 shall have been duly satisfied by
the Borrower, as determined by the Banks, in their sole discretion.
"TRANCHE-B CLOSING FEE" shall have the meaning provided in SECTION 2.8.
"TRANCHE-B COMMITMENT" shall mean the amount set forth opposite such Bank's
name in SCHEDULE 1 hereto under the heading "TRANCHE-B COMMITMENT".
"TRANCHE-B COMMITMENT FEE" shall have the meaning provided in SECTION 2.8.
"TRANCHE-B COMMITMENT PERCENTAGE" means, as to any Bank, the percentage
equivalent of such Bank's Tranche-B Commitment divided by the aggregate of the
Tranche-B Commitments for all Banks.
"TRANCHE-B FACILITY" means the Three Million Dollar ($3,000,000) non-
revolving bridge loan maturing on the Tranche-B Maturity Date.
"TRANCHE-B LOAN" shall have the meaning set forth in SECTION 2.2.
"TRANCHE-B MATURITY DATE" shall mean March 31, 1996.
"TRANCHE-B NOTES" means the separate promissory note, dated as of the
Tranche-B Closing Date, each executed by the Borrower and payable to the order
of a Bank in the original amount of such Bank's Tranche-B Commitment,
substantially in the form of EXHIBIT A.
"TRANSFER SUPPLEMENT" shall have the meaning provided in SECTION 9.4(d).
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"TRANSFEREE" shall have the meaning provided in SECTION 9.4(e).
"TYPE" shall mean any type of Loan determined with respect to the interest
option applicable thereto, I.E., a Base Rate Tranche-B Loan or a Eurodollar
Tranche-A Loan.
"UNFUNDED BENEFIT LIABILITIES" means with respect to any Plan at any time,
the amount (if any) by which (i) the present value of all benefit liabilities
under such Plan as defined in Section 4001(a)(16) of ERISA, exceeds (ii) the
fair market value of all Plan assets allocable to such benefits, all determined
as of the then most recent valuation date for such Plan (on the basis of
assumptions prescribed by the PBGC for the purpose of Section 4044 of ERISA).
"VECTRA (U.K.)" shall mean VECTRA Technologies (U.K.) Limited, an English
limited liability company, and its successors.
"WASTE SERVICES" shall mean VECTRA Waste Services, L.L.C., a Delaware
limited liability company.
"WASTE SERVICES GUARANTY" shall mean the Guaranty, dated as of even date
with this Agreement, by Waste Services in favor of the Agent, for the ratable
benefit of the Banks, the Agent and the Managing Agent and the Interest Rate
Providers.
"WASTE SERVICES SECURITY AGREEMENT" shall mean the Security Agreement,
dated as of even date with this Agreement, between Waste Services and the Agent,
for the ratable benefit of the Banks, the Agent and the Managing Agent and the
Interest Rate Providers.
F. AMOUNT AND TERMS OF CREDIT FACILITIES.
a. TRANCHE-A FACILITY. Subject to and upon the terms and conditions and
in reliance upon the representations and warranties of the Borrower set forth in
the Term Loan Agreement and in the related Loan Documents, each Bank, severally
and not jointly, agreed to and did advance Loans to the Borrower and hereby
agrees, subject to and upon the terms and conditions and in reliance upon the
representations and warranties of the Borrower set forth herein, severally but
not jointly, to maintain its currently outstanding Loans to the Borrower under
its Tranche-A Commitment in the sum of $1,607,221 (each such loan, a "TRANCHE-A
LOAN"). Subject to the terms of this Agreement relating to optional prepayments
and mandatory prepayments and the acceleration of maturities, the Tranche-A
Loans shall mature on the Tranche-A Maturity Date and shall be repaid, without
premium or penalty, by the Borrower on each Payment Date occurring after
December 31, 1995 and prior to the Tranche-A Maturity Date in principal
installments equal to $750,000 on each such Payment Date with the then
outstanding unpaid principal amount of the Tranche-A Loans to be repaid in full
on the Tranche-A Maturity Date.
i. GENERAL PROVISIONS RELATING TO TRANCHE-A LOANS. Each Tranche-A
Loan made by a Bank under the Tranche-A Facility shall, at the Borrower's option
in accordance
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with the terms of this Agreement, be either in the form of a Base Rate Loan or a
Eurodollar Loan. Once repaid, the Tranche-A Loans may not be reborrowed. The
Borrower shall repay the principal amount of the Tranche-A Loans in the amounts
and in the manner set forth in this Section and pay interest accrued on the
Tranche-A Loans at the rates and in the manner set forth in SECTION 2.4. The
Borrower may, at its option, prepay all or any portion of the Tranche-A Loans as
set forth in SECTION 2.6. In addition, the Tranche-A Loans shall be subject to
Mandatory Prepayments in accordance with SECTION 2.14.
ii. MINIMUM AMOUNT OF EURODOLLAR TRANCHE-A LOAN. All conversions,
continuations, payments, prepayments and selection of Interest Periods hereunder
shall be made or selected so that, after giving effect thereto, (i) the
aggregate principal amount of any conversion to or continuation of Eurodollar
Tranche-A Loans occurring on the same day for the same Interest Period shall not
be less than $1,000,000 or an integral multiple of $500,000 in excess thereof,
and (ii) there shall be no more than five (5) Eurodollar Loans outstanding at
any time.
iii. CONVERSION OR CONTINUATION OF TRANCHE-A LOANS.
(1) Subject to the other provisions hereof, the Borrower shall
have the option (i) to convert at any time all or any part of an outstanding
Base Rate Tranche-A Loan to one or more Eurodollar Tranche-A Loans, (ii) to
convert all or any part of outstanding Eurodollar Tranche-A Loans to Base Rate
Tranche-A Loans, on the expiration date of the Interest Period applicable
thereto, or (iii) to continue all or any part of outstanding Eurodollar Tranche-
A Loans which comprise part of the same Borrowing as Eurodollar Tranche-A Loans
for an additional Interest Period, on the expiration of the Interest Period
applicable thereto; PROVIDED that no Loan may be continued as, or converted
into, a Eurodollar Loan when any Default or Event of Default has occurred and is
continuing.
(2) In order to elect to convert or continue a Tranche-A Loan
under this SECTION 2.1(c), the Borrower shall deliver an irrevocable notice
thereof (a "NOTICE OF CONVERSION OR CONTINUATION") to the Agent no later than
10:00 A.M., Los Angeles time, (i) at least one (1) Business Day in advance of
the proposed conversion date in the case of a conversion to a Base Rate Loan and
(ii) at least three (3) Business Days in advance of the proposed conversion or
continuation date in the case of a conversion to, or a continuation of, a
Eurodollar Loan. A Notice of Conversion or Continuation shall specify (w) the
requested conversion or continuation date (which shall be a Business Day), (x)
the amount of the Tranche-A Loan to be converted or continued, (y) whether a
conversion or continuation is requested, and (z) in the case of a conversion to,
or a continuation of, a Eurodollar Loan, the requested Interest Period.
Promptly after receipt of a Notice of Conversion or Continuation under this
SECTION 2.1(c)(ii), the Agent shall provide each Bank with a copy thereof.
b. TRANCHE-B FACILITY. Subject to and upon the terms and conditions
herein set forth, each Bank, severally but not jointly, agrees to make Loans of
immediately available funds to the Borrower, on a non-revolving basis, from the
Tranche-B Closing Date until the earlier of
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the last Business Day prior to the Tranche-B Maturity Date or the date on which
the Tranche-B Commitments have been fully utilized, in an aggregate principal
amount not to exceed the Tranche-B Commitment of such Bank (each such loan, a
"TRANCHE-B LOAN"). The aggregate amount of the Tranche-B Commitments shall not
exceed $3,000,000. Subject to the terms of this Agreement relating to optional
prepayments and mandatory prepayments and the acceleration of maturities, the
Tranche-B Loans shall be due and payable, together with all accrued and unpaid
interest and other amounts chargeable to the Borrower under or with respect to
the Tranche-B Facility, on the Tranche-B Maturity Date.
i. GENERAL PROVISIONS RELATING TO TRANCHE-B LOANS. Each Tranche-B
Loan made by a Bank under the Tranche-B Facility shall be in the form of a Base
Rate Loan. The Borrower shall repay the principal amount of the Tranche-B Loans
in the amounts and in the manner set forth in this Section and pay interest
accrued on the Tranche-B Loans at the rates and in the manner set forth in
SECTION 2.4(a). The Borrower may, at its option and upon one (1) Business Day's
notice, prepay all or any portion of the Tranche-B Loans as set forth in SECTION
2.6 without premium or penalty. In addition, the Tranche-B Loans shall be
subject to Mandatory Prepayments in accordance with SECTION 2.14.
ii. PERMITTED USES OF TRANCHE-B LOANS. The proceeds of the Tranche-B
Loans shall be used to finance Capital Expenditures, as permitted hereunder, or,
with the written consent of the Required Banks, which consent shall be in their
sole discretion, for specific working capital purposes.
iii. NOTICE OF BORROWING FOR TRANCHE-B LOANS.
(1) The Borrower shall give the Agent at the Agent's Office
prior to 10:00 A.M., Los Angeles time, at least five (5) Business Days' prior
telex, facsimile or telephonic notice (promptly confirmed in writing) of a
Tranche-B Loan to be made hereunder. Such notice (the "NOTICE OF BORROWING")
shall be irrevocable and shall specify (i) the aggregate principal amount of the
requested Loans, (ii) the date of Borrowing (which shall be a Business Day) and
(iii) shall attach such purchase orders, invoices (showing the original invoice
date) and other supporting documentation describing the items to be purchased or
work to be performed as the Agent shall request in its reasonable discretion.
(2) Promptly after receipt of the Notice of Borrowing, the Agent
shall provide each Bank with a copy thereof and inform each Bank as to its Pro
Rata Share of the Tranche-B Loan requested thereunder.
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iv. DISBURSEMENT OF FUNDS FOR TRANCHE-B LOANS.
(1) No later than 1:00 P.M., Los Angeles time, on the date
specified in the Notice of Borrowing, each Bank will make available its Pro Rata
Share of the Tranche-B Loan requested to be made on such date, in U.S. dollars
and immediately available funds, at the Agent's Office. After the Agent's
receipt of the proceeds of such Tranche-B Loan, the Agent will make available to
the Borrower by depositing in the Borrower's account at the Agent's Office the
aggregate of the amounts so received.
(2) Unless the Agent shall have been notified by any Bank prior
to the date of the Borrowing that such Bank does not intend to make available to
the Agent its Tranche-B Loan to be made on such date, the Agent may assume that
such Bank has made such amount available to the Agent on such date and the Agent
in its sole discretion may, in reliance upon such assumption, make available to
the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank and the Agent has made such amount
available to the Borrower, the Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Agent's demand therefor, the Agent shall
promptly notify the Borrower and the Borrower shall immediately repay such
corresponding amount to the Agent. The Agent shall also be entitled to recover
from such Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent, at a rate PER ANNUM equal to the
Base Rate plus the Applicable Margin, calculated in accordance with
SECTION 2.4(a), for the Tranche-B Loan. Nothing herein shall be deemed to
relieve any Bank from its obligation to fulfill its commitments hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result of
any default by such Bank hereunder. Notwithstanding anything contained herein
or in any other Loan Document to the contrary, the Agent may apply all funds and
proceeds of Collateral available for the payment of any Obligations first to
repay any amount owing by any Bank to the Agent as a result of such Bank's
failure to fund its Tranche-B Loans hereunder.
c. NOTES.
i. TRANCHE-A LOAN NOTES. The Borrower's obligation to pay the
principal of, and interest on, each Bank's Tranche-A Loans shall be evidenced by
a Tranche-A Note duly executed and delivered by the Borrower and made payable to
such Bank in a principal amount equal to such Bank's Tranche-A Commitment.
ii. TRANCHE-B LOAN NOTES. The Borrower's obligation to pay the
principal of, and interest on, each Bank's Tranche-B Loans shall be evidenced by
a Tranche-B Note duly executed and delivered by the Borrower and made payable to
such Bank substantially in the form of EXHIBIT A hereto in a principal amount
equal to such Bank's Tranche-B Commitment.
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d. INTEREST.
i. The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Base Rate Loan from the date of the making of such Loan
until such Loan shall be paid in full at a rate PER ANNUM which shall be equal
to the sum of the Applicable Margin applicable thereto plus the Base Rate in
effect from time to time, such rate to change as and when the Base Rate and/or
the Applicable Margin changes, such interest to be computed on the basis of a
365- or 366-day year, as the case may be.
ii. The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date of the making of such
Loan until such Loan shall be paid in full at a rate per annum which shall be
equal to the sum of the Applicable Margin applicable thereto plus the relevant
Eurodollar Rate, such interest to be computed on the basis of a 360-day year.
iii. In the event that, and for so long as, any Event of Default shall
have occurred and be continuing, the outstanding principal amount of all Loans
and, to the extent permitted by law, overdue interest in respect of all Loans,
shall bear interest at a rate per annum (the "DEFAULT RATE") equal to the sum of
(x) two percent (2%) plus (y) the Base Rate then in effect plus (z) the
Applicable Margin then applicable to Base Rate Loans.
iv. Interest on each Loan shall accrue from and including the date of
the Borrowing thereof to but excluding the date of any repayment thereof
(PROVIDED that any Loan borrowed and repaid on the same day shall accrue one (1)
day's interest) and shall be payable (i) in respect of each Base Rate Loan,
quarterly in arrears on each Payment Date, (ii) in respect of each Eurodollar
Loan, on the last day of each Interest Period applicable to such Loan and, in
the case of an Interest Period of six months, on the date occurring three months
from the first day of such Interest Period and on the last day of such Interest
Period, and (iii) in the case of all Loans, on any prepayment or conversion (on
the amount prepaid or converted), at maturity (whether by acceleration or
otherwise) and, after such maturity, on demand.
v. The Agent shall, upon determining the Eurodollar Rate for any
Interest Period, promptly notify the Borrower and the Banks thereof.
vi. The Reference Bank shall provide to the Agent the information to
be provided by them under the definition of "EURODOLLAR BASE RATE" in accordance
with the terms hereof.
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e. INTEREST PERIODS.
i. The Borrower shall, in each Notice of Conversion or Continuation
in respect of the conversion into or continuation of a Eurodollar Loan, select
the interest period (each an "INTEREST PERIOD") applicable to such Eurodollar
Loan, which Interest Period shall, at the option of the Borrower, be either a
one-month, two-month, three-month or six-month period, provided that:
(1) the initial Interest Period for any Eurodollar Loan shall
commence on the date of any conversion from a Base Rate Loan and each Interest
Period occurring thereafter in respect of such Loan shall commence on the date
on which the next preceding Interest Period expires;
(2) if any Interest Period would otherwise expire on a day which
is not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; PROVIDED, HOWEVER, that if any Interest Period would otherwise
expire on a day which is not a Business Day but is a day of the month after
which no further Business Day occurs in such month, such Interest Period shall
expire on the next preceding Business Day;
(3) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such Interest
Period, such Interest Period shall end on the last Business Day of such calendar
month;
(4) no Interest Period in respect of any Loan shall extend
beyond the Maturity Date; and
(5) no Interest Period in respect of a Loan shall extend beyond
any date upon which a repayment of the Loans is required to be made pursuant to
SECTION 2.1 unless the aggregate principal amount of Loans which are Base Rate
Loans or which have Interest Periods which will expire on or before such date is
equal to or in excess of the amount of the Term Loan repayment required to be
made on such date.
ii. If upon the expiration of any Interest Period, the Borrower has
failed to elect a new Interest Period to be applicable to the respective
Eurodollar Loan as provided above, the Borrower shall be deemed to have elected
to convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
f. VOLUNTARY PREPAYMENTS. The Borrower shall have the right to prepay
the Loans in whole or in part from time to time on the following terms and
conditions: (i) the Borrower shall give the Agent written notice (or telephonic
notice promptly confirmed in writing), which notice shall be irrevocable, of its
intent to prepay the Loans, at least five (5) Business Days' prior to a
prepayment of Eurodollar Loans or at least one (1) Business Day prior to
prepayment of Base Rate Loans, which notice shall specify the amount of such
prepayment and what Types of Loans are to be prepaid and, in the case of
Eurodollar Loans, the specific Borrowing(s)
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pursuant to which made, and which notice the Agent shall promptly transmit to
each of the Banks, (ii) each prepayment shall be in an aggregate principal
amount of $250,000 or any integral multiple of $50,000 in excess thereof,
(iii) prepayments of any Loan made pursuant to this Section may only be made on
a Payment Date and prepayments of Eurodollar Loans made pursuant to this
Section may only be made on the last day of the Interest Period applicable
thereto and (iv) partial prepayments of the Tranche-A Loans shall be applied to
the scheduled installments of principal thereof in the inverse order of their
maturity.
g. METHOD AND PLACE OF PAYMENT.
i. Except as otherwise specifically provided herein, all payments
and prepayments under this Agreement and the Notes shall be made to the Agent
for the account of the Banks entitled thereto not later than 10:00 A.M., Los
Angeles time, on the date when due and shall be made in lawful money of the
United States of America by federal funds wire transfer in immediately available
funds at the Agent's Office, and any funds received by the Agent after such time
shall, for all purposes hereof (including the following sentence), be deemed to
have been paid on the next succeeding Business Day. Except as otherwise
specifically provided herein, the Agent shall thereafter cause to be distributed
on the date of receipt thereof to each Bank in like funds its Pro Rata Share of
payments so received.
ii. Except as otherwise specifically provided herein, Whenever any
payment to be made hereunder or under any Note shall be stated to be due on a
day which is not a Business Day, the due date thereof shall be extended to the
next succeeding Business Day and, with respect to payments of principal,
interest shall be payable at the applicable rate during such extension.
iii. All payments made by the Borrower hereunder and under the other
Loan Document shall be made irrespective of, and without any reduction for, any
setoff or counterclaims.
h. FEES. In consideration of the Bank's agreement to commit to make the
Tranche-B Loans available to the Borrower as contemplated by this Agreement, the
Borrower agrees to pay to the Banks, in accordance with their respective
Tranche-B Commitment Percentage, (a) an aggregate "Tranche-B Closing Fee" in the
amount of $150,000 which shall be due and payable upon the first to occur of
(i) the sale of the Borrower's waste or fuel services lines of business or other
similar sale of assets currently owned by the Borrower or its subsidiaries,
(ii) the sale by Borrower of additional common stock or preferred stock with a
redemption date of not earlier than one year after the earlier of the Tranche-A
Maturity Date or the Tranche-B Maturity Date or (iii) debt subordinated to all
debt of the Borrower to institutional lenders on terms satisfactory to such
institutional lenders, including the Banks, and (b) a "Tranche-B Commitment Fee"
in an amount equal to one-quarter of one percent (0.25%) PER ANNUM of the
average daily difference between the aggregate Tranche-B Commitments and the sum
of the aggregate principal amount of the Tranche-B Loans then outstanding, due
and payable quarterly in arrears on the last day of each calendar quarter,
commencing with the quarter during which the Tranche-B Closing Date
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occurs, with the final such payment due and payable on the date the Tranche-B
Commitments terminate under the terms of this Agreement. The initial
installment of the Tranche-B Commitment Fee shall accrue and be calculated from
June 30, 1995.
i. INTEREST RATE UNASCERTAINABLE, INCREASED COSTS, ILLEGALITY.
i. In the event that the Agent, in the case of clause (i) below, or
any Bank, in the case of clauses (ii) and (iii) below, shall have determined
(which determination shall, absent manifest error, be final and conclusive and
binding upon all parties hereto):
(1) on any date for determining the Eurodollar Rate for any
Interest Period, that by reason of any changes arising after the date of this
Agreement affecting the interbank Eurodollar market, adequate and fair means do
not exist for ascertaining the applicable interest rate on the basis provided
for in the definition of the Eurodollar Rate; or
(2) at any time, that the relevant Eurodollar Rate applicable to
any of its Loans shall not represent the effective pricing to such Bank for
funding or maintaining a Eurodollar Loan, or such Bank shall incur increased
costs or reductions in the amounts received or receivable hereunder in respect
of any Eurodollar Loan, in any such case because of (x) any change since the
date of this Agreement in any applicable law or governmental rule, regulation,
guideline or order or any interpretation thereof and including the introduction
of any new law or governmental rule, regulation, guideline or order (such as for
example but not limited to a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D of the Federal
Reserve Board to the extent included in the computation of the Eurodollar Rate),
whether or not having the force of law and whether or not failure to comply
therewith would be unlawful, and/or (y) other circumstances affecting such Bank
or the interbank Eurodollar market or the position of such Bank in such market;
or
(3) at any time, that the making or continuance by it of any
Eurodollar Loan has become unlawful by compliance by such Bank in good faith
with any law or governmental rule, regulation, guideline or order (whether or
not having the force of law and whether or not failure to comply therewith would
be unlawful) or has become impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely affects the
interbank Eurodollar market; then, and in any such event, the Agent or such Bank
shall, promptly after making such determination, give notice (by telephone
promptly confirmed in writing) to the Borrower and (if applicable) the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, the
Borrower's right to request Eurodollar Loans shall be suspended, and any Notice
of Borrowing or Notice of Conversion or Continuation given by the Borrower with
respect to any Borrowing of Eurodollar Loans which has not yet been made shall
be deemed canceled and rescinded by the Borrower, (y) in the case of clause
(ii) above, the Borrower shall pay to such Bank, upon such Bank's delivery of
written demand therefor to the Borrower with a copy to the Agent, such
additional amounts (in the form of an increased rate of interest, or a different
method of calculating interest, or otherwise, as such Bank in its sole
discretion shall determine)
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as shall be required to compensate such Bank for such increased costs or
reduction in amounts received or receivable hereunder and (z) in the case of
clause (iii) above, the Borrower shall take one of the actions specified in
clause (b) below as promptly as possible and, in any event, within the time
period required by law. The written demand provided for in clause (y) shall,
absent manifest error, be final and conclusive and binding upon all of the
parties hereto.
ii. In the case of any Eurodollar Loan or requested Eurodollar Loan
affected by the circumstances described in clause (a)(ii) above, the Borrower
may, and in the case of any Eurodollar Loan affected by the circumstances
described in clause (a)(iii) above the Borrower shall, either (i) if any such
Eurodollar Loan has not yet been made but is then the subject of a Notice of
Conversion or Continuation, be deemed to have canceled and rescinded such
notice, or (ii) if any such Eurodollar Loan is then outstanding, require the
affected Bank to convert each such Eurodollar Loan into a Base Rate Loan at the
end of the applicable Interest Period or such earlier time as may be required by
law, in each case by giving the Agent notice (by telephone promptly confirmed in
writing) thereof on the Business Day that the Borrower was notified by the Bank
pursuant to clause (a) above; PROVIDED, HOWEVER, that all Banks whose Eurodollar
Loans are affected by the circumstances described in clause (a) above shall be
treated in the same manner under this clause (b).
iii. In the event that the Agent determines at any time following its
giving of notice based on the conditions described in clause (a)(i) above that
none of such conditions exist, the Agent shall promptly give notice thereof to
the Borrower and the Banks, whereupon the Borrower's right to request Eurodollar
Loans from the Banks and the Banks' obligation to make Eurodollar Loans shall be
restored.
iv. In the event that a Bank determines at any time following its
giving of a notice based on the conditions described in clause (a)(iii) above
that none of such conditions exist, such Bank shall promptly give notice thereof
to the Borrower and the Agent, whereupon the Borrower's right to request
Eurodollar Loans from such Bank and such Bank's obligation to make Eurodollar
Loans shall be restored.
j. FUNDING LOSSES. The Borrower shall compensate each Bank, upon such
Bank's delivery of a written demand therefor to the Borrower, with a copy to the
Agent (which demand shall, absent manifest error, be final and conclusive and
binding upon all of the parties hereto), for all losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by such Bank in connection with the liquidation or reemployment of
deposits or funds required by it to make or carry its Eurodollar Loans), that
such Bank sustains: (i) if for any reason (other than a default by such Bank) a
conversion from or into, or a continuation of, Eurodollar Loans does not occur
on a date specified therefor in a Notice of Conversion or Continuation (whether
or not rescinded, canceled or withdrawn or deemed rescinded, canceled or
withdrawn, pursuant to SECTION 2.9(a) or 2.9(b) or otherwise), (ii) if any
repayment (including, without limitation, payment after acceleration) or
conversion of any of its Eurodollar Loans occurs on a date which is not the last
day of the Interest Period applicable thereto, (iii) if any prepayment of any of
its Eurodollar Loans is not made on any date specified in a notice of
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prepayment given by the Borrower, or (iv) as a consequence of any default by the
Borrower in repaying its Eurodollar Loans or any other amounts owing hereunder
in respect of its Eurodollar Loans when required by the terms of this Agreement.
Calculation of all amounts payable to a Bank under this SECTION 2.10 shall be
made on the assumption that such Bank has funded its relevant Eurodollar Loan
through the purchase of a Eurodollar deposit bearing interest at the Eurodollar
Rate in an amount equal to the amount of such Eurodollar Loan with a maturity
equivalent to the Interest Period applicable to such Eurodollar Loan, and
through the transfer of such Eurodollar deposit from an offshore office of such
Bank to a domestic office of such Bank in the United States of America, provided
that each Bank may fund its Eurodollar Loans in any manner that it in its sole
discretion chooses and the foregoing assumption shall only be made in order to
calculate amounts payable under this SECTION 2.10.
k. INCREASED CAPITAL. If any Bank shall have determined that compliance
with any applicable law, rule, regulation, guideline, request or directive
(whether or not having the force of law) of any governmental authority, central
bank or comparable agency promulgated or deemed applicable to such Bank after
the date hereof, has or would have the effect of reducing the rate of return on
the capital or assets of such Bank or any Person controlling such Bank as a
consequence of its commitments or obligations hereunder, then from time to time,
upon such Bank's delivering a written demand therefor to the Agent and the
Borrower (with a copy to the Agent), the Borrower shall pay to such Bank such
additional amount or amounts as will compensate such Bank or Person for such
reduction.
l. TAXES.
i. All payments made by the Borrower under this Agreement shall be
made free and clear of, and without reduction or withholding for or on account
of, any present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any governmental authority excluding, in the
case of the Agent and each Bank, net income and franchise taxes imposed on the
Agent or such Bank by the jurisdiction under the laws of which the Agent or such
Bank is organized or any political subdivision or taxing authority thereof or
therein, or by any jurisdiction in which such Bank's Domestic Lending Office or
Eurodollar Lending Office, as the case may be, is located or any political
subdivision or taxing authority thereof or therein (all such non-excluded taxes,
levies, imposts, deductions, charges or withholdings being hereinafter called
"TAXES"). If any Taxes are required to be withheld from any amounts payable to
the Agent or any Bank hereunder or under the Notes, the amounts so payable to
the Agent or such Bank shall be increased to the extent necessary to yield to
the Agent or such Bank (after payment of all Taxes) interest or any such other
amounts payable hereunder at the rates or in the amounts specified in this
Agreement and the Notes. Whenever any Taxes are payable by the Borrower, as
promptly as possible thereafter, the Borrower shall send to the Agent for its
own account or for the account of such Bank, as the case may be, a certified
copy of an original official receipt received by the Borrower showing payment
thereof. If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Borrower shall
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indemnify the Agent and the Banks for any incremental taxes, interest or
penalties that may become payable by the Agent or any Bank as a result of any
such failure. The agreements in this SECTION 2.12 shall survive the termination
of this Agreement and the payment of the Notes and all other Obligations.
ii. Each Bank that is not incorporated under the laws of the United
States of America or a state thereof (including each Purchasing Bank that
becomes a party to this Agreement pursuant to SECTION 9.4) agrees that, prior to
the first date on which any payment is due to it hereunder, it will deliver to
the Borrower and the Agent (i) two duly completed copies of United States
Internal Revenue Service Form 1001 or 4224 or successor applicable form, as the
case may be, certifying in each case that such Bank is entitled to receive
payments under this Agreement and the Notes payable to it, without deduction or
withholding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding tax. Each
Bank which delivers to the Borrower and the Agent a Form 1001 or 4224 and
Form W-8 or W-9 pursuant to the preceding sentence further undertakes to deliver
to the Borrower and the Agent two further copies of the said letter and
Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms, or other
manner of certification, as the case may be, on or before the date that any such
letter or form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent letter and form previously delivered by it
to the Borrower, and such extensions or renewals thereof as may reasonably be
requested by the Borrower, certifying in the case of a Form 1001 or 4224 that
such Bank is entitled to receive payments under this Agreement without deduction
or withholding of any United States federal income taxes, unless in any such
case an event (including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Bank from duly completing and delivering any such letter or form
with respect to it and such Bank advises the Borrower that it is not capable of
receiving payments without any deduction or withholding of United States federal
income tax, and in the case of a Form W-8 or W-9, establishing an exemption from
United States backup withholding tax.
m. STATEMENT FROM BANKS. All requests or demands for payments made by
any Bank to or upon the Borrower pursuant to SECTIONS 2.9, 2.10 or 2.11 hereof
shall be accompanied by a statement from such Bank setting forth in reasonable
detail the basis for such requested or demanded payment.
n. MANDATORY PREPAYMENTS.
i. If the Borrower shall issue, raise or receive any new equity and
debt, the Borrower shall promptly notify the Agent of the estimated Net Issuance
Proceeds of such equity issuance or contribution. The Borrower shall then
prepay principal amounts outstanding under the Loans in an amount equal to the
Net Issuance Proceeds of such equity issuance or contribution;
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ii. When the Borrower receives any payments due under the Plant
Services Purchase Agreement, including, without limitation, any and all payments
due from the release of escrowed funds from the escrow provided by the
Environmental Escrow Agreement, the Borrower shall then prepay principal amounts
outstanding under the Loans in an amount equal to the amount of any payments so
received.
All amounts due under this SECTION 2.14 shall be prepaid within two (2) Business
Days of receipt thereof by the Borrower and shall be applied in inverse order to
the scheduled installments for repayment of first the Tranche-B Loans then the
Tranche-A Loans.
G. CONDITIONS PRECEDENT.
a. CONDITIONS PRECEDENT TO LOANS. The effectiveness of this Agreement
and the obligation of each Bank to make its initial Tranche-B Loan hereunder is
subject to the satisfaction on or before the Tranche-B Closing Date of the
following conditions precedent:
i. LOAN DOCUMENTS.
(1) AMENDED AND RESTATED TERM LOAN AGREEMENT. The Borrower and
each Bank shall have duly executed and delivered this Agreement to the Agent.
(2) NOTES. The Borrower shall have duly executed and delivered
to each of the Banks' Tranche-B Notes as provided herein.
(3) REAFFIRMATION OF SECURITY AGREEMENT AND PLEDGE. The Agent
shall have received the Reaffirmation of Security Agreement and Pledge
Agreement, duly executed and delivered by the Borrower.
(4) REAFFIRMATION OF GUARANTY. The Agent shall have received
the Reaffirmation of Guaranty, duly executed and delivered by each of the
Guarantors party thereto.
(5) MORTGAGES. The Borrower and each Subsidiary of the Borrower
that owns real property, or an interest therein, shall have duly executed and
delivered to the Agent such amendments to the Mortgages reflecting the
Obligations of the Borrower, as set forth in this Agreement, as the Agent shall
request.
(6) REAFFIRMATION OF OBLIGATIONS. The Agent shall have received
the Reaffirmation of Obligations, duly executed and delivered by each of the
Subsidiaries party thereto.
(7) SIDE LETTER AGREEMENT. The Borrower shall have duly
executed and delivered the Side Letter Agreement and shall have duly performed
all of its obligations thereunder which are required to be performed by the
Borrower on or prior to the Tranche-B Closing Date.
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(8) INTERCOMPANY SECURITY AGREEMENT. Each Subsidiary of the
Borrower that is party to the Intercompany Security Agreement shall have duly
executed and delivered to the Agent a reaffirmation and acknowledgement of each
Subsidiary's obligations under the Intercompany Security Agreement.
(9) WASTE SERVICES GUARANTY. The Agent shall have received the
Waste Services Guaranty, duly executed and delivered by Waste Services.
(10) WASTE SERVICES SECURITY AGREEMENT. The Agent shall have
received the Waste Services Security Agreement, duly executed by Waste Services.
(11) FINANCING STATEMENT. The Agent shall have received such
UCC-1 financing statements and UCC-2 amendments, duly executed by the Borrower
or such Guarantors, as debtor, as the Agent shall reasonably require consistent
with the purposes of the Security Documents.
ii. OPINIONS OF COUNSEL. The Agent, the Managing Agent and each Bank
shall have received a legal opinion, dated the Tranche-B Closing Date, from
Preston Gates & Ellis, counsel to the Loan Parties, substantially in the form
set forth as EXHIBIT B hereto.
iii. CORPORATE DOCUMENTS. The Agent shall have received the
certificate of incorporation or similar constituent documents of each of the
Loan Parties as amended, modified or supplemented to the Tranche-B Closing Date,
certified to be true, correct and complete by the appropriate Secretary of State
or similar public official as of a date not more than five (5) days prior to the
Tranche-B Closing Date, together with a good standing certificate from such
Secretary of State or similar public official and a good standing certificate
from the Secretaries of State (or the equivalent thereof) of each other State or
other jurisdiction in which each of them is required to be qualified to transact
business, each to be dated a date not more than five (5) days prior to the
Tranche-B Closing Date.
iv. CERTIFIED RESOLUTIONS, ETC. The Agent shall have received a
certificate of the Secretary or Assistant Secretary of each of the Loan Parties
and dated the Tranche-B Closing Date certifying (i) the names and true
signatures of the incumbent officers of such Person authorized to sign the
applicable Loan Documents, (ii) the bylaws or similar constituent documents of
such Person as in effect on the Tranche-B Closing Date, (iii) the resolutions of
such Person's Board of Directors approving and authorizing the execution,
delivery and performance of all Loan Documents executed by such Person, and
(iv) that there have been no changes in the Certificate of Incorporation of such
Person since the date of the most recent certification thereof by the
appropriate Secretary of State.
v. OFFICER'S CERTIFICATE. The Agent and the Banks shall have
received a certificate of the President or Chief Financial Officer of the
Borrower, dated the Tranche-B Closing Date, certifying that (i) each of the Loan
Parties, Provident, VECTRA (U.K.) and, to
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the best of his or her knowledge, the other parties to the Loan Documents, have
performed or complied in all material respects with all agreements and
conditions contained in such Loan Documents and any agreements or documents
referred to therein required to be performed or complied with by each of them on
or before the Tranche-B Closing Date and (ii) subject to the foregoing, neither
any Loan Party, Provident, VECTRA (U.K.) nor, to the best of his or her
knowledge, any such other party is in default in the performance or compliance
with any of the material terms or provisions thereof, except to the extent that
performance thereof or compliance therewith or default has been waived with the
prior written consent of the Required Banks.
vi. RECEIVABLES FACILITY. Each of the Receivables Facilities
Documents shall be in full force and effect.
vii. INSURANCE. The Agent shall have received a certificate of
insurance demonstrating insurance coverage in respect of each of the Loan
Parties of types, in amounts, with insurers and with other terms satisfactory to
the Banks, which certificate shall indicate that the Agent, the Managing Agent
and the Banks are named additional insureds as their interests may appear and
shall contain a lenders loss payee endorsement in favor of the Agent in form and
substance satisfactory to the Agent.
viii. LIEN SEARCH REPORTS. The Agent shall have received
satisfactory reports of UCC, tax lien, judgment and litigation searches
conducted by a search firm acceptable to the Agent and the Banks with respect to
the Borrower and each other Loan Party in such locations as Agent shall
determine.
ix. SOLVENCY CERTIFICATE. Each Bank shall have received a
certificate signed by the chief financial officer of the Borrower, in form and
substance satisfactory to each Bank, containing conclusions as to whether each
Loan Party is Solvent.
x. TITLE INSURANCE. The Agent shall have received a paid policy of
mortgage title insurance or a paid endorsement to each policy of mortgage title
insurance with respect to each Mortgaged Premises (as defined in each Mortgage),
endorsing the coverage of full payment of the Obligations of the Borrower or
such other coverage to which Agent may agree, as set forth in this Agreement,
issued by a title insurance company satisfactory to the Agent and the Banks.
xi. ENVIRONMENTAL MATTERS. The Agent and each Bank shall, if the
Agent or any Bank shall have so requested, have received a written environmental
audit report in form and substance satisfactory to the Agent and the Banks
prepared by an independent environmental consultant acceptable to the Agent and
the Banks with respect to the properties and business of the Borrower, each of
its Subsidiaries, the Loan Parties and each of their Environmental Affiliates
and their respective environmental, safety, health violations, hazards and
liabilities. In addition, the Agent and each Bank shall be satisfied that
(a) the Borrower and each of its Subsidiaries and each of their respective
operations comply in all respects deemed material by the Agent and each such
Bank with all applicable environmental, health and safety statutes and
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regulations, (b) neither the Borrower nor any of its Subsidiaries are the
subject of any federal or state investigation evaluating whether any remedial
action, involving a material expenditure, is needed to respond to a release of
any toxic or hazardous waste or substance into the environment, and (c) neither
the Borrower nor any of its Subsidiaries has any contingent liability deemed
material on any Bank in connection with any past or present treatment, storage,
recycling, disposal or release or threatened release, at any location, of any
toxic or hazardous waste or proposed environmental, health or safety laws or
regulations.
xii. FEES AND EXPENSES. The Agent shall have received, for its
account and for the account of each Bank, as applicable, all Fees, excluding the
deferred Tranche-B Closing Fee of $150,000, and other fees and expenses due and
payable hereunder on or before the Tranche-B Closing Date, including, without
limitation, the fees and expenses accrued through the Tranche-B Closing Date, of
Cooley Godward Castro Huddleson & Tatum and any other counsel retained by the
Agent.
xiii. CONSENTS, LICENSES, APPROVAL, ETC. The Agent shall have
received copies of all consents, licenses, and approvals, if any, required in
connection with the execution, delivery and performance by the Loan Parties or
any of their respective Subsidiaries, and the validity and enforceability of the
Loan Documents, or in connection with any of the transactions contemplated
thereby, and such consents, licenses and approvals shall be in full force and
effect.
xiv. REPRESENTATIONS AND WARRANTIES. The representations and
warranties contained herein and in the other Loan Documents (other than
representations and warranties which expressly speak only as of a different date
which presentations shall be true and correct as of such different date) shall
be true and correct in all material respects on such date both before and after
giving effect to the making of the Loans, and the Agent and each Bank shall have
received a certificate to such effect dated the Tranche-B Closing Date from the
chief financial officer of the Borrower.
xv. FINANCIAL PLAN. The Agent and each Bank shall have received a
financial plan, including projections, prepared by the Borrower and certified by
its chief financial officer, demonstrating the projected consolidated financial
condition and results of operations of the Borrower and its Subsidiaries after
giving effect to the transactions contemplated by the Plant Services Purchase
Agreement, for the period commencing on the Tranche-B Closing Date and ending on
December 31, 1996, which projections shall be accompanied by a written statement
of the assumptions underlying the projections, and shall demonstrate the
Borrower's ability to meet its current obligations, including any Obligations
under this Agreement, as the same become due. Such projections shall include an
operating plan setting forth in chronological detail the specific actions
contemplated to be taken to enable the Borrower to meet the obligations
contained therein. All of the foregoing shall be satisfactory to the Banks and
Agent.
xvi. NO INJUNCTION. No law or regulation shall have been adopted, no
order, judgment or decree of any governmental authority shall have been issued,
and no litigation shall be pending or threatened, which in the judgment of the
Banks would enjoin, prohibit or restrain,
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or impose or result in the imposition of any adverse condition upon, the making
or repayment of the Loans or the consummation of the transactions contemplated
herein.
xvii. NO MATERIAL ADVERSE CHANGE. No event, act or condition
shall have occurred since June 30, 1995 which, in the judgment of the Banks, has
had or could have a Material Adverse Effect.
xviii.OTHER DOCUMENTS. The Agent shall have received such other
documents, information and items from the Loan Parties as the Agent shall
reasonably request.
All of the Notes, certificates, agreements, legal opinions and other
documents and papers referred to in this SECTION 3, unless otherwise specified,
shall be delivered to the Agent for the account of each of the Banks and, except
for the Notes, in sufficient counterparts for each of the Banks, and shall be
satisfactory in form and substance to each Bank in its sole discretion.
b. ALL TRANCHE-B LOANS. The obligation of any Bank to make any Tranche-B
Loan is subject to the satisfaction of the following further conditions
precedent:
i. NOTICE OF BORROWING. The Agent shall have received a fully
executed Notice of Borrowing in respect of the Loans.
ii. NO DEFAULT OR EVENT OF DEFAULT. No Default or Event of Default
shall have occurred and be continuing on such date either before or after giving
effect to the making of the Loans, and the Agent and each Bank shall have
received a certificate to such effect dated the funding date of such Loan from
the chief financial officer of the Borrower.
iii. RECEIVABLES FACILITY. The Receivables Facility shall have been
fully drawn-down with no availability for funding remaining thereunder pursuant
to the terms thereof.
The acceptance of the proceeds of the Tranche-B Loans shall constitute a
representation and warranty by the Borrower to each of the Banks that all of the
conditions required to be satisfied under this SECTION 3 in connection with the
making of such Loan have been satisfied.
H. REPRESENTATIONS AND WARRANTIES.
In order to induce the Banks to enter into this Agreement and to make the
Loans, the Borrower makes the following representations and warranties, which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans:
a. CORPORATE STATUS. Each Loan Party and each other Subsidiary of the
Borrower (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged or presently proposes to engage and (iii) has
duly qualified and is authorized to do business and is in good standing as a
foreign
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corporation in every jurisdiction in which it owns or leases real property or in
which the nature of its business requires it to be so qualified.
b. CORPORATE POWER AND AUTHORITY. Each Loan Party has the corporate
power and authority to execute, deliver and carry out the terms and provisions
of each of the Loan Documents to which it is a party and has taken all necessary
corporate action to authorize the execution, delivery and performance by it of
such Loan Documents. Each Loan Party has duly executed and delivered each such
Loan Document, and each such Loan Document constitutes its legal, valid and
binding obligation, enforceable in accordance with its terms, except as
enforceability may be limited by bankruptcy, insolvency, moratorium or other
laws affecting creditors' rights generally and by general principles of equity
(whether enforcement is sought in a proceeding in equity or at law).
c. NO VIOLATION. Neither the execution, delivery or performance by any
Loan Party of the Loan Documents to which it is a party, nor compliance by it
with the terms and provisions thereof nor the consummation of the transactions
contemplated thereby, (i) will contravene any applicable provision of any law,
statute, rule, regulation, order, writ, injunction or decree of any court or
governmental instrumentality or (ii) will conflict or be inconsistent with or
result in any breach of, any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of any Loan Party,
Provident or VECTRA (U.K.) pursuant to the terms of any indenture, mortgage,
deed of trust, agreement or other instrument to which such Loan Party, Provident
or VECTRA (U.K.) is a party or by which it or any of its property or assets is
bound or to which it may be subject, or (iii) will violate any provision of the
Certificate of Incorporation, By-Laws or other constituent documents of any Loan
Party, Provident or VECTRA (U.K.).
d. LITIGATION. There are no actions, suits or proceedings pending or
threatened in any court or administrative forum or before any arbitrator
(i) with respect to any of the Loans or Loan Documents or (ii) with respect to
any other matter (other than as disclosed on SCHEDULE 4.4 hereto) which, if
adversely determined, could otherwise be materially adverse to the Borrower, any
Loan Party, Provident or VECTRA (U.K.).
e. FINANCIAL STATEMENTS; FINANCIAL CONDITION; ETC. All of the balance
sheets, statements of income, stockholder's equity and changes in cash flow and
other financial data which have been furnished to the Agent in connection with
this Agreement or the Term Loan Agreement or the other Loan Documents have been,
and all such financial data to be furnished to the Agent throughout the term of
this Agreement shall be prepared in accordance with GAAP, consistently applied,
and fairly present the financial condition and the results of operations of the
entities covered thereby on the dates and for the periods covered thereby,
except as disclosed in the notes thereto and, with respect to interim financial
statements, subject to normally recurring year-end adjustments. Neither any
Loan Party, Provident nor VECTRA (U.K.) has any material liability (contingent
or otherwise) not reflected in such financial statements or in the notes
thereto.
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f. SOLVENCY. On the Tranche-B Closing Date each Loan Party will be
Solvent.
g. PROJECTIONS. The projections delivered pursuant to SECTION 3.1(o)
have been prepared on the basis of the assumptions accompanying them, and such
projections and assumptions, as of the date of preparation thereof and as of the
Tranche-B Closing Date, are reasonable and represent the Borrower's good faith
estimate of its future financial performance, it being understood that nothing
contained in this Section shall constitute a representation or warranty that
such future financial performance or results of operations will in fact be
achieved.
h. MATERIAL ADVERSE CHANGE. Since June 30, 1995, there has occurred no
event, act or condition which has had, or could have, a Material Adverse Effect.
i. USE OF PROCEEDS; MARGIN REGULATIONS. All proceeds of each Loan will
be used by the Borrower only in accordance with the provisions of
SECTION 2.2(b). No part of the proceeds of any Loan will be used by the
Borrower to purchase or carry any Margin Stock or to extend credit to others for
the purpose of purchasing or carrying any Margin Stock. Neither the making of
any Loan nor the use of the proceeds thereof will violate or be inconsistent
with the provisions of Regulations G, T, U or X of the Federal Reserve Board.
j. GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with (i) the
execution, delivery and performance of any Loan Document or the consummation of
any of the transactions contemplated therein or (ii) the legality, validity,
binding effect or enforceability of any Loan Document, except those listed on
SCHEDULE 4.10 that have already been duly made or obtained and remain in full
force and effect.
k. SECURITY INTERESTS AND LIENS. The Security Documents create, as
security for the Obligations, valid and enforceable security interests in and
Liens on all of the Collateral, in favor of the Agent, for the ratable benefit
of the Banks, the Agent and the Managing Agent and the Interest Rate Providers,
and subject to no other Liens other than Permitted Liens. The security
interests in and Liens on the Collateral (other than "FIXTURES" (as defined in
the Uniform Commercial Code of the State of New York) at locations with respect
to which no fixture filing has been made) the perfection and priority of which
is subject to the Uniform Commercial Code of any jurisdiction, 49 U.S.C. 11303
or the laws of England relating to the perfection of Liens on shares of English
companies shall be superior to and prior to the rights of all third parties
(except as disclosed on SCHEDULE 4.11), and no further recordings or filings are
or will be required in connection with the creation, perfection or enforcement
of such security interests and Liens, other than the filing of continuation
statements in accordance with applicable law.
l. TAX RETURNS AND PAYMENTS. Each Loan Party, VECTRA (U.K.) and
Provident has filed all tax returns required to be filed by it and has paid all
taxes and assessments payable by it which have become due, other than those not
yet delinquent or those that are reserved
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against in accordance with GAAP which are being diligently contested in good
faith by appropriate proceedings.
m. ERISA. Neither the Borrower nor any of its Subsidiaries has Plans
other than those listed on SCHEDULE 4.13. No accumulated funding deficiency (as
defined in Section 412 of the Code or Section 302 of ERISA) or Reportable Event
has occurred with respect to any Plan. There are no Unfunded Benefit
Liabilities under any Plan. The Borrower and each member of its ERISA
Controlled Group have complied with the requirements of Section 515 of ERISA
with respect to each Multiemployer Plan and is not in "DEFAULT" (as defined in
Section 4219(c)(5) of ERISA) with respect to payments to a Multiemployer Plan.
The aggregate potential total withdrawal liability, and the aggregate potential
annual withdrawal liability payments of the Borrower and the members of its
ERISA Controlled Group as determined in accordance with Title IV of ERISA as if
the Borrower and the members of its ERISA Controlled Group had completely
withdrawn from all Multiemployer Plans is not greater, in the aggregate, than
$10,000. To the best knowledge of the Borrower and each member of its ERISA
Controlled Group, no Multiemployer Plan is or is likely to be in reorganization
(as defined in Section 4241 of ERISA or Section 418 of the Code) or is insolvent
(as defined in Section 4245 of ERISA). No material liability to the PBGC (other
than required premium payments), the Internal Revenue Service, any Plan or any
trust established under Title IV of ERISA has been, or is expected by the
Borrower or any member of its ERISA Controlled.Group to be, incurred by the
Borrower or any member of its ERISA Controlled Group. Except as otherwise
disclosed on SCHEDULE 4.13 hereto, neither the Borrower nor any member of its
ERISA Controlled Group has any contingent liability with respect to any post-
retirement benefit under any "WELFARE PLAN" (as defined in Section 3(1) of
ERISA), other than liability for continuation coverage under Part 6 of Title I
of ERISA. No lien under Section 412(n) of the Code or 302(f) of ERISA or
requirement to provide security under Section 401(a)(29) of the Code or
Section 307 of ERISA has been or is reasonably expected by the Borrower or any
member of its ERISA Controlled Group to be imposed on the assets of the Borrower
or any member of its ERISA Controlled Group.
n. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING COMPANY ACT. No Loan
Party or any other Subsidiary of the Borrower is (x) an "INVESTMENT COMPANY" or
a company "CONTROLLED" by an "INVESTMENT COMPANY," within the meaning of the
Investment Company Act of 1940, as amended, (y) a "HOLDING COMPANY" or a
"SUBSIDIARY COMPANY" of a "HOLDING COMPANY" or an "AFFILIATE" of either a
"HOLDING COMPANY" or a "SUBSIDIARY COMPANY" within the meaning of the Public
Utility Holding Company Act of 1935, as amended, or (z) subject to any other
federal.or state law or regulation which purports to restrict or regulate its
ability to borrow money.
o. TRUE AND COMPLETE DISCLOSURE. All factual information (taken as a
whole) furnished by or on behalf of any Loan Party or any other Subsidiary of
the Borrower in writing to the Agent or any Bank on or prior to the Tranche-B
Closing Date, for purposes of or in connection with this Agreement is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of any Loan Party or any other Subsidiary of the Borrower in writing to
the Agent or any Bank will be, true and accurate in all material respects on the
date as
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of which such information is dated or furnished and not incomplete by omitting
to state any material fact necessary to make such information (taken as a whole)
not misleading at such time. As of the Tranche-B Closing Date, there are no
facts, events or conditions known to the Borrower which, individually or in the
aggregate, have or could be expected to have a Material Adverse Effect.
p. CORPORATE STRUCTURE; CAPITALIZATION. SCHEDULE 4.16 hereto sets forth,
the number of authorized and issued shares of capital stock, membership interest
or other equity interest of the Borrower and each of its Subsidiaries and of
each Loan Party and each Subsidiary of each Loan Party, the par value thereof
and the registered owner(s) thereof. All of such stock, membership interest or
other equity interest has been duly and validly issued and is fully paid and
nonassessable. Except as set forth on SCHEDULE 4.16, neither the Borrower, any
Loan Party nor any such Subsidiary has outstanding any securities convertible
into or exchangeable for its capital stock, membership interest or other equity
interest nor does any Loan Party or any such Subsidiary have outstanding any
rights to subscribe for or to purchase, or any warrants or options for the
purchase of, or any agreements providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to
its capital stock, membership interest or other equity interest.
q. ENVIRONMENTAL MATTERS.
i. Except as set forth in SCHEDULE 4.17, (i) each of the Loan
Parties and their Environmental Affiliates are in compliance with all applicable
Environmental Laws, (ii) each of the Loan Parties and their Environmental
Affiliates have all Environmental Approvals required to operate their businesses
as presently conducted or as reasonably anticipated to be conducted, (iii) none
of the Loan Parties nor any of their Environmental Affiliates has received any
written communication, whether from a governmental authority, citizens group,
employee or otherwise, that alleges that such Loan Party or Environmental
Affiliate is not in full compliance with all Environmental Laws, and (iv) to the
Borrower's best knowledge after due inquiry, there are no circumstances that may
prevent or interfere with such full compliance in the future.
ii. Except as set forth in SCHEDULE 4.17, there is no Environmental
Claim pending or threatened against any Loan Party, any other Subsidiary of the
Borrower or its Environmental Affiliate.
iii. Except as set forth in SCHEDULE 4.17, there are no past or
present actions, activities, circumstances, conditions, events or incidents,
including, without limitation, the release, emission, discharge or disposal of
any Material of Environmental Concern, that could form the basis of any
Environmental Claims against any of the Loan Parties or any of their
Environmental Affiliates.
iv. Without in any way limiting the generality of the foregoing,
except as disclosed in SCHEDULE 4.17, (i) there are no on-site or off-site
locations in which any Loan Party or its Environmental Affiliate has stored,
disposed or arranged for the disposal of Materials of
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Environmental Concern, (ii) there are no underground storage tanks located on
property owned or leased by any Loan Party or its Environmental Affiliate,
(iii) there is no asbestos contained in or forming part of any building,
building component, structure or office space owned or leased by any Loan Party
or its Environmental Affiliate, and (iv) no polychlorinated biphenyls
(PCB's) are used or stored at any property owned or leased by any Loan Party or
its Environmental Affiliate.
r. PATENTS, TRADEMARKS, ETC. SCHEDULE 4.18 lists, to the best of the
Borrower's knowledge after due inquiry, all trademarks, service marks, patents
and copyrights owned by each Loan Party and, to the best of the Borrower's
knowledge after due inquiry, identifies each trademark, service mark, and patent
licensing agreement with respect to which any Loan Party is licensor or
licensee. Each of the Loan Parties have obtained and hold in full force and
effect all material patents, trademarks, service marks, trade names, copyrights
and other such rights, free from burdensome restrictions, which are necessary
for the operation of its business as presently conducted. No material product,
process, method, substance, part or other material presently sold by or employed
by any Loan Party in connection with such business infringes any patent,
trademark, service mark, trade name, copyright, license or other right owned by
any other Person. There is not pending or overtly threatened any claim or
litigation against or affecting any Loan Party contesting its right to sell or
use any such product, process, method, substance part or other material.
s. OWNERSHIP OF PROPERTY. SCHEDULE 4.19 sets forth all the real property
owned or leased by the Loan Parties and identifies the street address, the
current owner (and current record owner, if different) and whether such property
is leased or owned. The Loan Parties have good and marketable fee simple title
to or valid leasehold interests in all of such real property and good title to
all of their personal property subject to no Lien of any kind except Liens
permitted hereby. The Loan Parties enjoy peaceful and undisturbed possession
under all of their respective leases.
t. NO DEFAULT. No Loan Party or any of their Subsidiaries is in default
under or with respect to any agreement, instrument or undertaking to which it is
a party or by which it or any of its property is bound in any respect which
could result in a Material Adverse Effect. No Default or Event of Default
exists.
u. LICENSES, ETC. The Loan Parties have obtained and hold in full force
and effect, all franchises, licenses, permits, certificates, contracts,
certificates of compliance, topical reports, authorizations, qualifications,
accreditation, easements, rights of way and other rights, consents and approvals
(collectively, "APPROVALS") which are necessary for the operation of their
respective businesses as presently conducted. All material Approvals of the
Nuclear Regulatory Commission and all other Approvals material to the business
and operations of the business of the Borrower and its Subsidiaries are listed
on SCHEDULE 4.21 hereto.
v. COMPLIANCE WITH LAW. Each Loan Party and each of their Subsidiaries
is in compliance with all material laws, rules, regulations, orders, judgments,
writs and decrees.
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w. NO BURDENSOME RESTRICTIONS. No Loan Party nor any of their
Subsidiaries is a party to any agreement or instrument or subject to any other
obligation or any charter or corporate restriction or any provision of any
applicable law, rule or regulation which, individually or in the aggregate,
could have a Material Adverse Effect.
x. LABOR MATTERS. Except as set forth on SCHEDULE 4.24, there are no
collective bargaining agreements or Multiemployer Plans covering the employees
of the Borrower, any of its Subsidiaries or any of the Loan Parties, and none of
such Persons has suffered any strikes, walkouts, work stoppages or other
material labor difficulty within the last five years.
y. NUCLEAR INSURANCE MATTERS; ETC. All risks of the Borrower and its
Subsidiaries and their respective businesses and operations relating to nuclear
or radioactive materials (whether such risks arose with respect to the handling,
transportation or storage of such materials, engineering services or otherwise)
are insured (subject to standard and prudent deductibles) under the American
Nuclear Insurers "FACILITY FORM" policies of customers of the Borrower and its
Subsidiaries or the American Nuclear Insurers "SUPPLIER'S AND TRANSPORTER'S
FORM" policy currently maintained by the Borrower.
I. AFFIRMATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Tranche-B Closing
Date and until the Total Commitment has terminated, and the Obligations are paid
in full:
a. INFORMATION COVENANTS. The Borrower will furnish to each Bank:
i. QUARTERLY FINANCIAL STATEMENTS. Within forty five (45) days
after the close of each quarterly accounting period in each fiscal year of the
Borrower, the consolidated and consolidating balance sheet of the Borrower and
its Subsidiaries as at the end of such quarterly period and the related
consolidated and consolidating statements of income and consolidated statements
of cash flow and retained earnings for such quarterly period and for the elapsed
portion of the fiscal year ended with the last day of such quarterly period, and
in each case setting forth comparative figures for the related periods in the
prior fiscal year.
ii. ANNUAL FINANCIAL STATEMENT. Within ninety (90) days after the
close of each fiscal year of the Borrower, the consolidated and consolidating
balance sheet of the Borrower and its Subsidiaries as at the end of such fiscal
year and the related consolidated and consolidating statements of income and
consolidated statements of cash flow and retained earnings for such fiscal year,
setting forth comparative figures for the preceding fiscal year and, with
respect to such consolidated financial statements, certified without
qualification by Ernst & Young or other independent certified public accountants
of recognized national standing reasonably acceptable to the Required Banks, in
each case together with a report of such accounting firm stating that in the
course of its regular audit of the consolidated financial statements of the
Borrower, which audit was conducted in accordance with generally accepted
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auditing standards, such accounting firm has obtained no knowledge of any
Default or Event of Default, or if in the opinion of such accounting firm such a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.
iii. MONTHLY FINANCIAL STATEMENTS. Within thirty (30) days after the
end of each monthly reporting period in each fiscal year of the Borrower (or, in
the case of monthly reporting periods which end on the last day of a fiscal
quarter of the Borrower, within forty five (45) days of the end of each such
monthly reporting period), the consolidated and consolidating balance sheet of
the Borrower and its Subsidiaries as at the end of such monthly reporting period
and the related consolidated and consolidating statements of income and
consolidated statements of cash flow and retained earnings for such monthly
reporting period and for the elapsed portion of the fiscal year ended on the
last day of such monthly reporting period, and in each case setting forth
comparative figures for the related periods in the prior fiscal year.
iv. MANAGEMENT LETTERS. Promptly after the Borrower's receipt
thereof, a copy of any "MANAGEMENT LETTER" or other material report received by
the Borrower from its certified public accountants.
v. BUDGETS. For each fiscal year of the Borrower, within fifteen
(15) days of the approval of the Borrower's Board of Directors of the same (but
in no event later than January 15 of such fiscal year), a budget and financial
forecast of results of operations and sources and uses of cash (in form
satisfactory to the Required Banks and in any event on a monthly, quarterly and
annual basis and in a form comparable to the monthly, quarterly and annual
financial statements to be delivered by the Borrower with respect to each such
period pursuant to subsections (a), (b) and (c) above) prepared by the Borrower
for such fiscal year, accompanied by a written statement of the assumptions used
in connection therewith, together with a certificate of the chief financial
officer of the Borrower to the effect that such budget and financial forecast
and assumptions are reasonable and represent the Borrower's good faith estimate
of its future financial requirements and performance. The financial statements
required to be delivered pursuant to subsections (a), (b) and (c) above shall be
accompanied by a comparison of the actual financial results set forth in such
financial statements to those contained in the forecasts delivered pursuant to
this subsection (e) together with an explanation of any material variations from
the results anticipated in such forecasts.
vi. OFFICER'S CERTIFICATES. At the time of the delivery of the
financial statements under clauses (a), (b) and (c) above, a certificate of the
chief financial officer of the Borrower which certifies (x) that such financial
statements fairly present the financial condition and the results of operations
of the Borrower and its Subsidiaries on the dates and for the periods indicated,
subject, in the case of interim financial statements, to normally recurring
year-end adjustments and (y) that such officer has reviewed the terms of the
Loan Documents and has made, or caused to be made under his or her supervision,
a review in reasonable detail of the business and condition of the Borrower and
its Subsidiaries during the accounting period covered by such financial
statements, and that as a result of such review such officer has concluded that
no Default or Event of Default has occurred during the period commencing at the
beginning of
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the accounting period covered by the financial statements accompanied by such
certificate and ending on the date of such certificate or, if any Default or
Event of Default has occurred, specifying the nature and extent thereof and, if
continuing, the action the Borrower proposes to take in respect thereof. Such
certificate shall, in connection with the certificates required to be delivered
pursuant to clauses (a) and (b) above, set forth the calculations required to
establish whether the Borrower was in compliance with the provisions of
SECTION 6.1 during and as at the end of the accounting period covered by the
financial statements accompanied by such certificate.
vii. NOTICE OF DEFAULT OR LITIGATION. Immediately upon the occurrence
thereof, notice of (i) the occurrence of any Default or Event of Default,
(ii) any material litigation or governmental proceeding pending or threatened
against any Loan Party or any of their Subsidiaries and (iii) any other event,
act or condition which could result in a Material Adverse Effect.
viii. ERISA.
(1) As soon as possible and in any event within ten (10) days
after the Borrower or any member of its ERISA Controlled Group knows, or has
reason to know, that:
(i) any Termination Event with respect to a Plan has
occurred or will occur, or
(ii) any condition exists with respect to a Plan which
presents a material risk of termination of the Plan or imposition of an excise
tax or other liability on the Borrower or any member of its ERISA Controlled
Group, or
(iii) the Borrower or any member of its ERISA Controlled
Group has applied for a waiver of the minimum funding standard under Section 412
of the Code or Section 302 of ERISA, or
(iv) the Borrower or any member of its ERISA Controlled
Group has engaged in a "PROHIBITED TRANSACTION", as defined in Section 4975 of
the Code or as described in Section 406 of ERISA, that is not exempt under
Section 4975 of the Code and Section 408 of ERISA, or
(v) the aggregate present value of the Unfunded Benefit
Liabilities under all Plans has in any year increased by $10,000 or to an amount
in excess of $50,000, or
(vi) any condition exists with respect to a Multiemployer
Plan which presents a material risk of a partial or complete withdrawal (as
described in Section 4203 or 4205 of ERISA) by the Borrower or any member of its
ERISA Controlled Group from a Multiemployer Plan, or
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(vii) the Borrower or any member of its ERISA Controlled
Group is in "DEFAULT" (as defined in Section 4219(c)(5) of ERISA) with respect
to payments to a Multiemployer Plan, or
(viii) a Multiemployer Plan is in "REORGANIZATION" (as
defined in Section 418 of the Code or Section 4241 of ERISA) or is "INSOLVENT"
(as defined in Section 4245 of ERISA), or
(ix) any potential withdrawal liability (as determined in
accordance with Title IV of ERISA) of the Borrower and the members of its ERISA
Controlled Group with respect to all Multiemployer Plans (i) exists or (ii) at
any time after the notice provided for in clause (i) has been made, has in any
year increased by $10,000 or to an amount in excess of $50,000, or
(x) there is an action brought against the Borrower or any
member of its ERISA Controlled Group under Section 502 of ERISA with respect to
its failure to comply with Section 515 of ERISA,
a certificate of the president or chief financial officer of the Borrower
setting forth the details of each of the events described in clauses (A) through
(J) above as applicable and the action which the Borrower or the applicable
member of its ERISA Controlled Group proposes to take with respect thereto,
together with a copy of any notice or filing from the PBGC or which may be
required by the PBGC or other agency of the United States government with
respect to each of the events described in clauses (A) through (j) above, as
applicable.
(2) As soon as possible and in any event within two (2) Business
Days after the receipt by the Borrower or any member of its ERISA Controlled
Group of a demand letter from the PBGC notifying the Borrower or such member of
its ERISA Controlled Group of its final decision finding liability and the date
by which such liability must be paid, a copy of such letter, together with a
certificate of the president or chief financial officer of the Borrower setting
forth the action which the Borrower or such member of its ERISA Controlled Group
proposes to take with respect thereto.
ix. SEC FILINGS. Promptly upon transmission thereof, copies of all
prospectuses and regular and periodic financial information, proxy materials and
other information and reports, if any, which any Loan Party or any of their
Subsidiaries shall file with the Securities and Exchange Commission or any
governmental agencies substituted therefore or which any Loan Party or any of
their Subsidiaries shall send to its stockholders.
x. ENVIRONMENTAL. Promptly and in any event (i) within five (5)
Business Days after (A) the receipt by any Loan Party or any of its
Environmental Affiliates of any written communication from a governmental
authority that alleges that such Loan Party or Environmental Affiliate is not in
compliance with applicable Environmental Laws, (B) any Loan Party or any of its
Environmental Affiliates shall obtain actual knowledge that there exists
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(1) any Environmental Claim pending against such Loan Party or such
Environmental Affiliate or (2) any material Environmental Claim, to the
knowledge of any Loan Party, threatened against such Loan Party or such
Environmental Affiliate or (C) any release, emission, discharge or disposal of
any Material of Environmental Concern that could reasonably be likely to form
the basis of any material Environmental Claim against any Loan Party or any of
their Environmental Affiliates and (ii) within thirty (30) calendar days after
the receipt by any Loan Party or any of its Environmental Affiliates of any
written communication from a citizens group, employee or (other than as required
pursuant to (i)(A) above) otherwise, that alleges that such Loan Party or
Environmental Affiliate is not in compliance with applicable Environmental Laws,
a certificate of the chief executive officer or chief financial officer of the
Borrower specifying in detail the nature of such condition and the applicable
Loan Party's or Environmental Affiliate's proposed response thereto.
xi. OPERATING PERFORMANCE REPORT. Within thirty (30) days after the
end of each month, in each case in form and substance satisfactory to the Agent,
(i) a breakdown of operating revenue on a customer by customer basis prepared
for that month and the Borrower's fiscal year to date, and (ii) a report
detailing the breakdown for the Borrower and its Subsidiaries of operating
performance on a business segment basis prepared for that month and the fiscal
year to date, detailing revenues and operating profits.
xii. PRESS RELEASES. Concurrently with the dissemination thereof,
copies of all press releases distributed by the Borrower or any Subsidiary.
xiii. OTHER REPORTS. Within five (5) Business Days of the filing
thereof, copies of all reports filed by the Borrower or any of its Subsidiaries
with the Nuclear Regulatory Commission or any other governmental agency having
regulatory authority over the Borrower or any of its Subsidiaries.
xiv. CHANGE OF EXECUTIVE OFFICERS. Within five (5) Business Days of
the occurrence thereof, notice that Ray A. Fortney shall cease to be actively
employed as a senior executive officer of the Borrower.
xv. APPROVAL PROCEEDINGS. Within five (5) Business Days of its
receipt thereof, copies of any citation, order to show cause, or other legal
process or order that could have a Material Adverse Effect, directing the
Borrower or any of its Subsidiaries to become a party to or to appear at any
proceeding or hearing by or before any governmental agency or instrumentality or
any municipality or other agency or instrumentality which shall have granted to
Borrower or the Subsidiaries an Approval.
xvi. REVOCATION, ETC. OF APPROVALS. Within five (5) Business Days of
the occurrence thereof, notice of any (i) refusal or failure by any governmental
agency or instrumentality to renew or extend any material Approval,
(ii) proposed or actual revocation, termination, or modification (whether
favorable or adverse) of any material Approval, (iii) denial or threatened
denial or revocation or modification by any governmental agency or
instrumentality
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of any material Approval required by law, or (iv) notice from any governmental
agency or instrumentality with respect to any of the foregoing or with respect
to any proceeding or hearing which might result in any of the foregoing.
xvii. OTHER INFORMATION. From time to time, such other
information or documents (financial or otherwise) as any Bank may reasonably
request.
xviii. MONTHLY REPORTS. As soon as practicable and in any event
within fifteen (15) (as to clauses (i), (ii) and (iii), below) or thirty (30)
(as to clauses (iv) and (v), below) days, as applicable, after the end of each
month, a monthly Borrower-prepared report, including (i) as to the current
backlog under contracts with customers of the Borrower and its Subsidiaries as
of the last day of the immediately preceding month, (ii) a list of bids for new
customer contracts won, lost and currently outstanding made by the Borrower and
its Subsidiaries during the immediately preceding month, (iii) a list of
material contracts anticipated to be bid on by the Borrower or any of its
Subsidiaries within the next 6 months, including a description of each, (iv) a
monthly borrowing base projection for the current month for each working capital
line of credit available to the Borrower or any of its Subsidiaries and (v) a
comparison of the actual accounts receivables and available borrowing bases
under working capital lines of credit as of the last day of the immediately
preceding month against the accounts receivables and available borrowing bases
under working capital lines of credit projected for such date in the monthly
report delivered with respect to the prior month, in each case of the Borrower
and its Subsidiaries, with an explanation for any material variance.
xix. WEEKLY REPORTS. As soon as practicable and in any event by
Wednesday of each week, a weekly Borrower-prepared report, including (1) a
utilization report as to the hours charged by the Borrower and its Subsidiaries
for engineering services provided to customers during the immediately preceding
4 week period, (2) as to the Borrower's cash position, in the form of a daily
comparison of cash receipts against cash disbursements, including cash balance,
borrowings by the Borrower under the Receivables Facility and the availability
for additional borrowings under the Receivables Facility, for the immediately
preceding 2 week period, (3) as to the Borrower's projected cash position, in
the form of a daily comparison of cash receipts against cash disbursements,
including cash balance, borrowings by the Borrower under the Receivables
Facility and the availability for additional borrowings under the Receivables
Facility, for the current and next succeeding week and (4) as to the Capital
Expenditures made or incurred committed to be made or incurred (a) during the
immediately preceding week and (b) cumulatively since the beginning of the
current fiscal quarter.
b. BOOKS, RECORDS AND INSPECTIONS. The Borrower shall, and shall cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries in conformity with GAAP and all requirements of
law shall be made of all dealings and transactions in relation to its business
and activities. Subject to applicable regulations of the United States
Department of Energy and the United States Department of Defense, the Borrower
shall, and shall cause each of its Subsidiaries to, permit officers and
designated representatives of any Bank to visit and inspect any of the
properties of the Borrower or any of its Subsidiaries, and
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to examine the books of record and account of the Borrower or any of its
Subsidiaries, and discuss the affairs, finances and accounts of the Borrower or
any of its Subsidiaries with, and be advised as to the same by, its and their
officers and independent accountants, in each case as such Bank reasonably deems
necessary or desirable, upon reasonable notice and at such reasonable times as
such Bank may desire. The Borrower shall schedule an annual meeting with the
Banks attended by its senior officers convenient to each Bank, to discuss the
business, operations and financial results of the Borrower and its Subsidiaries.
c. MAINTENANCE OF INSURANCE. The Borrower shall, and shall cause each of
its Subsidiaries to, (a) maintain with financially sound and reputable insurance
companies insurance on itself and its properties in at least such amounts and
against at least such risks as are customarily insured against in the same
general area by companies engaged in the same or a similar business, which
insurance shall in any event not provide for less coverage than the insurance in
effect on the Tranche-B Closing Date (which coverage shall include at least
$10,000,000 in Director's & Officer's Liability coverage), (b) maintain the
Agent and the Banks as named additional insureds and loss payees in respect of
such insurance at least to the extent the Agent and the Banks are so named on
the Tranche-B Closing Date, (c) ensure that all risks of the Borrower and its
Subsidiaries and their respective businesses or operations relating to nuclear
or radioactive materials (whether such risks arise with respect to the handling,
transportation or storage of such materials, engineering activities or
otherwise) are insured (subject to standard and prudent deductibles) under the
American Nuclear Insurers "FACILITY FORM" policies of customers of the Borrower
and its Subsidiaries, under the American Nuclear Insurers "SUPPLIER'S AND
TRANSPORTER'S FORM" policy currently maintained by the Borrower or under other
coverages satisfactory to the Agent and the Banks and (d) furnish to each Bank
from time to time, upon written request, the policies under which such insurance
is issued, certificates of insurance and such other information relating to such
insurance as such Bank may request.
d. TAXES.
i. The Borrower shall pay or cause to be paid, and shall cause each
of its Subsidiaries to pay or cause to be paid, when due, all taxes, charges and
assessments and all other lawful claims required to be paid by the Borrower or
such Subsidiaries, except as contested in good faith and by appropriate
proceedings diligently conducted, if adequate reserves have been established
with respect thereto in accordance with GAAP and neither the Borrower's nor any
of its Subsidiaries' title to or right to use any of its properties or assets is
adversely affected by such nonpayment.
ii. The Borrower shall not, and shall not permit any of its
Subsidiaries to, file or consent to the filing of any consolidated tax return
with any Person (other than the Borrower and its Subsidiaries).
e. CORPORATE FRANCHISES. The Borrower shall, and shall cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its patents, trademarks, service
marks, trade names, copyrights,
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franchises, licenses, permits, certificates, authorizations, qualifications,
accreditation, easements, rights of way and other rights, consents and
approvals.
f. COMPLIANCE WITH LAW. The Borrower shall, and shall cause each of its
Subsidiaries to, comply with all applicable laws, rules, statutes, regulations,
decrees and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of their
business and the ownership of their property, including, without limitation, all
Environmental Laws.
g. PERFORMANCE OF OBLIGATIONS. The Borrower shall, and shall cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, debt instrument, lease, undertaking and
contract by which it or any of its properties is bound or to which it is a
party.
h. MAINTENANCE OF PROPERTIES. The Borrower shall, and shall cause each
of its Subsidiaries to, ensure that its properties used or useful in its
business are kept in good repair, working order and condition, normal wear and
tear excepted.
i. ADDITIONAL COLLATERAL.
i. Concurrently with the consummation of any acquisition of assets
or properties (including, without limitation, the capital stock (or other
instruments or securities evidencing ownership) of any Person) by the Borrower
or its Subsidiaries or the formation of any new Subsidiary of the Borrower, the
Borrower shall:
(1) in the case of an acquisition of capital stock of any Person
by the Borrower or any Subsidiary of the Borrower or the formation of a new
Subsidiary of the Borrower: (A) if a Subsidiary of the Borrower is the acquiror
of such capital stock or other instruments or securities evidencing ownership
and such Subsidiary is not then a party to the Subsidiary Pledge Agreement,
cause such Subsidiary to deliver to the Agent a duly executed counterpart
signature page to the Subsidiary Pledge Agreement, in the form attached thereto
as Annex I, together with the authorization to the Agent and the Banks to attach
such signature pages to the Subsidiary Pledge Agreement, (B) deliver or cause to
be delivered to the Agent all of the certificates representing the capital stock
or other instruments or securities evidencing ownership so acquired or of such
newly created Subsidiary as additional collateral for the Obligations, to be
held by the Agent in accordance with the terms of the Pledge Agreement or a
Subsidiary Pledge Agreement, as the case may be and (C) cause any new Subsidiary
which is being acquired or formed to deliver to the Agent (1) duly executed
counterpart signature pages to each of the Guaranty, the Subsidiary Security
Agreement and the Intercompany Security Agreement, in the forms attached
respectively thereto as Annex I, together with the authorization to the Agent
and the Banks to attach such signature pages to the Guaranty, the Subsidiary
Security Agreement and the Intercompany Security Agreement, respectively, (2) a
duly executed Intercompany Demand Note, which note shall have been indorsed in
blank by the Borrower, (3) if such Subsidiary owns any capital stock or other
instruments or securities evidencing
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ownership of any other Person, a duly executed counterpart signature page to the
Subsidiary Pledge Agreement in the form attached thereto as Annex I, together
with the authorization to the Agent and the Banks to attach such signature page
to the Subsidiary Pledge Agreement, and deliver certificates evidencing such
capital stock, instruments or securities to the Agent together with stock powers
duly executed in blank, (4) if such Subsidiary owns any registered trademarks or
owns any patents or owns or exclusively licenses and registered copyrights, a
duly executed counterpart signature page to the Subsidiary Intellectual Property
Security Agreement in the form attached thereto as Annex I, together with the
authorization to the Agent and the Banks to attach such signature page to the
Subsidiary Intellectual Property Security Agreement, (5) such Uniform Commercial
Code financing statements as shall be required to perfect the security interest
of the Agent and the Banks in the Collateral being pledged by such new
Subsidiary pursuant to the Subsidiary Security Agreement and (6) unless
otherwise agreed to in writing by the Required Banks, a Mortgage on each parcel
of real property owned by any Subsidiary so acquired or created, together with
such title insurance policies, surveys and appraisals as the Required Banks may
have reasonably requested;
(2) in the case of an acquisition of assets by the Borrower or
any Subsidiary, deliver or cause to be delivered by the Borrower or such
Subsidiary acquiring such assets, such Uniform Commercial Code financing
statements as shall be required to perfect the security interest of the Agent
and the Banks in the assets being so acquired and unless otherwise agreed to in
writing by the Required Banks, a Mortgage on each parcel of real property so
acquired together with such title insurance policies, surveys and appraisals as
the Required Banks may have reasonably requested; and
(3) in any case, provide such other documentation, including,
without limitation, one or more opinions of counsel reasonably satisfactory to
the Required Banks, articles of incorporation, bylaws and resolutions, which in
the reasonable opinion of the Required Banks is necessary or advisable in
connection with such acquisition or formation of such new Subsidiary.
ii. Concurrently with the construction or acquisition by the Borrower
or any of its Subsidiaries of any railcars or other rolling stock, the Borrower
or such Subsidiary shall deliver to the Agent such Interstate Commerce
Commission filings and recordings (each duly executed and delivered by the
Borrower or such Subsidiary, as appropriate) deemed necessary by the Agent to
evidence the Lien granted to the Agent in such railcars or rolling stock.
iii. Nothing contained in this SECTION 5.9 shall be construed to
permit any acquisition or the creation of any Subsidiary which is otherwise
prohibited by the terms of this Agreement or any other Loan Document.
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J. NEGATIVE COVENANTS.
The Borrower covenants and agrees that on and after the Tranche-B Closing
Date until the Total Commitment has terminated, and the Obligations are paid in
full:
a. FINANCIAL COVENANTS.
i. LEVERAGE RATIO. The Borrower shall not permit the ratio of
(i) Consolidated Total Indebtedness at the end of any fiscal quarter of the
Borrower during the periods set forth below to (ii) EBITDA of the Borrower and
its Subsidiaries for the four fiscal quarters of the Borrower then ended (taken
as one accounting period) (the "LEVERAGE RATIO") to exceed the ratio set forth
opposite such period; PROVIDED, HOWEVER, that calculations of the Leverage Ratio
shall specifically exclude the effect of any one time charges, write-offs or
adjustments relating to severance and restructuring costs incurred during the
Borrower's fiscal year ended January 2, 1995 up to an aggregate amount not to
exceed $3,427,000 and any one time severance costs, write-downs and write-offs
associated with the sale of the Plant Services Assets pursuant to the Plant
Services Purchase Agreement to an aggregate amount not to exceed $3,885,000:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 3.00 : 1.0
10/2/95 - 12/31/95 2.40 : 1.0
1/1/96 - Tranche-A Maturity Date 1.50 : 1.0
ii. INTEREST COVERAGE RATIO. The Borrower shall not permit the ratio of
EBITDA to Consolidated Interest Expense for the four fiscal quarters ending on
the last day of any fiscal quarter of the Borrower ending during any period set
forth below, to be less than the ratio set forth opposite such period; PROVIDED,
HOWEVER, calculations of the Interest Coverage Ratio shall specifically exclude
the effect of any one time charges, write-offs or adjustments relating to
severance and restructuring costs incurred during the Borrower's fiscal year
ended January 2, 1995 up to an aggregate amount not to exceed $3,427,000 and any
one time severance costs, write-downs and write-offs associated with the sale of
the Plant Services Assets pursuant to the Plant Services Purchase Agreement to
an aggregate amount not to exceed $3,885,000:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 4.45 : 1.0
10/2/95 - Tranche-A Maturity Date 5.00 : 1.0
48.
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iii. FIXED CHARGE COVERAGE RATIO. The Borrower shall not permit the
ratio of Earnings Available for Fixed Charges to Fixed Charges for the four
fiscal quarters of the Borrower ending on the last day of any fiscal quarter of
the Borrower ended during any period set forth below, to be less than the ratio
set forth opposite such period; PROVIDED, HOWEVER, calculations of the Fixed
Charge Coverage Ratio shall specifically exclude the effect of any one time
charges, write-offs or adjustments relating to severance and restructuring costs
incurred during the Borrower's fiscal year ended January 2, 1995 up to an
aggregate amount not to exceed $3,427,000 and any one time severance costs,
write-downs and write-offs associated with the sale of the Plant Services Assets
pursuant to the Plant Services Purchase Agreement to an aggregate amount not to
exceed $3,885,000:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 1.10 : 1.0
10/2/95 - 12/31/95 1.20 : 1.0
1/1/96 - 3/31/96 1.30 : 1.0
4/1/96 - 6/30/96 1.35 : 1.0
7/1/96 - 9/29/96 1.40 : 1.0
9/30/96 - 12/29/96 1.45 : 1.0
12/30/96- Tranche-A Maturity Date 1.50 : 1.0
iv. MINIMUM CONSOLIDATED NET WORTH. The Borrower shall not permit
Consolidated Net Worth at any time to be less than the sum of (i) $30,000,000
plus (ii) fifty percent of the cumulative amount of Consolidated Net Income for
each fiscal quarter (to the extent that the same is a positive number) of the
Borrower ending after January 7, 1994.
v. CAPITAL EXPENDITURES. The Borrower shall not make or incur (or
commit to make or incur) and shall not permit any of its Subsidiaries to make or
incur (or commit to make or incur) any Capital Expenditures, except Capital
Expenditures of the Borrower and its Subsidiaries during any of the periods set
forth below not to exceed in the aggregate the amount set forth opposite such
period:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 $ 800,000
10/2/95 - 12/31/95 $ 400,000
49.
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1/1/96 - 12/29/96 $5,000,000
12/30/96 - 12/28/97 $5,000,000
12/29/97 - 1/3/99 $5,000,000
Amounts permitted for Capital Expenditures during any of the Borrower's fiscal
quarters ending July 2 or October 1, 1995 but not utilized during such quarter
may be rolled over and used in the next succeeding fiscal quarter; PROVIDED that
no such unutilized amounts may be rolled over and utilized beyond December 31,
1995.
b. INDEBTEDNESS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume, suffer to exist or otherwise become or
remain directly or indirectly liable with respect to, any Indebtedness, other
than:
i. Indebtedness hereunder and under the other Loan Documents;
ii. Indebtedness outstanding on the Tranche-B Closing Date and set
forth on SCHEDULE 6.2 hereto;
iii. Indebtedness permitted under SECTION 6.6;
iv. Indebtedness of the Borrower of the type described in clause
(viii) of the definition of Indebtedness to the extent that the incurrence of
the same has been approved in writing by the Required Banks;
v. Indebtedness with respect to Capital Leases and other purchase
money indebtedness, in each case incurred to finance Capital Expenditures
permitted under SECTION 6.1, not in excess of $500,000 in the aggregate at any
one time outstanding; provided that any such Indebtedness shall not exceed 80%
of the lesser of the purchase price or the fair market value of the asset so
financed;
vi. Indebtedness of Receivableco to the Receivableco Banks under the
Receivables Facility Documents;
vii. Indebtedness of Receivableco to GSI or Services that is evidenced
by a Receivables Note;
viii. Indebtedness of the Borrower to its Subsidiaries;
ix. (i) Indebtedness of wholly-owned Subsidiaries of the Borrower
(other than VECTRA (U.K.) and Provident) to the Borrower incurred for working
capital purposes solely in connection with the cash management system of the
Borrower as in effect on the Tranche-B Closing Date provided that each such
Subsidiary has duly executed and delivered an
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Intercompany Demand Note and the Intercompany Security Agreement and provided
further that such Intercompany Demand Note has been duly indorsed in blank by
the Borrower and delivered to the Agent as collateral security for the
Obligations pursuant to the Pledge Agreement and (ii) Indebtedness of Services
to the Borrower permitted under SECTION 6.8(i);
x. Indebtedness of VECTRA (U.K.) incurred by VECTRA (U.K.) in an
aggregate amount not to exceed L500,000; and
xi. other unsecured Indebtedness of the Borrower and its Subsidiaries
(other than Provident and VECTRA (U.K.)) created, incurred or assumed after the
date hereof not enumerated in clauses (a) through (j) above which is
subordinated to the Obligations on terms and conditions satisfactory to each
Bank and which is otherwise satisfactory in form and substance to each Bank;
PROVIDED that the aggregate outstanding principal amount of such Indebtedness
shall not exceed $2,000,000 at any one time outstanding.
c. LIENS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist, directly or
indirectly, any Lien on any of its property now owned or hereafter acquired,
other than the following (collectively, "PERMITTED LIENS"):
i. Liens existing on the Tranche-B Closing Date and set forth on
SCHEDULE 6.3 hereto;
ii. Liens for taxes not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate reserves are being maintained in accordance with GAAP;
iii. Statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen and other Liens imposed by Law (other than any Lien
imposed by ERISA or pursuant to any Environmental Law) created in the ordinary
course of business for amounts not yet due or which are being contested in good
faith by appropriate proceedings diligently conducted and with respect to which
adequate bonds have been posted;
iv. Liens (other than any Lien imposed by ERISA or pursuant to any
Environmental Law) incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts,
performance and return of money bonds and other similar obligations (exclusive
of obligations for the payment of borrowed money);
v. Easements, rights of way, zoning and similar restrictions and
other similar charges or encumbrances not interfering with the ordinary conduct
of the business of the Borrower or any of its Subsidiaries and which do not
detract materially from the value of the property to which they attach or impair
materially the use thereof by the Borrower or any of its
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Subsidiaries or materially adversely affect the security interests of the Agent
or the Banks therein;
vi. Liens granted to the Agent for the benefit of the Banks pursuant
to the Security Documents securing the Obligations;
vii. Liens on the accounts receivable of VECTRA (U.K.) which secure
the Indebtedness permitted pursuant to SECTION 6.2(j);
viii. Cash collateralization of letters of credit permitted under
SECTION 6.6(d);
ix. Liens on the Purchased Assets created pursuant to the Receivables
Facility Documents;
x. Liens created pursuant to Capital Leases and to secure other
purchase money Indebtedness permitted pursuant to SECTION 6.2(e), provided that
such Liens are only in respect of the property or assets subject to, and secure
only, the respective Capital Lease or other purchase money Indebtedness; and
xi. Liens granted to AFCO in the unearned premiums and dividends
which may become payable under the insurance policies financed by AFCO and loss
payments under such policies which reduce the unearned premiums, provided such
Lien in the loss payments is expressly subject to the interest of any mortgagee
or loss payee under such policies.
d. RESTRICTION ON FUNDAMENTAL CHANGE.
i. The Borrower shall not, and shall not permit any of its
Subsidiaries to, in each case without the prior written consent of the Required
Banks, enter into any merger or consolidation, or liquidate, windup or dissolve
(or suffer any liquidation or dissolution), discontinue its business or convey,
lease, sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or any substantial part of its business or property, whether
now or hereafter acquired, except as otherwise permitted under SECTION 6.5.
ii. The Borrower shall not, and shall not permit any of its
Subsidiaries to, (i) acquire by purchase or otherwise any property or assets of,
or stock or other evidence of beneficial ownership of, any Person, except
purchases of inventory, equipment, materials and supplies in the ordinary course
of Borrower's or such Subsidiary's business, (ii) create any Subsidiary, or
(iii) enter into any partnership or joint venture, PROVIDED, that the Borrower
or its Subsidiaries may enter into the Permitted Joint Venture if their
investment therein is permitted under SECTION 6.8(e) hereof and that Waste
Services may be merged into Services, with Services being the survivor.
iii. Borrower shall not and shall not permit any of its Subsidiaries
to, amend its certificate of incorporation or bylaws.
52.
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e. SALE OF ASSETS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, convey, lease, sell, transfer or otherwise dispose of (or
agree to do so at any future time) all or any part of its property or assets,
except (i) [sales of inventory in the ordinary course of business, (ii) the
Borrower, GSI and Services may sell the Purchased Assets to Receivableco
pursuant to the terms of the respective Receivables Agreements and (iii)] sales
of long-term assets to the extent that the net proceeds of such sales, in excess
of $200,000, in the aggregate, from and after the Tranche-B Closing Date, are
used solely to prepay principal amounts outstanding under the Loans, which
amounts shall be prepaid within two (2) Business Days of receipt thereof by the
Borrower and applied in inverse order to the scheduled installments for
repayment of the Loans. For purposes of this covenant, seventy five percent
(75%) of any net proceeds received from the sale of the Recytek Option shall be
excluded from the calculation of net proceeds required to be applied to prepay
the principal amount outstanding under the Loans.
f. CONTINGENT OBLIGATIONS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, create or become or be liable with respect to any
Contingent Obligation, except:
i. pursuant to the Guaranty or the Security Documents;
ii. Contingent Obligations which are in existence on the Tranche-B
Closing Date and which are set forth on SCHEDULE 6.6;
iii. reimbursement obligations with respect to appeal, tender, bid and
performance bonds posted by reputable bonding companies on behalf of the
Borrower and its Subsidiaries supporting obligations of the Borrower and its
Subsidiaries arising in the ordinary course of their respective businesses;
iv. the Borrower may, in the ordinary course of its business, enter
into guaranties of the performance of obligations of its Subsidiaries under
contracts entered into by its Subsidiaries in the ordinary course of business
with their respective customers; provided, that no such performance guaranty
shall (i) support obligations of Subsidiaries for the payment of money or the
performance of any other financial obligation of any Subsidiary or
(ii) otherwise constitute an obligation described in clauses (i) through (iv),
inclusive, of the definition of Contingent Obligations;
v. reimbursement obligations under letters of credit in an amount
not to exceed $2,000,000 at any one time outstanding; and
vi. indemnity obligations of the Borrower and Services arising under
the terms of the Plant Services Purchase Agreement.
g. DIVIDENDS. The Borrower shall not, and shall not permit any of its
Subsidiaries to, declare or pay any dividends (other than dividends payable
solely in common stock), or
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return any capital to, its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its stockholders as
such, or redeem, retire, purchase or otherwise acquire, directly or indirectly,
any shares of any class of its capital stock now or hereafter outstanding (or
any options or warrants issued with respect to its capital stock), or set aside
any funds for any of the foregoing purposes (all the foregoing "DIVIDENDS"),
other than Dividends paid to the Borrower or any of its Subsidiaries by any of
its wholly-owned Subsidiaries.
h. ADVANCES, INVESTMENTS AND LOANS. The Borrower shall not, and shall
not permit any of its Subsidiaries to, lend money or credit or make advances to
any Person, or directly or indirectly purchase or acquire any stock, obligations
or securities of, or any other interest in, or make any capital contribution to
any Person, except that the following shall be permitted:
i. accounts receivable owned by the Borrower and its Subsidiaries,
if created in the ordinary course of the business of the Borrower and its
Subsidiaries and payable or dischargeable in accordance with customary trade
terms;
ii. loans and advances to the Borrower by any of its Subsidiaries and
loans and advances evidenced by the Receivables Notes;
iii. loans and advances made by the Borrower to its wholly-owned
Subsidiaries to the extent that the Indebtedness of such Subsidiaries to the
Borrower is permitted under SECTION 6.2(i)(a) hereof;
iv. investments existing on the Tranche-B Closing Date and identified
on SCHEDULE 6.8 hereof;
v. a onetime contribution of assets constituting the technology set
forth on SCHEDULE 1.1 hereto and the assets and infrastructure of the waste
services line of business of Services to the Permitted Joint Venture on terms
and subject to documentation reasonably satisfactory to the Agent, PROVIDED that
no such contribution or investment shall be permitted hereunder unless
immediately before and immediately after the making of such contribution or
investment no Default or Event of Default shall have occurred and be continuing;
vi. loans and advances by the Borrower and its Subsidiaries to their
employees in the ordinary course of its business not exceeding $200,000 in the
aggregate at any one time outstanding;
vii. the Borrower and its Subsidiaries may acquire and hold Cash
Equivalents;
viii. capital contributions made by the Borrower to Receivableco
pursuant to and in accordance with the terms of the Receivables Purchase
Agreement;
54.
<PAGE>
ix. loans made by the Borrower to Services the proceeds of which are
contemporaneously used by Services to purchase capital assets; provided that
such loan is evidenced by a promissory note substantially in the form of
EXHIBIT C hereto (each, an "INTERCOMPANY ACQUISITION DEMAND NOTE") and PROVIDED
FURTHER, that such note has been pledged and delivered to the Agent pursuant to
the terms of the Pledge Agreement, indorsed in blank;
x. acquisitions other than by Waste Services of capital stock or
assets of other Persons for cash in an aggregate amount not to exceed $1,000,000
during any fiscal year of the Borrower; and
xi. acquisitions other than Waste Services of capital stock or assets
of other Persons the consideration for which consists solely of the common stock
of the Borrower in an aggregate amount not to exceed $2,000,000 during any
fiscal year of the Borrower.
i. TRANSACTIONS WITH AFFILIATES. The Borrower shall not, and shall not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate, other than on terms and conditions substantially as favorable to
the Borrower or such Subsidiary as would be obtainable at the time in a
comparable arm's length transaction with a Person other than an Affiliate.
j. LIMITATION ON VOLUNTARY PATENTS AND MODIFICATIONS OF CERTAIN
DOCUMENTS. The Borrower shall not and shall not permit any of its Subsidiaries
to, without the prior written consent of the Required Banks (a) make any sinking
fund payment or voluntary or optional Payment or Prepayment on or redemption or
acquisition for value of (including, without limitation, by way of depositing
with the trustee with respect thereto money or securities before due for the
purpose of paying when due) or exchange of any Indebtedness other than the
Indebtedness hereunder and under the other Loan Documents, or (b) amend, modify
or waive, or permit the amendment, modification or waiver of, any provision of
any Receivables Note, any Receivables Agreement or any of the Receivables
Facility Documents.
k. CHANGES IN BUSINESS. The Borrower shall not, and shall not permit any
of its Subsidiaries to (a) sell or otherwise dispose of any of their respective
lines of business or (b) enter into any business which is different in any
material respect from that conducted by the Borrower or such Subsidiary (other
than in connection with the Permitted Joint Venture), as the case may be, on the
Tranche-B Closing Date.
l. CERTAIN RESTRICTIONS. The Borrower shall not, and shall not permit
any of its Subsidiaries or any Person controlling the Borrower to, enter into
any agreement which restricts the ability of the Borrower or any of its
Subsidiaries to (a) enter into amendments, modifications or waivers of the Loan
Documents, (b) sell, transfer or otherwise dispose of its assets, (c) create,
incur, assume or suffer to exist any Lien upon any of its property, (d) create,
incur, assume, suffer to exist or otherwise become liable with respect to any
Indebtedness, or (e) pay any Dividend, provided that Capital Leases or
agreements governing purchase money Indebtedness
55.
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which contain restrictions of the types referred to in clauses (b) or (c) with
respect to the property covered thereby and restrictions contained in the
Receivables Facility Documents shall be permitted.
m. LEASE PAYMENTS. The Borrower shall not, and shall not permit any of
its Subsidiaries to, incur, assume or suffer to exist, any obligation for
payments under Operating Leases whether for real or personal or mixed property
(including, without limitation, rental payments and payments of taxes
thereunder), except that the Borrower and its Subsidiaries may incur rental
payment obligations not to exceed in the aggregate during each fiscal year
specified below the amount set forth opposite such fiscal year:
<TABLE>
<CAPTION>
FISCAL YEAR AMOUNT
<S> <C>
1995 $7,200,000
1996 and thereafter $7,900,000
</TABLE>
n. SALES AND LEASEBACKS. The Borrower shall not, and shall not permit
any of its Subsidiaries to, become liable, directly or indirectly, with respect
to any lease, whether an operating lease or a Capital Lease, of any property
(whether real or personal or mixed) whether now owned or hereafter acquired,
(i) which the Borrower or such Subsidiary has sold or transferred or is to sell
or transfer to any other Person, or (ii) which the Borrower or such Subsidiary
intends to use for substantially the same purposes as any other property which
has been or is to be sold or transferred by the Borrower or such Subsidiary to
any other Person in connection with such Lease.
o. PLANS. The Borrower shall not, nor shall it permit any member of its
ERISA Controlled Group to, take any action which would increase the aggregate
present value of the Unfunded Benefit Liabilities under all Plans to an amount
in excess of $100,000.
p. FISCAL YEAR; FISCAL QUARTER. Except as disclosed to the Agent and the
Banks prior to the Tranche-B Closing Date, the Borrower shall not, and shall not
permit any of its Subsidiaries to, change its fiscal year or any of its fiscal
quarters.
q. PROVIDENT. Notwithstanding anything contained in this Agreement or
any Loan Document to the contrary, the Borrower shall not permit Provident to
make, incur or suffer to exist and Indebtedness, Liens, loans, investments
(other the Cash Equivalents) or acquisitions or otherwise enter into any
transactions other than the provision of insurance to the Borrower and its
Subsidiaries in the ordinary course of business and consistent with past
practices.
r. SOURCE OF REPAYMENT OF TRANCHE-B LOANS. The Borrower shall not, and
shall not permit any of its Subsidiaries, whether directly or indirectly, to
apply and proceeds of any loans advanced by the Receivableco Banks under the
Receivables Facility to repay or prepay the Tranche-B Loans.
56.
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K. EVENTS OF DEFAULT.
a. EVENTS OF DEFAULT. Each of the following events, acts, occurrences or
conditions shall constitute an Event of Default under this Agreement, regardless
of whether such event, act, occurrence or condition is voluntary or involuntary
or results from the operation of law or pursuant to or as a result of compliance
by any Person with any judgment, decree, order, rule or regulation of any court
or administrative or governmental body:
i. FAILURE TO MAKE PAYMENTS. The Borrower shall default in the
payment when due of any principal of the Loans, interest, Fees, including,
without limitation, the payment of the deferred $150,000 Tranche-B Closing Fee
when due, or other amounts owing hereunder.
ii. FAILURE TO MAKE PAYMENTS DUE UNDER THE ENVIRONMENTAL ESCROW
AGREEMENT. The Borrower fails to make the payment of $1,100,000 due from
disbursements due under the Environmental Escrow Agreement on or prior to
November 30, 1995.
iii. BREACH OF REPRESENTATION OR WARRANTY. Any representation or
warranty made by any Loan Party herein or in any other Loan Document or in any
certificate or statement delivered pursuant hereto or thereto shall prove to be
false or misleading in any material respect on the date as of which made or
deemed made.
iv. BREACH OF COVENANTS.
(1) The Borrower shall fail to perform or observe any agreement,
covenant or obligation arising under SECTION 6 or SECTIONS 5.1(c), (e), (f) OR
(g), 5.4, 5.5 OR 5.9.
(2) The Borrower shall fail to perform or observe any agreement,
covenant or obligation contained herein (except for those contained in
subsections (a), (b) and (c)(i), above), and such failure shall continue for
five (5) Business Days.
(3) Any Loan Party shall fail to perform or observe any
agreement, covenant or obligation arising under any provision of the Loan
Documents other than this Agreement, which failure shall continue after the end
of the applicable grace period, if any, provided therein.
v. DEFAULT UNDER OTHER AGREEMENTS. Any Loan Party or any of their
Subsidiaries shall default in the payment when due (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise) of any amount
owing in respect of any Indebtedness (other than the Obligations) in the
aggregate principal amount of $100,000 or more; or any Loan Party or any of
their Subsidiaries shall default in the performance or observance of any
obligation or condition with respect to any such Indebtedness or any other event
shall occur or condition exist, if the effect of such default, event or
condition is to accelerate the maturity of any such Indebtedness or to permit
(without regard to any required notice or lapse of time) the holder or holders
thereof, or any trustee or agent for such holders, to accelerate the maturity of
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any such Indebtedness, or any such Indebtedness or portion thereof shall become
or be declared to be due and payable prior to its stated maturity other than as
a result of a regularly scheduled payment.
vi. BANKRUPTCY, ETC. (i) Any Loan Party shall commence a voluntary
case concerning itself under the Bankruptcy Code; or (ii) an involuntary case is
commenced against any Loan Party and the petition is not controverted within ten
(10) days, or is not dismissed within thirty (30) days, after commencement of
the case; or (iii) a custodian (as defined in the Bankruptcy Code) is appointed
for, or takes charge of, all or substantially all of the property of any Loan
Party or any Loan Party commences any other proceedings under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to any Loan Party or there is commenced against any
Loan Party any such proceeding which remains undismissed for a period of thirty
(30) days; or (iv) any order of relief or other order approving any such case or
proceeding is entered; or (v) any Loan Party is adjudicated insolvent or
bankrupt; or (vi) any Loan Party suffers any appointment of any custodian or the
like for it or any substantial part of its property to continue undischarged or
unstayed for a period of thirty (30) days; or (vii) any Loan Party makes a
general assignment for the benefit of creditors; or (viii) any Loan Party shall
fail to pay, or shall state that it is unable to pay, or shall be unable to pay,
its debts generally as they become due; or (ix) any Loan Party shall call a
meeting of its creditors with a view to arranging a composition or adjustment of
its debts; or (x) any Loan Party shall by any act or failure to act consent to,
approve of or acquiesce in any of the foregoing; or (xi) any corporate action is
taken by any Loan Party for the purpose of effecting any of the foregoing.
vii. ERISA. (i) Any Termination Event shall occur, or (ii) any Plan
shall incur an "ACCUMULATED FUNDING DEFICIENCY" (as defined in Section 412 of
the Code or Section 302 of ERISA), whether or not waived or (iii) the Borrower
or a member of its ERISA Controlled Group shall have engaged in a transaction
which is prohibited under Section 4975 of the Code or Section 406 of ERISA which
could result in the imposition of liability in excess of $100,000 on the
Borrower or any member of its ERISA Controlled Group, or (iv) the Borrower or
any member of its ERISA Controlled Group shall fail to pay when due an amount
which it shall have become liable to pay to the PBGC, any Plan or a trust
established under Title IV of ERISA, or (v) a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that an ERISA
Plan must be terminated or have a trustee appointed to administer any ERISA
Plan, or (vi) the Borrower or a member of its ERISA Controlled Group suffers a
partial or complete withdrawal from a Multiemployer Plan or is in "DEFAULT" (as
defined in Section 4219(c)(5) of ERISA) with respect to payments to a
Multiemployer Plan, or (vii) a proceeding shall be instituted against the
Borrower or any member of its ERISA Controlled Group to enforce Section 515 of
ERISA, or (viii) any other event or condition shall occur or exist with respect
to any Plan which could subject the Borrower or any member of its ERISA
Controlled Group to any tax, penalty or other liability in excess of $100,000.
viii. SECURITY DOCUMENTS. Any of the Security Documents shall for
any reason cease to be in full force and effect, or shall cease to give the
Agent the Liens, rights,
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powers and privileges purported to be created thereby including, without
limitation, a perfected first priority security interest in, and Lien on, all of
the Collateral in accordance with the terms thereof (to the extent such
perfection or priority is required by covenant, representation or otherwise by
the terms of such Security Documents).
ix. GUARANTY. The Guaranty or any provision thereof shall cease to
be in full force and effect, or any Guarantor or any Person acting by or on
behalf of any Guarantor shall deny or disaffirm all or any portion of such
Guarantor's obligations under such Guaranty.
x. CHANGE OF CONTROL ETC. A Person or a group of Persons acting in
concert shall beneficially own and control at least a majority of the issued and
outstanding shares of each class of capital stock of the Borrower entitled
(without regard to the occurrence of any contingency) to vote for the election
of members of the board of directors of the Borrower.
xi. JUDGMENTS. One or more judgments or decrees in an aggregate
amount of $100,000 or more shall be entered by a court or courts of competent
jurisdiction against the Loan Parties (other than any judgment as to which, and
only to the extent, a reputable insurance company has acknowledged coverage of
such claim in writing) and (i) any such judgments or decrees shall not be
stayed, discharged, paid, bonded or vacated within thirty (30) days or
(ii) enforcement proceedings shall be commenced by any creditor on any such
judgments or decrees.
xii. ENVIRONMENTAL MATTERS. (i) Any Environmental Claim shall have
been asserted against any Loan Party or any Environmental Affiliate thereof
which could reasonably be expected to have a Material Adverse Effect, (ii) any
release, emission, discharge or disposal of any Material of Environmental
Concern shall have occurred, and such event could form the basis of an
Environmental Claim against any Loan Party or any Environmental Affiliate
thereof which, if determined adversely, could have a Material Adverse Effect, or
(iii) any Loan Party or its Environmental Affiliate shall have failed to obtain
any Environmental Approval Necessary for the management, use, control,
ownership, or operation of its business, property or assets or any such
Environmental Approval shall be revoked, terminated, or otherwise cease to be in
full force and effect, in each case, if the existence of such condition could
have a Material Adverse Effect.
xiii. REGULATORY. Any refusal or failure of any governmental
agency or instrumentality to issue or renew any Approval shall occur, or any
forfeiture or revocation of any Approval shall occur, or any restrictions shall
be placed on any Approval if such refusal, failure, forfeiture, revocation or
restriction could reasonably be expected to have a Material Adverse Effect.
b. RIGHTS AND REMEDIES. Upon the occurrence of any Event of Default
described in SECTION 7.1(e), the Commitments shall automatically and immediately
terminate and the unpaid principal amount of and any and all accrued interest on
the Loans and any and all accrued Fees and other Obligations shall automatically
become immediately due and payable, with all additional interest from time to
time accrued thereon and without presentation, demand, or
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protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and notice of acceleration), all of which are hereby expressly
waived by Borrower, and the obligation of each Bank to make any Loan hereunder
shall thereupon terminate; and upon the occurrence and during the continuance of
any other Event of Default, the Agent shall at the request, or may with the
consent, of the Required Banks, by written notice to Borrower, (i) declare that
the Commitments are terminated, whereupon the Commitments and the obligation of
each Bank to make any Loan hereunder shall immediately terminate, and
(ii) declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loans and any and all accrued Fees and other Obligations to be,
and the same shall thereupon be, immediately due and payable with all additional
interest from time to time accrued thereon and without presentation, demand, or
protest or other requirements of any kind (including, without limitation,
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate and notice of acceleration), all of which are hereby expressly
waived by Borrower.
L. THE AGENT.
a. APPOINTMENT. Each Bank, in its capacity as a Bank, and, if such Bank
shall become an Interest Rate Provider, in its capacity as an Interest Rate
Provider, and the Managing Agent hereby irrevocably designates and appoints
Banque Paribas as the Agent of such Bank (in its capacity as a Bank and, if
applicable, as an Interest Rate Provider) or the Managing Agent, as the case may
be, under this Agreement and each of the other Loan Documents and each Bank
hereby appoints Banque Nationale de Paris as the Managing Agent of such Bank
under this Agreement, and each such Bank and the Managing Agent irrevocably
authorizes Banque Paribas as the Agent for it, to take such action on its behalf
under the provisions of this Agreement and each other Loan Document and to
exercise such powers and perform such duties as are expressly delegated to the
Agent by the terms of this Agreement and each other Loan Document, together with
such other powers as are reasonably incidental thereto. Notwithstanding any
provision to the contrary elsewhere in this Agreement, neither the Agent nor the
Managing Agent shall have any duties or responsibilities, except those expressly
set forth herein, or any fiduciary relationship with any Bank, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities on
the part of the Agent or Managing Agent shall be read into this Agreement or
otherwise exist against the Agent or Managing Agent. The provisions of this
SECTION 8 are solely for the benefit of the Agent, the Managing Agent and the
Banks and no Loan Party shall have any rights as a third party beneficiary or
otherwise under any of the provisions hereof. In performing its functions and
duties hereunder and under the other Loan Documents, the Agent shall act solely
as the agent of the Banks and does not assume nor shall be deemed to have
assumed any obligation or relationship of trust or agency with or for any Loan
Party or any of their respective successors and assigns.
b. DELEGATION OF DUTIES. The Agent may execute any of its duties under
this Agreement or the other Loan Documents by or through agents (including the
Managing Agent) or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to
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such duties. The Agent shall not be responsible for the negligence or
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
c. EXCULPATORY PROVISIONS. The Agent shall not be (i) liable for any
action lawfully taken or omitted to be taken by it or any Person described in
SECTION 8.2 under or in connection with this Agreement or any other Loan
Document (except for its gross negligence or willful misconduct), or
(ii) responsible in any manner to any of the Banks for any recitals, statements,
representations or warranties made by any Loan Party contained in this Agreement
or any other Loan Document or in any certificate, report, statement or other
document referred to or provided for in, or received under or in connection
with, this Agreement or any other Loan Document or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement, or
any other Loan Document or for any failure of any Loan Party to perform their
obligations hereunder or thereunder. The Agent shall not be under any
obligation to any Bank to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement or any other Loan Document, or to inspect the properties, books or
records of any Loan Party. This Section is intended solely to govern the
relationship between the Agent, on the one hand, and the Banks, on the other.
d. RELIANCE BY AGENT. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any Note, writing, resolution, notice, consent,
certificate, affidavit, letter, cablegram, telegram, facsimile, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to any Loan Party), independent accountants and
other experts selected by the Agent. The Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless the Agent shall have
received an executed Transfer Supplement in respect thereof. The Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Banks as it deems appropriate or it shall first be
indemnified to its satisfaction by the Banks against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Agent shall in all cases be fully protected in acting, or
in refraining from acting, under this Agreement and the other Loan Documents in
accordance with a request of the Required Banks, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all the Banks and
all future holders of the Notes.
e. NOTICE OF DEFAULT. The Agent shall not be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default unless the Agent has
received notice from a Bank or the Borrower referring to this Agreement,
describing such Default or Event of Default and stating that such notice is a
"NOTICE OF DEFAULT." In the event that the Agent receives such a notice, the
Agent shall promptly give notice thereof to the Banks. The Agent shall take
such action with respect to such Default or Event of Default as shall be
directed by the Required Banks; provided that unless and until the Agent shall
have received such directions, the Agent may (but shall not be obligated to)
take such action, or refrain from taking such action, with
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respect to such Default or Event of Default as the Agent shall deem advisable
and in the best interests of the Banks.
f. NON-RELIANCE ON AGENT AND OTHER BANKS. Each Bank expressly
acknowledges that neither the Agent, nor any of its officers, directors,
employees, agents, attorneys in fact or affiliates has made any representations
or warranties to it and that no act by the Agent hereafter taken, including,
without limitation, any review of the affairs of any Loan Party, shall be deemed
to constitute any representation or warranty by the Agent. Each Bank represents
and warrants to the Agent that it has, independently and without reliance upon
the Agent or any other Bank and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, prospects, financial and other conditions and
creditworthiness of the Loan Parties and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Bank also represents that it
will, independently and without reliance upon the Agent or any other Bank, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, operations, property,
prospects, financial and other condition and creditworthiness of the Loan
Parties. Except for notices, reports and other documents expressly required
under the Loan Documents to be furnished to the Banks by the Agent, the Agent
shall not have any duty or responsibility to provide any Bank with any credit or
other information concerning the business, operations, property, prospects,
financial and other condition or creditworthiness of the Loan Parties which may
come into the possession of the Agent or any of its officers, directors,
employees, agents, attorneys-in-fact or affiliates.
g. INDEMNIFICATION. The Banks agree to indemnify the Agent and its
officers, directors, employees, representatives and agents (to the extent not
reimbursed by the Loan Parties and without limiting the obligation of the Loan
Parties to do so), ratably according to their Pro Rata Shares, from and against
any and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever (including, without limitation, the fees and disbursements of counsel
for the Agent or such Person in connection with any investigative,
administrative or judicial proceeding commenced or threatened, whether or not
the Agent or such Person shall be designated a party thereto that may at any
time (including, without limitation, at any time following the payment of the
Obligations) be imposed on, incurred by or asserted against the Agent or such
Person as a result of, or arising out of, or in any way related to or by reason
of, any of the Loans or the execution, delivery or performance of any Loan
Document (but excluding any such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
solely from the gross negligence or willful misconduct of the Agent or such
Person as finally determined by a court of competent jurisdiction).
h. AGENT IN ITS INDIVIDUAL CAPACITY. The Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of business
with the Loan Parties as though the Agent were not the Agent hereunder. With
respect to Loans made or renewed by it
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and any Note issued to it, the Agent shall have the same rights and powers under
this Agreement as any Bank and may exercise the same as though it were not the
Agent, and the terms "BANK" and "BANKS" shall include the Agent in its
individual capacity.
i. SUCCESSOR AGENT. The Agent may resign as Agent upon thirty (30) days'
notice to the Borrower and the Banks. If the Agent shall resign as Agent under
this Agreement, then the Required Banks during such thirty (30) day period
shall, after consultation in good faith with the Borrower, appoint from among
the Banks a successor agent, whereupon such successor agent shall, with the
consent of the Borrower succeed to the rights, powers and duties of the Agent
and the term "AGENT" shall mean such successor agent, effective upon its
appointment, and the former Agent's rights, powers and duties as Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement or any holders of the Notes.
After any retiring Agent's resignation hereunder as Agent, the provisions of
this SECTION 8 and SECTION 9.1 shall inure to its benefit as to any actions
taken or omitted to be taken by it while it was Agent under this Agreement. The
Managing Agent may resign as Managing Agent at any time. Upon such resignation,
no successor Managing Agent shall be appointed.
M. MISCELLANEOUS.
a. PAYMENT OF EXPENSES, INDEMNITY, ETC. The Borrower shall:
i. whether or not the transactions hereby contemplated are
consummated, pay all out-of-pocket costs and expenses of the Agent in connection
with the negotiation, preparation, execution and delivery of the Loan Documents
and the documents and instruments referred to herein and therein, the creation,
perfection or protection of the Agent's Liens in the Collateral (including,
without limitation, fees and expenses for title and lien searches and filing and
recording fees), and any amendment, waiver or consent relating to any of the
Loan Documents (including, without limitation, as to each of the foregoing, the
fees and disbursements of Cooley Godward Castro Huddleson & Tatum special
counsel to the Agent and any other attorneys retained by the Agent and allocated
costs of internal counsel) and of the Agent and each Bank in connection with the
preservation of rights under, and enforcement of, the Loan Documents and the
documents and instruments referred to therein or in connection with any
restructuring or rescheduling of the Obligations (including, without limitation,
the fees and disbursements of counsel for the Agent and for each of the Banks);
ii. pay, and hold the Agent and each of the Banks harmless from and
against, any and all present and future documentary, stamp, excise and other
similar taxes with respect to the foregoing matters and hold the Agent and each
Bank harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and
iii. indemnify the Agent and each Bank, its officers, directors,
employees, representatives and agents (each an "INDEMNITEE") from, and hold each
of them harmless against,
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any and all losses, liabilities, claims, damages, expenses, obligations,
penalties, actions, judgments, suits, costs or disbursements of any kind or
nature whatsoever (including, without limitation, the fees and disbursements of
counsel for such Indemnitee in connection with any investigative, administrative
or judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated a party thereto) that may at any time (including, without
limitation, at any time following the payment of the Obligations) be imposed on,
asserted against or incurred by any Indemnitee as a result of, or arising out
of, or in any way related to or by reason of, (i) any of the Loans or the
execution, delivery or performance of any Loan Document, (ii) any violation by
any Loan Party or its Environmental Affiliate of any applicable Environmental
Law, (iii) any Environmental Claim arising out of the management, use, control,
ownership or operation of property or assets by any of the Loan Parties or any
of their Environmental Affiliates, including, without limitation, all on-site
and off-site activities involving Materials of Environmental Concern, (iv) the
breach of any environmental representation or warranty set forth in
SECTION 4.17, (v) the grant to the Agent and the Banks of any Lien in any
property or assets of any of the Loan Parties or any stock or other equity
interest in any of the Loan Parties, and (vi) the exercise by the Agent and the
Banks of their rights and remedies (including, without limitation, foreclosure)
under any agreements creating any such Lien (but excluding, as to any
Indemnitee, any such losses, liabilities, claims, damages, expenses,
obligations, penalties, actions, judgments, suits, costs or disbursements
incurred solely by reason of the gross negligence or willful misconduct of such
Indemnitee as finally determined by a court of competent jurisdiction). The
Borrower's obligations under this Section shall survive the termination of this
Agreement and the payment of the Obligations.
b. RIGHT OF SETOFF. In addition to any rights now or hereafter granted
under applicable law or otherwise, and not by way of limitation of any such
rights, upon the occurrence and during the continuance of any Event of Default,
each Bank is hereby authorized at any time or from time to time, without
presentment, demand, protest or other notice of any kind to any Loan Party or to
any other Person, any such notice being hereby expressly waived, to set off and
to appropriate and apply any and all deposits (general or special, time or
demand, provisional or final) and any other indebtedness at any time held or
owing by such Bank (including, without limitation, by branches and agencies of
such Bank wherever located) to or for the credit or the account of any Loan
Party against and on account of the Obligations of the Loan Parties to such Bank
under this Agreement or under any of the other Loan Documents, including,
without limitation, all interests in Obligations purchased by such Bank pursuant
to SECTION 9.4, and all other claims of any nature or description arising out of
or connected with this Agreement or any other Loan Document, irrespective of
whether or not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
c. NOTICES. Except as otherwise expressly provided herein, all notices,
requests and demands to or upon the respective parties hereto to be effective
shall be in writing (including by facsimile, telex, or cable communication), and
shall be deemed to have been duly given or made when delivered by hand, or five
(5) days after being deposited in the United States mail, postage prepaid, or,
in the case of telex notice, when sent, answerback received, or, in the case of
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facsimile notice, when sent and confirmed, or, in the case of a nationally
recognized overnight courier service, one (1) Business Day after delivery to
such courier service, addressed, in the case of each party hereto, at its
address specified opposite its signature below or on the appropriate Transfer
Supplement, or to such other address as may be designated by any party in a
written notice to the other parties hereto, provided that notices and
communications to the Agent shall not be effective until received by the Agent.
d. SUCCESSORS AND ASSIGNS; PARTICIPATION; ASSIGNMENTS.
i. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and
inure to the benefit of the Borrower, the Banks, the Agent, all future holders
of the Notes and their respective successors and assigns, except that the
Borrower may not assign or transfer any of its rights or obligations under this
Agreement without the prior written consent of each Bank. No Bank may
participate, assign or sell any of its Credit Exposure (as defined in clause (b)
below) except as required by operation of law, in connection with the merger,
consolidation or dissolution of any Bank or as provided in this SECTION 9.4.
ii. PARTICIPATION. Any Bank may at any time sell to one or more
Persons (each a "PARTICIPANT") participating interests in any Loan owing to such
Bank, any Note held by such Bank, any Commitment of such Bank and or any other
interest of such Bank hereunder (in respect of any such Bank, its "CREDIT
EXPOSURE"). Notwithstanding any such sale by a Bank of participating interests
to a Participant, such Bank's rights and obligations under this Agreement shall
remain unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement (except as expressly provided below), and the Borrower and
the Agent shall continue to deal solely and directly with such Bank in
connection with such Bank's rights and obligations under this Agreement. The
Borrower agrees that if any Obligations are due and unpaid, or shall have been
declared or shall have become due and payable upon the occurrence and during the
continuance of an Event of Default, each Participant shall be deemed to have the
right of setoff in respect of its participating interest in amounts owing under
this Agreement and any Note to the same extent as if the amount of its
participating interest were owing directly to it as a Bank under this Agreement
or any Note, provided that such right of setoff shall be subject to the
obligations of such Participant to share with the Banks, and the Banks agree to
share with such Participant, as provided in SECTION 9.7. The Borrower also
agrees that each Participant shall be entitled to the benefits of SECTIONS 2.9,
2.10 and 2.11, provided that no Participant shall be entitled to receive any
greater amount pursuant to such sections than the transferor Bank would have
been entitled to receive in respect of the amount of the participating interest
transferred by such transferor Bank to such Participant had no such transfer
occurred. Each Bank agrees that any agreement between such Bank and any such
Participant in respect of such participating interest shall not restrict such
Bank's right to agree to any amendment, supplement, waiver or modification to
this Agreement or any other Loan Document, except where the result of any of the
foregoing would be to extend the final maturity of any Obligation or any
regularly scheduled installment thereof or reduce the rate or extend the time of
payment of interest thereon or reduce
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the principal amount thereof or release all or substantially all of the
Collateral (except as expressly provided in the Loan Documents).
iii. ASSIGNMENTS. Any Bank may, in the ordinary course of its
business and in accordance with applicable law, at any time assign to any Bank
or any affiliate thereof or, with the consent of the Agent, to any other Person
(each an "ASSIGNEE") all or any part of its Credit Exposure in a minimum
principal amount of $1,875,000. The Borrower, the Agent and the Banks agree
that to the extent of any assignment under this Agreement the Assignee shall be
deemed to have the same rights and benefits under the Loan Documents and the
same rights of setoff and obligation to share pursuant to SECTION 9.7 as it
would have had if it were a Bank hereunder; provided that the Borrower and the
Agent shall be entitled to continue to deal solely and directly with the
assignor Bank in connection with the interests so assigned to the Assignee
unless and until such Assignee becomes a Purchasing Bank pursuant to clause (d)
below.
iv. ASSIGNMENTS TO PURCHASING BANKS. Any Bank may at any time and
from time to time assign to one or more Persons ("PURCHASING BANKS") all or any
part of its Credit Exposure in a minimum principal amount of $1,875,000 pursuant
to a supplement to this Agreement, substantially in the form of EXHIBIT D hereto
(a "TRANSFER SUPPLEMENT"), executed by such Purchasing Bank, such transferor
Bank and the Agent. Upon (i) such execution of such Transfer Supplement,
(ii) delivery of an executed copy thereof to the Borrower and the Agent and
(iii) payment by such Purchasing Bank to such transferor Bank of an amount equal
to the purchase price agreed between such transferor Bank and such Purchasing
Bank, such transferor Bank shall be released from its obligations hereunder to
the extent of such assignment and such Purchasing Bank shall for all purposes be
a Bank party to this Agreement and shall have all the rights and obligations of
a Bank under this Agreement to the same extent as if it were an original party
hereto, and no further consent or action by the Borrower, the Banks or the Agent
shall be required. Such Transfer Supplement shall be deemed to amend this
Agreement to the extent, and only to the extent, necessary to reflect the
addition of such Purchasing Bank as a Bank and the resulting adjustment of the
Commitments, if any, arising from the purchase by such Purchasing Bank of all or
a portion of the Credit Exposure of such transferor Bank. Promptly after the
consummation of any transfer to a Purchasing Bank pursuant hereto the transferor
Bank, the Agent and the Borrower shall make appropriate arrangements so that a
replacement Note is issued to such transferor Bank and a new Note is issued to
such Purchasing Bank, in each case in principal amounts reflecting such
transfer. Further, upon the consummation of any transfer to a Purchasing Bank,
the transferor Bank agrees to supplement SCHEDULE 1 to show the date of such
transfer, the transferor Bank, the Purchasing Bank, the Purchasing Bank's
address for notice purposes and the amount of the Commitments so transferred.
v. DISCLOSURE OF INFORMATION. The Borrower authorizes each Bank to
disclose to any Participant, Assignee or Purchasing Bank (each, a "TRANSFEREE")
and any prospective Transferee any and all financial and other information in
such Bank's possession concerning the Borrower which has been delivered to such
Bank by the Borrower pursuant to this Agreement or which has been delivered to
such Bank by the Borrower in connection with such Bank's credit evaluation of
the Borrower prior to entering into this Agreement provided that
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such Transferee or prospective Transferee agrees to use its best efforts to
maintain the confidentiality of any non-public information delivered to it
unless otherwise compelled by legal process (it being understood that it may
share such non-public information with its officers, agents, attorneys,
regulators and advisors).
e. AMENDMENTS AND WAIVERS. Neither this Agreement, any Note, any other
Loan Document to which the Borrower is a party nor any terms hereof or thereof
may be amended, supplemented, modified or waived except in accordance with the
provisions of this Section. The Required Banks and the Borrower may, from time
to time, enter into written amendments, supplements, modifications or waivers
for the purpose of adding, deleting, changing or waiving any provisions to this
Agreement, the Notes, or the other Loan Documents to which the Borrower is a
party, provided that no such amendment, supplement, modification or waiver shall
(a) extend either the Maturity Date or any installment or required prepayment of
any Obligations or reduce the rate or extend the time of payment of interest on
any Obligations, or reduce the principal amount of any Obligations or reduce any
fee payable to the Banks hereunder, or release all or any substantial portion of
the Collateral (except as expressly contemplated by the Loan Documents) or
change the amount of any Commitment of any Bank, or amend, modify or waive any
provision of this SECTION 9.5 or the definition of Required Banks, or consent to
or permit the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or any other Loan Document, in each case
without the written consent of all the Banks, or (b) amend, modify or waive any
provision of SECTION 8 or any other provision of any Loan Document if the effect
thereof is to affect the rights or duties of the Agent, without the written
consent of the then Agent. Any such amendment, supplement, modification or
waiver shall apply to each of the Banks equally and shall be binding upon the
Borrower, the Banks, the Agent and all future holders of the Notes. In the case
of any waiver, the Borrower, the Banks and the Agent shall be restored to their
former position and rights hereunder and under the outstanding Notes, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing, but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon.
f. NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
the Agent or any Bank or any holder of a Note in exercising any right, power or
privilege hereunder or under any other Loan Document and no course of dealing
between any Loan Party and the Agent or any Bank or the holder of any Note shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder or under any other Loan Document preclude
any other or further exercise thereof of the exercise of any other right, power
or privilege hereunder or thereunder. The rights and remedies herein expressly
provided are cumulative and not exclusive of any rights or remedies which the
Agent or any Bank or the holder of any Note would otherwise have. No notice to
or demand on any Loan Party in any case shall entitle any Loan Party to any
other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Agent, the Banks or the holder of any
Note to any other or further action in any circumstances without notice or
demand.
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g. SHARING OF PAYMENTS. Each of the Banks agrees that if it should
receive any amount hereunder (whether by voluntary payment, by realization upon
security, by the exercise of the right of setoff or banker's lien, by
counterclaim or cross action, by the enforcement of any right under the Loan
Documents, or otherwise) which is applicable to the payment of any Obligations,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in such Obligations owing to such Banks in such amount
as shall result in a proportional participation by all of the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
h. GOVERNING LAW; SUBMISSION TO JURISDICTION.
i. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF NEW YORK.
ii. Any legal action or proceeding with respect to this Agreement or
any other Loan Document and any action for enforcement of any judgment in
respect thereof may be brought in the courts of the State of New York or of the
United States of America for the Southern District of New York, and, by
execution and delivery of this Agreement, the Borrower hereby accepts for itself
and in respect of its property, generally and unconditionally, the nonexclusive
jurisdiction of the aforesaid courts and appellate courts from any thereof. The
Borrower irrevocably consents to the service of process out of any of the
aforementioned courts in any such action or proceeding by the mailing of copies
thereof by registered or certified mail, postage prepaid, the Borrower at its
address set forth opposite its signature below. To the extent permitted by law,
the Borrower hereby irrevocably waives any objection which it may now or
hereafter have to the laying of venue of any of the aforesaid actions or
proceedings arising out of or in connection with this Agreement or any other
Loan Document brought in the courts referred to above and hereby further
irrevocably waives and agrees not to plead or claim in any such court that any
such action or proceeding brought in any such court has been brought in an
inconvenient forum. Nothing herein shall affect the right of the Agent, any
Bank or any holder of a Note to serve process in any other manner permitted by
law or to commence legal proceedings or otherwise proceed against the Borrower
in any other jurisdiction.
i. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument.
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j. EFFECTIVENESS. This Agreement shall become effective on the date on
which all of the parties hereto shall have signed a counterpart hereof and shall
have delivered the same to the Agent which delivery, in the case of the Banks,
may be given to the Agent by telecopy (with the originals delivered promptly to
the Agent via overnight courier service).
k. HEADINGS DESCRIPTIVE. The headings of the several Sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
l. MARSHALLING; RECAPTURE. Neither the Agent nor any Bank shall be under
any obligation to marshall any assets in favor of any Loan Party or any other
party or against or in payment of any or all of the Obligations. To the extent
any Bank receives any payment by or on behalf of any Loan Party, which payment
or any part thereof is subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to such Loan Party 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 such Loan Party to
such Bank as of the date such initial payment, reduction or satisfaction
occurred.
m. SEVERABILITY. In case any provision in or obligation under this
Agreement or the Notes or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not an any way be affected or impaired thereby.
n. SURVIVAL. All indemnities set forth herein including, without
limitation, in SECTIONS 2.9, 2.10, 2.12, 8.7 and 9.1 shall survive the execution
and delivery of this Agreement and the Notes and the making and repayment of the
Loans hereunder.
o. DOMICILE OF LOANS. Each Bank may transfer and carry its Loans at, to
or for the account of any branch office, subsidiary or affiliate of such Bank.
p. LIMITATION OF LIABILITY. No claim may be made by any Loan Party or
any other Person against the Agent or any Bank or the Affiliates, directors,
officers, employees, attorneys or agent of any of them for any special,
indirect, consequential or punitive damages in respect of any claim for breach
of contract or any other theory of liability arising out of or related to the
transactions contemplated by this Agreement or any other Loan Document, or any
act, omission or event occurring in connection therewith; and each Loan Party
hereby waives, releases and agrees not to sue upon any claim for any such
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
q. CALCULATIONS; COMPUTATIONS. The financial statements to be furnished
to the Agent and the Banks pursuant hereto shall be made and prepared in
accordance with GAAP
69.
<PAGE>
consistently applied throughout the periods involved and consistent with GAAP as
used in the preparation of the financial statements referred to in SECTION 4.5,
and, except as otherwise specifically provided herein, all computations
determining compliance with SECTION 6.1 hereof shall utilize GAAP.
r. WAIVER OF TRIAL BY JURY. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
EACH OF THE BORROWER, THE AGENT, THE MANAGING AGENT AND THE BANKS HEREBY
IRREVOCABLY WAIVES ALL RIGHT OF TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
LOAN DOCUMENT OR ANY MATTER ARISING HEREUNDER OR THEREUNDER.
s. WASHINGTON NOTICE. ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY,
EXTEND CREDIT OR FOREBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE
UNDER WASHINGTON LAW.
70.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
officers to executive and deliver this Agreement as of the date first above
written.
VECTRA TECHNOLOGIES, INC.
By:
------------------------------------
Title: Chief Financial Officer
Notice Address:
1010 S. 336th Street, Suite 220
Federal Way, WA 98003
Attn: Lynne Heitman
BANQUE PARIBAS, as Agent and as a Bank
By:
------------------------------------
Title:
By:
------------------------------------
Title:
Notice Address:
101 California Street, Suite 3150
San Francisco, CA 94111
Attn: Robert N. Pinkerton
71.
<PAGE>
BANQUE NATIONALE DE PARIS,
as Managing Agent and as a Bank
By:
------------------------------------
Title:
By:
------------------------------------
Title:
Notice Address:
499 Park Avenue
New York, NY 10022
Attn: Richard Cushing
72.
<PAGE>
SCHEDULE 1
TO CREDIT AGREEMENT
BANKS AND COMMITMENTS
TRANCHE-A
NAME OF BANK COMMITMENT
Banque Paribas $1,607,221
Domestic Lending Office and
Eurodollar Lending Office:
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Banque Nationale de Paris $1,607,221
Domestic Lending Office and
Eurodollar Lending Office:
499 Park Avenue, 7th Floor
New York, NY 10022
TRANCHE-B
NAME OF BANK COMMITMENT
Banque Paribas $1,500,000
Domestic Lending Office and
Eurodollar Lending Office:
2029 Century Park East, Suite 3900
Los Angeles, CA 90067
Banque Nationale de Paris $1,500,000
Domestic Lending Office and
Eurodollar Lending Office:
499 Park Avenue, 7th Floor
New York, NY 10022
<PAGE>
FIRST AMENDMENT
(AMENDED AND RESTATED TERM LOAN AGREEMENT)
This FIRST AMENDMENT ("AMENDMENT") dated as of November 13, 1995 is entered
into by and among VECTRA TECHNOLOGIES, INC. (the "BORROWER"), BANQUE PARIBAS, as
a Bank (as defined below) and as the Agent (as defined below), and BANQUE
NATIONALE DE PARIS, as a Bank and as the Managing Agent (as defined below).
RECITALS
A. The Borrower has entered into that certain Term Loan Agreement dated
as of January 6, 1994, as amended, and as amended and restated by that certain
Amended and Restated Term Loan Agreement dated as of September 20, 1995 (as so
amended and restated, the "TERM AGREEMENT"), among the Borrower, the Banks party
thereto, Banque Paribas, acting in its separate capacity as agent for the Banks
(the "AGENT"), and Banque Nationale de Paris, acting in its separate capacity as
Managing Agent (as defined therein) (the "MANAGING AGENT").
B. The parties to the Term Agreement desire to further amend the Term
Agreement on and in accordance with the terms, subject to the conditions and in
reliance upon the representations and warranties set forth below.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other good
and valuable consideration, the receipt and adequacy of which is hereby
acknowledged, and intending to be legally bound, the parties hereto agree as
follows:
SECTION 1. DEFINITIONS. Capitalized terms used but not defined in this
Amendment shall have the meanings given to them in the Term Agreement.
SECTION 2. AMENDMENTS TO TERM AGREEMENT.
(a) Subsection (a) (Leverage Ratio) of Section 6.1 (Financial
Covenants) of the Term Agreement is amended to delete the table appearing at the
end of Subsection (a) and to insert in its place the following:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 3.50:1.0
10/2/95 - 12/31/95 2.40:1.0
1/1/96 - Tranche-A Maturity Date 1.50:1.0
1
<PAGE>
(b) Subsection (b) (Interest Coverage Ratio) of Section 6.1
(Financial Covenants) of the Term Agreement is amended to delete the table
appearing at the end of Subsection (b) and to insert in its place the following:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 52 2.25:1.0
10/2/95 - Tranche-A Maturity Date 5.00:1.0
(c) Subsection (c) (Fixed Charge Coverage Ratio) of Section 6.1
(Financial Covenants) of the Term Agreement is amended to delete the table
appearing at the end of Subsection (c) and to insert in its place the following:
PERIOD RATIO
Tranche-B Closing Date - 10/1/95 1.00:1.0
10/2/95 - 12/31/95 1.20:1.0
1/1/96 - 3/31/96 1.30:1.0
4/1/96 - 6/30/96 1.35:1.0
7/1/96 - 9/29/96 1.40:1.0
9/30/96 - 12/29/96 1.45:1.0
12/30/96 - Tranche-A Maturity Date 1.50:1.0
(d) Subsection (e) (Capital Expenditures) of Section 6.1 (Financial
Covenants) of the Term Agreement is amended to delete the table appearing in
Subsection (e) and to insert in its place the following:
PERIOD MAXIMUM AMOUNT
Tranche-B Closing Date - 10/1/95 $4,000,000
10/2/95 - 12/31/95 $ 400,000
1/1/96 - 12/29/96 $5,000,000
12/30/96 - 12/28/97 $5,000,000
2
<PAGE>
12/29/97 - 1/3/99 $5,000,000
SECTION 3. LIMITATION OF AMENDMENT.
(1) The amendments set forth in SECTION 2, above, are effective for
the purposes set forth herein and shall be limited precisely as written and
shall not be deemed to (i) be a consent to any amendment, waiver or modification
of any other term or condition of any Loan Document or (ii) otherwise prejudice
any right or remedy which the Banks, the Agent or the Managing Agent may now
have or may have in the future under or in connection with any Loan Document.
(2) This Amendment shall be construed in connection with and as part
of the Loan Documents and all terms, conditions, representations, warranties,
covenants and agreements set forth in the Loan Documents, except as herein
waived or amended, are hereby ratified and confirmed and shall remain in full
force and effect.
SECTION 4. REPRESENTATIONS AND WARRANTIES. In order to induce the
Banks, the Agent and the Managing Agent to enter into this Amendment, the
Borrower hereby represents and warrants to each Bank, the Agent and the Managing
Agent as follows:
(a) After giving effect to this Amendment (i) the representations and
warranties contained in the Loan Documents (other than those which expressly
speak as of a different date) are true, accurate and complete in all material
respects as of the date hereof and (ii) no Default or Event of Default has
occurred and is continuing;
(b) The Borrower has the corporate power and authority to execute and
deliver this Amendment and to perform its obligations under the Term Agreement,
as amended by this Amendment, and each of the other Loan Documents to which it
is a party;
(c) The certificate of incorporation, bylaws and other organizational
documents of the Borrower delivered to each Bank on the Tranche-B Closing Date
are true, accurate and complete and have not been amended, supplemented or
restated and are and continue to be in full force and effect;
(d) The execution and delivery by the Borrower of this Amendment and
the performance by Borrower of its obligations under the Term Agreement, as
amended by this Amendment, and each of the other Loan Documents to which it is a
party have been duly authorized by all necessary corporate action on the part of
the Borrower;
(e) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of its obligations under the Term Agreement, as
amended by this
3
<PAGE>
Amendment, and each of the other Loan Documents to which it is a
party do not and will not contravene (i) any law or regulation binding on or
affecting the Borrower, (ii) the certificate of incorporation or bylaws of the
Borrower, (iii) any order, judgment or decree of any court or other governmental
or public body or authority, or subdivision thereof, binding on the Borrower or
(iv) any contractual restriction binding on or affecting the Borrower;
(f) The execution and delivery by the Borrower of this Amendment and
the performance by the Borrower of its obligations under the Term Agreement, as
amended by this Amendment, and each of the other Loan Documents to which it is a
party do not require any order, consent, approval, license, authorization or
validation of, or filing, recording or registration with, or exemption by any
governmental or public body or authority, or subdivision thereof, binding on the
Borrower, except as already has been obtained or made; and
(g) This Amendment has been duly executed and delivered by the
Borrower and is the binding obligation of the Borrower, enforceable against it
in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, liquidation, moratorium or other similar
laws of general application and equitable principles relating to or affecting
creditors' rights.
SECTION 5. REAFFIRMATION. The Borrower hereby reaffirms its
obligations under each Loan Document to which it is a party.
SECTION 6. COUNTERPARTS. This Amendment may be executed in any number
of counterparts and all of such counterparts taken together shall be deemed to
constitute one and the same instrument.
SECTION 7. EFFECTIVENESS. This Amendment shall become effective on the
receipt by the Agent of an originally executed counterpart (or facsimile thereof
with the original to follow by Federal Express or other overnight courier) of
this Amendment, executed by the Borrower and each of the Banks as shall at such
point and thereafter be deemed effective as of September 21, 1995.
SECTION 8. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9. RELEASE AND WAIVER.
(a) The Borrower hereby acknowledges and agrees that: (i) it has no
claim or cause of action against any Bank or the Agent or the Managing Agent or
any parent, subsidiary or affiliate of any Bank or the Agent or the Managing
Agent, or any of such Bank's, the Agent's or the Managing Agent's officers,
directors, employees, attorneys or other representatives or agents (all of which
parties other than the Banks, the Agent and the Managing Agent being,
4
<PAGE>
collectively, the "LENDER AGENTS") in connection with the Term Agreement, the
Loans thereunder or the transactions contemplated therein; (ii) it has no offset
or defense against any of its respective obligations, indebtedness or contracts
in favor of the Banks, the Agent or the Managing Agent; and (iii) it recognizes
that each of the Banks, the Agent and the Managing Agent has heretofore properly
performed and satisfied in a timely manner all of its respective obligations to
and contracts with the Borrower.
(b) Although each of the Banks, the Agent and the Managing Agent
regards its respective conduct as proper and does not believe the Borrower to
have any claim, cause of action, offset or defense against such Bank, the Agent
or the Managing Agent or any Lender Agent in connection with the Term Agreement,
the Loans thereunder or the transactions contemplated therein, each Bank, the
Agent and the Managing Agent wishes and Borrower agrees to eliminate any
possibility that any past conditions, acts, omissions, events, circumstances or
matters could impair or otherwise affect any rights, interests, contracts or
remedies of the Banks, the Agent or the Managing Agent. Therefore, the Borrower
unconditionally releases and waives (i) any and all liabilities, indebtedness
and obligations, whether known or unknown, of any kind of any Bank, the Agent or
the Managing Agent or of any of Lender Agents to the Borrower, except the
obligations remaining to be respectively performed by the Banks, the Agent or
the Managing Agent as expressly stated in the Term Agreement, this Amendment and
the other Loan Documents; (ii) any legal, equitable or other obligations or
duties, whether known or unknown, of any Bank, the Agent, the Managing Agent or
any Lender Agent to the Borrower (and any rights of the Borrower against any
Bank, the Agent, the Managing Agent or any Lender Agent) besides those expressly
stated in the Term Agreement, this Amendment and the other Loan Documents;
(iii) any and all claims under any oral or implied agreement, obligation or
understanding with any Bank, the Agent, the Managing Agent or any Lender Agent,
whether known or unknown, which is different from or in addition to the express
terms of the Term Agreement, this Amendment or any of the other Loan Documents;
and (iv) all other claims, causes of action or defenses of any kind whatsoever
(if any), whether known or unknown, which the Borrower might otherwise have
against any Bank, the Agent, the Managing Agent and/or any Lender Agent on
account of any condition, act, omission, event, contract, liability, obligation,
indebtedness, claim, cause of action, defense, circumstance or matter of any
kind whatsoever which existed, arose or occurred at any time prior to the
execution and delivery of this Amendment or which could arise concurrently with
the effectiveness of this Amendment.
(c) THE BORROWER AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN,
UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS,
LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THIS AMENDMENT
IN FAVOR OF THE BANKS, THE AGENT, THE MANAGING AGENT AND THE LENDER AGENTS. TO
THE EXTENT ANY LAW MAY BE APPLICABLE, THE BORROWER WAIVES AND RELEASES (TO THE
MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE
HAVE UNDER THE LAWS OF THE
5
<PAGE>
STATE OF NEW YORK OR ANY OTHER APPLICABLE JURISDICTION
WHICH MIGHT LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS
OR RELEASES UNDER THIS AMENDMENT.
IN WITNESS WHEREOF, the parties hereby have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
VECTRA TECHNOLOGIES, INC.
By:______________________________
Its:_____________________________
BANQUE PARIBAS, as a Bank and as Agent
By:______________________________
Its:_____________________________
By:______________________________
Its:_____________________________
BANQUE NATIONALE DE PARIS, as a Bank and as
Managing Agent
By:______________________________
Its:_____________________________
6
<PAGE>
ACKNOWLEDGEMENT OF AMENDMENT
AND REAFFIRMATION OF GUARANTY
C. Each of the undersigned Guarantors hereby acknowledges and confirms
that it has reviewed and approved the terms and conditions of this Amendment.
D. Each Guarantor hereby consents to this Amendment and agrees that its
respective Guaranty of the Obligations of the Borrower under the Term Agreement
shall continue in full force and effect, shall be valid and enforceable and
shall not be impaired or otherwise affected by the execution of this Amendment
or any other document or instrument delivered in connection herewith.
E. Each Guarantor severally represents and warrants that, after giving
effect to this Amendment, all representations and warranties contained in its
respective are true, accurate and complete as if made the date hereof.
GUARANTORS PACIFIC NUCLEAR STORAGE SYSTEMS, INC.
By:____________________________________
Printed Name:__________________________
Title:_________________________________
NUCLEAR PACKAGING, INC.
By:____________________________________
Printed Name:__________________________
Title:_________________________________
VECTRA SERVICES, INC.
By:____________________________________
Printed Name:__________________________
Title:_________________________________
CTL INTERNATIONAL, INC.
By:____________________________________
Printed Name:__________________________
Title:_________________________________
7
<PAGE>
VECTRA GOVERNMENT SERVICES, INC.
By:___________________________________
Printed Name:_________________________
Title:________________________________
VECTRA WASTE SERVICES, L.L.C.
by: VECTRA Technologies, Inc., its Manager
By:__________________________________
Printed Name:________________________
Title:_______________________________
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> OCT-01-1995
<CASH> 4,250
<SECURITIES> 1,102
<RECEIVABLES> 22,301
<ALLOWANCES> 0
<INVENTORY> 1,605
<CURRENT-ASSETS> 33,857
<PP&E> 24,677
<DEPRECIATION> 11,838
<TOTAL-ASSETS> 78,586
<CURRENT-LIABILITIES> 41,534
<BONDS> 0
<COMMON> 45,819
0
0
<OTHER-SE> (11,378)
<TOTAL-LIABILITY-AND-EQUITY> 78,586
<SALES> 2,177
<TOTAL-REVENUES> 24,047
<CGS> 1,338
<TOTAL-COSTS> 17,649
<OTHER-EXPENSES> 8,209
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 639
<INCOME-PRETAX> (2,450)
<INCOME-TAX> (532)
<INCOME-CONTINUING> (1,918)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,918)
<EPS-PRIMARY> (.24)
<EPS-DILUTED> (.24)
</TABLE>
